Delhi High Court
Dewan & Sone Investment Pvt. Ltd. vs New Delhi Municipal Committee on 5 November, 1996
Equivalent citations: 1996VAD(DELHI)429, 66(1997)DLT278
JUDGMENT Mohd. Shamim, J.
(1) These three writ petitions bearing Nos. 573, 574 and 575 of 1976 are being taken up together for the purposes of disposal as the parties in the three writ petitions are the same, and the common questions of law and facts which are Bkely to arise while disposing them of, are also the same Reliefs sought are also identical in all the three writ petitions. Facts in brief which led to the presentation of the three petitions are being enumerated below in order to facilitate the disposal.
(2) The petitioner are a private limited company. They are the owner and landlord of the premises bearing No. G.39, Connaught Circus, New Delhi (hereinafter referred to as the disputed property for the sake of convenience). The ground floor portion of the said premises is in occupation of State Bank of India as a tenant. The petitioner have cleared the, house tax for the year 1972-73. The petitioner were served with a notice dated November 1, 1975 under Section 67 of the Punjab Municipal Act ('the Act' for short), for the amendment of the annual value of the premises referred to above for the period April 1, 1972 to March 31, 1973 under the proposed Resolution No. 34 dated October 28, 1975 whereby the respondent proposed to revise the annual value to Rs. 91,800.00 . The petitioner were required through the notice adverted to above to file objections in writing on of before December 6, 1975 and to appear before the respondent on December 9, 1975. The petitioner filed objection on December 1, 1975 to the above said proposed annual value. The afore-mentioned Resolution of the respondent Committee purporting to revise the assessment list was objected to on the ground of being illegal and without jurisdiction. The objections preferred by the respondent were rejected December 9, 1975 and the respondent revised the annual value from Rs. 6000.00 to Rs. 1,02,000 less 10 for the period April 1, 1972 to March 31, 1973. The petitioner approached the Additional District Magistrate under Sections 84 of the Act against the above said Resolution No. 64 dated December 9,1975 The said appeal was dismissed vide judgment and order dated March 11, 1976. The impugned Resolution dated December 9, 1975 passed by the respodent and the judgment and order dated March 11, 1976 passed by the Additional District Magistrate are without jurisdiction contrary to law inasmuch as the respondent had no jurisdiction or power to amend the assessment list retrospectively under Section 67 of the Act in view of the law laid down by Full Bench of this Court as reported in Life Insurance Corporation v. New Delhi Municipal Committee, Ilr (1973) 11 Delhi 112 (1) It was in the above circumstances that the petitioner approached this Court.
(3) The respondent have opposed the petition, inter alia, on the following grounds : that the disputed property has been let out to State Bank of India on a monthly rent of Rs. 8,500.00 w..e.f. November, 1971. The said property remained under assessed iinadvertently. The respondent on detection of the mistake revised the annual value of the property From Rs. 6000.00 to Rs. l,02,000.00 on the basis of the actual rent vide Resolution No. 64-66 dated December 9, 1975 for the assessment years 1972-73. 1973-74 and 1974-75 under Section tion 60 of the Act. "Since the present case involves several questions of disputed facts hence the petitioner cannot involve the jurisdiction of this Court under Art. 226 of the Constitution of India. It is incorrect to suggest that the respondent are not competent to amend the assessment list with retrospective efect. The provisions of Section 84 of the Act are quite clear and provide that in case of under assessment on account of fraud or mistake on the part of the Committee or on the part of the assessee, in that eventuality, the same can be rectified at any time after making amendment in the list. The petitions are false and frivolous and they are liable to be dismissed.
