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Muni Lal Vohra and anr. Vs. Delhi Municipal Corporation and anr. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtDelhi High Court
Decided On
Case NumberCivil Writ Petition No. 1170 of 1976
Judge
Reported in13(1977)DLT323
ActsDelhi Municipal Corporation Act, 1957 - Sections 114
AppellantMuni Lal Vohra and anr.
RespondentDelhi Municipal Corporation and anr.
Advocates: B.S.C. Singh,; Tara Chand Brijmohan Lal,; Uma Jain and;
Cases ReferredGanga Ram v. Mohd. Usman
Excerpt:
delhi municipal corporation act - sections 114, 2(47) and 116--determination of rateable value of land or building for purpose of fixing tax--rent paid to lessee by sub-lessee--whether can be taken into consideration--section 121, whether applicable.; the rateable value of, and consequently the tax payable on, a certain house owned by the petitioners was enhanced, taking into-consideration the rent that was being paid to the main tenant by its sub-tenant, albeit the subletting had been effected without the landlord's consent. in this writ petition the petitioners contended that they could not be assessed to tax on that basis.; that in determining the assessment of the annual value (rateable value) the assessing authority is not concerned with a rent which a tenant may receive from his.....t.v.r. tatachari, c.j. (1) this writ petition has been filed by the petitioners, shri muni lal vohra and shri hira lal vohra, praying that the order (annexure a.6), dated 19th june, 1974, whereby the assistant assessor and collector, delhi municipal corporation, enhanced the rateable value of the property no. 2537/x, known was ramjas building, asaf ali road, new delhi, from rs. 44,010 to rs. 82,350 as well as the order of shri o. p. singla, additional district, judge, delhi, dated 23rd april, 1976, upholding on appeal the aforesaid order of the assistant assessor and collector be quashed. the delhi municipal corporation has been imp leaded as the first respondent and shri o. p. singia has been imp leaded as the second respondent.(2) the petitioners are the owners of the aforesaid ramjas.....
Judgment:

T.V.R. Tatachari, C.J.

(1) This Writ Petition has been filed by the petitioners, Shri Muni Lal Vohra and Shri Hira Lal Vohra, praying that the order (Annexure A.6), dated 19th June, 1974, whereby the Assistant Assessor and Collector, Delhi Municipal Corporation, enhanced the rateable value of the property No. 2537/X, known was RamJas Building, Asaf Ali Road, New Delhi, from Rs. 44,010 to Rs. 82,350 as well as the order of Shri O. P. Singla, Additional District, Judge, Delhi, dated 23rd April, 1976, upholding on appeal the aforesaid order of the Assistant Assessor and Collector be quashed. The Delhi Municipal Corporation has been imp leaded as the first respondent and Shri O. P. Singia has been imp leaded as the second respondent.

(2) The petitioners are the owners of the aforesaid Ramjas Building situated on Plot No. Ii, Block No. Iv, Asaf Ali Road, New Delhi, which bears the Municipal No. 2537/X. The petitioners let out the entire ground floor of the building with attached bath and lavatory to M/s. Matchwel Electricals (India) Ltd., at a rental of Rs. 1,600 per month payable in equal shares to each of the petitioners as per lease deed (Annexure A.I), dated 9th October, 1964, which was registered on 21st October, 1964. The other portions of the building were let out to other tenants, excepting a room, a kitchen, and a latrine on the second floor which were kept in the self occupation of the petitioners. The building was assessed prior to 1972 at a rateable value of Rs. 44,010.

(3) The lessee, M/s. Matchwel Electricals (India) Ltd., while retaining only a mazenine floor with itself, is alleged to have sublet the rest of the premises in its tenancy to M/s. Bajaj Auto Ltd. and M/s. Bajaj Electricals without obtaining the consent of the Lessers, the petitioners. Alleging that the lessee had not only sublet as stated above but also committed various other breaches of the terms of the lease, such as storing of petrol and non-payment of rent on or before the stipulated date, the petitioners filed a petition (Annexure A.2) for the eviction of the lessee on 26th April, 1973, under Section 14(1)(b) of the Delhi Rent Control Act, 1958. The lessee resisted the petition for eviction on the ground that M/s. Bajaj Auto Ltd. was only its associate or licensee and there was no subletting the, in the alternative, pleaded that it had a right sublet. It was submitted that there was no firm by the name of M/s. Bajaj Electricals. It denied also the other alleged breaches of the terms of the lease. The petition for eviction was pending in the Court of Shri S. N. Kapur, Additional Rent Controller, Delhi.

