Calcutta High Court
Calcutta Municipal Corporation And ... vs Indian Automobiles (P) Ltd. on 4 January, 2000
Equivalent citations: AIR2000CAL135, AIR 2000 CALCUTTA 135, (2000) 1 RENTLR 377, (2000) 1 CAL HN 220, (2000) 1 CAL LJ 413, (2000) CAL WN 425
Author: Bhaskar Bhattacharya
Bench: Bhaskar Bhattacharya
ORDER Bhaskar Bhattacharya, J.
1. This revisional application under Article 227 of the Constitution of India is at the instance of Calcutta Municipal Cor-poration and is directed against order dated February 26, 1999 passed by the Municipal Assessment Tribunal, Calcutta Municipal Corporation in Appeal No. MVA 1211 of 1996 and 1212 of 1996 thereby reducing the annual valuation of the Premises No. 2, Mozaffar Ahmed Street, Calcutta for the periods commencing from 4th quarter of 1984-85 and 4th quarter of 1990-91.
2. There is n,o dispute that the disputed property is a nine storied building used for commercial purposes and the opposite party leased the same to one Shri Banwarilal Passoari at a monthly rental of Rs. 75,000/-The Municipal authority assessed the valuation of the property at Rs. 18,80,600/- and Rs. 21,63,560/- with effect from 4th quarter of 1984-85 and 4th quarter of 1990-91 respectively.
3. Being dissatisfied, the opposite party preferred the aforesaid two Municipal Appeals and by the order impugned in this application, the Municipal Assessment Tribunal reduced the amount to Rupees 8,20,800/- for both the quarters.
4. In arriving at such conclusion the Municipal Assessment Tribunal by relying upon the decision of the Apex Court in the case of Corporation of Calcutta v. L.I.C. of India reported in, held that while assessing the valuation of the property the amount taken by Banwarilal Passoari, the tenant, from his sub-tenants could not be taken into consideration.
5. Being dissatisfied, that Municipal Authority has preferred the instant revisional application.
6. Therefore, the only question that arises for determination in this application is whether in assessing the valuation of a building any rent realised by tenant from his subtenants should also be taken into account in addition to the rent realised by the owner from such tenant.
7. There is no dispute that the decision of the Supreme Court in the case of Corporation of Calcutta v. L.l.C. of India was based on the provisions contained in Calcutta Municipal Act, 1951. Section 168(1) of the said Act, at the relevant time stood as under (Para 6):
"For the purpose of assessment to the 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 let from year to year less xxxxx Provided that in respect of any land or building the standard rent of which has been fixed under Section 9 of the West Bengal Premises Rent Control (Temporary Provision) Act, 1950, the annual value thereof shall not exceed the annual amount of the standard rent so fixed."
8. New standard rent stood determined by the definition of that expression appearing in Section 2(10)(b) of 1950 Act which provided as follows: (Omitting parts not relevant) Standard rent in relation to any premises means--
(a) xxxxx
(b) where the rent has been fixed under Section 9 the rent so fixed; or at which it would have been fixed if applications were made under the said Section."
9. There is also no dispute that in the aforesaid case before Supreme Court as it appears from paragraphs 5 and 8 of the judgment, both the Court of Small Causes and the High Court determined the annual valuation on the basis of standard rent as statutorily) assessed by virtue of the second part of Section 2(10)(b) quoted above. According to the aforesaid two Courts, the standard rent was Rs. 2,800/- a month.
10. In the aforesaid fact, it was contended on behalf of the Municipal authority before the Supreme Court that in assessing annual valuation of the premises the amount of rent received by the tenant from its sub-tenants amounting to Rs. 4,520/- a month should also be taken into consideration in addition to Rs. 2,800/- fixed as standard rent. Such contention was turned down by the Apex Court holding that the assessing authority was not concerned with the rent which the tenant might receive from his sub-tenants.
