Punjab-Haryana High Court
Tara Chand vs Municipality And Anr. on 7 December, 2004
Equivalent citations: AIR2005P&H128, (2005)140PLR301
Author: Ajay Kumar Mittal
Bench: Ajay Kumar Mittal
JUDGMENT Ajay Kumar Mittal, J.
1. This appeal is directed against order dated 17-1-1997 passed by the learned single Judge in C.W.P. No. 4671 of 1983 whereby he rejected the appellant's prayer for quashing the assessment of house tax made by Municipal Committee, Rewari (for short, 'the Municipal Committee') for the years 1980-81 and for issuance of a direction to levy house tax in accordance with the Haryana Municipal Act, 1973 (for short, 'the Municipal Act') read with the Haryana Urban (Control of Rent and Eviction) Act, 1973 (for short, 'the Rent Control Act').
2. The appellant owns property bearing No. 7685/6 situated within the municipal limits of Rewari. He is running a factory under the name and style of M/s. Bipan Metal Works. In 1981, the Municipal Committee assessed the annual value of the appellant's property at Rs. 60,000/-. The appellant contested the proposed assessment and filed objections dated 21-4-1981. After considering the same, Administrator of the Municipal Committee, vide his order dated 16-9-1981 passed under Section 69(2) of the Municipal Act, determined the annual value of the appellant's property at Rs. 36,000/-. Accordingly, house tax demand of Rs. 4050/- was created for the years 1980-81 and 1981-82. The appeal filed by the appellant was partly allowed by Deputy Commissioner, Narnaul, who reduced the annual value of his property from Rs. 36,000/- to Rs. 30,000/-. C.W.P. No. 3181 of 1982 filed by the appellant questioning the determination of the annual value of his property and the demand of house tax was dismissed by the learned single Judge. The learned single Judge noticed the non-obstante clause contained in Section 2(1) of the Municipal Act, the judgments of the Supreme Court in Municipal Corporation, Indore v. Smt. Ratna Prabha, (1977) 1 SCR 1017 : (AIR 1977 SC 308) and Assistant General Manager, Central Bank of India v. Commissioner, Municipal Corporation for the city of Ahmedabad, (1995) 4 JT(SC) 310 and held "it should thus be apparent that in the cases of the property situated in the city of Haryana and governed by the Haryana Municipal Act, question of applicability of the standard rent under the Rent Control Act would not arise."
3. Shri Rajesh Garg assailed the order of the learned single Judge by arguing that the view taken by him on the interpretation of Section 2(1) read with Section 69 of the Municipal Act is patently erroneous. Shri Garg emphasised that Section 2 of the Municipal Act does not preclude the fixation of rent in accordance with the Rent Control Act and, therefore, in respect of the properties which are in self-occupation of the owners, the words "expected to be let" should be treated as fair rent for the purpose of determination of annual value. He further argued that where the property is governed by the provisions of the Rent Control Act, the fair rent ascertainable under that Act should be treated as annual value irrespective of the actual rent received by the owner. In support of his arguments, Shri Garg relied on the judgments of the Supreme Court in Devan Daulat Rai Kapoor v. New Delhi Municipal Committee, AIR 1980 SC 541, Dr. Balbir Singh v. M.C.D., AIR 1985 SC 339 and Municipal Corporation of Greater Mumbai v. Kamla Mills Ltd., (2003) 6 SCC 315 : (AIR 2003 SC 2998) and a judgment of this Court in Banarasi Dass Mahajan v. State of Punjab, 1990 (1) Pun LR 1.
4. Shri C. B. Goel, learned counsel for the Municipal Committee and Shri Jaswant Singh, learned Senior Deputy Advocate General supported the order of the learned single Judge and argued that the annual value of the appellant's property was rightly determined keeping in view Section 2(1)(a) of the Municipal Act. Shri Goel relied on the judgments of the Supreme Court in Municipal Corporation v. Ratnaprabha, (1977) 1 SCR 1017 : (AIR 1977 SC 308), Radhika Theatre, Rewari v. State of Haryana, 1996 (2) Pun LR 51 : (1996 AIHC 4956) and East India Commercial Co. Pvt. Ltd. v. Corporation of Calcutta (1998) 4 SCC 368 : (AIR 1998 SC 1789).