(4) On 24th March, 1973, the Assistant Assessor and Collector of the Delhi Municipal Corporation had issued a notice to the petitioners under Section 126 of the Delhi Municipal Corporation Act, 1957 (hereinafter referred to as the Act) calling upon them to show cause why the retable value of the building in question be not enhanced from Rs. 44,010 to Rs. 82,350 with effect from 1st April, 1972 (Annexure A.4). The petitioners filed objections (Annexure A.5) to the said notice. The petitioners submitted, inter alia, that they were getting a rent of Rs. 1,600 per month from M/s. Matchwel Electricals (India) Ltd. and Rs. 2,325 per month from the other tenants, and that their total income from the building was Rs. 3,925 per month or Rs. 47,100 per year. But, the Deputy Assessor and Collector (Headquarters) of the Corporation, by his order, dated 19th June, 1974 (Annexure A.6), determined the rateable value of the building at Rs. 86,990 and, thereforee, maintained the proposed rateable value of Rs. 82,350. In arriving at the said figure, he took into consideration and included a sum of Rs. 5,100 being the rent per month which was admittedly being realised by the lessee, Mi/s. Matchwel Electricals (India) Ltd. from its sub-lessee, M/s. Bajaj Auto Ltd. Against the said order, the petitioners preferred an appeal under Section 169 of the Act. By his order, dated 23rd April, 1976 (Annexure A.9), Shri O. P. Singia, Additional District Judge, Delhi, dismissed the said appeal holding that the petitioners could be required to pay house-tax on a rateable value calculated on the basis of rent paid by the sub-lessee also to the main lessee even though the subletting was unauthorised by the landlords/owners. The petitioners have now filed the present Writ Petition challenging the aforesaid order of assessment as well as the appellate order.

THEMunicipal Corporation filed a counter affidavit, dated 20th December, 1976, opposing the said Writ Petition, and pleading that the determination of the rateable value was quite correct and legal.

BAWAShiv Charan Singh, learned counsel for the petitioners, contended that in determining the rateable value of the building in question the assessing authority was not entitled to take into consideration the rent received by the lessee, M/s. Matchwel Electricals India) Ltd., from its sub-lessee, M/s. Bajaj Auto Ltd.

(5) Section 114 of the Act empowers the levy of property taxes consisting of water tax, scavenging tax, fire tax, and general tax on lands and buildings in Delhi. The levy of each of the said taxes is to be made on the basis of the rateable value of the land or building in the manner prescribed in clauses (a) to (d) of sub-section (1) of Section 114. The term rateable value is defined in Section 2(47) of the Act as meaning-

'THE value of any land or building fixed in accordance with the provisions of this Act and the bye-laws made there under for the purpose of assessment to property taxes.'

Section 116 provides for the determination of rateable value of lands and buildings assessable to property taxes, and sub-section (1) thereof which alone is material for the purpose of this case reads as under :-

'(1)The rateable value of any land or building assessable to propetry taxes shall be the annual rent at which such land or building might reasonably be expected to let from year to year less-

(A).............................and

(B).............................

Provided that.............................

Provided further that in respect of any land or building 'the standard rent of which has been fixed under the Delhi and Ajmer Rent Control Act, 1952 (38 of 1952), the rateable value thereof shall not exceed the annual amount of the standard rent so fixed.'

The Delhi and Ajmer Rent Control Act, 1952, has been replaced by the Delhi Rent Control Act, 1958. It may be stated here that in the present case, it is common ground that standard rent has not been fixed for the building in question.

(6) The building in question is situated in Delhi and it is, thereforee, governed by the Delhi Municipal Corporation Act as well as by the Delhi Rent Control Act, and the determination of the rateable value has to be in accordance with both the enactments. This has been recognised in the second proviso to Section 116(1) set out above. Such determination in the context of Municipal legislation read with Rent Control Legislation has been considered in a number of decisions. In Corporation of Calcutta v. Smt. Padma Debi, : [1962]3SCR49 , a case that arose under the Calcutta Municipal Act, 1923, the Supreme Court observed at pages 153 and 154 as follows :-

'THE word 'reasonably' is not capable of precise definition. 'Reasonable' signifies 'in accordance with reason'. In the ultimate analysis it is a question of fact. Whether a particular act is reasonable or not depends on the circumstances in a given situation. A bargain between a willing Lesser and a willing lessee uninfluenced by any extraneous circumstances may afford a guiding test of reasonableness. An inflated or deflated rate of rent based upon fraud, emergency, relationship, and such other considerations may take it out of the bounds of reasonableness. Equally it would be incongruous to consider fixation of rent beyond the limits fixed by panel legislation as reasonable. ............................

