The court upheld that standard rent, defined by agreed terms, must guide rateable value assessments and cannot exceed set limits until judicial review occurs.

1. 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 S.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, Messrs. Filmistan 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 'licensees' 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 S.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 23rd November, 1964, the learned Chief Judge dismissed the appeals before him. The correctness of this decision is questioned in these appeals filed under S.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 22nd October, 1969. By an interlocutory judgment (reported in (1970) 72 Bom LR 461) the Division Bench sought findings on two issues from the learned Chief Judge of the Court of Small 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 16th April, 1970, the learned Additional Chief Judge submitted his findings on the two issues which were remanded to him for determination by the Division Bench is aforestated.

7. On the first issue the learned Advocate for the Appellants appearing before the learned Chief Judge conceded that for purpose 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 20th March, 1970. The answer to the first issue was accordingly recorded in consonance with 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