Karnataka High Court
K. Shivakumar And Ors. vs Commissioner, Mandya City ... on 18 August, 2000
Equivalent citations: AIR2001KANT49, AIR 2001 KARNATAKA 49, 2001 AIR - KANT. H. C. R. 58 (2001) 3 KANT LJ 559, (2001) 3 KANT LJ 559, 2001 AIR - KANT. H. C. R. 58
Author: V. Gopala Gowda
Bench: V. Gopala Gowda
ORDER V. Gopala Gowda, J.
1. The petitioners have challenged the legality and validity of the order passed by the first respondent vide Annexures A to A2 dated 28-10-1994 and further to quash Annexure-B to B2 passed by R2 dated 19-5-1998, urging various legal contentions.
2. Certain undisputed facts are stated as hereunder for the purpose of considering the rival contentions urged by the learned counsel for the parties.
The property in question is a commercial complex bearing Municipal Door No. 1978/ A, measuring 12 x 50 ft. (360 x 1130 metres), 1978/B measuring 12 x 15 ft. (360 x 13.30 metres) and 1978/G measuring 20 x 50 ft. (9.6 x 13.30 metres) respectively situated at Rajendra Prasad Road, Mandya Town, Mandya. The entire premises is let out to the State Bank of India, Mandya Branch. The first respondent in exercise of his power under Section 103 of the Karnataka Municipalities Act, 1964 (in short 'the Act') has revised the property tax in respect of properties in question vide Annexures A to A2 after following the procedure contemplated under the provisions of the Act and in compliance with the principles of natural justice. Earlier to the revision of the property tax, the first respondent has fixed the property tax at Rs. 6,000/- Vide its notice dated 17-10-1994. The property tax has been enhanced by the first respondent by issuing the impugned notice at Annexures A to A2 in exercise of his powers under Section 103(1)(d) of the Act read with Section 2(c) of the Act.
3. It is stated that, said orders have been challenged before the Divisional Commissioner by filing a statutory Appeal under Section 352 of the Act urging various legal grounds contending that, the revision of property tax of the petitioner under the provisions of the Act is in contravention of provisions of Section 14 of the Karnataka Rent Control Act, 1961 (in short 'Rent Control Act') as the first respondent was required to determine the fair rent and that should have been taken into consideration as the rateable value for the purpose of fixing the Annual Rateable Value of the building (in short 'ARV') that would be earned in respect of the building in question by the owner before either fixing the property tax or revising the property tax. It is contended by the learned counsel for the petitioner that the said procedure has not been followed by the first respondent. Therefore, the learned counsel submits on behalf of Impugned orders passed by the first respondent are liable to be quashed.
4. The second respondent, after hearing both the parties in the Appeals filed by the petitioners has passed the impugned orders at Annexures B to B2 affirming the revision of the property tax made by the first respondent in the impugned notices at Annexures A to A2 thereby the property tax has been revised which has been assessed and fixed to a sum of Rs. 20,736/- p.a. which is arbitrary, unreasonable and without authority of law as the impugned orders passed by respondents 1 and 2 are without Jurisdiction as the ARV has not been determined by the first respondent by following the procedure as contemplated under Section 14 of the Rent Control Act as the said Act has got application to the first respondent City Municipal Council in view of Schedule-I of the said Act.
