Bombay High Court
Jagdish Amritlal Karia And Anr vs B.M.C. And Anr on 5 November, 2014
Author: R.D. Dhanuka
Bench: R.D. Dhanuka
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FA186.90
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
FIRST APPEAL NO.186 OF 1990
ALONGWITH
FIRST APPEAL NO.187 OF 1990
ALONGWITH
FIRST APPEAL NO.188 OF 1990
ALONGWITH
FIRST APPEAL NO.189 OF 1990
DISTRICT : BOMBAY
1. Jagdish Amritlal Karia, )
2. Mrs. Anuradha Jagdish Karia, )
both of Bombay Indian Inhabitants, )
residing at 4-A, Dama House, First Floor,)
Tejpal Road, Gamdevi, )
Bombay - 400 007 ) ..... Appellants
(Org.Appellants)
VERSUS
1. The Bombay Municipal Corporation )
of Greater Bombay, a Statutory Corporation)
constituted under Bombay Act III of 1888,)
having its Office at Mahapalika Marg, )
Bombay - 400 001 )
2. The Municipal Commissioner of )
Greater Bombay, having his Office at )
Mahapalika Marg, Bombay - 400 001 ) ..... Respondents
(Org.Respondents)
--
Mr.Rajesh Patil, a/w. Asmant Nimbalkar for the Appellants.
Mr.Vinod Mahadik for BMC/Respondents.
--
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FA186.90
CORAM : R.D. DHANUKA, J.
RESERVED ON : SEPTEMBER 29, 2014
PRONOUNCED ON : NOVEMBER 5, 2014
JUDGMENT
These four first appeals were heard together and are being disposed of by a common judgment as the points involved therein are common. Some of the relevant facts for the purpose of deciding these appeals are as under :-
2) By an indenture of lease dated 28th February 1921 between the trustees for the Improvement of the City of Bombay a Corporation constituted under the City of Bombay Improvement Act, 1898 and one Mr.Mohamed Abba Juma, the said board granted the said Mr.Mohamed Abba Juma a lease of the premises i.e. lease of the land containing an area of 5722 sq.yards or thereabouts togetherwith the buildings and structures standing thereon situate on and being plot no.4 of the East Agripada (North) bearing Industrial Survey No.1964 of Byculla Division and bearing E Ward Nos. 7411(1) (2) and for the term of 99 years commencing from 1 st day of December 1915 on the terms and conditions setout in the said indenture of lease.
3) By an indenture of wakf dated 6th March 1933 between the said Mr.Mohamed Abba Juma and Rehmabai Mohamed Abba Juma and two others called as trustees of the indenture of wakf, the said Mohamed Abba Juma, entered into a lease agreement dated 3rd May 1951 to lease the said land hereditaments and premises.
4) On 2nd June, 1951 the said Rehmabai and others assigned the leasehold rights in favour of Mr.Amritlal V.Karia on the terms and conditions recorded therein.::: Downloaded on - 05/11/2014 23:48:08 :::
Kvm 3/62 FA186.90 The lessee was entitled to erect any structures on the said land subject to the sanction and in accordance with the regulations and bye-laws of the municipality or other public authority. The lessee was entitled to use the demised premises for business and other purposes and to erect any structures on the open space subject to sanction, rules, regulations and bye-laws of the authorities including municipal authorities. The lessee was also permitted to sublet or assign the role or any part of his interest in the demised premises or any part thereof.
5) By an order dated 26th August 1955 passed by this court in Suit No. 3799 of 1947, all the interest rights and liabilities of the said Rehmabai and others in so far as plot no.4 and area admeasuring 5300 sq.yards was concerned was assigned to the said Mr.Amritlal Vallabhdas Karia.
6) The right, title and interest of the City of Bombay Improvement Trust thereafter vested in the Municipal Corporation of Greater Mumbai. The lessee thereafter requested the corporation to grant him a new lease in respect of the said plot for the term equivalent to the residue unexpired of the term of 99 years. On 6th May 1964 the Municipal Corporation of Greater Bombay accordingly entered into an indenture of lease with the lessee Mr.Amritlal V.Karia and assigned the said plot on lease to the said lessee on the terms and conditions recorded therein. One of the condition under the said indenture of lease was that the lessee shall obtain necessary permission for construction of the buildings on the demise land from the city engineer. Since then the said lessee became the lessee of the Municipal Corporation in respect of this said demised land and structures.
7) On 7th November 1979, the corporation issued a notice informing the lessee that the rateable value of the three properties i.e. bearing E Ward No.7411(1), E ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 4/62 FA186.90 Ward No.7411(4) and E Ward No.7411(5-6) was modified taking into consideration of the standard rent and interim rent fixed by the court for various period mentioned therein.
8) On 10th June 1980 the Directorate of Industries forwarded copy of the exemption order to the lessee under section 20(i) of the Urban Land (Ceiling and Regulation) Act, 1976 alongwith the plan to the lessee in respect of the said plots. Under the said order the lessee was informed that area of vacant land exempted was that of 1676.31 sq.mtrs. One of the condition of the said exemption was that the exempted vacant land described in the schedule to the said order shall not be used for any consideration whatsoever and even if there was a change in the FSI in future permitting additional construction, that part was not to be available for such construction.
9) On or about 22nd March 1983 the Corporation issued special notice under section 167 of the Act informing that the assessment book had been amended and called upon the lessee to file complaint within 15 days from the date of receipt of the said notice under section 163 (2) of the said Act and to point out the grounds on which the valuation was complained against. The corporation informed that the rateable value of the premises mentioned therein had been fixed/increased to Rs.16,935/- for the year 1983-84. The Corporation issued similar notices also in respect of the other structures.
10) In response to the said notices the lessee through his advocate lodged a complaint objecting to the fixing of the rateable value of the property on the ground that the same was unauthorised construction and appeared to have been erected by the tenant without the consent and permission of the lessee and in ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 5/62 FA186.90 breach of the express terms of tenancy. The lessee informed the corporation that he was taking steps against the concerned tenant. In the alternative it was contended that even if the said structure was liable to tax, the rateable value was very high and exorbitant. The lessee requested to register a complaint and to fix a meeting for investigation of the said complaint. Similar complaint was filed in respect of all the structures in question which according to the lessee were unauthorisedly constructed by the tenants without permission of the lessee. The lessee also filed various documents and a report dated 31 st December 1987 obtained from M/s.Poonager, Bilimoria and Co., Architects, Engineers and Surveyors raising objections about the quantum of rateable value and suggesting that the rateable value of all the sheds were assessable if at all at notional rate of Rs.1/- per month.
11) The Municipal Corporation prepared a Tabulated ward report (TWR) for the fortnight ended 15th January 1983 in respect of such noticed structures. It was mentioned in the said report that the C.I. shed was constructed by the tenant of Karia compound on the amenity land.
12) On 30th August 1983 the investigating officer passed an order deciding the rateable value in respect of the noticed structures and rejected the submissions of the lessee. The lessee thereafter impugned the orders passed by the investigating officer by filing municipal appeals before the Small Causes Court at Bombay being Municipal Appeal Nos.303 of 1983, 304 of 1983, 305 of 1983, 83 of 1984, 325 of 1984 and 259 of 1985.
13) Being aggrieved by the said order dated 30th August 1983 the appellants preferred four separate appeals under section 217 of the Municipal Corporation Act ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 6/62 FA186.90 before the Small Causes Court at Bombay bearing Municipal Appeal No.303 of 1983, 305 of 1983, 325 of 1984 and 259 of 1984.
14) After considering the pleadings, the Small Causes Court framed points for determination which are are under :-
1) Whether the concerned property in each of the appeal is a structure or hereditament liable to be separately numbered and assessed for the purposes of taxes?
2) Is concerned structures in each of the appeals constructed unauthorisedly or illegally by the tenants of the structures in contravention of the provisions of the Bombay Rent Act and/or in terms of tenancy and/or Urban Land Ceiling and Regulation Act and/or in breach of the restrictions under the byelaws under the B.M.C.Act and development Rules? If so whether and to what extent the appellants are liable to pay taxes on assessment of rateable value of such structures ?
3) Is fixation of the rateable value in respect of the concerned structures excessive or illegal? If so, what consequential orders be passed in connection with the said assessment ?
4) Relief and costs?
Both the parties led oral evidence before the Small Causes Court.
15) By a common order dated 20th and 21st July 1989 the learned Additional Chief Judge disposed of six municipal appeals including the above referred four appeals granting part relief in aforesaid four municipal appeals and dismissed the other two appeals bearing Nos.303 of 1983 and 305 of 1983.
16) Being aggrieved by the order and judgment dated 21st July 1989 passed by the Additional Chief Judge Small Causes Court the appellants herein filed aforesaid four appeals under section 218 of the Mumbai Municipal Corporation Act, 1888. The First Appeal nos.186 of 1990, 187 of 1990, 188 of 1990 and 189 of ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 7/62 FA186.90 1990 are arising out of the orders passed by the learned Additional Chief Judge in Small Causes Court in Municipal Appeal Nos.303 of 1983, 305 of 1983, 325 of 1984 and 259 of 1984 respectively.
17) The appellants raised various issues in these four appeals. This court by an order dated 17th June 2000 formulated following two questions for consideration which are are under :-
"1. While assessing general tax on the structures which have been legally constructed by the appellants, when the entire land (including the land on which unauthorised structures have subsequently come up) has been taken into consideration and the land has been assessed to general tax, can again the same land be taken into consideration for levying general tax in relation to the unauthorised structures ?
2. When admittedly the structures in relation to which property tax or general tax is being levied are unauthorised structures, in the sense that they have been constructed without getting the building plans sanctioned by the Corporation and they have been occupied without the Corporation issuing an occupation certificate, be subjected to levy of property tax or general tax by the Corporation?"
18) By an order dated 17th June 2000 this court recorded the submission of the Municipal Corporation that the Corporation did not dispute that once a piece of land is taken into consideration and subjected to levy of property tax at the time of assessing property tax on the buildings which have been legally constructed, the same land could not be again taken into consideration for levy of property tax while assessing the property tax on a new structure. It is held that the land which has been assessed to property tax once cannot be again subjected to that purpose merely because a new structure has come up while assessing the new structure.
::: Downloaded on - 05/11/2014 23:48:08 :::Kvm 8/62 FA186.90 Only the rateable value of the building will have to be taken into consideration as the land is already assessed to property tax while assessing the old structure. This court accordingly answered the first question formulated as aforesaid in the said order dated 17th June 2000.
19) However, in so far as second question formulated as aforesaid is concerned, this court after referring to various judgments took a different view and did not agree with the earlier judgments in case of Rambhai Laxminarayan Kothari vs. Municipal Commissioner and others reported in AIR 1995 Bombay 411 and directed the office to place the matter before the Hon'ble Chief Justice for referring the issue to a Division Bench of this court.
20) By an order and judgment dated 13th July 2001 passed by the Division Bench of this court the second issue referred to the Division Bench by the learned Single Judge came to be decided. It is held by the Division Bench that the Municipal Corporation is entitled to levy property or general tax prescribed in case of unauthorised or illegal structures which are constructed without getting the building plans sanctioned by the corporation and which are occupied without the corporation issuing the occupation certificate. The Division Bench directed the office to place the appeals before the learned Single Judge for final disposal.
21) These first appeals were thereafter placed on board before the learned Single Judge. During the course of the argument it was submitted that the learned judge of Small Causes Court while deciding the four appeals had not given any reasons whatsoever in support of the judgment of dismissal of the four appeals with reference to the question of fixing the rate. This court accepted the said submission of the appellants and by an order dated 14 th July 2009 directed the learned judge of ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 9/62 FA186.90 Court of Small Causes to record his reasons on the point 'whether the order passed by the officer of the corporation fixing the assessment in each of the appeal is proper and to submit his findings to this court. This court clarified that this court had not expressed any view on merits of the matter. The Small Causes Court was also directed to render findings in regard to the said two structures on the quantum of assessment.
22) Pursuant to the said order passed by this court, the Additional Chief Judge of the Small Causes Court at Bombay after hearing the parties rendered its findings on the issues referred by this court and held that the two shed portions of structures 7411(1C) and 7411(1D) were to be assessed at the rate of Rs.25 per 10 sq.mtrs. and the loft portion of structure 7411(1C) to be assessed at the rate of Rs.13 per 10 sq.mtr for the relevant period of those appeals as just fair and reasonable and forwarded those findings to this court. The appellants have impugned those findings also by carrying out amendment in these appeals.
