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2002(2) Supreme 5
SUPREME COURT OF INDIA
(From Kolkatta High Court)
G.B. Pattanaik, R.P. Sethi and Bisheshwar Prasad Singh, JJ.
India Automobiles (1960) Ltd. -Appellant
versus
Calcutta Municipal Corporation & Anr. -Respondents
Civil Appeal No. 5109 of 2000
Decided on 13-2-2002
Counsel for the Parties :
For the Appellant : Jaideep Gupta, Anil Agarwal, K.V. Vijayakumar, Advocates.
For the Respondents : Tapash C. Ray, Sr. Advocate, Gaurav Jain and Mrs. Abha Jain, Advocates.
Held : We do not find any conflict in the judgments of this Court so far as the determination of annual value of the property under the municipal laws is concerned. Distinction, if any, is based upon the relevant provision of the statute of a State with which this Court was dealing, particularly with respect to such Statutes which contained a non obstante clause. We are of the view that the basis for determination of annual rent value has to be the standard rent where the Rent Control Act is applicable and in all other cases reasonable determination of such rent by the municipal authorities keeping in view various factors as indicated herein earlier, including the rent which the tenant is getting from his sub-tenant. In appropriate cases the owner of the property may be in a position to satisfy the authorities that the gross annual rent of the building of which the annual valuation was being determined cannot be more than the actual rent received by such owner from his tenant. The municipal authorities shall keep in mind the various pronouncements of this Court, the statutory provisions made in the specified Municipal Acts, keeping in mind the applicability or non-applicability of the Rent Act and the peculiar circumstances of each case, to find out the gross annual rent of the building including service charges, if any, at which such land or building might, at the time of assessment, be reasonably expected to let from year to year in terms of Section 174 of the 1980 Act. (Para 22)
The High Court was right in remanding the appeals to the Appellate Tribunal for deciding on merits but was not justified to restrict the consideration only on the basis of rent being paid by the sub-tenant to the tenant for the purposes of determining the gross annual value. The Appellate Tribunal shall consider the appeals in the light of our judgment by keeping in mind all the circumstances including the rent actually received by the owner of the building and the rent being paid to the tenant by his sub-tenant. The Appellate Tribunal shall also keep in mind the peculiar circumstances of the case, if any, for determining the gross annual rent at which the building in controversy, at the time of assessment, is reasonably expected to let from year to year, less the allowances and other considerations referred to in Section 174 of the 1980 Act. If the annual valuation determined is more than the gross annual rent which the appellant is actually receiving from his tenant, the appellant shall be at liberty to recover the excess amount paid in terms of Section 194 of the 1980 Act. (Para 23)
JUDGMENT
Sethi, J.-Aggrieved by the determination of annual valuation made in terms of Section 174 of the Calcutta Municipal Corporation Act, 1980 (hereinafter called "the 1980 Act"), the appellant-owner of a nine storeyed building, admittedly, used for commercial purposes, filed an appeal before the Municipal Assessment Tribunal who vide its order dated 26th February, 1999 allowed the appeal and fixed the annual value on the basis of rent actually received by the appellant-owner. Feeling aggrieved, the respondent-corporation approached the High Court under Article 227 of the Constitution of India who, vide the order impugned in this appeal, set aside the order of the Tribunal and directed it to hear the appeals on merits keeping in mind that total amount paid by the sub-tenants to the tenant of the appellant should also be taken into consideration in assessing the annual valuation.
2. It is not disputed that the property in question was leased out by the appellants to their tenant, named Banwarilal Pasari at a rental of Rs. 75,000/- per month vide a duly executed lease deed (Annexure P1). There is also no dispute that the building is a nine storeyed building and is used for commercial purposes. The respondent-Corporation carried out the general revision of the annual valuation of the premises effective from fourth quarter of 1984-85 and also for the period from fourth quarter of 1990-91. Proposed valuation was communicated to the owners vide two notices issued under the 1980 Act directing them to attend the hearing before the Hearing Officer of the Corporation on the date specified in the notice. The appellant submitted objections to the notices and objected to the same challenging the proposed valuation and the basis thereof. The Hearing Officer vide his two orders dated 15.4.1996 fixed annual valuation from fourth quarter of 1984-85 at Rs. 18,80,600/- and from further quarter of 1990-91 at Rs. 21,63,560/-. The annual valuation assessment was made under Section 174 of the 1980 Act by taking into consideration the rent paid by the sub-tenants. The Municipal Assessment Tribunal accepted the appeal of the owners by relying upon the judgment of this Court in Corporation of Calcutta v. Life Insurance Corporation of India (1970(2) SCC 44). Not satisfied with the judgment of the Tribunal, Municipal Corporation moved the High Court by way of a petition under Article 227 of the Constitution of India, which was allowed by setting aside the order of the Tribunal vide judgment impugned in this appeal. The High Court held that the aforesaid decision of this Court had no application to an assessment made under Section 174 of the 1980 Act which was found to be materially different from Section 168 of the Calcutta Municipal Act, 1951 under which the assessment had been made in Life Insurance Corporation s case (supra). The High Court further held that under 1951 Act the annual valuation in no case could exceed the standard rent fixed by the West Bengal Premises Rent Control (Temporary Provision) Act, 1950 but under the 1980 Act which had a non-obstante clause, the annual valuation can be fixed notwithstanding anything contained in the West Bengal Tenancy Act, 1956 or any other law for the time being in force. It has been further held that under the 1980 Act, the consolidated rate is primarily leviable, if the land and building is let upon lessor and if the land and building is sub-let, still upon the superior lessor under Section 193 of the Act, and for that reason Section 194 of the Act has conferred a right upon the lessor, lessee or the sub-lessee to recover the excess amount from their respective tenants for the excess payable by them due to creation of tenancy or sub-tenancy. It was further held that the Municipal Corporation is in no way bound by the fixation of standard rent or fair rent by the Rent Controller and the rent realised by a tenant from the sub-tenant or by a sub-tenant from his tenant is required to be taken into considera
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