Municipal Corporation of the City of Ahmedabad Vs Oriental Fire and General Insurance Co Ltd - Citation 739139 - Court Judgment

Judgment:

B.N. Kirpal, C.J.

1. The question which arises for consideration in the large number of First Appeals filed against various orders of Small Causes Courts is as to how to determine the rateable value of premises for the levy of property tax under the provisions of the Bombay Provincial Municipal Corporations Act, 1949 (hereinafter referred to as 'The B.P.M.C. Act').

2. Considering the importance of the points involved and in order to determine all the questions which arise in connection with the assessment to house tax, these Appeals were heard together and various learned counsels addressed arguments on all the issues which could, possibly, arise and which are being decided by this judgment. For the sake of convenience, and in order to appreciate various submissions made, facts of two sample cases, viz., First Appeal No. 469 of 1990 filed by the Corporation against M/s. Hindustan Photo Films . (which is the case of premises occupied by a tenant) and First Appeals Nos. 1339 of 1983 to 1341 of 1983 filed against Shri G. L. Shah (who is an owner in self-occupation of the premises in question), may, briefly, be considered.

3. M/s. Hindustan Photo Films . are occupying premises, measuring 600 sq. ft. in the cellar, 1588 sq. ft. on the ground floor and 790 sq. ft. on the first floor of a building in a central location at Ahmedabad. The said premises were taken on rent by M/s. Hindustan Photo Films at the rate of Rs. 2/- per. sq. ft. In respect of the assessment year 1983-84, the Corporation had fixed gross rateable value of the premises in question at Rs. 1,51,609/-, against which the Company preferred an appeal and the Small Causes Court, vide order dated 2nd January, 1989 in M.V.A. No. 3479 of 1984 reduced the gross rateable value to Rupees. 6,906/-. For the years 1984-85 and 1985-86, the Corporation adopted the rateable value of Rs. 1,51,609/- which had been fixed by it for the year 1983-84. The rateable value had been fixed on the basis of the actual rent being paid. But, on appeals being filed by the Company, the gross rateable value was again reduced by the Small Causes Court to Rs. 6,906/- by following its earlier decision of 2nd January, 1989 in respect of the assessment year 1983-84. For the year 1986-87, the Corporation again fixed the gross rateable value at Rs. 1,51,609/-. But, for the subsequent year, i.e. 1987-88, the gross rateable value was increased to Rs. 1,78,164/-. Appeals were filed by the Company, and once again the gross rateable value was reduced to Rs. 6,906/- because of the earlier judgment dated 2nd January, 1989. The total claim vide bill dated 5th of August, 1987 of the Corporation was for Rs. 4,68,848.50, including arrears of Rs. 3,63,018.82. But the entire claim for Rs. 3,63,018.82 was quashed and it is thereafter that F.A. No. 469 of 1990 has been filed in respect of the year 1987-89.

4. First Appeals Nos. 1339 of 1983 to 1341 of 1983 relate to rateable value of premises, which are in self-occupation of the owner himself and relate to the assessment years 1980-81, 1981-82 and 1982-83. The gross rateable value was fixed by the Municipal Corporation for each of these years at Rs. 12,714/-. Various contentions were raised, in the Appeals which were filed against the said assessment, before the Small Cause Court. The submission related to the validity, on the orders passed on the ground that the Municipal Commissioner himself had not passed the orders and there was no valid delegation order, and, on the basis of comparable instances, the comparison being with the rateable value fixed by the Small Cause Court themselves of other buildings, the Court came to the conclusion that reasonable and expected rent would be. Rs. 3.50 per sq. metre for the premises on the ground floor, Rs. 3.00 per sq. metre for the premises on the first floor and Rs. 2.50 per sq. metre for the premises on the second floor. This building is situated at the High Court road and is in the centre of a prestigious commercial area. The rateable value so computed came to Rs. 2,220/-, after taking into consideration the area occupied by the owner. It is against the said decision of the Small Cause Court that the Appeals have been filed by the Corporation.

5. The question relating to the determination of the rateable value has been the subject matter of a number of decisions of the Supreme Court regarding Acts of different States. The relevant provisions of the BPMC Act, however, never seem to have come up for consideration either before a Division Bench of this Court or before the Supreme Court. It was for this reason that learned counsel argued at length and raised different contentions connected with the question of the determination of the rateable value of tenanted as well as self-occupied premises. These contentions we will presently consider after referring to the relevant provisions of the BPMC Act and the Rules made thereunder.

6. Under Section 127(1) of the BPMC Act, the Corporation can, inter alia, impose property taxes. Sub-section (3) of Section 127 provides that the municipal taxes are to be assessed in accordance with the provisions of the Act and the Rules. Under Section 129(c), a general tax at a prescribed rate is leviable on the rateable value of the property. It is this expression, viz., 'rateable value', which has been the subject matter of various judicial pronouncements. Section 2(54) defines rateable value, inter alia, to mean the value of any building or land with reference to any given premises in accordance with the provisions of the Act and the Rules for the purpose of assessment of property taxes. Rule 7 of the Taxation Rules framed under the BPMC Act states as to how rateable value is to be determined. Sub-rule (3) of Rule 7 provides that in order to fix the rateable value of any building, land or premises, there shall be deducted from the amount of annual letting value of such building a sum equal to 10% of the annual letting value and the said deduction shall be in lieu of all allowances for repairs or on any other account whatsoever. It, therefore, becomes necessary to determine the 'annual letting value', because that, in effect, after the requisite deduction is made, is the rateable value.

7. Section 2(1A) defines 'annual letting value'. The said sub-section reads as follows :-

'2. In this Act, unless there be something repugmant in the subject or context, --

(1A) 'annual letting value' means, --

(i) in relation to any period prior to 1st April, 1970, the annual rent for which any building or land or premises, exclusive of furniture or machinary contained or situates therein or thereon, might, if the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 were not in force, reasonably be expected to let from year to year with reference to its use;

(ii) in relation to any other period, the annual rent for which any building or land or premises, exclusive of furniture or machinery contained or situate therein or thereon, might reasonably be expected to let from year to year with reference to its use;

and shall include all payments made or agreed to be made to the owner by a person (other than the owner) occupying the building or land or premises on account of occupation, taxes insurance or other charges incidentalthereto;

Provided that for the purposes of Sub-clause (ii), --

(a) in respect of any building or land or premises the standard rent of which has been fixed under Section 11 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, the annual rent thereof shall not exceed the annual amount of the standard rent so fixed;

(aa) in respect of any building or land or premises, the standard rent of which is not fixed under Section 11 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, the annual rent received by the owner in respect of such building or land or premises shall, notwithstanding anything contained in any other law for the time being force, be deemed to be the annual rent for which such building or land or premises might reasonably be expected to let from year to year with reference to its use;

(aaa) Clause (aa) shall not apply to a case where the annual rent received by the owner in respect of such building or land or premises is in the opinion of the Commissioner less than the annual rent for which such building or land or premises might, notwithstanding anything contained in any other law for the time being in force, reasonably be expected to let from year to year with reference to its use;

(b) in the case of any land of a class not ordinarily let the annual rent of which cannot in the opinion of the Commissioner be easily estimated, the annual rent shall be deemed to be six per cent of the estimated market value of the land at the time of assessment;

(c) In the case of any building of a class not ordinarily let, or in the case of any industrial or other premises of a class not ordinarily let, or the case of a class of such premises the building or buildings in which are not ordinarily let, if the annual rent thereof cannot in the opinion of the Commissioner be easily estimated, the annual rent shall be deemed to be six per cent of the total of the. estimated market value, at the time of the assessment, of the land in which such building or buildings stand or, as the case may be, of the land which is comprised in such premises, and the estimated cost, at the time of the assessment, of erecting the building or, as the case may be, the building or buildings comprised in such premises.'

8. Section 2(1A)(i) and (ii) deal with two different periods of time. While Sub-clause (i) of Section 2(1A) relates to fixation of annual letting value for the period prior to 1st April, 1970, Sub-clause (ii) deals with the period thereafter. In the present Appeals, we are concerned with Sub-clause (ii) of Section 2(1A), which states that 'annual letting value' will mean the 'annual rent' for which any building or land might reasonably be expected to let from year to year with reference to its use. Annual rent is also to include all payments made or agreed to be made to the owner by a person (other than the owner), who may be occupying the building or land. The proviso to Sub-clause (ii) are important. Proviso (a) states that if standard rent has been fixed under Section 11 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as 'The Rent Act'), then the annual rent shall not exceed the annual amount of the standard rent so fixed.

9. Proviso (aa) was inserted with effect from 1st of April, 1984. It is not disputed that the same will apply for the official year 1984-85 onwards. According to this proviso, in the absence of standard rent being fixed under Section 11 of the Rent Act, the annual rent received by the owner of premises, which are let out, is deemed to be the annual rent at which the premises might be expected to be let from year to year. In other words, the contractual rent liable to be paid by the tenant to the landlord will be regarded as the annual rent for the purpose of determining the annual letting value under Sub-clause (ii) of Section 2(1A).

10. Proviso (aaa) contemplates those types of cases, where the annual rent, which is actually received by the owner, is, in the opinion of the Commissioner, less than the annual rent for which the building may reasonably be expected to be let from year to year. This proviso has, obviously, been inserted to prevent landlords and tenants from circumventing the provisions of proviso (aa), by fixing contractual rent at an abnormally low figure and, therefore, in such cases, power has been given to the Commissioner to fix the reasonable rent, notwithstanding the provisions of proviso (aa).

11. Proviso (b) of Section 2(1A) relates to fixation of annual letting value of a land and the simple method provided for determining this is to fix it at 6% of the estimated market value. Proviso (c) deals with fixing of annual letting value of a building not on the basis of the annual rent, but on the basis of certain percentage of its estimated market value. In order that Clause (c) should apply, two conditions have to be satisfied, viz., that the building must fall in a class of buildings, which is not, ordinarily, let, and, secondly, if the annual rent thereof cannot, in the opinion of the Commissioner, be easily estimated.

12. Section 2(1A)(ii) on the mere readingof the said sub-clause states that the 'annualletting value' means the 'annual rent' forwhich the building may reasonably be expected to let. The proviso, apply only totenanted premises, but in case of tenantedpremises for a period prior to 1-4-1984 therateable value will have to be fixed on thesame principle which is to be applicable toself-occupied premises.

13. At this stage, reference is necessary to two decisions of this Court. The first decision is that of a Full Bench in the case of Municipal Corporation, Ahmedabad v. Canara Bank, XXXIII(2) GLR 1086. In that case the question arose that where the tenant agree to pay the property tax, would the tax so paid be regarded as a part of rent for the purpose of computing the annual letting value. It was held by the Full Bench that the property tax so paid must be regarded as forming part of the rent, because it is an obligation of the owner which was being discharged by the tenant and the amount of property tax had to be taken into consideration and added to the actual rent being paid to the owner, for the purposes of determining the annual letting value. The second decision is that of Special Civil Application No. 4368 of 1984 and connected matters, decided on 28th April, 1994, where the question arose before this Court with regard to the validity of proviso (aa) to Section 2(1A) of the BPMC Act. It was held by this Court that after 1-4-1984, by virtue of the insertion of provisos (aa) and (aaa), the annual letting value has to be determined on the basis of the actual rent received by the landlord from the tenant. This was a clear departure from the principles regarding determination of rateable value which may be applicable in case of tenanted premises prior to 1-4-1984. It was further held that the said provisions were intra vires and reteable value had to be calculated on the basis of the actual rent paid and not on the basis of determining the hypothetical rent for the purposes of determining the annual letting value.

14. The key provision in Section 2(1A) is Sub-clause (ii). The said Sub-clause (ii) of Section 2(1A) is in pari materia with and analogous to the provisions of the local law applicable in Delhi, relating to property tax, which have been the subject matter of leading decisions of the Supreme Court, viz., cases of Devan Daulat Rai Kapoor v. New Delhi Municipal Committee, AIR 1980 SC 541, and Balbir Singh v. M.C.D., AIR 1985 SC 339.

15. In Devan Daulat Rai Kapoor, the Supreme Court was concerned with the interpretation of Section 3(1)(b) of the Punjab Municipal Act, 1911, which defined 'annual value' to mean 'the gross annual rent at which such house or building............ may reasonably be expected to let from year to year'. After examining the earlier decisions in the case of Corporation of Calcutta v. Padma Debi, (1962) 3 SCR 49 : (AIR 1962 SC 151) and Guntur Municipal Council v. Guntur Town Rate Payers' Association, (1971) 2 SCR 423 : (AIR 1971 SC 353), and Corporation of Calcutta v. Life Insurance Corporation, (1970) 2 SCC 44 : (AIR 1970 SC 1417), the Court held that where the Rent Control Act applied, the landlord could not, reasonably, be expected to receive from a hypothetical tenant, anything more than the fair rent in accordance with the principles laid down in the Rent Act and the annual value was liable to be determined on the basis of the fair rent, as determined under the Rent Act. It was also held in this case that even in a case of a building, in respect of which no standard rent had been fixed within the the prescribed period of limitation and the tenant was precluded from making an application for fixation of standard rent, even in such a case, the annual value must be limited to the measure of standard rent determinable under the Rent Act. This principle was to apply whether the building had been let out to a tenant, who may or may not have lost his right to apply for fixation of standard rent, or the building was in self-occupation of the owner.

16. The ratio decidendi of the decision of the Supreme Court in Devan Daulat Rai Kapoor's case (supra) was followed and amplified by that Court in Balbir Singh's case (supra). It was held that the standard rent determinable on the said principles set out in the Rent Act was the outer limit of the rent which the landlord may except to receive from a hypothetical tenant.

