( 1 ) THIS judgment will dispose of Civil Appeals Nos. 614, 615 and 616 of 1980. These Appeals are filed by a Public Charitable Trust, challenging the decision of the Small Causes Court, whereby the rateable value of the property of the appellants was reduced.

( 2 ) THE appellant had constructed premabhai Hall. The construction was undertaken after the old hall which had been constructed on 1544 sq. yards had been demolished and additional land, measuring 1680 sq. yards had been acquired. A portion of the premises had been given on rent to Madura Bank and another portion to the Bank of India. A major portion of the building, however, was used for holding shows or cultural activities.

( 3 ) THE Municipal Corporation had fixed separate rateable value with regard to the portion of the building which had been given on lease to Madura Bank and the Bank of India. The rateable value given in respect thereof and the tax which was charged subsequently on the same is not in question in the present proceedings. In these cases, we are concerned with the levy of property tax on the premabhai hall itself.

( 4 ) THE Municipal Corporation in respect of the four years in question, viz. , 1976-77, 1977-78, 1978-79 and 1979-80, had fixed rateable value at Rs. 8,21,220/ - for 1976-77 and for subsequent years at Rs. 4,06,920. 00.

( 5 ) AGAINST the said fixation of the rateable value, appeals were filed by the appellant before the Small Causes Court. Taking into consideration the market value of the land as at 1976 at about Rs. 17,00,000. 00 and by adding thereto the cost of construction, the total value of the property was determined. On that, the small Causes Court calculated the reasonable return at 6% and came to the conclusion that the annual letting value came to Rs. 2,86,860. 00. In applying the rate of 6%, the Small Causes Judge was of the view that one had to keep the charitable intention of the Institute in mind while fixing the reasonable return. It is for this reason that instead of fixing the reasonable return at eight and two-third per cent, fixed the reasonable return at 6%. The aforesaid decision of the Small Causes court has been challenged in these Appeals.

( 6 ) AS far as the rateable value is concerned, we find that the principles adopted by the Small Causes Court, viz. , cost of land plus cost of building and applying a reasonable return thereto, is in consonance with the judgment of this Court in municipal Corporation, Ahmedabad v. Oriental Fire and General Insurance company Limited, [1994 (2) GLR 1498] : F. A. No. 829 of 1983 and connected matters, decided on 8th September, 1994. It was, however, argued that the land measuring 1544 sq. yards had been acquired a long time ago and this land had, in fact, been donated, for which no payment had been made. Whether the payment was made or not is immaterial because for fixing the rateable value on the basis of cost of construction and cost of land, it is the market value of the land when the construction commenced which is relevant. The land may have been acquired by gift or by purchase or in any other manner, but for the purpose of determining the rateable value, it is the market value of the land which has to be taken into consideration. Construction of the new hall commenced, we are informed by the learned Counsel, some time in 1970. Therefore, it is the value as on that date which should be taken into consideration. The value of land in 1976 taken at Rs. 17,00,000. 00 may not exactly be correct, because the value of land should have been taken as on the day when the construction commenced which was earlier in point of time. The Small Causes Court has valued 1544 sq. yards of land at Rs. 8,00,000/ - in the year 1976 and has added this to the price of Rs. 9,00,000. 00 which was paid for the additional land. It is unfortunately not in evidence as to what would be the market value of the land measuring 1544 sq. yards at the time when the construction commenced and this is