ORDER
Ashok Bhan, J.
1. Petitioner's property bearing No. 2011 in Ward No. 7, Railway Road, Nawanshahar was assessed to annual letting value of Rs. l,000/- upto 1980-81. The Executive Officer vide his order, Annexure P-1, increased the annual letting: value from Rs. 1,000/- to Rs. 2,000/-. The admitted ease of the parties is that no additions and alterations were made to the property for the last several years.
2. The petitioner, aggrieved against the order of the Municipal Committee, Annexure P-1, filed an appeal under Section 84 of |the Punjab Municipal Act before the Appellate Authority contending therein that no additions, alterations and improvements in the property were made; that the property was governed by the East Punjab Urban Rent Restriction Act (hereinafter referred to as the Rent Act); and, the annual letting value could not be increased arbitrarily as had been done by the Executive Officer of the Municipal Committee. The Appellate Authority rejected the appeal by orders Annexure P-3 dated February 10, 1982 holding that the property in dispute was not governed by Section 4 of the Rent Act.
3. Aggrieved. against the action taken by the respondents enhancing the annual letting value from Rs. 1,000/- to Rs. 2,000/-, the present writ petition has been filed by the petitioner.
4. I have beard the learned counsel for the parties at length. As stated earlier, the admitted position between the parties is that no additions, alterations or improvements have been made in the property in dispute. The property is situated in the area of Municipal Committee, Nawanshahar which is admittedly governed by the Rent Act. The finding recorded by the Appellate Authority that the property is not governed by the Rent Act is not correct. Once it is held that the property is not governed by the Rent Act, then the annual letting value of the property is to be assessed according to Section 3 (l)(b) of the Punjab Municipal Act, which states that the annual rental value must be assessed reasonably, the criteria being the rent at which it may be rented out. The building admittedly is governed by rent control legislation. Regarding such building, the Supreme Court of India in Dewan Daulat Rai Kapoor etc v. New Delhi M. C., A.I.R. 1980 S. C. 541. has held that a landlord of a building which is governed by the provisions of Rent Control Legislation, cannot reasonably be expected to receive anything more than the standard rent from a hypothetical tenant and the annual value of the building cannot, therefore, exceed the standard rent. The Supreme Court observed as under :--
'According to the definition occurring in Section 3 (1) (b) of the Punjab Municipal Act (3 of 1911) annual value' of a building would be the gross annual Rent at which the building may reasonably be expected to let from year to year. It is obvious from this definition that unlike the English Law where the value of occupation by a tenant is the criterion for fixing annual value of the building for rating purposes, here it is the value of the property to the owner which is taken as the standard for making assessment of annual value. The criterion is the rent realisable by the landlord and not the value of the holding in the hands of the tenant. The rent which the landlord might realise if the building were let is made the basis for fixing the annual value of the building. What the landlord might reasonably expect to get from a hypothetical tenant, if the building were let from year to year, affords the statutory yardstick for determining the annual value. There would ordinarily be in a free market close approximation between the actual rent received by the landlord and the rent which he might reasonably expect to receive from hypothetical tenant. But where the rent of the building is subject to rent control legislation, this approximation may and often does get displaced.
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 and the annual value of the building cannot therefore exceed the standard rent Even in case of a building in receipt 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 has lost his right or 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 determining the annual value of the building on the basis of such figures of standard rent. '
This judgment of their lordships' of the Supreme Court has been followed by this Court in a number of cases which were cited at the bar but are not being referred to this judgment. In this case the annual Setting value has been enhanced by the authorities below from Rs. 1,000/- to Rs. 2,000/- without giving any reasons. The Collector while rejecting the appeal has observed that the Rent Act is not applicable to the petitioner's case This finding is wrong in view of the fact that the East Punjab Urban Rent Restriction Act, is applicable to the area where the property in dispute is situate.
5. This writ petition, under the circumstances, succeeds. Orders, Annexures P-1 and P-2 passed by the Municipal Committee enhancing the annual letting value from Rs. 1,000/- to Rs. 2,000/- and affirmed by the Appellate Authority, respectively are set aside. No order as to costs.