Delhi District Court
Dr. Jagat Narain vs . New Delhi Municipal Council on 6 August, 2012
Dr. Jagat Narain vs. New Delhi Municipal Council
IN THE COURT OF INDER JEET SINGH, ADDL. DISTRICT JUDGE03,
ROOM NO. 308, SOUTH DISTRICT, SAKET COURTS, NEW DELHI
In the matter of
HTA No. 02/2010
Dr. Jagat Narain,
S/o Late Dr. Prem Narain,
R/o 152, Jor Bagh, New Delhi 110003.
.....Appellant
Versus
New Delhi Municipal Council,
Through its Chairperson,
Palika Kendra, Sansad Marg,
New Delhi 110001.
.....Respondent
Appeal Presented on : 29.07.2010
Date of Institution : 04.10.2010
Decision Reserved on : 19.07.2012
Date of Decision : 06.08.2012
HTA No. 02/2010 Page 1 of 13
Dr. Jagat Narain vs. New Delhi Municipal Council
JUDGEMENT
(on Appeal under section 115 of NDMC Act, 1994)
1. By order dated 27.02.2004 under section 72 of NDMC Act, 1994, the respondent fixed rateable value of Rs. 6,49,600/ from 01.04.2003 in respect of premises No. 152, Jor Bagh, New Delhi {i.e RV of ground floor (SOP) of Rs. 6,690/ less 10%; RV of FF and BF of Rs. 7,15,104/ less 10%} for the year 20032004. By rectification order dated 07.06.2010, the respondent fixed rateable value of the year 20042005 Rs. 6,43,200/ w.e.f 01.12.2004 to 31.03.2009 and RV of Rs. 1,68,400/ w.e.f 01.04.2009 under new byelaws of 2009. The appellant Jagat Narain, in the present appeal, assails respondent's exparte order dated 27.02.2004 and rectification order dated 07.06.2010 to set aside or modify them and to fix it as Rs. 6,49,600/ w.e.f 01.04.2003 and RV of Rs. 31,600/ w.e.f 01.10.2003.
2.1 The appeal property No. 152, Jor Bagh, New Delhi belongs to the appellant, the construction thereof comprises ground floor (1687 sq. feet), the first floor (1339 sq. feet) and the second floor (282 sq. feet) was completed in 1962, the respondent had assessed the entire property at RV of Rs. 31,600/. The ground floor has always remained under self occupation for residential purposes. The first floor and the second floor were let out on rent to Mr. Foo Kok Jang @ Rs. 35,000/ per month w.e.f 15.11.2000; @ Rs. 59,592/ w.e.f 01.04.2003. He vacated the demise premises on 30.09.2003.
HTA No. 02/2010 Page 2 of 13Dr. Jagat Narain vs. New Delhi Municipal Council 2.2 The first floor and the second floor remained vacant from 01.10.2003 onwards but the same were taken in self occupation for residential purposes on 01.12.2004. Therefore, the entire property is deemed to be under self occupation of appellant for residential use w.e.f 01.10.2003 onwards.
2.3 On 12.04.2001, the respondent had passed the assessment order and assessed the appeal property as follows
(i) Entire property under self occupation at RV Rs. 31,600/ w.e.f 01.04.1994.
(ii) Ground floor self occupied and first floor and second floor @ Rs. 3,000/ pm at RV Rs. 38,400/ w.e.f 01.11.1994.
(iii) Ground floor self occupied and first floor and second floor @ Rs. 15,000/ pm at RV Rs. 16,800/ w.e.f 01.11.1997.
(iv) Ground floor self occupied and first floor and second floor @ Rs. 20,000/ pm at RV Rs. 2,22,000/ w.e.f 01.11.1998.
(v) Ground floor self occupied and first floor and second floor @ Rs. 35,000/ pm at RV Rs. 3,38,400/ w.e.f 15.11.2000.
2.4 However, the respondent / NDMC passed an exparte assessment order on 27.02.2004 and revised the assessment of property from RV of Rs. 3,84,000/ to RV of Rs. 6,49,000/ w.e.f 01.04.2003, on the ground of increase in rent.
