Civil Revision Application No.459 of 2000,Civ. Rev. Appln. No.460 of 2000,Civ. Rev. Appln. No.461 of 2000,Civ. Rev. Appln. No.462 of 2000,Civ. Rev. Appln. No.463 of 2000,Civ. Rev. Appln. No.464 of 2000,Civ. Rev. Appln. No.465 of 2000,Civ. Rev. Appln. No.466 of 2000,Civ. Rev. Appln. No.748 of 2000

15th January, 2007

Petitioner Counsel: Shri. C. S. KAPTAN
Respondent Counsel: Shri. ANAND PARCHURE

Cases Cited:
1994(6) SCC 572 [Para 3]

JUDGMENT

JUDGMENT :- All these revisions can be disposed of by a common judgment, since they involve same question of law and facts.

2. The lower court by its common judgment set aside the order of assessment passed by the Additional Deputy Municipal Commissioner, whereby he modified the previous assessment. The Municipal Corporation has, therefore, filed these revisions.

3. The respondents own and run Mangal Karyalaya i.e. marriage halls. These marriage halls are made available to public for the purpose of marriages and other functions on payment of certain charges. All these halls were assessed to payment of property tax, leviable under Section 115-A of the City of Nagpur Corporation Act, 1948 (hereinafter referred to as 'Act'). A notice dated 19-6-1998 was issued to the owners of the marriage halls, informing them about the fresh assessment and the tax proposed to be imposed w.e.f. 1-10-1997. All respondents raised an objection under Section 128 of the Act. The objections were overruled and the tax proposed was levied. Being aggrieved by that order, appeals under Section 130 of the Act were preferred before the District Court, Nagpur. The learned judge of the lower court, relying upon the decision of the Supreme Court in 1994(6) SCC 572 held that the Corporation was bound to make assessment and levy taxes on the basis of fair rent alone. He held that the Corporation i.e. the petitioner could not legally determine the annual letting value on the basis of particular percentage of the charges payable per day of their use and multiplying this percentage by a certain number of days booking. Observing so, he set aside this method of assessment and directed that the assessment of property tax be made on basis of fair rent as laid down in the Belgaon Municipal Corporation case, referred to above.

4. I have heard the learned counsel for the revision-petitioners and the respondents. Section 115-A of the Act defines what taxes are included in the property tax. Section further says that the property tax shall be imposed on the buildings and the lands.

5. The building in question is not a residential building. The marriage halls are not let out on either monthly rent or yearly rent. They are allowed to be made use of on payment of certain charges which are bound to differ from event to event and even customer to customer and also on the basis of the period or days of occupation. The charges may differ during some parts of the month and some part of the year. They could be much less when there could be no season of marriage. There could, therefore, be no fixed charges per day also. It may so happen that the owner may charge less to certain people or categories of people and occupancy charges may differ on number of days occupation i.e. if it is used for a day, the charges may be higher and if it is proposed to be used for a week or more, charges could lower. It is also a matter of common knowledge that there could be occupancy for certain season in a year and not year rounded. The halls may remain vacant for number of days which may also differ from hall to hall and locality to locality.

6. It is to be seen that the marriage hall is never let out on monthly or yearly basis, nor exclusive possession of the hall is handed over to customer. There could, therefore, be no relationship of landlord and tenant between the owner of the hall and the person making temporary use of the hall. The person making use also does not strictly fall in the definition of licensee as given in the Maharashtra Rent Control Act, 1999. The definition of licence in the Maharashtra Rent Act reads thus -

"(5) "Licensee", in respect of any premises or any part thereof, means the person who is in occupation of the premises or such part, as the case may be, under a subsisting agreement for licence given for a licence fee or charge; and includes any (person in such occupation of any premises or part thereof in a building vesting in or leased to a Co-operative Societies Act, 1960; but does not include a paying guest, a member of a family residing together, a person in the service or employment of the licensor, or a person conducting a running business belonging to the licensor or a person having any accommodation for rendering or carrying on medical or paramedical services or activities in or near a nursing home, hospital, or sanatorium or a person, having any accommodation in a hotel, lodging house, hostel, guest house, club, nursing home, hospital, sanatorium, dharmashala, home for widows, orphans or like premises, marriage or public hall or like premises, or in a place of amusement or entertainment nor like institution, or in any premises belonging to or held by an employee or his spouse who on account of exigencies of service or provisions of residence attached to his or her post or office is temporarily not occupying the premises, provided that he or she charges licence fee or charge for such premises of the employee or spouse not exceeding the standard rent and permitted increase for such premises, and any additional sum for service supplied with such premises or a person having accommodation in any premises or part thereof for conducting a canteen, creche, dispensary or other services as amenities by any undertaking or institution; and the expressions "licence", "licensor" and "premises given on licence" shall be construed accordingly;"

7. The temporary occupant, therefore, cannot be either called a tenant or a licensee. Since there is no relationship of landlord or tenant and licensor or licensee, the provisions of the Maharashtra Rent Control Act are not attracted. These buildings are not, therefore, governed by the Maharashtra Rent Act at all. Since these buildings are never let out as such on any day as defined in the Bombay Rent Act, it is not possible to determine fair rent in respect of all these buildings. In the reported case, the building was governed by the Rent Act and, therefore, determination of the property tax could be done on basis of fair rent. We have seen that in the case in hand there is no basis available to determine fair rent. Hence, the case of Belgaon Municipal Corporation has no bearing on the case in hand and the ratio in that case could not be applied. The learned judge of the lower court, therefore fell in error in ordering the assessment to be made on the basis of fair rent.