17. With regard to interpretation of Section 2(1A)(ii), reference may lastly be made to the decision of the Supreme Court in the case of Morvi Municipality v. State of Gujarat, AIR 1993 SC 1508 : (1993 AIR SCW 1476). Though the Court was not concerned with the provisions of the Bombay Provincial Municipal Corporation Act, which are applicable in the City of Ahmedabad, the Court was called upon to interpret the provisions of Section 2(1) of the Gujarat Municipalities Act, 1964, which are, more or less, in pari materia with Section 2(1A) of the B.P.M.C. Act. After referring to its earlier decisions in the case of Corporation of Calcutta v. Padma Debi, AIR 1962 SC 151, Corporation of Calcutta v. Life Insurance Corporation of India, AIR 1970 SC 1417, Guntur Municipal Council v. Guntur Town Rate Payers' Association, AIR 1971 SC 353, and Devan Daulat Rai Kapoor v. New Delhi Municipal Committee, AIR 1980 SC 541, it came to the conclusion that the expression 'annual letting value' would mean the rental income from the property, which is to be taken into consideration while estimating the reasonable return that a landlord can expect from his property. It further held that whether the rent is restricted on account of the operation of rent restriction legislation, the outer limit of the reasonable rent that can be expected from the property stands defined by such restriction and, while estimating or calculating the annual rent which might reasonably be expected from such property, the provisions of such legislation have to be taken into consideration. It was observed in Morvi Municipality's case that:--

'.......... Different rent restriction legislations have described the maximum rent recoverable under them differently such as standard rent, fair rent, etc. Hence the annual letting value of the building or land or both to which the rent restriction is applicable cannotexceed the annual standard or fair rent. It isthe annual standard/fair rent which alone,therefore, can form the basis of the assessment of the property tax by the localauthority.......'

18. From the aforesaid discussions itwould follow that Section 2(1A)(ii), including theprovisos, deal with the determination of'annual rateable value' for self-occupied aswell as tenanted premises. Whereas in respectof self-occupied premises the same has to bedetermined by applying the principles laiddown in the cases of Devan Daulat RaiKapoor, Dr. Balbir Singh and Morvi Municipality (supra), i.e. by estimating and determining the standard rent which has to be thebasis, in respect of tenanted premises differentprinciples will apply because of provisos (a),(aa) and (aaa) to Sub-clause (ii) of Section 2(1A).Before 1-4-1984 the rateable value of tenantedpremises will have to be determined on thesame principles as enunciated in the aforesaidSupreme Court decisions but after 1-4-1984the actual rent received or the contractual rentis to be the determining factor in view ofProviso (aa) to Section 2(1A)(ii).

19. Applying the aforesaid principles, to the present case, we have to see what is the maximum rent legally recoverable by the owner under the provisions of the Rent Control Act applicable in Ahmedabad.

20. It now becomes necessary to refer to the provisions of the Rent Act, 1947 in order to understand as to how standard rent is determined under the said Act. Section 5(10) contains the exhaustive definition of standard rent and the same reads as under:--

'5. In this Act unless there is anything repugnant to the subject or context-

(10) 'Standard rent' in relation to any premises means-

(a) where the standard rent is fixed by the Court and the Controller respectively under the Bombay Rent Restriction Act, 1939, or the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1944, such standard rent; or

(b) where the standard rent is not so fixed, subject to the provisions of Section 11.

(i) the rent at which the premises were let on the first day of September, 1940, or

(ii) where they were not let on the first day of September, 1940, the rent at which they were last let before that day, or

(iii) where they were first let after the first day of September, 1940, the rent at which they were first let, or

(iv) in any of the cases specified in Section 11,the rent fixed by the Court:'

Section 11 enables the Court to fix standard rent and also provides for permitted increases in certain cases. Sub-section (1) of Section 11, which is relevant at this stage, reads as follows:--

'11. (1) In any of the following, cases the Court may, upon an application made to it for that purpose, or in any suit or proceeding, fix the standard rent at such amount, as, having regard to the provisions of this Act and the circumstances of the case, the Court deems just-

(a) where any premises are first let after the specified date and the rent at which they are so let is in the opinion of the Court excessive; or

(b) where the Court is satisfied that there is no sufficient evidence to ascertain the rent at which the premises were let in any one of the cases mentioned in Sub-clauses (i) to (iii) of Clause (b) of Sub-section (10) of Section 5; or

(c) where by reason of the premises having been let at one time as a whole or in parts and at another time in parts or as a whole, or for any other reasons, any difficulty arises in giving effect to this part; or

(d) where any premises have been or are let rent free or at a nominal rent or for some consideration in addition to rent; or

(e) where there is any dispute between the landlord and the tenant regarding the amount of standard rent.'

21. Like the Delhi Act, Section 5(10) also provides that where, by an order of a Court, standard rent is fixed, then for the said premises, that will be the standard rent. Sub-section (b) of Section 5(10) deals with those cases where there is no order of a Court fixing the standard rent. In such a case, 'standard rent' is defined to mean, the rent at which the premises were let on the first day of September, 1940, or at which they were last let before that day, or the rent at which they were firstlet after 1st September, 1940. According to Sub-clause (b) of Section 5(10), therefore, it is the contractual rent first fixed after 1-9-1940 which is regarded as 'standard rent', but this is, however, subject to rent which may be fixed by the Court under Section 11.

22. The provisions of Section 5(10)(b) are a clear departure from the Delhi Rent Control Act in one important aspect. That aspect is that, like most of the cases, with which we are concerned, the first contractual rent is itself regarded as standard rent unless altered by passing an order under Section 11. To give a hypothetical example, if on the 1st of September, 1940, a house is let out for a rent of Rs. 1,000/- per month and thereafter, due to change of tenant or otherwise, the rent is increased to Rs. 2,000/- per month, which may, subsequently, be increased further, where no order under Section 11 has been passed, the first contractual rent, viz., Rs. 1,000/- per month, as on 1st September, 1940, will be regarded as standard rent under the provisions of Section 5(10)(b). This rent, when it was first charged, was a lawful rent and would continue to be so unless it is varied by an order passed under Section 11 of the Act.

23. In Devan Daulat Rai Kapoor's case, it was observed by the Supreme Court at page 543 that:--

'......It is the standard rent alone which thelandlord could reasonably expect to receive from a hypothetical tenant, because to receive anything more would be contrary to law.....'

This was the basis, which was adopted by the Supreme Court in coming to the conplusion that the rent, which could lawfully be claimed from a tenant should alone be regarded as standard rent. Section 5(10)(b) of the Rent Act makes the receipt of the contractual rent, in the case of first letting, to be lawful. This rent is itself regarded by the Act as the standard rent. Therefore, for the purpose of fixing the rateable value said to 1-4-1984 under the BPMC Act, it is this rent, which should be taken into consideration.

24. The standard rent, defined in Section 5(10), where it is not fixed by the Court, is subject to an order passed under Section 11 of the Rent Act. Section 11(1)(a) gives the Court jurisdiction to fix standard rent even with regard to the premises, which are let for the first time. An order under Section 11(1)(a) would be passed if, in the opinion of the Court, the contractual rent so fixed is, in the opinion of the Court, excessive. When an order is passed under Section 11(1)(a), fixing the standard rent, at a figure lower than the contractual rent of the premises, when first let out, then the effect of this would be that the rent fixed by the order of the Court would be regarded as a standard rent. In other words, what was regarded as standard rent, by virtue of Section 5(10) would stand replaced by the new standard rent as determined under Section 11(1)(a) of the Rent Act. Till an order is passed under Section 11(1)(a), the rent of the premises, when first let, would be regarded as standard rent.

25. In the appeals, which are before us relating to tenanted premises, it had been contended before the Small Cause Court, on behalf of the tenants, that the contractual rent, even in the case of first letting, should be ignored, and the Court should fix hypothetical rent by invoking the provisions of Section 11 of the Rent Act. This argument has found favour with the Small Cause Courts, who have then, in every case, determined the rent at an amount considerably lower than the first agreed rent. Before dealing with such determination, the question which arises is, whether, in principle, the view of the Small Cause Court is correct. The cases of Devan Daulat Rai Kapoor and Dr. Balbir Singh were concerned with the rent law, as applicable in Delhi. According to the Delhi Rent Control Act, the standard rent has to be determined according to the formula prescribed therein, which envisages a percentage of return on the cost of land and the cost of construction. Where cost of land and cost of construction is not available, then the Delhi Rent Control Act envisages the rent, which is prevailing in the neighbourhood, to be used as a measure for determining the standard rent. As already noticed, the agreed rent is, at no point of time, under the Delhi Rent Control Act, regarded as the standard rent. In Ahmedabad, however, as opposed to the Delhi Rent Control Act, the first contractual rent in case of premises let after 1st of September, 1940 is regarded as the standard rent by virtue of the provisions of Section 5(10) of the Act. It is only if an application is filed under Section 11 and an order passed that the firstcontractual rent will not be regarded as the standard rent. In the case of first letting, when no order under Section 11 has been passed, the Municipal authorities have to determine the annual value on the basis of the then prevailing standard rent, viz,., the first contractual rent. In the scheme of things, there would be no occasion for the Municipal authority or the Small Cause Court, while determining the rateable value, to arrive at a hypothetical rent under Section 11 of the Rent Act because the first contractual rent is the rent, which the landlord can legally recover.

26. We find support for the aforesaid interpretation of Section 5(10) and Section 11, in relation to fixation of rateable value, from a decision of a Division Bench of the Bombay High Court in the case of Filmistan Private Ltd. v. Municipal Corporation for Greater Bombay, AIR 1973 Bom 66. The Bombay High Court was also concerned with the same provisions, as we are in these cases, and it had been contended that in fixing the rateable value, the agreed rent of the premises must be ignored and the rateable value must be fixed with reference to the notional or hypothetical standard rent as would be fixed in an enquiry under Section 11 of the Bombay Rent Act. After referring to the decisions of the Supreme Court in Guntur Municipal Council's case (supra) and Life Insurance Corporation's case (supra), the Bombay High Court distinguished those cases, as well as the case of Padma Debi (supra) by bringing to focus the difference between the West Bengal Rent Control Act and the Bombay Rent Act. It was observed by the Bombay High Court in Filmistan Private Ltd.'s case, at page 71, as follows:--

'........However, there is, as pointed out, amaterial difference between the West Bengal Rent Control Act and the Bombay Rent Act. The definition of 'standard rent' in the West Bengal Rent Control Act is in our opinion materially and vitally different from that under the Bombay Rent Act. In our opinion under the Bombay Rent Act, in case of premises first let after the first day of September, 1940, the agreed rent at which they were first let is by the statutory definition to be the standard rent. Such standard rent is, however, subject to the provisions of Section 11. In this later section provision has been made bythe Legislature for recalculation or refixation of the standard rent in certain cases, So long as there is no determination by the Court under Section 11, the landlord is perfectly justified in recovering from the tenant or claiming from the tenant the contractual rent; neither his recovery nor his claim is in any sense of the term unlawful. Thus in such cases what the landlord can charge under Section 5(10)(b)(iii) is the standard rent until there is subsequent determination by the Court that it is excessive; on such determination the standard rent would be recalculated and refixed at a lower amount. Until such refixing is done, the agreed rent will be the standard rent. The two sections must be read together and when this is done it is clear that in case of premises let out after the first day of September, 1940, the rent at which they were let out is the standard rent which may be varied subsequently in case an application is made to the Special Court under Section 11 in such proceedings as are indicated therein. Until such an application is made the agreed rent is the standard rent within the meaning and definition of 'standard rent' in the Bombay Rent Act.......'

We are in respectful agreement with the aforesaid proposition of law and, in our opinion, the same is in conformity even with the subsequent judgments of the Supreme Court in the case of Devan Daulat Rai Kapoor, Dr. Balbir Singh and Morvi Municipality.

27. Assuming, however, that in fixing the rateable value, the Municipal authority and the Small Cause Court are not bound by the first contractual rent and the Municipal authorities can determine hypothetical standard rent under Section 11, then what are the principles, which will apply while fixing the standard rent under that provision. As is evident from a bare perusal of Section 11(1)(a), an order under that sub-section can be passed if the rent first fixed is, in the opinion of the Court, excessive. Unless the Court comes to the opinion that the contractual rent is excessive, it would have no jurisdiction to pass an order under Section 11(1)(a), fixing the standard rent at a figure different from the first contractual rent. The question which would materially arise would be, as to how can the Court determine as to whether the rent is excessive or not?

28. The Bombay Rent Act, unlike the Delhi Rent Control Act, does not contain a mathematical formula for determining the standard rent. The section itself makes no reference to the cost of construction or cost of land in arriving at the standard rent. Nor is there any mention of rents prevailing in the neighbourhood to be a measure for determining the standard rent. What are the principles' to be followed or how is the determination to take place under Section 11 of the Act?

29. In Special Civil Application No. 1429 of 1974, Baroda Municipal Corporation v. V. G. Vasavada, a single Judge of this Court (M. P. Thakkar, J.), in judgment dated 14th of September, 1976, held that assessment of a property cannot be made on the basis of valuation of the adjoining property mechanically. He observed that :--

'......Even assuming that both the properties are similar in all respects in area, in nature and in age of structure and in amenities and a comparison can be made, it would be unsafe to value the property under assessment at par with the valuation made in respect of the adjoining property ipso facto. The valuation made in respect of the adjoining property may have been erroneous and valuation of the property under assessment would have to be made on its own and the reasons for arriving at the valuation must be reasons for valuing that very property.......'

To the same effect is the judgment of another single Judge of this Court, reported in the case of Kusumben Popatlal v. Mahendra, 16 GLR 348. It was held in this case that unless, therefore, there is evidence to show that :--

'.....two premises were constructed by the same landlord in a single transaction or that they were constructed by two different landlords as a part of the same transaction, rent charged in respect of one cannot be made the basis for fixing the standard rent of another.......'

While observing that the rent charged in respect of a neighbouring premises or premises situated in the same locality cannot, ordinarily, furnish the basis for fixing the standard rent of another premises, it was, however, held that:--

'......If in one building two different premises have been let out to two different tenants, the rent charged in respect of one of them can furnish evidence of a comparable rent for fixing the standard rent of another. Similarly, the evidence of rent charged in respect of one building is relevant and can be used for fixing the standard rent of another, if both were constructed in the same transaction or as a part of the same transaction irrespective of whether they were constructed by one landlord or more if they are otherwise similar and identical in all respects.'

