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Mehar Singh Vs. Municipal Corporation of Delhi - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtDelhi High Court
Decided On
Case NumberCivil Writ Petition No. 1735 of 1981
Judge
Reported inAIR1983Delhi259; 21(1982)DLT304; 1982RLR431
ActsDelhi Municipal Corporation Act, 1957 - Sections 116 and 126; Delhi Rent Control Act, 1958 - Sections 6
AppellantMehar Singh
RespondentMunicipal Corporation of Delhi
Advocates: I.K. Anand,; S.L. Bhatia and; Meera Bhatia, Advs
Cases ReferredJyoti Parsad v. Mcd
Excerpt:
tenancy - fixation of rent - section 6 of delhi rent control act, 1958 - standard rent for premises self occupied by assessed can be determined on basis of standard rent in respect of portion let out by assessed. - - 476/80 in this court which was disposed of by an order of a bench of this court dated 12th may, 1980. the bench was dealing with a batch of writ petitions was as to how the annual letting value of house property is to be determined for the purposes of arriving at the amount of house tax under the punjab municipal act as well as the municipal corporation of delhi act. this fiction enables one to overcome the difficulty that might be otherwise created in applying section 6 of the rent control act to a case of a property not let out. there is, however, no reason to limit..........d.l.t. 88 as applied by a bench of this court, property had to be determined with reference to the standard rent of the property which can be fixed under section 8 or section 9, as the case may be, of the delhi rent control act, 1958. it was pointed out by the bench that the respondents had not fixed the annual letting value by reference to section 6 or section 9 of the delhi rent control act. the impugned assessments were, thereforee, quashed and the respondents were directed to fix the annual letting value and arrive at the amount of tax payable by the petitioners in accordance with law after giving them an opportunity to lead evidence or give particulars so as to enable the respondents to arrive at the figure of the standard rent. in case the necessary particulars were not given the.....
Judgment:

S. Ranganathan, J.

(1) It will be convenient to dispose of all these four matters by a common order.

(2) The petitioner was the owner of a plot of land bearing No. A-116, Wazirpur Industrial Area, New Delhi which had beed acquired by the petitioner for Rs. 70.000.00 in December, 1974. up to the assessment year 1978- 79 its rateable value was taken at Rs. 8,920.00 and is not in dispute. For the assessment year 1978-79 also, initially the rateable value was taken at the same figure of Rs. 8,920.00 and the assessment list, on this footing, was authenticated on 8th May, 1978. Similarly for the assessment years 1979-80 and 1980-81 also, the assessment lists were authenticated on 5th May, 1979 and 9th July, 1980 respectively be adopting the assessment list of 1978-79.

(3) The revenue authorities having come to know that the assessed had put up a building on the plot of land and that the construction of this building had been completed, on 23rd March, 1979, a notice was served on the petitioner proposing to rateable value from Rs. 8,920.00 to Rs. 1,88,540.00 for the assessment year 1978-79. The assessed was called upon to file his objections to the above proposal on or before 28th April, 1979. The assessed is stated to have filed hii objections on 28th April, 1979. The objections of the petitioner wa rejected. Orders of assessment was passed on 6th March, 1980 determining the rateable value of the premises at Rs. 1,87,410.00 with effect from 1-4-1978. Demands were raised calling upon the assessed to pay house tax on the basis of the above rateable value, thereupon the petitioner filed Civil Writ No. 476/80 in this Court which was disposed of by an order of a Bench of this court dated 12th May, 1980. The Bench was dealing with a batch of writ petitions was as to how the annual letting value of house property is to be determined for the purposes of arriving at the amount of house tax under the Punjab Municipal Act as well as the Municipal Corporation of Delhi Act. The Bench pointed out that ai per the decision of the Supreme Court in the case of Dewan Daulat Rai Kapur v. New Delhi Municipal Committee 17 (1980) D.L.T. 88 as applied by a Bench of this Court, property had to be determined with reference to the standard rent of the property which can be fixed under Section 8 or Section 9, as the case may be, of the Delhi Rent Control Act, 1958. It was pointed out by the Bench that the respondents had not fixed the annual letting value by reference to Section 6 or Section 9 of the Delhi Rent Control Act. The impugned assessments were, thereforee, quashed and the respondents were directed to fix the annual letting value and arrive at the amount of tax payable by the petitioners in accordance with law after giving them an opportunity to lead evidence or give particulars so as to enable the respondents to arrive at the figure of the standard rent. In case the necessary particulars were not given the respondents were to fix the standard rent in accordance with the provisions of Section 9(4) of the Delhi Rent Control Act.

