Allowed

Bal Krishan v. M.C.Sangrur and Another

Punjab & Haryana HC13 Aug 2008CWP/883/1986

Case brief

AI extract

What is this about?

The petitioner challenged the enhancement of rental value for property tax assessment. The court held that for properties governed by rent control legislation, annual value cannot exceed standard rent determined under the Rent Act, even if higher rent is actually received. Impugned orders were quashed and remanded.

What did the court decide?

Impugned orders enhanced was set aside and the case remitted to respondent No.1 for re-determination of annual rental value after opportunity of hearing.

Bal Krishan Vs M.C.Sangrur and Another — Punjab & Haryana HC (2008) — LawSathi Research

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C.W.P. No. 883 of 1986 [1]

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

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C.W.P. No. 883 of 1986 Date of decision: August 13, 2008

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Bal Krishan v. The Municipal Committee, Sangrur and another

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CORAM : HON'BLE MR. JUSTICE RAJESH BINDAL.

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Present: Mr. K.G.Chaudhary, Advocate for the petitioner. Nemo for the respondents.

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Rajesh Bindal J.

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The challenge in the present petition is to the order dated 12.3.1985 (Annexure P.1) passed by respondent No.1, whereby the rental value of the property of the petitioner was increased from Rs. 2,316/- to Rs. 19,656/- per annum and order dated 23.12.1985 (Annexure P.3), passed by respondent No.2, whereby the appeal against order (Annexure P.1) was dismissed.

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Learned counsel for the petitioner submitted that the petitioner is owner of property unit No.B-III/276 situated at Chhota Chowk, Sangrur. The property in question was assessed to house tax for the first time in the year 1964 at annual rental value of Rs. 2,316/-. The annual rental value, so assessed, continued upto the year 1983-84. For the year 1984-85, respondent No.1 served a notice for enhancement of annual rental value from Rs. 2,316/- to Rs. 19,656/-. The petitioner filed objections to the proposed enhancement. However, rejecting the same and ignoring the provisions of law, assessment of annual rental value was made at Rs. 19,656/-. Aggrieved against the order, the petitioner preferred appeal before respondent No.2 which was dismissed on 23.12.1985 upholding the

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C.W.P. No. 883 of 1986 [2]

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assessment.

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The petition was admitted on 21.2.1986 and recovery of enhanced amount was stayed. It was listed for hearing on 28.4.2004. However, no one appeared for the respondents. On 12.2.2008, noticing the fact that the respondents were earlier represented by Ms. Surjit Kaur Taunque, Advocate, who had since been expired, actual date notice was directed to be issued to respondent No.1 for 21.4.2008. Notice was duly served for the date fixed. However, still no one appeared for the respondents on 21.4.2008. Even today, when the case was called for hearing, no one appeared for the respondents. In the circumstances, the case was taken up and heard.

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The contention raised by learned counsel for the petitioner is that for the purpose of determination of rental value, the principles laid down under the Rent Control Legislation were to be applied, which the respondents have failed to do. He referred to the judgments in Kehar Singh v. The Municipal Committee, Phagwara and another, 1980 Revenue Law Reporter 491, Punjab Concast Steels Ltd. v. The Municipal Corporation, Ludhiana and another, 1984 Revenue Law Reporter, 394 and Indian Oil Corporation Ltd. v. Commissioner, Jalandhar Division, Jalandhar and another, 1997(1) Punjab Law Reporter 545. He further submitted that in the impugned order, passed by respondent No.1, it has been wrongly noticed that the tenant, in the property in question, had sublet the same at a monthly rent of Rs.1500/- per month, as there is no evidence on record to that effect.

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Having heard learned counsel for the petitioner, I find merit in the contention raised by him. Hon'ble the Supreme Court in Devan Daulat Rai Kapoor etc. etc. v. New Delhi Municipal Committee and another etc.

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C.W.P. No. 883 of 1986 [3]

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etc., AIR 1980 Supreme Court 541, while dealing with an identical issue, held as under:

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

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C.W.P. No. 883 of 1986 [4]

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Following the same, a Division Bench of this Court in Kehar Singh's case (supra) held as under:

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“It cannot be disputed that the conclusion arrived at by the Deputy Commissioner is not sustainable in law. It has been authoritatively held by their Lordships of the Supreme Court that under the provisions of Section 3(1)(b) of the Act, the annual value of a building would be the gross annual rent at which such house or building may reasonably be expected to let from year to year. It has been held that if the property is situate in a town where the provisions of the East Punjab Urban Rent Restriction Act are applicable in that case, the annual letting value shall have to be determined keeping in view the provisions of Section 4 of the Act, i.e., the standard rent which can be fixed even though no order has been passed for fixing the standard rent because the property is self occupied. Reference in this connection may be made to the decision of their Lordships of the Supreme Court in Devan Daulat Rai Kapoor and others v. New Delhi Municipal Committee and others.”

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Besides in the cases, referred to above, in C.W.P. No.8569 of 1987—Indian Oil Corporation Ltd. v. Municipal Committee, Patiala and another, decided on 17.9.2007 also, this Court reiterated the legal issue raised by the petitioner regarding fixation of annual rental value in terms of the judgment of Hon'ble the Supreme Court in Devan Daulat Rai Kapoor's case (supra).

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Following the dictum of law laid down in Devan Daulat Rai

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C.W.P. No. 883 of 1986 [5]

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Kapoor's case (supra), I am of the considered opinion that the impugned orders are contrary to the law laid down by Hon'ble the Supreme Court.The same are, accordingly, set aside and the case is remitted back to respondent No.1 for re-determination of the annual rental value in accordance with law after affording an opportunity of hearing to the petitioner.

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The writ petition is disposed of in the manner indicated above.

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(Rajesh Bindal) Judge

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August 13,2008 mk

Bal Krishan v. M.C.Sangrur and Another

Case brief

What is this about?

What did the court decide?

Bal Krishan v. M.C.Sangrur and Another

Case brief

What is this about?

What did the court decide?

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