Municipal Corporation Of Delhi vs Institute Of Economic And Market ...
1991 Latest Caselaw 660 Del

JUDGMENT

B.N. Kirpal, J.

(1) The petitioner is challenging the order of the Addl. District Judge, Delhi who had allowed the appeal of the respondent and directed the Additional Tax Recovery Collector to re-fix the rateable value of the property No E-2/380, Asian Games Village Complex, Siri Fort, New Delhi by applying the provisions of Section 6 of the Delhi Rent Control Act.

(2) Briefly stated the facts are that the Delhi Development Authority had constructed a number of flats, commonly known as the Asian Games Village Complex at Siri Fort, New Delhi. As the name itself suggests, these flats were constructed in order to house various participants who came to take part in the Asian Games in 1982. These flats were subsequently sold either by allotment or by auction by the Delhi Development Authority. The sale took place in the present case on 26th March, 1987 and the flat in question was purchased for Rs. 7,70,000. The Additional Tax Recovery Collector purported to apply the principles laid down by the Supreme Court In the case of Dr. Balbir Singh v. Municipal Corporation of Delhi, and determined the rateable value at Rs. 53,000.00 . In arriving at this figure, however, the Additional Tax Recovery Collector based his calculations on the cost of the flat which was charged from the respondent. The grievance of the respondent, who filed an appeal against the aforesaid order before the Addl. District Judge, was that in applying the principles laid down in Dr. Balbir Singh's case, the rateable value had to be fixed taking into consideration the cost of land and the cost of construction thereon. It was submitted that the construction commenced in the year 1980 and it is the cost of the land at that time which should be taken into consideration.

(3) By the impugned judgment dated 14th March, 1989 the Additional District Judge, accepted this contention and came to the conclusion that the rateable value should be re-determined by finding out what is the Standard Rent which could be determined as per Section 6 of the Delhi Rent Control Act.

(4) In the petition filed before us it is contended by the learned Counsel for the petitioner that the principles laid down by the Supreme Court in Dr. Balbir Singh's case cannot be applied. Furthermore, an affidavit dated 21st October, 1991 has been filed in Court in which it is stated that the Delhi Development Authority had determined the prices at which the flats were to be allotted. The pricing formula adopted by the Delhi Development Authority was as under: (1)Cost of acquisition of land; (2) Actual cost of development of land; (3) Actual cost of construction of building; (4) Departmental charged @ 1.5% per annum; (5) Maintenance charges @ 2.5 % per annum; and (6) Interest @ 12 ø/o per annum on blocked up capital.

(5) In our opinion the flats in question being residential which were capable of and were infact sold individually to different parties either by allotment or by auction, the rateable value has to be determined according to the principles enunciated by the Supreme Court in Dr. Balbir Singh's case. Dr. Balbir Singh's case was concerned with residential building as the present case. This is not a flat in a multi-storeyed building or a flat constructed by a Cooperative Society who may have obtained land at a concessional rate. We are here concerned with a case where the Delhi Development Authority has constructed flats and thereafter sold the same and in arriving at the reserve price or the price of allotment has taken into consideration the actual cost of acquisition of land and the development charges thereon. In our opinion In such a case the principles laid down by the Supreme Court in Dr. Balbir Singh's case (supra) would be clearly applicable.

(6) It Is not necessary or proper for us, in exercise of our jurisdiction under Article 226 of the Constitution, to determine as to what elements should be taken Into consideration in arriving at the cost of land and/or the cost of construction of the building. These are questions which will be gone into by the Addl. Tax Recovery Collector but we are firmly of the opinion that the departmental charges or maintenance charges or interest after the building has been constructed can under no circumstance from part of the cost of construction. We give no finding or opinion as to whether the departmental charges, maintenance charges or interest incurred or spent by the Delhi Development Authority up to the completion of the flats can or cannot be taken into consideration in arriving at the cost of construction of the building. This is a problem which has to be sorted out by taking into consideration the principles of accountancy and principles of valuation by the assessing authority. What has to be determined according to Dr. Balbir Singh's case in arriving at the Standard rent is the cost of land and the cost of construction. What are the various elements which make up the cost of land and cost of construction will be determined and would depend upon the facts of each case.

(7) As far as order of the Addl. District Judge is concerned, we find no infirmity in the same. The writ petition is dismissed in the aforesaid terms. The re-assessment should be completed, as directed by the Addl. District Judge, at an early date, after notice to the respondent, keeping the observations made herein in view.

(8) No order as to costs.