Municipal Corporation Of Delhi vs Gurmukh Chand
1987 Latest Caselaw 116 Del

JUDGMENT

B.N. Kirpal, J.

(1) The challenge in this writ petition is to the order of the Additional District Judge, who, on an appeal having been filed by respondent No.1, had set aside the assessment to house tax of the house owned by respondent No. 1 and had determined himself the rateable value thereof.

(2) Respondent No. I is the owner of the house No. E-274, East of Kailash, New Delhi. Construction of the ground floor was commenced sometimes in 1971 and the same was let out to a tenant at a monthly rent of Rs. 475.00 . The rateable value of this was fixed at Rs. 5130.00 per annum on the basis of rent received by respondent No. 1.

(3) In the year 1978-79 respondent No. I constructed the first floor and Barsati floor. The said Barsati floor was let out on a monthly rent of Rs. 450.00 . The ground floor was let out at an increased rent of Rs. 850.00 Per month.

(4) On account of the additional structure having been constructed the Corporation issued a notice under Section 126 proposing to enhance the rateable value from Rs. 5130.00 to Rs. 22,680.00 with effect from 1-4-1979. The respondent owner filed objections but by order dated 2nd May, 1983 the rateable value of the premises in question was fixed at Rs. 17,120.00 with effect from 1st June, 1979. In fixing this rateable value the Assessor and Collector purported to act by applying the provisions of Section 9(4) of the Delhi Rent Control Act and worked out the standard rent at the said figure of Rs. 17,120.00 .

(5) Being aggrieved, respondent No. I filed an appeal to the Additional District Judge. Byorder dated 8th July, 1985 the said appeal was allowed. The Additional District Judge, who decided the appeal, followed the judgment of the Supreme Court in the case of Dr. Balbir Singh and Ors. v. M.C.D. and Ors. and came to the conclusion that alter five years period had elapsed of the letting of the ground floor, the premises had to be valued not by applying the provisions of Section 9(4) of the Act but by applying the provisions of Section 6(1) of the Delhi Rent Control Act. Similar was the position with regard to the first floor and barsati floor. TheAdditional District Judge, then proceeded to compute the rateable value on the basis of the valuation report of the cost of construction which had been submitted by the respondent-owner. The rateable value has now been worked out at Rs. 5348.00 per annum with effect from 1st June, 1979.

(6) The aforesaid decision of the Additional District Judge has been challenged in this petition.

(7) It is submitted by the learned counsel for the petitioner that the Additional District Judge ought not to have fixed the rateable value himself. The submission is that no opportunity was granted to the petitioner herein to lead evidence to show what was the cost of construction and, secondly the Additional District Judge ought to have looked into the authenticity of the valuation report and should not ha.ve accepted it on its face value.

(8) It is further submitted that the Additional District Judge also erred in arriving at the rateable value only on the basis of the cost of construction. The submission is that in respect of Barsati, the same was let out after construction and, therefore, the valuation of the same had to be on the basis of rent received for a period of five years. The submission on behalf of the respondent, however, is that the Additional District Judge, while deciding the appeal, was competent to arrive at the rateable value himself on the basis of the evidence on record and this he has done by applying the principles laid down in Dr. Balbir Singh's case, (supra). The learned counsel submits that no interference is called for in the order of the lower appellate court.

(9) In the present case the rateable value was determined after the decision of the Supreme Court in the case of Devon Daulit Rai Kapoor v. N.D.M.C. & Ors. . In that case the Supreme Court hadheld that the rateable value cannot be more than the standard rent of a building. The Assessor and Collector has purported to follow that principle but in determining the rateable value he has invoked the provisions of Section 9(4) of the Delhi Rent Control Act. After the Assessor & Collector had passed the order in the present case on 2nd May, 1983. The Supreme Court clarified in its decision in Dr. Balbir Singh's case, (supra) that the rateable value has primarily to be determined by invoking the provisions of Section 6 of the Rent Control Act and not by applying the provisions of Section 9(4). The Additional District Judge, was, therefore, correct in coming to the conclusion that it is the provisions of Section 6(1) of the Act which were applicable and not Section 9(4) but where he fell in error was that having corrected the authorities on law he then proceeded to determine the rateable value himself without giving opportunity to the petitioner-herein to lead evidence, if it so desired, on the question as to what should be the rateable value under Section 6. My attention has been drawn to two orders passed by this court, firstly. In C.W. No. 2383 of 1986 dated 5th Feb. 1987 where writ petition was dismissed in liming and the order dated 6th Feb. 1987 passed in C W. 2329 of 1986 where again the writ petition was dismissed in liming. There orders are as follows :- "C.W. 2383/86. 5-2-1987 Present : Mr. Madhu Tewatia for the petitioner. Mr. Prem Want Singh for the respondents. The rateable value in the present case has been fixed as per the provisions contained in Section 6(1) of the Delhi Rent Control Act. This is in accordance with the judgment of the Supreme Court in the case reported as : Dr. Balbir Singh and Ors.v Municipal Corporation of Delhi and Ors. Learned counsel for the Corporation submits that the appellate authority cannot fix the rateable value himself and must remand the case for determination by the Assessor and Collector. The Appellate authority has got all the powers which the trial court (assessor and Collector) has got. There is thus no merit in the writ petition and the same is accordingly dismissed." "C.W. 2329/86. 6-2-1987 Present : Ms. Madhu Tewatia, counsel for the petitioner. Since the impugned order passed by Appellate Authority is in accordance with the decision of the Supreme Court in Dr. Balbir Singh's case reported as Dr. Balbir Singh & Ors. v. Municipal Corporation of Delhi and Ors. , we are not inclined to entertain the petition under Article 226 of the Constitution of India. The appeal is a continuation of the assessment proceedings. The petition is accordingly dismissed."

