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1971 Supreme(Bom) 80

IN THE HIGH COURT OF BOMBAY
(M. G. Chitale and S. K. Desai JJ.)
FILMISTAN PVT. LTD. -Appellant.
v.
MUNICIPAL COMMISSIONER GREATER BOMBAY -Respondent.
Advocate Appeared
For appellant - Y. S. Ohitale.
For respondent - K. K. Singhvi, A. M. Desai and O. J. Sawant.

The standard rent for calculating rateable value under the Bombay Municipal Act is the agreed rent at the time of letting, unless modified by a court under section 11 of the Bombay Rent Act.

Headnote:

BOMBAY MUNICIPAL ACT - SECTION 154 - STANDARD RENT - RATABLE VALUE - CALCULATION: 1. Rateable value for property assessment under the Bombay Municipal Act must be based on the standard rent of the premises and cannot exceed it. 2. Standard rent, as defined in the Bombay Rent Act, is the rent at which the premises were first let after September 1, 1940, unless modified by a court under section 11 of the Act. 3. Agreed rent at the time of letting is the standard rent until a court determines it to be excessive under section 11, after which the standard rent is recalculated and refixed at a lower amount. 4. In the absence of a determination under section 11, the agreed rent remains the standard rent for calculating rateable value under the Bombay Municipal Act.

Fact of the Case:

The appellants, owners of a property known as Bombay Talkies Studios, let out various structures on the property to small-scale industries in 1960. The Municipal Commissioner increased the rateable value of the property for the year 1960-61, leading to an appeal by the appellants to the Chief Judge of the Court of Small Causes under section 217 of the Bombay Municipal Act.

Finding of the Court:

1. The occupants of the structures, though called licensees, were truly tenants of the appellants. 2. The premises were first let out in 1960-61, and the agreed rent at that time was the standard rent as per section 5(10)(b)(iii) of the Bombay Rent Act. 3. The standard rent could be varied only through an application to the special Court under section 11 of the Bombay Rent Act, and until such an application was made, the agreed rent remained the standard rent.

Issues: 1. Whether the occupants of the structures were tenants or licensees. 2. Whether the premises were first let out in 1960-61 or earlier. 3. Whether the agreed rent at the time of letting was the standard rent for calculating rateable value under the Bombay Municipal Act.

Ratio Decidendi: 1. The definition of standard rent in the Bombay Rent Act (section 5(10)(b)(iii)) specifies that for premises first let after September 1, 1940, the standard rent is the rent at which they were first let, subject to the provisions of section 11. 2. Section 11 provides for recalculation and refixing of standard rent in certain cases, but until such a determination is made by the Court, the agreed rent remains the standard rent. 3. The rateable value under the Bombay Municipal Act cannot exceed the standard rent, and in the absence of a determination under section 11, the agreed rent is the standard rent for calculating rateable value.

Final Decision: The appeals were dismissed, as the rateable value fixed by the Municipal Corporation was not based on any rent exceeding the standard rent.

JUDGMENT

S. K. DESAI J.- This is a group of 39 appeals arising from the judgment of the learned Chief Judge of the Court of Small Causes, Bombay, sitting as the persona designata under section 217 of the Bombay Municipal Corporation Act, 1888 (Bombay Act III of 1888) ; the said Act will be hereinafter referred to as the Bombay Municipal Act.

2. The appellants, Messers. Fimlistan Private Limited, are the owners of a property known as Bombay Talkies Studios, situated at Dady Seth Road, Malad, Bombay. Until 1960 the appellants were using the property for their own purposes viz. for the production of cinema films. This property covers an extensive area of slightly over 18 acres. In 1960 the appellants gave the various structures situated on the property on what was said to be leave and licence basis to various small scale industries. The appellants had provided certain amenities to the licenstes such as free use of electricity, water, electricians, sweepers, pumpmen, watchmen, etc.

3. For the year 1960-61 a special notice increasing the rateable value of the property was served on the appellants by the Municipal Commissioner for Greater Bombay, who is the respondent in this group of appeals. The appellants filed a complaint in accordance with the Act protesting against the increase in the rateable value. The objections of the appellants were rejected by the Assessor and Collector of the Corporation, and being aggrieved thereby the appellants filed an appeal to the Chief Judge of the Court of Small Causes under section 217 of the Bombay Municipal Act.

4. The appellants were heard by the Chief Judge initially in March 1964 when preliminary objections raised on behalf of the Corporation were disposed of. The appellants were thereafter heard by the learned Chief Judge on the remaining issues, and by his judgment dated November 23, 1964 tile learned Chief Judge dismissed the appeals before him. The correctness of this decision is questioned in these appeals filed under section 218 (d) of the Bombay Municipal Act which are for disposal before us.

5. These appeals had come up before a Division Bench of this Court consisting of Chandrachud and Wagle JJ., on October 22, 1969. By an interlocutory judgment (1970 Mh.LJ 866=72 Bom. L R 461) the Division Bench sought findings on two issues from the learned Chief Judge of the Court of S mall Causes. The learned Chief Judge was directed to find, firstly, whether the occupants of the structures, though called licensees, were truly tenants; and, secondly, as to what would be the standard rent of the premises. The learned Chief Judge was further directed to give opportunity to both the sides to lead evidence on these issues.

6. Evidence was recorded before the Additional Chief Judge of the Court of Small Causes, Bombay, and by his judgment dated April 16, 1970 the learned Additional chief Judge submitted his findings on the two issues which were remanded to him for determination by the Division Bench as afore stated.

7. On the first issue the learned advocate for the appellants appearing before the learned Chief Judge conceded that for purposes of these appeals the occupants of the structures, though called licensees, were truly tenants of the appellants, and a note to that effect was taken by the learned Additional Chief Judge on March 20, 1970. The answer to the first issue was accordingly record. ed in consonance with this concession.

8. For the purpose of the second issue the appellants had made an attempt to lead evidence before the learned, Additional Chief Judge to prove that the premises in these appeals were not let out for the first time in 1960-61 but had been let out earlier sometime in 1947, and for this purpose the appellants had sought to rely upon a lease alleged to have been executed on August 9 1947 between the executors and trustees of the last will of F. E. Dinshawand the Bombay Talkies Limited. The original lease was not produced and the appellants had during the course of the p









































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