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Sham Kapoor Vs. Municipal Corporation of Delhi and ors. - Court Judgment

LegalCrystal Citation
SubjectMunicipal Tax
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 79 of 1971
Judge
Reported in1971RLR81
ActsDelhi Municipal Corporation Act, 1957 - Sections 126
AppellantSham Kapoor
RespondentMunicipal Corporation of Delhi and ors.
Advocates: P.N. Lekhi,; T.C.P. Lal and; Hari Shankar, Advs
Cases ReferredFilmistan (P) Ltd. v. Municipal Commissioner
Excerpt:
delhi municipal corporation act (1957) - section 126--notice under, for enhancement of rateable value--criteria for determination of rateable value--maintainability of writ petition before actual assessment.; municipal corporation of delhi, in the instant case, issued a notice on 6-1-71 under section 126 of the delhi municipal corporation act asking the persons concerned to show cause why the rateable value should not be enhanced as stated in that notice for 1970-71. the question that arises for decision in this case is whether the rate-able value of any land or building assessable to property taxes under the delhi municipal corporation act, 1957 must be made in conformity with the criteria laid down by the delhi rent control act, 1958, regardless of whether the 'standard rent' for the.....s. rangarajan, j. (1) this judgment will dispose of similar writ petitions nos. 80,133 to 137 and 176 of 1971. it will be sufficient to set out the facts in c.ws 79 & 80 of 1971. the only point of distinction between c.ws 79 & 80 of 1971 and the rest is that in c.ws 79 & 80 alone there is the additional fact of a notice having been issued by the municipal corporation of delhi on 6-1-1971 under section 126 of the delhi municipal corporation act asking the persons concerned to show cause why the rateable value should not be enhanced as stated in that notice for 1970-71. even before the expiry of the dates mentioned in the said notices for showing cause the writ petitions 79 & 80/71 were filed on 18-1-1971. the rest were filed some time later. (2) the petitioner in c.w. 79/71 is the owner of.....
Judgment:

S. Rangarajan, J.

(1) This judgment will dispose of similar Writ Petitions Nos. 80,133 to 137 and 176 of 1971. It will be sufficient to set out the facts in C.Ws 79 & 80 of 1971. The only point of distinction between C.Ws 79 & 80 of 1971 and the rest is that in C.Ws 79 & 80 alone there is the additional fact of a notice having been issued by the Municipal Corporation of Delhi on 6-1-1971 under section 126 of the Delhi Municipal Corporation Act asking the persons concerned to show cause why the rateable value should not be enhanced as stated in that notice for 1970-71. Even before the expiry of the dates mentioned in the said notices for showing cause the writ Petitions 79 & 80/71 were filed on 18-1-1971. The rest were filed some time later.

(2) The petitioner in C.W. 79/71 is the owner of building bearing Municipal No. 35 Faiz Bazar, Delhi and the petitioner in C.W. 80/71 is a joint owner of building bearing Municipal No. 36 Faiz Bazar, Delhi. Both the buildings. Numbers 35 and 36, were jointly assessed, though they are in fact two separate buildings owned by two separate owners. It is common ground that the previous assessment was at Rs. 55,070.00 and that the same was sought to be raised to Rs. 82,840.00. It is claimed for the petitioners that both the buildings were cons- tructed in the year 1949, the cost of construction being stated to be Rs. 1,47,064.98. They were originally owned by one Radha Krishen Kapur. After his death there was a partition in the family. No. 35, Faiz Bazar is stated to have been allotted to the petitioner in C.W. 79/71 and No. 36 to the family of the petitioner in C.W. 80/71.

(3) The case of the petitioners in all the writ Petitions is that the buildings are held on lease and fetch rent. The only contention that has been put forward is that for the purpose of calculating the standard rent the value of the land has to be discarded and that the Municipal Corporation could have only regard to the standard rent of the buildings as fixed by the Delhi Rent Control Act, 1958 which, in the instant cases, is said to be on the basis of a percentage of the aggregate amount of the reasonable cost of construction.

(4) The facts stated in the returns filed in opposition to the Writ Petitions are that notice for increase of rateable value was issued in respect of the Municipal Nos. 35 and 36 with effect from 31-4-1969, from Rs. 29,160.00 to Rs. 55,070.00. No objections were filed in respect of it. A public notice was issued on 10-4-1970 under section 124 of the Delhi Municipal Corporation Act of 1957 that the assessment list for the year 1970-71 which had been prepared in pursuance thereof had been authenticated by the Commissioner of Municipal Corporation of Delhi on the 10th April, 1970. In this manner the old values adopted for 1969-70 were adopted for 1970-71 also. On 18-6-1970 the demand notice for the year 1970-71 was issued. In November, 1970 the petitioner's counsel, Shri P.N. Lekhi, issued a notice to the Municipal Corporation of Delhi objecting to the rateable value being fixed on the basis of the annual rent and contending that even if the tenant may value of the property at a figure higher than the 'standard rent' payable under the Delhi Rent Control Act, 1958, it was the rent realisable in law that is exigible to tax and informed the Commissioner that the cost of construction of the building was at a certain figure (Rs. 1,47,064.96; in the case of petitioners in C.Ws 79 & 80 of 1971). The entire legal position was discussed and it was, also explained that the land on which the building stood haveing been held on lease it was, according to the decision of this Court, not to be taken into account since it had no market value. The position taken was that rateable value could be fixed by the Municipal Corporation, in area where the Delhi Rent Control Act, 1958 applies, only on the basis of what was permissible under the Rent Control Act; any rateable value vocative of this principle was on the face of it illegal and void. It was subsequent to the issue of this notice that the petitioners in C.Ws 79 and 80 of 1971, received the further notice under section 126 from the Municipal Corporation of Delhi still further enhancing the rateable value from Rs. 55,070.00 to Rs. 82,840.00. The reasons for making the alterations in the said assessment list were stated to be :

'(1)addition of a room and big godown on the top floor (which is denied); (2) erroneously valued.'

(5) With reference to CWs 79 to 80 of 1971 one of the preliminary objections taken was that the petitioners had no locus standi to file the Writ Petitions. But this objection is without substance because the impugned notice dated 6-1-1971 was itself issued to the petitioner in C.W. 80 of 1971 and the petitioner in C.W. 79 of 1971 is the widow of Shri Amar Nath Kapur, the brother of the petitioner in C.W. 80 of 1971.

(6) Yet another preliminary objection raised is that the petitiners have not exhausted the remedies under the Delhi Municipal Corporation Act of 1957 by preferring an appeal to the District Judge.

