Sambhu Nath Falit vs Corporation of Calcutta and Another

Salil Kumar Dutta, J.—This is an appeal against the judgment and order passed by Sabyasachi Mukherji, J. dated May 19, 1971 discharging the Rule Nisi obtained by the petitioner appellant. The petitioner filed an ap-plication under Article 226(1) of the Constitutibn praying histeralia for a writ on the respondent Corporation of Calcutta calling upon them not to give effect to the assessment of annual valuations made in respect of the Bustee No. 12, Bedford Lane, Calcutta with effect from 2nd quarter of 1954-55, 2nd quater of 1960-61 and also to the notice dated December 29, 1967 enhancing the annual valuation of the bustee from 2nd quater of 1966-67. This application was originally dismissed on July 28, 1969 and on appeal the Appeal Court issued Rule Nisi on June 5, 1970. The Rule which was thereafter discharged by the impugned order. In regard to the assessment of annual valuation taking effect from 2nd quarter of 1954-55 and also from 2nd quarter of 1960-61. it appears that the petitioner had knowledge of the relevant assessments at least on or about December 17, 1965. The petitioner however moved this court after a long lapse of time only in 1969 without availing himself of the remedies available under the Act or otherwise. Accordingly we are of opinion that the petitioner is not entitled to any relief in respect of those assessments on his application in constitutional writ jurisdiction.

As regards the notice of December 29, 1967 of fresh assessment enhancing the earlier valuation, the petitioner''s objection is that the word ''rate'' has acquired a special meaning by judicial decisions as being the annual value of land and building on basis of rent actual or notional. Section 165 of the Calcutta Municipal Act, 1951 (hereinafter referred to as the said Act) which is the charging section, limits the liability of the owner to the rent received by him; accordingly, it is contended, section 202 of the said Act cannot authorise the Corporation to realise from the owner of the land a larger sum on basis of rent of huts to which the owner of the huts are only entitled.

The property in dispute is a bus-tee which means u/s 2(1) of the said Act, an area containing land occupied by or for purposes of, any collection of huts standing on a plot of land not less than ten cottas in area. The relevant provisions for assessment of the consolidated rates are as follows :

A graduated consolidated rate on the annual valuation determined under this Chapter may be imposed-by the Corporation upon all lands and buildings in Calcutta for the purposes of this Act.

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168 (1) 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.

(4) The provisions of sub-section (1). shall be subject to the following provisions, namely

(i)

(ii)

(iii) the annual value of a bustee shall be deemed to be the gross annual rent at which the land contained within it,., might reasonably be expected to let from year to year plus the gross annual rent at which the huts erected thereon might reasonably be expected to let from year to year, after deducting therefrom the rent of the land and an allowance of ten per cent. For the costs of repairs and for all expenses necessary to maintain such huts in a state to command such gross rent.

One-half of the consolidated rate shall be payable by the owners of the lands and buildings and the other half by the occupiers thereof.

(1) Nothwithstanding contained in section 191 the entire consolidated rate leviable upon a bustee shall, after deducting therefrom a sum equal to one-eighth of such rate, be paid by the owner of the land contained within the bustee : Provided that if the owner of the land contained within the bustee is also the owner of the huts therein, no such deduction shall be made.

(2) Whenever the consolidated rate is leviable upon a bustee the owner of the land contained within such bustee may recover from the owner of each hut standing thereon--

(i) One-half of the consolidated rate payable in respect of the portion of the land on which the huts stands;

(ii) The entire consolidated rate payable in respect of the hut.

(3) The sum deducted under sub-section (1) shall be retained by the owner of the land contained within the bustee.

(a) As a set-off against the expenses which may be incurred in collecting the portion of the rate recoverable under sub-section (2) from the owners of huts, and

(b) As commutation of all refunds in respect of huts which are vacant or which may be removed or destroyed during the continuance of the period for which the rate is leviable.

