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SUPREME COURT OF INDIA
M.H. BEG AND P.N. SHINGHAL, JJ.
New Delhi Municipal Committee, Appellant
Versus
M. N. Soi and another, Respondents.
Civil Appeal No. 541 of 1976,
D/- 24-9-1976.
Advocates appeared
S. T. Desai, Sr. Advocate, (M/s. Bikawamjit Nayar, B. P. Maheshwari and Suresh Sethi, Advocates with him), for Appellant; Mr. M. Natesan Sr. Advocate, (M/s. N. H. Hingorani, P. C. Bedi and M. K. Garg, Advocates with him), for Respondent No. 1.
Punjab Municipal Act – Section 84 - Delhi and Ajmer-Merwara Rent Control Act, 1947 - Section 15 - Delhi and Ajmer Rent Control Act, 1952 - Section 46 - Rent Control Act – Quash of order - Fixation of standard rent – Claim of compensation - Whether such assessment is leviable or not or when the land-revenue has been wholly or in part compunded for or redeemed amount which but for such composition or redemption - Whether house or building and furniture and land let for use or enjoyment therewith are let by same contract or by different contracts and if by different contracts - Whether such contracts are made simultaneously or at different times - It appears from statement of facts by Full Bench which has not been questioned before us that fixation of rent under New Delhi House Rent Control Order, 1939 continues to be valid notwithstanding the repeal of Control Order by Section 15 of the Delhi and Ajmer Rent Control Act, 1947 which in its turn was repealed by Section 46 of Delhi and Ajmer Rent Control Act, 1952 - Repealing provisions maintained intact validity of all that was legally done under repealed Order - It is clear that although legislative provisions for fixation of standard rent contained in Section 9 of Delhi Rent Control Act 59 of 1958 are comparatively recent and fairly elaborate yet fixation of rates for purposes of assessment of house tax is still governed by provisions of Section 3 (1) (b) of Punjab Municipal Act of 1911 enacted at a time when there was no machinery for control of rents - Whole of Section 3 (1) may be set out here in order to get an idea of nature of valuation contemplated by Act of 1911 for purposes of rating - Provided that in case of land assessed to land-revenue or of which land-revenue has been wholly or in part released compounded for redeemed or assigned annual value shall if State Government so direct be deemed to be double aggregate of following amounts - Amount of land-revenue for time being assessed on land whether such assessment is livable or not or when land-revenue has been wholly or in part compounded for or redeemed amount which but for such composition or redemption would have been leviable and when improvement of land due to canal irrigation has been excluded from account in assessing land-revenue amount of owners rate or water advantage rate or other rate imposed in respect of such improvement – Held, Court think was ratio decided which was decided as long ago - If law has remained unchanged despite that pronouncement by this Court of which the law making authorities must be deemed to be cognizant presumption would be that intention from allowing State of law so declared to continue is to let rating be governed by fixation of rent by Rent Control authorities and not by test of actual income derived by landlord - In other words concept of an open market applicable to such cases is not one where landlord is absolutely free to let to anybody at any rent he can obtain and where tenant has corresponding freedom to offer anything he likes for any accommodation he may want to hire - As court know right to offer many things one possesses for either sale or hire as well as freedom to purchase or to hire them is hedged round today with conditions imposed by law - Concept of this restricted open market if one may juxtapose such antithetical concepts is well established today - Area of open market is circumscribed by law - It is within this restricted area that reasonable mans expectations must be deemed to operate even if such a concept seems to import an element of unreality into field of rating - Legal norms often savor of some artificiality - Court think that this provision far from helping case of appellant Municipal Committee suggests that it is in conformity with notions of reasonable rental value today for purposes of assessment - Mere fact that Section 3 (1) (b) of Punjab Municipal Act of 1911 left determination of reasonable expectations of rent to assessing authorities does not mean that they can today ignore subsequent law fixing restrictions on rent and penal consequences with which their infringement is visited - Provisions of Delhi Municipal Corporation Act, 1957 were introduced after concept of restrictions on rent and letting of accommodation had become well established in this country - It shows what reasonable expectation in new context could or should mean - Therefore in court opinion existence of such provisions supports case of respondent which was accepted by Full Bench - In any case so long as ratio case holds ground this Court cannot by judicial interpretation introduce a new concept of reasonable expectation - If resulting position is not just or equitable its remedy lies in amendment of law itself by legislation - Court cannot remedy it - Appeal dismissed
