Smt. Shubh Lata JaIn Vs. Municipal Corporation of Delhi - Court Judgment

Excerpt:
property - assessment - article 226 of constitution of india and section 6 (1) (a) (2) of delhi rent control act, 1958 - petition against order passed by respondent in house tax appeal and order assessing rateable value of certain amount in respect of property - petitioner contended that standard rent once having been fixed under section 6a respondent empowered to increase rateable value only by 10% in view of section 6 - petitioner alleged that respondent could not assess property on basis of cost of construction and cost of land - assessor and collector proceeded to follow principles laid down by apex court in precedent - in light of amendment of act rateable value fixed at rate of 10% on market value of land and cost of construction - held, order of respondent upheld. - - 11. i do not find any infirmity in the order of the appellate authority as well as that of the assessor and collector.orderc.k. mahajan, j.1. the petition is directed against the order dated 1st november, 1996 passed by respondents no. 3 in house tax appeal and order dated 21st december, 1993 assessing the rateable value at rs. 9900/- with effect from 1st december, 1998 in respect of property no. b-2/250, paschim vihar, new delhi. 2. the petitioner owns the property no. 2/250 paschim vihar, new delhi. the rateable value of the said property was fixed at rs. 8130/- w.e.f. 1.4.83 after taking into consideration the costs of land and costs of construction, following the procedure under section 6 of the delhi rent control act. in 1991 respondents no. 1 and 2 proposed to increase the rateable value of the said property from rs. 8130/- to rs.10170/- w.e.f. 29.3.1991 and from rs.8130/- to rs. 36,500/- from 1.4.1989 on the ground of amendment of the delhi rent control act. the petitioner filed objections against the proposed increase in the rateable value. by order dated 21st december, 1993 respondent no.2 assessed the rateable value at rs.9900/- with effect from 1.12.1988. the costs of land and costs of construction was taken at rs.1,09,500/- on which the annual rateable value, as per the amended delhi rent control act, was fixed. 3. aggrieved by the order of respondent no.2 the petitioner filed an appeal under section 169 of the delhi municipal corporation act. the appeal was dismissed and the order or respondent no. 2 was maintained. 4. the petitioner contends that the standard rent once having been fixed under section 6a of the delhi rent control act, respondent no.1 was empowered to increase the rateable value only by 10% in view of section 6a, and could not have assessed the property on the basis of cost of constructions and cost of land. the premises were let out in july, 1978 and there was no change in the letting value and thereforee there was no ground for raising the rateable value. in short the contention was that 10% increase was to be made on the standard rent and not on the costs of construction and cost of land. he further contended that the order passed is not a reasoned one and is in violation of principles of natural justice. 5. the petitioner placed reliance on the decisions of the supreme court reported in dr.balbir singh & others vs . m.c.d. & others : [1985]152itr388(sc) ; bhagwat rai & others vs . state of punjab & others : air1996sc95 and municipal corporation of delhi vs . m/s. express newspapers ltd., : [1998]3scr685 . 6. it has been held by the supreme court in dr. balbir singh's case that the standard rent after the expiration of a period of five years would be determinable on the principles set out in sub-section 1(a) (2) (b) of section 6 and the rateable value of the premises, whether residential or non residential, cannot exceed the standard rent but in a given case may be less than the standard rent. the premises in the present case are partly tenanted and partly self occupied. after the expiry of the period of five years the standard rent was determinable on the principles set out in section 61(a)(2)(b). the property was let out from the very beginning and the assessment of ratable value could be made in accordance with the rent realised for the first five years. after five years the property was to be assessed on the basis of costs of construction and cost of land in terms of dr. balbir singh's case. 7. section 6a and 6 1(a) (2) (b) were inserted in the delhi rent control act by amendment act 1988. section 6a reads as under : '6a. revision of rent. notwithstanding anything contained in this act the standard rent, or where no standard rent is fixed under the provisions of this act in respect of any premises, the rent agreed upon between the landlord and the tenant, may be increased by ten per cent every three years. 8. the provisions of section 6a of the act are not applicable. the rateable value has not been increased in the present case on the basis of section 6a. section 6 1(a) (2) (b) read as under: 6. standard rent: (1) subject to the provisions of sub section (2), 'standard rent', in relation to any premises, means (a) in the case of residential premises (1) ...... (2) where such premises have been let out at any time on or any after the 2nd day of june, 1944.- (a) ....... (b) in any other case, the rent calculated on the basis of ten per cent per annum of the aggregate amount of the actual cost of construction and the market price of the land comprised in the premises on the date of the commencement of the construction. 9. that by virtue of amendment made to section 6 of the delhi rent control act the quantum of rent was enhanced from 8-1/4 to 10% of the aggregate amount of actual cost of construction and the market price of the land. 10. the property was assessed on the basis of rent released for the first five years after 1978 and thereafter the property was to be assessed on the cost of construction and cost of land. the assessor and collector, who proceeded to follow the principles laid down in dr. balbir singh's case and in the light of the amendment of the delhi rent control act determined the rateable value at the rate of 10% on the market value of the land and costs of construction. cost of land and cost of construction was worked out to rs.1,09,500/- and there is no dispute in this regard. the proposal of the respondents was to assess the standard rent at the rate of 10% instead of 8-1/4% in view of the amendment of the delhi rent control act. the principles laid down by the supreme court in dewan daulat rai and dr. balbir singh's case will apply to the facts of this case. 11. i do not find any infirmity in the order of the appellate authority as well as that of the assessor and collector. 12. for the reasons aforesaid the writ petition is dismissed. no order as to costs.