5. It is further contended by the learned counsel appearing on behalf of the petitioner Mr. Deshraj that the orders passed by the first respondent are bad in law. Though they have enhanced the ARV and revision of the property tax in respect of the properties in question on the basis of rent paid by their tenants and that they have not determined the ARV as defined under Section 2(1) of the KMC Act r/w Section 14 of the Rent Control Act. The aforesaid legal ground was urged in the appeal before the second respondent by the petitioner, when he has challenged the impugned notes A to A2, issued by the first respondent. The second respondent has reaffirmed the findings recorded by the first respondent holding that the assessment of rateable value made by the first respondent and the revision of property tax fixed by him is legal and valid without taking into consideration the legal grounds urged before him and also the reliance placed upon the law laid down by the Apex Court and this Court in the Judgments in the case of East India Commercial Co. Pvt. Ltd. v. Corporation of Calcutta in the case of Govt. Servants Co-operative House Bldg. Society Ltd. v. Union of India, AIR 1989 Kant 41 (sic) in this regard. It is contended by the learned counsel for the petitioner that, the second respondent has failed to exercise his appellate jurisdiction for non-consideration of the legal submissions made before him in the Appeal filed by the petitioners. Therefore, the learned counsel on behalf of the petitioners would submit that the impugned orders are liable to be quashed.
6. Sri P. S. Manjunath, learned counsel appearing on behalf of first respondent sought to justify the impugned orders passed by the first respondent contending that the same are in conformity with Section 103(1)(d) read with Section 2(1) of the KMC Act referred to above and further submitted that, Judgment of Supreme Court is in respect of revision of property tax made by the first respondent. Therefore, he would submit, that the reliance placed upon the judgment of Supreme Court by the petitioner's counsel has no application to the facts of the case for the reason that similar to the second proviso to the Delhi Municipal Corporation Act is not provided under the KMC Act, 1964. Further he contends that, judgment has got application to the case of the first respondent for the reason that, the provision Under Section 103 r/w 2(1) of the KMC Act does not enable the Authority under that Act for determination of rateable value of the property for either fixing or revising the property tax. The second proviso to said section clearly enumerates that, in respect of land or building, standard rent has been fixed in Delhi and Ajmer, the ratable value thereof they are not existing the annual rent. The similar second proviso as provided under the provision Under Section 116 of the Municipal Corporations Act is not provided to Section 103(1) of KMC Act of 1964 therefore, it is urged that the law laid down in the said case has no application to the facts of the case.
7. The learned counsel on behalf of the first respondent, has also placed reliance at paragraph 8 on the judgment in support of the case of the 1st respondent. Further the learned counsel would submits that, the judgment of the Apex Court has no application to the facts of this case as the facts of the said case and the provisions of the KMC Act and the provision Under Section 116 of the Delhi Municipal Corporation Act are entirely different wherein the provisions Under Section 103 of KMC Act for determination of rateable value of the building or land is entirely different from Section 116 of the Delhi Municipal Corporations Act, 1957. Therefore, the learned counsel submits that, the impugned orders passed by the first respondent are perfectly legal and valid and that the same need not be interfered with by this Court in exercise of its extraordinary and supervisory jurisdiction under Article 226 & 227 of the Constitution of India.
8. The learned Addl. Government Advocate Mr. K. N. Puttegowda appearing for the second respondent submits that, he has applied his mind to the facts of the case with reference to the relevant provisions of Section 103 r/w 2(1) of the KMC Act, keeping in view the law laid down in this regard stating that the rateable value is relevant consideration for the purpose of revision of tax under the provisions of the KMC Act has been considered and passed well considered impugned orders. The appellate authority, after perusing the relevant records placed before him pertaining to this case and after consideration of the same he had recorded finding of fact on the determination of rateable value of the properties in question. The finding of fact recorded by the second respondent on the basis of records and on relevant material facts furnished by the 1st respondent in the impugned notices at Annexures A, A1 & A2 the same have been considered and he has affirmed the determination of the ARV approved by the 1st respondent in respect of the property in question and therefore, the impugned order passed by the 2nd respondent need not be interfered with by this Court as there is neither illegality nor findings are erroneous in the impugned orders. Hence, he has prayed for dismissal of the writ petition.