Referring to the above provisions the appellant relied on the decision in Patel Gordhandas Hargovindas Vs. Municipal Commissioner, Ahmedabad, wherein following earlier decisions it was held that rate is a tax on annual value of lands and buildings computed on basis of actual or notional rent of the property. Reference was also made to the decision in Corporation of Calcutta Vs. Life Insurance Corporation of India, which held that in determining the annual value the assessing authority is not concerned with the rent which a tenant may receive from his sub-tenant. It was further observed that it is the gross rent which the owner may realise by letting the land or building under a free bargain. It was accordingly contended that the annual valuation should not take into account what the tenants may realise from their sub-tenants in respect of the huts and being a property tax it can be imposed on the owners on their income from the property.

A sizable area within the Corporation of Calcutta is occupied by bustees. Tenancies of lands with right to erect structures is in vague in respect of lands of the bustees and are governed by the Calcutta Thika Tenancy Act, 1949. Rent from lands of the bustee as also from huts three of constitute income from the property though the owner is not entitled to the rent from the huts. For lands and buildings of Calcutta the annual value is to be the gross annual rent which the land or building might be reasonably expected to let from year to year. Similar basis for computation of annual valuation has been provided in section 168(4) (iii) for bustee, which, as already indicated, consists of gross annual rent of land and gross annual rent at which the huts may reasonably expected to let. In view of the nature of, the tenancy in, a bustee and in the context of the consolidated rate being a first charge on the property, it is only fit and proper that the owner should be made liable for the consolidated rate in respect of the bustee to secure find ensure collection of municipal taxes to the municipal fund on which the municipal services depend. The owner at the same time has been given the statutory right to recover half of consolidated rate payable in respect of the land under the hut and also the entire consolidated rate in respect of the hut together with a specified percentage of the rate for expenses of collection. Such provisions do not appear to be unreasonable or an inequitable imposition on the owner of the bustee.

The petitioner''s further grievance is that for payments of consolidated rates of the bustee by him the Corporation grants a consolidated receipt. Such receipt does not indicate the specific amount of consolidated rates payable for the huts and the lands there under of the bustee. Accordingly it is not possible for him to recover the amount from the owners of the huts. The owner however is entitled to obtain details of valuation in respect of the bustee which will indicate the valuation of each hut and the land there under and the consolidated rates thereon. If the petitioner produces the receipt showing payment of consolidated rate in respect of the bustee together with the details of valuation, these will show the amount of consolidated rate that the petitioner has paid for the lands and huts of the bustee. Mr. Banerjee learned counsel for the Corporation has assured that the Corporation will be willing to certify that the amount of consolidated rates paid by the owner in respect of the bustee includes the rates payable in respect of lands and of huts by their owners including the details thereof. We are of opinion that there is no cause for any prejudice or loss being caused to the owner of the bustee in these circumstances. For all these reasons the petitioner is not entitled to any relief in the appeal which is disposed of with the following directions :

(i). The respondent Corporation of Calcutta will supply to the petitioner appellant the annual value of the huts and lands there under of the bustee No. 12, Bedford Lane, Calcutta, as made u/s 168(4) (iii) of the Calcutta Municipal Act, 1951 separately in respect of the following valuations :

(a). Annual valuation with effect from 2nd quater of 1954-55;

(b). Annual valuation with effect from 2nd quarter of 1960-61;

(c). Annual valuation with effect from 2nd quarter of 1966-67.

(ii). The respondent Corporation of Calcutta upon receiving payment of consolidated rates from the petitioner will certify that such payments have been made also for huts and lands there under of the bustee No. 12, Bedford Lane, Calcutta.

(iii). It is placed on record that the Court is not expressing any opinion on the service of assessments orders is respect of the valuations with effect from the 2nd quarter of 1954-55 and 2nd quarter of 1960-61 for the above property.

(iv). It is also placed on record that in view of the emergency the petitioner is not challenging the virus of relevant provisions of the Calcutta Municipal Act, 1951 under Article 14 of the Constitution.

There will be no order for costs in the appeal.

Sankar Prasad Mitra, C.J.

I agree.

Appeal disposed of with certain directions.