1. This appeal is by the Corporation of Calcutta and is directed against the order of the Chief Judge of the Court of Small Causes, Calcutta dated 8th April 1938 in an appeal filed before him by the assessee, the respondent, under the provisions of Section 141, Calcutta Municipal Act (Bengal Act 3 of 1923). The case relates to the assessment of Premises No. 16, Dalhousie Square, north, commonly known as the Writers Buildings, made by the Corporation of Calcutta in 1934 under Section 127(b) of the said Act. The immediately previous assessment was in force from 1928 to 1934. At that assessment the annual value was taken at Rs. 3,13,480. That figure was arrived at thus:
Land 240 cottas at Rs. 21,000per cotta ... ... Rs. 50,40,000Building, less depreciation ... Rs. 12,29,615--------------Rs. 62,69,6155 per cent of do Rs. 3,13,480
At the revaluation in 1934 the assessor made the calculations thus:
Land, 240 cottas at Rs. 23,000 per cotta ... ... Rs. 55,20,000Building less depreciation ... Rs. 11,92,727---------------Rs. 67,12,727 5 per cent of do Rs. 3,35,636(annual value for rating).
2. The respondent filed objections to the said valuation under Section 139. Those objections were heard by the second Deputy Executive Officer who restored the valuation of 1928. The respondent then filed an appeal to the Chief Judge of the Court of Small Causes, Calcutta, who further reduced the annual value from Rs. 3,13,480 to Rs. 2,95,536. It was admitted before the said learned Judge and before us also that only a small portion of the ground floor, consisting of a few rooms, had been let out by the respondent to a Co-operative Bank and two Co-operative Societies at a total monthly rent of Rs. 200-14-0 and the rest of the building was in the direct occupation of the respondent. The learned Chief Judge following the decision of this Court in Corporation of Calcutta v. Motichand Chowdhury (1036) 63 Cal. 1215 now reversed by the Judicial Committee, held that the portions in occupation of the said tenants ought to be valued under Section 127(a) and the remaining portion under Section 127(b). The annual value of the rented portion was thus found by him to be Rs. 2386 and the rest which was assessed under Section 127(b) was valued thus:
Land 240 cottas at Rs. 19,500per cotta ... ... Rs. 46,80,000Building ... ... Rs. 11,82,108-------------Rs. 58,62,1085 per cent Of do Rs. 2,93,150
3. The first point urged by the appellant is that this method is wrong and the assessment cannot be made partly under Section 127(a) and partly under Section 127(b), but must be made under Section 127(b) only. This contention must be given effect to in view of the decision of the Judicial Committee in Corporation of Calcutta v. Motichand Chowdhury . The second point has been raised by the appellant in a simple form. It says that the land ought to be valued at Rs. 21,000 per cotta, because that is the effect of the evidence. The respondent's counsel however raises complications by asking us to lay down a definite method of valuing land on which a building stands. He goes further and says that in view of the language employed in Section 127(b) there is only one legitimate method, and that is, that the annual rent of the whole premises must be estimated and capitalized in the first instance. Then from the capitalized amount, the present cost of erecting the building after allowing for reasonable depreciation, is to be deducted. The balance is, according to him, the estimated 'present value of the land valued with the building as part of the same premises.' Any other method says he, would not give due effect to the phrase 'valued with the building' used by the Legislature. This method however was not accepted by a Division Bench in Corporation of Calcutta v. Jardine, Skinner & Co. : AIR1937Cal14 .
4. Section 124 of the Act empowers the Corporation of Calcutta to impose consolidated rates on land and building on the basis of annual value as determined under Chap. 10 of the Act. Sections 127 and 128 are the Sections in that chapter which deal with the mode of determining annual value. Broadly speaking two distinct methods are provided for in Section 127 based upon the nature of the property. Section 128 furnishes the third method, where the property to be assessed belongs to the Board of Trustees for the Improvement of Calcutta. If the subject be bare land or building erected for letting purposes or ordinarily let, the annual value is to be what a hypothetical tenant would pay as rent from year to year less a certain deduction. This is Clause (a) of Section 127. Clause (b) deals with what may, for brevity's sake, be called residential buildings, buildings erected for the use of and actually used by the owner. The yearly rent which a hypothetical tenant would pay is not to be the basis. That is to say the owner in occupation is not to be considered as a tenant, as in England, for the purpose of determining the rateable value. This is a fundamental difference. Leaving out matters of detail by which the rateable value is arrived at in England by making specified deductions from the gross value, the fundamental and only basis of rating in England according to statutory enactments in respect of all classes of property is the yearly rent which a hypothetical tenant would reasonably pay. The methods employed and the calculations made, no doubt, vary according to the nature of the rateable property, e.g. (a) house let out or occupied by the owner (b) railways and dockyards, etc. but they have one and same object in view, namely the determination of the annual rent which a hypothetical tenant would pay. The contractor's method, as it is called, is applied when having regard to the nature of the property such annual rent cannot be satisfactorily ascertained directly. By this method the total cost, i.e. price of land and the costs of construction is determined and a certain percentage thereof, usually 5 per cent., is taken and the figure so arrived at is taken as the hypothetical yearly rent. But the Calcutta Municipal Act, in our judgment, provides in Section 127(b) an independent method, a method independent of the method prescribed in Clause (a) of that Section, for, if the Legislature had intended beneficial occupation determined in terms of letting value to be the sole criterion for determining the annual value, no distinction would have been made by it between classes of rateable properties based on user by the owner and user by a tenant. The contractor's principle as applied in England would have been equally available in India in determining the hypothetical annual rent, in regard to properties in respect of which an estimate of the same could not have been satisfactorily made by the direct method. We accordingly hold that beneficial occupation determined in terms of letting value is not the principle adopted by the Legislature in Clause (b).
