IMPORTANT POINTS
Assessments made after the 1994 bye-laws came into existence, shall be governed by these byelaws alone.
In the context of the applicant requesting for disposal the word ‘settlement’ occurring in 3rd Proviso of section 169 would not mean consensual arrangement between both parties. It would mean determination to be made by Taxation Tribunal on the basis of annual value.
As per 2nd Proviso of section 169 the Tribunal may take up appeal of a person, even in absence of a request from him, with the approval of the District Judge where the appeal was filed.
All cases where assessment is yet to be finalized, or an appeal is pending before District Judge either initially or on remand from superior Courts would be covered by section 116G(2).

JUDGMENT

R.F. Nariman, J.

1. Leave granted.

2. In this batch of appeals there appear to be two distinct groups dealing with two separate questions that have been raised by counsel for the Municipal Corporation of Delhi. Civil Appeal No. 6718 of 2004 raises a question as to the correctness of the judgment of the Division Bench of the Delhi High Court in Municipal Corporation of Delhi v. Dhunishaw Framroz Daruwala, 100 DLT 679 (2002), decided on 23.7.2002, whereas the other appeals raise a question as to the correctness of the judgment of the Division Bench of the Delhi High Court dated 21.4.2010 in Municipal Corporation of Delhi v. Major General Inderpal Singh Kahai & Anr., 169 DLT 352 (2010) (DB).

3. The first question raised by counsel for the MCD in the present appeals concerns itself with a post 1994 scenario – that is after the Delhi Municipal Corporation came out with the “Delhi Municipal Corporation (Determination of Rateable Value) Bye-Laws, 1994” published in the gazette on 24.10.1994. By these bye-laws, the Delhi Municipal Corporation has taken upon itself the determination of rateable value of lands and buildings according to principles laid down therein.

4. Under Section 116(1) of the Delhi Municipal Corporation Act, 1957, the Corporation is to determine the rateable value of any lands or buildings assessable to property taxes at the annual rent at which such land or building might reasonably be expected to let from year to year. The said provision reads as follows:

“116. Determination of rateable value of lands and buildings assessable to property taxes.

(1) The rateable value of any land or building assessable to property taxes shall be the annual rent at which such land or building might reasonably be expected to let from year to year less—

(a) a sum equal to ten per cent of the said annual rent which shall be in lieu of all allowances for costs of repairs and insurance, and other expenses, if any, necessary to maintain the land or building in a state to command that rent, and

(b) the water tax or the scavenging tax or both, if the rent is inclusive of either or both of the said taxes:

Provided that if the rent is inclusive of charges for water supplied by measurement, then, for the purpose of this section the rent shall be treated as inclusive of water tax on rateable value and the deduction of the water tax shall be made as provided therein:

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 (38 of 1952), the rateable value thereof shall not exceed the annual amount of the standard rent so fixed.

Explanation.—The expression "water tax" and "scavenging tax" shall mean such taxes of that nature as may be levied by an appropriate authority.”

5. The fleshing out of the skeleton contained in Section 116(1) is thereafter done by bye-law 3 of the 1994 bye-laws which provides as under:-

“3. Determination of rateable value of lands and buildings-(1) For the purposes of sub-section (1) of Section 116 of the Act, the annual rent shall be determined as under:

(a) where the premises are on rent, the rent actually realised or realisable, unless the same is collusive or concessional, shall be the annual rent. Where the tenancy commences on or after the 1st day of April, 1995 and where the commissioner has reason to believe that the declared rent does not represent the prevalent rent of the year of letting and the difference between declared rent and the prevalent rent is more than twenty five percent of the declared rent, the annual rent shall be the prevalent rent;

Explanation-For the purposes of this clause the prevalent rents shall be determined by a Panel of Assessors to be appointed by the Commissioner. Such Panel shall include a representative from the Government, a representative of the Corporation, a representative of any Taxation Department (other than the Corporation) or a Valuer and a representative of the property owner