9. After considering the rival contentions urged by the learned counsel on behalf of the parties, I have perused the petition averments, documents, the impugned notices and orders challenged in these writ petitions. I have carefully examined the provisions of Section 103(1) read with Section 2(1) of the KMC Act and also Section 14(6) of the Rent Control Act which was in existence in statute book prior to striking down the same by this Court in the case in the case of Arun Balawant Chandagadkar v. Khutubuddin Shabhakhan Pathan. After perusing Section 103(1)(d) of the KMC Act, it is noticed that procedure is provided for the purpose of fixing property tax and revision of the property tax. The said provision reads thus :
"103. Preparation of assessment list: (1) When a tax on buildings or lands or both is imposed, the assessor shall cause an assessment list of all buildings or lands, or buildings and lands in the municipal area to be prepared containing -
(a) to (c) x x x x x x x x x x x x x
(d) the annual rateable value or other basis on which the property is assessed;
and (e) xxx xxx xxx xxx 10. The ARV is defined under Section 2(1) of the Act which reads thus :
Section 2(1) : 'Annual Rateable Value' means the gross annual rent for which any building or land exclusive of furniture or machinery contained or situated therein or thereon, might reasonably be expected to let from month to month or year to year."
11. The short point for consideration in these writ petitions is whether, the provisions u/S. 14 of the Karnataka Rent Control Act, 1961 was required to be taken into consideration by the first respondent for determining the ARV of the property to fix the property tax by revising the same in exercise of its power or not? To consider this question, the Judgments of the Apex Court referred to supra are also considered. The judgment referred to above are applicable to the facts of this case in view of the law laid down by the Apex Court at paras 8 and 9. The judgment in the case of Govt. Servants Co-op. House Building Society Ltd. v. Union of India has no application to the facts of the case for the reason that, Section 103(1) of the KMC Act is entirely different from the said proviso to Section 116(2) of the Delhi Municipal Administration Act of 1957, whereas under the provisions of Section 103(1)(d) R/w Section 2(1) of the Act, the rateable value of the property has to be determined on the basis Of determination of Annual rent for which any building or land exclusive of furniture or machinery contained or situated or thereon might reasonably be inspected to let from month to month or year to year as defined under Section 2(1) of the KMC Act. Therefore, the judgment in the Government Servants Co-operative House Building Society Limited v. Union of India has no application to the facts of this case, for the reason that the Supreme Court in another case in East India Commercial Corpn. Company v. Corporation of Calcutta upon which the reliance was placed by both learned counsel on behalf of the parties has clearly laid down the law regarding the procedure to be followed for determination of the property Tax under the provisions of the KMC Act for assessing the property within its limits after taking ARV of the properties upon which strong reliance is placed by the learned counsel for the first respondent and this Court has considered the same to answer the point formulated by this Court, to find out the correctness of the impugned notices and the orders issued and passed by the respondents in these petitions.
12. The learned counsel for the petitioner submits that. Assessment or revision of property tax should have been made by the respondents taking into consideration of the fair rent required to be determined as provided under Section 14 of the Karnataka Rent Control Act in respect of the properties in question, is the relevant consideration for them, should have been taken into consideration by the first respondent having regard to the cases referred to supra. This legal contention of the petitioners counsel is rebutted by the learned counsel appearing on behalf of first respondent placing reliance upon the provisions under Sections 2(1) r/w 103(1)(d) r/w 103(1)(d) of the Act of 1964 and also the judgment in the case of East India Commercial Corpn. referred to supra, he has placed reliance of the said judgment at paragraph 8 which reads thus (at page 1790-1791) :
"8. In order to deal with the rival contentions it is necessary to first refer to the relevant provisions of the statutes. Section 168 of the Municipal Act provides for the method by which the amount of consolidated rate for the purpose of assessment of the rent and building has to be fixed. Sub-sections (1) to (3) of Section 168 which are relevant, read as under:
(1) For the purpose of assessment to consolidated rate the annual value of any land or building shall be deemed to be the gross annual rent at which the land or building might at the time of assessment be reasonably expected to from year to year, less, in the case of building an allowance of ten percent, for the cost of repair and for all other expenses necessary to maintain the building in a state to command such gross rent:
Provided that in respect of any land or building the rent of which has been fixed under the provisions of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950 or West Bengal Premises Tenancy Act, 1956, the annual value thereof shall not exceed the annual amount of the rent so fixed.
