JUDGMENT

BHAGWATI, J.:—These appeals by certificate raise a common question of law relating to assessment of annual value for levy of house tax where the building is governed by the provisions of Rent Control legislation, but the standard rent has not yet been fixed. One appeal relates to a case where the building is situate within the jurisdiction of the New Delhi Municipal Committee and is liable to be assessed to house tax under the Punjab Municipal Act, 1911 while the other two relate to cases where the building is situate within the limits of the Corporation of Delhi and is assessable to house tax under the Delhi Municipal Corporation Act, 1957. The house tax under both statutes is levied with reference to the annual value of the building. Section 3 (1) (b) of the Punjab Municipal Act, 1911 defines annual value to mean, in the case of any house or building the gross annual rent at which such house or building.... may reasonably be expected to let from year to year subject to certain specified deductions, and the same definition of annual value is to be found in Sec. 116 of the Delhi Municipal Corporation Act, 1957 with only this difference that there is a second proviso to Section 116 which is absent in Section 3 (1) (b). That proviso reads : Provided further that in respect of any land or building the standard rent of which has been fixed under the Delhi and Ajmer Rent Control Act, 1952, the rateable value thereof shall not exceed the annual amount of standard rent so fixed. It was, however, common ground between the parties that this proviso is immaterial and, in fact, it was so held in Corporation of Calcutta v. Life Insurance Corporation, (1970) 2 SCC 44. We may, therefore, ignore the existence of this proviso and deal with both the categories of appeals on the basis of the same definition of annual value; Annual value of a building, according to this definition, would be the gross annual rent at which the building may reasonably be expected to let from year to year, (emphasis supplied);

2. It is obvious from this definition that unlike the English Law where the value of occupation by a tenant is the criterion for fixing annual value of the building for rating purposes, here it is the value of the property to the owner which is taken as the standard for making assessment of annual value. The criterion is the rent realisable by the landlord and not the value of the holding in the hands of the tenant. The rent which the landlord might realise if the building were let is made the basis for fixing the annual value of the building. The word reasonably in the definition is very important. What the landlord might reasonably expect to get from a hypothetical tenant, if the building were let from year to year, affords the statutory yardstick for determining the annual value. Now, what is reasonable is a question of fact and it would depend on the facts and circumstances of a given situation. Ordinarily, as pointed out by Subba Rao. J., speaking on behalf of the Court in Corporation of Calcutta v. Padma Devi, (1962) 3 SCR 49; a bargain between a willing lessor and a willing lessee uninfluenced by any extraneous circumstances may afford a guiding test of reasonableness. An inflated or deflated rate of rent based upon fraud, emergency, relationship and such other considerations may take it out of the bounds of reasonableness. The actual rent payable by a tenant to the landlord would in normal circumstances afford reliable evidence of what the landlord might reasonably expect to get from a hypothetical tenant, unless the rent is inflated or depressed by reason of extraneous considerations such as relationship, expectation of some other benefit etc. There would ordinarily be in a free market close approximation between the actual rent received by the landlord and the rent which he might reasonably expect to receive from hypothetical tenant. But where the rent of the building is subject to rent control legislation, this approximation