Delhi District Court
R.S Junior Modern School vs New Delhi Municipal Council on 27 February, 2025
IN THE COURT OF DISTRICT JUDGE-05, NEW DELHI
DISTRICT, PATIALA HOUSE COURTS, NEW DELHI
House Tax Appeal No:24/2018
IN THE MATTER OF : -
1. R.S. Junior Modern School
Through its Head Mistress Smt. Manju Rajput
Humayun Road, New Delhi
.......... Appellant
VERSUS
New Delhi Municipal Council
Through its Chairperson,
Sansad Marg,
New Delhi - 110001
.......... Respondent
APPEAL UNDER SECTION 115 of the NDMC Act, 1994
Date of institution : 02.07.2018
Date when judgment reserved : 04.02.2025
Date of Judgment : 27.02.2025
JUDGMENT:-
1. Vide this judgment, I shall decide the present appeal filed by the appellant against the assessment order dated 31.03.2018 passed by the respondent.
2. Briefly stated the facts of the case which led to filing of the present appeal are that the appellant is owned by a society i.e. Modern School, Delhi registered under the Societies Registration Act. The Modern School, Delhi owns/runs various schools, one of which is Modern School, Barakhamba Road and another is R.S. Junior Modern School, HTA No. 24/18 Page 1 of 11 R.S. Junior Modern School Vs. NDMC Humayun Road, New Delhi. Vide Agreement of Lease dated 17.07.1963, the President of India leased out 3.697 acres of land to the petitioner society at Humayun Road, New Delhi at annual lease money of Rs.924.25 per annum for a premium of Rs.18,485/- for the purpose of a school building to Modern School, New Delhi. Since then, appellant society is running the R.S. Modern School. The annual value of the aforesaid property was lastly determined vide order dated 18/24.09.1997 at Rs.6,75,300/- less 10% w.e.f. 1997-98 onwards on which appellant is paying a sum of Rs.1,20,980/- per annum as municipal property tax.
3. A notice U/s.72 of the NDMC Act, 1994 dated 29.03.2005 was issued proposing to increase the legally determined rateable value from Rs.6,04,900/- to Rs.8,91,100/- per annum w.e.f. 01.04.2004 on the basis of comparable rent. The said notice was served on the appellant on 02.04.2005 against which the appellant filed the objections on 03.05.2005. Without deciding the above proposal w.e.f. 01.04.2004, the respondent again issued another notice U/s.72 of the NDMC Act dated 09.02.2011 proposing to increase the ratable value to Rs.3,41,15,300/- per annum under NDMC (Determination of Annual Rent) Bylaws 2009 against which objections were filed. The said bylaws has been held to be ultra vires by the Hon'ble Delhi High Court vide its judgment dated 10.08.2017.
4. The respondent vide the impugned assessment order dated 31.03.2018 has held that property was allegedly HTA No. 24/18 Page 2 of 11 R.S. Junior Modern School Vs. NDMC inspected in October, 2002 where a cellular antenna was found installed on the school building. It is contended that there was/is no cellular antenna on the school building at any time and had it been there, it would have been reflected in the notices U/s.72 dated 29.03.2005 and 09.02.2011. It is contended that the respondent has confirmed the proposal at Rs.8,91,100/- per annum w.e.f. 01.04.2004 on the basis of surmises and conjectures. It is contended that the impugned assessment order is time barred. It is contended that the proposed rateable value of Rs.8,91,100/- per annum w.e.f. 01.04.2004 is on comparable rent basis but the same could not have been determined on the comparable rent basis without disclosing the basis for arriving at such a calculation or on the basis of some alleged cellular antenna which never existed.
5. Hence, it is prayed that the impugned bill / demand dated 13.04.2018 and the impugned order dated 31.03.2018 may be set aside and the respondent may be directed to maintain the ratable value of the aforesaid property at Rs.6,04,900/- per annum w.e.f. 01.04.2004 onwards.
6. Along with appeal, an application U/s.117 of NDMC Act read with Section 5 of Limitation Act is also filed by the appellant.
7. The respondent has not filed reply to the appeal.
However, the respondent has filed the reply to the above application contending that the appeal is time barred. There is no time limit prescribed in NDMC Act to decide the notice U/s.72. The Assessing Authority can exercise its jurisdiction HTA No. 24/18 Page 3 of 11 R.S. Junior Modern School Vs. NDMC to decide the notice within a reasonable period if the assessee provides the relevant information as asked for in the hearings. The impugned order is well reasoned and detailed one and gives the details and reasons for the calculation of the RV. The site visit of the property clearly showed a cellular antenna on the premises, rent of which was not disclosed by the appellant and therefore, the respondent has correctly fixed the RV. The respondent has prayed for dismissal of the appeal.
8. I have heard the Ld. Counsel for the parties and have perused the records.
9. At the outset, it may be noted that the impugned order has been passed on 31.03.2018. By virtue of Section 116 of NDMC Act, such an order can be appealed within 30 days. The present appeal has been filed on 02.07.2018 and as such is not within the limitation. Section 117 of NDMC Act provides for condonation of delay if the appeal is not preferred within time if the appellant satisfies the court that he had sufficient cause for not preferring the appeal within the limitation period.