If standard rent cannot be fixed on the basis of rent prevailing in the neighbourhood, then what principle should be followed by the Court while passing an order under Section 11(1)(a) of the Rent Act. This question came up for consideration before a single Judge of this Court in the case of Rajnikant Jeshingbhai Sheth v. Rameshchandra Kantilal Bhatt, 23 (1) GLR 71 : (AIR 1982 Guj 85). The question arose with regard to fixation of standard rent with regard to different floors of a school building, which had been constructed in Ahmeddbad. After referring to the decisions of the Bombay High Court in the case of Saipansaheb Dawoodsaheb v. Laxman (1955) 57 BLR 413 : (AIR 1955 Bom 435) and Bai Dahi v. Ghanshyam, AIR 1955 Bom 102, it was emphasised that the scheme of the Act was such that it sought to curb exploitation of the tenants in the matter of realisation of rents by landlords, while, on the other hand, it promises a fair and reasonable return on investment as and by way of an impetus to the owners of land to construct on their lands. In other words, in fixing the standard rent, the correct approach should be as to what is the net return, which a landlord should be, reasonably, allowed on his investment. Reference was then made to the judgment of Tendolkar, J., Harilal v. Jain Co-op. Housing Society (1957) 59 BLR 217 : (AIR 1957 Bom 207), in which it was held that intervention of the Court with the contractual rent can only be where the rent is not only not reasonable, but exceeds by some substantial margin what is reasonable, so that it may be termed 'excessive.' It was held that there was always a gap between what is reasonable and what is excessive and that what is excessive does not begin where what is reasonable necessarily ends. If the contractual rent is within thisgap between what is excessive and what isreasonable, then the Court had no jurisdiction to fix a just rent in such a case. It waspointed out that the decision in Harilal's casewas approved by a Division Bench of theBombay High Court in Rukmanibai v.Shivanarayan, (1965) 67 BLR 692. Followingthe aforesaid decisions in Harilal's case andRukmanibai's case, Ahmadi, J., observedthat:--

'.....I am in respectful agreement with theabove view expressed by Tendolkar, J. It is,therefore, clear on the plain language of Section 11of the Act that the Court has jurisdiction tointerfere with the contractual rent if and onlyif it considers the same to be excessive, i.e.,unreasonably high.........'

While fixing the standard rent, the Court held that there should be a fair return on the value of land on the date of letting. It was further observed that the nature of construction and the use to which the property is put are to be taken into account, and the rate of 1.25% on the total cost of construction was allowed as reasonable outgoings. Therefore, applying the principle of determining return on capital as being the basis for fixing the standard rent, it was observed by A.M. Ahmadi, J. in Rajnikant's case as follows :--

'.....The Court should also take note of the fact that between the date of commencement of construction and the date of letting the amount invested by the owners did not fetch any return whatsoever. In determining the return on investments made in real estate the Court must realise the fact that the standard rent once determined will not increase with the subsequent increase in the Bank rate, returns on gilt-edged securities and returns fetched by other investors from time to time, although the benefit of inflation by way of rise in the prices of real estate will be available if and when the tenant vacates. Keeping in mind all these facts and the fact that the return on the investment of the owners of building must be less than what a hypothetical tenant would have to pay by way of interest on the capital borrowed for building the same superstructure for himself, I think it would be reasonable to allow a net return on 7 per cent on the cost of construction of the ground floor and 7.25 per cent on the cost of construction of the upper floors, since the municipal taxes arepaid by the tenants......'

30. To recapitulate, the aforesaid decisions of this Court emphasise the fact that unless the properties are identical, the rents in the neighbourhood may not be the correct measure in determining the standard rent. A more scientific and a fair method for determining the standard rent would be to fix a return on the capital employed and the rate of return should have relevance to the rate of interest, which is prevailing in the market at the relevant point of time. On such determination, if it is found that the contractual rent of the premises, let for the first time, is 'excessive', in terms of the meaning ascribed to that expression in Rajnikant's judgment, then the standard rent, so determined, should be fixed.

31. At this juncture, it will be appropriate to consider the question with regard to the onus of proof. It was vehemently contended that before the Small Cause Court, the onus was on the Municipality to prove that the gross rateable value fixed by it was in accordance with law. In our opinion, this will not be a correct interpretation of law. When the gross rateable value has been determined by the Assessing Authority and an appeal is filed contending that the contractual rent should not be regarded as a standard rent, as it is excessive, then it is for the person, who makes this allegation to prove his case. Onus of proof is on the person, who would fail, if a particular fact is not proved. The averment that the contractual rent charged, by the owner is excessive is made by the appellant before the Small Cause Court. It would, therefore, be for the appellant to prove as to what should be the standard rent, which must be at a figure less than the contractual rent. In this connection, evidence will have to be led by way of cost of land and cost of construction of the premises in question or the actual rent, which is being received in the neighbourhood with regard to identical or similar premises. If no evidence in this connection is led, the gross rateable value, determined by the Municipal Authorities on the basis of first letting, must be regarded as the annual letting value under the B.P.M.C. Act.

32. Mr. Modi also relied on the decision of a single Judge of this Court (S. L. Talati, J.), dated 15th February, 1982, in F.A.No. 1503 of 1981, Ahmedabad District Cooperative Bank Limited v. Municipal Corporation, Ahmedabad, and submitted that when an appeal is filed before the Small Cause Court, it is the duty of the Corporation to lead proper evidence at that time in order to justify a new rateable value, which may have been fixed by it. In that case, the appellant was in occupation of premises owned by him. After the rateable value had been fixed, an appeal was filed and the printed reply was filed on behalf of the Corporation. Filing of such replies was, rightly, criticised by Talati, J. On behalf of the appellant, reliance was placed on the order of the Small Cause Court, regarding Cama Hotel, and another judgment of the Small Cause Court in the case of UCO Bank. These two judgments were based on a compromise and this was taken note of by Talati, J. The learned Judge also referred to the case of Filmistan Private Limited v. Municipal Commissioner for Greater Bombay, 72 BLR 461, in which it was observed that responsibility to establish that the rateable value has not properly fixed by the Commissioner, rests on the assessee. The said decision was distinguished by Talati, J., by observing that it related to the question of burden of proof when a complaint is filed by the property owner when he challenges the gross rateable value proposed to be fixed by the Municipal authorities and the said evidence is either accepted or rejected by the Municipal authorities, because of the other evidence, which they may have. Once the appeal is filed and the question arises before the Small Cause Court as to what should be the rateable value, the judgment of Talati, J., seems to suggest that the burden of proof before the Small Cause Court would be of the Corporation. As we have already observed, the rateable value has to be fixed on the principle enunciated by the Supreme Court in Devan Daulat Rai Kapoor's case and subsequent cases. This fact has also been noted by Talati, J. Once this is so, the only evidence of material, which is required for fixing the rateable value is either the cost of construction, or cost of land or comparable rents in the immediate neighbourhood. Evidence with regard to cost of construction and cost of land can best, if not only, be available with the owner of the property. Therefore, whether it be the stage of assessment or at the stage ofappeal before the Small Cause Court, evidence in this regard should always be led or produced by the owner. If, on the other hand, the Corporation chooses to disregard this and purports to fix the rateable value on the basis of rents in the neighbourhood, or by applying any other method then it is only, in such cases, that the Corporation has to justify its action. When an appeal is filed, challenging the gross rateable value, it will be for the appellant to show that the rateable value fixed by the Corporation is not in accordance with law. We cannot read the judgment of Talati, J., to mean that in every case before the Small Cause Court, the onus of proof will be on the Corporation. Dealing with the contention regarding burden of proof, the Division Bench of the Bombay High Court, in Filmistan's case observed as follows:--

'....It was urged before us by Mr. Chitale who appears on behalf of the appellants that the rateable value of the property has been increased by the Corporation for the year 1960-61 without any apparent justification and, therefore, the burden must rest on the Corporation to show that the increase is justified. This contention is not borne out by the provisions of the Act. We have set out the relevant sections earlier from which it is clear that the scheme envisaged by the Act is that an appropriate entry is to be made in the assessment book by the Commissioner, notice thereof, sometimes specially, is to be given to the person affected by the entry and the burden is cast on the person challenging the entry to show that the rateable value fixed by the Commissioner or the increase proposed by him is not justified. That is why the assessee is required to file a complaint and if the Commissioner finds on investigation that the complaint is unjustified, the assessee has been given a right under Section 217 to file an appeal to the Chief Judge of the Court of Small Causes. It is open to the assessee to satisfy the Chief Judge, if necessary by examining an expert valuer under Section 218B of the Act, that the Commissioner has not fixed the rateable value of the property correctly. If the appeal to the Chief Judge fails, the assessee is given a further opportunity to file an appeal to the High Court under Section 218D. The burden, however, must always rest on theassessee to, establish that the rateable value has not been properly fixed by the Commissioner......'

The aforesaid observations were made in the case of an analogous provision and we agree with the Bombay High Court that the burden must always rest on the assessee to establish, when he files an appeal before the Small Cause Court, that the rateable value has not been properly fixed by the Commissioner.

33. Mr. Modi, appearing on behalf of the respondents in a very large number of cases and representing tenants or owners, informed us, and, in fact, argued, for fixation of standard rent on the basis of the factors, which were being followed by the Ahmedabad Municipal Corporation, in some cases, and also by the Small Cause Courts, It was submitted that in the case of one building, occupied by B. M. Institute on Ashram Road, a prime locality in Ahmedabad, the Deputy Municipal Commissioner had fixed the letting rate of Rs. 2.25 per sq. metre per month, vide order dated 13th February, 1980. Keeping in mind the said order, the Small Cause Court, in an appeal for the subsequent year by the same Institute for another building, but in the same complex, reduced the letting rate from Rs. 6/- to Rs. 2.25 per sq. metre per month. In respect of three other buildings at Ashram Road which were occupied by the Ahmedabad Textile Mills Owners' Association, Gujarat Chamber of Commerce and Industry and E.S.I.C., the Municipal Corporation had fixed the annual letting value on the basis of the carpet area at a monthly rate of'Re. 1.00 per sq. metre to Rs. 2.25 per sq. metre per month. This was in the year 1980 and, presumably, in the absence of knowledge of the judgment of the Supreme Court in Devan Daulat Rai Kapoor's case (supra). The annual value so fixed in respect of these four buildings then appears to have been followed by the Small Cause Courts in subsequent cases regarding other buildings.

34. In effect, what has happened is that for determining the standard rent, allegedly under Section 11 of the Rent Act, the Small Cause Court neither adopted the principle for determining the standard rent, on the basis of the actual rent prevalent in the neighbourhood, nor the return on the cost of construction and cost of land. The Small CauseCourt evolved a novel procedure of ostensibly fixing the standard rent under. Section 11, by adopting the annual letting value fixed either by concession or otherwise in respect of a few buildings on Ashram Road and then determining the rent per sq. metre. The amounts of standard rent so determined have no relation to the reality of the situation. In no case have the Small Cause Court considered the actual rent received in the neighbourhood of similar buildings, and the hypothetical figure of annual value of some properties has been assumed to be the actual rent for the purposes of fixing the standard rent. This method is clearly unknown and is contrary to law. Either the Small Cause Court should have seen the actual rent received of similar premises in the same or neighbouring locality, or the standard rent, in the absence of contractual rent, should have been determined, by finding out a fair return on the, cost of construction and cost of land.

35. Before concluding on this aspect, we may notice a contention, which has been raised on behalf of the respondents, relating to the annual letting value being fixed on the basis of the standard rent. Referring to Devan Daulat Rai Kapoor's case, it was submitted that it was observed therein by the Supreme Court, that the rateable value of a building could not exceed the standard rent and must be limited to that. The submission was that rateable value could even be less than the standard rent and there was nothing illegal in the Small Cause Court adopting a rateable value, which does not measure up to the standard rent. In this connection, however, the observations of the Supreme Court in Dr. Balbir Singh's case at page 346 are pertinent :--

'.....It is thus clear from this decision that the rateable value of a building cannot exceed the measure of standard rent, whether determined by the Controller under Section 9 of the Rent Act or arrived at by the assessing authority by applying the principles laid down in the Rent Act, but it may in a given case be less than the standard rent having regard to various attendant circumstances and considerations. If, for example, the building is not in a proper state of repair or is so situate that it has certain disadvantages from the point of view of easy accessibilityor means of transport or any other similarcause, the actual rent which the owner mayreasonably expect to receive from a hypothetical tenant may be less than the standardrent determinate on the principle laid downin the Rent Act......'

The reading of the aforesaid passage clearly shows that it is only in exceptional circumstances that the rateable value would be less than the standard rent. The examples given by the Supreme Court clearly bring out the fact that unless and until there are clear disadvantages relating to a particular building or tenement, the Standard rent would, ordinarily, be the norm. In the exceptional cases, it will be for the owner to prove that the actual rent, which he may, reasonably, be expected to receive would be less than the standard rent determinable on the principles laid down in the Rent Act. In all such cases, evidence will have to be led, not by the Corporation, but by the landlord, showing that due to particular disadvantages of the property or such other similar reason, the annual letting value should be less than the standard rent determined in accordance with the known principles in law. Where no such evidence is led, the plea of the owner or tenant must, necessarily, fail.

36. As already noticed, with effect from 1st April, 1984, with the insertion of Proviso (aa) to Section 2(1A), the contractual rent received by the owner is deemed to be the annual rent for the purposes of determining the annual letting value. This is, of course, subject to Proviso (aaa), with which we are not concerned in these cases. The principle of Devan Daulat Rai Kapoor's case or Dr. Balbir Singh's case would not apply with regard to tenanted premises, after 1-4-1984. The said principles will, however, continue to apply with regard to self-occupied premises.

37. With regard to some Institutions, like Hospitals, Schools, or other public institutional buildings, it was also submitted that the provisions of Section 2(1A) Proviso (c) would be applicable and in such cases, the principle of Devan Daulat Rai Kapoor's case, etc., would not apply. Proviso (c) contemplates a case of a building, which belongs to a class, which is not, ordinarily, let and in respect of which the annual rent cannot, in the opinion of the Commissioner, be easily estimated. Now the annual rent is to be determined on the basisof the standard rent and this is fixed either by taking into account the rents in the neighbourhood of identical buildings or by ascertaining the cost of land and cost of building and fixing a return on the same. A fixed return on the capital employed is a known method for determination of hypothetical rent. This is the method, which was adopted by this Court in the case of Rajnikant (supra), which was the case of a school. When this principle was applied by Ahmadi, J. in the case of a school, there would be very rare cases where the annual rent cannot be so estimated. But even if such cases exist the said Proviso (c) states that the annual rent will be 6% of the estimated market value of land and building at the time of assessment.