Judgment:
ORDER

C.K. Mahajan, J.

1. The petition is directed against the order dated 1st November, 1996 passed by respondents No. 3 in House Tax Appeal and order dated 21st December, 1993 assessing the rateable value at Rs. 9900/- with effect from 1st December, 1998 in respect of property No. B-2/250, Paschim Vihar, New Delhi.

2. The petitioner owns the property No. 2/250 Paschim Vihar, New Delhi. The rateable value of the said property was fixed at Rs. 8130/- w.e.f. 1.4.83 after taking into consideration the costs of land and costs of construction, following the procedure under Section 6 of the Delhi Rent Control Act.

In 1991 respondents No. 1 and 2 proposed to increase the rateable value of the said property from Rs. 8130/- to Rs.10170/- w.e.f. 29.3.1991 and from Rs.8130/- to Rs. 36,500/- from 1.4.1989 on the ground of amendment of the Delhi Rent Control Act. The petitioner filed objections against the proposed increase in the rateable value. By order dated 21st December, 1993 respondent No.2 assessed the rateable value at Rs.9900/- with effect from 1.12.1988. The costs of land and costs of construction was taken at Rs.1,09,500/- on which the annual rateable value, as per the amended Delhi Rent Control Act, was fixed.

3. Aggrieved by the order of respondent No.2 the petitioner filed an appeal under section 169 of the Delhi Municipal Corporation Act. The appeal was dismissed and the order or respondent No. 2 was maintained.

4. The petitioner contends that the standard rent once having been fixed under Section 6A of the Delhi Rent Control Act, respondent No.1 was empowered to increase the rateable value only by 10% in view of Section 6A, and could not have assessed the property on the basis of cost of constructions and cost of land. The premises were let out in July, 1978 and there was no change in the letting value and thereforee there was no ground for raising the rateable value. In short the contention was that 10% increase was to be made on the standard rent and not on the costs of construction and cost of land. He further contended that the order passed is not a reasoned one and is in violation of principles of natural justice.

5. The petitioner placed reliance on the decisions of the Supreme Court reported in Dr.Balbir Singh & Others Vs . M.C.D. & Others : [1985]152ITR388(SC) ; Bhagwat Rai & others Vs . State of Punjab & others : AIR1996SC95 and Municipal Corporation of Delhi Vs . M/s. Express Newspapers Ltd., : [1998]3SCR685 .

6. It has been held by the Supreme Court in Dr. Balbir Singh's case that the standard rent after the expiration of a period of five years would be determinable on the principles set out in sub-section 1(a) (2) (b) of Section 6 and the rateable value of the premises, whether residential or non residential, cannot exceed the standard rent but in a given case may be less than the standard rent. The premises in the present case are partly tenanted and partly self occupied. After the expiry of the period of five years the standard rent was determinable on the principles set out in section 61(A)(2)(b). The property was let out from the very beginning and the assessment of ratable value could be made in accordance with the rent realised for the first five years. After five years the property was to be assessed on the basis of costs of construction and cost of land in terms of Dr. Balbir Singh's case.

7. Section 6A and 6 1(A) (2) (b) were inserted in the Delhi Rent Control Act by Amendment Act 1988. Section 6A reads as under :

'6A. Revision of rent.

Notwithstanding anything contained in this Act the standard rent, or where no standard rent is fixed under the provisions of this Act in respect of any premises, the rent agreed upon between the landlord and the tenant, may be increased by ten per cent every three years.

8. The provisions of Section 6A of the Act are not applicable. The rateable value has not been increased in the present case on the basis of Section 6A.

Section 6 1(A) (2) (b) read as under:

6. Standard rent: (1) Subject to the provisions of sub section (2), 'standard rent', in relation to any premises, means

(A) in the case of residential premises

(1) ......

(2) where such premises have been let out at any time on or any after the 2nd day of June, 1944.-

(a) .......

(b) in any other case, the rent calculated on the basis of ten per cent per annum of the aggregate amount of the actual cost of construction and the market price of the land comprised in the premises on the date of the commencement of the construction.

9. That by virtue of amendment made to Section 6 of the Delhi Rent Control Act the quantum of rent was enhanced from 8-1/4 to 10% of the aggregate amount of actual cost of construction and the market price of the land.

10. The property was assessed on the basis of rent released for the first five years after 1978 and thereafter the property was to be assessed on the cost of construction and cost of land. The Assessor and Collector, who proceeded to follow the principles laid down in Dr. Balbir Singh's case and in the light of the amendment of the Delhi Rent Control Act determined the rateable value at the rate of 10% on the market value of the land and costs of construction. Cost of land and cost of Construction was worked out to Rs.1,09,500/- and there is no dispute in this regard. The proposal of the respondents was to assess the standard rent at the rate of 10% instead of 8-1/4% in view of the amendment of the Delhi Rent Control Act. The principles laid down by the Supreme Court in Dewan Daulat Rai and Dr. Balbir Singh's case will apply to the facts of this case.

11. I do not find any infirmity in the order of the appellate authority as well as that of the Assessor and Collector.

12. For the reasons aforesaid the writ petition is dismissed. No order as to costs.