8. The question now remains as to what method should be adopted to determine the assessment i.e. the annual letting value. Section 119 of the City of Nagpur Municipal Corporation Act, 1948 lays down the method of determining the annual letting value. There are also bye-laws under the Act in Part-II (taxation). The bye-laws which are relevant are Nos.3 to 9. These bye-laws give out guidelines as to how under Section 119(a) and (b) the property tax could be assessed. It would be necessary to reproduce here Section 119 of the City of Nagpur Municipal Corporation Act.

"119. Annual value of land or building how to be ascertain.

For the purpose of assessing land or buildings to the property taxes, -

(a) the annual value of land shall be deemed to be the gross annual rent of which the land might at the time of assessment reasonably be expected to be let from year to year :

Provided that in the case of land assessed to land revenue or of which the land revenue has been wholly or in part released, compounded for, redeemed or assigned, the annual value shall, if the State Government so directs, be deemed to be double the aggregate of the following amounts, namely:-

(i) the amount of the land revenue for the time being assessed on the land, whether such assessment is leviable or not, or

(ii) when the land revenue has been wholly or in part compounded for or redeemed, the amount which would have been leviable but for such composition or redemption; and

(b) the annual value or any building shall be deemed to be the gross annual rent at which such building, together with its appurtenances and any furniture that may be let for user of enjoyment therewith, might reasonably at the time of assessment be expected to be let from year, less an allowance of ten per cent for the cost of repairs and for all other expenses necessary to maintain the building in a state to command such gross annual rent.

Explanation I: For the purpose of this clause it is immaterial whether the building and the land let for use or enjoyment therewith are let by the same contract nor by different contracts, and if by different contracts whether such contracts are made simultaneously or at different times.

Explanation II :- The term "gross annual rent" shall not included any tax payable by the owner in respect of which the owner and tenant have agreed that it shall be paid by the tenant.

(c) the annual value of any building, the gross annual rent of which cannot be determined under clause (b), shall be deemed to be either and a quarter per cent on the sum obtained by adding the estimated present cost of erecting the building, less any amount which the Commissioner may deem it reasonable to deduct for depreciation, to the estimated market value of the land valued with building as part of the same premises :

Provided as follows (i) in calculating the annual value of any land or building under this Section the value of any machinery hon such land nor in such building shall be excluded : and (ii) when a building is occupied by an owner under such exceptional circumstances as to render excessive a valuation eight and a quarter per cent on the cost of erecting the building, less depreciation, lower percentage may be taken."

9. On going through this Section, it is apparent that Sub-Section (a) deals with open land assessment and (b) deals with building of which annual letting value can be determined on basis of gross annual rent. The present case does not fall either under clause (a) or (b) because the property is not open piece of land nor is it let out on monthly or yearly rent. Hence, the only provision under which the present building i.e. marriage hall can be assessed is under Section 119(c) of the Act. There could be no other method by which the marriage halls could be assessed. We have seen that the bye-laws give a guidelines with respect to assessment under Section 119(a) and (b) only. The bye-laws do not refer to Section 119(c) of the Act. To my mind, Section 119(c) of the Act, however, appears to be self-sufficient in respect of the method to be adopted while determining the annual letting value. To my mind, therefore, the only provision available for assessment of buildings like marriage halls is Section 119(c) of the Act. It says that annual value of such building shall be eight and a quarter percent on the sum obtained by adding the estimated present cost of erecting the building less any amount which Commissioner may deem reasonable to deduct for depreciation to the estimated value of the land valued with building. The learned counsel for the applicant/Corporation contended that the words "present cost of erecting building" should be interpreted to mean the cost of the building as on today. The argument has no force. The present estimated cost has to be taken as cost as on 1-10-1997 i.e. the date on which the valuation was sought to be charged by notice under Section 127 of the Act. The valuation prior to 1-10-1997 was not under challenge, hence we cannot go back prior to that date nor can it mean any date subsequent to 1-10-1997.

10. Hence, the revisions will have to be partly allowed. Hence, the order.

i) The revisions are partly allowed.

ii) The order of the lower court is set aside. The petitioner/Municipal Corporation shall assess the respondents' buildings in question as per provisions of Section 119(c) of the City of Nagpur Municipal Corporation Act on the basis of the estimated cost of erecting building as on 1-10-1997.

iii) No order as to costs.

Revision partly allowed.