(4) In pursuance of the directions of this Court in Cw 476/80 the petitioner filed objections on 3rd December, 1980 starting that a part of the building had been let out to a tenant with effect from 1st August, 1978 and that the rest of the building remained vacant and that in the circumstances the rateable value should be determined on the cost basis and not under Section 6(2)(b) of the Delhi Rent Control Act. The assessed also preferred objections on similar lines to the demand raised for 1980-81 and the assessment list proposed for the assessment year 1981-82.

(5) The objections preferred by the petitioner for the assessment year 1978-79 and 1979-80 and those for the assessment year 1980-81 and 1981-82 were decided by the second respondent on 30th May, 1981. Referring to the judgment of this court in the cases of Sailesh Jain v. Mcd (CW 918/80 dismissed in liming on 30th September, 1980) and Jyoti Parsad v. Mcd (CW 1122/80 dismissed in liming on 10th November, 1980) respondent No. 2 rejected the contentions of the petitioner. He found that a part of the premises of the extent of 17978 sq. ft. had been let out for Rs. ll,000.00 per mensemand that the self-occupied portion with the assessed was 4533 sq. ft. He, thereforee, calculated the standard rent for the entire property at Rs. l,87,410.00 . The assessed petitioner challenges the order dated 30th May, 1981 in these four writ petitions covering the four assessment years 1978-79, 1979-80,1980.81 and 1981-82.

(6) So far as the assessment years 19 79-80 and 1980-81 are concernned, objection taken on behalf of the petitioner is that the determination dated 30th May, 1981 enhancing the rateable value from Rs. 8,920.00 contained in the authenticated assessment list to Rs. 1,87,410.00 without the issue a specific notice under Section 126 was illegal and contrary to the terms of Sections 124 to 127 of the Delhi Municipal Corporation Act. This contention need not detain us as the matter is covered by a Full Bench decision of this Court in the case of Lok Kalyan Samiti v. Mod : AIR1978Delhi189 . The Full Bench has held that once a notice under Section 126 proposing an increase of the rateable value in respect of the land or building is given and the assessment list for the year is amended in pursuance of the notice, it is not necessary to issue notice under Section 126 for the subsequent years and the adoption of the rateable value for any subsequent year will automatically mean the adoption of list of the earlier year as amended consequent on the revision. There is, thereforee, no force in the contention of the learned counsel for the petitioner that the order dated 30th May, 1981 is invalid on this score.

(7) The more important objection which was argued forcibly by Sri Anand, counsel for the petitioner, was that the determination of the rateable value in respect of the portion of the premises occupied by the assessed on the basis of the rent at which a portion of the property had been let out is not in consequence with the decision of the Supreme Court in Dewan Daulat Rai's case. The learned counsel's contention is that in respect of this portion of the property the rateable value has to be determined on the basis of the cost of the land and cost of the construction in accordance with the provisions of Section 6(1)(B)(2)(b) of the Delhi Rent Control Act. He submits that the respondents have taken the rateable value by applying the provisions of Section 6(2)(b) of the above Act which was not applicable and that the determination could not also be sustained by reference to Section 9(4) as that Sub-section can be brought into force only where the determination of the standard rent is not possible under Section 6.