10. The appellant has contended that as per Section 115 and 116 of the Act, the appellant can file an appeal on the receipt of order. The appellant has contended that it had not received the copy of the impugned order and thereafter it has applied for certified copy and the appellant was supplied the attested copy of the impugned order on 08.06.2018 and thereafter the courts were closed for summer vacations and thereafter he preferred the appeal after opening of the court on HTA No. 24/18 Page 4 of 11 R.S. Junior Modern School Vs. NDMC 02.07.2018. The appellant has also placed the letter dated 01.06.2018 of the NDMC by which certified copy of assessment order was sent to the appellant. Though in the said letter, it is stated that assessment order has already been sent to the appellant on 17.04.2018. However, the respondent has not placed anything to show that assessment order had been sent to the appellant as claimed. Further, there is no such inordinate delay and considering the facts and circumstances of the case and to decide the appeal on merits, the delay in filing the appeal is hereby condoned.
11. Now, coming to the merits of the present appeal.
12. The Ld. Counsel for the appellant has vehemently argued that the impugned order dated 31.03.2018 in respect of the notice dated 29.03.2005 is time barred as same has been decided after a delay of 13 years. He further submitted that the respondent has not disclosed that how the rateable value has been fixed of the property in question i.e. the school by the impugned order as there is no relation between the notice dated 29.03.2005 and the assessment order dated 31.03.2018. He further submitted that the basis of fixing the RV on the ground of cellular antenna is incorrect and contrary to the notices dated 29.03.2005 and 09.02.2011 wherein there is no reference of any cellular antenna on the school building. He submitted that the impugned order is passed on the basis of surmises and conjectures and without any rationale and therefore the same is liable to be set aside and the respondent may be directed to maintain the rateable value of the property HTA No. 24/18 Page 5 of 11 R.S. Junior Modern School Vs. NDMC at Rs.6,04,900/- w.e.f. 01.04.2004 onwards. He has relied upon the judgments in Dr. Balbir Singh & Ors. Vs. MCD and Ors., Ved Marwah & Ors. Vs. NDMC & Ors.
13. The Ld. Counsel for the respondent has vehemently contended that there is no delay in passing the impugned order. The objections were filed by the appellant to the notice U/s.72 of the NDMC Act and the same were dealt with. He submitted that the assessee was not supplying the rental information and therefore the delay in passing the assessment order cannot be attributed to the respondent. He further submitted that there is no provision in the NDMC Act to decide the notice U/s.72 within a particular period and the assessing authority has to decide the same within a reasonable period. He further submitted that when the inspection was carried out in the year 2002, at that time, the antenna was found and therefore the assessment has been done on the basis of comparable rent. He submitted that the appeal is liable to be dismissed as the assessment order is well reasoned and calls for no interference of this court. He has relied on the judgment of State Trading Corporation India Ltd. Vs. NDMC.
14. The appellant has assailed the assessment order dated 31.03.2018 by which the notice dated 29.03.2005 issued U/s.72 of the NDMC Act by which the rateable value has been proposed to be increased from Rs.6,04,900/- per annum to Rs.8,91,100/- per annum w.e.f. 01.04.2004 has been decided. The impugned order dated 31.03.2018 U/s.72 of NDMC Act would show that two notices dated 29.03.2005 HTA No. 24/18 Page 6 of 11 R.S. Junior Modern School Vs. NDMC and 09.02.2011 U/s.72 of NDMC Act were issued in respect of the property in question proposing to increase the rateable value. Since the notice dated 09.02.2011 was issued on the basis of the Bylaws of the year 2009 which were made effective from 01.04.2009 and since the said Bylaws 2009 have been struck down by the Hon'ble Delhi High Court vide order dated 10.08.2017 and the SLP filed by the NDMC before the Hon'ble Supreme Court was pending, the notice dated 09.02.2011 was not decided and has been left to be decided after the disposal of SLP. As such, the impugned order dated 31.03.2018 has decided the notice dated 29.03.2005 given U/s.72 of the NDMC Act.
15. The perusal of the impugned order would show that the reason assigned for increasing the proposed rateable value w.e.f. 01.04.2004 on the comparable rent basis was that a cellular antenna was found by the field staff of the respondent in the month of October 2002 when the school premises were inspected and the appellant was requested to provide the rental information but the appellant had failed to provide the same and therefore the expected hypothetical rent in respect of cellular antenna was added to the existing RV to arrive at proposed rateable value.