UNDERthe Rent Control Act the receipt of any rent higher than the standard rent fixed under the Act is made penal for the landlord................

ONEmay legitimately say under those circumstances that a landlord cannot reasonably be expected to let a building for a rent higher than the standard rent. A law of the land with its penal consequences cannot be ignored in ascertaining the reasonable expectations of a landlord in the matter of rent. In this view, the law of the land must. necessarily be taken as one of the circumstances obtaining in the open market placing an upper limit on the rate of rent for which a building can reasonably be expected to let.'

'(7)It is said that Section 127(a) (of the Calcutta Municipal Act, 1923) does not contemplate the actual rent receiver by a landlord but a hypothetical rent which he can reasonably be expected to receive if the building is let. So stated the proposition is unexceptionable. Hypothetical rent may be described as a rent which a landlord may reasonably be expected to get in the open market. But an open market cannot include a 'black market', a term euphemestically used to commercial transactions entered into between parties in defiance of law. In that situation, a statutory limitation of rent (by the Rent Control Legislation) circumscribes the scope of the bargain in the market. In no circumstances, the hypothetical rent can exceed that limit.'

In Corporation of Calcutta v. The Life Insurance Corporation of India : [1971]1SCR249 , after referring to the decision in Padma Debi's case (supra), the Supreme Court observed at page 1418 as follows :-

'THE test of reasonableness of the gross annual rent at which the building may at the time of the assessment reasonably be expected to let in Section 127(a) is the rent which the landlord may realise if the house is let under a bargam between a willing Lesser and a willing lessee, uninfluenced by extraneous considerations, and in determining the reasonableness of the expectation of the landlord in the matter of rent a law which imposes penal consequences cannot be ignored. The law must be taken as one of the circumstances obtaining in the open market placing an upper limit on the rate of rent for which a building can reasonably be expected to let, and since a statutory limitation of rent circumscribes the scope of the bargain in the market, in no circumstances can be hypothetical rent exceed the limit prescribed by the law.'

In Dewan Daulat Ram Kapur v. The New Delhi Municipal Committee, (1973) I Delhi 363, a Full Bench of this High Court considered the various situations that are likely to arise in the fixation of the rateable value under the Act, and applied the aforesaid decisions of the Supreme Court to such situations in the light of the provisions of the Delhi Rent Control Act. At page 383, the Full Bench held, inter alia, as under :-

'IN the case of rented premises the annual value shall not exceed the standard rent if fixed by the Controller or statatorily determined under the Delhi Rent Control Act, in other cases, where the standard rent has not been fixed or determined as aforesaid, the annual value shall not exceed the agreed rent unless the agreed rent is tainted by fraud,

(7) In the present case. as already stated, the standard rent has not been fixed by the Controller. It is also common ground that it is not a case in which the standard rent is statutorily determined under the Delhi Rent Control Act. thereforee, as held by the Full Bench, the annual value cannot exceed the agreed rent unless it is tainted by fraud collusion, etc. But, the Corporation has not alleged in the present case that the agreed rent payable by the lessee to the petitioners is tainted in the aforesaid manner. thereforee, according to the decision of the Full Bench, as between the petitioners (Lessers) and the lessee, M/s. Matchwel Electricals (India) Ltd., the annual rent is not to exceed the figure arrived at by taking the agreed rent as Rs. l,600.00 p.m. The question for consideration before us, however, is as regards the incilusion of the rent of Rs. 5,100.00 received by the said lessee from its sub-lessee. As regards the said question, the decision of the Full Bench is not of much assistance in the present case, as the aforesaid question for consideration before us did not, as such, arise in the case before the Full Bench and was not, thereforee, considered by the Full Bench.

Our attention was drawn by the counsel to the decisions in which was affirmed by the Supreme Court in . But, these decisions also are not of assistance in the present case as the question for consideration before us did not, as such, arise in those cases and was not, thereforee, considered.