(8) This contetion of the learned counsel was rejected by us a few days back in relation to the assessment year 1978-79 and 1981-82 and the other two writ petitions were adjourned for a clarification regarding the contention raised by the petitioner which has been referred to above. In doing so we followed the order passed by this court in Jyoti Parsad v. Mcd dated 10th November, 1980. In that case the petitioner had let out the basement, first and second floors of his premises but the ground floor and mezzanine floor were lying vacant. The Corporation assessed the rateable value on the footing that even for the vacant portion the standard rent would be the same as the agreed rent at which the other portions had been let out. It was contended before the learned Judges that the Corporation had no option but to determine the standard rent of the property on the basis of the cost of construction. But the Court pointed out that since the construction had been made after 9th June, 1955 the rate at which the property had been let out would determine the rent for a period of five years under Section 6(2)(b). During this period the landlord could legitimately let out this property on this rate of rent, which thereforee became the reasonable rent which the landlord can realise for the building. This principle, it was held, would apply not only to the portion which was not let out but also to the portion which was not let out since, for a period of five years, there was no restriction regarding the rate of rent at which it could be let and the standard rent would be the rent at whish the property is first let out. The facts of the present Case being identical, we dismissed writ petitions Nos. 1732 and 1733/81 which related to the assessment years 1978-79 and 1981-82. The petitioner has applied for a review of those two orders and contends that the provisions of Section 6(2)(b) are not applicable to such a case and that standard rent should be fixed only in accordance with the cost of construction and the cost of land under Section 6(1)(B)(2)(b). It is difficult to see how review applications would be maintainable in the circumstances but, however, since we are of opinion having heard the other two writ petitions on this point that our earlier conclusion is correct, we proceed to deal with the review applications on merits instead of considering whether they are liable to be dismissed even in liming.

(9) The principle laid down by the Supreme Court in the case of Dewan Daulut Rai Kapur's is that where in respect of certain premises a standard rent has been or can be fixed under the Delhi Rent Control Act, the annual letting value cannot be determined on the basis of any higher rent even if, in fact, the assessed might be receiving such higher rent. This principle can be easily applied where the property in question is let out because the main purpose of the fixation of standard rent under the Rent Control Act ii to regulate landlord-tenant relationship. The provisions of Sections 6(1) and (2) apply only to such a case. Section 6(1)(A) deals with residential premises and Section 6(1)(B) with other premises. Section 6(1) contemplates premises which have been let out and depending upon whether the date of letting out is prior to 2nd June, 1944 or later than that date, separate formula for standard rent are to be worked out in terms of paragraph (A) or (B) of the Sub-section. Similarly, Section 6(2) contemplates buildings constructed between 2nd June, 1951 and 9th June, 1955 and premises constructed thereafter. In this case also the standard rent is to be fixed only on the ba(r)is of the rent at which they were let out. In short, the whole of Section 6 comes into play only where a property has been let out and the fixation of standard rent in accordance with either sub-section requires a determination of the date on which the property was let out. There is difficulty in applying the principle in a case where the property is occupied by the owner for such a case and so Sections 6(1) and (2) can have no application. The language of Section 116 of the Municipal Corporation of Delhi Act no doubt involves a fiction for determining the annual letting value, namely, the rent that would be obtainable in case the property were to be let out. This fiction enables one to overcome the difficulty that might be otherwise created in applying Section 6 of the Rent Control Act to a case of a property not let out. But Section 116 does not enact a further fiction as to the date of the Jetting out and, in the absence of such a date, it will be difficult to fit in the determination of standard rent in such a case within framework of Section 6. On the other hand the terms of Section 9 are very wide. As rightly pointed out by Shri Bhatia for the respondents, Section 9 enables the Controller to fix the standard rent even in the case of a premises for which there is no tenant at all and at the application of the landlord. This possibility is also envisaged by the wide definition of landlord' to mean not only a person who is receiving or is entitled to receive the rent of a premises let but to a tenant but also any person who would receive the rent or be entitled to receive the rent if the premises were let out to a tenant. Though perhaps it is difficult to concieve of a necessity that might compel a landlord to approach the Rent Controller for fixing a standard rent for the property in his own occupation. Shri Bhatia appears to be right in contending that legally it is possible for such an application to be made under Section 9. Now sub section (4) of Section 9 provides that, where for any reason it is not possible to determine the standard rent of any premises on the principles set forth under Section 6, the Controller may fix such rent as would be reasonable having regard to the situation, locality and conditions of the premises and the amenities provided therein and where there are similar or nearly similar premises in the locality having regard also to the standard rent payable in respect of such premises. The language of Section 9 is thereforee, wide enough to take in any case whether the property is let out or not provided, for any reason, it is not possible to determine its standard rent under Section 6. We have pointed out above that to a case of the present type Section 6 does not provide any approprite formula for the determination of standard rent. The parties before us and indeed even generally a large number of assesseds appear to have proceeded on the footing that in the case of self accupied properties the standard rent will have to be determined in accordance with para (b) of sub-clause (2) of either clause (A) or clause (B) of Section 6(1). But there is no statutory basis, in our opinion, for such general assumption. It has also been sought to be made out that Section 9(4) will be attracted in such a case only if it is not possible to determine the standard rent under sub-para (b) of sub-clause (2) of Clause (A) or clause (8) such as for example where the assessed fails to furnish the relevant details regarding the cost of construction at the market price of the land. There is, however, no reason to limit the applicability of sub-section 9 is clearly applicable in a case of the present type because the formula set out in Section 6 whether it is sub-section (1) or (2) is not applicable. If this conclusion be correct, as we think it is, then the assessor was right in thinking that the standard rent for the premises self occupied by the assessed can be determined on the basis of the standard rent in respect of the portion that has been let out by the assessed. In other words, thereforee, the basis on which the assessment has proceeded is correct; Section 6(2)(b) is applicable not directly, but because the standard rent of the let out portion under Section 6(2)(b) is a comparable standard rent which can be taken into account in terms of Section 9(4) for determining the standard rent of the portion not let out but remaining in the petitioner's occupation.

