IMPORTANT POINT
The bye laws framed under the Punjab Municipal Act, 1911 cannot be applied because the Act has been repealed and the bye laws though not specifically repealed, are inconsistent with the NDMC Act 1994.

JUDGMENT :

Kurian, J.

1. Leave granted in SLP (C) No. 18110/2006.

2. The basis of assessment of property tax under the New Delhi Municipal Council Act, 1994 (in short the “NDMC Act”) is the subject matter of these appeals. In Chapter VIII of Taxation, Section 60 of the NDMC Act has dealt with the subject. Under Section 60(1)(a), the Municipal Council is entitled to levy the property tax. Under sub-section (3) the property tax shall be levied, assessed and collected in accordance with the provisions of the Act and the bye-laws made thereunder. Section 61 of the NDMC Act speaks about the rates of property tax and it is provided that unless otherwise specified under the Act, the property tax shall not be less than 10% and not more than 30% of the rateable value of lands and buildings. Section 63 of the NDMC Act deals with the determination of rateable value of lands and buildings. The provision reads as follows:

“63. Determination of rateable value of lands and buildings assessable to property tax.-(1) The rateable value of any lands or building assessable to any 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 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:

Provided that in respect of any land or building the standard rent of which has been fixed under the Delhi Rent Control Act, 1958 (59 of 1958) the rateable value thereof shall not exceed the annual amount of the standard rent so fixed.”

3. Though the learned senior counsel appearing for the appellants sought to place reliance on the proviso under section 63(1) of the NDMC Act, we are afraid the contention cannot be appreciated. The concept of standard rent is no more available under the Delhi Rent Control Act, 1958, since the said provision has been struck down in the case of Raghunandan Saran Ashok Saran (HUF) Vs. Union of India & Others reported in 95 Delhi Law Times 508 (2002)(DB). Additionally, it is also to be noted that the standard rent in the case of the appellants has never been fixed under the Delhi Rent Control Act, 1958.

4. In the cases before us there are two categories of buildings 1) self-occupied and 2) out of the leased premises a portion which is self occupied and the rest let out on sub-lease under due permission from the Government of India. In case the premises is sub-let, there is a condition that the lessee should pay to the Government 25% of the gross rent fetched out of the sub-lease.

5. In the impugned judgments, the High Court has taken the view that since there is already a payment of rent by the sub-lessee, there need not be any other exercise for assessment of the reasonable rent. The High Court has based its decision under bye-law 12 of the New Delhi Municipal Committee Byelaws Relating to the Assessment and Collection of House Tax. For the purpose of reference, we may extract the provision of bye-law 12:-

“12. The annual value of a building or house which is in the owner's own occupation either for residential purposes or for commercial purposes and the standard rent of which has not so far been fixed by a competent authority may be calculated under section 8(1)(b) on the basis of rents of similar accommodation prevalent in the locality and in the event of the Committee being of the opinion that the same is not feasible, the annual value may be calculated under section 3(1)(c).”

6. However, it is pointed out that the Punjab Municipal Act, 1911 has been repealed and as per Section 416(2) of the NDMC Act what is saved is only the provisions under the bye-laws which are not otherwise inconsistent with the provisions of the NDMC Act. Since there is a provision and procedure under Section 63 the NDMC Act for calculating the annual rent, one need not refer at all to the bye-laws as quoted above sin