(7) It may be noticed that the notice to show cause why the assessment should not be enhanced was issued with reference to Nos. 35 and 36 Faiz Bazar; the assessment has not been completed. There could be no occasion yet for filing an appeal which can be only after the assessment is made. The petitioners claim that the issue of the notice itself is illegal. In these circumstances there can be no objection, of a preliminary nature, to the maintainability of the C.Ws 79 & 80 of 1971. Even regarding the other Writ Petitions the petitioners in all of them, as well as in C.Ws 79 & 80 have invoked the jurisdiction of this court under Art. 226 of the Constitution to declare that the basis on which the assessment proceeds is illegal as being opposed to the provisions of the Delhi Rent Control Act, 1958. It is not claimed for the Municipal Corporation that the rateable assessment is being made on any footing other than what the owner is said to receive byway of agreed rent from the tenants when the standard rent had not been fixed by the Rent Controller. According to the petitioners in these Writ Petitions that is not permissible; what is. permissible is on the basis of the reasonable cost of construction plus the market price, if any, of the land. In these circumstances there seems to be no necessity to make the petitioners wait till the assessments are completed or to go through the process of filing appeals against such assessments.

(8) Nor do I see much force in the contention that any of the petitioners' is estopped from raising any contention, by way of filing objections to the proposed rateable value, especially for the year 1970-71 when the assessment list for 1970-71 was authenticated on the 10th April, 1970 and public notice to that effect was also published in the newspapers. If the authentication was not legally made I do not see how the Commissioner would be barred from looking a fresh into those assessments.

(9) It seems to me, thereforee, that there is no substance in any of the preliminary objections and that these Writ Petitions have to be disposed of on the merits.

(10) The interesting question that falls for decision in these Writ Petitions is whether the rateable value of any land or building assessable to property taxes under the Delhi Municipal Corporation Act, 1957 must be made in conformity with the criteria laid down by the Delhi Rent Control Act, 1958 regardless of whether the 'standard rent' for the same has been actually fixed by the rent Controller or not. The relevant provisions of the Delhi Municipal Corporation Act as well as of the Delhi Rent Control Act (which for purposes of convenience will be referred to hereafter as the Municipal Act and the Rent Act, respectively) may now be noticed. Section 1(2) of the Municipal Act states that except as provided in the Act it extends only to Delhi; Delhi has been defined by section 2(10) of the Act as meaning the entire area of the Union territory of Delhi except New Delhi and Delhi Cantonment.

(11) The components arid rates of property taxes have been prescribed by section 114 of the Act; section 115 provides for the premises in respect of which property taxes are to be levied.

(12) Section 116 reads as follows:

'116.(1) The rateable value of any land of building assessable to property taxes shall be the annual rent at which such land or building might reasonably be expected to let from year to year less; (a) a sum equal to ten per cent of the said annual rent which shall be in lieu of all allowances for costs of repairs and insurance, and other expenses, if any, necessary to maintain the land or building in a state to command that rent, and (b) the water tax or the scavenging tax or both, if the rent is inclusive of either or both of the said taxes; Provided that if the rent is inclusive of charges for water supplied by measurement, then, for the purpose of this section the rent shall be treated as inclusive of water tax on rateable value and the deduction of the water tax shall be made as provided therein: 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, the rateable value thereof shall not exceed the annual amount of the standard rent so fixed. (2) The rateable value of any land which is not built upon but is capable of being built upon and of any land on which a building is in process of erection shall be fixed at five per cent of the estimated capital value of such land. (3) All plant and machinery contained or situate in or upon any land or building and belonging to any of the classes specified from time to time by public notice by the Commissioner with the approval of the Standing Committee, shall be deemed to form part of such land or building for the purpose of determining the rateable value thereof under sub-section (1) but save as aforesaid no account shall be taken of the value of any plant or machinery contained or situated in or upon any such land or building.'

(13) Section 1(2) of the Rent Act, 1958 provides that it shall apply to the areas included within the limits of New Delhi Municipal Committee and the Delhi Cantonment Board and to such urban areas within the limits of the Municipal Corporation of Delhi as are specified in the First Schedule. The First Schedule mentions the following areas:

1.the Municipality of New Delhi excluding the area specified in the First Schedule to the Delhi Municipal CorporationAct, 1957; 2. the Municipal Committee, Delhi; 3. the Notified Area Committee, Civil Station, Delhi; 4. the Municipal Committee, Delhi-Shahdara; 5. the Notified Area Committee, Red Fort; 199 6. the Municipal Committee, West Delhi; 7. the South Delhi Municipal Committee; 8. the Notified Area Committee, Mehrauli.

(14) The Central Government may also extend the operation of the Rent Act or any provision thereof to any other urban area included within the limits of Municipal Corporation of Delhi or exclude any area from the operation of the Act or any provision thereof. It is not disputed that the Delhi Rent Act of 1958 applies only to a part of the Union territory of Delhi to which the Delhi Municipal Corporation Act, 1957 applies.

(15) Section 2(k) defines standard rent, in relation to any premises, as meaning the standard rent referred to in section 6 or where the standard rent has been increased under section 7, such increased rent.

(16) Section 4 reads as follows:

'4.(1) Except where rent is liable to periodical increase by virtue of an agreement entered into before the 1st day of January, 1939, no tenant shall, not withstanding any agreement to the contrary, be liable to pay to his landlord for the occupation of any premises any amount in excess of the standard rent of the premises, unless such amount is a lawful increase of the standard rent in accordance with the provisions of this Act. (2) Subject to the provisions of sub-section, (1), any agreement For the payment of rent in excess of the standard rent shall be construed as if it were an agreement for the payment of the standard rent only.'

(17) Section 5 prevents any person claiming or receiving any rent in excess of the standard rent, notwithstanding any agreement to the contrary except to the extent provided by the Act. Section 6 provides that subject to the provisions of sub-section (2) thereof, standard rent in relation to any premises means that what has been specifically laid down in (A) in respect of residential premises, and (B) in respect of other than residential premises. It is claimed for the petitioners that the present cases come under section 6-B(2)(b) and that since none of the earlier provisions applied the rent should be calculated on the basis of 7'%, per annum of the aggregate amount of the reasonable cost of construction and the market price of the land comprised in the premises on the date of the commencement of the construction (the market price of the land being stated to be nil on account of the same being only lease-hold land). It would not be necessary to determine exactly what the market value should be if the view contended for by the petitioners is to be accepted; that is not the basis on which either the assessments or the impugned notice in C.Ws 79 & 80 of 1971 have proceeded. Even if the premises were residential section 6(A)(2)(b) provides a similar 7'% per annum of the aggregate amount of the reasonable cost of construction and the market price of the land comprised in the premises on the date of the commencement of the construction. The percentage would be 8% if the annual value exceeds Rs. 1,200.00. It would not make any practical difference, thereforee, whether the properties in question concerned are residential or other than residential.