(4) After going through the petition I find that the petitioner want this Court to quash the notice dated November 1, 1975 (Annexure A), the Resolution No. 64 dated December 9, 1975 (Annexure C) and the order dated March Ii, 1976 (Annexure E) on the ground that the respondents are not competent to amend the rateable value with retrospective effect. Thus they want. a restraint order to be issued against the respondent from realising the tax on the basis of the above said Resolution and the notice (vide para 9J of the petition). The petitioner in this connection have relied on a Full Bench judgment and order of this Court dated March 27, 1993 in C.W.P. No. 445/68, (8), Life Insurance Corporation v. New Delhi Municipal Committee, Ilr (1973) 11 Delhi 112. However, the said principle was never pressed into service by the learned counsel for the petitioner, and rightly so. in view of the judgment and order passed by the Hon'ble Supreme Court as reported in New Delhi Municipal Committee v. Life Insurance Corporation , whereby the said Full Bench decision was set aside. It was observed by the Hon'ble Supreme Court that the Municipal Committee was competent enough to assess a particular property with retrospective effect. To reproduce the exact words from the said authority it was observed "In the instant case, a part of the base- ment is alleged to have escaped assessment and if that be true we are unable to understand that the assessee, the Lic here could in face of S.67 raise a contention that the assessment list of past years though faulty cannot now be corrected." This Court need not dilate on this point any further in view of the law laid down by the Hon'ble Supreme Court.
(5) Learned counsel for the petitioner Mr. Sharma has however, raised a new contention before this Court. According to him, the respondent amended the rateable value in res pect of the disputed property on the ground that it was erroneously valued and has been under assessed as the said premises had been let out to State Bank of India on a monthly rent of Rs. 8500.00 w.e.f. November 1971. Thus the said property remained under assessed on account of a mistake and the said mistake was detected subsequently. Hence the annual rateable value was revised from Rs.6000.00 to Rs. l,02,000.00 on the basis of the alleged actual rent vide Resolution Nos. 64-66 dated December 9, 1975 for assess ment years 1972-1973, 1973-74 and 1974-75 (vide para C of . the counter affidavit). The learned counsel has thus assailed the legality and the validity of the said assessment on the ground that a duty has been cast on the shoulders of the respondent to assess the rateable value of a premises keep- ing in view the rent which the said property is likely to. fetch on being let out from year to year [vide Section 3(l)(b) of the Act]. Hence the rent which a landlord is likely to receive from the premises on being let out has been made the basis for fixing the rateable value of a building. I am tempted here to cite the exact words used by the legislature in Section 3(l)(b) of the Act. "In the case of any house or building the gross annual rent which uch House or building may. reasonably be expected to let from year to year The said reasonable expectation of the landlord cannot be more than the standard rent fixed by the Rent Controller in accordance with the provisions of Delhi Rent Control Act. Because a landlord can in no circumstances be permitted to recover more than that from a hypothetical tenant. Rent at a higher rate than the standard rent would be un-enforceable and would expose the landlord to penal consequences. According to the learned counsel the respondent in view of the above, fell into a grave error by fixing the rateable value, in the instant case, on the Basis of the rent which is alleged to have been realised by the landlord i.e. the petitioner for the disputed years. The learned counsel in support of his contention has led me through a number of authorities. It was observed by the Hon'ble Supreme Court in The Corporation of Calcutta v. Smt. Padma Debi and other ."(A) combined reading of the provisions of Ss.2(10) (b), 3 and 33 (a) of the Rent Control Act leaves no room for doubt that a contract for a rent at a rate higher than the standard rent- is not only not enforceable but also that the landlord would be committing an offence if he collected a rent above the rat" the standard rent. One may legitimately say under the circumstances that a landlord cannot reasonably be expected to let a building for a rent higher than the standard rent In this view, the law of the land must necessarily be taken as one of the circumstances, obtaining in the open market placing an upper limit on the rate of rent for which a building can reasonably be expected to let.
(6) The omission of a specific provisions, as in S. 26 of the Calcutta Rent Act of 1920 prohibiting the Calcutta corporation from making assessment .of any rent higher than the rent fixed by the Rent Controller in the-subsequent Acts does not inevitably lead to the conclusion that the omission implies the conferment of such a power. No implied prohibition can be drawn from the history of the legislation. It follows that the rental value under S.127(a) of the Act cannot be fixed higher than then standard rent under the Rent Control Act."
(7) The above view was again reiterated in Dewan Datilat Rai v. New Delhi Municipal Corporation of Delhi Air 1970 Supreme Court 541(5) "We are, therefore, of the view that, even if the standard rent has not been fixed by the Controller, the landlord cannot reasonably expect to receive from a hypothetical tenant anything more than the standard rent determinable under the Act and this would be so equally whether the building has been let out to a tenant who has lost his right to apply for fixation of the standard rent or the building is Self-occupied by the owner. The assessing authority would, in either case, have to arrive to at its own figure of the standard rent by applying principles laid down in the Delhi Rent Control Act, 1958 for determination of standard rent and determine the annual value of the building on the basis of such figure of standard rent."
