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SUPREME COURT OF INDIA
BEFORE B.P. JEEVAN REDDY AND SUJATA V. MANOHAR, JJ.
ASSTT. GENERAL MANAGER, CENTRAL BANK OF INDIA AND OTHERS
Versus
COMMISSIONER, MUNICIPAL CORPORATION FOR THE CITY OF AHMEDABAD AND OTHERS
Civil Appeals No. 5405 of 1995 with Nos. 5406-31 of 1995{From the Judgment and Order dated 8-9-1994 of the Gujarat High Court in F.A. No. 158 of 1994(
Decided on 9-5-1995
Advocates appeared:
V.R. Reddy, Additional Solicitor General, F.S. Nariman, G.L. Sanghi, R.F, Nariman, Arun Jaitley, N.S. Sistani, B.K. Mehta and Soli J. Sorabjee, Senior Advocates (Ms Reema Bhandari, M.N. Shroff, Ms Neelam Kalsi, Vimal Dave, P.P. Singh, E.R. Kumar, Ms Simmi Kumar, P.M. Parekh, PR. Seetharaman, K.V. Mohan, G.S. Sistani, Maninder Singh, Bhaskar P. Tanna, Mahrook N. Kerawala, Mukul Mudgal, D.A. Dave, Ms Meenakshi Arora, Advocates, for the Intervenors with them) for the appearing parties.
Bombay Rents, Hotel and Lodging House Rates Control Act, 1944 - Section 11 - Bombay Provincial Municipal Corporation Act, 1949 – Assessment – Tenant - Annual Rent - Appeal against Order Assessing Property Tax - Appeals against judgment - Two questions arise for consideration - Whether a tenant of a building is entitled to file and maintain an appeal against order assessing property tax as applicable in the State of Gujarat and (ii) whether proviso (aa) to sub-clause (a) of clause (1-A) of Section 2 of said Act is valid and effective. Clause (1-A) defines the expression "Annual Letting Value". Proviso (aa) says that where in respect of any building or land or premises, standard rent is not fixed and Lodging annual rent received by owner in respect of such building or land or premises shall, notwithstanding anything contained in any other law for the time being in force, be deemed to be annual rent for which such building or land or premises might reasonably be expected to let from year to year with reference to its use" Gujarat High Court has held on first question that an appeal can be preferred only by the owner of the building and not by any other person including the tenant – Held, Special written notice to owner or occupier shall specify nature of such entry - Special notice must inform the owner about the entries mentioned in Rule 9, clauses (a), (b), (c) and (d), because said Rule 15 has to be read with Rules 9 and 13. When statute specified as to what should be the contents of a notice, and that is so specified in Rule 15(2), the general principles enunciated by the aforesaid decisions and of the other High Courts would not be applicable. For the purposes of giving an opportunity to an owner or an occupier to file a complaint, all that he has to be informed is what the Commissioner has entered in the assessment book. One of the items, which is entered, is rateable value - Commissioner is under no obligation to inform as to how the rateable value, which is entered in the assessment book, has been arrived at - It is for owner to complain if he finds rateable value to be high. The principles for fixation of rateable value are well known. Ordinarily, a rateable value will be arrived at after particulars had been given by the owners or occupiers under Rule 8 of the said Rules - It will be for the complainant to lead evidence and prove as to what should be correct rateable value. A hearing is contemplated by Rule 18 and if assessee requires any classification with regard to the entry made in the assessment book, we see no reason as to why this classification would not, ordinarily, be given. Be that as it may, Rule 15(2) does not require the giving of any particulars in addition to what is stated therein. The aforesaid decisions of various courts therefore, can be of no assistance to the respondents - Appeals allowed
JUDGMENT
B.P. JEEVAN REDDY, J.- Delay condoned.
2. Leave granted. Heard S/Shri G.L. Sanghi, Rohinton Nariman, V.R. Reddy and Andhyarujina for the appellants and S/Shri F.S. Nariman, Soli Sorabjee, B.K. Mehta for the respondents.
3. These appeals are preferred against the judgment of the Gujarat High Court in a batch of first appeals. Two questions arise for consideration, viz., (i) whether a tenant of a building is entitled to file and maintain an appeal against the order assessing the property tax under the provisions of the Bombay Provincial Municipal Corporation Act, 1949 as applicable in the State of Gujarat and (ii) whether proviso (aa) to sub-clause (a) of clause (1-A) of Section 2 of the said Act is valid and effective. Clause (1-A) defines the expression "Annual Letting Value". Proviso (aa) says that where in respect of any building or land or premises, standard rent is not fixed under Section 11 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1944 (Bombay Rent Act) "the annual rent received by the owner in respect of such building or land or premises shall, notwithstanding anything contained in any other law for the time being in force, be deemed to be the annual rent for which such building or land or premises might reasonably be expected to let from year to year with reference to its use". The Gujarat High Court has held on the first question that an appeal can be preferred only by the owner of the building and not by any other person including the tenant. On the second question, it has recorded its opinion on the meaning and effect of proviso (aa).
Tenants right to object to assessment and his right to file appeal
4. The contention of the learned counsel for the appellants-tenants is this: By virtue of the agreements entered into between the appellants and their respective landlords, the obligation to discharge the property taxes has been placed exclusively upon the tenants. The landlord receives the rent exclusive of the property taxes which means that any increase/enhancement of property taxes affects the tenant and tenant alone and not the landlord. The tenants, therefore, have a direct stake in determination/assessment of property taxes. Even apart from the agreements between the parties, Section 10 of the Bombay Rent Act empowers the landlord to increase the rent correspondingly where the rates or cesses payable in respect of the said premises (which includes the property taxes) are enhanced. Inasmuch as the liability to pay the property taxes is cast upon the tenants both by virtue of the agreement between the parties and also by virtue of the Bombay Rent Act, the landlords are not taking any interest nor are they filing complaints or taking other proceedings to have the property taxes correctly assessed. In many cases, the landlords are using the enhancement of assessment as a lever of pressure to make the tenant vacate the premises. Notwithstanding such direct interest of the tenant in the matter of determination/assessment of property taxes, the High Court has held that they have no right to file an appeal against the assessment of property taxes. This is causing grave prejudice to the tenants. They are being punished by uncalled for increases in property taxes while at the same time depriving them of the right to appeal and to question the enhancement. The scheme and provisions of the Municipal Corporations Act do enable the tenant to question the assessment or the enhancement in assessment, as the case may be, in respect of the premises occupied by him and also to file appeal and take other proceedings in that behalf. On the other hand, it is submitted by the learned counsel for the Corporation that the Act makes the owner of the premises alone primarily liable for property taxes and it is that person alone who is entitled to file a complaint or appeal in case he feels aggrieved by the assessment or enhancement of the assessment. The Act does not confer any such right upon the tenant nor does
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