Nasim Ali, J.
1. The Royal Calcutta Turf Club (hereinafter referred to as the 'club') is the owner of 6/1A, Bhowanipore Road. The premises is a two-storied masonry building having 37 stables for race horses and 5 godowns in the ground floor and 23 rooms for syces' quarters in the first floor. In 1940 the annual value of this building under Section 127(a), Calcutta Municipal Act, was determined by the Assessor of the Calcutta Corporation to be Rs. 8505. This figure was arrived at in the following manner:
Rent Rs. 875 X 12 = 10,500
Less 10 p. c. 1050
Less 10 p.c. 945
2. The club being dissatisfied with the valuation gave a notice of objection to the valuation under Section 139 of the Act. The ground of this objection as stated in the notice in substance was this: The stalls were meant for letting to race' horseowners. The club charged Re. 1 per stall per day. The total collection of rent during 1939-1940 was rupees 2793. The fair rent for each stall is Rs. 10 or at best Rs. 12 per month. This objection was heard and rejected by the First Deputy Executive Officer of the Corporation under Section 140 of the Act. The club being dissatisfied with the order rejecting its objections appealed to the Court of Small Causes, Sealdah under Section 141 (1) of the Act. The Small Cause Court Judge dismissed the appeal. The reasons given by the Judge in support of his decision are these:
(1) The stalls in the disputed premises remain vacant for long periods during the year. (2) No tenant who would be willing to pay an annual rent with the idea that he would be in a position to sublet the stalls from time to time during the racing season was available. (3) For purposes of assessment there is a material difference between a case in which a tenant may actually be expected to remain in occupation throughout the year and a ease where there is every reason for thinking that no such tenant will in fact occupy the premises throughout the year. (i) If in determining the annual value under Section 127 (a) of the Act, any allowance is made for this difference the result will lead to an absurdity as the assessee would again get remission of rates under Sections 151 and 152 of the Act. (5) In the case of premises which are expected to remain vacant for long periods every year the proper method for determining the gross hypothetical annual rent is to multiply the actual daily, weekly, monthly or seasonal rent ordinarily realised during the period when the premises remain occupied by the requisite figure. (6) If the gross annual rent be determined according to this method the vacancy remission under Sections 151 and 152 would remove all grounds for complaint on the score of allowance not being made at the time of assessment. (7) The gross annual rent of the disputed premises has been determined by the Corporation according to this method. The club appeals to this Court under Section 142(3) of the Act.
3. By Section 127(a) of the Act, for the purpose of assessing a building erected for letting purposes or ordinarily let to consolidate rate, its annual value should be the gross annual rent at which that building might at the time of assessment reasonably be expected to let from year to year minus ten per cent, of the gross annual rent for cost of repairs, etc. After the annual value of a building is determined in accordance with the provisions of Section 127(a) the consolidate rate payable for it is assessed under Section 124 of the Act. Sections 150 and 151 come into operation after the consolidated rate has been determined under Section 124 of the Act. These sections come under the heading 'payment and recovery of the consolidated rate.' These provisions of these sections, therefore, cannot be taken into consideration while determining the annual gross rent under Section 127(a) of the Act. If the nature of a building is such that it can be let only for short periods during each year the rate of rent at which it is let or is expected to let for short periods would be higher than the rate at which a hypothetical tenant from Year to year can be reasonably expected to take. Each stall in the disputed premises is let at Rs. 30 per month during the racing seasons. The assessor first reduced this monthly rent to Rs. 23-8-0 as the club pays for the electric current for the fans provided. The assessor then deducted 10 per cent, from the gross annual rent for all the stables calculated at the rate of Rs. 23-8-0 per month from each stall apparently on the ground that these stalls could not be let throughout the year. The gross monthly rent determined by the assessor under Section 127 (a) for each of the stalls in the disputed premises is therefore about Rs. 21-4-6. The case of the club is that the gross monthly rent per stall should be Rs. 10 or 12. Mr. Sawday (witness 1 for the club) in his evidence said that RS. 10 or 12 per month would be fair rent for each stall and syces' accommodation in the disputed premises. His estimate is based on the rent which is paid for the stalls in 1/1 Katwakhuti Road and Ballygunge Biding School. There is no evidence to show the nature of the stables in Ballygunge Riding School. The Katwakhuti Road is a kutcha structure having Navah tiled roof. The rent for the stables in these two premises, therefore, cannot be a fair oasis for determining the gross monthly or annual rent for the disputed premises. The Assessor of the Calcutta Corporation in his evidence said:
I inspected stalls in 2A, Bakery road. There are 48 stalls. There is no accommodation for syces there. The roofs are made of asbestos corrugated sheets. The assessment was made at rate of Rs. 20 per stall per month. This was accepted by the party. The Bakery Road stalls are occupied for long periods and since their erection the stalls in disputed premises are occupied only for a few months in the year....