(18) Section 9 of the Rent Act gives the power to the Controller to fix the standard rent in the prescribed manner; he shall fix an amount as the standard rent which appears to him to be reasonable having regard to the provisions of section 6 or 7 where there is any increase inrent. While fixing the standard rent he shall specify a date from which the standard rent so fixed shall be deemed to have effect; in B no case, however, the date so specified shall be earlier than one year prior to the date of the filing of the application for the fixation of the standard rent. The limitation for application for fixation of standard rent has also been fixed bysection 12; it is two years from the date of the commencement of the Act in the cases of premises let out earlier and in those cases where the letting is subsequent to the Act, within two years from the date of the letting. The Controller could entertain an application even after the period of two years if he is satisfied that the applicant was prevented by sufficient cause from filing the application in time. Section 13 provides for refund of rent, premium etc. not recoverable under the Act, that is to say, in cases where any sum has been paid, whether before or after the commencement of the Act, in contravention of any of the provisions of the Rent Act, 1958 or even the earlier Delhi & Ajmer Rent Control Act of 1952, which the Rent Act of 1958 had repealed under section 57. An application for such refund, however, could be made within a period of one year from the date of such payment; on such an application the Controller could order the landlord to refund such sum or the value of such consideration to the tenant or order adjustment of such sum or the value of such consideration against the rent payable by the tenant.

(19) Section 48 of the Act imposes penalties for persons contravening any of the provisions of section 5; they shall be punishable as in the case of contravention of the provisions of sub-section (1) of section 5 (which provides that no person shall claim or receive any rent in excess of standard rent with a certain arrangement.)

(20) Section 50 ousts the jurisdiction of the civil court from entertaining any suit or proceeding in so far as it relates to the fixation of standard rent in relation to any premises to which the Rent Act, 1958 applies.

(21) The leading case on this subject is the Corporation of Calcutta v. Smt. Padma Debi and others : [1962]3SCR49 where section 127(a) of the Calcutta Act, 1923 fell for consideration. The said Act of 1923 was replaced by the Calcutta Municipal Corporation Act, 1951. Section 168(1) of the Calcutta Municipal Corporation Act of 1951, corresponding to section 127(a) of the Calcutta Municipal Act of 1923, is identical with the present section 116 of the Delhi Municipal Corporation Act; it reads as follows:

'S.168(1): For the purpose of assessment to the consolidated rate, the annual value of any land or building shall be deemed to be the gross annual rent at which the land or building might at the time of assessment be reasonably expected to let from year to year less; Provided that in respect of any land or building the standard rent of which has been fixed under section 9 of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950, the annual value thereof shall not exceed the annual amount of the standard rent so fixed.'

(22) The above proviso was not there in S.127(a) of the 1923 Act. In Smt. Padma Debi's case(1) Subba Rao, J. (as his Lordship then was) speaking for the Supreme Court observed that the rental value under the Calcutta Act of 1923 could not be fixed higher than the standard rent under the West Bengal Rent Control Act of 1950. The actual question in that case was whether the annual valuation should be fixed on the basis of the monthly value of the premises (Rs. 1,450.00), at which the premises was actually taken on rent or the standard rent (Rs. 632 and Annas 8 per month) fixed by the Rent Controller. Section 127(a) also contained the words 'gross annual rent at which the land or building might at the time of assessment reasonably be expected to be let from year to year.' The Rent Control Act had come into force before the assessment was finally completed by the Corporation. It was, thereforee, held that the Corporation had no power to fix the annual value of the premises higher than the standard rent.

(23) The Supreme Court had occasion to consider Section 168(1) of the Calcutta Municipal Corporation Act, 1951 in Corporation CalCutta v. Life Insurance Corporation of India : [1971]1SCR249 . Under a lease the property was to fetch a monthly rental of Rs. 2,000.00 which by mutual agreement was raised to Rs. 2,800.00 per month. The tenant had sublet a major part of the premises receiving an aggregate amount of Rs. 4,520.00. After referring to Smt. Padma Debi's case(1) and section 168(1) of the Calcutta Municipal Corporation Act, 1951, Shah, J. (as his Lordship then was) observed as follows:

'COUNSELurged that under the proviso, gross rent for which the land or building might reasonably be expected to let is subject to the maximum limit of the annual standard rent, only in those cases in which standard rent under section 9 of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950 is fixed by order of the Controller, and since no such rent is fixed by order of the Controller, the proviso to section 168 does not apply, and the assessing authority was, in determining the annual value, competent to take into account all relevant circumstances including the rent at which the premises were or could be sublet. 7. It is true that the assessment of annual value in Smt. Padma Debi's case (supra) was for the year 1950-51 and Section 127(a) of the Calcutta Municipal Act, 1923, was in these terms: the annual value of land, and the annual value of any building, erected for letting purposes or ordinarily let, shall be deemed to be the gross annual rent at which the land or building might at the time of assessment reasonably be expected to be let from year to year, less. That section did not contain a proviso in the form of the proviso to Section 168(1) of the Calcutta Municipal Corporation Act, 1951. But the enactment of the proviso does not alter the law. This Court in Smt. Padma Debi's case (supra) interpreted 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), and 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. 8. By the addition of the proviso, in our judgment the meaning of the expression 'gross rent at which the land or building might reasonably be expected to let' is not altered. In the present case, there is no order of the Controller fixing standard rent under section 9 of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950, but the standard rent stands determined by the definition of that expression in Section 2(10) (b) of that Act, which provides (omitting parts not relevant); 'standard rent' in relation to any premises means:- (b) where the rent has been fixed under Section 9 the rent so fixed, or at which it would have been fixed if application were made under the said section.' 9. We are thereforee of the view that the High Court was right in assessing the annual value on the basis of the standard rent as statutorily determined. It is common ground that the standard rent of the premises was Rs. 2,800.00 per month by virtue of the second part of Section 2(10)(b).'