38. Several contentions were urged relating to the procedure, which had been adopted for the assessment of properties to tax. While the Corporation contended that the procedure, as prescribed by the Rules, was meticulously followed and, in any case, there has been a substantial compliance of the same, the counsel on behalf of the owners and the tenants have, on the other hand, contended that requisite notices under the Rules were not issued, or they were issued by persons who were not authorised to issue them, and that assessments were made by unauthorised persons.

39. One important contention, which was raised, was also with regard to the right of the tenant to challenge the fixing of the annual rateable value.

40. In order to deal with these contentions, the provisions of the Act and the Rules may now be examined. Section 139 of the B.P.M.C. Act fixes the primary responsibility for payment of property taxes. The said provision is as under:--

'139. (1) Subject to the provisions of Sub-section (2) property taxes assessed upon any premises shall be primarily leviable as follows, namely:--

(a) if the premises are held immediately from the Government or from the Corporation, from the actual occupier thereof:

Provided that property taxes due in respect of buildings vesting in the Government and occupied by servants of the Government or other person on payment of rent shall beleviable primarily from the Government : (b) if the premises are not so held--(i) from the lessor if the premises are let;

(ii) from the superior lessor if the premisesare sub-let;

(iii) from the person in whom the right to let the premises vests if they are unlet.

(2) If any land has been let for any term exceeding one year to a tenant and such tenant has built upon the land, the property taxes assessed upon the said land and upon the building erected thereon shall be primarily leviable from the said tenant or any person deriving title from the said tenant by the operation of law or by assignment or transfer but not by sub-lease or the legal representative of the said tenant or person whether the premises be in the occupation of the said tenant or person or legal representative or asub-tenant;

Provided that where the building so erected on the land is of a temporary nature or is unauthorised the property taxes upon the land and building shall be primarily leviable from the person in whom the right to let the land vests.' Section 140 deals with the situation when occupiers may be held liable for payment of property taxes. The said section reads a follows:--

'140.(1) If the sum due on account of any property tax remains unpaid after a bill for the same has been duly served under the rules upon the person primarily liable for the payment thereof and the said person be not the Occupier for the time being of the premises in respect of which the tax is due, the Commissioner may serve a bill for the amount upon the occupier of the said premises, or, if there are two more occupiers thereof, may serve a bill upon each of them for such portion of the sum due as bears to the whole amount due the same ratio which the rent paid by such occupier bears to the aggregate amount of rent paid by them both or all in respect of the said premises.

(2) If the occupier or any of the occupiersfails within thirty days from the service of any such bill to pay the amount therein claimed, the said amount may be recovered from himin accordance with the rules.

(3) No arrear of a property-tax shall be recovered from any occupier under this section which has remained due for more than one year, or which is due on account of any period for which the occupier was not in occupation of the premises on which the tax is assessed.

(4) If any sum is paid by, or recovered from, an occupier under this section, he shall be entitled to credit therefor in account with the person primarily liable for the payment of the same.'

Section 141 creates a charge on the premises and is as follows:--

141. (1) Property-taxes due under this Act in respect of any building or land shall, subject to the prior payment of the land revenue, if any, due to the State Government thereupon, be a first charge, in the case of any building or land held immediately from the Government, upon the interest in such building or land of the person liable for such taxes and upon the movable property, if any, found within or upon such building or land and belonging to such person; and in the case of any other building or land, upon the said building or land and upon the movable property, if any, found within or upon such building or land and belonging to the person liable for such taxes.

Explanation.-- The term 'property taxes' in this section shall be deemed to include charges payable under Section 134 for water supplied to any premises and the costs of recovery of property-taxes as specified in the rules.

(2) In any decree passed in a suit for the enforcement of the charge created by Sub-section (1), the Court may order the payment to the Corporation of interest on the sum found to be due at such rate as the Court deems reasonable from the date of the institution of the suit until realisation, and such interest and the cost of enforcing the said charge, including the costs of the suit and the cost of bringing the premises or moveable property in question to sale under the decree; shall, subject as aforesaid, be a fresh charge on such premises and movable property along with the amount found to be due, and the Court may direct payment thereof to be made to the Corporation out of the sale proceeds.'

41. Section 139(1)(a) deals with cases, where premises are held from the Government or the Corporation. We are not concerned with these cases here. What is relevant is Section 139(1)(b). This sub-section clearly states that property taxes shall be primarily leviable under Clause (b) on the lessor, if the premises are let and on the superior lessor, if the premises are sublet or on a person, in whom the right to let the premises vests. In other words, the liability for payment of property taxes in case of tenanted premises is on the lessor or the superior lessor. The liability is, certainly, not of the tenant. The tenant becomes liable under Sub-section (2) of Section 139 where the land is given to him on lease and the superstructure is constructed by him. Even in such a case, as he is the owner of the building, the liability to property tax is on him and the liability is not on his sub-lessee. The cases with which we are concerned are either owner occupied or are one to which the provisions of Section 139(1)(b) are applicable, viz., the premises, which have been let out to tenants by the owners.

42. The liability of the tenant towards payment of property taxes arises because of special provision made under Section 140(1). This liability will arise only if any sum, on account of property tax, remains unpaid after the bill has been served upon the person primarily liable. The words, 'person primarily liable', obviously, have reference to such a person mentioned in Section 139(1) of the Act. Where such a bill remains unpaid, the Commissioner has been given a power to serve such a bill on the occupier/s. Sub-section (2) requires payment of such a bill to be made within 30 days, but Sub-section (3) makes it clear that arrear of property tax shall not be recovered from an occupier, which has remained due for more than one year, or which is due on account of any period, for which the occupier was notin occupation of the premises. Credit is given to the tenant, under Sub-section (4), for the sum so paid on behalf of the landlord. No liability, in other words, can be fastened on the tenant unless and until a bill is served upon him by the Commissioner, requiring the tenant to make the payment.

43. Section 141 creates a charge on the land or building and even the movables therein, but it is made clear that the charge is only upon such land or building, or movables of a person, who is liable to pay the taxes.

44. Reading the three Sections together, viz., Sections 139, 140 and 141, it is apparent that in the case of tenanted premises, the property tax is primarily leviable on the lessor and it is only, if he does not pay that the bill can be served on the tenant. It is also conceivable that the tenant may not pay, even though he may be under an obligation to do so on a valid notice under Section 140 being served on him. It is only in such a case that the provisions of Section 141 will be applicable to him. If, on the other hand, the demand is raised only on the owner, because of Section 139, then no property of the tenant or, non-owner occupier can be attached. A notice under Section 140 is akin to a garnishee order and any payment made by the tenant would entitle him to be reimbursed by the lessor. Considering the fact that Sub-Section (3) of Section 140 prescribes that the property tax, which can be recovered can only be for the period, during which the tenant was in occupation and that also is not to be recovered if it has remained due for more than one year, there is force in the contention on behalf of the tenants that the amount of property tax, sought to be realised from the tenants, in the event of default by the lessor, cannot or should be more than the rent which is due and payable by the tenant presently or in future.

45. The important Rules relating to assessment which are relevant for considering arguments regarding procedure to be followed, and the alleged infirmities thereon, are as follows :--

'7. (1) In respect of industrial premises and in respect of any other premises, which the Commissioner may decide to treat as one property having regard to the nature of the premises and the use or uses to which they are put or are capable of being put the rateable value of the buildings and land comprised in such premises shall be determined remises-wise.

(2) For the purpose of fixing the rateable value, different parts of any premises may be valued according to their use.

(3) In order to fix rateable value of anybuilding or land or premises assessable to aproperty tax there shall be deducted from theamount of the annual letting value of suchbuilding, land or premises a sum equal to tenper cent of such annual letting value and thesaid deduction shall be in lieu of all allowances for repairs or on any other accountwhatever.

8. (1) To enable him to determine value of any building or land or premises and the person primarily liable for the payment of any property tax leviable in respect thereof, the Commissioner may require the owner or occupier of such building or land or premises or of any portion thereof, to furnish him, within such reasonable period as the Commissioner prescribes in this behalf with information or with a written return signed by such owner or occupier:--

(a) as to the name and place of abode of the owner or occupier, or of both the owner and occupier of such building or land or premises;

(b) as to the dimensions of such building or land or premises, or of any portion thereof and the rent, if any, obtained for such building or land or premises or any portion thereof; and

(c) as to the actual cost or other specified details connected with the determination of the value of such building or land or premises.

(2) Every owner or occupier on whom any such requisition is made shall be bound to comply with the same and to give true information or to make a true return to the best of his knowledge or belief.

(3) Whoever omits to comply with any such requisition or fails to give true information or to make a true return to the best of his knowledge or belief shall, in addition to any penalty to which he may be liable, be precluded from objection to any assessment made by the Commissioner in respect of such building or land or premises of which he is the owner or occupier.

(4) The Commissioner may also, for the purpose aforesaid, make an inspection of any such building or land or premises.

9. The Commissioner shall keep a book, to be called 'the assessment book', in which shall be entered every official year -

(a) a list of all buildings or lands or as the case may be, premises in the City, distinguishing each either by name or number as he shall think fit and containing such particulars, regarding the location or nature of each as will, in his opinion be sufficient for identification;

(b) the rateable value of each such building or land or as the case may be, premises determined in accordance with the provisions of this Act and the rules;

(c) the name of the person primarily liable for the payment of the property taxes, if any, leviable on each such building or land or as the case may be, premises;

(d) if any such building or land or as the case may be, premises is not liable to be assessed to the general tax, the reasons of such non-liability;

(e) When the rates of the property-taxes to be levied for the year have been duly fixed by the Corporation and either the period fixed by public notice, as hereinafter provided, or the receipt of complaints against the amount of rateable value entered in any portion of the assessment book has expired, or the complaint if any, made against the entry has been disposed of in accordance with the provisions hereinafter contained, the amount at which each building or land or premises entered in such portion of the assessment-book is assessed to each of the property-taxes, if any, leviable therein;

(f) if under Section 134 or 135, a charge is made for water supplied to any building or land or premises by measurement, or thewater-tax or charge for water by measurement is compounded for, or if, under Section137, the conservancy tax for any building orland or premises is fixed at a special rate theparticulars and amount of such charge,composition or rate;

(8) such other details, if any, as the Commissioner from time to time thinks fit to direct.

12. (1) When the name of the person primarily liable for the payment of property-taxes in respect of any premises cannot be ascertained it shall be sufficient to designate him in the assessment book and in any notice which it may be necessary to serve upon the said person under this Act, 'the holder' of such premises, without further description.

(2) If, in any such case, any person in occupation of the premises shall refuse to give such true information as may be requisite for determining who is primarily liable as aforesaid, such person shall himself be liable, until such information is obtained, for all property taxes leviable on the premises of which he is in occupation.

13. (1) When the entries required by Clauses (a), (b), (c) and (d) of Rule 9 have been completed, as far as practicable, in the assessment book or any section thereof, the Commissioner shall give public notice thereof and of the place where the assessment book or the section, or a copy of it, may be inspected.

(2) Such public notice shall be given by advertisement in the local newspapers and also by posting placards in conspicuous places in the City.

14. (1) Every person who reasonably claims to be the owner or occupier of some premises entered in the assessment book or the agent of any such owner or occupier shall be permitted, free of charge, to inspect and to take extracts of any entry from any portion of the said book which relates to the said premises.

(2) Any person not entitled under Sub-rule (1) to inspect and take extracts from anyportion of the assessment book free of charge shall be permitted to do so on payment of such fee as shall from time to time be prescribed in this behalf by the Commissioner, with the approval of the Standing Committee.

15. (1) The Commissioner shall, at thetime and in the manner prescribed in Rule 13,give public notice of a day, not being less thanfifteen days from the publication of suchnotice, on or before which complaints againstthe amount of any rateable value entered inthe assessment book will be received in hisoffice.

(2) In every case in which any premises have for the first time been entered in the assessment book as liable to the payment of property taxes, or in which the rateable value of any premises liable to such payment has been increased, the Commissioner shall, as soon as conveniently may be after the issue of the public notice under Sub-rule (1), give a special written notice to the owner or occupier of the said premises specifying the nature of such entry and informing him that any complaint against the same will be received in his office at any time within fifteen days from the service of the special notice.

16. (1) Every complaint against the amount of any rateable value entered in the assessment book or against the mention of the name of any person as primarily liable for the payment of property taxes or against any entry indicating the use of any building or land or premises or against the treatment of any building or land as liable to be assessed to the general tax must be made by written application to the Commissioner, which shall be left at his office on or before the day or the latest day fixed in this behalf in the public or special notice aforesaid.

(2) Every such application shall set forth briefly but fully the grounds on which the valuation is complained against.

17. The Commissioner shall cause all complaints so received to be registered in a book to be kept for this purpose and shall give notice in writing, to each complainant, of the day, time and place when and where at his complaint will be investigated.

18. (1) At the time and place so fixed, theCommissioner shall investigate and disposeof the complaint in the presence of thecomplainant, if he shall appear, and, if not inhis absence.

(2) For reasonable cause, the Commissioner may from time to time adjourn the investigation.

(3) When the complaint is disposed of, the result thereof shall be noted in the book of complaints kept under Rule 17 and any necessary amendment shall be made in accordance with such result in the assessment book.

19. Entries required by Clause (e) of Rule 9 shall be made on the disposal of the complaint, if any, and thereupon the entries so made in the assessment book, subject to such alterations as may thereafter be made therein under Rule 5 or 20, shall be conclusive evidence as to the amount of the respective property tax leviable on the respective building, land or premises in the official year to which the assessment book relates.

20. (1) Subject to the provisions of Sub-Rule (2) the Commissioner may upon the representation of any person concerned or upon any other information at any time during the official year to which the assessment book relates amend the same -

(a) by inserting therein the name of any person whose name ought to be so inserted or any premises previously omitted;

(b) by striking out the name of any person not liable to the property tax;

(d) by altering the assessment on any land or building or premises which has been erroneously valued or assessed through fraud, accident or mistake;

(e) by inserting or altering an entry in respect of any building erected, re-erected, altered, added to or reconstructed in whole or in part after the preparation of the assessment book;

(f) by making or cancelling any entryexempting any premises from liability to anyproperty tax.