(8) We have, however, the decision of the Supreme Court in Corporation of Calcutta v. The Life Insurance Corporation of India (Supra) in which the question was considered. In that case, the facts were as follows. Messrs A. Firpo Ltd. held as tenants premises No. 11, Government Place East, Calcutta, belonging to the Asiatic Assurance Company Ltd. under a lease at a monthly rental of Ra. 2,000. The rent was subsequently increased by mutual agreement to Rs. 2,800 per month. The tenant sublet a major part of the premises to five different tenants and the aggregate rent received from the sub-tenants amounted to Rs. 4,520. The Corporation of Calcutta assessed the annual value of the premises at Rs. 32,076 for six years prior to 1st April, 1955. The Corporation assessed the annual value again with effect from 1st April, 1955, at Rs. 62,761 rejecting the objections raised by the owner of the premises. On appeal by the Life Insurance Corporation of India, which had statutorily acquired the rights of the owner, the Court of Small Causes assessed Rs. 33,240 as the annual value. On appeal by the Corporation of Calcutta, the said order was confirmed by the High Court.

On further appeal by the Corporation of Calcutta to the Supreme Court under a certificate, it was contended on behalf of the appellant that in determining the annual value of the premises, the assessing authority was entitled to take into consideration the rent received by the tenant, M/s. Firpo Limited, from its sub-tenants. The Supreme Court pointed out that it was clearly laid down in Smt. Padma Debi's case (supra) that in determining the annual value of tile land or building for the purpose of ascertaining the consolidated rate, the standard rent is the maximum amount which can be taken into account, and that in the case before it the Court of Small Causes and the High Court had determined the annual value on the footing of the standard rent. The Supreme Court repelled a contention on behalf of the Corportion of Calcutta that Smt. Padma Debi's case had no application to the case before the Supreme Court since the former was decided on the interpretation of Section 127 (a) of the Calcutta Municipal Act, 1923, whereas the latter case was to be determined on the interpretation of Section 168 of the Calcutta Municipal Corporation Act, 1951, of which the scheme was different. The Supreme Court explained that the words 'gross annual rent at which the land or building might at the time of assessment reasonably be expected to let from year to year' in Section 127 (a) were interpreted in Smt. Padma Debi's case, and it was held that in determining the gross annual rent statutory limitation of rent circumscribes the scope of the bargain in the market and, thereforee, in no circumstances the hypothetical rent may exceed the limit, and that the addition of the proviso in Section 168(1) of the Act of 1951, did not alter the meaning of the words 'gross rent at which the land or building might reasonably be expected to let'. The Supreme Court pointed out that in the case before it there was no order of the Controller fixing standard rent under the relevant Rent Control legislation, and that in the circumstances the High Court was right in assessing the annual value on the basis of the standard rent as statutorily determined.

(9) The Supreme Court also repelled the contention on behalf of the Corporation of Calcutta that where there were different grades of owners of a building, the assessing authority was bound to take into consideration the value to each grade of owner for the purpose of determining the standard rent, and that qua their sub-tenants Messrs A. Firpo Ltd. were the owners of the premises and the rent which they received had also to be taken into account in determining the standard rent in view of the definition of 'owner' in Section 5(53) as including-

'THE person for the time being receiving the rent of any land or building or of any part of any land or building, whether on his own account or as agent or trustee for any person or society or for any religious or charitable purpose, or as a receiver or who would so receive such rent if the land, building or part thereof were let to a tenant,' and Section 193 of the Calcutta Municipal Corporation Act, 1951, which provides-

'WHERE there are gradiations of owners of any land or building, the Commissioner may, notwithstanding anything contained in Section 191, apportion the owner's share of the consolidated rate in respect of such land or building among such owners in proportion to the amount of the net rent receivable by each of them and thereupon the owner's share of the consolidated rate shall be paid by such owners accordingly.'

The Supreme Court pointed out as follows:-

'BUT under the Act the quantum of the consolidated rate depends upon the annual value of land or building on the gross rent for which the land or building might reasonably be expected to let, and not the gross rent at which the subordinate interest of a tenant may be expected to sob- let. In determining the assessment of annual value, the assessing authority is not concerned with the rent which the tenant may receive from his sub-tenant. It is the gross rent which the owner may realise by letting the land or building under a bargain 'uninfluenced by extraneous considerations' which determines the annual value. Section 193 only provides for apportionment of consolidated rate : it is irrelevant in determining annual value.'