5. Now, it would be advantageous to juxtapose and notice the definition of annual value under Section 3(1) of the Punjab Municipal Act, 1911 (for short, 'the 1911 Act') and under Section 2(1) of the Municipal Act.
Punjab Municipal Act Haryana Municipal Act "3. In this Act, unless there is something repugnant in the subject or context.--
"2. In this Act, unless there is anything repugnant in the subject or context. --
(1) "annual value"
means--
(1) "annual value"
notwithstanding anything contained in any other law for the time being in force, means --
(a) in the case of land or building which is in the occupation of a tenant, the gross annual rent at which the land or building has actually been let :
Provided that in the event of increase in the rent, the Committee may make corresponding increase in the annual value :
(a) in the case of land, the gross annual rent --
(i) to be calculated on the basis of fair rent fixed under the law relating rent restriction for the time being in force; or (ii) where no fair rent referred to in item (i) is fixed, at which it is expected to be let or it is actually let, whichever is greater :
Provided further that where the land or building has been let by the owner to any of his relations, and the Committee is of the opinion that the rent fixed does not represent the true rent, the rent fixed under the agreement of lease shall not be taken into consideration and the annual value shall be determined in accordance with the principles contained in clause (b) :
Provided that in the case of land assessed to land revenue or any other tax in lieu thereof or of which the land revenue has been wholly in part released, compounded for, redeemed or assigned, the annual value shall, if the State Government so directs, be deemed to be double the aggregate of the following amounts, namely --
(b) in the case of land or building which is occupied by the owner, the annual value shall be five per cent on the sum obtained by adding the present market value of the land and estimated cost, of erecting the building less ten per cent depreciation :
Provided that in the calculation of annual value of any land and building, no account shall be taken of the furniture or machinery thereon :
(c) in the case of any land on which no building has been erected but on which a building can be erected, and on any land on which a building is in the process of erection, the annual value shall be fixed at five per cent of the estimated market value of such land :
(i) the amount of the land-revenue or any other tax in lieu thereof for the time being assessed on the land, whether such assessment is leviable or not; or when the land-revenue, has been wholly or in part, compounded for or redeemed the amount which, but for such composition or redemption would have been leviable: and
(d) in the case of any land on which no building has been erected but on which a building can be erected, or which is partially built and is being used by erecting tents, temporary structures for the purpose of accommodating marriage parties, circus shows or for any entertainment purposes or such other purpose as may be specified in this behalf by the Committee with the previous sanction of the State Government the annual value shall be twenty per cent of the estimated market value of such land."
(ii) when the improvement, of the land due to canal irrigation has been excluded from account in assessing the land-revenue, the amount of owner's rate or water advantage rate, or other rate imposed in respect of such improvement :
(b) in the case of any house or building together with its appurtenance or any furniture that may be let for use and enjoyment therewith, the gross annual rent --
(i) to be calculated on the basis of fair rent fixed under the law relating to rent restriction for the time being in force: or
(ii) where no fair rent referred to in item (i) is fixed, at which it is expected to be let or it is actually let, whichever is greater, subject to the following deductions : --
(1) a deduction not exceeding twenty per centum of the gross annual rent as the committee in each particular case may consider a reasonable allowance on account of the furniture let therewith:
(2) a deduction of twelve and a half per centum for the cost of repairs and for all other expenses necessary to maintain the building in a state to command such gross annual rent. The deduction under tills sub-clause shall be calculated on the balance of the gross annual rent after the deduction, if any, under item (1);
(3) where land is let with a building such deduction, not exceeding twenty per centum of the gross annual rent, as the committee in each particular case may consider reasonable on account of the actual expenditure, if any, annually incurred by the owner on the maintenance of the land in a state to command such gross annual rent.
Explanation I. -- For the purpose of this clause it is immaterial whether the house or building and the furniture and the land let for use or enjoyment therewith, are let by the same contract or by different contracts, and If by different contracts, whether such contracts arc made simultaneously or at different times.
Explanation II. -- The term "gross annual rent" shall not include any tax payable by the owner in respect of which the owner and tenant have agreed that it shall be paid by the tenant;
(c) in the case of any house or building, the gross annual rent of which cannot be determined under clause (b), five per centum on the sum obtained by adding the estimated present cost of erecting the building, less such amount as the committee may deem reasonable to be deducted on account depreciation, if any, to the estimated market value of the site and any land attached to the house or building.