16. The appellant has vehemently contended that it has never installed any cellular antenna and there is no basis of the increase of rateable value on that ground. The appellant has placed on record the notice dated 29.03.2005 issued U/s.72 to the appellant by which the appellant was informed HTA No. 24/18 Page 7 of 11 R.S. Junior Modern School Vs. NDMC to increase the rateable value w.e.f. 01.04.2004 from Rs.6,04,900/- to Rs.8,91,100/-. The reason given for amendment in the assessment list or for increase in the proposed rateable value is the comparable rent. As such, there is nothing in the notice dated 29.03.2005 to infer that the field staff of the respondent had inspected the school premises in October 2002 and found cellular antenna installed in the school premises of the appellant. When the appellant has vehemently contended that no such cellular antenna had ever existed on the school premises then it was for the respondent to establish that any such field inspection was carried out and the antenna was found installed in the school premises but no document in support of the same has been placed by the respondent. It is only for the first time, the respondent has asserted the said fact in the impugned order dated 31.03.2018. Further the notice dated 29.03.2005 talks about the reasons for increase of rateable value because of comparable rental and not on account of cellular antenna being installed on the premises of appellant school. In the impugned order dated 31.03.2018, it is not disclosed by the respondent that on what basis comparison has been made and which comparative property has been taken into consideration to increase the rateable value from Rs.6,04,900/- to Rs.8,91,100/-. Therefore, in the absence of any comparative property being disclosed by the respondent, the reason given by the respondent in the notice dated 29.03.2005 and consequently the final assessment order increasing the RV are found to be unjustified and without any basis. Further, there is no corelation between HTA No. 24/18 Page 8 of 11 R.S. Junior Modern School Vs. NDMC the notice dated 29.03.2005 issued U/s.72 of NDMC Act by which the rateable value was proposed to be increased on comparative rental basis whereas final order passed on 31.03.2018 is based on the annual rent in respect of alleged cellular antenna installed on the school building.
17. There is yet another aspect of the matter. The respondent had issued the notice dated 29.03.2005 U/s.72 of NDMC Act to the appellant. The same was served upon the appellant on 02.04.2005 and thereafter the appellant filed the objections vide letter dated 02.05.2005. Thereafter, the respondent fixed date of hearing on 14.02.2010 and when none appeared another hearing was fixed on 22.12.2015 when the advocate of the appellant school appeared and filed the written submissions on 19.12.2015. Thereafter, the respondent has passed the impugned order on 31.03.2018. It would show that the notice dated 29.03.2005 has been decided by the respondent after a gap of more than 13 years. It has been held in Ved Marwah and others vs. NDMC and others by the Hon'ble Delhi High Court that the proceedings initiated pursuant to the notice U/s.72 of the NDMC Act should be concluded in a reasonable period of not more than 3 years. In the said case the notices for revising the assessment list were issued over a decade prior to passing of the final orders by the NDMC. The Hon'ble High Court has held that the inordinate delay was unreasonable and quashed the assessment order.
18. Although the Ld. Counsel for the respondent has argued that the judgment in Ved Marwah is not applicable in HTA No. 24/18 Page 9 of 11 R.S. Junior Modern School Vs. NDMC the present case because the delay in finalizing the assessment order cannot be attributed to the respondent rather it was the appellant who was not supplying the rental information in respect of the cellular antenna. However, I do not find any merit in this contention. The impugned order dated 31.03.2018 itself would show that immediately after receiving the notice U/s.72 dated 29.03.2005, the appellant had filed the objections on 02.05.2005. The respondent kept the said objections pending and slept over the same and only fixed the date of hearing in the year 2010 and another hearing was fixed after five years in 2015. The appellant again filed the written submissions on 19.12.2015. Yet the respondent took about another 3 years to pass the impugned order. In these circumstances, it cannot be said that delay was attributable to the appellant in not supplying the rental information. Therefore, the ratio of judgment in Ved Marwah will squarely cover the present case.
19. In the present case, there is an inordinate delay on the part of respondent/NDMC in finalizing the assessment. The initial notice Us.72 of the NDMC Act was issued on 29.03.2005 while the final assessment order has been passed on 31.03.2018 i.e. after a gap of more than 13 years between the issuance of initial notice and finalization of assessment order. As such, in view of the observations made in Ved Marwah by the Hon'ble High Court the delay in finalizing the assessment is inordinate and arbitrary. For the above reasons, the impugned assessment order cannot be sustained. The HTA No. 24/18 Page 10 of 11 R.S. Junior Modern School Vs. NDMC impugned assessment order passed after the huge delay of 13 years is bad in law and is liable to be set aside.
20. In view of the aforesaid discussion, the appeal is allowed. The impugned assessment order dated 31.03.2018 is set aside. However, as observed by the Hon'ble Delhi High in Ved Marwah, the respondent/NDMC is at liberty to rework the assessment by issuing a fresh notice to the appellant from the period commencing from three years prior to the date on which the final notice was issued/assessment order passed and finalize the assessment within a reasonable time.
21. File be consigned to record room after due compliance.
Announced in the open Court on 27th February, 2025 (Balwant Rai Bansal) District Judge-05 (New Delhi District) Patiala House Courts, New Delhi HTA No. 24/18 Page 11 of 11 R.S. Junior Modern School Vs. NDMC