(24) The Supreme Court had considered a case of rateable assessment rising under section 82 of the Madras District Municipalities Act, 1920 in Guntur Municipal Council v. Guntur Rate Payers Association : [1971]2SCR423 Section 82(2) of the said Act, which did not contain any reference to any Rent Act, makes provision for the fixation of annual value according to the rent at which lands and buildings are reasonably to be let from month to month or from year to year less the specified deduction. And if the building is of a class not ordinarily let and in the opinion of the Assessing Authority the gross annual rent could not be estimated the annual value shall be deemed to be 6% of the total of the estimated value of the land and the estimated cost of constructing the building less deduction of reasonable amount not exceeding 10^ for depreciation. Grover, J' speaking for the Supreme Court, held that the Municipality was not free to assess an arbitrary rental value and was bound by the fair or the standard rent which would be payable for a particular premises under the Rent Act in force during the .year of assessment. The holding in Smt. Padma Devi's case was not questioned; the only point argued before the Supreme Court was that under the Rent Act in question only the fixation of fair rent of the building debarred the landlord from claiming or receiving the payment of any amount in excess of such fair rent. By the same token, it was contended that even if the building was not let out to a tenant but in the self-occupation of the landlord it would fall within the same principle if no fair rent had been fixed in respect of it. Grover, J. rejected the said argument observing as follows:

'WEare. unable to agree that on the language of section 82(2) of the Municipalities Act any distinction can be, made between buildings the fair rent of which has been actually, fixed by the Controller and those in respect of which no such rent has been fixed. It is perfectly clear that the landlord cannot lawfully expect to get more rent than the fair rent which is payable in accordance with the principles laid down in the Act. The assessment of valuation must take into account the measure of fair rent as determinable under the Act. It may be that where the Controller has not fixed the fair rent the municipal authorities will have to arrive at their figure affair rent but that can be done without any difficulty by keeping in view the principles laid down in section 4 of the Act for determination affair rent. This would, of course be with regard to the assessment of valuation for the period subsequent to the coming into force of the Act. '

(25) A Division Bench of this Court consisting of Andley, J. and myself was concerned in Municipal Corpn. v. Lakshmi Nflrain Singh 1970 R.C.R. 230 with the question whether under the provisions of Punjab Municipal Act (3 of 1911) the municipal assessment of the property could bemade contrary to the provisions of the Delhi and Ajmer Rent Control, Act, 1952, Schedule Ii, which in the case of letting prior to 1952 had specifically provided that the agreed rent was, until any other rent was fixed by the Controller, the standard rent. The question was answered in favor of the assessed. An earlier decision, also by a Division Bench of this Court consisting of Hardayal Hardy and V.S. Deshpande, JJ' in Vidya Prakash v. Municipal Committee, Simla 1969 P.L.R.. 179,(s) which .dealt with a rateable assessment under the Punjab Municipal Act in the context of the application of the East Punjab Rent Restriction Act (3 of 1949), was distingrfisheid by us on the ground that the provisions of East Punjab Rent Restrictions Act were totally different from those of the Delhi and Ajmer Rent Control Act of 1952. Since this distinction is important for the 'present discussion reference may be made to the following passages in the judgment of V.S. Deshpande, J. who spoke for the Division Bench, pertaining to the East Punjab Urban Rent Restriction Act, 1949

'6.The East Punjab Urban Rent Restriction Act, 1949 does not lay down that the fair rent of every building shall befixed by the Rent Controller or that it is illegal for a landlord and a tenant to agree to a rent which is higher than some national fair rent though none is determined. The provisions of the said Act are limited in their operation. It is only if an application for the determination is made by a tenant or a landlord to the Collector that the fair rent is determined by the latter. Once such a fair rent is determined, the Assessing Authority under the Punjab Municipal Act, 1911 is bound to take such a fair rent as the basis of the reasonable letting value. 8. On the Other hand, the East Punjab Urban Rent Restriction Act, 1949 does not prohibit a landlord from recovering market rent from the tenant which may be above the fair rent if the fair rent has not been fixed under the Act. The observations of the Supreme Court in paragraphs 6 and 7 of the Corporation of Calcutta's case (Smt. Padma Debi's case) would not, thereforee, apply to a case in which fair rent has not been fixed under the East Punjab Urban Rent Restriction Act, 1949. 10. We would like to emphasise that the definition of the reasonable letting value in the Punjab Municipal Act, 1911 and the fair rent in the East Punjab Urban Rent Restriction Act, 1949 are fundamentally different. ............. The, reason why the fair rent fixed by the Controller under the Rent Restriction Act has to be taken as the basis for reasonable letting value by the Assessing Authority under the Punjab Municipal Act 1911, is not that the criteria for the determination of the fair rent are in any way relevant for the determination of reasonable letting value; these criteria are entirely different from each other. The only reason why the basis of the reasonable letting value has to be the fair rent when such fair rent has been fixed is that the law prohibits the parties from agreeing to any other rent and, thereforee, it is not reasonable to expect that the letting value of such a house can be anything other than the fair rent. 11. If you bear in mind this reason why the provisions of rent Restriction Act became relevant in the determination of the reasonable letting value of a house then it would be immediately clear that they can be relevant only when the law makes such relevance necessary. thereforee, when the Rent Restriction Act does not apply at all to the case of a building as the present one, the very relevance of the provisions of the Rent Restriction Act disappears. For, the only law applicable then is the Punjab Municipal Act, 1911.'

(26) V. S. Dashpande, J. sitting singly considered the provisions of the Delhi Rent Control Act, 1958 simplicities relating to the fixation of standard rent in Manmohan Chawla v. Jaswant Singh. His Lordship pointed outthat the standard rent could be fixed only on an application made to the Controller and that too within the period of limitation as provided by section 12 of the Act. This decision was affirmed by the Suprem Court in M. M. Chawla v. Sethi 1969 Rent Control Journal 130. The scheme of the Act was stated to be entirely inconsistent with standard rent being determined otherwise than by order of the Controller. The prohibition against recovery of rent in excess of the standard rent is said to apply only from the date on which the standard rent is determined by order of the Controller and not before that. The same was followed by B.C. Misra, J. in Manohar Lal v. Smt. Kaushalya Devi (S.A. O. 224 of 1971 decided on 29-7-1971). This case arose under section 13 of the Rent Act of 1958 as to whether an application can be made to the Controller for refund of any sum paid in excess and that is in contravention of any of the provisions of the Rent Act of 1958 or of 1952, the same shall be refunded or adjusted and is payable if such an application is made within one year from the date of such payment. Misra, J. construed this provision to mean that such an application could be made within a year of the fixation of standard rent even though the payments were made earlier and explained that the Supreme Court had rejected, in M.M. Chawla v. Sethi, the view that standard rent of a given tenement is by virtue of section 6 of the Act a fixed quantity and that the liability for payment of a tenant is circumscribed thereby even if the standard rent is not fixed by the order of the Controller.