23) Mr Patil learned counsel appearing for the appellants placed reliance on the definition of "owner" under Section 3(m) of the Mumbai Municipal Corporation Act 1888 and submits that since the appellant was not owner of the structure unauthorisedly constructed by the tenant of the appellant, within the meaning of Section 3(m) of the Act, Corporation cannot recover any rent or any tax for such unauthorised structure from the appellants. Section 3(m) of the Mumbai Municipal Corporation Act 1888 reads thus :
"3. Definition of terms.-- In this Act, unless there be something repugnant in the subject or context,
(a) to (l) ....
(m) "Owner" when used in reference to any prmises, means the ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 10/62 FA186.90 person who receives the rent of the said premises, or who would be entitled to receive the rent thereof if the premises were let, and includes---
(i) an agent or trustee who receives such rent on account of the owner; and
(ii) an agent or trustee who receives the rent of, or is entrusted with, or concerned for, any premises devoted to religious or charitable purposes; and
(iii) a receiver, sequestrate or manager, appointed by nay court or competent jurisdiction to have the charge of, or to exercise the rights of an owner of the said premises."
24) Learned counsel placed reliance on the definition of "building" under Section 3(s) of the Act and submits that the impugned structure constructed by the tenant would fall within the definition of "building" defined under Section 3(s). Section 3(s) of the Act reads thus :
"3. Definition of terms.-- In this Act, unless there be something repugnant in the subject or context,
(a) to (r) ....
(s) " building " includes a house, out-house, stable, shed, hut and every other such structure, whether of masonry, bricks, wood, mud, metal or any other material whatever;
[(sa) tenement" means a building or a part of a building, other than a temporary building or a part thereof, let or intended to be let or occupied separately;
(SB) ' temporary building " means any building which is constructed principally of mud, leaves, grass, cloth, thatch, wood, corrugated iron or asbestos cement sheets or such other material and includes a building of whatever size constructed of whatever material which the Commissioner has allowed to be built as a temporary measure;]"
25) Learned counsel placed reliance on the definition of "premises" as defined under Section 3(gg) of the Act and submits that the land in this case was leased to ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 11/62 FA186.90 the appellants by the Municipal Corporation. The appellants let out the land to the tenants for construction of structure thereon. There was no FSI left after such structures were already constructed on the land which was tenanted by the appellants. The tenants of the appellants however constructed additional structure in the open space. It is submitted that the appellants were not the owners of such additional structure. The Corporation had already assessed the entire land on which the original structure was constructed and has already recovered the tax thereon. Section 3(gg) of the Act reads thus :
"3. Definition of terms.-- In this Act, unless there be something repugnant in the subject or context,
(a) to (ff) ....
(gg) " premises" includes messuages, buildings and lands of any tenure : whether open or enclosed, whether built on or not and whether public or private:]"
26) Learned counsel appearing for the appellant placed reliance on Sections 146 and 147 of the Act and would submit that the responsibility to apportion the property for the purpose of tax could be on the appellant only if the appellants would have let out the said additional structures to the tenants. The appellants could be considered as owners of the land whereas the tenants who had constructed the structures were owners of the said structures. It is submitted that under Section 146(2), the tax could be primarily leviable if the premises are let by the lessor or the premises are sub let by the superior lessor. The appellants not having let out the unauthorised structure constructed and occupied by the tenant nor the tenant had sublet the said structure, case of the appellants would fall under Section 146(2)
(c) of the Act. It is submitted that thus the Corporation could have recovered the tax if any, from the tenants who had constructed and occupied the unauthorised structures and not the appellants. Sections 146 and 147 of the Act read thus :
::: Downloaded on - 05/11/2014 23:48:08 :::Kvm 12/62 FA186.90 "Section 146 - Primary responsibility for property taxes on whom to rest-
(1) Property taxes shall be leviable from the actual occupier of the premises upon which the said taxes are assessed, if such occupier holds the said premises immediately from (the Government) or from the Corporation or from fazendar.
[Provided that the property taxes due in respect of any premises owned by or vested in the Government and occupied by a government servant or any other person on behalf of the government for residential purposes shall be leviable primarily from the Government and not the occupier thereof.] (2) Otherwise the taxes shall be primarily leviable as follows, namely :
(a) If the premises are let, from the lessor;
(b) if the premises are sub let, from the superior lessor; and
(c) if the premises are unlet, from the person in whom the right to let the same vests.
[(d) if the premises are held or occupied by a person who is not the owner and the whereabouts of the owner of the premises cannot be ascertained, from the holder or occupier:
and
(e) if the premises are held or developed by a developer or an attorney or any person in whatever capacity, such person may be holding the premises and in each of whom the right to sell the same exists or is acquired, from such holder, developer, attorney or person, as the case may be:
Provided that, such holder, developer, attorney or person shall be liable until the actual sale is effected.] [(3) But if any land has been let for any term exceeding one year to a tenant, and such tenant on any person deriving title howsoever from such tenant has built upon the land, the property taxes assessed upon the said land and upon the building erected thereon shall be leviable primarily from the said tenant or such person, whether or not the premises be in the occupation of the said tenant ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 13/62 FA186.90 or such person.] Section 147 - Apportionment of responsibility for property tax when the premises assessed are let or sub-let. -
(1) If any premises assessed to any property tax are let, and their rateable value [or the amount of property tax levied on the basis of capital value, as the case may be,] exceeds the amount of rent payable in respect thereof to the person from whom, under the provisions of the last preceding section, the said tax is leviable, the said person shall be entitled to receive from his tenant the difference between the amount of the property tax levied from him, and the amount which would be leviable from him if the said tax were calculated on the amount of rent payable to him.
(2) If the premises are sublet and their rateable value [or the amount of' property tax levied on the basis of capital value, as the case may be,] exceeds the amount of rent payable in respect thereof to the tenant by his sub-tenant, or the amount of rent payable in respect thereof to a sub-tenant by the person holding under him, the said tenant shall be entitled to receive from his sub-tenant or the said subtenant shall be entitled to receive from the person holding under him, as the case may be, the difference between any sum recovered under this section from such tenant or sub-tenant and the amount of property tax which would be leviable in respect of the said premises if the rateable value [or the amount of' property tax levied on the basis of capital value, as the case may be,] thereof were equal to the difference between the amount of rent which such tenant or sub-tenant receives and the amount of rent which he pays.
(3) Any person entitled to receive any sum under this section shall have, for the recovery thereof, the same rights and remedies as if such sum were rent payable to him by the person from whom he is entitled to receive the same."
27) Learned counsel placed reliance on Sections 154 and 155 of the Act and would submit that the appellants could not have filed any proceedings against the tenants for recovery of rent since the tenants had never let out the said structures ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 14/62 FA186.90 and the same was constructed and occupied unauthorisedly by the tenant. The question of considering the rent alleged to have been recovered by the appellants by determining the ratable value thus did not arise. It is submitted that under Section 155 of the Act, the Corporation ought to have issued a notice upon the tenant/occupier who were owners of such unauthorised structure for the purpose of obtaining information or to enter and inspect the assessable premises.
28) Learned counsel submits that the Corporation had issued a notice to the appellants to recover taxes on the additional structure. No notice was given to the actual occupier. The occupier was not even asked to remain present even at the time of hearing. Since the appellants were neither the owners nor occupiers of the additional structures, appellants were not liable to pay any taxes. The Corporation did not take any steps to serve notice upon the occupiers. It is submitted that though the division bench of this Court in its Judgment delivered on 13/07/2001 between the same parties on the reference made by the learned single Judge, took a view that the Corporation was entitled to levy property and general tax in case of unauthorised or illegal structure, a question still remains whether such property and general tax can be recovered from the original owner of the land or lessee who had given the land on lease for construction of structure and even if such tenant carried out additional and unauthorised construction thereon.
29) Mr Patil learned counsel then submits that if a tenant creates any sub-
tenancy, he would be a landlord of such sub-tenant in so far as structure is concerned. In this case, the appellants had granted the plot on tenancy to the tenants with a right to put up the structure and thus the lessor would be owner of the land whereas tenant would be owner of such structure. It is submitted that the appellant is neither entitled to recover any rent for such unauthorised structure ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 15/62 FA186.90 from the tenant nor has been recovering any rent or other compensation for carrying out such unauthorised construction. Learned counsel invited my attention to the order of the Government of Maharashtra prescribing the terms and conditions of exemption under Section 20 of the Urban Land (Ceiling and Regulation) Act, 1976 in respect of the land in question. It is submitted that it was one of the mandatory term and condition of the exemption of the land that the portion of the land prescribed in the schedule was not to be used for any consideration whatsoever. Even if there was any change in the FSI in future permitting the additional construction, that part was not available for such construction. The schedule appended to such order prescribed that an area admeasuring 1676.31 sq. meters was area of vacant land which was exempted under Section 20 of the Urban Land (Ceiling and Regulation) Act 1976. It is submitted that in view of the terms and conditions of the exemption of the land, the tenant was bound to keep exempted land vacant under the provisions of Section 20 of the Urban Land (Ceiling and Regulation) Act 1976 and no construction thereon could have been carried out by the appellants. There was no FSI available. The structures constructed by the tenants were admittedly unauthorised. No recovery of municipal taxes on the additional structure thus could be effected by the Municipal Corporation from the appellants.
30) Learned counsel for the appellants invited my attention to the cross examination of the witness examined by the Municipal Corporation. In para 4 of the cross examination of Mr.P.R.Dange, the said witness admitted that the amenity land for the purpose of assessment of rateable value was compulsorily required to be kept for construction. All the lands in dispute in these appeals were amenity lands. The witness deposed that in all the four instances the structure was capable of being occupied independently of the main building to which it appurtenants. In ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 16/62 FA186.90 one case only the structure had one side which was part of the main building. The other three instances were independent on the main structure. The witness deposed that he had computed the assessment on the basis of area plus hypothetical rent.
Two structures bearing nos. 7411(1D) and 7411(6A) were occupied by Bombay Boring Works. The witness did not know if the said Bombay Boring Works had occupied the premises adjoining structure no.7411(6A) in the main building. The witness did not give any proforma under section 155 of the Act to the occupier of the structure. He did not make any enquiries with any particular person. When the witness inspected the shed, it was full of empty drums. The witness applied the rate of Rs.40/- per 10 square meters as shed only and not as a storage space. He did not take into account the value of the land and structure. The witness was aware that it was a leasehold land from the Municipal Corporation. He did not know if that portion was required to be kept open under the terms of lease.
31) The witness admitted in the cross examination that he would not have assessed the property ward No.7411(1F) if the structure would not exist. The land under that structure was already reflected in the assessment of the adjoining building. The witness deposed that the said answer would hold good for other three structures i.e. 7411(1C), 7411(1D) and 7411(6A).
32) In paragraph 9 of the cross examination the witness deposed that he did not know who had constructed the structure 7411(1F). The Tabulated Ward Report (TWR) showed that it was constructed by the tenants. It is deposed it was not as if that was constructed by M/s. Bombay Boring Works. In paragraph 12 of the cross examination the witness admitted that the structure no.7411(1C) was constructed by the tenants. He however did not remember if the name of the tenant was Marine Tex Engineers. The witness could not say if the structure was abutting the ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 17/62 FA186.90 premises of that tenant. The witness denied the suggestion that the said structure was attached to building on one side, the compound wall on the second side and two sides open. The witness had issued notice under section 155 of the Act for the said structure no.7411(1C). It is deposed that there was one tenant on the second floor to whom the notice was issued but he did not remember the name. According to the information given to him, the tenants constructed that structure and therefore the witness issued the said notice. The tenant however did not respond to the said notice. The witness did not take any action. In paragraphs 13 and 14 of the cross examination the witness deposed that structure no.7411(1D) was constructed by Bombay Boring Works which was touching the premises of the said Bombay Boring Works. It was open on one side. The witness issued notice under section 155 of the Act but there was no response. No rent was disclosed.
33) The witness admitted that the tenants were not called at the time of hearing of the objection. The witness admitted that all the assessment of the main buildings were on the basis of standard rent but he was not aware of the standard rent of the main building and was not taken into consideration by him.
