Surjit Ram vs Municipal Committee, Kurali

S.S. Dewan, J.—The question for determination in this appeal is whether the assessment of house-tax from 1st April, 1972 to 31st March 1974 is illegal ?

It is manifest from the above that the question here is pristinely legal and the facts of the case before me would be of no great relevance. It would, therefore, suffice to mention that the plaintiff had filed a suit against the Municipal Committee, Kurali for permanent injunction restraining the latter from recovering house-tax from him for the period 1st April, 1972 to 31st March 1974 alleging that the alleged assessment of the recovery of house-tax from him was illegal and ultra vires on the grounds, inter-alia that previously the house in question was assessed for house-tax at the annual rental value of Rs. 300/-and now for the year 1973-1974 it was assessed at the annual rental value of Rs. 1,400/- when there was no change or addition in the house. It was further averred in the plaint that the Municipal Committee was not entitled to increase the rental value for the purposes of house-tax more than that which was provided u/s 4 of the East Punjab Urban Rent Restriction Act, 1949 (for short, the Rent Act) : that the assessing authority was bound to make an assessment of the annual rent in accordance with the provisions of the Rent Act keeping in view the criteria laid down therein for the, determination of fair rent and that the provisions of Sections 62 to 68 of the Punjab Municipal Act, 1911 had not been complied with by the Municipal Committee in making the assessment of the house-tax. These allegations were denied by the Municipal Committee It was pleaded that all the legal formalities had been gone into and the whole procedure was followed in assessing the house-tax.

The learned counsel for the appellant has assailed the impugned orders on the ground that the Courts below had gone wrong in relying on the principal laid down in Lt. Col. Micheal A. R. Skinner and others v. The Municipal Committee, Hansi (1959) 71 P.L.R. 205 wherein it was found that the annual rental value of the house for the purposes of house-tax is to be determined on the basis of the fair rent or standard rent if the house is in possession of a tenant but if the house is not in possession of a tenant then this criterion cannot be applied. The learned counsel has contended that the law laid down in the aforesaid authority is no longer good law in view of the authoritative pronouncements of their Lordships of the Supreme Court in The Guntur Municipal Council Vs. The Guntur Town Rate Payers'' Association etc., and Dewan Daulat Rai Kapoor and Others Vs. New Delhi Municipal Committee and Others, . In Guntur Municipal Council case (supra) it was observed as under :--

There is no distinction between buildings the fair rent of which has actually been fixed by the Rent Controller and those in respect of which no such rent has been fixed. When the controller has not fixed the fair rent, the municipal authorities will have to arrive at their own figure of fair rent in accordance with the principles laid down in the Rent Control Act.

In Devan Daulat Rai Kapoor''s case (supra), it was observed in the following terms :--

''''Where a building is governed by the provisions of Rent Control Legislation the landlord cannot reasonably be expected to receive anything more than the standard rent from a hypothetical tenant end the annual value of the building can not therefore exceed the standard rent. Even in case of a building in respect of which no standard rent has been fixed within the prescribed period of limitation and thus the tenant is precluded from making an application for fixation of standard rent with the result that landlord is lawfully entitled to continue to receive the contractual rent, the annual value must be limited to the measure of standard rent determinable under the Rent Act and cannot be determined on the basis of the higher rent actually received by the landlord from the tenant. Even if the standard rent has not been fixed by the Controller the landlord cannot reasonably expect to receive from a hypothetical tenant anything more than the standard rent determinable under the Act and this would be so equally whether the building has been let out to a tenant who was lost his right to apply for fixation of the standard rent or the building is self-occupied by the owner. The assessing authority would, in either case, have to arrive at its own figure of the standard rent by applying principles laid down in the Delhi Rent Control Act, 1958 for determination of standard rent and determine the annual value of the building on the basis of such figure of standard rent".

The principal enshrined in the aforesaid Supreme Court decisions applied to the facts of this case with full vigour. The Second Appeal is, therefore, allowed and the suit decreed. In the circumstance, there will be no order regarding costs.