(27) Shri P.N. Lekhi does not dispute the position that between the landlord and the tenant the agreed rent would have to be paid in the absence of standard rent being fixed by the Rent Controller since the standard rent under the said Act could be fixed only by making an application under section 9 to the Rent Controller and subject to the conditions and limitations laid down under the said Act. There is further limitation under section 9(7) of the Act that the Rent Controller could in no case specify that the standard rent shall be operative for a period of more than one year prior to the date of the filing of the application for the fixation of the standard rent. But Shri Lekhi contends that in the matter of the Delhi Municipal Corporation determining the amount of tax payable in respect of property situate, not merely within the Union Territory of Delhi but in the areas to which the Rent Act of 1958 applies, the Corporation is bound to heed the provisions of the Rent Act regardless of whether the standard rent in respect of any property has been fixed or not. In support of this contention he relies on the observations, quoted earlier, in the Corporation of Calcutta and the Guntur Municipal Council cases. Referring to the contention put forward that the Proviso to section 168(1) of the Calcutta Municipal Corporation Act of 1951, similar to the second proviso to section 116(1) of the Delhi Municipal Corporation Act, 1957 was not there in section 127(a) of the Calcutta Municipal Act, 1923, which alone fell for consideration in Smt. Padam Debi's case. Shah, J. (as his lordship then was) observed as follows: 'But the enactment of the proviso does not alter the law.' X X X X X X

'PARA7: By the addition of the proviso in our judgment the meaning of the expression 'gross rent at which the land or building might reasonably be expected to be let is not altered.' In the absence of any order of the Controller fixing the standard rent in that case reference was made to the relevant provisions in the Rent Act of that area defining 'standard rent' as including' that which had either been fixed by the Controller or at which it would have been fixed if an application were made under this section. In the latter case section 82 of the Madras District Municipalities Act of 1920 did not even contain any reference to the assessment having to be made by reference to the provisions of.any Rent Act for at the time when the said Act was passed there was none; even after the rent was statutorily controlled in the said area no further amendment was made of section 82 by incorporating therein any reference to the Rent Acts of the area as was done in Calcutta or as it has been done in Delhi. In Smt. Padma Devi's case Subba Rao, J. traced the history of the Rent Acts in Calcutta and was unable to spell out any implied prohibition from making reference to the Rent Act despite absence of any express reference to it in section 127(a) of the Calcutta Municipal Act 1923. By reason of the proviso added to the corresponding section 168(1) of the Calcutta Municipal Corpn. Act of 1951, the position, probably became even stronger for theassessed; it was observed by Shah, J. that the proviso did not alter the law. Shri P.N. Lekhi also seeks to deprive some assistance from some observations made by me in C.W. 12-D of 1962 - Ram Parshad and others v. Municipal Corporation of Delhi decided on 19th January, 1971. That was also a case which was similar to the Municipal Corporation of Delhi v. Lakshmi Narain Singh in that the provisions Of the Delhi Rent Act, 1952 was applicable, but the discussion was in the context of section 116 of the Delhi Municipal Corporation Act of 1957. I followed the decision of the Division Bench in Lakshmi Narain Singh's case and also referred to the decisions of the Supreme Court in the Guntur Municipal Council case and Smt. Padma Devi's case. The contention which was repelled by me was that the second proviso to section 116(1) of the Delhi Municipal Corporation Act would apply only in respect of land or building where the standard rent had been fixed by the Controller. In repelling these arguments I had relied upon the Second Schedule of the Rent Act of 1952 which provided that the agreed rent, in the case of letting prior to 1952, was the standard rent until it was varied by the Rent Controller. Neither my decision, sitting singly, in Ram Parshad nor the one by the Division Bench in Lakshmi Narain Singh would cover fully the present case since it was only held in those cases that the Delhi & Ajmer Rent Control Act, 1952 has statutorily fixed the standard rent, as per the Second Schedule of this Act. In Lakshmi Narain Singh the Punjab Municipal Act of 1911 was involved, whereas in Ram Parshad, it was the second proviso to section 116(1) of the Delhi Municipal Corporation Act. The argument that the Municipal Corporation was not precluded from taking into account the actual rent collected in the absence of the same being 'fixed' by the controller under the provisions of the Delhi & Ajmer Rent Control Act, 1952 was repelled by me in Ram Parshad.

(28) Shri T.C.B.M. Lal urged that since the Municipal Corporation under s. 116(1) of the Municipal Corporation, Act should have regard to the annual rent at which the property may reasonably be expected to let from year to year there was no other limitation in this regard except what had been expressly imposed by the second proviso to section 116(1), namely, that only in cases where the standard rent had been 'fixed' under the Delhi & Ajmer Rent Control Act, 1952, the Corporation was limited to a consideration of the standard rent so 'fixed'. It is worth recalling that there was no similar proviso in section 127(a), of the Calcutta Municipal Act, 1923 it was introduced into the corresponding section 168(1) of the Calcutta Municipal Corporation Act, 1951. Shah, J. had observed in Corporation of Calcutta v. Life Insurance Corporation of India, in more than one place, that the above said proviso had not altered the law; his lordship had further pointed out that the standard rent stood determined by the definition of that expression in section 2(10)(b) of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950. It is worth comparing section 2(10)(b) of the West Bengal Rent Act, 1950 with the Delhi Rent Acts of 1952 and 1958. In the Calcutta Rent Act, standard rent means, where the rent has been fixed, the rent so fixed, or at which it could have been fixed if application were made under, this Act. l.t was on the. basis of this provision that Shah, J. upheld the decision of the High Court assessing the annual value on the basis of the standard rent as statutorily determined.

(29) The definition of standard rent in the Delhi and Ajmer Rent Control Act 1952 was as follows:

(1)where the standard rent has been fixed by the court under section 8 the rent so fixed; (2) where the standard rent has not been fixed under section 8, the standard rent of the premises as determined in accordance with the provisions of the Second Schedule.

(30) In the Delhi Rent Act of 1958 'standard rent' means the standard rent referred to in section 6. Section 6 of the Delhi Rent Act of 1958 reads as follows:

(IT would be sufficient to set Out section 6(1)(A) alone which applies to 'residential premises; (B), which applies to premises other than residential, need not be separately set out because the provisions in this regard also are, similar).