5. The provisions of Section 128, moreover indicate that the said principle is not the only principle kept in view by the Legislature for the purpose of estimating annual value of rateable property. Properties vested in the Board of Trustees for the Improvement of Calcutta have no letting value during the improvement operations, still the Board is to be rated in respect of those properties on the basis that the annual value is to be a certain percentage of the costs of acquisition. The principle formulated by Lord Birkenhead L.C. in Port of London Authority v. Assessment Committee of Orsett Union (1920) A.C. 273 at page 284, that assessability depends upon' whether the occupation is of value or not is no doubt a basic principle, but it is not the only basic principle underlying the provisions of ch. 10, Calcutta Municipal Act. In Calcutta bare ownership would sustain the liability to be rated. On the principle of rating adopted in England however if the owner of a house suffers it to lie barren and unoccupied, he cannot be rated at all (Ryde on Eating, p. 200, Edn. 4; Faraday on Eating p. 11, Edn. 4). This is not sq under the Calcutta Municipal Act. In such a case the owner is rateable, but he has not to pay the full rate but gets deduction^ to the extent of half for the full period during which the premises is unoccupied and a further deduction of a fourth in certain contingencies (Section 151). It would therefore, in our judgment, be not right to say that beneficial occupation is the sole consideration and that it is the beneficial occupier and the value of his occupation that has to be considered in all cases of assessment under the Calcutta Municipal Act. We cannot therefore agree fully with the observations of Roy J. in Corporation of the Town of Calcutta v. Ashutosh De : AIR1927Cal659 . That principle may apply to an assessment falling within Clause (a) of Section 127 but even in that case which was a case of assessment under Clause (a) the decision of the Letters Patent Bench, which upheld Mukerji J. does not support fully what Roy J. had said. We accordingly hold that in cases coming under Clause (b) it would not be legitimate to hold that the word 'value' in that clause does not mean 'sale value' and excludes the same. We cannot also hold that for finding the 'estimated present value of land' the assessor is bound to find out the reasonable hypothetical rent of the whole premises. That would be determining annual value in terms of Clause (a), and Clause (b) would in that case be redundant. The adoption of the method suggested by the learned Counsel for the respondent would in effect introduce into an assessment of a residential building the method formulated in the case of a building let on hire. In our judgment it is possible to give a reasonable meaning to the phrase 'valued with building' used in Clause (b) without adopting the method suggested by him. Section 127(b) directs the determination, (a) of the present costs of erecting the building, e.g., structures and (b) of the present estimated value of the land valued with the building, etc. A deduction on account of depreciation, if any, from item 1 gives the nett value of the structures. That is item 1 in the calculation. To it must be added the amount of item 2 and five per cent, of the grand total is to be the annual or rateable value.
6. It is a fundamental principle of construction that ordinarily words should not be added to a statute. It is also a fundamental principle that ordinarily words used by the Legislature are not to be ignored. No portion of a statutory enactment ought to be disregarded and every word used should if possible, be given effect to. It is only when there is a manifest absurdity or inconsistency that the paste and scissor method is to be applied. The words 'valued with the building' cannot be ignored, if some meaning can be given to the phrase. Mr. Bose's argument is that those words have been used by the Legislature with two objects. Firstly, to indicate that the land on which the building stands and the compound is to be regarded with the building as one unit of assessment; and secondly, to exclude the rental basis for the purpose of arriving at the value of the land in the premises on which the building stands. With regard to the first contention, the said intention would have been equally expressed without the words 'valued with the building' or without the word 'valued.' The words 'estimated present value of the land with the building as part of the same premises' Would have been sufficient. This construction of Mr. Bose leaves out of consideration the word 'valued' used by the Legislature. Mr. Bose supports his second contention thus : He says that Clause (a) deals with two subjects: (i) bare land, (ii) building used for hire. But Clause (b) deals with buildings only, not with bare land. He says that but for the phrase 'valued with building' in Clause (b) it would have been open to the Corporation to estimate the present value of the compound and open spaces included in a house by the method indicated in Clause (a). The Legislature by the use of the said phrase merely intended to exclude that method in the case of assessment of a residential building.