(2) Where any amendment is made under Sub-rule (1) which has the effect of imposing on any person any liability for the payment of property taxes which would not be incurred but for such amendment or which has the effect of increasing the rateable value of any premises as stated in the assessment book a special written notice as provided in Sub-rule (2) of Rule 15 shall be given by the Commissioner and, as far as may be, the procedure laid down in Rules 16, 17 and 18 shall be followed.

(3) Every such amendment shall be deemed to have been made, for the purpose of determining the liability or exemption of the person concerned in accordance with the altered entry, from the earliest day in the current official year when the circumstances justifying the amendment existed.

21. (1) It shall not be necessary to prepare a new assessment book every official year. Subject to the provisions of Sub-rule (2), the Commissioner may adopt the entries in the last preceding year's book with such alterations as he thinks fit, as the entries for each new year:

Provided that public notice shall be given in accordance with Rules 13 and 15 every year and the provisions of the said rules and of Rules 16 to 20, both inclusive, shall be applicable each year.

Provided further that if the Commissioner adopts any entries in the last preceding year's book with or without any alteration, the Commissioner shall, in respect of such adopted entries, give effect to every final appellate decision under Part III of Chapter XXVI for all official years subsequent to the official year to which such entries have been made by adopting them as aforesaid.

(2) A new assessment book shall be prepared at least once in every four years.'

Reading all the aforesaid Rules together, the scheme appears to be that rateable value has to be determined and in order to do so, particulars can be obtained, under Rule 8, from the owner or the occupier, of such building, land or premises. Omission to comply with the requisition would invite the provisions of Rule 8(3). Entries in the assessment book are to be entered, giving the information mentioned in Rule 9 and when entries mentioned in Clauses (a), (b), (c), (d) of Rule 9 have been completed, then Rule 13(1) requires public notice being given, and copy of the assessment book being placed for inspection. Where difficulty arises in ascertaining the name of the person, who is primarily liable for payment of property taxes, recourse can be had to Rule 12. After the public notice is issued, inspection of the same can be had and within the time prescribed, complaints can be filed against the rateable value under Rule 15. After issuing the public notice under Rule 15(1), a special notice has to be given in writing to the owner or occupier, where premises had been entered in the assessment book for the first time or the rateable value of the premises has been increased. After complaints have been filed, to the proposed rateable value, under Rule 16, the same are to be registered and under Rule 17, and notice for hearing is to be given to each of the complainants. Rule 18 contemplates hearing of the complaints and the result thereof is to be noted in the book of complaints and necessary amendment is to be made, in accordance with such result, in the assessment book. The entries made are conclusive evidence as to the amount of respective property tax, but during the official year, and subject to Sub-rule (2), the Commissioner may make amendments in the assessment book under Rule 20. Rule 21 enables the Commissioner to adopt the entries of the last preceding year's book as entry for each new year after giving requisite public notice. A new assessment book is required to be prepared at least once in every four years.

46. It was contended that a special notice under Rule 15(2) is required to be issued by the Municipal Commissioner and under the Rules 9 and 20 also, it is the Commissioner, who has Upkeep the assessment book and make amendments therein:. It was contended that, in the instant cases, the Municipal Commissioner did not himself issue any special notice, nor did he decide any complaints and, therefore, the assessments made were null and void. Relying upon the decisions in Ballabhadas Agarwala v. J. C. Chakravarty, AIR I960 SC 576 : (1960 Cri LJ. 752) State of U. P. v. Singhara Singh, AIR 1964 SC 358 : (1964(1) Cri LJ 263). The State of Gujarat v. Dhirajlal Amratlal Kansara; (1975) 16 GLR 982, Municipal Corporation of Rajkot v. State of Gujarat, (1979) 20 (2) GLR 595, and Atmanand Jain Punjabi Dharmashala v. State of Gujarat, (1980) 21 (2) GLR 787, it was submitted by Shri Modi that all statutory duties and, functions must be discharged and performed by the Officer authorised by law, in the manner prescribed by the statute, i.e., a special notice must be issued and signed by the Commissioner, heating and disposal of the complaint must be done by the Commissioner, the bill must be issued under the signature of the Commissioner and not by any other officer.

47. There can be no dispute with the proposition that when a person, under the provisions of an Act or the Rules, has been designated or authorised to perform statutory duties and functions, then it is only that person, and no one else, who can discharge the same. It is also not in dispute that in none of the cases has any such statutory duty been performed by the Commissioner himself. The aforesaid contention, however, clearly overlooks the provisions of Section 49 and Section 69(1) and (2) of the BPMC Act, which read as under:--

'49. (1) A Deputy Municipal Commissioner or Assistant Municipal Commissioner shall, subject to the orders of the Commissioner, exercise such of the powers and perform such of the duties of the Commissioner, including powers and duties of a judicial or quasi-judicial nature as the Commissioner shall from time to time depute to him:

Provided that the Commissioner shall inform the Corporation of the powers and duties which he from time to time deputes to a Deputy Municipal Commissioner or Assistant Municipal Commissioner:

Provided further that nothing in this subsection shall be deemed to empower the Commissioner to issue any order regulating the exercise of powers or performance of-duties of a judicial or quasi-judicial nature deputed by him.

(2) All acts and things performed and done by a Deputy Municipal Commissioner or Assistant Municipal Commissioner during his tenure of office and by virtue thereof shall for all purposes be deemed to have been performed and done by the Commissioner.'

'69. (1) Subject to the provisions of Sub-sections (2) and (3) any of the powers, duties or functions including powers, duties or functions of a judicial or a quasi judicial nature, conferred or imposed upon or vested in the Commissioner or the Transport Manager by or under any of the provisions of the Act may be exercised, performed or discharged, under the control of the Commissioner or the Transport Manager as the case may be and subject to his revision and to such conditions and limitations, if any, as may be prescribed by rules, or as he shall think fit to prescribe in a manner not inconsistent with the provisions of this Act or rules, by any municipal officer whom the Commissioner or the Transport Manager generally or specially empowers by order in writing in this behalf; and to the extent to which any municipal officer is so empowered, the word 'Commissioner' and the words 'Transport Manager' occurring in any provision in this Act, shall be deemed to include such officer:

Provided that nothing in this sub-section shall be deemed to empower -

(i) the Commissioner or the Transport Manager to exercise control over, or

(ii) the State Government, the Corporation, the Commissioner or the Transport Manager to prescribe any conditions or limitations in regard to, the exercise, performance or discharge of powers, duties or functions of a judicial or quasi judicial nature, by a municipal officer under this sub-section.

(2) The Commissioner shall not, except with the prior approval of the Standing Committee make an order under Sub-section (1) affecting his powers, duties or functions under any of the following sections, sub-sections and clauses, namely:--

10(1)(h), 12(1), 18(1), 26(2), 43(2), 43(4), 43(5), 51(2), 67(3)(b), 67(3)(c), 67(3)(d), 71(2), 73, 77, 78(1), 85, 86, 87, 90, 92(2), 94, 95, 121, 122, 125, 126, 130(1)(b), 131(1), 134, 137, 144, 152, 154, 160, 174, 176, 177, 188, 195, 196, 197, 201, 205, 207, 208, 209, 210, 212, 213, 214, 216, 220, 224, 232, 243, 268, 269, 270, 272(2), 273, 274, 275(1), 277, 278, 281, 298, 300, 301, 303, 304, 305, 310, 317, 319, 321, 322, 323, 324, 325, 328, 329, 330, 331, 332, 363, 364, 371(2), 373, 386(2), 439(3), 439(4), 441, 442, 445, 466, 481 except Clause (a) of Sub-section (1).

The aforesaid sections clearly empower the Commissioner to delegate to the Deputy Municipal Commissioner or the Assistant Municipal Commissioner such of the powers and duties as he may, from time to time, depute and any act done by any of the Officers, so deputed, is to be deemed to have been performed and done by the Commissioner himself. In order to rebut the arguments on behalf of the Corporation based on Sections 49 and 69 of the Act, it was submitted by Shri Modi that no orders under Section 49 or Section 69 had been placed on record before the Judges of the Small Cause Court. It was for the Corporation, it was contended, to satisfy the appellate court that the Officers, other than the Commissioner, had been duly authorised to issue notices and decide the complaints under the said Rules. It is no doubt true that it is for the Corporation to satisfy the appellate authority, when a contention is raised with regard to the jurisdiction of the Officer, that appropriate orders of delegation had been issued under Section 49 and/ or Section 69 of the Act. It does appear that in most of the cases, where such contention was raised, submission was made, to this effect, before the appellate court on behalf of the appellants, was for the first time. No such contention appears to have been raised in the complaints, which were filed before the Municipal authorities pursuant to the general or the special notice, which had been issued. When such a contention had been raised in the appeal, the Corporation had an opportunity of rebutting the same by placing on record necessary orders, stated to have been passed under Section 49 or Section 69. In most of the cases, this contention was not decided, because, the relief was given on merits. In a few cases, however, the appellate court did come to the conclusion that no order of delegation had been produced and, therefore, the orders for assessment were liable to be quashed. This course, which was adopted, has been challenged before us.

48. It has been submitted on behalf of the Corporation that as an appellate court, the Small Cause Court could and should have asked whether any order of delegation had been passed and if so, should have asked for its being produced. In this connection, our attention was invited to the Municipal Appellate Rules, 1976, which had been framed by this Court under Article 227 of the Constitution of India and gazetted on 25th November, 1976. These Rules relate to the appeals filed under Section 138 of the Gujarat Municipalities Act, 1963, as well as under Section 406 of the B.P.M.C. Act, 1949 before the Small Cause Court. Apart from providing as to how the appeal should be presented the said Rules also deal with the manner of hearing such appeals. One such Rule, which is relevant in the present case, is Rule 11, which provides that no party shall be entitled to lead evidence in addition to what had been led under the relevant provisions of the Act and the Rules unless permitted by the Magistrate or Judge to do so. The said Rule further provides that :--

'The Magistrate or the Judge, may, however, suo motu call for additional evidence if he considers it necessary in the interest of justice.'

We need not deal with Rules 12 and 13, which entitle a party to apply for permission to lead additional evidence, because the focus of the arguments of the counsel for the parties was on the aforesaid Rule 11, which gave the Judge suo motu powers to call for additionalevidence.

49. In matters like this where notices are issued, complaints heard and assessments finalised, under orders of Municipal Officers, other than the Commissioner, and a contention is raised with regard to the jurisdiction of such an Officer, the Court can and should exercise the suo motu powers under Rule 11 and call for additional evidence. Such power is to be exercised in the interest of justice. Justice should be done to both the parties. Furthermore, when the provisions of Sections 49 and 69 exist, it would be appropriate for the Court to enquire as to whether any order of delegation has been made. As we shall presently see, the proceedings in appeal before the Small Cause Court are in the nature of original proceedings. This being so, there is clearly a duty on the Judges of the Small Cause Court to see that there is no miscarriage of justice to either party.

50. In none of the cases where the assessments have been quashed on the ground that the Commissioner had not issued notices or finalised the assessment, did the Small Cause Court suo motu ask for evidence or orders, which may have been passed under Sections 49 and 59 of the Act. Nor were any applications filed or request made by the Corporation to lead evidence to prove the delegation of power by the Commissioner under Section 49 and/ or Section 69 of the BPMC Act. Even at the stage of further appeal to the High Court, in appropriate case, on an application being made or even suo motu additional evidence regarding delegation of power can be taken.

5l. It was also contended that the Rules and the Act required that notices could be issued, complaints heard and the rateable value determined only by the Municipal Commissioner himself. The submission of Mr. Modi was that, in the instant case, and even in the other cases in which he appeared, as the Commissioner had not exercised jurisdiction therefore, the notices which were issued and the orders passed were null and void.

52. On behalf of the appellants, CivilApplication No. 2232 of 1994 has been filed, inter alia, praying that the documents annexed to the said application which are certified copies of orders passed by the Municipal Commissioner delegating his functions and powers to various Authorities under the Act be placed on record under Rule 11 of the Municipal Appeal Rules, 1976 and/or Order 41, Rule 27 of the Code of Civil Procedure.

53. Section 49(1) provides that the Deputy Municipal Commissioner or the Assistant Municipal Commissioner shall, subject to the orders of the Commissioner, exercise such of the powers and perform such of the duties, including powers and duties of a judicial or quasi-judicial nature as the Commissioner shall from time to time depute. Sub-section (2) of Section 49 reads as under: --

'....(2) All acts and things performed and done by a Deputy Municipal Commissioner or Assistant Municipal Commissioner during his tenure of office and by virtue thereof shall for all purposes be deemed to have been performed and done by the Commissioner....'

Along with the said application, certifiedcopies of various orders of delegation passedunder Sections 49 and 69 have been placed onrecord. The perusal of the same clearly showsthat there was valid delegation of powers tothe Deputy Municipal Commissioner and/orAssistant Municipal Commissioner fromtime to time. In any case, Section 49(2) seemsto indicate that when acts are performed bythe Deputy Municipal Commissioner or theAssistant Municipal Commissioner, then byvirtue of the said statutory provision, theyshall be deemed to have been performed anddone by the Commissioner.

54. Along with the application, the appellants, have also placed on record orders passed by the Commissioner under Section 69 of the BPMC Act, This section enables the delegation of powers, duties and functions including those which are of judicial or quasi-judicial nature on any Municipal Officer. The perusal of the said documents clearly shows that the notices under Section 15(2) were issuedproceedings taken and orders passed by officers who were duly empowered to do so by virtue of the powers having been delegated to them. It was submitted by Shri Modi that at this stage of the proceedings, this Court should not entertain fresh evidence and take the said documents on record.

