Calcutta High Court (Appellete Side)

Kolkata Municipal Corporation vs Sukumar Chakraborty on 21 August, 2023

                IN THE HIGH COURT AT CALCUTTA
                 CIVIL REVISIONAL JURISDICTION
                         APPELLATE SIDE

PRESENT:

THE HON'BLE JUSTICE AJOY KUMAR MUKHERJEE

                             C.O. 184 of 2018
                      Kolkata Municipal Corporation
                                   Vs.
                          Sukumar Chakraborty.
                                  With
                            C.O. 186 of 2018
                      Kolkata Municipal Corporation
                                   Vs.
                         Bhaskar Bandhopadhyay

For the petitioners                :       Mr. Alak Kumar Ghosh
                                           Mr. Swapan Kumar Debnath



Heard on                           :       11.08.2023

Judgment on                        :       21.08.2023


Ajoy Kumar Mukherjee, J.

1. In view of commonality of issues involved in both the applications

being C.O. 184 of 2018 and C.O. 186 of 2018, those are taken up together

and are being disposed of by this common order. Being aggrieved by the

order dated 11th April, 2014 passed by learned 2nd Bench, Municipal

Assessment Tribunal, Kolkata Municipal Corporation (KMC), in MA Appeal

No. 87 of 2013, C.O. 184 of 2018 has been preferred and being aggrieved by

the order dated 21.01.2015 passed by the learned 1st Bench, Municipal

Assessment Tribunal, KMC in MA Appeal No. 85 of 2013, the other

application being C.O. 186 of 2018 has been preferred. Both the

applications relate to fixation of annual valuation in respect of two separate

flats situates in same premises being no. 37/2A Canal West Road. While flat

no. 3A in 3rd Floor of the said premises is the subject matter of C.O. 184 of

2018, on the other hand flat no 3C in the 3rd Floor of the same building is

the subject matter of C.O. 186 of 2018. Petitioner of C.O. 184 of 2018 (First

application) contended that the opposite party purchased a flat being Flat

No. 3A measuring an area of 1429 Square feet at 3rd Floor and Car parking

space measuring of an area of 134.5 square feet, whereas the opposite party

of the second application being C.O. 186 of 2018 purchased the flat No. 3C

in the same building measuring 1418 square feet and of a car parking

space, measuring of area of 135 square feet.

2. Both the opposite parties after purchase applied to the petitioner

herein for mutation of their respect name against the said respective

purchased flat including car parking space. The KMC authorities issued a

notice proposing the amount for assessment of annual valuation in respect

of said flats and car parking space with effect from 1st quarter of 2010-

2011. After service of notice upon the opposite party, with the proposal of

assessment of annual valuation, the respective opposite parties raised their

objection and by an order dated 13.12.2012, the hearing officer of KMC,

after considering the objection, fixed annual valuation of the flat and car

parking space in respect of first application being C.O. 184 of 2018 at Rs.

33,870/- for the period w.e.f 1/2010-2011 taking into consideration

reasonable rent at the rate of Rs. 2.10 per square feet per month for covered

arear and at the rate of Rs. 1 per square feet per month for car parking

space. On the other hand the hearing officer of KMC fixed annual valuation

in respect of flat and car parking space in connection with second

application being C.O. 186 of 2018 at Rs. 33,620/- for the period w.e.f.

1/2010-2011.

3. Felling aggrieved, the opposite parties herein preferred appeal being

MA 84 of 2013 and MAA No. 87 of 2013 against said order of the hearing

officer dated 13.12.2012 before the learned Municipal Assessment Tribunal,

KMC. The Tribunal after hearing the parties in the appeal, passed order

allowing the appeal in part and modifying the order of the hearing officer,

reduced the amount of the Annual Valuation and refixed annual valuation

at Rs. 18,590/- for the said period in respect of flat in question for the

aforesaid first application and Rs. 18,460/- for the flat in question for the

second application.