'6.(L)Subject to the provisions of sub-section (2), 'standard rent.', in relation to any premises means:- (A) in the case of. residential premises- (1) .where such premises have been let out at any time before the 2nd day of June, 1944,- (a) if the basic rent of such premises per annum does not exceed six hundred rupees; the basic rent; or (b) if the basic rent of such premises per annum exceeds six hundred rupees, the basic rent together with ten per cent of such basic rent; 208 (2) where such premises have been let out at any time on or after the 2nd day of June, 1944,- (a) in any case where the rent of such premises has been fixed under the Delhi and Ajmer- Merwar Rent Control Act, 1947, or the Delhi and Ajmer Rent Control Act, 1952,- (i) if such rent per .annum does not exceed twelve hundred rupees, the rent so fixed; or (ii) if such rent per annum exceeds twelve hundred rupees, the rent so fixed together with ten per cent of such rent; (b) in any other case, the rent calculated on the basis of seven and one-half per cent per annum of the aggregate -amount of the reasonable cost of construction and the market price of the land comprised in the premises on the date of the commencement of the construction: Provided that where the rent so calculated exceeds twelve hundred rupees per annum this clause shall have effect as if for the words 'seven and one half per cent', the words 'eight and one fourth per cent,' had been substituted'

(31) The present cases do not fall under any of the other clauses except (2)(b). It is, thereforee, stated for the assesseds that the rent has to be calculated on the basis of 7' per cent per annum of the aggregate amount of reasonable cost of construction alone and that the leasehold land in these cases does not have any market value. It is not necessary for the purpose of these cases to go into the reasonable cost of construction and market price of land, if any. What is sought in these petitions is only the quashing of the impugned rateable assessment and issue of notices for making such assessments on the footing of the actual rent for which the properties in question have been let out in the absence of any standard rent having been fixed by the Rent Controller. Until such standard rent is fixed, runs the argument of Shri P.N. Lekhi, the only basis on which the Corporation can proceed to make the assessment is on the basis of the aggregate amount of reasonable cost of construction and the market price of the land, if any. This argument has been further amplified by Shri Lekhi as follows; unlike the older Municipal Corporation Acts which did not make any reference to the restrictive provisions of Rent Acts (for the simple reason that such restrictive Rent Acts did not exists at the time of the older enactments) the Calcutta Act, 1951, on which model the Delhi Municipal Corporation Act, 1957 has been based, introduced the concept of the rateable assessment only following but not being contrary to the provisions of the restrictive Rent Act in operation in the concerned area. When the Delhi Municipal Corporation Act, 1957 was passed the Delhi & Ajmer Rent Control Act, 1952 was in operation; this has been subsequently replaced, with a number of modifications, by the Delhi Rent Control Act of 1958. The Delhi Rent Control Act, 1958 makes reference to the fixation of standard rent not only to be made under the Act of 1958 but also to the previous fixation under the Delhi & Ajmer Rent Control Act, 1952, or the previous Act of that name, of 1947 as well. The object in enacting the second proviso to section 116(1) was obviously to make the rateable assessment correspond to the position as it obtains by reason of the restrictive provisions of the Rent Act.

(32) It is also worth recalling that the Delhi Rent Act of 1958 applies only to a part of the area to which the Delhi Municipal Corporation Act, 1957 applies. There is force in the submission of Shri Lekhi that in interpreting the second proviso to section 116(1) of the Delhi Municipal Corporation Act, 1957 it must be so interpreted as will not lead to any discrimination, in the matter of making rateable assessment of property, even in the areas to which the Rent Act applies, between the buildings rented out and those which are self-occupied. It is a well-accepted principle of rating (vide Chapter 21, Ryde on Rating, 12th Edition and the General Rate Act, 1967) in the United Kingdom that when the statute requires the assumption that the property to be valued is to be let the fact that it is even occupied by the owner is immaterial. In such cases the test is what a hypothetical tenant would pay if he took the property on rent ( vide London County Council v. Erith and West Ham (1893) A.C. 562; R. v. School Board for London (1886) 17 Q.B.D. 738. This is so rigid, that Ryde goes to the extent of pointing out that the effect of the decision of the House of Lords in London County Council is that, even though it may be impossible in fact, the actual occupier should be a yearly tenant of the hereditament to be rated, still for the purpose of valuing that hereditament it must be supposed that the actual occupier is among the possible yearly tenants.

(33) The Act does not enable owner occupiers, or even landlords, to approach the Rent Controller for fixation of standard rent. It would be unreasonable, thereforee, to read into section 116(1) of the Delhi Municipal Corporation Act, 1957 any distinction between buildings of which standard rent has been fixed and those where it has not been fixed. No rational basis has been suggested for making such a distinction between the two. It is a well-accepted principle of statutory construction that a statute should be so construed as to avoid grave doubt as to its constitutional validity, that is to say, it should be given an interpretation which supports its constitutionality. The courts would deem towards constitutionality of the enactment (vide Express Newspapers Limited v. Union of India, 1968 S.C. 578. Even the expression in section 116(1) 'might reasonably be expected to let' has to be understood in the context of the Delhi Rent Control Act, 1958 which has statutorily defined standard rent, under section 6(1), as what would apply in the present case-the rent calculated on the basis of 7' or 8 per cent per annum as the case may be, of the aggregate amount of the reasonable cost of construction and the market price of the land. It is worth recalling that this provision, a residuary one, will come into operation, only, in the case of both residential as well as non-residential premises, if the' standard rent is not determinable by the application of the earlier provisions in section 6(A) or (B).

(34) Whatever may be the position as it obtains between the landlord and the tenant or the landlord being able to collect by way of agreementany rent for the property, subject only to the standard rent being fixed by an application made for that purpose and subject to the limitations imposed by the Rent Act, 1958, I can see no support for the view that the taxing authority can merely have regard to the actual rent that is being collected, when the standard rent has not been fixed by the Rent Controller and the other relevant provisions in the Rent Act do not apply and refuse to rateably assess the property particulariy at the owner's request on the basis of the rent calculated at the relevant percentage of the aggregate amount of cost of construction and market price of land, if any.

(35) The present cases focus attention, in a rather sharp form, on the question whether the rating authority can refuse when so demanded by the assessed, to base the assessment on a percentage of the aggregate value of the reasonable cost of construction and the market price of the land, if any, when the Delhi Municipal Corporation Act, section 116(1) second proviso,expressly says that the rateable value should not exceed the standard rent (in cases where it has been fixed, the rent so fixed) and section 6 of the Delhi Rent Act of 1958 contains a residuary clause (both in the case of residential and nonresidential premises) that it should be on the basis of a percentage of. the reasonable cost of construction and market price of land (if any) if the case does not come within the other clauses specially enumerated It is worth recalling that section 9(4) provides for the Rent Controller adopting the basis of rent of similar premises in similar locality, situation etc. if the case does not fall within the principles of section 6. The principles of section 6, where they apply, are sacrosanct and are binding on the Rent Controller when he fixes the standard rent; in other words, no discretion is given to him to eliminate the principles of section 6 unless they do not apply to any given case. Can the rating authority, then, avoid going into the principles of section 6? The answer to this question should obviously depend, in the first place, upon the construction of section 116(1) which contains the above second proviso. It has to be noticed that the second proviso does not say that the basis of the rateable value shall be 'as fixed' ; it only says that 'it shall not exceed' the amount of standard rent so fixed. The authority of the Supreme Court seems available to say that the rating authority is not confined to cases where the standard rent as it has been actually fixed by the Rent Controller, in other words, the rating authority must have regard to considerations which are both relevant and appropriate for fixing the standard rent, which in these cases include a percentage of the reasonable cost of construction plus the market price of the land, if any. In the present cases it is common ground that the buildings in question were let out subsequent to 2nd June, 1944 and that the rents of the premises have not been fixed.