(10) This decision of the Supreme Court has laid down that in determining the assessment of the annual value (rateable value) the assessing authority is not concerned with a rent which a tenant may receive from his sub-tenant, and that it is the gross rent which the owner may realise by letting the land or building under a bargain uninfluenced by extraneous considerations which determines the annual value (rateable value). In the present case before us, as already pointed out, it is not the case of the Delhi Municipal Corporation that the rent of Rs. 1,600 which the petitioners (owners) realised from the lessee was by any letting of the premises under a bargain influenced by extraneous considerations or that any part of the rent which the lessee, M/s. Matchwel Electricals (India) Ltd., received from its sub-lessee, M/s. Bajaj Auto Ltd., had gone into the hands of the petitioners (owners) . thereforee, in view of the aforesaid decision of the Supreme Court, it has to be held that the assessing authority was not entitled to take into consideration the rent received by M/s. Matchwel Electricals (India) Ltd. from its sub-lessee, M/s. Bajaj Auto Ltd. in determining the late- able value of the premises in question.

(11) Mr. Tara Chand Brij Mohan Lal, learned counsel for the Delhi Municipal Corporation, relied upon the decision of a learned single Judge of this Court (H. R. Khanna, C. J.) in Ganga Ram v. Mohd. Usman, I.L.R. (1971) Delhi 639 in support of his contention that the assessing authority was entitled to take into consideration the rent received by the lessee from its sub-lessee in determining the reteable value. In that case, the facts were as follows. The petitioner, Ganga Ram, had taken a house from the respondent Mohd. Usman, on a monthly rent of Rs. 60. The petitioner sublet some portions of the house to three persons on monthly rent of Rs. 23.50; Rs. 33 and Rs. 22 respectively, and retained a portion of the house in his own occupation. On account of the subletting, the Delhi Municipal Corporation took it that the house was fetching a rent of Rs. 138.25 P. per month and fixed the rateable value on that basis. The respondent went up in appeal against the said assessment, but the appeal was dismissed by the Additional District Judge. The respondent thereupon filed two suits against the petitioner in respect of two different periods, on the allegation that by virtue of the provisions in Section 121 of the Delhi Municipal Corporation Act, 1957, he was entitled to recover the excess of the amount of property tax paid by him to the Municipal Corporation over what has been paid by him for the house in dispute had its rateable value been assessed on the basis of the monthly rent of Rs. 60, the actual amount of rent received by him from the petitioner. The suits were decreed by the Additional Judge, Small Cause Court. Against that judgment, the petitioner, Ganga Ram filed two Civil Revisions in the High Court.

The first contention urged on behalf of the petitioner in the revisions was that the suits brought by the respondent were not maintainable. The learned Chief Justice pointed out that according to Section 120 of the Delhi Municipal Corporation Act, the property tax was primarily leviable, if the land or building was let, upon the Lesser, that sub-section (1) of Section 121 of the said Act makes it manifest that in case the rateable value of a land or building exceeds the amount of rent payable in respect thereof to the Lesser, the Lesser shall be entitled to receive from the lessee the difference between the amount of property taxes levied upon him and the amount which would be livable upon him if the said taxes had been calculated on the amount of rent payable to him, and that sub-section (3) of Section 121 clothes the Lesser for the purpose of the recovery of the excess amount of the property taxes with the same rights and remedies as if such sum were rent payable to him by the person from whom he is entitled to receive the same. The learned Chief Justice explained-

'THE object of the above provision is to throw the burden on the tenant of the higher property tax for the tenanted premises to the extent of the difference between the amount been tax which would have been levied had the assessment been made on the rent payable by the tenant to the landlord and the tax actually levied. This would be so irrespective of the fact whether the liability to pay higher property tax arises because of any act of the tenant like subletting of the premises or not. The present case, however, of the respondent is much stronger. As the liability to pay enhanced amount of property tax was imposed upon the respondent by the Municipal Corporation because of the act of the petitioner in subletting portions of the house in question, the respondent in my opinion, was entitled to be reimbursed by the petitioner for the excess property tax paid by the respondent in view of the provisions of Section 121 reproduced above. It also seems inequitable that even though the petitioner is making a profit by sub-letting a portion of the house in dispute at a rent higher than the total rent paid by him for the entire house, the liability for the payment of the excess property tax because of the subletting be thrown upon the respondent.'