(2) If the gross annual rent of any land not ordinarily let cannot be easily estimated, the gross annual rent of the land for the purpose of Sub-section (1) shall be deemed to be five percent of the estimated present value of the land.
(3) If the gross annual rent of a building not ordinarily let cannot be easily estimated, the gross annual rent of the building for the purpose of Sub-section (1) shall be deemed to be five percent of the value of the building obtained by adding the estimated cost of erecting the building at the time of assessment less a reasonable amount to be deducted on account of appreciation, if any, to the estimated present market value of the land valued with the building part of the same premises."
13. By reading the aforesaid judgment of the Apex Court, it is noticed that Apex Court has made it clear that the concerned local Municipality and Municipal Corporation has got power to assess the property tax in respect of building or land belonging to a Khatedar as provided under the provisions of the relevant Municipal Act, except when Municipal Act itself contains a non-obstante clause.
14. In view of law declared at paragraph 8 of the Judgment in Eastern India case referred to supra, in my considered view, the first respondent was not required to follow the procedure as contemplated under Section 14(6) of the KRC Act (now this provision has been struck down). Therefore, the contention of the learned counsel for the petitioners that the revision of property tax on the basts of the rateable value determined as per Section 2(1) r/w 103(1)(d) of the KMC Act and not following the procedure as provided under the Rent Control Act is misconceived, as the said provisions of the Rent Act is not required to be followed by the first respondent as there is an elaborate procedure provided under the provisions of the KMC Act referred to supra. Therefore, this Court has to hold against the petitioner holding that first respondent is empowered to assess the properties in question on the basis of rateable value of the properties and revise the properties tax after following the procedure contemplated under Section 103 read with Section 2(1) of the KMC Act. Hence, the contention urged on behalf of the petitioners that the impugned notices vide Annexures A, A1 and A2 passed by the first respondent not following the provisions Under Section 14 of the Rent Control Act is wholly untenable in law and the said contention is liable to be rejected as the same is not legal and valid in view of the relevant provisions of the KMC Act referred to supra and the law laid down by the Apex Court in the case of East India's case referred to supra. Further, this Court has also examined the legality and validity of the impugned orders passed by the Appellate Authority. The appellate authority on the basis of relevant records and the findings recorded by the first respondent and on the basis of the relevant material particulars furnished regarding the ARV by the petitioner in respect of the properties in question was made available in respect of ARV which has been earned by the petitioner from their tenants has been accepted. It is an undisputed fact that the ARV arrived at by the first respondent has been accepted as correct, as the same is based, on relevant records and material relevant facts produced and furnished by the petitioner and the legal contentions urged by the petitioners before the second respondent. All the relevant records and facts have been appropriately considered by the second respondent and the order has been passed affirming the revision of property tax made by the first respondent in respect of the properties in question based on ARV which has been earned by the petitioners by way of rents from their tenants. I do not find any illegality or error in the findings recorded by the second respondent in the impugned orders on the other hand, the second respondent has passed well considered orders, which need be interfered with by this Court in exercise of its jurisdiction under Arts. 226 and 227 of the Constitution of India. Further, the learned counsel appearing on behalf of the petitioners is unable to show to this Court that the orders passed by the second respondent suffers from either error in law or the findings recorded are erroneous.
15. For the reasons recorded by me in the preceding paragraphs of this judgment answering against the petitioner and holding In favour of first respondent stating that the first respondent has got every power to assess the property tax by following the procedure as contemplated under Section 103 and r/w Section 2(1) of the Act and the first respondent was not required to follow the provisions of Section 14 of the Rent Control Act for determination of the ARV of the properties. Therefore, the notices and orders impugned in these petitions vide Annexures A to A2 and B and B2 respectively need not be interfered with by this Court. Hence, the petitions must fail. Accordingly, the writ petitions are dismissed.