(1) This is a suit brought by Nand Kishore Bagrodia and others against the Siemens India Ltd. and the Municipal Corporation of Delhi for declaration as under :
'(A)that a decree for declaration be passed in favor of the plaintiffs against the defendant No. 2 that defendant No. 2 is not entitled to club and join the two items of income i.e. income from the suit property by way of rent and the hire charges for the air-conditioning plant and the action of defendant No. 2 is a nullity ab initio and that the plaintiffs are not liable to pay any tax much less house tax on the income of hire charges from the air conditioning plant installed in the suit property ;
(B)that a decree for permanent injunction be passed in favor of the plaintiffs against defendant No. 2 restraining defendant No. 2 from claiming any amount of tax on the hire charges from the air-conditioning plant installed in the suit property and from recovering a sum or Rs. 2,77,830.00 in accordance with the notice dated 6-1-1978.'
(2) Briefly stated the facts averred are that the plaintiffs are the owner-landlords of property bearing No. B-5, Jangpura, New Delhi and they let out the same to the Siemens India Ltd. on 5-9-1973. The rent agreed upon was Rs. 11,944.00 p.m. There was a stipulation for further increase after the lapse of a period of five years. At the same time another agreement was executed between the plaintiffs and the Siemens India Ltd. under which the plaintiffs gave on hire an air-conditioning plant having a capacity of 46 tons and 12 other window-type air-conditioners. For providing these extensive facilities, the hirer advanced an amount of Rs. 2 lacs to the plaintiffs. Hire-charges agreed upon were Rs. 11,472.00 p.m. The hirer was made entitled to deduct every month Rs. 7,500.00 for purpose of adjustment of the advance of Rs. 2,00,000.00 .
(3) The Municipal Corporation of Delhi has now sought to assess the plaintiffs towards house-tax of this property by clubbing the two incomes, the rental of the suit property as well as the hire-charges. The plaintiffs grievance is that they cannot be clubbed together and that hire-charges cannot be made the subject-matter of house-tax.
(4) The Municipal Corporation initially made appearance in Court and filed a written statement. Later it absented and was proceeded ex-parte. The Siemens India Ltd. has not chosen to contest the suit.
(5) Now exparte-evidence of the plaintiffs has been recorded and I have gone through the record of the case and considered the entire circumstances. It is apparent from the narration of the facts above that there were two separate agreements between the parties one related to the lease of the property, and the other the hiring of the air-conditioning plant and the air-conditioners.
(6) Section 247 of the Delhi Municipal Corporation Act defines ratable value as to mean the value of any land or building fixed in accordance with the provisions of the Act and the bye-laws made there under for the purposes of property taxes. The basic corpus thus is land or building. In other words reference is to immovable property. It is their valuation which on determination ultimately invites the levy of property tax. The definition does not cover moveables and other fixtures not permanently and inextricably attached to land or building.
(7) Section 116 of the Delhi Municipal Corporation Act next makes provisions for determination of ratable value of the lands and buildings assessable to property taxes. Here again the valuation has to be co-related to land and the building. These provisions also do not extend the ratable value or property taxes to fixtures, furnishing or any other moveables put up and not permanently affixed on land and building.
(8) Section 120 of the Act further lays down the incidence of property taxes and the persons on whom they can be levied. Here-again the emphasis is on the land and building.
(9) No other provision under the Delhi Municipal Corporation Act has been shown which entitles the Municipal Corporation to levy property taxes on fixtures like airconditioners or air-conditioning plants. They thereforee cannot be made the subject-matter for the levy of property tax.
(10) This being the position, there is substance in the case of the plaintiffs that the hire-charges recovered from the tenant for the air-conditioning plant and air-conditioners provided to them cannot be subjected to property tax and thereforee those hire-charges cannot be taken into account while levying property tax on the building itself.
(11) The result thereforee is that the suit of the plaintiffs is decreed with costs to the effect that the air-conditioning plant and air-conditioners provided by the plaintiffs to the tenant on hire basis at property in dispute are not liable to the levy of property tax, and the hire-charges cannot be clubbed with the rental income which the plaintiffs are otherwise drawing from the tenant for the property in dispute.