Judgment

SHINGHAL, J.:- This appeal by special leave is directed against the judgment of the Madhya Pradesh High Court dated September 26, 1968* setting aside the appellate order of the Second Additional District Judge, Indore, dated October 29, 1966 and remitting the matter to the Municipal Commissioner for a fresh determination of the annual value of the building.

1968 MPWR 819.

2. The building in question is known as "Viram Lodge", on Ravindra Nath Tagore Marg, Indore. It belongs to the respondents and has been used by them as a hotel. The annual gross rental value of the building was determined at Rs. 6600/- in 1956. It was revised by the Assessment Officer on June 3, 1965 and was raised to Rs. 43,405.20. The respondents filed objections to the valuation, but the Municipal Commissioner fixed the annual value of Rs. 43,405.20. He held that, in view of the "non-obstante" clause in Section 138 (b) of the Madhya Pradesh Municipal Corporation Act, 1956, hereinafter referred to as the Act, there was no justification for the argument that the rental value of the premises could not be fixed at a rate higher than the standard rent under Section 7 of the Madhya Pradesh Accommodation Control Act, 1961. An appeal was taken to the Second Additional District Judge, but without success. The respondents then filed an application for revision, which was allowed by the impugned judgment of the High Court dated September 26, 1968. This is how the present appeal has arisen at the instance of the Municipal Corporation and its officers.

3. Section 138 of the Act prescribes the mode for determining the annual value of any land or building for purposes of assessing it to property tax. Clause (a) of the section deals with the annual value of land, and it is not the case of the parties that it has any bearing on the controversy. Clause (b) prescribes the mode of determining the annual value of a building and reads as follows:-

"(b) the annual value of any building shall notwithstanding anything contained in any other law for the time being in force be deemed to be the gross annual rent at which such building, together with its appurtenances and any furniture that may be let for use or enjoyment therewith might reasonably at the time of assessment be expected to be let from year to year, less an allowance of ten per cent for the cost of repairs and for all other expenses necessary to maintain the building in a state to command such gross annual rent."

4. There are two explanations to the clause. It is nobodys case that they have any bearing on the short point in controversy before us. Clause (c) of the section prescribes that if the gross annual rent of a building cannot be determined under clause (b), the annual value of the building shall be determined according to that clause. It is not in controversy before us that the Viram Lodge was never let on rent, and is being run as a hotel by its owners, the present respondents, so that the question of fixing its standard rent under Section 7 of the Madhya Pradesh Accommodation Control Act, 1961, has not arisen. It has been argued that, even so, the reasonable rent contemplated by Sec. 138 (b) of the Act cannot exceed the standard rent to be fixed under the aforesaid Section 7. It has thus been urged that it was incumbent for the Municipal Commissioner to determine the annual value of the building on the same basis on which its standard rent was required to be fixed under Section 7. Reliance in this connection has been placed on the decisions of this Court in Corporation of Calcutta v. Smt. Padma Debi, (1962) 3 SCR 49; Corporation of Calcutta v. Life Insurance Corporation of India, (1971) 1 SCR 248; Guntur Municipal Council v. Guntur Town Rate Payers Association, (1971) 2 SCR 423 and New Delhi Municipal Committee v. M. N. Soi, Civil Appeal No. 541 of 1976 Decided on 24-9-1976.

5. As has been stated, clause (b) of Section 138 of the Act provides that the annual value of any building shall "notwithstanding anythi