2.5 The appellant has not availed vacancy remission on tax amount payable at RV of Rs. 6,49,600/ from 30.09.2003 to 30.11.2004. The appellant written applications (on 06.10.2003, 25.03.2004, 22.02.2007 and 08.02.2010) and requested the respondent to revise / rectify the rateable value and to consider that entire property is to be under self occupation of HTA No. 02/2010 Page 3 of 13 Dr. Jagat Narain vs. New Delhi Municipal Council appellant. The rectification order dated 07.06.2010 has been passed. Whereas the assessment of appeal property at RV of Rs. 6,49,600/ w.e.f 01.10.2003 upto 30.11.2004 and RV of Rs. 6,43,600/ w.e.f 01.11.2004 upto 31.03.2009 is highly excessive, illegal and without jurisdiction. The impugned orders are liable to be set aside.
3.1 During the course of arguments, similar contentions have been advanced, with a submission that another order dated 29.09.2008 under section 70(6) of NDMC Act for the year 20092010 has been received, whereby the rateable value of the property is assessed at Rs. 1,68,400/ w.e.f 01.04.2009 that although in the appeal, there was a request to fix the rateable value of Rs. 31,600/ w.e.f 01.10.2009, however, in view of the notification of New Delhi Municipal Council (determination of annual rent) ByeLaws, 2009 have been enforced w.e.f 01.04.2009 and in view thereof, the appellant has no grievances for rateable value of Rs. 1,68,400/ w.e.f 01.04.2009.
3.2 But other rateable value, of period prior to 01.04.2009, as determined in the impugned order read with the rectification order are excessive, arbitrary and contrary to the provisions of law. The appellant refers many assessment orders of many properties in support thereof that the building constructed before 01.12.1988 are to be assessed for the purposes of rateable value on the basis of standard rent or Section 6 of Delhi Rent Control Act. There are different Acts like Delhi Municipal Corporation Act, Delhi Cantonment Act and New Delhi Municipal Council HTA No. 02/2010 Page 4 of 13 Dr. Jagat Narain vs. New Delhi Municipal Council Act, however, the same are governing different divisions of Delhi, for the purposes of administrative convenience but their provisions for the purposes of rateable value are to be considered parimateria. The property No. 152, Jor Bagh, New Delhi is to be considered self occupied premises for the purposes of rateable value and rateable value comes to Rs. 31,600/ w.e.f 01.10.2003 and it may be considered Rs. 6,49,600/ w.e.f 01.04.2003 to 30.09.2003. Ld. Counsel fortifies his contentions on the basis of precedent / case law, therefore, to avoid repetitions, the same are reproduced hereunder
1. The State Trading Corporation of India Ltd. vs. New Delhi Municipal Council 104 (2003) DLT 808 - it is held that "there is no doubt that the Rent Act is for the protection of the tenants. The original concept was not to cover self occupied properties. However, for purposes of calculation of rateable value, the Supreme Court in terms of the aforesaid judgments applied the principles of standard rent also to self occupied properties. It is by this principle in fiction that self occupied properties continue to be governed and the rateable value determined in terms of Section 6 of the Rent Act. The mere fact that for some period of time the property is outside the purview of the Rent Act will not give a license to the respondent to determine the rateable value for all times to come on the same principle of actual rental. The moment the property ceases to be a tenanted property and is self occupied, it comes back to the original position where it was before the property was so rented out. In such a situation, thus, the principles laid down in Dr. Balbir Singh vs. MCD 27 (1985) DLT 1 (SC), Dewan Daulat Rai Kapoor vs. New Delhi Municipal Committee 1980 (1) SC 685 and as interpreted and incorporated in Delhi Paints and Chemicals vs. New Delhi Municipal Committee 50 (1993) DLT 207, would again become applicable to the property in question and the rateable value would be liable to be determined on the basis of the principles contained in Section 6 of the Rent Act. This would equally apply whether the letting out is by the owner of by the predecessor in interest of the owner".
Further, it is held that all properties, residential or commercial constructed pre1988 or post 1988, whether rented out for some period or HTA No. 02/2010 Page 5 of 13 Dr. Jagat Narain vs. New Delhi Municipal Council not, which are in self occupation, will have the rateable value determined in accordance with provisions of Section 6 of the Rent.
2. New Delhi Municipal Council vs. The State Trading Corporation of India Ltd. LPA 413/2003 (Date of Decision - 15.12.2005) - the impugned judgment dated 25.04.2003 of STC vs. NDMC (Supra) was subject matter before Hon'ble Division Bench of High Court of Delhi with regard to effect of Clause (d) of Section 3 of Delhi Rent Control Act as amended to post 01.12.1988 construction and it was held that operation of byelaws 12, 13 and 14 of NDMC House Tax ByeLaws, 1962 has been excepted under section 416(2) of NDMC Act till superseded by fresh byelaws (the byelaws of 1962 were framed under the provisions of the Punjab Municipal Act, 1911) and NDMC is entitled to access the self occupied premises constructed after 01.12.1988 on comparable rent of similar premises in the locality. (Ld. Counsel of appellant reiterates that the construction of the appeal property was completed in 1962).