4. It appears from the copy of the Inspection Book of the Corporation (Ex. E) that the assessor while deigrmining the annual gross rent of the stalls in Bakery Road deducted 10 per cent, of the annual rent calculated at the rate of Rs. 20 per month for each stall. In other words the gross monthly rent for each of the stalls in Bakery Road was determined to be Rs. 18. The position, therefore, is that the assessor of the Corporation has assessed the gross monthly rent for each stall in the disputed premises and in 2A, Bakery Road at RS. 21-4-6 and RS. 18 respectively. There are no syces' quarters in 2A, Bakery Road but the stalls there are occupied for long periods and since their erection the stalls in the disputed premises are occupied only for a few months in the year. In view of the nature of demand for stalls in these two premises at the time of assessment I hold that the amount of gross monthly rent for each of the stalls in the disputed premises should be the same as fixed by the Corporation for each of the stalls in 2A, Bakery Road. The annual valuation of the disputed premises, therefore is:
18 X 37 X 12=7992
Less 10 p.c. Statutory deduction 799
5. The appeal is accordingly allowed in part. The annual valuation is to reduce to Rs. 7193. Parties will bear their own costs in this appeal.
6. The appellants, the Royal Calcutta Turf Club are the owners of certain stables known as No. 6/IA, Bhowanipore Road admittedly rateable under Section 127 (a), Calcutta Municipal Act. The main difficulty in assessing them lies in the fact of their being habitually unproductive for at least half the year, so that there is no empiric test of their annual value. Both parties however agree - rightly I think - that it is easily possible to imagine a hypothetical tenant from year to year without making any at all fantastic assumption. The question is purely one of amount-what would the individual so imagined be prepared to pay? The evidence we have to go on consists of (i) the revenue ordinarily produced by the disputed premises while they are let and (ii) the revenue produced by other similar premises.
7. The method adopted by the corporation to try to ascertain what the hypothetical tenant (if he ever did materialise) would pay for these premises is, briefly, as follows : Prom the gross rent of Rs. 30 per month at which each stall therein is let when it is let at all they have first, and rightly, deducted a sum in respect of the provision of electric 3urrent for fans, which is a 'tenant's burden borne by the landlord'. They have estimated its value' at Rs. 6-8-0 per month per stall which is not disputed. They have then multiplied Rs. 23-8-0 (the residue) by 37 (the aumber of stalls) and by 12 and from the product have deducted 10 per cent, being the statutory deduction provided for by Section 127(a). Without being under any statutory obligation to do so, they have then deducted from the residue 10 per cent, of itself, because the premises, being habitually let not as a whole but in a number of parts, might easily produce less than their full revenue, owing to lack of tenants for one or more parts, without entitling the assessees to the benefits of. total non-occupancy and unproductivity which Section 151 of the Act prescribes. The residue, in round figures, was taken by the corporation as the rateable value, and it amounts to Rupees 8505, which amount the lower Court has upheld. The appellants contend that the corporation is in reality taking a peak month and multiplying the benefit it produces by twelve, which, they say, must be wrong and is by no means compensated by an allowance (however adequate in itself) for casual vacancies in the case of individual stalls.