34) Learned counsel also invited my attention to the examination in chief and cross examination of the witness examined by the appellants. The appellants examined Mr.Jagdish Amritlal Karia, the appellant no.1. In the examination in chief the witness deposed that in 1982 there was no FSI available because of reduction of index figure. All the four structures were constructed by the tenants in the main building letout to them respectively viz. Marine Tex Engineers, Bombay Boring Works, Chandrakant R.Shah and Bombay Boring Works respectively.
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35) It is stated by the appellant No.1 in the evidence that his permission was not taken by the tenants prior to construction and those structures were in compulsory open space and amenity land. He did not charge any amount to the tenants for those structures. The property was covered by Urban Land (Ceiling & Regulation) Act, 1976. The space between the new structures built by the tenants was required to be kept compulsorily open as such because of the provisions of the lease deed, provisions of the Bombay Municipal Corporation Act, 1888 and the Urban Land (Ceiling & Regulation) Act, 1976. Witness deposed that structure bearing No.7411 (1d) was constructed by Bombay Boring Works and was used as a workshop. The structure was not attached to any building but was in the compulsory open space 7411(4). In so far as structure No.7411 (1c) is concerned, it is deposed that the said structure was adjoining the main wall of the building No.7411 (1) which was put up by Marine tex Engineers who are tenants with Unit 4A 4B and 6 on the ground floor in the said building being used as workshop by the tenants. The roof of 7411 (1D) is resting on poles and also the roof of 7411 (1C). The witness deposed that he had taken a report of architect of Mr Sam Rao of M/s Punegar Billimoria and Co. The standard rent of the units occupied by three tenants had been fixed. He did not receive any amount from any of the tenants for the use of land under the structure and also did not seek any increase of standard rent as he had not let it out nor permitted them to build. The land under the offending structure is incapable of being let. They cannot be used separately from the user of the main structure.
36) The witness deposed that there was a permission to the tenants to use the open space around the building for ingress or egress. The witness deposed that he had not filed any ejectment suit but he had objected to their unauthorised user and asked them to vacate. The witness produced the valuation report prepared by the ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 19/62 FA186.90 architect.
37) In cross examination of the appellant No.1 the witness deposed that structure No.7411(6A) and 7411(1D) were put up by Bombay Boring Works. The Bombay Boring Works were the tenants in the building and were occupying 5 units in the building on the ground floor and were paying Rs.456 per month for all the five units. It is deposed that structure No.7411 (1C) is constructed by Marine Tex Engineering and No.7411(1F) is put up by Chandrakant R. Shah admeasuring 246 sq.ft. 8105 sq. meters respectively. It is deposed that the structures were constructed on the lands required to be kept open as an amenity land. The tenants were prohibited from putting up any construction under the lease agreement. He did not take any action against them as landlord. The witness denied the suggestion that the structure was capable of commanding rents.
38) The appellants also examined Mr Sam Phiroz Rao, architect and engineer as one of the witness. In his examination in chief, he deposed that he had got the plan annexed to Exhibit-G drawn and prepared for the purpose of declaration under the ULC Act. The ULC authorities had exempted the area of 1676. sq. meters under the provisions of ULC Act and the said land was not capable of the built upon. They could be built upon under Development Control Regulations. The witness deposed that he had inspected the offending structure and had seen the nature of construction. The structures were located in the necessary amenity open space of the property and were not capable of being authorised by the Corporation. On dismantling of the structure, no new structure could come up. These structures did not exist in December 1979 and could not be considered as hereditament for the purpose of the rating. The structures were not capable of distinct use of anyone except for unit holders and were not capable of being let or separately let. The ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 20/62 FA186.90 witness deposed that according to him the rating thereof was if at all would be at notional value of Rs.1 per sq. meter. The Corporation has rated at the cost of Rs.30 to 33 per month of 10 sq. meters. In the cross examination of the said architect, he deposed that he had last visited the property just before giving the report before November 1987. He found four offending structures there.
39) The witness deposed that he knew the rate per sq. meter in 1982 for that type of structures. There could be earning not more than Rs.20-25 per sq. meter for additional work adjoining the building. If constructed with permission of BMC and competent authority, they could have fetched rent of Rs.15 to Rs.25 per 10 sq. meters. The witness deposed that even if structures would have been constructed by the owner along with the main factory premises, there could not be independently let and even if let to the same tenant as occupying the factory premises, the rent could be of not more than 15% to 20% of letting rate of the factory premises. The witness also replied to the question of the Court that the car parking space or amenity could not be equated with amenity land unless the land was larger than 12 ft. away from factory. When the witness was asked by the Court whether he could say that appropos the space in which the tenant had built unauthorised extensions or structures assessed in the appeals before the Court, the owner had a right to let them out within the meaning of Section 146 of the Act, the witness answered in negative and added that the lands were already married to the building which were already let. The learned counsel submits that the trial Court has not considered these reply given to the Court by the witness in the impugned Judgment.
40) Learned counsel when queried by this Court states that the appellants had filed a suit subsequently for eviction against M/s Marine Tex on the ground that the ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 21/62 FA186.90 said tenant had carried out unauthorised construction. The said suit was decreed in favour of the appellants. The appeal filed by the said M/s Marine Tex is admitted. The said suit was filed after the impugned order came to be passed by Small Causes Court. The appellants did not file any other suit in respect of other structures. Learned counsel submits that the finding of the learned Judge that the structure itself is a separate structure of considerable occupational value which could be independently let out is contrary to the provisions of lease deed, terms and conditions of the exemption order passed by the state government and also provisions of the Mumbai Municipal Corporation Act.
41) The learned counsel submits that though the learned Judge rendered a finding that the temporary shed constructed by Bombay Boring Works was a plain act of trespass in the compulsory open space by the side of the building by the occupant (Bombay Boring Works) the learned Judge did not grant complete relief to the appellant.
42) Mr Patil learned counsel submits that the learned trial Judge has disposed of municipal appeal No.11/1988 along with the appeals filed by the appellants which was of some other landlords in respect of some other properties totally different and unrelated and has mixed up the facts of appeal No.11 of 1988 with the facts in appeals filed by the appellants.
43) Learned counsel submits that the learned trial Judge had referred to various judgments in the impugned judgment which were not at all applicable to the facts of this case and were clearly distinguishable with the fact of this Case. It is submitted that none of the judgments, the issue as to whether the appellant had any right to let the portion on which unauthorised construction was put up arose which ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 22/62 FA186.90 issue had arisen in appeals filed by the appellants. It is submitted that the learned trial Judge wrongly applied the principles of those judgments proceeding on the premise that the appellants in this case also had right to let out the amenity land and to construct a structure thereon.
44) Learned counsel submits that it was only when the building which was being put up in such a state that it was actually and legally capable of occupation that the letting value of the building could enter into the computation for rating and not otherwise. Learned counsel submits that though the municipal corporation had full knowledge of the fact that the tenants of the appellants had put up unauthorised structure no action under Section 351 of the Act was initiated by the Corporation against the unauthorised construction for demolition but on the other hand the Corporation issued notice for recovery of property tax and general tax on such unauthorised structure to the appellants thereby causing hardship to the appellants.
45) Learned counsel submits that the municipal corporation initiated action to assess the additional structures only of which the appellants were neither owners nor occupiers. The occupants of the said unauthorised structure were the owners of those structures and thus notice under Section 162(2) of the Act ought to have been issued to such trespassers and not to the appellants.
46) Learned counsel submits that on the deposition of the appellants that the suit structures were unauthorised and were constructed by the tenants without any permission and that the appellants had not recovered any rent in respect of such additional structures nor could have recovered any rent, there was no cross examination of appellant No.1 by the municipal corporation. The learned trial Judge however did not consider this crucial aspect in the entire judgment at all.
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47) In so far as the quantification of the ratable value assessed by the municipal corporation and partly reduced by the learned trial Judge is concerned, the learned counsel invited my attention to the additional findings rendered by the trial Court on remand by this Court on that issue. It is submitted that the valuation of the land had already been considered while fixing ratable value of the main building and the standard rent had been already fixed. It is submitted that the conclusion of the learned trial judge that the unauthorised structure could not be assessed at a lessor rate than the main building is totally erroneous. It is submitted that the said unauthorised structure would not fetch any rent since the same was incapable of being let out and thus the learned trial Judge ought to have considered the ratable value of such unauthorised structure with notional value of Rs.1 per sq. meter. The learned counsel submits that since the appellants did not have right to let out the open portion of the land, if structure was removed, then the structures could not be assessed.
48) Mr. Patil, learned counsel for the appellants submits that even if this Court comes to the conclusion that the Corporation was empowered to recover taxes by fixing rateable value and recover taxes of unauthorised construction carried out by the tenants from the appellants, such rent cannot be in excess of the standard rent which would be the upper limit. It is submitted that the Court while considering the rateable value, has also to consider a situation whether conditions were less favourable or not, locality or quality of construction, absence of necessary amenities etc. Learned counsel submits that there is a vast disparity in the rateable value of old premises and new premises.
49) It is submitted by the learned counsel that since there was total prohibition from letting the portion on which the unauthorised construction is put up by the ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 24/62 FA186.90 tenants, no rateable value of the structure illegally constructed by the tenants in teeth of prohibition can be considered at all. In support of the aforesaid submission, learned counsel placed reliance on the Judgments in the cases of (i) Lt. P.R. Choudhary (retd.) Vs. Municipal Corporation of Delhi with Ravish Chander Rastogi & Ors. Vs. Municipal Corporation of Delhi & Ors., reported in 2000 Supreme Court and Full Bench Rent Cases page 303, (ii) Dr. Balbir Singh & Ors.Vs. M/s. M.C.D. & Ors., reported in AIR 1985 SC 339, (iii) Municipal Corporation of Delhi Vs. Express Newspaper Ltd., reported in AIR 1998 SC 2945, (iv) Corporation of Calcutta Vs. Smt. Padma Debi & Ors., reported in AIR 1962 SC 151, (v) The Municipal Corporation ig of Greater Bombay Vs. M/s. Polychem Ltd., reported in AIR 1974 SC 1779, (vi) Dewan Daulat Rai Kapoor & Ors. Vs. New Delhi Municipal Committee & Ors., reported in 1980 (1) SCC 685, (vii) New Delhi Municipal Committee Vs. M.N. Soi & Anr., reported in AIR 1977 SC 302, (viii) Century Spinning & Mfg.Co. Ltd. Vs. Asst. Municipality of Ulhasnagar, reported in AIR 1968 SC 859 and (ix) Nirlon Synthetic Fibers & Chemicals Ltd. Vs. Municipal Corporation of Greater Bombay & Ors., reported in AIR 2002 Bom. 295.
50) Learned counsel appearing for the appellants distinguishes the Judgments referred to and relied upon by the Supreme Court in the impugned judgment on the ground that in none of those judgments the Supreme Court and/or this Court has considered the situation where there was absolute prohibition against the landlord to let out the entire portion of land and prohibiting construction on entire open plot of land. It is submitted that in this case, even the Corporation found that unauthorised structures were put up by the tenants and not by the appellants. In this case, the Municipal Corporation was fully aware of the names and addresses of the tenants who had put up unauthorised structures in respect of ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 25/62 FA186.90 which the Corporation wanted to levy additional taxes by determining the rateable value in respect of such unauthorised structures.
51) Mr. Mahadik, learned counsel appearing for the Municipal Corporation, on the other hand, supported the findings rendered in the impugned judgment and placed reliance on the judgment referred to and relied upon by the Supreme Court and this Court adverted to in the impugned judgment. It is submitted by the learned counsel that the appellants were lessee of the land. The appellants had already allowed the lessee to carry out construction on the said land. Primary liability to pay taxes on the land as well as structures would be that of the appellants being lessor of the land. It is submitted that the Corporation is not under any obligation to recover rent from the tenant or any other occupants even if he has carried out any unauthorised construction. Learned counsel submits that though the appellants have admitted that the construction of unauthorised structure was carried out by their tenants, the appellants did not bother to take any action against such tenants for eviction or for recovery of any additional rent or taxes demanded by the Municipal Corporation. It is submitted that the appellants even ignored to make any complaint to the Corporation against any such tenants for unauthorised construction.
