Gujarat High Court
Municipal Corporation Of Ahmedabad vs Moti Apartment Owners' Association on 28 October, 1994
Equivalent citations: (1994)2GLR1662, 1995 A I H C 3632
Author: B.N. Kirpal
Bench: B.N. Kirpal
JUDGMENT B.N. Kirpal, C.J.
1. This is an appeal against the judgment of Small Causes Court, who had allowed the respondent's appeal challenging the rateable value fixed by the appellant.
2. The respondent is the owner of the premises which are occupied by him, situated in ward Ellisbridge. In respect of the assessment year 1987-88, the gross rateable value was determined by the appellant at a figure of Rs. 38,400/-.
3. The respondent filed an appeal before the Small Causes Court. Reliance was placed on the decision dated 22-5-1989 of the Small Causes Court in another case being M.V.A. No. 9815 of 1988, wherein the Court had applied letting rate at Rs. 6.05 per square metre per month for the first four floor premises stated to have been situated nearby the property in question. The premises in the present case are located on the second floor of the building and admeasure about 80 sq. mtr. The Small Causes Court applied the letting rate of Rs. 6/- per square metre per month and worked out a notional rent at Rs. 480/- per month. The gross rateable value was accordingly fixed at Rs. 5,760/-.
4. It is contended by Learned Counsel for the appellant that the Small Causes Court ought to have determined the gross rateable value on the basis of the principles laid down by the Supreme Court specially those of Diwan Daulatrai Kapoor v. New Delhi Municipal Committee -, and Dr. Balbir Singh & Ors. v. M/s. M.C.D. - .
5. A Division Bench of this Court in First Appeal No. 829 of 1983 -Municipal Corporation, Ahmedabad v. Oriental Fire and General Insurance Company Ltd., vide a judgment dated 8th September, 1994, ( has upheld a similar contention and it was observed in the said case that the rateable value of self-occupied premises has to be determined by applying the principles enunciated by the Supreme Court in the aforesaid two cases of Divan Daulatrai Kapoor and Dr. Balbir Singh as well as the decision of this Court in the case of Rajnikant Jeshingbhai Sheth & Ors. v. Rameshchandra Kantilal Bhatt & Ors. , inasmuch as the order of the Small Causes Court does not show that these principles had applied. While determining the gross rateable value, the proper course is to set aside the order and remand the case for fresh decision.
6. One point however, needs to be reiterated, whether the rateable value so fixed in the case of self-occupied property can be revised at different intervals. The answer to this question is very obvious and is in the negative. The reason for this is very simple. The rateable value of self-occupied premises has to be fixed either by determining hypothetical rent on the basis of the reasonable return of the cost of construction and the cost of land or on the basis of properties which are let and which are similar in nature. Once determination takes place by applying the said principle, the said rateable value cannot possibly undergo any change. As long as the premises remain in self-occupation, the rateable value for the succeeding years will have to be that which was determined in accordance with law for the first year. The only occasion when the Corporation or the Municipality will get a right to revise the rateable value will be, if the owner occupant makes additions or alterations or incurs any capital expenditure on that property itself. It has to be clearly understood that carrying out minor repairs or white-washing cannot be regarded as a capital expenditure so as to permit enhancement of rateable value. A question may also arise whether a rateable value can be increased in case of change of ownership. Here again the rateable value is relatable to the property in question and if the premises continued to be the self-occupied property by the new owner, change in the ownership would not and should not ipso-facto result in the increase of the rateable value. It is only if further additions or alterations are undertaken and capital expenditure incurred by the new owner, can there be any change in the rateable value of self-occupied premises.
7. It was also submitted on behalf of the appellant that in view of the fact that the position qua determination of the rateable value for the properties in the city of Ahmedabad has now been authoritatively clarified by the aforesaid judgment of this Court, it will become necessary that in future years these principles are adopted by the Corporation itself which may not have followed these principles in the earlier years. The apprehension is that if four years have not been completed or if new assessment book has not been completed, can such exercise be undertaken. In our opinion there should be no difficulty as far as this is concerned because each assessment year is a self-contained year. Therefore, if the rateable value is proposed to be changed by following the principles now reiterated in this Court's judgment, the Corporation can do so even though the new assessment book may not be completed.
8. However, before undertaking the exercise of revising the rateable value, the Corporation will be duty bound to comply with the provisions of the Rules including Rule 15(2) in particular and opportunity will have to be given to the owners who may like to file complaints against the proposed change and which complaints will have to be decided.
9. While making the aforesaid observation, we allow the present appeal, set aside the order of the Small Causes Court and restore the Municipal Valuation Appeal No. 9815 of 1988 with a direction that the same should be decided in accordance with law. There will be no order as to costs.