3. M/s. Sunil Rai & Co. Pvt. Ltd. vs. MCD 48 (1992) DLT 621 - held, under the provisions of DMC Act, 1957 that once an appeal in respect of base year is heard and decided on merits and assessment is either confirmed or varied, the effect would be that the same would be valid for subsequent years and there will be no necessity of filing any appeal for subsequent assessment years, if in subsequent assessment year, the subsequent base of the year is adopted.
Further, assessee may not be able to deposit tax at the time of filing the appeal, but he may pay it up within a short time and Appellate Court's incidental and ancillary power to entertain the appeal has not been curtailed by the provisions of law. (Ld. Counsel for appellant requests that respondent's objection does not survive since tax amount was deposited on 24.11.2010 and receipt has also been placed on record after filing of appeal in the month of July 2010).
4. State of Punjab vs. Mohar Singh AIR 1955 SC 84 - the appellant's counsel, by referring the present case submits that in this case the Governor of East Punjab Promulgated Ordinance No. 7 of 1948 on 03.03.1948 regarding registration of land claims of East Punjab refugees. Mohar Singh filed a claim on 17.03.1948 that he held land measuring 104 canals in Mianwali (West Punjab). Ordinance was replaced on 01.04.1948 by Act 12 HTA No. 02/2010 Page 6 of 13 Dr. Jagat Narain vs. New Delhi Municipal Council of 1948, reenacting all the provisions of the repealed ordinance. Mohar Singh was prosecuted on 13.05.1950 u/s 7 of Act 12 of 1948 for filing false claim. Mohar singh pleaded guilty. Sentenced till rising of the Court. Case referred to High Court for enhancement of sentence. The Division Bench of Punjab High Court set aside conviction u/s 7 of the Act 12 of 1948 interalia holding that Act 12 of 1948 was not in existence when the claim was filed on 17.03.1948. Held further that Sec 6 of the General Clauses Act is applicable when an act or regulation is repealed simplicitor but when the repeal is followed by enactment, as in the present case. Supreme Court held when repealed is followed by a fresh legislation on the same subject, we have to look for the provisions of the New Act for determining whether they indicate a fresh intention to keep alive old rights and liabilities and whether the new Act manifests an intention to destroy them. Held as the Repealing Act 12 of 1984 reproduces the provisions of Ordinance in their entirety. The case falls under section 6 of General Clauses Act. Appeal was allowed and judgment of High Court set aside.
5. Lt. Col. P.R. Chaudhary (Retd.) vs. Municipal Corpn. Of Delhi (2000) 4 SCC 577 - held that law declared in Dr. Balbir Singh vs. MCD 27 (1985) DLT 1 (SC) case applies and matter was remitted to the assessing authority for fresh assessment in order to prevent irrational discrepancy between rateable value of old and new building. Further, there is unprecedented increases in prices of land and of construction resulting in high standard rent, if standard rent of newlyconstructed buildings is retained as the measure of rateable value for the purpose of assessing property tax, held, the consequence would be huge disparity between rateable value of old and new buildings even when they were similar or located in same or adjoining neighbourhoods. Even though some difference would be inevitable, such wide disparity would be irrational and illogical.
Further held that in all revenue matters, there is no adversary system. Municipal Corporations rely on assessment records of rateable value of premises and on their field staff for reports on necessity for enhancement of rateable value. Contention of Corporation that it had no means to act on principles laid down by Supreme Court (regarding assessment of rateable value of newly constructed buildings in this case), held to be a specious plea.
6. Commissioner of Wealth Tax vs. O.P. Tandon 1992 Income Tax Reports HTA No. 02/2010 Page 7 of 13 Dr. Jagat Narain vs. New Delhi Municipal Council Volume 195, Page 688 - the provisions of Wealth Tax and Rules were under consideration and held that Rules providing method for valuing house, wholly or mainly used for residential purposes, is purely procedural and it has retrospective application and it applies to all proceedings pending on that day when rule was brought into force.