(10) Even assuming that it can be said, because of the fiction contained in Section 116 of the Delhi Municipal Corporation Act, that the property has to be treated as having been let out on the first day of the assessment year with which one is concerned, in the present case, the position will be that Section 9(4) will still apply to the premises in question. The opening words of Section 6(2) make it clear that this sub-section over-rides Section 6(1). In other words where a property has been constructed after 2nd June, 1951 it if Section 6(2) and not Section 6(1) that will apply. The determination of the standard rent in such a case has to be done under sub section (2) and not sub-section (1) of Section 6. In the present case, thereforee, Subsection (1) will not be available to the assessed. Again, Section 6(2)(b) will also not apply because there is no agreed rent at which the property is let out. The result of that again, will be that this is not a case in which the standard rent can be determined on the principles set forth under Section 6. In view of the matter also the provisions of Section 9(4) get attracted to the present case and having regard to the fact that the property in question is a portion of the property another portion of which has been let out at an agreed rent, the standard rent based on the agreed rent of the let out portion can be taken into account under Section 9(4).

(11) We reach the same conclusion even if we approach the issue from yet another aspect. For purposes of municipal taxes, the 'premises' is the entire building bearing No. A-1 16. A substantial portion of it has been let out. Though that portion will be itself a separate (Premises) for purposes of the Rent Control Act, our attention has not been drawn to any provision of the Municipal Act which would justify the division of the property into two portions for municipal tax purposes. Considering the premises in this light, it would be correct to say that it was constructed after 9-6-1955 and it would also not be incorrect to say that it has been let out for the first time at an agreed rent. The provisions of Section 6(2)(b) can, thereforee, be applied and the standard rent for the entire premises fixed on the basis of the agreed average rent. From this point of view also, the assessment would appear to be in Older.

(12) We are, thereforee, of opinion that the determination of the annual value by the respondents calls for no interference.

(13) Mr. Anand, learned counsel for the petitioner, sub mitted that the result of our finding will not only be that the agreed rent in respect of the let out portion will be applied so long as the property is in occupation of the owner but also that if even after that the property is let out for the first time the department will continue to assess the standard rent on the basis of the rent which the property is let out for five years thereafter. He contends that this would create a hardship in the case of an owner who does not let out the property immediately on its construction. In the first place we do riot want to express any opinion as to the mode of assessment of the property after its. subsequent letting since we arc not concerned the position now. But that apart, we arc unable to see any hardship involved in the case because after the owner lets out the property he will be assessed only on the basis of the rent for which he has let out and that being the standard rent under Section 6(2)(b) there could be no hardship involved. There is, thereforee, no merit in this contention either.

(14) In the result the writ petitions arc dismissed with costs, counsel's fee Rs. 150.00 (one set).


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