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1978 Supreme(Bom) 97
Bombay High Court
VAIDYA
Tata Hydro Electric Power Supply - Appellant
Versus
Municipal Commissioner of Greater Bombay - Respondent
Decided On : 06/13/1978
N.M. Kachare and D.G. Koranne, for Appellants.
The main legal point established in the judgment is that the rateable value for property tax should include structures built by trespassers on acquired lands, as the appellants had a hypothetical right to let the structures, in accordance with Section 146(2)(c) of the Act and well-established rateable valuation practice.
Headnote:
Rateable Valuation - Property Tax - Summary: The court addressed the rateable value of lands acquired for erecting towers and connecting wire lines, where trespassers built hutments. The Municipal Corporation levied property tax based on the rental value of both the land and the hutments. The court held that the appellants had a hypothetical right to let the structures on the land, and thus, the rateable value included the structures built by trespassers. The decision was consistent with the well-established law regarding rateable valuation practice under Section 146(2)(c) of the Act.
Fact of the Case:
The case involved a dispute over the rateable value of lands acquired for erecting towers and connecting wire lines, where trespassers built hutments. The Municipal Corporation levied property tax based on the rental value of both the land and the hutments.
Finding of the Court:
The court found that the appellants had a hypothetical right to let the structures on the land, and thus, the rateable value included the structures built by trespassers. The decision was consistent with the well-established law regarding rateable valuation practice under Section 146(2)(c) of the Act. As a result, all four appeals were dismissed.
Issues: The main issue was whether the rateable value for property tax should include the structures built by trespassers on the acquired lands, in addition to the value of the land itself.
Ratio Decidendi: The court held that the rateable value should include the structures built by trespassers, as the appellants had a hypothetical right to let the structures on the land, in accordance with Section 146(2)(c) of the Act and well-established rateable valuation practice.
Final Decision: All four appeals were dismissed, and no order was made as to costs.
2. The appellants carried the appeals under Section 217 of the Bombay Municipal Corporation Act, before the Chief Judge, Small Causes Court at Bombay. The appeals were dismissed on the (round that under Sec. 146(2)(c) of he Act, the Municipal Corporation was entitled to fix the rateable value not only of the land, which was admittedly rested in the company, but also of the structures, which were built on the ands, as the appellants had a right to let those lands for the purpose of building structures.
3. The learned Additional Chief Judge, who decided the matter, relied on the decisions in National Grindlays Bank Ltd. v. The Municipal Corporation for Greater Bombay, 72 Bom LR 112 : (AIR 1969 SC 1048) and Ramji Keshavji v. The Municipal Commissioner of Greater Bombay ((1954) 56 Bom LR 1132).
4. The decision of the learned Additional Chief Judge is challenged by Mr. Koranne the learned counsel appearing or the appellants, on the ground that the structures do not belong to the appellants; and therefore the appellants had no right to let the structures, and hence Section 146(2)(c) of the Act had 10 application.
5. The argument must be rejected firstly because Section 146(2)(c) lays down :
"(2) Otherwise the said taxes shall be primarily leviable as follows, namely :-
(a) .................
(b) ...............
(c) if the premises are unlet, from the person in whom the right to let the same vests."
6. The word 'premises' is defined in, Section 3(gg) of the Act as including messuages, buildings and lands of any tenure, whether open or enclosed, whether built on or not and whether public or private. In the circumstances, for the purposes of determining the rateable value, the fact that the lands are acquired for the appellants M/s. Tata Hydro Electric Power Supply Co. Ltd. for erecting the electric poles and the tenure restricted the use of the land, is irrelevant; and as the land could be let only by the appellants, they must be held to have a hypothetical
'right to let' the structures thereon, within the meaning of Section 146(2)(c) of the Act.
7. The interpretation is consistent with the well settled principle of rating as stated in Ryde on Rating, Thirteenth Edition, 1976. In Ryde on Rating it is said at pages 420-421 :
"Who may be the hypothetical tenant :- The statute requires the assumption that the property to be valued is to be let and therefore the fact that it is occupied by the owner is immaterial. All possible occupiers, including the actual occupier, must be taken into account as possible tenants from year to year."
8. At page 422, the effect of the decision of the House of Lords in London County Council v. Erith and West Ham (1893) A. C. 562, was stated as follows :-
"'The effect of this decision of the House of Lords is that, even though it may be impossible in fact, and forbidden by law, that the actual occupier should be a yearly tenant of the hereditament to be rated, still for the purpose of valuing that hereditament it must be supposed that the actual occupier is among the possible yearly tenants; and unless the supposition be made, most absurd anomalies result."
9. It is true, that Mr. Koranne is quite right in his submission that the aforesaid decisions of the Supreme Court and this Court were cases, where the lands were actually let for constructing the buildings. Nevertheless, even though the trespassers have constructed the structures, having regard to the consistent practice of ra