4.1 Whereas Ld. Counsel for respondent / NDMC opposed the appeal vehemently, firstly, the appeal cannot be entertained without deposit of the entire tax amount payable by the appellant; secondly, there is no flaw in the assessment order or in the rectification order; thirdly, Sections 4, 6 and 9 of the Delhi Rent Control Act has been held ultravires and struck down from the book of statute by Hon'ble High Court of Delhi in Raghunandan Saran Ashok Saran (HUF) vs. UOI reported as 95 (2002) DLT 508, therefore, appellant's contentions are not maintainable to assess the property on the basis of standard rent. The respondent had assessed the rateable value from time to time as per laws and byelaws and that is why, there was split of assessment with regard to SOP and the portions rented out to the tenants. The appeal is liable to be dismissed. The respondent derives its bone of contention by referring certain case law / precedent, which are
1. Shyam Kishore vs. Municipal Corporation of Delhi (1993) 1 SCC 22 - held that the Appellate Court cannot hear the appeal without predeposit of tax and Appellate authority has no jurisdiction to waive the condition or to stay the collection of tax pending disposal of the appeal.
2. Indian Hotels Co. Ltd. vs. New Delhi Municipal Council 1996 (III) AD (Delhi) 299 - deposit of tax amount is a condition precedent to the hearing of appeal by the Appellate authority.
HTA No. 02/2010 Page 8 of 13Dr. Jagat Narain vs. New Delhi Municipal Council
3. Sir Sobha Singh & Sons vs. New Delhi Municipal Council 1996 (IV) AD (Delhi) 56 - held that the NDMC may be permitted to determine rateable value on the basis of comparative rent even for self occupied properties.
4. Model Press Pvt. Ltd. vs. Mohd. Saied, RFA No. 576/2007 & Joginder Lal Kuthialal vs. Rajesh Kumar Meatle, RFA No. 1113/2006 (Date of Decision - 19.11.2008) - held that when the premises is beyond the purview of the Delhi Rent Control Act and monthly rent exceeds Rs. 3,500/. Further, Sections 4, 6 and 9 of the DRC Act have been struck down. (It is supplemented by Ld. Counsel for respondent that since Section 6 is no more on the book of statute, therefore, appellant's contentions are not maintainable to determine the rateable value on the basis of standard rent or under section 6 of the DRC Act).
4.2 Ld. Counsel for appellant explains that Raghunandan Saran case was also discussed in State Trading Corporation of India vs. NDMC case with an observation that special leave petition is pending for consideration before the Apex Court, therefore, the provisions of standard rent or Section 6 of the DRC Act may be considered.
(5) FINDINGS -
The contentions of both the sides are assessed in the light of statutory provisions of law, precedent and case law. The points raised are being considered one by one.
5.1 When the appeal was presented on 29.07.2010, the appellant had not paid the tax amount, however, during the pending of the appeal, the appellant deposited the amount and receipt dated 24.11.2010 was placed on record. Accordingly, the respondent's contention on the point HTA No. 02/2010 Page 9 of 13 Dr. Jagat Narain vs. New Delhi Municipal Council of deposit of amount stand answered. Now the other issues are considered.
5.2 Paragraph 2.3, above, reflects the determination of rateable value from time to time, by bifurcating separately the self occupied portion and the rented portion. The rateable value, by Section 72 of NDMC Act, from 01.04.2003 by order dated 27.02.2004, was also on the basis of self occupied property by splitting it from other portions on the basis of rent, which used to pay by Mr. Foo Kok Jong. In the rectification order dated 07.06.2010, the ground floor portion (self occupied property) was as it is of Rs. 6,690/ but the remaining determination was carried on the basis of average prevailing rent of Rs. 28/ per sq. feet / per month.
In State Trading Corporation case (Supra, decided on 25.04.2003) dealt with not only with the principles laid down in Dr. Balbir Singh case but also detailed analysis was carried with regard to other cases of Sir Sobha Singh & Sons Pvt. Ltd. (Supra), Raghunandan Saran Ashok Saran case and Delhi Paints & Chemicals case, Dewan Daulat Rai Kapoor case and Lt. Col. P.R. Chaudhary case, by holding that all the properties, residential or commercial, whether constructed pre1988 or post1988, whether rented out for some period or not, which are in self occupation will have rateable value determined in accordance with the provisions of Section 6 of the DRC Act. Raghunandan Saran Ashok Saran is subject matter of special leave petition pending for consideration before the Apex Court. In NDMC vs. STC case (decided on 15.12.2005), it was held that provisions of byelaws No. 12, 13 and 14 of the NDMC House Tax Bye HTA No. 02/2010 Page 10 of 13 Dr. Jagat Narain vs. New Delhi Municipal Council Laws, 1962 have been accepted under section 416(2) of the NDMC Act till they are superseded by fresh byelaws and NDMC is entitled to access the self occupied premises, which are constructed after 01.12.1988, on comparable rent of similar premises in the locality. The New Delhi Municipal Council (determination of annual rent) ByeLaws, 2009 w.e.f 01.04.2009 have been notified in Delhi Gazette extraordinary Part IV, Pages 5 to 7. As appears, they are prospective in nature, without reference to the pending cases for determination of rateable value.