(36) In order to fully appreciate the requirements of a situation like this it would be helpful to know how rating authorities were required to base their assessment on annual value .alone, excluding the capital value. Wanchoo,J. (as his lordship then, was) speaking for the Supreme Court went into the history of the legislation concerning the subject, both in England and in India, in Patel Godhandas Hargovindas v. Municipal Commissioner, Ahmedabad : [1964]2SCR608 . (ii) The question in that ease was whether sections 73 and 75 of the Bombay Municipal Boroughs Act, 1925 permitted the Rule (350 A) for rating lands at one per cent of the valuation based on capital. ' Having regard to the legislative history of England and India up to 1925 the rule was, struckdown (Sarkar, J: dissenting) holding that the expression 'rate' employed in the said Act had itself acquired aspecial meaning, to convey a tax for local purposes imposed by local authorities. It was in this context it was observed that the annual value of lands or buildings on or in connection with which it was imposed could be arrived at in one of three ways:

(1)actual rent fetched by land or building where it is actually let; (2) where it is not let rent based on hypothetical tenancy, particularly in the case of buildings; and (3) where either of these two modes are not available byvaluation based on capital value from which actual value has to be found by applying a suitable percentage which may not be the same for lands and buildings.

(37) It was urged before the Supreme Court, in that case, that it really made no difference whether the rate was levied at a percentage of the capital value or as a percentage of the annual value arrived at on the basis of capital value by fixing a certain percentage of the annual value arrived at on the basis of capital value as the yield of the year. Dealing with this argument his lordship observed as follows: 'Mathematically, thereforee, it may be possible to arrive at the same amount of the rate payable by an occupant of land, whether the rate is fixed at a particular percentage of the annual value. But this identity would not in our opinion make any difference to the invalidity of the method of fixing the rate on the capital value directly. If the law enjoins that the rate would befixed on the annual value of lands and buildings, the municipality cannot fix it on the capital value and then justify it on the ground that the same result could be arrived at by fixing a higher percentage as the rate in case it was fixed in the right way on the annual value. The only question thereforee is what does the law enjoin on the rating authority-does it permit recourse to the capital value for this purpose?'

(38) It is specially appropriate to the present question that Wanchoo, J. discussed the amendment, of the year 1930, to Madras District Municipalities Act (V) of 1920 which enabled rating on the basis of capital value. Section 82 of the Act (of 1920), as unamended, had provided that the tax assessed on the owner on the basis of the annual value-deemed to be the gross annual rent at which it may be reasonably expected to let for month to month or year to year subject to certain deductions. The amendment said:

PROVIDED that- (a) in the case of certain building dealt with (i) and (ii) 'the annual value of the premises shall be deemed to be six per cent of the total value of the estimated value of the land and the estimated present cost of erecting the building after deducting for depreciation a reasonable amount which shall in no case be less than 10 per cent of such cost.' machinery and furniture having to be excluded from such valuation.

(39) Wanchoo, J. pointed out that this statutory inroad did not affect the legislative history and practice prior to 1925. What is then the position under the Delhi Municipal Corporation Act of 1957 read with the Rent Act of 1958 Being a fiscal enactment the relevant provisions of the Delhi Municipal Act, 1957 have to be construed liberally in favor of the assessed and strictly against the taxing authority. It is instructive to bear in mind what Roulette, J. said in Cane Brandy Syndicate v. Commissioners of Land Revenue 19211.K.B.64 'in a taxing Act one has to look at what is clearly said. There is no room for intendment. There is no equity about a tax. There is no presumption about a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.' Hegde, J. speaking for the Supreme Court in Messrs Baidyanath Ayurved Bhavan (P) Ltd. v. The Excise Commissioner, U.P. and others, (C.A. No. 1024 of 1970 decided on 14-10-1970(13) observed that in interpreting a taxing provision the courts should not ordinarily concern themselves with the policy behind the provision or even with its impact. The simple question, thereforee, is whether on the language employed by the second proviso to section 116(1) of the Delhi Municipal Corporation Act, 1957, are the considerations relevant for the fixation of standard rent made applicable to assessments by the rating authority If they are made applicable, as undoubtedly they have been, the further question can only be concerning the extent to which they have been made applicable. In other words, the question is whether the Rent Act has been made applicable only in cases where the standard rent has been fixed by the Controller It is worth recalling that the words employed are not that the rateable value should be determined on the basis of the standard rent 'as fixed' by the Controller but it shall only 'not exceed' the rent so fixed. This is some indication that this provision only concerns itself with the provisions of the Rent Act not being violated while determining the rateable value; this also seems to indicate further that whatever has been made relevant for fixing standard rent by the Rent Act, is also relevant under the Delhi Municipal Corporation Act. If section 6 of the Rent Act refers to the capital value becoming relevant in cases Other than those specially provided for by section 6 that also becomes relevant because the definition of standard rent in the Rent Act itself refers to section 6 of this Act. It is this way that consideration of capital value becomes relevant while rateably assessing property;. on the plain language of the second proviso, it seems to me, an enquiry into the capital value of the property cannot be burked where it becomes necessary under the Rent Act. It is worth repeating that the law (as laid down by the second proviso to section 116(1)) does not enjoin that the rating should be done only on the basis of annual value; it has, on the other hand, by making a reference to the Rent Act (of 1952) made the considerations relevant under that Act applicable to rating; that Act has been replaced by the Act of 1958. While under the former standard rent had been statutorily fixed in certain cases, as pointed out in the Division Bench case to which I was a party, the same has not been statutorily fixed but it is determinable by recourse to the principles mentioned in section 6 of the Rent Act of 1958 which gives no discretion at all in this respect to the Controller. It is worthrecalling that the Division Bench case, to which I was a party, arose under the Punjab Municipal Act, 1911 read with the Delhi and Ajmer Rent Control Act of 1952; the case decided by me singly, followed the above Division Bench case, which arose under the Delhi Municipal Act of 1957 read with the Delhi and Ajmer Rent Control Act of 1952. It may be noticed that the second Schedule of the Act legislatively determines that in the case of the first letting prior to 1952 the agreed rent itself is the standard rent unless the same is re-fixed by the Controller. Here then, is an instance where the fixing of standard rent contemplated by the second proviso to section 116(1) not being confined to cases where the standard rent is fixed by the Rent Controller; the second proviso made an express reference to the Rent Act of 1952.

