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C.G. Ramanathan Vs. Commissioner, Corporation of Madras - Court Judgment

LegalCrystal Citation
SubjectMunicipal Tax
CourtChennai High Court
Decided On
Reported in(1979)1MLJ421
AppellantC.G. Ramanathan
RespondentCommissioner, Corporation of Madras
Cases ReferredTirunelvsli v. Haniffa
Excerpt:
- .....charges for amenities. he would also contend that the landlord bad accepted the assessment on the rental basis of rs. 1 000 per month even at the time when the rent was rs. 900 plus rs. 400 (rent and amenities). he would therefore seek to sustain the order of the appellate authority, who fixed the rental value at rs. 1,000 and directed the taxing authority to arrive at the annual value on that basis in order to arrive at the annual valuation of the premiies, which is ordinarily let out and which is within the jurisdiction of the corporation of madras, the axing authorities are entitled to assess and estimate the rent which the property is leased iut in the normal course. what is 'reasonably be expected to fetch', is a matter which varies from case to case : it all depends on the facts.....
Judgment:

T. Ramaprasada Rao, C.J.

1. The owner of premises No. 72, Archbishop Mathias Street, Madras, aggrieved by the order of the Chief Judge, Court of Small Causes, Madras (Appellate Authority under the Tamil Nadu Buildings (Lease and Rant Control) Act, 1960), who fixed the annual value of the premises at Rs. 10,920 has filed this civil revision petition. The main contention before me is that, even though the property would fetch a rent of Rs. 900 per month and an additional income of Rs. 400 per month toward amenities provided in the premises earlier to 31st March, 1973 yet after 31st March, 1973, to wit, in June, 1973, the premises were let out to Parry and Company for occupation by one of its officers, on a rent of Rs. 600 per month and an additional charge of Rs. 200 per month for amenities. The main contention of Mr. Gopinath, learned Counsel for the petitioner, is that as there is proof of payment of such rent in the form of rent receipts and a lease deed inter se between the landlord and the tenant, there is no possibility of any speculation in this case and that the rent ought to be fixed on the basis of the actual and not en mere assumptions or best judgment method. On the other hand Mr. Palaniswamy, learned Counsel for the Corporation, would refer to Section 100 of the City Municipal Corporation Act, 1919, and would say that in certain circumstances the actuals paid by the tenant may not be a safe guide for arriving at the annua1 valuation of the premises, as other circumstances should also be taken into consideration to fix the reasonable rent which the property is likely to fetch in the opan market, if let out freely. For this purpose he would rely upon the admitted fact that the tame property, before it was let out to Parry and Company, was fetching a monthly rent of Rs. 1,300 made up of Rs. 900 rent and Rs. 400 as charges for amenities. He would also contend that the landlord bad accepted the assessment on the rental basis of Rs. 1 000 per month even at the time when the rent was Rs. 900 plus Rs. 400 (rent and amenities). He would therefore seek to sustain the order of the Appellate Authority, who fixed the rental value at Rs. 1,000 and directed the taxing authority to arrive at the annual value on that basis In order to arrive at the annual valuation of the premiies, which is ordinarily let out and which is within the jurisdiction of the Corporation of Madras, the axing authorities are entitled to assess and estimate the rent which the property is leased iut in the normal course. What is 'reasonably be expected to fetch', is a matter which varies from case to case : it all depends on the facts rtf each case. If there is no proof of letting the building prior to the challenged valuation for the purpose of fixing the property tax, then the yardstick adopted by the Corporation in fixing such reasonable rent can be scrutinized by the authorities in the higher hierarehy. But if, on the other hand, there is proof or, at any rate, acceptable material on which the taxing authorities can act and arrive at the reasonable rent which the property would fetch in normal circumstances, then such material cannot be lightly brushed aside and it is not open to the owner to dictate that the rent which was being paid by the tenant in occupation, after negotiations with him, should be taken, willy-nilly, AS the basis for arriving at the annual value if the premises. In fact a Division Bench of this Court in Municipal Council, Tirunelvsli v. Haniffa : (1969)2MLJ495 , while considering a provision under the District Municipalities Act, which is in pari materia with Section 100 of the City Municipal Corporation Act, observed that, though the Municipality, while determining the annual rental value, was not bound by the actual rent paid by the tenant the rent fixed under the lease deeds should normally be taken as the best prima facie evidence, in the absence of proof that any other element was reasonable for fixing up a lower rent, and that, if the Municipality wanted to enhance the rent, there must be proof that a hypothetical tenant intending to use the property for the same purpose would pay more. In the instant case it is not necessary to consider a hypothetical tenant, for, a few months before the date when the property was leased out to Parry and Company, the property was fetching a rent of Rs. 900 per month with an additional amount of Rs. 400 towards charges for amenities. It therefore appears to me that, having regard to such material, which is acceptable and which ought to be acted upon, the authorities should be asked to arrive at the annual valuation of the premises on that basis for the reason that it is not questioned before us as being either unfair or illusory. In fact, it appears that the Corporation estimated the rent, in spite of the available proof as stated above, on the basis that the rental yield was Rs. 1,000. As to why this was done is not clear. It is in this same that the decision of the Division Bench referred to above comes to the rescue of the petitioner. If there is available material, which has to be accepted and against which nothing is said, then it is mandatory on the part of the taxing authorities functioning under the City Municipal Corporation Act, to adopt the rent quoted-in the lease deed, unless it is shown to be far too low than the market rent. No such inference can be drawn in the instant case. I am unable to agree with the Appellate Authority when it adopted the total rent of Rs. 1,300 which included a sum of Rs. 400 towards charges for amenities and having found that the total rent ought to be Rs. 1,300, and allowing a deduction of Rs. 200, it arrived at the monthly rent of Rs. 1,000. I am unable to accept this conclusion. There is abundant proof, which is also admitted, that a few months before, the premises were let out for Rs. 900 per month, the additional amount Rs. 400 of being referable to amenities. It follows that the reasonable rent which the premises can be expected to fetch at all times can be fixed at Rs. 900 per month. In this view of the matter, the order of the Appellate Authority cannot be sustained. It, is accordingly set aside, the rental value is fixed at Rs. 900 per month, and the taxing authorities will fix the annual valuation on this basis.

2. The civil revision petition is allowed. There will be no order as to costs.


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