55. It will be seen that in most of the cases the Small Cause Court has allowed the appeals of the assessees on merits and it is only in one or two appeals that the question of the jurisdiction of the Officer passing the orders has been decided. It is no doubt true that the Municipal authorities, due to negligence or otherwise, did not place these orders of delegation on the record of the Small Cause Court. Our attention has, however, been drawn to the Rules, known as 'Municipal Appeal Rules, 1976' made by this Court in exercise of the powers conferred under Article 227 of the Constitution. Rule 10 of, the said Rules, inter alia, states that the written reply shall be set out in paragraphs numbered consecutively stating whether the facts are disputed by the respondent or not. In the instant case, there has been a general denial in the written statement, with regard to the validity of the orders passed, but that is not material because Rule 11 gives the Magistrate or the Judge power to suo motu call for additional evidence if he considers it necessary in the interest of justice. In our opinion, the Small Cause Court ought to have suo motu called for additional evidence. As has been stated in the said Civil Application, powers have been delegated by the Municipal Commissioners right since 1961. The Small Cause Courts ought to have enquired and required orders of delegation being placed on record. Section 49 and Section 69 both envisage delegation of powers and it would have been proper exercise of jurisdiction if the Small Cause Courts had demanded leading of such evidence. In any case, this Court has powers under Order 41 Rule 27 to entertain the application. Merely because there has been possible negligence on the part of the Corporation in not producing the orders of delegation before the Small Cause Court should not result in an undue or unjust benefit being given to a tenant and the Corporationbeing deprived of the tax legitimately due under the Act. This is a case where due to the fault in producing evidence in order to meet a technical objection on the part of the tenants, payment of legitimate tax dues are sought to be avoided. For the negligence of the Corporation's lawyer or its employees, public revenue should not be allowed to suffer and just dues must be paid. To our opinion, the power of the appellate court to allow fresh evidence even at the appellate stage under Order 41, Rule 27 cannot be disputed. The circumstances contained in the said provision are clearly satisfied. In this connection, reference may be made to the case of Billa Jagan Mohan Reddy v. Billa Sanjeeva Reddy, (1994) 4 SCC 659 where it has been observed that :--

'....It is settled law that, if the documentsare found to be relevant to decide the real issue in the controversy, and when the court felt that interest of justice requires that the documents may be received, exercising the power under Order 41, Rule 27, CPC the appellate court would receive the documentsand consider their effect thereof....'

In the present case, the interest of justice does require the acceptance of the documents, which clearly show that the Officers under whose signature the notices were issued and who passed the orders of assessment and sent the bills were duly empowered to do so. Accordingly, Civil Application No. 2232 of 1994 is allowed.

56. We may at this stage also notice the contention of the learned counsel for the appellants to the effect that in any event there can be no challenge to the validity of the notices issued and the orders passed in view of the provisions of Section 485(1) of the BPMC Act. The said Section reads as follows:--

'485. (1) Any informality, clerical error, omission or other defect in any assessment made or in any distress levied or attachment made or in any notice, bill, schedule, summons or other documents issued under this Act, or under any rule, regulation, by-law or standing order may at any time, as far as possible, be rectified.....'

This Section relates to the infirmities which are in the category of informality, clerical error, omission or other defects. We cannot agree with the contention of the learned counsel for the appellants that if there has been no valid delegation under Section 49 or Section 69, then the assessment made or notice issued would be saved by the provisions of Section 485. Section 485 is really concerned with minor infirmities which do not go to the root of the matter.

57. It was then submitted that special notice under Rule 15(2) must be issued to the owner, as well as to the occupier. In support of this submission, it was urged that Sub-rule (2) of Rule 15 stated that the Commissioner shall give a special written notice 'to the owner or occupier of the said premises'.

58. It is, no doubt, true that Sub-rule (2) of Rule 15 does contemplate a situation, where special notice may be given to the owner or occupier. In other words, Sub-rule (2) of Rule 15 does not contemplate special written notice to be given only to the owner. If that is so, then under what circumstances is a special written notice required to be given to an occupier?

59. The Scheme of the Act and the Rules clearly is that liability for payment of property tax is on the person primarily liable. This is clearly provided by Section 139, read with Rule 8. In order to find out who is the person primarily liable, information may be sought from the owner or occupier. The person primarily liable under S. 139(1)(b) is the lessor or the superior lessor. This liability, however, shifts to the occupier at the stage of assessment, and before the raising of the bill only when the provisions of Rule 12(2) are attracted. If true information with regard to the name of the person, who is primarily liable, is not given by the person in occupation of the premises, then Sub-rule (2) of Rule 12 makes the occupier himself to be liable for all property taxes leviable. Rule 15(2), which follows Rule 12, when it refers to special notice being given to the occupier, can have reference to a case, where Rule 12(2) is applicable and the name of the person primarily liable is not known. Special notice underSection 15(2) will also have to be given to a tenant where he, under Section 139(2) of the BPMC Act, and not the owner, is liable to pay the tax by virtue of his being the tenant of the land on which premises are constructed by him. There is no third situation where a special notice has to be given to tenant.

60. The Rules cannot travel beyond the scope of the Act. The liability to pay property tax, according to Section 139(1) in case of tenanted premises, is on the lessor. It is the name of the person, who is primarily liable, which is to be entered in the assessment book, as provided by Rule 9(c). The Act, in contradistinction to the Rules, contemplates realisation of property tax from the tenant under Section 140(1) in a case only after bill has been submitted to the lessor and the same remains unpaid. The stage of Rule 15(2) is prior in point of time to the raising of the bill. Under the Act, the liability to pay property tax is fastened on the occupier or the tenant only under the provisions of Section 140. The demand for property tax can be made only after the assessment book has been finalised and a bill raised. The assessment book is finalised only when provisions of the Rules, including Rule 15, have been complied with and complaints received and determined under Rule 18. Therefore, interpreting Rule 15(2), in the light of the provisions of the Act, the inference can only be that the Rule's require only one assessment to be made on the person, who is primarily liable and not on any one else. Notice under Rule 15(2) to an occupier, and not to an owner, is, therefore, contemplated only when the occupier does not inform about the name of the owner, thereby attracting the provisions of Rule 12(2), which, by a fiction, makes him the person liable till the requisite information is obtained or where provisions of Section 139(2) are applicable.

61. It was also submitted that special notice under Rule 15(2) must be given both to the owner and occupier. It was contended that even if the liability to pay the tax is of the owner, by virtue of Section 139 of the Act, nevertheless, in the event of the rent having been fixed as being inclusive of taxes, then, ifspecial notice is served on the occupier-tenant, the landlord, for no fault of his, wouldbe punished and penalised if the tenant doesnot inform the owner about the service ofsuch a notice or he himself does not take anyaction in pursuance of such notice. Therefore,it is just and expedient to read the conjunction'or' of Rule 15(2) as 'and'. We see no substancein this submission. The Act provides that theperson primarily liable is the lessor, videSection 139. Provisions of Rule 15(2) comeinto play during the course of assessment. Theassessment is to be made in respect of thepremises and, obviously, the person concerned would be, the owner. In this background, when duty is cast to serve a noticeunder Rule 15(2), on owner or occupier, theimplication clearly is that, normally, specialnotice will be issued to the owner. It is onlywhere the provisions of Rule 12(2) come intoplay and the occupier becomes liable that anotice under Rule 15(2) would be required tobe issued to him.

62. The Act and the Rules do not contemplate two notices in respect of the same premises for a single official year being issued to two different persons. If the contention of Mr. Modi is correct, the effect would be that for a single official year, one notice will have to be issued to the occupier and another notice to the tenant. This may, then, result in conflicting situations arising. Supposing the owner does not file any objections and accepts the proposed assessment, can the tenant file a complaint and oppose the same. The reverse situation would be where the tenant accepts the proposed rateable value, but the owner objects. In each of such cases, a very anomalous situation will result when no objections are filed pursuant to one notice, which is issued under Rule 15(2) and the assessment would become final, but in respect of the same premises, if the other person, viz., either the owner or the tenant, files complaints, then the proposed assessment would not be final. The conjunction 'or' in Rule 15(2) can, under no circumstances, in our opinion, be regarded as 'and'.

63. It was further submitted that when the property is newly constructed or the rateablevalue is to be increased, then issuance of a notice under Rule 15(2) is mandatory. Such a notice in writing is to be issued in addition to the public notice given under Rule 13(1). It was also submitted that the use of the word 'shall' in Rule 15(2) makes the issuance of such a notice mandatory and if the same is not given, any assessment made would be null and void.

64. The requirement of giving a notice under Rule 15(2) is clearly in consonance with the principles of natural justice. The Rules contemplate that once entries have been entered in the assessment book, then they can be adopted in subsequent years and that a new assessment book must be made once every four years. The advertisement, contemplated by Rule 13, is only to the effect that the assessment book is ready and that it can be inspected at a place to be notified therein. In case of a property newly constructed or where the rateable value is to be enhanced, such public, notice under Rule 13 would give no indication regarding the entries made. The requirement of Rule 15(2) of giving a special notice if only to make the person concerned aware of the fact that the premises are going to be entered in the assessment book for the first time or the rateable value is liable to be changed.

65. What will be the effect, if a special notice, as contemplated by Rule 15(2), is not issued?

66. Reading of Rule 15(2) shows that giving of special notice is mandatory. The use of the word 'shall' in Rule 15(2) clearly indicates that there is an obligation which is cast on the authorities concerned to issue a notice in writing notwithstanding the fact that a general notice may have been published under Rule 13. A notice under Rule 13, published in the newspaper, would not indicate the properties, which are newly added in the assessment book or the changes with regard to the rateable value, which have been made. The public notice under Rule 13 would merely state that the entries in the assessment book have been completed and the same is open for inspection. In the case of new properties, where rateable value has beenincreased, special notice must be given under Rule 15(2). As we have already observed, the requirement of giving a special notice under Rule 15(2) incorporates one of the cardinal principles of natural justice. The owner is required to be put to notice as to what action is contemplated by the Corporation with regard to the fixation of rateable value. If no such notice is given, then the result, which must normally, follow is that the said assessment will have to be quashed. The Small Cause Court, once it is satisfied that a special notice, as required under Rule 15(2), has not been given, would, normally, set aside the assessment. We are saying 'normally' because, one situation may arise, in which case, even if notice under Rule 15(2) has not been given, the Small Cause Court ought not to set aside the assessment. Such a situation will arise where notice under Rule 15(2) is waived. The principle of waiver, in such cases, is that if certain requirements or conditions are provided by a statute, in the interest of a particular person, then the requirements, or conditions, even if mandatory, may be waived by that person, if no public interest is involved, and in such a case, the act done will be valid even if the requirement or condition has not been performed (see Dhirendra Nath Gorai v. Sudhir Chandra Ghosh, AIR 1964 SC 1300, at page 1304, Indian Electric Works Ltd. v. James Mantosh, AIR 1971 SC 2213. Superintendent of Taxes, Dhubri v. Onkarmal Nathmal Trust, AIR 1975 SC 2065 (1975 Tax LR 2020).

67. Where, therefore, an assessee chooses to file a complaint against the proposal to fix or increase the reteable value, even without the issuancc of a valid special notice under Rule 15(2), the principle of waiver would apply. The requirement of issuing a notice under Rule 15(2) is to give an opportunity, of filing a complaint, to the assessee. If a complaint is filed then the purpose for which the notice was to be issued, is fulfilled. In such a case, even if no notice is issued or the notice, which is issued, suffers from any defect, the principle of waiver would apply and an assessee, in appeal before the Small Cause Court, or even thereafter, cannot be allowed to contend that non-compliance with the provi-sions of Rule 15(2) must result in the assessment being regarded as a nullity. In those appeals, therefore, where complaints were filed under Rule 16 and the same were disposed of under Rule 18, a contention that no notice under Rule 15(2) was not served cannot be raised.

68. But, where the principle of waiver does not apply and a notice under Rule 15(2) is not issued and an assessment is made, then after coming to the conclusion that the assessment is a nullity, can the Small Cause Court quash the assessment simpliciter or does it have a duty or jurisdiction to take further action in the matter.

69. The provisions of Rule 20 clearly show that the power of the Commissioner to make changes in the entry can be exercised only during the official year itself. Once this official year is over, the Commissioner will have no jurisdiction to make any alteration. In Anant Mills Co. Ltd. v. Municipal Corporation, Ahmedabad, 1993(2) G. L. H. 897, it was held by a Division Bench of this Court, after examining the scheme of the Act, that the assessment must be completed before the close of the relevant official year and once the official year has expired, the Commissioner cannot assess and levy property tax and, therefore, the Court also cannot issue direction to the Commissioner to do something which was not permissible under the Act. The quashing of the assessment would mean that the Commissioner would not be in a position to reassess and levy property taxes and the taxes for those official years would be totally lost to the Corporation. This being the position, the appellate court cannot and should not set aside the assessment and remand the case for de novo assessment by the Commissioner. Any remand would, obviously, serve no useful purpose.

70. In view of the aforesaid position inlaw, it was submitted by the learned counsel for the Corporation that in such cases, the Chief Judge or the Judges of the Small Cause Court themselves should determine the rateable value in accordance with law. The counsel for the respondents, however, contended that if the assessment is a nullity,because of non-compliance with the provisions of Rule 15(2), or otherwise, then the Small Cause Court has no option but to quash the assessment, in toto.