52) It is submitted that as a matter of record, the Corporation had issued a notice to one of such tenants which is also recorded in the impugned order and judgment. It is submitted by the learned counsel that the Corporation had issued notice for determination of rateable value in respect of the additional structures/sheds on the theory of the hypothetical letting and determined the quantum on the basis of the hypothetical rent.
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53) In so far as facts of Appeal No.11 of 1988 disposed of by the learned Judge along with other six appeals filed by the appellants are concerned, it is submitted that the facts of Appeal No.11 of 1988 are different and are distinctly set out and separated by the learned Judge in the impugned judgment. It is submitted that there is no confusion of the facts in Appeal No.11 of 1988 and facts in other six appeals canvassed by the learned counsel for the appellants.
54) Mr. Mahadik, learned counsel for the Corporation placed reliance on the judgment of Supreme Court referred to and relied upon by the learned Judge in the impugned Judgment and Decree including the judgment of this Court in the case of Ramakant Madhusudan Tipnis Vs. Municipal Corporation of Greater Bombay, reported in AIR 1978 Bombay 382. Learned counsel submits that the facts of the case before this Court in the case of Ramakant M. Tipnis (supra) are identical to the facts of this case and the principles laid down by this Court and the said Judgment squarely apply to the facts of this case. It is submitted that even in that case, the trespasser had unauthorisedly constructed the structure which was not let out by the landlord. This Court, after considering Section 146(2)(c) of the Act and after considering the judgment of this Court in the case of Ramji Keshavji Contractor Vs. The Municipal Commissioner of Greater Bombay, reported in (1954) Vol. LVI Bom. LR 1132, has held that the landlord is made primarily liable to pay the tax though the structure was unauthorisedly constructed by the tenant and/or the trespasser. This Court considered that in view of Section 146 of the Mumbai Municipal Corporation Act, 1888, the landlord is primarily liable to pay taxes. It is submitted that even when the structure is unlet, the principle of hypothetical landlord and hypothetical tenant would apply and the land and building together will constitute the composite unit for assessment. Paragraphs 2 to 13 of the said judgment read thus :-
::: Downloaded on - 05/11/2014 23:48:08 :::Kvm 27/62 FA186.90 "2. The appellant objected to the as-sessment of one room in the property, the monthly rent of which was estimated by the Municipal Officers at Rs. 5 for the purpose of assessment. The contention of the appellant was that that room has been unauthorisedly constructed by a trespasser and, therefore, he was not liable to pay the tax for that room.
This contention was overruled by the learned Chief Judge on the ground that even though the premises were not let, under Section 146 (2) (c) of the Act, the owner of the land on which it was built was primarily liable as held in Ramji Keshavji v. Municipal Commr. of Greater Bombay, (1954) 56 Bom LR 1132.
3. A somewhat identical point arose in F. As. Nos. 169, 170, 171 and 571 of 1971 and relying on the decision of the House of Lords in London County Council v. Churchwardens and Overseers of the Poor of the Parish of Erith in the County of Kent, 1893 AC 562, and the passage at page 422 of Ryde on Rating as to the effect of this decision, I confirmed the decision of the Chief Judge of the Small Cause Court in that case as consistent with the rating practice as established in England and here in view of the provisions contained in Section 146 (2) (c) and the definition of 'premises' contained in Section 3 (gg) of the Bombay Municipal Corporation Act as well as the aforesaid decision of this Court and a later decision of the Supreme Court in National and Grindlays Bank Ltd. v. Municipal Corporation for Greater Bombay, .
4. Mr. Tipnis, who appears in person, has also fairly drawn my attention to a Division Bench decision of this Court, to which I was a party, in First Appeal No. 240 of 1968 (Bom) with other First Appeals, decided on June 28, 1976.
5. Mr. Tipnis, however, sought to distinguish all these cases on the ground that they were cases where the landlords could have had a right to let. In the present case, according to Mr. Tipnis, ha had no right to construct anything on the portion of the land in respect of which assessment is levied. He was forbidden by the Rules of the Municipality from constructing anything on the land) and merely because someone has constructed an unauthorised structure, he cannot be held liable on the footing that he had a right to let the premises.
6. This argument, in my opinion, ignores the definition of the word 'land' contained in Section 3 (r). Under that definition, 'land' includes land which is built upon or covered with water, benefits to arise out of land, things attached to the earth or permanently fastened to anything attached to the earth and rights created by legislative enactment over any street. There is nothing in this definition to indicate that what is ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 28/62 FA186.90 built upon must be so built upon in accordance with the Rules of the Municipal Corporation or that it should be an authorised structure.
7. The word used in Section 146 (2) (c) is 'premises' which is defined in Section 3 (gg) as including messages, buildings and lands of any tenure, whether open or enclosed, whether built on or not and whether public or private. As the definition includes lands of any tenure, even though the owner may not be able to construct anything on it, as contended by Mr. Tipnis, it is included in the definition of 'land' for the purposes of the Bombay Municipal Corporation; and, in any event, it is included along with the building on it, whether constructed authorisedly or unauthorisedly, in the definition of 'premises'.
8. We are concerned with hypothetical right to let and not with the actual right to let when considering Section 146 (2) (c). It is necessary in this connection to quote the following passage at page 422 of Ryde on Rating, Thirteenth Edition, 1976, which runs as follows:--
"The effect of this decision The London County Council v. The Churchwardens and Overseers of the Poor of the Parish of Erith in the County of Kent 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. This view is also quoted with approval by Bean and Lockwood's Rating Valuation Practice, Sixth Edition, 1969. at page 19, and it is further observed by the learned authors:--.
"The nature of the tenancy envisaged is important, and in R. v. South Staffordshire Water Co, ((1885) 16 QBD 359) it was held that 'a tenant from year to year is to be considered as a tenant capable of enjoying the property for an indefinite time, having a tenancy which it is expected will continue for more than a year but which is liable to be put to an end by notice'. It is thus apparent that a reasonable prospect of the tenancy continuing may be assumed and the decision in Humber Ltd. v. Jones and Rugby Rural Dist. Council ((I960) 53 R & IT 293) has made it clear that the implied lack of security of tenure cannot be claimed as a factor which would adversely affect the rent to be expected."
10. In Ramji Keshavji v. Municipal Commr. of Greater Bombay, (1954) 56 3om LR 1132, the appellant who was the landlord let out an open plot of land to one Kanse for a period of one year from April 1, 1949 to ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 29/62 FA186.90 March 31, 1950, on a monthly rent of Rs. 140 and the tenant constructed upon this plot a temporary asbestos shed. The Bombay Municipality treated the land and the shed as a single assessable unit and fixed the combined rateable value thereof at Rs. 5,500 for the assessment period from October 1, 1953 to March 31, 1954. When the bill was presented to the landlord, he contended that he was not primarily liable for the payment of the tax in respect of the shed constructed by the tenant,
11. After referring to Ss. 147, 154, 155 and 156 of the Bombay Municipal Corporation Act, Chagla, C.J. observed at page 1135:--
"Now, in our opinion, these sections must be read in the light of Section
146. The object of these sections is to fix rateable value and also to determine who is primarily liable. Therefore, if the primary liability under Sub-section (2) is upon the lessor where the premises are let, the information that would have to be gathered and the rateable value that will have to be fixed would be with regard to premises which would include both the land and the building, if a building was constructed upon the land. It would be untenable to suggest, that under Sections 154, 155 and 156 the Municipality should assess land separately from the building. If the Municipality were to do that, then it would be impossible to fix the primary liability as far as the building is concerned.
It may also be pointed out that in the Bombay Municipal Corporation Act 'land' is defined as land which is being built upon or is built upon, and, therefore, when Sections 154, 155 and 156 refer to 'land.', it would include any structure put up on the land. Therefore in our opinion, the scheme of Section 146 and Sections 154, 155 and 156 clearly indicates that, when a land is let and the letting does not fall within the purview of Sub-section (3) of Section 146, and where the landlord is made primarily liable under Sub-section (2) of Section 146, the proper rateable unit is the land with the building standing thereon."
12. It is clear that in that case, as the original lease was only for one year, so far as the year of assessment was concerned, it could not be said that the premises were let by the landlord to the tenant, But nevertheless this Court held, with respect, rightly that the building and the land must be assessed together and the landlord would be primarily liable under Section 146 (2),
13. It is true that Mr. Tipnis is right in his submission that so far as the case of National and Grindlays Bank Ltd. was concerned, the case fell within the ambit of Section 148 (2), (a) of the Act. Nevertheless, in that ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 30/62 FA186.90 case the Supreme Court has laid down (at p. 1051 of AIR):--
"The scheme of Section 146 of the Act is that when land is let and the tenant has built upon that land, there should be a composite assessment of tax upon the land and building taken together." It must, therefore, follow that even when it is unlet, the principle of hypothetical landlord and hypothetical tenant would apply and the land and the building together will constitute the composite unit for assessment."
55) Mr. Mahadik, learned counsel for the Corporation then submits that as far as the quantum of rateable value and taxes determined by the Small Causes Court is concerned, the same is in accordance with the principles laid down by the Supreme Court and this Court and after considering the evidence led by the parties on record. There was no question of determining the rateable value at notional value of Rs.1/- per square meters as canvassed by the learned counsel for the appellants.
56) Mr. Patil, learned counsel for the appellants in rejoinder made an attempt to distinguish the judgment of this Court in the case of Ramakant M. Tipnis (supra) on the ground that in this case, the appellants had no right to let the portion of land on which the tenants had put up unauthorised structures and facts of that case are different.
REASONS AND CONCLUSION
57) A perusal of the record indicates that there is no dispute that the appellants who were claiming through the original lessee Mr.A.V.Karia and he was allowed to erect structures on the demised land and to sublet it. It is not in dispute that the lessee had permitted his tenants to erect structures on the portion of the land. The appellants were aware of such construction put up by the tenant on the land. It is however case of the appellants that in so far as noticed structure are concerned, the ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 31/62 FA186.90 appellants were neither permitted under the lease deed or under any provisions of law to construct such noticed structures nor the appellants granted any permission to their tenants to put up such additional structures. It is case of the appellants that those tenants were thus trespassers in respect of such unauthorised construction and neither the appellants could recover any rent from such trespassers in respect of additional structures which was unauthorised nor any rent and/or any other compensation was ever recovered by the appellants from such trespassers in respect of unauthorised construction.
58) The submission of the appellants is that appellants were thus not liable to pay any taxes in respect of such unauthorised construction. Even if the corporation could recover any tax in respect of such unauthorised construction, the corporation having knowledge and it being an admitted position that such structures were unauthorised structures and were put up by the tenants of the appellants, corporation could recover such taxes only from such trespassers/tenants and not from the appellants. The appellants in support of this submission placed reliance on the oral evidence led by the witness examined by the appellants and also the cross examination of the witness examined by the corporation. The appellants also placed reliance on the tabulated ward report prepared by the inspectors of the corporation admitting that such structures were put up by the tenants of the appellants.
59) In so far as submissions of the learned counsel for the appellants that the structures in question were constructed by the tenants without permission of the appellants or that the same could not have been constructed in violation of the Lease Deed or without permission of the Municipal Corporation or the landlords and thus no taxes could be recovered of such unauthorised and illegal structures ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 32/62 FA186.90 from the appellants are concerned, the oral evidence led by the witness examined by the appellants would indicate that the witness has completely shown ignorance as to when the tenants started construction. He has deposed that he came to know when he got the special notice from the Corporation and he was not aware of such construction prior to that. The witness admitted that he had not complained to the Corporation against such unauthorised construction or requested for its removal though he visited the property at times. The witness also admitted that he had not taken action against those tenants as the landlord.
He deposed that he has orally objected. He deposed that the tenants were prohibited from putting up any construction. Learned counsel appearing for the appellants did not deny that no complaint of any nature whatsoever was made by the appellants against such unauthorised construction to the Corporation. During the course of the arguments, learned counsel for the appellants however, stated that as regards one of the structures, the appellants had filed proceedings for eviction against M/s.Marine tex engineers on the ground of such unauthorised construction in the proceedings filed after the Trial Court passed the impugned order in this proceeding. The Small Causes Court passed a decree against the tenants which decree is impugned by the tenants before the Appellate Bench of the Small Causes Court. Such proceedings filed by the tenant is pending. It is submitted that except the said proceedings, the appellants did not file any other proceedings before receiving special notice from the Corporation or any time thereafter till today.