4. Mr. Ghosh learned Counsel appearing on behalf of the petitioner

submits that the Tribunal should not have decreased the valuation abruptly,

without disclosing proper reason. The Tribunal should have considered the

relevant provision of section 174 of the Kolkata Municipal Corporation Act

1980, including the provisions laid down in sub-section (2) and sub-section

(3) of section 174 to the extent that the reasonable rent should be assessed

on the basis of the existing market rate to be fetched at the rate of per

square feet per month. At the time of the fixation of annulation valuation, in

fact, the learned Tribunal failed to make any effort to ascertain the

estimated market rental value of the flat for the purpose of determination of

annual valuation of the premises in question. On the contrary the order

impugned has been passed in gross violation of principles of natural justice

as it was passed without considering the submissions made by the

petitioner. Accordingly the petitioner has prayed for setting aside the order

impugned.

5. Inspite of service of summon the opposite parties are not represented

in the present case.

6. I have considered submissions made by learned Advocate for the

petitioner and I have also gone through the respective orders in respect of

which the present applications have been preferred. It appears that in

respect of the first application being C.O. 184 of 2018, the court below

observed that the locality where the demised flat situates is thickly

populated having well connectivity with other parts of Metropolitan City

Kolkata and all KMC amenities are available. Inspite of observing higher

escalation of costs with the advancement of days in maintaining of such

KMC amenities, the Tribunal abruptly fixed rent of the demised flat at Rs.

1.15 per square feet per month for flat area and Rs. 0.58 per square feet per

month for car parking space for the said period. It further appears while the

Tribunal has fixed the said rent, they have not given any reason and it is

palpably clear from the order that said rate of rent has been fixed

whimsically without any basis.

7. Similarly while the order impugned passed in connection with second

application being C.O. 186 of 2018, the Tribunal relied upon an earlier

judgment passed by the same tribunal being MAA No. 87 of 2013 which was

passed in connection with another flat of the premises in appeal where same

Bench has fixed RR at Rs. 1.15 per square feet per month for flat area and

0.58 per square feet per month for car parking area w.e.f. 1/2010-2011.

Accordingly applying same rate of rent Tribunal below reduced Annual

Valuation at Rs. 1.15 per square feet per month for flat area and Rs. 0.50

per square fit per month for car parking area w.e.f. 1/2010-2011. What is

the basis of fixing such rate of rent either in respect of premises involved in

MAA No. 87 of 2013 or in respect of present applications has not been

stated anywhere in the concerned orders.

8. The Kolkata Municipal Corporation Act 1980 provides the detailed

provisions of taxations and property tax under part IV chapter XII of the

said Act. Under section 180 of the said Act the annual valuation of a land

or building may be revised on the grounds mentioned in the said provisions

under the said Act. Section 184(4) of the said Act mandates that before

making any revision/fixation of annual valuation, the Municipal

Commissioner shall give notice not less than 30 days to the owner enabling

the said person to raise objection to the proposed annual valuation. Section

188 of the Act deals with hearing and determination of objection of

valuation. Section 189 of the Act of 1980 provides for preferring appeal

before the Municipal Assessment Tribunal for disposal of appeal preferred

against the order passed under section 188 of the Act.

9. The State Government by virtue of section 170 read with section 600

of the Act of 1980 has framed Calcutta Municipal Corporation (Taxation)

Rules 1987. Section 188 of the said Act read with Rule 9(3) of the said Rule

of 1987 provides detailed procedure for hearing and disposal of an objection

to the proposed annual valuation of the property in question. Said

provisions make it clear that the duty casts upon Hearing Officer to adhere

to the said procedure while dealing with the objection under section 186 of

the Act. The Hearing officer under Rule 9(3) (c) of the said Rule of 1987 is

vested with the jurisdiction to call upon the person appearing before him at

the time of hearing to file written statement supported by duly sworn-in

affidavit, if necessary, giving particulars of his submission in support of the

disputes raised against the proposed annual valuation of the property.

Similarly Tribunal by virtue of Rule 15 enjoys the power of civil court and to

summon any witness or for production of any document which the Tribunal

may require for disposal of the appeal before it and the detailed procedure

for hearing of the appeal has been laid down in Rule 19 of the said Rule,

which includes local inspection, in case of necessity, of such premises,

which are the subject matter of appeal as provided in rule 20 of the Rule of

1987.