(8) The matter with regard to fixation of the annual rateable value of a building again came up for consideration before the Hon'ble Supreme Court in Dr. Balbir Singh and others etc. V. M/s. M.C.D.and Others, etc. . (6) Their Lordships opined "The rateable value of a building whether tenanted or self occupied, is limited by the measure of standard rent arrived at by the assessing authority by applying the principles laid down in the Rent Act and cannot exceed the figure of the standard rent so arrived at by the assessing authority. The standard rent determinable on the principles set out in the Rent Act is the upper limit of the rent which the landlord may expect to receive from a hypothetical tenant, but it may in a given case be less than the standard rent having reward to various attendant circumstances and considerations.The test therefore is not what is the standard rent of the building but what is the rent which the owner reasonably expects to receive from a hypothetical tenant and such reasonable expectation can in no event exceed "the standard rent of the building determinable in accordance with the principles laid down in the Rent Act, though it may in ft given case be lower than such standard rent."
(9) It is thus clear beyond any reasonable doubt from the authorities alluded to above that the municipal authorities while fixing the rateable value of a premises have to take into account the standard rent, if any, fixed by the Rent Controller under the provisions of the Delhi Rent Control Act, Even in those cases where no standard rent has been fixed the municipal authorities have to take into consideration the reasonable expectation of a landlord to receive rent in respect of a particular premises if the same is let out to a hypothetical tenant. The said reasonable expectation can in no event be more than the rent which is determinable by the Rent Controller under the provisions of the Delhi Rent Control Act.
(10) Learned counsel for the petitioner Mr. Sharma, in view of the above, has argued that the rateable value admittedly in the instant case was fixed on the basis of the alleged contractual rent in between the landlord and the State Bank of India at Rs. 8500.00 per month. Hence it is obviously wrong.
(11) Learned counsel for the respondent Mr, R. P. Gupta has not challenged the position of law on the above point. In fact, he has not urged any thing to the contrary. Thus it can be safely concluded that as far as the legal position is concerned on this point the same is not being questioned by the respondent. Learned Council for the respondent Mr. Gupta has, however vehemently contended that the petitioner for the best reasons known to them neither lock up the said plea in their objection which they have filed against the rateable value before the assessing authorities on December 1, 1975 in response to the notice dated November 1, 1975 nor they took the said plea as one of the grounds of appeal when they preferred the same before the Additional District Magistrate under Section 84 of the Act against the Resolution No. 64 dated December 9, 1975 passed by the respondent regarding the assessment year 1972-73 with retrospective effect. Curiously enough this plea was not taken up even before this Court while filing the present writ petition as one of the grounds of challenge to the fixation of the rateable value. The petitioner instead challenged the same on the ground that the respondent was not competent to fix the rateable value with retrospective effect. The learned counsel thus contends that the petitioner cannot now be permitted to raise the said plea before this Court. They must drink as they have brewed. They themselves are responsible for the predicament which they find themselves in. Admittedly the said plea was available to the petitioner as there is no difference in the legal position on the above point which was obtaining in the year 1976 and which is at present. The learned counsel has thus strenuously argued that the petitioner would be deemed to have given up the said plea and as such they cannot be allowed to take us this plea now for the first time to the disadvantage of the respondent. The learned counsel in support of his argument has led me through the observations of a Full Bench of the Allahabad High Court as reported in Messrs. Adarsh Bhandar Vs. Sales Tax Officer, .(7) "This complaint however is not to be found among the grounds on which relief is sought in the petition. No statement is made in the affidavit filed in support of the petition that the petitioner was not in fact afforded an opportunity of proving the correctness of his return; such an assertion is made for the first time in the rejoinder-affldavit. The "allegation" mentioned in the grounds of the petition which accord ing to the petitioner he had no opportunity to substantiate. refer to another matter namely his contention that he was not in lav liable to pay sales tax on his turnover for the quarter in question. I am of opinion that this complaint ought not in these circumstances to be entertained."