60) A perusal of the record thus clearly indicates that though the appellants were fully aware of such unauthorised construction put up on the land, no action against the tenants was taken by the appellants before passing a decree by the Trial Court. The appellants also did not make any complaint to the Corporation ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 33/62 FA186.90 against such unauthorised construction for initiating action against such tenants.
In my view, the appellants thus could not oppose levy of Municipal taxes of such unauthorised construction which was admittedly put up by the tenants on the land which was given on lease to the appellants by the Municipal Corporation. The appellants not having taken any action against such tenants for unauthorised construction could not have expected from the Corporation to take action suo moto against such unauthorised construction. It is not the case of the appellants that though any complaint was made to the Corporation or that such unauthorised construction was brought to the notice of the Corporation, the Corporation did not take any action against such unauthorised construction.
61) Be that as it may, the Division Bench of this Court has already held that there is no provision under the Mumbai Municipal Corporation Act which provides that the building should be legally constructed or authorisedly constructed for the purpose of taxation. Once the construction is complete and can be occupied, it falls in the category of building. The Division Bench in this matter by the Judgment and Order dated 13th July, 2001 has held that in view of Section 143 of the Mumbai Municipal Corporation Act, the taxes shall be levied in respect of all buildings and lands in Greater Bombay unless there is any specific exception carved out under the provision of the said Act. There is no such exception made in respect of illegal construction or unauthorised construction. The Division Bench has also held that the demolition of an unauthorised construction or imposition of penalty are safeguards provided to see that there is no unauthorised or illegal construction made in the city or otherwise it may prove to be hazardous or dangerous to the public. But from that, it cannot be concluded that the Municipal Corporation cannot impose the property taxes on such illegal or unauthorised construction. It is held that if such ::: Downloaded on - 05/11/2014 23:48:08 ::: Kvm 34/62 FA186.90 constructions are held to be exempt from payment of property taxes, then it would be an open invitation to the people to have such construction as it may not be possible to demolish or penalise those making such construction for years in view of the legal process involved. The law has to take its own course. The Division Bench of this Court also took cognizance of the fact that many a times such unauthorised structures are regularised after many years for one reason or the other. There is no provision in the Act which exempts unauthorised construction from payment of property taxes. The Division Bench has also held that in view of Section 146 (2)(c), the primary liability is that of the owner of the land to pay the property tax for such unauthorised construction.
62) In my view, thus there is no merit in the submission of the learned counsel for the appellants that in view of prohibition for carrying out any construction on the amenity plot or the construction having being carried out by the tenant and/or trespasser without permission of the appellants or the Municipal Corporation, no taxes on such unauthorised construction could be levied by the Corporation under Section 146 and other provisions of the Act and more particularly from the appellants. In my view, this argument does not survive in view of the Judgment of this Court delivered on 13th July, 2001 in this matter between the parties. The said judgment admittedly has not been impugned by the appellants and attained finality. In my view though the Corporation did not take any action against the unauthorised occupants in view of the appellants not bringing those facts to the notice of the Corporation or otherwise, since the structures in question were the structures within the meaning of Section 3 (s) of the Act, it attracted the payment of Municipal taxes and the Corporation cannot be prevented from recovering the taxes on such ground.
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63) The next submission of the learned counsel for the appellants is that the taxes on the unauthorised construction could have been collected from the appellants only if the appellants would have let out the said structures. It is the case of the appellants that the appellants would be considered as the owners of the land only whereas the tenants who have constructed these structures were the owners of the said structures and thus in so far as the structures are concerned, the taxes could be levied and collected only from such tenants. It is submitted by the learned counsel for the appellants that the case of the appellants would fall under Section 146 (2)(c) of the Act. This issue raised by the appellants is also discussed by the Division Bench of this Court in the order dated 13th July, 2001. The Division Bench has considered various judgments of the Supreme Court and this Court. In the said judgments on this issue as to who would be primary liable to pay the property taxes, the Division Bench has referred to various judgments in the case of Ramji Keshavji Contractor Vs. The Municipal Commissioner of Greater Bombay, reported in (1954) Vol. LVI Bom.
LR 1132 (supra) and has already negatived this submission. Submission of the appellants is contrary to the judgment of Division Bench.
64) In so far as submission of the leaned counsel for the appellants that Corporation could not have taken any steps to recover from the appellants in respect of the structures constructed by the tenants/trespassers or that notice ought to have been given to the tenants also is concerned, in my view, the appellants have not disputed the position that the unauthorized construction was put up on the land which was a lease hold land given to the appellants and they were lessees of the Municipal Corporation. This court as well as Supreme Court in the above referred judgments have already taken a view that the primary liability to pay taxes was on ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 36/62 FA186.90 the lessor and the lessor in turn could have taken steps to recover the additional amount of taxes required to be borne by the lessor from such tenants/trespassers by adopting proceedings. Corporation is not required to take any steps to recover from the tenants/trespassers when such structures are constructed on the land given by the Corporation to appellant being lessee of such plot. In my view the submissions of the learned counsel is thus contrary to the well settled principles of law laid down by the Supreme Court and this court that under section 146(2) of the Mumbai Municipal Corporation Act, the primary liability to pay tax was on the lessor. It is for the appellants to take appropriate steps to recover additional amount from the tenants in accordance with law.
65) In so far as submission of the learned counsel for the appellants that Corporation ought to have issued notice to the tenants/trespassers is concerned, a perusal of the oral evidence indicates that the notice was issued by the corporation to one of such tenants. Be that as it may, since the primary liability to pay taxes was on the lessors, in my view, even if no notice was issued by the Corporation to the tenants/trespassers for recovery of taxes, lessors cannot escape their primary liability to pay such taxes. Merely because such tenants would be owners of such unauthorized structure, in my view since such unauthorized structures were on the land admittedly leased in favour of the appellants, appellants are primarily liable to pay taxes in respect of such unauthorized construction put up on the lease hold land.
66) In so far as submission of the learned counsel for the appellant that even appellant could not have carried out any such construction on the plot without any permission of the Municipal Corporation or in breach of the conditions of exemption under section 20(i) of the Urban land (Ceiling and Holding) Act or that ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 37/62 FA186.90 there being no FSI available is concerned, in my view this argument is in teeth of the decision of the Division Bench of this court that the Corporation is entitled to recover municipal taxes also in respect of the unauthorized construction. In my view if such structures are demolished in future, the same can be let out by the appellants. There is thus no merit in this submission of the learned counsel for the appellant.
67) In so far as judgments of Supreme Court and this court referred to aforesaid and relied upon by the learned trial Judge which are sought to be distinguished by learned counsel for the appellants on the ground that there was no prohibition on the lessors in any of those matters to carry out any further construction or that there was no FSI available, is concerned, in my view this submission is also in the teeth of the judgment of the Division Bench in this matter and such argument thus does not survive. In my view once it is held that the Corporation is entitled to recover taxes even in respect of unauthorized structure, whether there was any prohibition from carrying out any construction or that the same being illegal, such arguments do not survive.
68) The Division Bench of this Court in the case of Ramji Keshavji Contractor (supra) has considered the issue that when the land is leased to the tenant and the tenant has put up the structure upon that land, he is primarily liable under the Bombay Municipal Corporation Act to pay the property tax. The Division Bench in the said judgment has held that 'land' is defined as land which is being built upon or is built upon, and therefore, when Sections 154, 155 and 156 refer to 'land', it would include any structure put up on the land. The scheme of Section 146 and Sections 154 to 156 clearly indicates that when a land is let and does not fall within the purview of sub-section (3) of Section 146 and where the ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 38/62 FA186.90 landlord is made primarily liable under Section 146(2), the proper rateable unit is the land within the building standing thereon. The Division Bench answered the question in affirmative that the Municipality can hold the landlord primarily liable to pay property taxes on the basis of rateable value together with asbestos shed constructed by the tenants. The relevant portions of the said judgment read thus :-
"2. The facts giving rise to this reference are very few and they are that the appellant, who is the landlord, let out an open plot of land to one Kanse for a period of one year from April 1, 1949, to March 81, 1950, on a monthly rent of Rs. 140 and the tenant constructed upon this plot a temporary asbestos shed. The Bombay Municipality treated the land and the shed as a single assessable unit and fixed the combined rateable value at Rs. 5,500 for the assessment period October 1, 1953, to March 81, 1954. After the rateable value was fixed, a bill was presented to the appellant on the basis of this assessment and the appellant filed the appeal before the learned Chief Judge contending that he was not primarily liable for the payment of tax in respect of the shed constructed by the tenant.
3. It should be made clear at the outset that the question raised in the reference only concerns the primary liability to pay property-tax; it is not concerned with the liability inter se the landlord and the tenant. The statute has fixed the primary liability with regard to property-tax in order to facilitate the collection of property-tax. The principle underlying this statute is that the Municipality should know whom it should hold liable and the Municipality should not be put to the difficulty of ascertaining the actual liability of different persons who may have interest in a particular property. The section we are concerned with is Section 146. Sub-section (7) deals with the primary liability of an occupier who holds the premises immediately from the Government or from the Corporation or from a fazendar. That is not the case here. Sub- section (2) provides for all other cases (cases other than those falling under Sub-section (1)), and it provides that otherwise the said taxes shall be primarily leviable as laid down in the following sub-clauses; and sub-cl.(a) provides : "if the premises are let, from the lessor". Now, in this case, the premises are let and, therefore, the person primarily liable for the payment of tax on these premises would be the lessor, that is, the appellant. Subsection (3) is an exception to Sub-section (2)(a), and it provides that ...if any land has been let for any term exceeding one year to a tenant, and such tenant has built upon the land, the property taxes ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 39/62 FA186.90 assessed upon the said land and upon the building erected thereon shall be primarily leviable from the said tenant or his legal representative, whether the premises be in the occupation of the said tenant or of his legal representative, or of a sub-tenant.
Therefore, it is clear that, in every case where premises are let, the primary liability is upon the landlord except in the one case referred to in Sub-section (3), where the primary liability is upon the tenant and not upon the landlord. Admittedly this case does not fall under Sub-
section (3) of Section 148. Therefore, in our opinion, it is clear that the primary liability in this case is upon the lessor.
4. Now, the difficulty arises by reason of the fact that in India the view has been taken that one person may be the owner of a land and another person may be the owner of a structure that is built upon the land. Consistently with that view, it is undoubtedly true that in this case the land belongs to the lessor and the asbestos shed put up by the tenant belongs to the tenant; and the contention of the landlord is that he should not be assessed to tax with regard to a part of the premises of which he is not the owner. But in putting forward this contention, the landlord overlooks the provisions of Section 147, which seems to give him the right of recovering from his tenant the amount of tax which he has paid in excess of the tax which the property is liable to pay on the basis of the rent recovered by the landlord. The learned Chief Judge also seems to have doubted the practice followed by the Municipality for a very long period of treating the land and the building constructed upon it as a single assessable unit. In this connection, we might look at the provisions with regard to the valuation of property assessable to property-tax and these provisions are to be found in Sections 154, 155 and 156. Section 154, Sub-section (1), provides that In order to fix the rateable value of any building or land assessable to a property-tax, there shall be deducted from the amount of the annual rent for which such land or building might reasonably be expected to let from year to year a sum equal to ten per centum of the said annual rent and the said deduction shall be in lieu of all allowance for repairs or on any other account whatever.
This determines the reteable value. This reteable value can be fixed either of a building or of land. The difficulty is caused by this, that whereas in Section 146 the Legislature has used the expression "premises", in Section 154(1) the expression used is "building or land."