10. Here the Tribunal by the order impugned has modified annual

valuation of the First flat in question being flat No. 3 A absolutely assigning.

No reason while disposing MAA 87 of 2013 and in case of second flat in MAA

85 of 2013 Annual Valuation reduced on the basis of one of its earlier

judgment in connection with the premises passed in MAA No. 87 of 2013. It

has not been stated why assessment made in that MAA No.87 of 2013 has

been taken as model yardstick of assessment for computing annual

valuation of the said flat No. 3C. The Tribunal being the quasi-judicial

authority is bound to follow the procedure while discharging their duty.

Accordingly it is apparent, while modifying order of hearing officer, the

learned Tribunal has not recorded any cogent reason in respect of 1st flat

and unexplained reasoning without any basis for 2nd flat while such

modification, in violation of principle of natural justice has been made and

he has clearly passed the order in violation of the statutory/obligation

casted upon the Tribunal for assessment of annual valuation.

11. On careful reading of section 174 (a) of the Kolkata Municipal

Corporation Act, 1980 it appears that the corporation is empowered to fix

the annual valuation of a premises for the purpose of determining, the tax to

be paid in respect of said premises. Apex Court while dealing with Municipal

laws in force in different states in India laid down guidelines for

determination of annual rent, which should be determined on the basis of:-

(a) Actual gross annual rent, where the premises has been let out.

(b) If the premises has not been let out then on rent of hypothetical

tenancy basis.

(c) Valuation arrived on the basis of capital value from which the

annual value has to be found applying a suitable percentage,

where either of the first two modes is not available.

(Bombay Municipal Corporation Vs. LIC, AIR 1970 SC 1584: 1970

(1) SCC 791 (para-8) & Guntur Municipal Council Vs. Guntur town

Rate Payers' Association (AIR 1971 SC 353): 1970 (2) SCC 803

(para 5& 6).

12. In this context it should be made clear that fixation of annual

valuation arbitrarily (as has been done in the present context) is not

permissible under the law. Neither the corporation nor the Tribunal is free

to assess any arbitrary annual value and corporation has to look to what is

"fair rent" which would be payable for the premises in question during the

year of assessment under the West Bengal premises Tenancy Act, 1997. The

premises in question, if not actually let out, then the hypothetical fair rent,

rent of neighbouring premises and other attending facts and circumstances

of the potentialities should be taken into account for the purpose of

assessment of annual valuation.

13. In India Automobiles Vs. Calcutta Municipal Corporation,

reported in AIR 2022 SC 1089, Apex Court observed:-

24. "......... We are of the view that the basis for determination of annual rent value has to be the standard rent where the Rent Control Act is applicable and in all other cases reasonable determination of such rent by the municipal authorities keeping in view various factors as indicated herein earlier, including the rent which the tenant is getting from his sub-tenant. In appropriate cases the owner of the property may be in a position to satisfy the authorities that the gross annual rent of the building of which the annual valuation was being determined cannot be more than the actual rent received by such owner from his tenant. The municipal authorities shall keep in mind the various pronouncements of this Court, the statutory provisions made in the specified Municipal Acts, keeping in mind the applicability or non-applicability of the Rent Act and the peculiar circumstances of each case, to find out the gross annual rent of the building 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 in terms of Section 174 of the 1980 Act."

14. Since the Tribunal below failed to exercise jurisdiction vested in it by

law and also the Tribunal did not pass cogent speaking order while refixing

annual valuation of the premises, which caused grave miscarriage of justice,

this court has no other alternative but to interfere with the order impugned

invoking power under Article 227 of the Constitution of India.

15. In such view of the matter I have no other option but to set aside the

impugned order concerning annual valuation made by Tribunal for first

quarter of 2010-2011 with a direction to decide MAA No, 87 of 2013 and 85

of 2013 afresh keeping in mind the aforesaid guidelines and also on the

basis of the available materials on record including inspection book copies

and also following statutory rules in respect of determination and fixation of

annual valuation as laid down in the relevant provisions of the Kolkata