(40) The further point that arises in these cases-not specifically decided either in the above Division Bench case or the one decided by me sitting singly-is whether in cases where the standard rent has not been fixed, either by the Controller or by the legislature (as under the Rent Act of 1952) the assessed is not entitled to ask the rating authority to fix the assessment on the basis of a percentage of the capital value It seems to me that the answer has to be in favor of the assessed when section 116(1) of the Delhi Municipal Corporation Act, 1957 is read with sections 2(K) and 6 of the Rent Act of 1958. If this is so, the impact of construing the provisions in this manner is hardly relevant. Even if I am wrong here that these are cases where it is permissible to look behind the reasons for placing the second proviso on the statute book-those reasons also may seem to support the above result. There has been a statutory inroad into the older concept of rating which has essentially based either on the actual rent paid or collected or what a hypothetical tenant may have been willing to pay as rent. The older concept has become corroded by reason of the restraints statutorily placed on the freedom of the landlord in the matter of Realizing the rent as he wished to have subject only to the ordinary law of economics- supply and demand. There has now been a marriage, as it were, between the principles of rating and restrictions imposed by Rent Acts. To effect a separation between the two sets of principles would. be to create an imbalance which would be manifestly harmful; it would, indeed, seem more appropriate to say that the marriage has become so indissoluble that the twin sets of considerations in this regard seem to have been made out of whole cloth., There may be no doubt cases where the tenants agree to pay rents in excess of what is permissible under the Rent Acts. But the remedy for this situation can only lie in the direction of the needed steps taken by the concerned parties to enforce the provisions of the Rent Acts; the remedy, it seems tome, cannot lie in the direction of the rating authority stepping in share the benefit of such rent, in excess of what is permissible under the concerned Rent Act. An argument of this kind is foreclosed by Smt. Padma Debt.

(41) If the assessing authority rateably assesses the property on the basis of the agreed rent even where it is not fixed by the Rent Controller the following anomalies will result:-There is no provision in the Act by which the assessed would be able to get any refund from out of the property taxes so assessed and paid if there is a fixation of standard rent by the Rent Controller at any later point of time. It is also common knowledge that proceedings for the fixation of standard rent take a fairly long time to decide finally, for there are usually appeals and second appeals against such fixation. Even during the pendency of proceedings for fixing standard rent the Municipal Corporation would be in difficulty in rateably assessing on the basis of the rent fixed, at a lower level, when the same is underchallenge owing to the pendency of an appeal or second- appeal, on account of there being no ' express provision for itself refunding to the assessed any portion of property tax paid if the standard rent is reduced subsequently inappeal or Second appeal, and there being no express provision for the owner (landlord) applying himself for fixing the standard rent, particularly in the case of self-occupation.

(42) There are well defined principles for calculating the reasonable cost of construction. These principles-authorised schedule of rates for various types of construction-are resorted to by the Rent Controller in the matter of fixing the standard rent calculated on the basis of the reasonable cost of construction. Even in respect of market price of land decisions of courts, which are binding on the assessing authority as well as the Rent Controller, offer sufficient guidelines. There is thus very little discretion left to the Rent Controller in this regard under the Delhi Rent Act of 1958-asituation totally different from what was seen, for instance, under the East Punjab Rent Restriction Act. It is by no means difficult for the assessing authority to ascertain the reasonable cost of construction and the market price of the land, if any. It is fairly clear that it could not make any arbitrary decision concerning the same. In other words, the assessing authority can call for and have tangible material before it while making such an assessment. The percentage is 71. on the aggregate value thus found except where it is 8 (i.e.) in cases where the rent so calculated exceeds twelve hundred rupees per annum; this result which would follow, arithmetically, from the computation of such aggregate value. It would also be' instructive to notice how other taxing authorities have approached the relevant provisions of restrictive Rent Acts.

(43) The following observations of Banerjee, J., speaking on behalf of the Division Bench, in Controller of Estate Duty, West Bengal, v. Radha Devi Jalan : [1968]67ITR761(Cal) appear appropriate in this context. 'In the operation of the various Rent Restriction Acts which have been operating in the State for now well over a quarter of a century the landlords have lost the right of letting out their houses at any rent they choose.. . the position now is that houses may be let out only on fair rents and not more. 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 which each building can be reasonably expected to let.' In that case the appellate authority had failed to take into account the operation of the Rent Restriction Act which was stated to make all the difference. It was observed that the Appellate Tribunal had rightly taken into account this aspect of the matter. In a context somewhat similar to the present case Chandrachud, J. held in Filmistan (P) Ltd. v. Municipal Commissioner, Bombay (1970) M L J 866 that despite the standard or the fair rent not being fixed by the authority exercising jurisdiction to fix it under the provisions of the Rent Act the same should be done by the rating authority which must have regard to the provisions of the restrictive Rent Act. I respectfully concur with the following observations of Chandrachud, J. relying on Padma Debi and repelling an identical argument (and the finding of the Chief Judge of the Small Causes Court in that case) that the contractual rent must be taken as the standard rent for fixing the annual letting value of the property, since the standard rent had not been fixed.

'THEratio of the decision of the Supreme Court is that the rateable value of a property cannot be fixed higher than its standard rent under the Rent Control Act. This is not dependent upon whether the standard rent has been actually fixed under the Rent Control Act. It is true, as observed by the learned Chief Judge, that in Bombay, the Small Cause Court alone could fix the standard rent and sitting as a persona designata he could not arrogate to himself that power. But once it is clear that for the purpose of determining the annual letting value of a property regard must be had to the standard rent of that property under the Rent Control Act, it must follow that while fixing the rateable value one must consider what would be the standard rate of the property. As persona designata the learned Chief Judge could not fix the standard rent under the Bombay Rent Act but there is a distinction between fixing the standard rent under the Rent Control Act and considering for the purpose of fixing the rateable value as to what the standard rent would be.' '

(44) The standard rent in these cases not having been 'fixed' by the Rent Controller and none of the other provisions, section 6 or section 9(4) of the Delhi Rent Act 1958, being applicable the assessment has to be on the basis of the appropriate percentage of the reasonable cost of construction and the market price of the land if any. The impugned notices in C.Ws 79 & 80 as well as the impugned demand in all the Writ Petitions are, thereforee, quashed. It is hereby directed that the Municipal Corporation will proceed to ascertain the reasonable cost of construction as well as the market price of the land, if any, and arrive at the rateable value for assessing the property tax on the basis of section 6 of the Delhi Rent Control Act, 1958.

(45) The Writ Petitions are accepted accordingly but in the circumstances without costs.


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