THElearned Chief Justice also repelled a contention on behalf of the petitioner Ganga Ram that the claim of the respondent could not be entertained in view of the provisions of Section 7(2) of the Delhi filed objections which were registered as suit No. 471 of 1967. The of the said Section 7(2) and those of Section 121 of the Delhi Municipal Corporation Act. The learned Chief Justice held that Section 7(2) of the Delhi Rent Control Act was a general provision relating to the amounts which can be recovered by the landlord from the tenants in addition to the rent while Section 121 of the Delhi Municipal Corporation Act deals with the contingency where the property tax levied for the tenanted premises is more than the amount which would have been levied had the assessment been made on the basis of the rent payable by the tenant to the landlord, and that since Section 121 is an enactment dealing specially with that particular contingency, its provision would have an overriding effect. The learned Chief Justice added that apart from the above, he was of the view that the provisions of Section 7(2) of the Delhi Rent Control Act were not attracted to the case before him as the said provisions dealt with tax on building or land imposed in respect of premises occupied by the tenant, and the petitioner before him, who was a tenant of the premises in dispute, had ceased to occupy portions of the premises which had been sublet by him and indeed the enhanced tax had been imposed because of the subletting of those portions.

The third and the last contention urged before the learned Chief Justice was that the assessiment of raiteable value made by the Municipal Corporation for the house in question was liable to be quashed in view of the decisions of the Supreme Court in the cases of . The learned Chief Justice observed that it was, in his opinion, not necessary to express any opinion on the point as to whether the assessment made by the Corporation regarding rateable value of the house in dispute suffered from an infirmity. In the result, the learned Chief Justice dismissed the Civil Revisions and affirmed the judgment of the Additional District Judge.

IThas to be noted that the first two contentions urged before the learned Chief Justice were only to the effect that the suit for there covery of the excess tax from the tenant was not maintainable, and that the claim of the respondent Mohd. Usman, could not be entertained in view of the provisions of Section 7(2) of the Delhi Rent Control Act. The learned Chief Justice dealt with those two contentions and repelled the same. The learned Chief Justice did not express any opinion on the third contention as regards the correctness or the legality of the assessment of the rateable value made by the Municipal Corporation. Thus, this decision is not of any assistance to us as the point under consideration by us was not considered and decided in it.

(12) Shri Tara Chand Brij Mohal Lal referred to the decision in . The said decision is not applicable as the question that arose for consideration in that case was whether the license fee received by the landlord himself from a hoarding put up on the building is to be included for the purpose of the assessment of the annual value, whereas in the present case, the sub-lessee was paying rent to the lessee and not to the petitioners (owners).

(13) Shri Tara Chand Brij Mohan Lal also referred to Section 121 of the Delhi Municipal Corporation Act and contended that the provisions therein show that in fixing the rateable value, the assessing authority can take into consideration the rent paid by the sub-lessee to the lessee also. Section 121 reads as follows :-

'121.(1)-IF any land or building assessed to property taxes is let, and its rateable value exceeds the amount of rent payable in respect thereof to the person upon whom under the provisions of Section 120 the said taxes are leviable, that person shall be entitled to receive from his tenant the difference between the amount of the property taxes levied upon him and the amount which would be livable upon him if the said taxes were calculated on the amount of rent payable to him.

(2)If the land or building is sublet and its rateable value exceeds the amount of rent payable in respect thereof to the tenant by his sub-tenant, or the amount of rent payable in respect thereof to a sub-tenant by the person holding under the sub-tenant, the tenant shall be entitled to receive from his sub-tenant or the sub-tenant shall be entitled to receive from the person holding under him, as the case may be, the difference between any sum recovered under this section from such tenant or sub-tenant and the amount of property taxes which would be livable in respect of the said land or building if the rateable value thereof were equal to the difference between the amount of rent which such tenant or sub-tenant receives and the amount of rent which he pays.

(3)Any person entitled to receive any sum under this section shall have for the recovery thereof, the same rights and remedies as if such sum were rent payable to him by the person from whom he is entitled to receive the same.'

The purpose of the Section is, as mentioned in the heading of the Section, to apportion the liability for property taxes when the premises assessed is let or sublet.