Then Section 155 provides for the right of the Commissioner to enable him to determine the rateable value of any building or land and the ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 40/62 FA186.90 person primarily liable for the payment of any property-tax leviable, in respect thereof, and to require the owner or occupier of such building or land to furnish him with the necessary information. Section 156 provides for the Commissioner maintaining a book called "the assessment-book", which book is to contain, among other things, a list of all buildings and lands in Greater Bombay distinguishing each, either by name or number, as he shall think fit. Now, in our opinion, these sections must be read in the light of Section 146. The object of these sections is to fix the rateable value and also to determine who is primarily liable. Therefore, if the primary liability under Sub-section (2) is upon the lessor where the premises are let, the information that would have to be gathered and the rateable value that will have to be fixed would be with regard to premises which would include both the land and the building, if a building was constructed upon the land. It would be untenable to suggest, that under Sections 154, 155 and 156 the Municipality should assess land separately from the building. If the Municipality were to do that, then it would be impossible to fix the primary liability as far as the building is concerned. It may also be pointed out that in the Bombay Municipal Corporation Act "land" is defined as land which is being built upon or is built upon, and, therefore, when Sections 154,155 and 156 refer to "land", it would include any structure put up on the land. Therefore, in our opinion, the scheme of Section 146 and Sections 154, 155 and 156 clearly indicates that, when a land is let and the letting does not fall within the purview of Sub-section (3) of Section 146, and where the landlord is made primarily liable under Sub-section (2) of Section 146, the proper rateable unit is the land with the building standing thereon. The same view was taken of the right of the Municipality to assess land and building as one rateable unit in a reference that came before Mr. Justice Bavdekar and Mr. Justice Vyas in Gopinath Krishna Pradhan v. Municipal Corporation of Greater Bombay (1953) Civil Reference No. 2 of 1953, decided by Bavdekar and Vyas JJ., on August 19, 1953 (Unrep.).
5. The question that has been submitted to us by the learned Chief Judge is whether the Municipality can hold the appellant primarily liable for the property-tax on the basis of the rateable value of the land together with the asbestos shed constructed thereon by his tenant, and the answer we propose to give to this question is in the affirmative.
6. No order as to costs."
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69) This court in case of M/s. Tata Hydro Eletric Power Supply Co. Ltd. Vs. Municipal Commissioner of Greater Bombay AIR 1979 BOMBAY 10 rejected the submissions of the landlord that section 146(2)(C) of the Act had no application on the ground that the structures did not belong to the landlord and therefore, he had no right to let the structures. This court after considering the definition of premises under section 3(gg) of the Act and after considering section 146(2) (C) held that for the purpose of determining the rateable value, the fact that the land was acquired for the landlord 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 landlord 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. This court held that even if the trespassers have constructed the structures, having regard to the consistent practice of rating, as stated by Ryde on Rating the structures built by the trespassers must also be included when determining the liability of the landlord who had the right to let. It is held that the order passed by the learned Additional Chief Judge, confirming the levy of tax on the landlord for such construction was consistent with the well established law regarding rateable valuation practice in respect of such hypothetical tenants which are contemplated under section 146(2)© of the Act. Paragraph 2 to 10 of the said judgment read thus :
"2. The appellants carried the appeals under Section of the Bombay Municipal Corporation Act, before the Chief Judge, Small Causes Court at Bombay. The appeals were dismissed on the ground that under Section of the Act, the Municipal Corporation was entitled to fix the rateable value not only of the land, which was admittedly vested in the company, but also of the structures, which were built on the lands, 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, MANU/SC/0344/1969: [1969]3SCR565 and Ramji Keshavji v. The Municipal Commissioner of Greater Bombay ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 42/62 FA186.90 MANU/MH/0196/1954: (1954)56BOMLR1132 .
4. The decision of the learned Additional Chief Judge is challenged by Mr. Koranne the learned counsel appearing for 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 of the Act had no application.
5. The argument must be rejected firstly because Section 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 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 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. East and West Ham , 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 ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 43/62 FA186.90 occupier is among the possible yearly tenants; and unless the supposition be made, most absurd anomalies result."
9. It is true, that Mr. Koranne to 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 rating, as stated by Ryde on Rating, the structures built by the trespassers must also be included, when determining the liability of the appellants, who had the right to let.
10. In my opinion, therefore, the decisions of the learned Additional Chief Judge were consistent with the well established law regarding rateable valuation practice in respect of such hypothetical tenants, which are contemplated under Section of the Act."
70) The Supreme Court in the case of National and Grindlays Bank Ltd Vs. Municipal Corporation of Greater Bombay (1969)LXXIL BLR 112 after considering the provisions under section 146(2)(a) and other relevant provisions of the Mumbai Municipal Corporation Act held that scheme of section 146 is that when the land is let and the tenant has built upon the land, there should be a composite assessment of tax upon the land and building taken together and in the case of such a composite unit, the primary liability of assessment of tax is intended to be on the lessor of the land under section 146(2)(a) of the Act. Supreme Court interpreted section 146(3) and held that the lessor of the premises as mentioned in section 146(2)(a) was to be construed as to mean the lessor of the land and which the building has been constructed by the tenant. It is held that the language of that sub section would suggest that the lessor of the land has the right of recovery from his tenant the amount of tax which he has in excess of the tax which the property is liable to pay and the basis of the rent recovered by the lessor. Supreme Court held that the intention of the legislature was clear in fixing the primary liability of property tax upon the owner of the land in a case not falling under section 146(3) of the Act which is to facilitate the collection of the property tax. It is not ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 44/62 FA186.90 unreasonable that in a case of that description the legislature should impose the primary liability for the payment of the property tax upon the lessor of the land and to give him the right of recoupment under section 147. Supreme Court approved the interpretation of this court of section 146 in case of Ramji Keshavji (supra). Supreme Court also considered the practice followed by the Corporation for a very long time of treating the land and the building constructed upon it as single unit and charging the property tax from the owner of the land in a case where the land was let for a period of less than one year to a tenant who had constructed a building thereon. Relevant portion of the said judgment is extracted as under :
"It was contended by Mr. Khambatta that on a proper construction of section 146(2) of the Act there should, have been separate assessments in respect of the building and the land in the present case. It was argued in the alternative that even if section 146(2) of the Act contemplates a composite assessment of the building and the land, the primary liability should be imposed upon the owner of the building and not on the owner of, the land. It was said that the right to let the building vests in the lessee of the land and not in the appellant, and so, the primary liability was upon the lessee under section 146(2) of the Act. The argument was pressed that the appellant cannot be treated as a lessor under section 146(2) of the Act,, because the appellant has not let the 571 land with the building thereon as one- unit to the lessee. The opposite viewpoint was presented on behalf of the respondent. It was, argued, in the first place, that section 146(2) of the Act contemplates that there should be a composite assessment of the land and the building taken as one unit. In the case of such a composite assessment, the primary liability of the payment of tax was on the landlord under sub-section (2)(a) of section 146 except in the case, referred to in sub-section (3) where the primary liability was- upon the tenant and not upon the landlord. Admittedly, the present case did not fall under section 146(3), and, therefore,. the primary liability was placed upon the appellant. In our opinion, the argument put forward on behalf of the respondent is well-founded and must be accepted as correct. In the first place, the language of section 146(2) indicates that the Legislature contemplated that in a case where the land and the building are owned by different persons there should be a composite assessment of property tax. The reason is that in section 146(1) and (2) the word premises' is used in contrast to section 146(3) where the words 'land and building' are separately mentioned. In ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 45/62 FA186.90 section 154(1) of the Act again, the Legislature uses the expression 'building or land'. Then section 155 provides for the right of the Commissioner to call information from the owner or the occupier in order to enable him to determine the rateable value of any building or land and the person primarily liable for the payment of any property, tax levied in respect thereof. Section 156 provides that the Commissioner shall maintain a book to be called 'the assessment book' which book is to contain among other things a list of all lands and buildings. Therefore, the scheme of section 146 is that, when the land is let and the tenant has built upon the land, there should be a composite assessment of tax upon the land and building taken together. We are further of opinion that in the case of such a composite unit the primary liability of assessment of tax is intended to be on the lessor of the land under; section 146(2)(a) of the Act. It was objected by Mr. Khambatta that the appellant was only the lessor of the land and not of the building, and so, the appellant cannot be held to be the lessor within the meaning of section 146(2) (a). 'We do not think that there is any merit in this objection. Section 146(3) of the Act furnishes the key to the interpretation of section 146(2)(a), in the context of section 146(3) the lessor of the premises as mentioned in section 146(2)(a) must be construed as to mean the lessor of the land on which the building has been constructed by the tenant. In this connection, reference should be made to section 147 which provides for an apportionment of responsibility for property tax when the premises assessed are let or sub-let. The language of this sub-section sugge sts that the lessor of the land has the right of recovering from his tenant the amount of tax 572 which he has paid in excess, of the tax which the property is liable to pay on the basis of the rent recovered by the lessor. It is also clear that the intention, of the Legislature in fixing the primary liability of property tax upon the owner of the land in a case not falling under s. 146(3) of the Act is to facilitate the collection of, property tax. In the, case of a monthly tenant who puts up a temporary shack or asbestos shed on the land and who may at any time terminate the lease at a short notice, it is not always possible for the Corporation to keep track of the lessee and to collect the property tax from him. It is not unreasonable therefore that in a case of this description the Legislature should impose the primary liability for the payment of the property tax upon the lessor of the land and to give him the right of recoupment under section 147. A similar view with regard to the interpretation of section 146, of the Act was expressed by a Division Bench of the Bombay High Court consisting of Chagla, C.J. and Shah, J. in Ramji Keshavji's(1) case. It was held by the learned judges in that case that where the owner of a ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 46/62 FA186.90 land had leased it to a tenant for a period of one year and the tenant had put up a structure upon the land, the owner of the land was primarily liable to pay property tax together with the structure constructed thereon. Counsel on behalf of the appellant challenged the correctness of this decision, but for the reasons already expressed we hold that the ratio of this decision is correct. We Shall, however, assume in favour of the appellant that the meaning of section 146 (2) of the Act is obscure and that' it is possible to interpret it as throwing the primary liability for payment of property tax upon the lessee who has constructed a, building on the land. Even upon that assumption we think that the view of the law expressed by the Bombay High Court in this case ought not to be interfered with. The reason is that in a case where the meaning of an enactment is obscure, the Court may resort to contemporary construction, that is the construction which the authorities have put upon it by their usage and conduct for a long period of time. The principle applicable is "optima legum interpres est consuetudo" (2). In Ohlson's case(3), in dealing with the interpretation of section 39 of the Pawnbrokers, Act, 1872, Stephen, J. said :
" What weighs with me very greatly in coming to the present conclusion is the practice of the Inland Revenue Commissioners for the past sixteen years. So long ago as 1874 this very point was decided by Sir Thomas Henry, for whose decisions we 'all have very great respect; and the least that can be said with regard to the case before him is that he pointedly called the attention of the commissioners to the case-the learned magistrate having offered to state a case-an offer refused by the ,commissioner, who by their refusal must be taken to have acquiesced in the decision. 'Mat is a very strong contemporaneous exposition of the meaning of the Act".
The same principle was referred to by Lord Blackburn in Clyde Navigation Trustees v. Laird(1). The question in dispute in that case was, whether the Clyde Navigation Consolidation Act, 1858 (repealing eight prior Acts) imposed navigation dues on timber floated up the Clyde in logs chained together. From 1858 to 1882 dues had been levied on this class of timber without resistance from the owners; and some judges in the Court of Session suggested that this non- resistance might be considered in construing the statute. On this point Lord Blackburn said .
"I think that submission raises a strong prima facie ground on which they (the owners) could not resist, And I think a court should be cautious, and not decide unnecessarily that there is no such ground. If the Lord President (Inglis) means no more than this when he calls it ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 47/62 FA186.90 'contemporanea exposito of the statutes which is almost irresistible', I agree with him. I do not think that he means that enjoyment at least for any period short of that which gives rise to prescription, if founded on a mistaken construction of a statute, binds the court so as to prevent it from giving the true construction. If he did, I should not agree with him, for whom I know of no authority, and am not aware of any principle, for so saying.
In our opinion, the principle of contemporanea exposito applies to the present case. The Act was passed in the year 1888 and there appears to be a practice followed by the Bombay Municipal corporation for a very long time of treating the land and the building constructed upon it as single unit and charging the property tax upon the owner of the land in a case where the land is let for a period of less than one year to a tenant who has constructed a building thereon [See Ramji Keshavji's case(2)]."
71) Division Bench of this court in case of M/s. Byramjee Jeejeebhoy Pvt. Ltd.