Judgment
BEG, J.:- This appeal by special leave is directed against the unanimous decision of a Full Bench of the Delhi High Court. The case before us arose from a Writ Petition filed by the respondent, M. N. Soi, praying that certain assessment orders, together with the order under Sec. 84 of the Punjab Municipal Act III of 1911, passed on 11th February, 1966, by an Additional District Magistrate of Delhi relating to the house of the petitioner at 15, Prithviraj Road, New Delhi, modifying assessments on appeal, be quashed. The respondent landlord submitted that assessment for purpose of rating, in accordance with the provisions of Section 3 (1) (b) of the Punjab Municipal Act III of 1911 (hereinafter referred to as the Act) and, in particular, the interpretation of the words "may reasonably be expected to be let from year to year", impose upon the assessing authorities the obligation not to aseess at a higher rental value than the "standard rent." It is not disputed that standard rent of the house was fixed on 25th September, 1941, in the following terms:
"After due consideration of all the facts and circumstances a fair rent of Rs. 170/- one Hundred and Seventy P. M. (unfurnished) on annual tenancy, exclusive of House Tax and Irrigation water charges, is hereby fixed for House No. 15, Prithvi Raj Road, New Delhi under Clause 5 of the Rent Control Order, 1939."
2. It appears from the statement of facts by the Full Bench, which has not been questioned before us, that the fixation of rent in 1941, under the New Delhi House Rent Control Order, 1939, continues to be valid notwithstanding the repeal of the Control Order by Section 15 of the Delhi and Ajmer-Merwara Rent Control Act, 1947, which, in its turn, was repealed by Section 46 of the Delhi and Ajmer Rent Control Act, 1952. The repealing provisions maintained intact the validity of all that was legally done under the repealed Order.
3. The Delhi Rent Control Act, 1958 (59 of 1958), contains a very elaborate procedure for the fixation of "standard rent" under Section 6 of this Act. In so far as such premises as "have been let at any time before the 2nd day of June, 1944", are concerned, the standard rent is determined as follows:
"6 (1) (a) If the basic rent of such premises per annum does not exceed six hundred rupees, the basic rent; or
(b) if the basic rent of such premises per annum exceeds six hundred rupees, the basic rent together with ten per cent of such basic rent;"
The first two clauses of the second schedule to the 1958 Act define the "basic rent" for the purposes of the case before us:
"1. In this Schedule, basic rent in relation to any premises let out before the 2nd June, 1944, means the original rent of such premises referred to in paragraph 2 increased by such percentage of the original rent as is specified in paragraph 3 or paragraph 4 or paragraph 5, as the case may be.
2. Original rent, in relation to premises referred to in paragraph 1, means-
(a) where the rent of such premises has been fixed under the New Delhi House Rent Control Order 1939, or the Delhi Rent Control Ordinance, 1944, the rent so fixed; or
(b) in any other case,-
(i) the rent at which the premises were let on the 1st November, 1939, or
(ii) if the premises were not let on that date, the rent at which they were first let out at any time after that date but before the 2nd June 1944."
Thus, the "fair rent" fixed under the 1939 Order determines, ultimately the "standard rent" which still affects the assessment of rates in the manner indicated below.
4. It is clear that, although legislative provisions, for the fixation of standard rent in New Delhi, contained in Section 9 of the Delhi Rent Control Act 59 of 1958, are comparatively recent and fairly elaborate, yet, the fixation of rates for purposes of assessment of house tax is still governed by the provisions of Section 3 (1) (b) of the Punjab Municipal Act of 1911, enacted at a time when there was no machinery for the control of rents. The whole of the S
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