8. Before us the respondents contended that their basis of assessment - which appears to me on the face of it erroneous - was right. Our attention was drawn to (1889) 22 Q.B.D. 211 (1889) 22 Q.B.D. 211 : 60 L.T. 181, Smith v. Churchwadens etc. of Birmingham and (1889) 22 Q.B.D. 703 (1889) 22 Q.B.D. 703 : 58 L.J.M.C. 161 53 J.P. 787 Smith v. Churchwardens etc. of Birmingham in which the learned recorder of that city had dismissed an appeal by an occupier of premises which could only be let by the week end at 5 sterling against an assessment of .18 or s/x 52. The Divisional Court and Court of appeal both upheld his conclusion. But it must be remembered that that conclusion was really ' one of fact, and by no means an unreasonable one. A person who would take premises for himself of 5 a week might well be prepared to dispense with any 'reduction on taking a quantity' in consideration of the advantages of keeping all his rent in his pocket till the end of the year and of not being liable to ejectment on a week's notice. There was not, and would hardly have been, any evidence that people resort to Birmingham at any particular season and eschew ii at others; and though in that case no allowance was made for the possibility of so-called 'void' it may well be that the demand for cheap housing in Birmingham greatly exceeded the supply, and that, consequently, the risk of a 'void' was negligible. Much more important are cases such as (1901) 65 J.P. 7 (1901) 65 J.P. 7 : 83 L.T. 408 : 17 T.L.R. 5 Mayor etc. of Southend v. White and (1903) 67 J.P. 32 (1903) 67 J.P. 32 : 87 L.T. 271 : 18 T.L.R. 699, Ganga v. Wren. These arose out of attempts by occupiers of seaside shops and boarding houses, where business could only be profit, ably carried on in summer, to escape rates for half the year by shutting up the premises and leaving them. They were unsuc cessful, it being pointed out by Channell J. in the latter case that, if the fair annual rent of the boarding house is, say 100, both the landlord and the tenant know that the season will only last for half the year and make their bargain on that footing: the rent is, therefore, lower than it otherwise would be. Darling J. compared the occupancy of such a building with that of a fruit tree, which would hardly be said to be occupied only while fruit is on its branches. It is however nowhere suggested that a boarding house at lowest off should be assessed for the year by multiplying its profits in (say) August by twelve, any more than the fruit tree would be assessable on the basis that it was perpetually bearing fruit. On the contrary, if it is remembered that the rated occupiers in these eases correspond with the appellants, and their lodgers or customers with the horses, in the present case, they are authorities directly in favour of the appellants.
9. The respondent corporation also prays in aid Section 151, Calcutta Municipal Act, under which an assessee whose premises are wholly unoccupied and unproductive of rent over a certain period becomes entitled to a refund. But the relevant Section 127(a) does not incorporate Section 151 and you cannot, in my opinion, justify an impost under one section which, by the terms of that section, is excessive by saying that the injured person may get something back under another section. I agree in thinking it clear that the respondent's basis of assessment is incorrect. But it is not so easy to ascertain the correct figure for these premises. Of the various other premises whose valuation we have been asked to consider the most helpful, because they are most similar are No. 2, Bakery Road. On their assessment (which has not been appealed) the figure corresponding to Rs. 23 8-0 in the present case is taking the corporation's method of calculation Rs. 20. Actually, as my learned brother points out, this should be called Rs. 18 and only one deduction of 10 per cent, should be made in order, by strictly statutory methods, to reach the same result. The Bakery Road stables are newer than the disputed premises and after they were opened many other stables were transformed into cowhouses. The appellants asked us to infer that this was because the latter could not compete with 2 Bakery Road. On the other hand, the respondents contend that these are inferior stables to the disputed premises principally because they have no accommodation for syces which the disputed premises have.
10. For myself I do not regard it as proved that the advantage, if any, of having quarters for syces over the stalls of valuable horses outweighs such disadvantages as the increased risk of fire due to the careless habits of the bipeds concerned. Indeed if Rs. 18 be the correct figure for these premises I am rather surprised that the difference between this figure and Rs. 23-8-0, or rather Rs. 21-4-6 is not greater. But, while on the evidence before us, I do not see any reason for assessing these premises at a proportionately higher figure than Bakery Road, equally I do not on that evidence see how we can assess them at a proportionately lower figure. Even if the unappealed assessment on Bakery Road is in reality too high we have, it seems to me, absolutely no materials for estimating the amount of the excess. I therefore agree in the result which my learned brother proposes.