11. The aforesaid decision of the Supreme Court, in my opinion, has no application to an assessment based on Section 174 of the Calcutta Municipal Corporation Act, 1980 ("1980 Act") which is materially different from Section 168 of the Calcutta Municipal Act, 1951. ("1951 Act")
12. To appreciate the aforesaid question, the relevant parts of Section 174 of the 1980 Act are quoted below:--
174(1)-- Notwithstanding anything contained in the West Bengal Premises Tenancy Act, 1956 or in any other law for the time being in force, 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 including service charges, if any, at which such land or building might at the time of assessment be reasonably expected to let from year to year less * * (2) to (4A) xxxxx
13. A comparison of the provisions for assessment of consolidated rates provides in 1951 Act with those contained in 1980 Act will show that under the 1951 Act the annual valuation in no case could exceed the standard rent fixed by West Bengal Premises Rent Control (Temporary Provision) Act, 1950 ('1950 Act') but under 1980 Act the annual valuation can be fixed notwithstanding anything contained in West Bengal Premises Tenancy Act, 1956 (1956 Act') which has been enacted repealing 1950 Act and such annual valuation can exceed standard rent (renamed as 'fair rent' in 1956 Act).
14. Furthermore, under 1980 Act, the consolidated rate shall be primarily leviable if the land or building is let, upon lesser and if the laud or building is sublet, still upon the superior lessor (See Section 193) and for that reason right has been conferred upon the lessor, lessee or the sublessee to recover excess amount from their respective tenants for the excess payable by them due to creation of tenancy or sub-tenancy.
14A. Section 194 of 1980 Act gives such power to the lessor, lessee or the sub-lessee. The said provision is quoted hereunder :--
194(1) If the annual valuation of any land or building exceeds the amount calculated on the basis of the rent of such land or building payable to the person upon whom the consolidated rate on such land or building is leviable under Section 193, such person shall be entitled to receive from his tenant the difference between the amount of consolidated rate on such land or building and the amount which would be leviable if the consolidated rate on such land or building were calculated on the basis of rent payable by him.
(2) If the annual valuation of any land or building which is sub-let exceeds the amount calculated on the basis of such land or building payable to the tenant by his sub-tenant or to the sub-tenant by the person holding under him, the tenant or the sub-tenant shall be entitled to receive from his subtenant or the person holding under him, as the case may be, the difference between any sum recovered under this Act from such tenant or sub-tenant and the amount of consolidated rate on such land or building which would be leviable if the annual valuation of such land or building were calculated on the basis of rent payable to the tenant by his sub-tenant or the sub-tenant by the person holding under him.
15. The scheme of 1980 Act as mentioned above thus leaves no doubt that in assessing the valuation of a building, the Municipal authority is at present in no way bound by the fixation of standard rent or fair rent by a Rent Controller acting under 1950 Act or 1956 Act and the rent realised by a tenant from his sub-tenant or by a sub-tenant from his tenants should also be taken into consideration and such amount should be treated as gross rent of the building for the purpose of Section 174 of 1980 Act. Therefore the decision of Apex Court in the case of corporation of Calcutta v. L.I.C. of India (supra) which was decided on the basis of 1951 Act under which the annual valuation could not exceed annual standard rent cannot have any application to an assessment under 1980 Act where there is no such restriction.
16. The appellate tribunal below therefore acted illegally and with material irregularity in holding that in assessing annual valuation of a building, the amount realised from the sub-tenants cannot be taken into consideration.
17. Mr. Roy appearing for the opposite party contended that his client disputes the amount of rent payable by the sub-tenants and the appellate Tribunal did not enter the said question.
18. It appears from the judgment given by the Appellate Tribunal that other questions taken in the Memorandum of Appeal were not gone into.
19. Under the aforesaid circumstances I set aside the order of the Appellate Tribunal and direct it to hear out the appeals on merit keeping in mind that amount realised from sub-tenants should also be taken into consideration in assessing the annual valuation.
20. The revisional application is allowed to the extent indicated above.
21. No costs.