Vs. Municipal Commissioner of Greater Bombay 1976 ILR Bombay 671 considered the question whether the owners of the lands were liable to be assessed with the property tax both for the lands and the structures building thereon by the trespassers although ordinarily under the law of property, they do not have a right to let the structures built by the trespassers until they got possession of the structures after evicting the trespassers. It was one of the argument of the owners that they were not liable to pay the assessment as it could not be said that the premises were let or sublet or unlet or that the owners still had a right to let the same within the meaning of section 146(2)(a), (b), (c) and (3). It is held that whether the trespasser has or has not right to let the structure in law, there can be no doubt that even the owner had got the right to let the land and also the structure after evicting the trespassers subject to equities if any between the owner and the trespasser. The Division Bench followed the earlier judgment of this court delivered by the Division Bench in case of Ramjee Keshavji (Supra) and applied the ratio of the said judgment to the issue considered by the Division Bench in the ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 48/62 FA186.90 case of Byramjee Jeejibhoy Pvt. Ltd. (supra). This court after considering the judgment of supreme court in case of National and Griendlays Bank (supra) held that even in case of doctrine of dual ownership of Indian Law did not come in the way and it has held that there should be composite assessment of law and structure and the primary liability of assessment in case is intended to be on the lessor to the extent not merely in respect of the land but also in respect of the structure though the structure was built by the tenant. This court rejected the submissions of the owner that owner had no right to let the structure built by the trespasser on his land. This court held that though the structure was built by the trespassers on the land, the owner of the land had obviously a right to let the land as well as the structure after evicting the trespassers as long as the trespasser's right is not protected by prescription. This court took a view that it could not expect the municipal corporation to take steps in levying taxes on trespasser's buildings when their records even did not show the names of the trespassers as the records would normally show the rightful owners having title to the property. Relevant portion of the said judgment read thus :
It cannot be disputed that the owner of the land on which trespassers had constructed a structure, has a right to let the land.
If he has a right to let the land, it must be held that he has a right to let the premises within the meaning of s.146(2), having regard to the above definition of the word 'premises' and also the definition of the word 'building' contained in s.3(2), which runs as follows :-
"building' includes a house, out-house, stable, shed, hut and every other such structure, whether of masonry, bricks, wood, mud, metal or any other material whatever."
Further, the definition of the word 'land' in s.3(4) lays down :
" 'land' includes land which is being built upon or is built ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 49/62 FA186.90 upon or covered with water, benefits to arise out of land, things attached to the earth or permanently fastened to anything attached to the earth and rights created by legislative enactment over any street."
The argument that because the building can be separately let from the land with or without the consent of the owner, the owner of the land alone cannot be said to have the right to let the structure built by the trespasser, has to be rejected as the definition of 'premises' includes both buildings and lands.
It was strenuously urged that the definition must be read subject to the context; and having regard to the legal possibility of dual ownership of the land and structure, unless the right to let existed in the person, at the time of leaying assessment in respect of both the land and the structure separately, s. 146 (2), (c) was not applicable. The argument, though attractive, is without any merit. 'Right to let' must mean a legally enforceable right to let. A trespasser, who had built a structure later, in certain circumstances, may claim such a right against his tenant by way of estoppel, but it cannot be said that he had a 'right to let', as he was in wrongful possession of the land and built the structure unauthorisedly.
Whether the trespasser has or has not 'might to let' the structure, in law, there can be no doubt that even the owner had got the 'right to let' the land and also the structure after evicting the trespasser subject to equalities, if any, between the owner and the trespasser. The right to let must necessarily be coupled with the right to give possession to the tenant, after taking possession, if one is not in possession of the premises. It is only the owner of the land who can have the legally recognised and enforceable right. If the matter was really res integra, we would have no hesitation to come to the conclusion that the landlord, who is the owner of the land, had the 'right to let' within the meaning of s.146(2) of (c) the Act.
::: Downloaded on - 05/11/2014 23:48:09 :::Kvm 50/62 FA186.90 In our opinion, however, the matter is covered by the ratio in Ramji Keshavji Contractor v. The Municipal Commissioner of Greater Bombay, decided by Chagla C.J. and Shah, J. It is thus that in that case the land was let by the owner to a tenant for a period of one year. The tenant had put a structure upon the land. The case was expressly covered by s.146 (2), (a) of the Act. Making it clear that whatever was being considered was in relation to the liability to pay property-tax and not to determine the liability inter se between the landlord and tenant, Chagla C.J. observed at p.1134 :
"The statute has fixed the primary liability with regard to property-tax in order to facilitate the collection of property-tax. The principle underlying this statute is that the Municipality should know whom it should hold liable and the Municipality should not be put to the difficulty of ascertaining the actual liability of different persons who may have interest in a particular property. The section we are concerned with is s.146. Sub-section
(l) deals with the primary liability of an occupier who holds the premises immediately from the Government or from the Corporation or from a fazendar. That is not the case here, Sub-section (2) provides for all other cases [ceases other than those falling under sub-s (l)], and it provides that otherwise the said taxes shall be primarily leviable as laid down in the following sub-clauses; and sub-cl. (a) provides : 'if the premises are let, from the lessor'. Now, in this case, the premises are let and, therefore, the person primarily liable for the payment of tax on these premises would be the lessor, that is, the appellant."
Further, even in that case, an argument was made on the basis of the law in India, that one person may be the owner of the land; and another person may be the owner of the structure that was built upon. Sections 147, 154, 155 and 156 were considered. The entire scheme of determining the liability for assessment was also considered. Chagla, C.J. observed at p.1135 :
::: Downloaded on - 05/11/2014 23:48:09 :::Kvm 51/62 FA186.90 "Therefore, if the primary liability under sub-s. (2) is upon the lessor where the premises are let, the information that would have to be gathered and the rateable value that will have to be fixed would be with regard to premises which would include both the land and the building, if a building was constructed upon the land. It would be untenable to suggest, that under ss.154, 155 and 156 the Municipality should assess land separately from the building. If the Municipality were to do that, then it would be impossible to fix the primary liability as far as the building is concerned. It may also be pointed out that in the Bombay Municipal Corporation Act 'land' is defined as land which is being built upon or is built upon, and,therefore, when ss.154, 155 and 156 refer to 'land', it would include any structure put up on the land. Therefore, in our opinion, the scheme of s.146 and ss.154, 155 and 56 clearly indicates that, when a land is let and the letting does not fall within the purview of sub-s.(3) of s.146, and where the landlord is made primarily liable under sub-s.(2) of s.146, the proper rateable unit is the land with the building standing thereon. The same view was taken of the right of the Municipality to assess land and building as one rateable unit in a reference that came before Mr.Justice Bavdekar and Mr.Justice Vyas in Gopinath Krishna Pradhan v. Municipal Corporation of Greater Bombay (5)".
It is, therefore, clear that Chagla, C.J. and Shah, J., (as he then was), with respect, rightly relied on the definition of the word "land" as including both the land and structure. Similarly, the word "premises" must include both the land and structure for purposes of the Bombay Municipal Corporation Act. The ratio in that decision must, therefore apply to the facts and circumstances of the present case.
The point raised on behalf of the appellants is further settled by the decision of the Supreme Court in National and Grindlays Bank Ltd. vs. Municipal ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 52/62 FA186.90 Corporation for Greater Bombay-(6). This case was also sought to be distinguished on behalf of the appellants on the ground that it was also a case where the land was let by the lessor on a monthly basis to a third party, who had constructed a building thereon. The distinction is without any difference because even in that case the doctrine of dual ownership in Indian Law did not come in the way; and it has held that there should be a composite assessment of land and structure and the primary liability of assessment in such case is intended to be on the lessor to the extent not merely in respect of the land, but also in respect of the structure though the structure was built by the tenant.
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It is urged that we have only to substitute for the word "lessor" the words "owner of the land" in the reasoning and we shall arrive at the correct interpretation of s.146(2) (c).
As against this, it was strenuously urged on behalf of the appellants that the scheme of ss.146 to 155 shows that it was a discretionary power of the Corporation to levy the property tax on the land or the building thereon or on both; and the reasoning which prevailed in the above case, which was under s.146(2) (a) cannot be extended to a case like the present one, where the owner had no right to let the structure built by a trespasser on his land. The argument must be rejected, for as we have already stated above, in the present case, though the structure was built by the trespassers on the land the owner of the land has obviously a right to let the land as well as the structure after evicting the trespassers as long as the trespasser's right is not perfected by prescription. It is nobody's case in these appeals that the trespassers had acquired ownership by prescription.
It is true that there is nothing before us to show that the Municipal Corporation had followed the practice ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 53/62 FA186.90 of levying the property tax on the owner of the land in respect of even the structures built thereon by the trespassers. But the practice of levying the building and structure together was well established. If that practice is followed for purposes of levying the tax under s.146(2),
(c) it cannot be said that any part of the scheme of ss.146 to 155 is being violated or contravened or defeated. On the contrary, with respect, as rightly observed by Chagla, C.J., we cannot expect the Municipal Corporation to take steps or levy taxes on trespassers' buildings when their records even did not show the names of the trespassers and the records would normally show the rightful owners having title to the property. We are, therefore, of the view that the learned Chief Judge of the Small Causes Court rightly held that the question involved in these appeals was covered by the judgment in Ramji Keshavji's case.
72) Learned single Judge of this court in case of Ramakant Madhusudan Tipnis Versus Municipal Corporation of Greater Bombay AIR 1978 Bombay 382 has held that even if a premises is unlet, the principles of hypothetical landlord and hypothetical tenant would apply and the land and building together will constitute the composite unit for assessment. After considering the definition of land in section 3(r) it held that there is nothing in the said definition to suggest that what is built upon must be so built upon according to rules of the corporation or that it should be an authorized structure.
73) The next question that arises for consideration of this Court is whether the structures constructed by the tenants/trespassers were not the structures or hereditament capable of being separately let out and, therefore, liable to be assessed separately and would fall under the definition of expression "building"
::: Downloaded on - 05/11/2014 23:48:09 :::Kvm 54/62 FA186.90 under Section 3(s) of the Mumbai Municipal Corporation Act, 1888 ?
74) A perusal of the evidence on record would indicate that the structure E/7411(1C) was described as 'C.I. Shed' and was closed from sides by the tenant who was using it as wire knitting factory. The witness examined by the appellants also in his evidence deposed that it was adjoining the main wall of the building No.7411(1). In his cross-examination, he deposed that the tenant of the main building was occupying 3 units at the rent of Rs.331/-. Second witness examined by the appellants i.e. Mr. Rao submitted a plan in his evidence which was annexed to the report which described the said structure as rectangular structure attached to the building with two sides of the building forming the walls of the structure and two side walls of tin sheets. In the said report, he described it as new C.I. Shed closed on all sides and used as wire knitting factory. The said structure was in occupation of Marine Tex Engineers who were carrying on business of mechanical workshop manufacturing engineering items. In my view, the said structure no.E/7411(1C) is a shed which is independent of the buildings or tenements therein let out by the appellants to the said tenant Marine tex engineers and satisfies the definition of expression "building" in Section 3(s) of the Act which includes every other structures whether masonry or bricks, wood, metal or any other material whatsoever. Learned Trial Judge has rightly come to the conclusion that the said structures bearing No.E/7411(1C) was independent structure within the meaning of 'building' and liable to be assessed for the purpose of taxes as the same was capable of being occupied or being let out separately if such letting was permissible or legal.
75) In so far as structure no.E/7411(1D) is concerned, the witness examined by the Corporation described the said shed as C.I. Shed open from one side and ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 55/62 FA186.90 used as workshop by the tenant M/s. Bombay Boaring Works since April, 1982.
He proposed to assess the said C.I. Shed as 'workshop.' The witness examined by the appellants deposed that the said structure is by the side of the compound wall and was a tin structure within tin walls fully on two sides and tin wall partly on one side with dwarf gate on the same side and used as a workshop. It was not attached to any building. It was deposed that the same was, however, constructed in the compulsory open space of 7411(4). Similarly, Mr.Rao, second witness examined by the appellants, also in his report described the said structure as "structure" which was open at the front on one side and used as workshop. All witnesses examined before the Trial Court deposed that the said structure was also a sort of shed built by the tenant in the compulsory open space by the side of the building of which the occupants of the shed were not at all the tenants. A perusal of the record indicates that the said shed was also being used for commercial activities and was an independent structure to the exclusion of others and was capable of being let out separately in case the same was legally built by either the landlords or the tenants and they were able otherwise to let it. I am, therefore, not inclined to accept the submission made by the learned counsel appearing for the appellants that the said structure was not the structure within the meaning of Section 3(s) of the Mumbai Municipal Corporation Act, 1888 and was not attracting the payment of taxes. I do not find any infirmity with the finding recorded by the Trial Court which is after considering the entire evidence on record.
