Judgment

BEG, J.:- This appeal, by certification under Article 133 (1) (c) of the Constitution, is Directed against the judgment of a Division Bench of the Bombay High Court holding that, although, a vacant plot of land is rateable under the provisions of the Bombay Municipal Corporation Act 3 of 1888 (hereinafter referred to as the Act), and so is land which has been built upon yet, any part of land which is being actually built upon is not rateable until the building is finished because no tenant cannot take it in that condition in other words of the Division Bench upheld what may be called the doctrine of sterility with which the land was said to have been struck during the period when a building was being actually put up on it. The appellant Corporation question the applicability of this doctrine to rating of land in this country.

2. Before proceeding further, we may briefly give the facts and circumstances in which the question mentioned above arises. The respondent Company is the owner of 6652 sq. yds of land, out of which 450 sq. yds, were deducted for having fallen within "the set back line". Out of the remaining area of 6202 sq. yds., 1060 sq. yds., was being built upon at the relevant time whilst the remaining 5142 sq. yds. was lying vacant during the period under consideration. As the respondent Company did not lead any evidence about the hypothetical rent of any part of land, the Assessor and Collector of Bombay Municipal Corporation determined the market value of the whole land as Rs.62020/- at Rs.10/- per sq. yd. He then calculated the hypothetical rent by taking a rate of interest of 31/2 per annum as the reasonable return on this value so that the hypothetical annual rental value came to Rs.2170/-. From 1-1-1962, the Assessor divided the plot notionally into two parts from of 1060 sq.yds., which was being built upon, and the other of 5142 sq. yds. which was lying vacant. He then assessed the probable market value of the plot which was being built upon as Rs.10,600/- at Rs.10/- per sq. yd. but, as he considered it better developed, he fixed 5 per annum interest as a reasonable return on it for determining its hypothetical rent which came to Rs.530/-. For the vacant land, also valued at the same rate, the market value was found to be Rs.51,420/-, but the annual rate of interest to determine reaonable return was taken as 31/2 only, as was done previously for the whole land, so that its hypothetical annual rent came to Rs.1800/-. Thus, the total hypothetical annual rental value of the land for the period under consideration came to Rs.2330 for both parts according to what is known as the contractor s test."

3. The respondent company, aggrived by the Assessor s fixation of rateable value had appealed to the Small Cause Court of Bombay which dismissed the appeal. The respondent company then appealed to the Bombay High Court under Section 218(D) of the Act. The appeal was summarily rejected by a learned single Judge of that Court. On a further appeal, a Division Bench of the High Court, after repelling a preliminary objection to the maintainability of the appeal to it by adopting the view that it was not a second appeal for the purpose of the Letters Patent, held that the part of the land which was being built upon was not reteable at all as no tenant could or would take the property in that condition. Thus, the Division Bench had applied what may be called the doctrine of sterility". It observed:

"If there is no tenant who would be prepared to take the property from year to year in its then condition, evidently there can be no tax on the same".

As this doctrine could not apply to the vacant land, the order of the Assessing authority and the principle applied by it for rating that portion of the land were upheld by the Division Bench. No argument was addressed to us on the question whether an appeal lay to the Division Bench, in the circumstances of the case. We, therefore, refrain from considering this question.

4. Le