Kasturba Sewa Mandir vs The Municipal Committee and Others

S.P. Goyal, J.—This petition under Article 226 of the Constitution of India has been filed for quashing the house-tax assessment order, Annexure P.7 and the Appellate Order, Annexure P.9.

The Petitioner is a charitable trust registered under the Indian Trust Act, 1882 having its registered office at Rajpura. To enable it to carry out its purposes, the Central Government gave on lease, the land measuring 49.51 acres situate at Rajpura together with its tenements, buildings and other installations at nominal rent initially for a period of ten years vide Annexure P. 2, dated January 17, 1959. After the expiry of the said period, the Petitioner continued to hold the said property for some time on the same terms and condition whereafter it was extended for a period of 30 years vide lease deed dated May 31,1971.

The said land was numbered in the Municipal Records as plot No. 68 for the purposes of house-tax. After informing the Petitioner of the proposed annual value and hearing its representatives it was decided that the buildings constructed by the Trust were its property and being its owner it was liable to pay house-tax thereon. The annual value of the said buildings, as proposed, was approved and fixed at Rs. 1,02,000/-. The appeal filed by the Petitioner against this order having been dismissed by the Additional Deputy Commissioner, Patiala, vide judgment dated September 29, 1979, Annexure P.9, the Petitioner has come up in this petition.

The validity of the impugned orders has been challenged on two grounds, namely, that the buildings in dispute did not belong to the Petitioner-lessee as they were constructed with the funds granted by the Government of India who consequently is its owner and that the annual value has not been assessed in accordance with Jaw as declared by the Supreme Court in New Delhi Municipal Committee v. M.N. Soi and Anr. AIR 1977 SC 302.

To substantiate its first ground, the Petitioner produced on record some more documents marked as P11 to P-14. But from their perusal it is apparent that no funds were granted by the Union of India and instead whatever money was advanced for the construction of the buildings was advanced as loan repayable with interest at the rate of 4-1/2 per cent Clause 4 of the lease-deed, Annexure P. 4. further makes it clear that the buildings constructed by the Petitioner belong to the Trust and the lessor was given an option to purchase or take over those buildings at a price that may be mutually agreed upon and in case of disagreement at the price as may be fixed by an arbitrator. Consequently, there is no material on the record from which it can be inferred that the buildings constructed by the Petitioner were either constructed with the funds supplied by the lessor or that they belonged to the latter because of any stipulation in the lease-deed. The learned Counsel for the Petitioner faced with this situation prayed that he may be allowed another opportunity to produce more evidence to show that the buildings in dispute were constructed entirely with the funds supplied by the Union of India, but I do not propose to do so because the impugned orders have to be quashed on the second ground and the case has to be remanded to the Municipal Committee for fresh assessment. The Petitioner would then be at liberty to produce any evidence before the Committee to prove that the buildings in dispute do not belong to it.

As regards the second ground, the challenge is based on the decision of the Supreme Court in The New Delhi Municipal Committee�s case (supra) wherein it was held that the reasonable rent contemplated by Section 3(1)(b) of the Punjab Municipal Act 1911, can in no case be above the fair rent or-the standard rent fixed by the provisions relating to the fixation of the rent under the Rent Control Legislation. The learned Counsel for the Municipal Committee Respondent does not dispute that the annual value has not been fixed according to the principles laid down in the East Punjab Urban Rent Restriction Act, 1949 for the determination of the fair rent. The annual value having been thus assessed against the provisions of the Act cannot be sustained and has to be quashad.

For the reasons recorded above, this petition is allowed the impugned orders quashed and the case remanded to the Municipal Committee for making fresh assessment in accordance with law. No costs.