76) In so far as quantification of the tax imposed by the corporation is concerned, learned counsel for the appellants placed reliance upon various judgments referred to aforesaid in paragraph 49. On perusal of the record indicates that the investigating officer adopted the rate of Rs.33 and Rs.30 per ten ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 56/62 FA186.90 sq. mtr in respect of the structures 7411 (1c) and 7411(1d) respectively. The learned Additional Chief Judge however, on remand came to the conclusion that the said portion of structure 7411(1c) and 7411(1d) shall be assessed at the rate of Rs.25/- per ten sq. mtr and loft portion of the structure 7411(1c) shall be assessed at the rate of Rs.13/- per ten sq. mtrs. for the relevant period as just, fair and reasonable.
77) The submission of the appellants on this issue is that the structures in question not being in possession of the appellants, the rateable value in respect of such structures cannot be computed and should be taken at the notional rent of Rs.1/- per sq. mtr. This court has already negatived the submission of the appellants that no valuation of the property can be ascertained merely because the same was not occupied by the lessor himself. This court has already taken a view that rateable value in respect of such structure can be taken on the basis of hypothetical tenancy and hypothetical rent. The valuation has to be considered on the basis that such structures were hypothetically let out and that the rent in respect thereof was fetched by the lessor.
78) A perusal of the record indicates that the investigating officer made assessment of structure 7411(1c)at the rate of estimate rent of Rs.40/- per ten sq. mtr of the area of shed admeasuring 346.50 sq. mtrs and at the rate of Rs.20/- per ten sq. mtr in respect of loft area admeasuring 168.75 sq. mtr. and proposed the rateable value of Rs.16935/- NPA with effect from 1st April, 1982. The Investigating Officer however, modified the proposed rateable value and assessed the said structure at the rate of Rs.33/- per ten sq. mtr. for shed and Rs.16/- per ten sq. mtr. for loft and reduced the rateable value to Rs.13890/- NPA with effect from 1st April, 1982. As per Tabulated Ward report of Shed no. 7411(1d) the proposed ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 57/62 FA186.90 assessment was made at the estimated rent of Rs.40/- per ten sq. mtr. in respect of the area of shed admeasuring 100.30 sq. mtr. and proposed rateable value at Rs.3940/- NPA with effect from 1st April, 1982. The investigating officer however, modified the rateable value by accepting the rent of Rs.30/- per ten sq. mtr. thereby reduced the rateable value to Rs.2960/- NPA with effect from 1st April, 1982. The same rateable value in respect of those two structures were maintained for the subsequent years. Division Bench of this court in this matter has already taken a view that there is no provision in the Mumbai Municipal Corporation Act directing the Corporation to assess unauthorized structures at particular rate or at lessor rate considering its occupational value to the owner. In my view the submission of the learned counsel for the appellants that the rateable of the suit structure has to be considered at Rs.1/- per sq. mtr. on the basis of its no occupational value to the appellants is devoid of merits and is rejected.
79) Perusal of the record clearly indicates that the aforesaid two structures were separate hereditaments put up by the tenants and are capable of being let out after evicting the present occupants by the lessors. A perusal of the record indicates that the appellants did not make any written submissions before the investigating officer. It is not the case of the appellants that the investigating officer or Small Causes Court did not consider any submissions on the issue of quantification or any evidence led by the appellants. In so far as submission of the learned counsel for the appellants that the investigating officer could not have added the market price of the land twice, once while determining the standard rent of the original structure and again while determining the standard rent of additional structure is concerned, a perusal of record indicates that the appellants did not produce any material on record in support of this submission. In the cross examination of the witness examined by the municipal corporation, he deposed that he had not taken ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 58/62 FA186.90 into account the value of the land and the structure and deposed that he had applied the rate of Rs.40/- per 10 sq.mtrs. for shed only. The witness also deposed that he had computed assessment on the basis of hypothetical rent. I am thus not inclined to accept the submission of the learned counsel for the appellants that the Corporation has considered the market price of the land twice i.e. first while determining the standard rent of the original structure and again while determining the standard rent of additional structure.
80) Supreme Court in case of Dr.Balbir Singh and others vs. Municipal Corporation of Delhi AIR 1984 S.C. 339 has held that even if there is any restriction on sale, transfer or assignment, it cannot be said that the market price of the plot of such land cannot be ascertained. It may have effect of depressing the market price which a lessor would be inclined to pay for the plot of land. Paragraph 17 of the said judgment reads thus :-
17. This argument which seems to have prevailed with the assessing authorities in rejecting the applicability of sub-s (l) (A(2)(b) or (1) (B)2(b) of Section 6 and resorting to the provisions of Sub-section (4) of Section 9 is wholly unfounded. Merely because the plot of land on which the premises are constructed cannot be sold transferred or assigned except to a member of the Co-operative House Building Society and without the prior consent of the Government, it does not necessarily mean that there can be no market price for the plot of land. It is not as if there is total prohibition on the sale, transfer or assignment of the plot of land so that in no conceivable circumstance, it can be sold, transferred or assigned. The plot of land can be sold, transferred or assigned but only to one from amongst a limited class of persons, namely, those who are members of the Co-operative House Building Society and subject to the Rules and Regulations, any eligible person can be admitted to the membership of the Co-
operative House Building Society. There is also a further restriction, namely that the sale, transfer or assignment can ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 59/62 FA186.90 take place only with the prior consent of the Government But subject to these restrictions, the sale, transfer or assignment can take-place. It cannot, therefore, be said that the market price of the plot of land cannot be ascertained. When we have to determine what would be the market price of the plot of land on the date of commencement of construction of the premises, we must proceed on the hypothesis that the prior consent of the Government has been given and the plot of land is available for sale, transfer or assignment and on that footing, ascertain what price it would fetch on such sale, transfer or assignment. Of course, when the class of potential buyers, transferees or assignees is restricted, the market price would tend to be depressed. But even so, it can be ascertained and it would not be correct to say that it is incapable of determination. There is also one other factor which would go to depress the market price and that stems from the clause in the sub-lease which provides that on sale, transfer or assignment of the plot of land the Government shall be entitled to claim 50% of the unearned increment in the value of the plot of land and the Government shall also be entitled to purchase the plot of land at the price realisable in the market after deducting there from 50% of the unearned increment. Since the leasehold interest of the sub-
lease in the plot of land is cut down by this burden or restriction, the market price of the plot of land cannot be determined as if the leasehold interest were free from this burden or restriction. This burden or limitation attaching to the leasehold interest must be taken into account in arriving at the market price of the plot of land because any member of the Cooperative House Building Society who takes the plot of land by way of sale, transfer or assignment would be bound by this burden or restriction which runs with the land and that would necessarily have-the effect of depressing the market price which he would be inclined to pay for the plot of land. We must, therefore, discount the value of this burden or restriction in order to arrive at a proper determination of the market price of the plot of land and the only way in which this can be done is by taking the market price of the plot of land as if it were unaffected by this burden or restriction and deducting from it, 50% of the unearned increase in the value of the plot of land on the basis of the hypothetical sale, as representing the value ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 60/62 FA186.90 of such burden or restriction. This mode of determination of the market price has the sanction of the decision of this Court in P. N. Sikand's Case (AIR 1977 SC 1657) (supra). We do not, therefore, think that the assessing authorities were right in taking the view that because the plot of land could not be sold transferred or assigned except to a member of the Co-operative House Building Society and without the prior consent of the Government, its market price was unascertainable and hence the standard rent of the premises could not be determined under sub-sec. (1)(A)(2)(b) or(1)(B)(2)(b) of Section 6 and had to be assessed only under sub-s(4) of Section 9. We are firmly of the view that the market price of the plot of land at the date of commencement of construction of the premises was ascertainable on the basis of the formula we have indicated notwithstanding the restriction on transferability contained in the sub- lease and the standard rent of the premises constructed on the plot of land was determinable under the provisions of Sub-section (l)(A)(2)(b) or (l)(B)(2)(b) of Section 6. The argument of the Delhi Municipal Corporation that in all such cases resort has to be made to the provisions of Sub-section (4) of Section 9 for determination of the standard rent of the premises must be rejected.
81) Supreme Court in case of Municipal Corporation of Greater Mumbai vs. Kamla Mills Ltd. (2003) 6 SCC 315 has held that the burden of proving what the standard rent was in respect of the land or in respect of the building constructed thereon while objecting to the rateable value fixed by the commissioner is always on the assessee. This court in case of Municipal Corporation of Grater Bombay vs. State Bank of India 2005 (3) Bom.C.R. 319 has held that it is the responsibility of the assessee to place evidence on record to enable the court to consider what should be the standard rent and the burden of proving this fact is always on the assessee.
82) In so far as exact area of the structures is concerned, a perusal of the record ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 61/62 FA186.90 indicates that the evidence of the witness examined by the appellants is totally silent on this issue. Even the architect Mr.S.P.Rao examined by the appellants in his evidence though had visited the property before giving his report did not dispute the area of both the structure and the loft portion. In my view the Small Causes Court has thus rightly come to the conclusion that the area of two structures and loft portion are correctly taken for assessment.
83) The order of the investigating officer indicates that the submission of the appellants was that the rate of more than 20 per 10 sq.mtr. would be unfair and unjust. The first witness examined by the appellants did not depose that he had not suggested any such rate before the investigating officer. The appellants did not give any supporting material in support of the rate of Rs.20 per 10 sq.mtr. In the oral evidence led by Mr.S.P.Rao he had admitted in cross examination that if such structures were constructed with the permission of the corporation and competent authority, it could have fetched rent of Rs.15/- to Rs.25/- per 10 sq.mtr. The said witness deposed that he had prepared the said report after visiting the site and after taking into consideration all the alleged demerits of the structures including restrictive covenants, unauthorised construction and nature of structure as erected of old tin sheets. In my view even if the said structures were constructed without permission of the corporation or any competent authority, there is no provision in law that such structures have to be assessed at lesser rate or will have no occupational value to the landlord.
84) I have perused the reasons rendered by the Small Causes Court on 29 th December, 2009 after remand minutely. After considering the entire evidence on record the Small Causes Court has reduced the rate adopted by the investigating officer from Rs.33/- and Rs.30/- per 10 sq.mtr. in respect of shed portion of ::: Downloaded on - 05/11/2014 23:48:09 ::: Kvm 62/62 FA186.90 structure 7411(1C) and 7411(1D) respectively to Rs.25/- per 10 sq.mtr. in respect of both those structures as just fair and reasonable for the relevant period of those appeals. In so far as loft portion of structures 741(1C) is concerned, the investigating officer had already reduced the rate to Rs.16/- per 10 sq.mtrs. from Rs.20/-. The appellants did not lead any evidence to prove that even the rate of Rs.16/- per 10 sq.mtr. was excessive. The Small Causes Court considered the rate of Rs.13/- per 10 sq.mtr. as just and reasonable in respect of loft portion as against the rate of Rs.16/- per 10 sq.mtr. considered by the investigating officer.
85) In so far as the judgments referred to and relied upon by Mr.Patil, learned counsel for the appellants on the issue of quantification referred to aforesaid is concerned, none of these judgments support the case of the appellants and are clearly distinguishable.
86) In my view the onus was on the assessee to prove that the rates adopted by the investigating officer were excessive and more than standard rent and what should have been a reasonable rent while challenging the rateable value. The appellants have failed to discharge this burden. In my view the Small Causes court has substantially reduced the rate considered by the investigating officer and has in my view determined the rate which is fair, just and reasonable in respect of all the structures in question which the appellants are liable to pay as primarily liable.
87) In my view all the aforesaid appeals are thus devoid of merits and are accordingly dismissed. There shall be no order as to costs.
88) In view of disposal of first appeals, civil applications pending if any, are also stand disposed of.
[R.D. DHANUKA, J.] ::: Downloaded on - 05/11/2014 23:48:09 :::