71. The principle underlying the judgment in Anant Mill's case clearly answers the aforesaid question in favour of the Corporation. In that case, it had been contended that the Chief Judge has no jurisdiction to entertain the grounds affecting legality of the assessment. It was also submitted in that case, on behalf of the assessee, that if the Chief Judge came to the conclusion that the method of assessment was illogical or irrelevant and the assessment, therefore, invalid, then it would not be competent for the Chief Judge to determine the rateable value afresh by applying the appropriate method in a correct manner. Elaborating further, it was submitted that all that the Chief Judge would be able to do would be to declare the assessment invalid and leave it to the Commissioner to make a fresh assessment according to the correct method and this would, again, result in the Corporation losing the tax altogether. Similar is the contention raised before us, namely, that the assessment is bad as proper procedure is not followed. Rejecting the submission, the Division Bench, in Anant Mills' case, at page 922, observed as follows :--

'.....This contention is also, in our opinion,without substance. It ignores the scheme of the provisions in regard to appeals contained in the Act. We have already pointed out that an appeal may be preferred against the rateable value and in this appeal the assessee would challenge the determination of the rateable value made by the Commissioner. He may challenge it on any ground available to him and such ground may well relate to the method of valuation adopted for the purpose of determining the rateable value. It is apparent from the provision in Section 409 Sub-section (1) and particularly the words 'before evidence as to value has been adduced' that the appeal against rateable value is in the nature of an original proceeding where evidence as to value may be led by both parties. The Chief Judge may on the application of a party to the appeal appoint acompetent person to make the valuation andsuch person may be called as a witness and ifhe is so-called, he may be cross-examined bythe other side. The evidence as to value whichmay be adduced before the Chief Judge in theappeal may be based on any method which isregarded by the party or his witness asappropriate. It cannot be restricted to themethod of valuation adopted by the Commissioner. So also when a competent person isdirected to make a valuation, he may value itaccording to the method which he regards asproper there is no requirement in the statutethat his, valuation must be based on themethod adopted by the Commissioner. Theentire question as to retable value would beopen before the Chief Judge and as contemplated under Section 411 Clause (a), it wouldbe for the Chief Judge to fix the ratable valueand the decision of the Chief Judge fixing theratable value would be final, subject to appealto the High Court and the Commissionerwould be bound to give effect to such decisionas provided in Section 413. The whole schemeof the provisions clearly contemplates that inthe appeal against the ratable value, the ChiefJudge would have to fix the ratable value afterconsidering the evidence as to value whichmay be adduced before him and it is implicitin this process that he would also have todecide which method of valuation should beadopted. If, therefore, the Chief Judge takesthe view that the contractor's test method isinappropriate or inapplicable, he can decidewhich other method should be adopted andfix the rateable value by applying suchmethod on the basis of the evidence beforehim.'It was contended by Shri Modi that such a course would be clearly contrary to the judgment of the Supreme Court in the case of Martin Burn Limited v. Calcutta Municipal Corproation, AIR 1966 SC 529 and that if the order of assessment is not valid, because of non-compliance with Rule 15(2), or any other Rule, then the Court would have no jurisdiction to undertake the exercise of fixing the ratable value itself. Similar contention was also raised in Anant Mills case. The Court examined the relevant provisions of the Calcutta Municipal Act, 1928, and comparedthe same with the provisions of the Bombay Provisional Municipal Corporation Act, andthen observed as follows:--

'.... This decision given on the basis of ascheme of taxtion contained in the Calcutta Act can hardly be of any relevance when we are considering a question arising under a totally different scheme of taxation contained in the Corporation Act. The power of the Court of Small Cause under the Calcutta Act was to cancel the assessment or to revise or alter the valuation and the Supreme Court held that since the method on the basis of which the valuation was made by the Corporation was illegal, the Court of Small Cause could not do anything except cancel the assessment; it would not make an independent valuation itself by adopting the correct method, for that would not be revision or alteration of the valuation. But here under the Corporations Act the power of the Chief Judge in appeal against reteable value is not restricted merely to revision or alteration of the valuation. On the contrary it is a wide power conferred in general terms without any words of limitation. It says that an appeal against the reteable value shall be heard and determined by the Chief Judge. The Chief Judge is empowered to fix the retable value after considering the evidence a to value adduced before him and the Commissioner is enjoined to give effect to the decision of the Chief Judge. The principles of the decision in Martin Burn's case can, therefore, have no application under the Corporation Act.

30. The result of this discussion is that if we quash and set aside the assessment made by the Deputy Municipal Commissioner on any of these grounds urged on behalf of the petitioners, the tax for the official years 1967-68 and 1968-69 would be lost to the Corporation whereas no such drastic consequence would ensue if these grounds are left to be decided by the Chief Judge in the appeals preferred by the petitioners. The Chief Judge can entertain these grounds and if he is of the view that the contractors method adopted by the Deputy Municipal Commissioner is not proper or relevant to the determination of the annual rental value, he can determine the annual rental value of the premises by applying the appropriate method and the tax can be levied on the petitioners on the basis of such ratable value. The latter alternative would do full justice to the peitioners without causing grave and undue hardship which would inevitably result to the Corporation if the former alternative were adopted. We, therefore, refuse to entertain these grounds in the exercise of our jurisdiction under Article 226 of the Constitution. They can be decided by the Chief Judge in the appeals preferred by the petitiones....'

We are in respectful agreement with the aforesaid observations in Anant Mill's case. Following the said ratio, it would mean that even if the assessment is held to be not in accordance with law, whether because of the wrong method followed with regard to determining the rateable value or because of any irregularity or illegality in procedure or because of violaton of the principles of natural justice or because notice under Rule 15(2) had not been issued, then the Small Cause Court would itself have the jurisdiction to examine evidence and determine the correct rateable value. It would be wholly inappropriate for the Small Cause Court to merely quash the assessment, which would have the effect that for the official years in question, the entire tax would be lost to the Corporation. In effect, the ratio decidendi of the decision in Anant Mills' case is that the Small Cause Court exercises the same power and will have the same jurisdiction, which is exercised by the Commissioner for the purposes of determining what should be the correct reteable value.

72. Learned counsel for the Corporation have rightly contended that the powers of the Small Cause Court are analogous to the powers of the Tribunal under the Industrial Disputes Act. It was held in Cooper Engineering Ltd. v. P.P. Mundhe, AIR 1975 SC 1900: (1975 Lab IC 1941) that if no domestic enquiry had been held by the employer before taking action against the employee, then the Labour Court itself could examine the evidence and come to the conclusion whether the action against the workman, which had beentaken was proper or not. Similarly, if principles of natural justice have not been followed and/or notice under Rule 15(2) had not been issued, the Small Cause Court would have the power to determine the ratable value in accordance with law.

73. It was then contended by Shri Modi that under Rule 18, not only should the Commissioner himself investigate and dispose of the complaints, but the complaints, which are filed, must be disposed of in the presence of the complainant himself. Rule 18 deals with the hearing of complaints. Sub-rule(1) requires that if a complainant appears, then the Commissioner shall investigate and dispose of the complaint in his presence. Sub-rule (2) gives him the power to adjourn the investigation from the tb time. If the argument of Shri Modi is correct, it would mean that not only the investigation, but even the order, disposing of the complaint, must be passed in the presence of the complainant. We find no warrant for such interpretation of Rule 18. The import of the said rules appears to be that the complaint should not be dealt with or investigated behind the back of the complainant. If the complainant chooses to appear, then he must be given an opportunity of being heard. The rule does not state that order, dealing with the contention raised in the complaint, must also be passed in his presence. Rule 18(1) would require the complainant being told about the result of the order of the Commissioner on the complaint, which is filed, If prior to the disposal, some information or facts have been received by the Commissioner on which he proposes to place reliance, then the said Rule 18 would require that the said information or facts must be made known to the complainant prior to the disposal of the complaint. This would be in consonance with the principles of natural justice. The Commissioner may dictate an order in the presence of the complainant or may reserve the order and then, on a subsequent date, inform the complainant of the passing of the order and disposing of the complaint. This would amount to requisite compliance with the provisions of Rule 18. As regards the requirement of the Commissioner himself to investigate and dispose of the complaint is concerned, such, powers of theCommissioner can be delegated to the Deputy Commissioner under Section 49 and/or Section 69 of the BPMC Act. In any case, the aforeasid Rule 18, is, in our opinion, only directory.

74. It was vehemently contended that the special notice, which is issued must mention material particulars, like method of assessment, carpet area, letting rate, as also the reasons for fixing the gross rateable value at a particular figure so that the concerned asses-see can effectively and specifically file his objections and meet with the case of the Tax Department and produce relevant and matching evidence in support of his contentions. Relying upon the decisions reported in the cases of Ghaisgaon Borough Municipality v. Multanchand Fulchand Sancheti, AIR 1956 Bom 675, R.R. Dalavai v. Government of Tamil Nadu, 1978 Mad LJ 93, Shri Mohan Singh v. Municipal Corporation of Delhi, 1980 MCC 196 (Delhi), Corporation of Trivandrum v. Bhaskaran Nair, 1988 (1) MCC 338 (Ker), Gurdial Singh v. Deputy Commissioner, Simla, 1974 MCC 643 (HP), New Delhi Municipal Committee v. Indian Bank Limited, 1974 MCC 610 (Delhi), J.C. Mills Ltd. Gwalior v. Municipal Corporation, Gwalior, 1986 (1) MCC 402 (MP), and Gade Narayan Murty v. Berhampur Municipality, AIR 1981 Ori 29, it was submitted that in the absence of such particulars, the special notice would be vague and general, and liable to be quashed.

75. What are the requirements of a notice which are stipulated in Rule 15(2)? Notice under Section 15(2) is issued after entry in the assesment book has been made. Sub-rule (2) of Rule 15 requires that the special written notice to the owner or the occupier shall specify the nature of such entry. In other words, the special notice must inform the owner about the entries mentioned in Rule 9, Clauses (a), (b), (c) and (d), because the said Rule 15 has to be read with Rules 9 and 13. When a statute specifies as to what should be the contents of a notice, and that is so specified in Rule 15(2), the general principles enunciated by the aforesaid decisions and of other High Courts would not be applicable.

For the purposes of giving an opportunity to an owner or an occupier to file a complaint, all that he has to be informed is what the Commissioner has entered in the assessment book. One of the items, which is entered, is the ratable value. The Commissioner is under no obligation to inform as to how the rateable value, which is entered in the assessment book, has been arrived at. It is for the owner to complain if he finds the rateable value to be high. The principles for fixation of rateable value are well-known. Ordinarily, a rateable value will be arrived at after particulars had been given by the owners or occupiers under Rule 8 of the Rules. On the receipt of the notice, it will be for the complainant to lead evidence and prove as to what should be the correct rateable value. A hearing is contemplated by Rule 18 and if the assessee requires any clarification with regard to the entry made in the assesssment book, we see no reason as to why this clarification would not, ordinarily, be given. Be that as it may, Rule 15(2) docs not require the giving of any particulars in addition to what is stated therein. The aforesaid decisions of various Courts, therefore, can be of no assistance to the respondents.

76. It was further submitted that any judgment delivered by the Judge in respect of a particular official year, even though such judgment may be delivered after two years, becomes effective and operative retrospectively and would relate back to the commencement of the official years, for which the appeal is decided by the Judge. An example which was given was that if the appeal for 1981-82 was decided on 31st October, 1984, and the rateable value fixed by the Commissioner at Rs.5,000/- was reduced to Rs. 1,500/- then the judgment would have to be given effect to for the year commencing from 1-4-1981 and for all subsequent years notwithstanding that entries are made by the Commissioner, in the meantime, for the assessment years 1982-83, and 1983-84. It was contended that, by virtue of Section 413(2), the original entry of Rs. 5,000/- shall be deemed to have been made at Rs. 1,500/- on account of the effect of the judgment delivered by the Judge for the year 1981-82 andoperation of law for the assessment years 1982-83 and 1983-84 the assessment must be regarded as having been reduced to Rs. 1,500/- and then, in respect of those years or future years if the rateable value is to be increased to the figure of Rs. 5,000/- a special written notice, as contemplated by R. 15(2), has to be given.

77. There can be no doubt that according to Rule 21, the entries of the earlier year can be adopted for the subsequent years. Furthermore every rateable value which is fixed, against which appeal is not filed or every appellate order, which becomes final, has to be given effect to. We, are however, unable to agree with the contention of the learned counsel that, in the example given above, by him, for the assessment years 1982-83 and 1983-'84 and onwards, a notice under Rule 15(2) has to be issued, because for the year1981-'82, the appellate court had reduced the rateable value to Rs. 1,500/- after entries for1982-'83 and 1983-'84 have been adopted. In the very example, which is given, it is contemplated that the entry for 1981-'82 was finalised after the issuance of a valid notice under Rule 15(2). As long as that entry of Rs. 5,000/- for the year 1981-'82 remains, the same could be adopted by the Commissioner in the subsequent years 1982-'83 and 1983-'84. If after such adoption for the years 1982-'83 and 1983-'84, the appellate court in respect of the assessment year 1981-'82 allows the appeal and reduces the rateable value, the decision in the said appeal can only be regarded as being given for the assessment year 1981-'82. In taxation, each year is to be regarded as distinct and separate. The Act does not postulate that the appellate decision for one year will, ipso facto, be regarded as a decision for the other years as well. As long as appeals have been filed before the Small Cause Court, or to the High Court, the assessment cannot be regarded as having become final.

78. It was submitted that there should be a hearing prior to the issuance of notice under Rule 15(2) of the Rules. The said submission is without any merit. There is no requirement under the Rules or the statute for any pre-notice hearing. The scheme of the Rulesrequires notice to be issued after entries havealready been made in the assessment book.Normally, those entries would be made afterparticulars have been furnished under Rule 8.In a sense, therefore, the owners and/oroccupiers would know the basis, on which anotice under Rule 15(2) has been issued. Inany case, neither the principles of naturaljustice, nor the rules provide for any hearingbeing given before the issuance of a noticeunder Rule 15(2), specially when, as far as theassessee is concerned, he will get adequateopportunity for putting forth his case when hefiles the complaint and when the hearing takesplace.

79. It was also submitted that notice under Rules Band 15 should be advertised in all papers, having large circulation and in various languages having regard to the fact that there may be many tax payers, who may not be Gujarati speaking. Rule 13(2) clearly requires that notice is to be given in the local newspapers. We have no reason to doubt that adequate publicity would not be given, in the newspapers. The submission made in this regard is devoid of any specific particulars and it is not possible to entertain any such vague contention.