SUB-SECTION(1) deals with the case as between the lessee and the Lesser and provides that if the rateable value for a land or building which has been let exceeds the amount of rent payable in respect thereof to the person upon whom the taxes are livable under Section 120 of the Act, the said person shall be entitled to receive from the lessee the difference between the amount of the property taxes levied upon him and the amount which would be livable upon him if the said taxes were calculated on the amount of rent payable to him. This sub-section does not deal with the rent paid by the sub-lessee to the lessee and is, thereforee, not relevant to the question under consideration by us.

(14) We may, however, notice two submissions made by Shri Tara Chand Brij Mohan Lal. The first was that if, as held by the Full Bench of this Court in Dewan Daulat Ram Kapur's case (supra), the rateable value in the case of a premises that has been let and the standard rent for which has not been fixed is to be determined on the basis of the agreed rent between the Lesser and the lessee, this sub-section would become otiose or redundant. It is not necessary to consider this submission as the present question before us is as regards the rent paid by the sub-lessee and we are not concerned with the correctness of the decision of the Full Bench which dealt with a case as between the Lesser and the lessee only. The second submission was that this sub-section, when it refers to the rateable value exceeding the amount of rent payable by the lessee to the Lesser, it contemplates the situation where the lessee sublets the whole or a portion of the premises under his tenancy and the Corporation determines the rateable value taking into consideration the rent payable by the sublessee to the lessee, and if it is not so, the provision would be otiose or redundant. We do not agree. When the sub-section does not make mention of any sublease or sublessee and it merely makes a provision for a situation as between the Lesser and the lessee, it would be adding words to the sub-section if it is held to contemplate a situation arising out of an act of subletting by the lessee to the sublessee. In our opinion, the sub-section confines itself to cases where the rateable value exceeds the rent payable by the lessee to the Lesser by reason of something transpiring between the lessee and the Lesser. Thus, when the agreed rent payable by the lessee to the Lesser is not accepted by the Corporation on the ground of fraud, collusion, etc., and the Corporation determines the rateable value on the basis of the rent for which the property can reasonably be expected to let, the rateable value so determined would naturally exceed the actual rent payable by the lessee to the Lesser, and in such a situation sub-section ( 1 ) provides that the Lesser can recover, unless there is any other legal bar, the difference between the amount of the property taxes levied upon the Lesser and the amount which would be livable upon him if the said taxes were calculated on the amount of rent payable to him by the lessee. In our opinion, sub-section (1) is intended to provide only for that situation.

SUB-SECTION(2) deals with a case between the lessee and the sublessee as well as a case between the sublessee and the person holding under the sublessee, and provides that if a land or a building is sublet and its rateable value exceeds the amount of rent payable in respect thereof to the lessee by sublessee or the amount of rent payable in respect thereof to a sublessee by the person holding under the sublessee the lessee shall be entitled to receive from the person holding under him, as the case may be, the difference between any sum recovered under this Section (i.e. under sub-section (1)) from such lessee or sublessee and the amount of property taxes which would be livable in respect of the said land or building if the rateable value thereof were equal to the difference between the amount of rent which such lessee or sublessee receives and the amount of rent which he pays. This provision. merely follows up the provision made in sub-section ( 1 ).

SUB-SECTION(3) just provides that the person entitled to receive the difference mentioned in sub-sections (1) and (2) shall have for the recovery thereof the same rights and remedies as if such sum were rent payable to him by the person from whom he is entitled to receive the same. Thus, the submission made by Shri Tara Chand, Brij Mohan Lal on the basis of section 121, namely, that the provisions therein show that in fixing the' rateable value, the assessing authority can take into consideration the rent paid by the sublessee to the lessee also, cannot be accepted.

(15) For the foregoing reasons, we accept the contention of Bawa Shiv Charan Singh on behalf of the petitioners and hold that in determining the rateable value of the building in question, the assessing authority was not entitled to take into consideration the rent received by the lessee, M/s Matchwel Electricals (India) Ltd., from its sublessee, M/s Bajaj Auto Ltd. We accordingly allow the Writ Petition and quash the order (Annexure A.6), dated 19th June, 1974, whereby the Assistant Assessor and Collector, Delhi, Municipal Corporation, enhanced the rateable value of the building in question from Rs. 44,010 to Rs. 82,350 as well as the order of Shri O. P. Singia, Additional District Judge, Delhi dated 23rd April, 1976, upholding the aforesaid order of the Assistant Assessor and Collector. In the circumstances of the case, we direct the parties to bear their own costs in the Writ Petition.


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