6. In Radhika Theatre's case (1996 AIHC 4956) (supra), a Division Bench of this Court interpreted Section 2(1) of the Municipal Act, which is relevant for deciding this appeal, and observed as under :
"On the strength of this definition our attention was drawn by the learned counsel for the respondents to the non obstante clause occurring in the Haryana Municipal Act, 1973. The language of the provisions are by and large by consonance with the decision of the Supreme Court in the case of Ratnaprabha (AIR 1977 SC 308) (supra). In other words, where fair rent has not been fixed then notwithstanding anything contained in any other law, the annual value has to be fixed on which the building is expected to be let or is actually to be let subject to certain deductions. It is not the case of the petitioners that fair rent has been fixed of cither of the buildings. Consequently, the authorities were well within their rights to take into consideration rent which the building was expected to be let rather than fall back on basis of fair rent fixed under the law relating to rent restrictions. It is brought to our notice that in the case of Devan Daulat Rai Kapoor (AIR 1980 SC 541) (supra) while considering the decision of the Supreme Court in the case of Ratnaprabha (supra) certain observations had been made but the Supreme Court hastened to add that it is not necessary to probe further into the correctness of this decision because there is no nonobstante clause in Section 3(1) of the Punjab Municipal Act or in Delhi Municipal Corporation Act. Consequently, the decision in the case of Ratnaprabha (supra) would hold good and valid with the result that the very basis of the plea of the petitioners learned counsel falls to the ground. The annual value so fixed cannot be held to be illegal merely because principles for fixation of fair rent under the Rent legislation have been ignored under the Haryana Municipal Act, 1973. The decisions in the case of Devan Daulat Rai Kapoor (AIR 1980 SC 541) and Dr. Balbir Singh (AIR 1985 SC 339) (supra) will not come to the rescue of the petitioners because the language of the provisions in these relevant enactments is different. There is no non obstante clause as exists in the Haryana Municipal Act, 1973."
7. In Municipal Corporation v. Ratna Prabha (AIR 1977 SC 308) (supra); Indian Oil Corporation v. Municipal Corporation, (1995) 4 SCC 96 : (AIR 1995 SC 1480) and Assistant General Manager, Central Bank of India v. Commissioner, Municipal Corporation for the city of Ahmedabad (1995 (4) JT (SC) 310) (supra), the Supreme Court interpreted the provisions contained in Section 138(b) of the Madhya Pradesh Municipal Corporation Act, 1956 and other provisions similar to Section 2(1) of the Municipal Act and held that the annual value is to be determined according to the principles contained in the Municipal Act and not as per the fair rent or the standard rent determinable under the Rent Control Act.
8. In East India Commercial Co. Pvt. Ltd. v. Corporation of Calcutta (AIR 1998 SC 1789) (supra), the Supreme Court reviewed various judicial precedents including those on which reliance has been placed by the learned counsel for the parties and held (para 17 of AIR) :
"From the aforesaid decisions, the principle which is deducible is that when the Municipal Act requires the determination of the annual value, that Act has to be read along with Rent Restriction Act which provides for the determination of fair rent or standard rent, Reading the two Acts together the rateable value cannot be more than the fair or standard rent which can be fixed under the Rent Control Act. The exception to this rule is that whenever any Municipal Act itself provides the mode of determination of the annual letting value like the Central Bank of India ease (1995 (4) JT (SC) 310) relating to Ahmedabad or contains a non obstante clause as in Ratna Prabha case (AIR 1977 SC 308), then the determination of the annual letting value has to be according to the terms of the Municipal Act. In the present case, Section 168 of the Municipal Act does not contain any non-obstante clause so as to make the Tenancy Act inapplicable and nor does the Act itself provide the method or basis for determining the annual value. This Act has, therefore, to be read along with Tenancy Act of 1956 and it is the fair rent determinable under Section 8(1)(d) which alone can be the annual value for the purpose of property tax."
9. By applying the ratio of the above noted judgments of the Supreme Court and of the Division Bench in Radhika Theatre's case (1996 AIHC 4956) (supra), we hold that the learned single Judge did not commit any error by rejecting the appellant's prayer for quashing the determination of the annual value of his property and the demand notice issued by the Municipal Committee.
10. No other point has been argued.
11. In the result, the appeal is dismissed. However, the parties are left to bear their own costs.