80. The last question, which requires consideration is whether the occupiers or the tenants have a right of filing a complaint and thereafter, an appeal against the proposed assessments. Under Section 127 of the BPMC Act, various types of taxes are imposed. They are property taxes, and taxes, on vehicles, boats and animals. In addition thereto, the Corporation may also impose octroi, taxes on dogs, theatre tax, toll on animals and vehicles entering the city, etc. Section 406 is a provision, which, inter alia, provides for appeals against any rateable value or tax fixed or charged under this Act. Unlike other statutes, the Section does not specifically state as to who can file an appeal. The locus standi of the appellant will, however, have to be inferred from Sub-section (2) of Section 406. Clause (b) of Section 406(2) states that no appeal shall be entertained in respect of a rateable value unless a complaint has been previously, made to the Commissioner and such complaint has been disposed of. Clause (d) provides that an appeal against an amendment made in the assessment book shall be entertained only if a complaint has been disposed of. The implication of this, clearly, is that a right of appeal is given to such a person, who has a right to file a complaint to the Commissioner against the rateable value. This right to file a complaint is exercised only when, under Rule 16, acomplaint is filed. The scheme of the Act and the Rules clearly is that the person primarily liable to pay the property tax is the owner or the lessor. Against the proposed rateable value, it is he, who is the person concerned or the person aggrieved. Rateable value once determiend can be adopted Under Rule 21 for the subsequent years. A tenant may come and go, but it is the owner, who is primarily concerned with the determination of the rateable value. As we have already observed, the Act and the Rules do not contemplate more than one complaint being filed in respect of the same property and for the same year. The Rules cannot be interpreted to lead to a result, where there will be conflicting assessment orders in respect of a single official year for the same property. It is no doubt true that it has been held in a number of cases that a person aggrieved will, certainly, have a right of appeal. But, who is the person aggrieved? In the case of rateable value, it can only be the owner and no one else. Under Section 139(1), the liability to pay the tax is fastened on the owner. The liability of the tenant of built-up premises is there only if tax remains unpaid and a notice under Section 140(1) arises'. Such a tenant, to whom a notice is issued under Section 140(1) may have a right to file an appeal under Section 406(2)(c), or under Section 406(1) itself. But, his right can only be in relation to the correctness of a notice issued under Section 140(1). He cannot challenge the fixation of the rateable value because that can only be challenged by the owner. Like other taxing statutes, direct or indirect, the right to file an appeal is only on the assessee. The fixation of rateable value cannot affect the tenant unless and until a notice under Section 140(1) is received by him. That notice is in the nature of a garnishee order and the payment made byhim is not paid on his own account, but is paid on account of the landlord, or owner, and that is why Sub-section (4) of Section 140 provides that for any sum so paid by the occupier, he is entitled to the credit of the amount so paid by him.

81. It was vehemently contended that under Rule 15(2), notice is contemplated to be given to the occupier as well and, therefore, he can also file an appeal. As we have already noticed, the notice under Rule 15(2) to an occupier will necessarily be because of provisions of Rule 12(2). There may also be another category of tenants, who would be entitled to file complaints and receive notice under Rule 15(2). Those tenants would be the ones mentioned in Section 139(2). The said provision provides that if any land has been let for any term exceeding one year to a tenant and such tenant has built upon the land, the property taxes assessed upon the said land and upon the building erected thereon shall be primarily leviable on the said tenant or on any person deriving title through him. Therefore, when in Rule 15(2), reference is made to the owner or the occupier, it contemplates not only an occupier, who becomes liable by virtue of Rule 15(2), but it will also take in its ambit a tenant of land who becomes a person primarily liable to pay tax on the building erected on tenanted land. Because such a tenant is a person primarily liable to pay tax therefore, he will have a right to file an appeal.

82. It was also urged on behalf of the appellants, that the Small Cause Courts have, in some cases, been entertaining appeals against the bills raising the tax demand, even though no complaints had been filed and/or the rateable value had become final. Such appeals were filed by the tenants and, in some cases, by the owners themselves.

83. It is now well-settled that the right to file an appeal is a creation of the statute. Section 406(1) provides of appeals against any rateable value or tax fixed or charged under this Act. Reference to rateable value in Sub-section (1) of Section 406, necessarily, pertains to tax on property. In view of the fact that under Section 127, other taxes such as taxes on vehicles, boats, animals, octroi, etc.,are also levied, Sub-section (1) of Section 406 also refers to appeals against 'tax fixed or charged' under the Act. Section 406(2)(b) specifically relates to appeal against a rateable value and Sub-clause (d) relates to appeal against any amendment made in the assessment book for property tax. It is not necessary to refer to Sub-clause (d) because that pertains to deposit of tax pending the entertainment of the appeal. Sub-clause (b) and (d), as we have already observed, postulate in relation to property tax appeals being filed only against rateable value. Sub-clause (c) of Section 406(2), no doubt, contemplates filing of an appeal against any tax. But, this sub-clause contemplates an appeal against such a tax in respect of which provisions exist for filing a complaint and the complaint being disposed of. Neither the Act, nor the Rules contemplate any complaint being filed against a bill a property tax and complaints, relating to property tax can only be filed against the rateable value. The Legislative intent, therefore, clearly is that it is only at the first stage, viz., the determination of the rateable value, that the appeals will be entertained and no appeal can be preferred against a bill levying tax as a consequence of the rateable value having been determined. The reason for this is obvious. The sending of a bill levying tax would amount to a mere mathematical calculation on the basis of the rateable value which is determined. If the determination of the rateable value can only be challenged by filing an appeal under Section 406(2)(b) or (d) and the same cannot be challenged once it has become final, then providing for appeal against the tax calculated on the basis of the rateable value would be meaningless.

84. It may happen that the rateable Value I may have been determined in gross violation of the provisions of the Act or the Rules and without following the procedure laid down in the Rules requiring giving the opportunity of filing a complaint by giving a public notice or a special notice. Where an owner has had an occasion or opportunity to file a complaint under the Rules against the proposed rateable value, but he fails to do so, no relief can be granted to him. If, on the other hand, in a ratecase, such an opportunity has not at all been afforded, then merely for equitable reasons a Court should not and cannot entertain an appeal against the bill because such a provision does not exist. The appropriate remedy in such a case will be for the owner to take recourse to the constitutional remedies provided by Article 227 or Article 226 of the Constitution of India.

85. In the case of a tenant to whom provisions of Section 139(2) are applicable, an opportunity is required to be given for filing a complaint and in such a ease, the question of his filing an appeal only against the bill would not arise. Where, in respect of premises a tenant is required to make payment pursuant to a bill issue under Sub-section (1) of Section 140, the tenant may be a person aggrieved. His grievance, however, cannot be with respect to the rateable value, which is determined after notice is issued to the owner and the tenants grievance can only be limited to the validity of such a bill being issued to him under said Section 140(1). In such a case, as liability is fastened on him, but he had opportunity to challenge the rateable value, an appeal would be maintainable under Sub-section (1) of Section 406 itself. The scope of the appellate jurisdiction in such a case will, however, be very limited. As already observed, there can be no challenge to the fixation of the rateable value and the limited challenge which can be there is with regard to the calculation of the tax on the basis of the rateable value already finalised or when the necessary ingredients of Sub-section (1) of Section 140 exist which could justify the issuance of a bill under that provision.

86. To sum up, therefore, the legal position is as follows:--

1. In the case of self-occupied premises, the rateable value has to be arrived at by applying the principles enunciated by the Supreme Court in Devan Daulat Rai Kapoor and Dr. Balbir Singh's cases and the decision of this Court in the case of Rajnikant Jeshingbhai Seth;

2. In the case of tenanted premises for the period prior to 1-4-1984, applying the principles of Devan Daulat Rai Kapoor and Dr. Balbir Singh's cases, the first rent fixed is the standard rent and if no order under Section 11 of the Rent Act is passed, then that rent will be the annual letting value;

3. In the case of tenanted premises, after 1st April, 1984, in view of proviso (aa) to Section 2(3A)(ii), the contractual rent will be the annual rent;

4. Special notice under Rule 15(2) is mandatory and if it is not given, the assessment will be set aside, but the Small Cause Court should itself decide as to what should be the ratable value after recording necessary evidence;

5. An Appeal against the assessment can only be filed by a person, who has filed or could have filed a complaint against the proposed rateable value, i.e. appeal can only be filed by the owner;

6. The tenant can file an appeal only if notice is issued to him under Section 140(1) or he is a tenant of land to whom the provisions of Section 139(2) applies. Tenants of constructed properties cannot file an appeal challenging the rateable value fixed;

7. An appeal cannot be filed against a bill, for the purposes of challenging the rateable value if complaint against the proposed fixation of rateable value had not been filed though opportunity had been given;

And

8. Powers of the Municipal Commissioner can be delegated to his subordinate Officers under Section 49 and Section 69 of the BPMC Act.

87. Reverting to the facts of the present cases, as far as First Appeals filed against Shri G.L. Shah are concerned, who was an owner in self-occupation of the premises in question, the rateable value has not been determined by the Small Cause Court as per the decisions of the Supreme Court. The rateable value fixed for adjoining or similar premises under the BPMC Act and not the actual rent and adopting that for the purposes of fixing the standard rent and/or the annual value for self-occupied premises is not in accordance with law. The annual value will have to bedetermined in the light of the principles contained herein. The assessments of Shri G.L. Shah and also of other owners who are in self-occupation of the premises will have to be done de novo by the Small Cause Court. The appeals against owners in self-occupation of the premises in question which have been heard by us are F.A. Nos. 1339/83, 1340/83, 1341/83, 2143/83, 821/84, 824/84, 841/90, 844/90, 1489/90, 1618/90, 1637/90, 44 to 50 of 1992, 53 to 60 of 1992, 774 to 780 of 1993, 281/94 and 1189 of 1983.

88. As regards M/s. Hindustan Photo Films . areconcerned, the appeals are liable to be allowed because the Small Cause Court has not correctly computed the rateable value. The rateable value had been fixed and the owner of the premises did not file any complaint, nor file any appeal before the Small Cause Court. We have already held that in such cases, the tenants to whom the provisions of Section 139(2) and Section 140 are not applicable have no right to file an appeal. Threfore, the Appeals filed by M/s. Hindustan Photo Films . before the Small Cause Court were not maintainable. That apart, even on merits, the decision of the Small Cause Court was incorrect. For the rateable years after 1984-'85, the assessment had to be made on the basis of the actual rent received and the Small Cause Court completely ignored the provisions of Section 2(1A)(ii) proviso (aa) of the BPMC Act. In any case, the determination of the gross rateable value at Rs. 6,906/-when the first letting was at Rs. 1,51,609/- per annum was completely unwarranted and contrary to the Act. Each year is self-contained and the principles of res judicata do not apply and merely because for the year 1983-'84, when the Corporation had adopted the rateable value of Rs. 1,51,609/- and the same was reduced in appeal to Rs. 6,908/- by the Small Cause Court and the same was not challenged further does not mean that for subsequent years, the Corporation could not adopt a correct rateable value.

89. To conclude, the Appeals, filed by the Corporation against owners of self-occupiedpremises, are allowed, being F.A. numbers 1339/83, 1340/83, 1341/83, 2143/83, 821/84, 824/84 641/90, 644/90, 1489/90, 1618/90, 1637/90, 44 to 50 of 1992, 53 to 60 of 1992, 774 to 780 of 1993, 261/94 and 1189 of 1983. The orders of the Small Cause Courts are set aside and the cases remanded to them for a decision de novo, for fresh fixation of the rateable value in the light of the observations made in this judgment.

90. The appeals filed by the Corporation against the tenants of constructed properties, being First Appeals Nos. 829, 941, 942, 985, 986, 987, 1077, 1078, 1119, 1120, 1180, 1181, 1182, 1219, 1220, 1221, 1302, 1358, 1376, 1377, 1447, 1690, 1837, 1862, 1863, 1865, 1866, 1884, 1890, 1983, 1984 and 1985 of 1983, 819, 1982, 1983, and 1985 of 1984, 101/86, 783/86, 1075/87, 1080/87, 587/88, 468, 469, 500, 505 and 508 of 1990, 1303/83, 1076/83, 666, 1238, 1239, 1214, 1403, 1404, 1455, 1483, and 1617 of 1990, 586/91, 1488/91, 1489/91, 2316/92, 2317/92, 2343/93, and 158 of 1994, are also allowed, firstly for the reasons that the actual rent at the time of first letting, for the period prior to 1-4-1984 and the contractual rent for the subsequent period will be the rateable value and, secondly, the tenants had no right to file complaint and/or appeal, challenging the rateable value more so without impleading the owners as parties. In these cases, the rateable values determined by the Municipal orders are restored. The Corporation will now be at liberty to recover house taxes in respect of the properties in question. Parties to bear their own costs.

91. Cross objections are dismissed.

92. Counsel for the respondents has made a request for staying the operation of the judgment. We see no reason to do so. The request is rejected.

93. Certified copies to be given to the parties immediately and the office to send copies of the judgment to the Chief Judge, Small Cause Court, within a week. He is directed to bring to the notice of the other Small Cause Courts the judgment now delivered.

94. The judgment should be circulated to the District Courts also.

Subject	Municipal Tax
Court	Gujarat High Court
Decided On	Sep-08-1994
Case Number	First Appeal No. 829/83
Judge	B.N. Kirpal, C.J. and; R.K. Abichandani, J.
Reported in	AIR1994Guj167; (1994)2GLR1498
Acts	Bombay Provincial Municipal Corporations Act, 1949 - Sections 2(1A), 2(3A), 2(54), 15(2), 49, 49(2), 69, 69(), 69(2), 127, 127(3), 129, 134, 135, 137, 139(1), 139(2), 139(3), 139(4), 140, 140(1), 140(3), 140(4), 141, 141(1), 217, 218B, 218D, 406, 406(1), 406(2), 409(1), 411, 413, 413(2), 457, 485 and 485(1); Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 - Sections 5(10), 9, 11 and 11(1); Evidence Act, 1872 - Sections 101 and 115; Bombay Provincial Municipal Corporations Rules - Rules 5, 8, 8(3), 9, 12, 12(2), 13, 13(1), 13(2), 15, 15(1), 15(2), 16, 17, 18, 18(1), 18(2), 20 and 21; Municipal Appellate Rules, 1976 - Rules 10 and 11; Code of Civil Procedure (CPC), 1908 - Order 41, Rule 27; Constitution of India - Articles 14, 226 and 227; Taxation Rules - Rule 7 and 7(3
Appellant	Municipal Corporation of the City of Ahmedabad
Respondent	Oriental Fire and General Insurance Co. Ltd.
Appellant Advocate	S.N. Shelat,; S.I. Nanavati,; J.R. Nanavati,;
Respondent Advocate	N.J. Modi,; Ashok Gandhi,; M.I. Hava,;
Cases Referred	and Gade Narayan Murty v. Berhampur Municipality

Municipal Corporation of the City of Ahmedabad Vs. Oriental Fire and General Insurance Co. Ltd. - Court Judgment