JUDGMENT :- Leave granted.

2. The appeal by speical leave arises from the order of the High Court of Punjab and Haryana in Civil W. P. No. 19209 / 91 dismissing the writ petition in limine.

3. The admitted facts are that appellant is having a house in Sangrur. For the assessment year 1987-88, the respondents have assessed the ratable value of the house at Rs. 1,50,472.50 after giving standard deductions under Section 3(1)(b) of the Punjab Municipal Act, 1991 (for short, the Act). The basis on which the property was assessed was the rent being received by the appellant from State Bank of India to whom they had let out at Rs. 12,687 / - per month. The question is whether the actual rent received by the appellants from the tenant would be the measure for determining annual value. Section 3(1) (b) of the unamended Act reads thus :

" 3(1) "annual value" means -

x x x x x x x x x x x x

(b) in the case of any house of building, the gross annual rent at which such house or building together with its appurtenances and any furniture that may be let for or enjoyment therewith, may reasonably be expected to let from year to year subject to the following deductions ;

x x x x x x x x x x"

4. This provision was subject of interpretation by this Court in Diwan Daulat Rai Kapur v. New Delhi Municipal Committee, (1980) 2 SCR 607 : AIR 1980 SC 541, which was followed in Mrs. Shiela Kaushish v. C. I. T., (1981) 4 SCC 121 : (AIR 1981 SC 1729). The question therein was whether the actual rent received from the tenant would form basis to determine the annual value. This Court considered the controversy and held thus : (At p. 1732 of AIR.)

"The argument of the municipal authorities was that since the standard rent of the building was not fixed by the Controller under Section 9 of the Rent Act in any of the cases before the Court and in each of the cases the period of limitation prescribed by Section 12 of the Rent Act for making an application for fixation of the standard rent had expired, the landlord in each case was entitled to continue to receive the contractual rent from the tenant without any legal impediment and hence the annual value of the building was not limited to the standard rent determinable in accordance with the principles laid down in the Rent Act, but was liable to be assessed by reference to the contractual rent recoverable by the landlord from the tenant. The municipal authorities urged that if it was not penal for the landlord to receive the contractual rent from the tenant, even if it be higher than the standerd rent determinable under the provisions of the Rent Act, it would not be incorrect to say that the landlord could reasonably expect to let the building at the contractual rent and of the contractual rent therefore provided a correct measure for determination of the annual value of the building. This argument was however rejected by the Court and it, was held that even if the standard rent of a building has not been fixed by the Controller under Sectuion 9 of the Rent Act, the landlord cannot reasonably expect to receive from a hypothetical tenant anything more than the standard rent determinable under the provisions of the Rent Act and this would be so equally whether the building has been let out a tenant who has lost his right to apply for fixation of the standard rent by reason of expiration of the period of limitation prescribed by Section 12 of the Rent Act or the building is self-occupied by the owner. Therefore, in either case according to the definition of "annual value" given in both statutes, the standard rent determinable under the provision of the Rent Act and not the actual rent received by the landlord from the tenant would constitute the correct measure of the annual value of the building. The Court pointed out that in each case the assessing authority would have to arrive at its own figure of the standerd rent by applying the principles laid down in the Rent Act for determination of the st