(12) The next case which has been relied upon by the learned counsel for the respondent is Hemant singh Kubear singh Vs. Board of Revenue Mp and another . wherein it was observed "It is said that these grounds were raised but not considered. Mere raising of grounds is not enough. It must appear that grounds had been pressed, it is only the grounds pressed before the Board and dealt with by it that can form the subject matter of the petition under Articles 226 and 227 of the Constitution of India We are bound to assume that the points mentioned, by the Board, alone were pressed. Contentions with reference to these grounds Nos. V and Vi cannot be allowed to be urged before us."
(13) The learned counsel has then brought to my notice the observations of the Hon'ble Supreme Court as reported in Municipal Corporation of the City of Jabalpur Vs. State of Madhya Pradesh and another "The Corporation moved the High Court of Jabalpur for relief under Article 226 praying for the issue of a writ of mandamus quashing the notification. The Corporation did not deny the fact that it was the Govt. of C.P. and Berar that had effected the transfer and the allegation in the petition in fact preceded on that basis. During the argument however, the Corporation put forward the case, transfer the transfer was not by the Government of the Central Provinces but by the Central Government. This new contention was based on the reasoning that S. 81 of the Jabalpur Corporation Act applied to transfer made after the Corporation Act came into force.
(14) Held that the High Court should not have allowed the petitioner to put forward the new case. but should have proceeded on the basis of the pleadings (15) Learned counsel for the petitioner Mr. Sharma, on the other hand, has contended that it is true that the petitioner have not taken up the above said plea specifically in their objections and in the grounds of appeal and even before this Court. However, the petitioner have very categorically stated in the writ petition that the impunged notice dated November I, i975, Resolution dated December 9, 1975 and the order dated March Ii, 1976 are. liable to be set aside as the same are illegal and invalid and without jurisdiction. Once it is alleged by the petitioner that the said Resolution and the notice are illegal and invalid then the said illegality and invalidity can be challenged on any ground. Thus the word illegality is wide enough to embrace within its fold any sort of illegality, including the illegality on The ground that the rateable value was not determined in accordance with the standard rent. Hence it cannot be said that the point which is being raised now is a new point.
(16) The next argument advanced by the learned counsel for the petitioner is that a legal point which goes to the root of the matter and is based on the facts admitted and can be disposed oi without having recourse to the evidence can be raised at any stage of the proceedings, including before this Court, The argument proceeds further that a duty has been cast on the shoulders of the Committee to assess the rateable value in accordance with law [vide S. 3(i) (b) of the Act]. If this is so the respondent are required to undertake this exercise only in accordance with law. Any act which is required to be done under law either should be done in accordance with law or not at all. it was observed by their Lordships of the Privy Council in Nazir Ahmad v. King- Emperor . "The rule which applies is that where a power is given to do a certain thing in a certain way the thing must be done in that way or not at all".
(17) I find myself in perfect agreement with the learned counsel, It has already been observed above that the respondent are under an obligation to determine the retable value of a particular property in accordance with Section 3 (1) (b) of the Act. This is a quasi judicial function vide British India Corporation Limited v. Deputy Commissioner, Gurdaspur and another, 1969 Rcr 720. (1 1) Thus the petitioner want to show this Court by raising the said legal point that the rateable value in the instant case was not determined in accordance with law i.e. not in accordance with the provisions of Sections 6 & 9 of the Delhi Rent Control Act. This they can do so on the basis of the record which is already before this Court. The opposite party is not going to be taken by surprise inasmuch as it can be presumed to be within the knowledge of the respondent that the rateable value is to be fixed inaccordance with law. Consequently the objection of the opposite party that the petitioner would be deemed to have give up this plea when they have not raised it specifically in their pleadings is unwarranted and unjustified in the circumstances of the present case. It is true as argued by the learned counsel for the respondent Mr. Gupta that a party should not be permitted and cannot be allowed to raise a new plea which is based on facts to the prejudice of the opposite party because in that eventuality they would not be in a position to meet the same at such a belated stage before an appellate court. However, when the plea which is proposed to be raised is simply, a legal plea then this Court feels such a plea can be permitted to be raised to any stage. The ordinary rule is that the parties should be confined to their pleadings particularly with regard to the averments which are based on facts. The said rule is dictated not merely by the need for orderliness in the pleadings but also on account of the fact that the opposite party should not be taken in any case by surprise and consequent injustice resulting therefrom.