(9) While dismissing the aforesaid writ petitions in liming it was observed that the appellant authority is empowered to fix the rateable value himself and that the appeal is a continuation of the assessment proceedings. There can be no doubt that the appellate authority is entitled to decide the very issue which is raised before the original authority. Mr. Nandrajog, learned counsel for the petitioner, does not dispute this. What is, however, submitted is that if full facts late not available with the appellate authority then it would be a prudent exercise of discretion for the appellate authority either to remand the case, after correcting the original authority on law, or to give opportunity to both the parties and then determine the rateable value. It is clearly averred in the presenOpetition that this opportunity was not afforded to the petitioner. The assessing authority had applied its mind to Section 9(4) of the Act and had determined the rateable value under that provision. At that time the decision of the Supreme Court in Dr. Balbir Singh's case, was not available. Therefore, the attention of the assessing authority was focussed not to the cost of construction and the cost of land but to facts which were relevant under Section 9(4). Before the appellate authority, namely, the Additional District Judge, the file could not have revealed any evidence on the part of the petitioner-herein which could have showed what should have been the correct cost of land and cost of construction. In my opinion, the Additional District Judge ought to have afforded the petitioner-herein an opportunity of leading evidence in this behalf, if it so desired. This he did not do.

(10) Furthermore, S find that the Additional District Judge has based his reliance on the valuation report which has been filed by the respondent-owner. Now under Section 6 the standard rent has to be determined on the basis of cost of land and cost of construction. It is, therefore for the owner to prove by leading evidence as to what was the cost of construction in 1971 of the ground floor, and in 1978-79 of the first floor, and Barsati which was incurred by him. This can best be shown by leading evidence to show the amount of money actually spent by the owner at the time of construction of the house. If for any reason this evidence is not available to the owner, then it may be that the authorities may be justified in allowing him to lead evidence as to what must have been the cost of construction and that cost of land. This evidence can be in the form of valuation report also but first the endeavor should be of requiring the owner to submit the primary proof of cost of con- struction incurred by him, namely, by showing how much payment was made by him by cheques, etc. in constructing the house. In the present case, this evidence was not led by the respondent-owner either before the original authority or before the Additional District Judge. The respondent owner ought to have been asked to lead evidence showing the amount which he actually spent and if, for any reason, he was not able to do so, then alone reliance could have been placed on the valuation report. Because the assessing authority was being corrected in law, the lower appellate authority ought to have at least given on opportunity to the assessing authority to lead evidence, if it so desired, on the question as to what was the cost of construction and the cost of land when the house was constructed by the respondent-owner. This has not been done by the Additional District Judge, in the present case. It is, of course, clear) by reason of Dr. Balbir Singh's judgment, that the cost of land cannot be added twice. Cost of land will have to be the cost of land at the time of commencement of construction.

(11) There is yet another infirmity in the order of the Additional District Judge. In the present case when the barsati was constructed the same was let out. Therefore for a period of five years it is the actual rent received.of-the barsati floor which should be taken into consideration in determining the standard rent. This has not been done by the Additional District Judge.

(12) For the aforesaid reasons, namely, because opportunity was to given to the petitioner-herein to lead evidence with regard to determination of standard rent under Section 6 and also because for Barsati floor the actual rent received was not taken into consideration, the order of the Additional District Judge is liable to be set-aside. Shri Premwant Singh, the learned counsel for respondent-owner, states that experience has shown that if the case is remanded to the assessing authority for re-determination then it results, more often than not, in harrassment of assesseds. Without commenting on this, I think it will be fair and proper, and to avoid all hardships to the parties, if, while setting aside the order of the lower appellate court, the case is remanded to that Court with a direction to afford opportunity to the petitioner to lead any evidence, if it so desires, with regard to fixation of rateable value under Section 6 and thereafter to decide the appeal filed by the respondent a fresh. If the lower appellate court so feels, it may give both the parties opportunity to lead fresh evidence on the point in issue.

(13) For the aforesaid reasons, the writ petition is allowed. The order dated 8th July, 1985 passed in Hta No. 81 of 1985 by Shri B.S. Chaudhary, Additional District Judge, is quashed and the appeal itself is restored for hearing. The District Judge, Delhi shall either hear the appeal himself or direct the same to be heard by an Additional District Judge. The parties should appear before the District Judge, Delhi on 6th April, 1987. Till the disposal of the said appeal, the operation of the assessment of the house will remain stayed provided admitted tax is paid by the owner. Parties to bearing their own costs.