7. We cannot however accept this contention. Clause (a) defines the annual value of land. In Clause (b) the phrase used is not 'estimated annual value of land' but 'estimated present value of land.' The word building used thrice in that sub-section has not the same meaning at all the places. The word 'building' occurring first obviously means not the structures only. It has the same meaning as in Clause (a). It includes the land underneath the structures and all open spaces which go with the house. The word 'building' used later on in Clause (b) means the structures only. Even without the words 'valued with the building' it would not have been legitimate for the Corporation to determine separately the annual value of the lands underneath the structures and the compound in terms of Section 127(a), for in that case there would be the determination of two annual values in assessment under Clause (b), whereas the Legislature has said that there should be only one. We cannot accordingly accept this contention of Mr. Bose.
8. It is a well established principle in rating that property must be valued as it exists at the time, when the rate is made, with all the existing circumstances rebus sic stantibus. Prospective appreciation or depreciation cannot be taken into account by the rating authority, nor can a hypothetical state of things be assumed. We think that the Legislature intended to give effect to this principle only when it used the phrase 'land valued with the building' in Section 127(b). The land is not to be regarded as bare land. It is to be taken in its present disposition and valued. It may be that the nature of the structure then existing on the land may reduce the value of the land to a figure below what it would have had, if it had been in a bare state, or may increase it to a higher figure. But that is a matter for the valuer. Such lands can be valued even without recourse to the process contended for by the respondent's counsel. We accordingly overrule the contention of the respondent on this part of the case.
9. The evidence on the record is, moreover, not such as can lead us to estimate what would be the reasonable rent of the entire premises. Mr. Sawday gives the rate of rent at Rs. 10 or Rs. 11 per hundred square feet in respect of premises which are at a distance and in localities of a different nature. The evidence on the said head by Lolit Mohan Laha carries with us no weight. He made some desultory enquiries with regard to rents paid in respect of some buildings at a distance and in a locality of a different character, but made no attempts to find out the rents paid for buildings nearabout. The Corporation of Calcutta has led some evidence on the point, but most of the cases relate to office rooms in or near the Stock Exchange. There is accordingly no reliable evidence on the record from which a fair conclusion can be drawn as to the letting value of the Writers' Buildings. The rent paid by the Co-operative Bank and the other Co-operative Societies located in some ground floor rooms afford no sure criterion. They were semi-Government departments.
10. To support its case about the value of the land the appellant, the Corporation, has adduced evidence of accepted assessments and has also relied upon a return submitted by the East Indian Railway administration in respect of premises No. 105, Clive Street in pursuance of a notice issued by the Chief Executive Officer under Section 136. The said premises is marked 105 in the plan which shows the Writers' Buildings and the adjoining locality. It is almost opposite the Writers' Buildings across the street. It has upon it a building almost of the same nature as the Writers' Buildings and the plot is almost as big as the plot in question. The value of the land is stated in the return to be Rs. 18,000 per cotta. The assessment was made on that basis and accepted by the assessee. That plot is however inferior to the Writers' Buildings in situation. It has a northern frontage whereas the latter faces south with a large open space with a beautiful garden and tank in the south. It is an island plot with broad roads on all the four sides. It is as Mr. Shrosbere has termed, a spot site in Calcutta. Lolit Mohan Laha, a witness examined by the Government has admitted the superiority of the Writers' Buildings and has stated in his evidence that the value of the land would be 10 to 15 per cent, more than the land occupied by the East Indian Railway offices. This is an admission from an unwilling witness. The value of land of the Calcutta Collectorate was assessed at Rs. 18,500 per cotta. That plot is much inferior to the Writers Buildings. We hold that it would be right and proper to add 15 per cent, to the value of land comprised in the premises occupied by the offices of the East Indian Railway Administration. We accordingly assess the present value of the land valued with the building as part of the premises at Rs. 20,700 per cotta. On that basis the annual value works out at Rs. 3,08,036 and the assessment must be on that basis.
11. We do not consider that the evidence afforded by the aforesaid return or by the accepted assessment of the neighbouring premises on which we have relied as inadmissible in evidence. Those, in our judgment, are relevant facts and admissible under Section 9, Evidence Act. In Pointer v. Norwish Assessment Committee (1922) 2 K.B. 471 it was held that evidence of the rateable value of other similar premises in the same Union is in point of law admissible but it was pointed out that the value afforded by such evidence would depend upon the circumstances and degree of closeness with which the two sets of premises resemble one another. On the question of admissibility (1922) 2KB 4716 was approved in Ladies' Hosiery and Underwear Limited v. West Middlesex Assessment Committee (1932) 2 K.B. 679. In the case before us, we have already pointed out that there is cogent evidence on which the assessment of the Writers' Buildings can be made on a comparison with assessment of the East Indian Railway offices and the Calcutta Collectorate. The result is that this appeal is partly allowed. As the appellant has succeeded very substantially it must have the costs of this Court and of the lower Court from the respondent. We assess the hearing fee at 15 gold mohurs.