(18) I am supported in my above view by the observations of a Full Bench of the Punjab High Court as reported in Santa Singh Gopal Singh and Others v. Rajinder Singh Bur Singh and Others "The broad rule however is that when a question of law is raised for the first time in a Court of last resort upon facts either admitted or proved beyond controversy, it is not only competent but perhaps expedient in the interests of justice to entertain the plea. But the expediency of adopting this course is clearly doubtful when the plea cannot be satisfactorily disposed of without deciding nice question of facts. Indeed such a course should never be followed unless the Court is satisfied that the evidence upon which it is asked to decide establishes beyond doubt that the facts, if fully and properly investigated would have supported the new plea and also that interests of justice demand it."
(19) To the same effect are the observations of their Lordships of the Supreme Court as reported in A. St. Arunachalam Pillai v. M/s. Southern Roadways Ltd. and another Air 1960 Supreme Court 119(13).., "It was not until the decision of the High Court in Writ Appeal No. 107 of 1955 that it became the considered view of that Court that the Regional Transport Officer had no jurisdiction to make any such variation. When the law was so declared by the High Court it could not reasonably be said that the High Court erred in allowing the respondent to take this point although in its petition under Article 226 the point had not been taken , Since the question went to the root of the matter and it involved the question whether the Regional Transport Officer had jurisdiction to vary the conditions of a permit the High Court faced with a Division Bench decision of its own on the matter, could not very well refuse permission to the respondent to rely on that decision in support of its petition questioning the validity of the order of the Government of Madras made under S. 64A of the Act."
(20) The above view was again reiterated by their Lordships of the Hon'ble Supreme Court as reported in R. J. Singh Ahluwalia v. The State of Delhi .(14) "....... .This ground of challenge had of course, not been raised in either of the two courts below but since it went to the root of the case, being a jurisdictional point we considered it just and proper to allow it to be raised."
(21) The same view was again given went to by the Supreme Court as reported in the management of Hamdard (Wakf) Laboratories, Delhi V. Raunaq Hussain and others 1971 Lab.I.C. 405(15) "It may be observed that an objection was raised at the time of arguments by the learned counsel for the contesting respondents that no ground had been taken and no contention had been advanced on behalf of the appellant before the Tribunal and the learned single Judge that the Standing Orders could not relate to the subject of transfer of employees. It was urged that the appellant should not be permitted to raise that ground in appeal. The above ground raised on behalf of the appellant is purely one of law on the admitted facts of the case, and we are of the opinion that the appellant should be allowed to raise it."' (22) It thus can be safely concluded from above that legal point which goes to the root of the matter and can be adjudicated upon on the basis of the admitted facts without the necessity of any further evidence in support of that contention can be raised at any stage. The mere fact that it was not pleaded and not taken up earlier before the lower courts would not come in the way of a party to put forward the said point. It has already been observed above that it is the statutory duty of the respondent to assess the rateable value in accordance with law. Assuming arguendo, if the petitioner are not allowed to raise this contention, in that eventuality the rateable value which has been fixed in respect of the disputed premises by the respondent which is not in accordance with law would go un-challenged and would remain intact as a corollary whereof an illegal order would be allowed to remain in operation not only to the detriment of the petitioner but to all other persons who would be similarly situated. The consequences which would follow there from would be very grave and serious. The function of a Court of Law is to do justice in between the parties and the same is to be done in accordance with law. The Court in case it comes to the conclusion that justice is not being done in a particular case on account of the inadvertence on the part of a party, and simply because a particular plea has not been raised and taken up it would not fold its hands in despair and would not be a mute spectator but rather would come forward to do justice and, as such, would allow a party to raise a legal plea even at the appellate stage in order to perform its duty.
(23) I have very carefully gone through the authorities relied upon by the learned counsel for the respondent. The said authorities are not applicable to the facts of the present case inasmuch as the said authorities relate to a point which was proposed to be raised on the basis of the facts which were not before the Court. The petitioner in the instant case as is manifest from above want to raise a plea which is purely legal and based on the admitted facts.
(24) In the circumstances stated above the petitioner are entitled to succeed. All the three petitions are allowed. The notice dated November 1,1975, Resolutions Nos-64,65 and 66 dated December 9,1976,passed by the Additional District Magistrate are hereby quashed. The respondent would, however, be free to assess the disputed property in accordance with law.
(25) In the circumstances of the case the parties are left to bear their own costs.