5.3 In impugned order dated 27.02.2004, the rateable value was determined for ground floor on the basis of self occupied portion / premises as well as on the basis of last rent used to be received, in respect of the first floor and the second floor but in the impugned rectified order, the rateable value for the first floor and the second floor was determined on the basis of average prevailing rent of Rs. 28/ per sq. feet w.e.f 01.12.2004 to 31.03.2009. The appellant had written and requested the respondent that Mr. Foo Kok Jong had vacated the first floor and the second floor on 30.09.2003 and this portion remained vacant from 01.10.2003 onwards and it was taken into self occupation for residential purposes on 01.12.2004. However, the respondent in its rectification order dated 07.06.2010, considered, as if, the tenant vacated the property on 30.11.2004 and it became under self occupation w.e.f 01.12.2004. The respondent had not considered either the remission period w.e.f 01.10.2003 onwards nor gave any findings thereon but instead construe it that the tenant had vacated on 30.11.2004 and it became under self HTA No. 02/2010 Page 11 of 13 Dr. Jagat Narain vs. New Delhi Municipal Council occupation w.e.f 01.12.2004.
5.4 Now by reading the factual position and the legal position, referred in paragraphs 5.3 and 5.2, above, the construction of property No. 152, Jor Bagh, New Delhi was completed in 1962 i.e it was constructed prior to 1988 and the NDMC (determination of annual rent) ByeLaws, 2009 are effected from 01.04.2009 and prior to it, NDMC House Tax Bye Laws, 1962 under the provisions of the Punjab Municipality Act, 1911 were applicable. However, in terms of STC case (decided on 25.04.2003) by Single Bench of Hon'ble High Court of Delhi read with NDMC case (decided on 15.12.2005) by Division Bench of Hon'ble High Court of Delhi, the rateable value could not be determined on the basis of prevailing rent when the building was constructed prior to 1988. Further, the tenant had not vacated the property on 30.11.2004 but on 30.09.2003 and the impugned rectification order treats, as if, tenant had vacated on 30.11.2004, there is gap of 14 months, which had not been considered by the respondent.
5.5 The law laid down by Hon'ble High Court of Delhi has not been followed in the impugned order dated 27.02.2004 and rectification order dated 07.06.2010. Therefore, both the orders are set aside and appeal is allowed.
6. Since the impugned order dated 27.02.2004 and rectification dated 07.06.2010 have been set aside, therefore, the matter is remanded HTA No. 02/2010 Page 12 of 13 Dr. Jagat Narain vs. New Delhi Municipal Council back to the Assessing Authority to reassess the property for aforementioned period by providing reasonable opportunities to both the sides. The appellant is also directed to appear before the Assessing Authority on 27.08.2012 (at 2 pm). Copy of present judgment be also sent to the Assessing Authority, NDMC House Tax Department, Palika Kendra, 9th Floor, Sansad Marg, New Delhi110001, forthwith.
Appeal file be consigned to record room.
Announced in the open Court (INDER JEET SINGH)
th
on 15 Shravana, Saka 1934 Additional District Judge 03,
South District, Saket Courts,
New Delhi / 06.08.2012
N
HTA No. 02/2010 Page 13 of 13
Dr. Jagat Narain vs. New Delhi Municipal Council
HTA No. 02/2010
06.08.2012
Appearance : Proxy counsel for appellant.
Proxy counsel for respondent.
Vide separate judgment, announced today, the appeal is allowed. Since the impugned order dated 27.02.2004 and rectification dated 07.06.2010 have been set aside, therefore, the matter is remanded back to the Assessing Authority to reassess the property for aforementioned period by providing reasonable opportunities to both the sides. The appellant is also directed to appear before the Assessing Authority on 27.08.2012 (at 2 pm). Copy of present judgment be also sent to the Assessing Authority, NDMC House Tax Department, Palika Kendra, 9th Floor, Sansad Marg, New Delhi110001, forthwith.
Appeal file be consigned to record room.
(INDER JEET SINGH)
Addl. District Judge03, South District,
N Saket/06.08.2012
HTA No. 02/2010 Page 14 of 13