Municipal Corporation of The City of Ahmedabad vs New India Assurance Co. Ltd.

A.M. Kapadia, J.—Challenge in the instant Appeal filed u/s 411 of the Bombay Provincial Municipal Corporations Act, 1949 ("BPMC Act" for short) is to the correctness of the judgment and order dated 4.6.1990, rendered in Municipal Valuation Appeal No. 17692 of 1989, by the learned Judge, Small Causes Court, Ahmedabad, by which the Municipal Valuation Appeal, filed by the respondent - New India Assurance Co. Limited, u/s 406 of the Act, has been partly allowed and thereby the Gross Rateable Value ("GRV" for short) of the premises situated in Ward Ellis Bridge-A/1, bearing F.P. No. 173 of 302, which was fixed at Rs. 4,70,336/- by the Assessor and Tax Collector of the Municipal Corporation has been reduced and fixed at 2,37,384/- for the Assessment Year 1989-90.

Brief facts of filing of the instant Appeal are that the respondent- New India Assurance Co. Ltd. having its registered Office at Bombay and Regional Office at the address stated in the Appeal Memo, hired the above premises, situated in Ward Ellis Bridge-A/1, bearing F.P. No. 173 of 302 on rent in the year 1985 at monthly rent of Rs. 6/- per sq. feet and had also agreed to pay Rs. 6/- per month as the service charges for air-conditioning of the whole building, which has to be provided by the landlord. The area of the premises is 2198 sq. feet. The premises is situated at 3rd Floor of Popular House, Near Income Tax Office, Ashram Road. Since the landlord did not provide the air conditioning facility, respondent also did not pay the air-conditioning charges, but later on they compromised and settled the rent of the premises at Rs. 9/- per month per sq. feet, which works out at Rs. 19,782/- per month. The Municipal Taxes are paid by the respondent - tenant directly to the Municipal Corporation. The Assessor and Tax Collector of the Ahmedabad Municipal Corporation had assessed the GRV at Rs. 4,70,336/- for the Assessment Year 1989-90 in respect of the premises occupied by the respondent - Insurance Company.

Aggrieved thereby, the respondent had filed an Appeal being Municipal Valuation Appeal No. 17692 of 1989 u/s 406 of the BPMC Act, before the learned Judge, Small Causes Court at Ahmedabad.

The learned Judge, Small Causes Court, Ahmedabad, on appreciation of evidence and considering the fact that the tax of the premises, which was paid by the respondent directly to the Municipal Corporation, is required to be deducted and, accordingly, the GRV was fixed at Rs. 2,37,384/- instead of Rs. 4,70,336/- fixed by the Assessor and Tax Collector of the Ahmedabad Municipal Corporation, which has given rise to the instant Appeal filed at the instance of the Ahmedabad Municipal Corporation - original respondent.

Mr. M.G. Nagarkar, learned Advocate for the Appellant - Ahmedabad Municipal Corporation, submitted that if the Municipal Tax was paid by the tenant directly to the Corporation, then in that case, the said amount has to be included in the annual letting value of the rented premises. In support of the aforesaid submission, Mr. Nagarkar has relied upon the decision of the Full Bench of this Court in the case of Municipal Corporation of The City of Ahmedabad v. Canara Bank reported in Vol XXXIII (2) GLR 1086, which has been confirmed by the the Supreme Court in the case of Canara Bank and Anr. v. Municipal Corporation of Ahmedabad, (1996) 7 SCC 298. He therefore submitted that in view of the settled principle enunciated by the Hon''ble Supreme Court, the impugned judgment and order passed by the learned Judge, Small Causes Court, Ahmedabad, reducing the GRV of the premises in question, deserves to be quashed and set aside by allowing this Appeal and thereby restoring the GRV fixed at Rs. 4,70,336/- by the Assessor and Tax Collector of Ahmedabad Municipal Corporation. He, therefore, urges to allow this Appeal.

Mr. Rajni H. Mehta, learned Advocate for the respondent - New Indian Assurance Co. Limited has supported the impugned judgment and order and submitted that the learned Judge of the Small Causes Court, Ahmedabad, has committed no illegality since the Full Bench decision of this Hon''ble Court, which has been confirmed by the Hon''ble Supreme Court, cited by Mr. Nagarkar, learned Advocate for the Appellant - Corporation, has been delivered on 19.6.1992, whereas the judgment and order impugned in the instant appeal has been delivered by the learned Judge, Small Causes Court, Ahmedabad, on 4.6.1990 i.e. prior to judgment of this Court. Mr. Rajni Mehta, learned Advocate for the respondent-Insurance Company submitted that in view of the settled principle of law enunciated by the Hon''ble Supreme Court, appropriate order may be passed.

We have considered the submissions advanced by Mr. M.G. Nagarkar, learned Advocate for the Appellant and Mr. Rajni H. Mehta, learned Advocate for the respondent. We have also perused the impugned judgment and order as well as the decisions cited at the Bar.

It has been held by the Full Bench of this Court in the case of Municipal Corporation of The City of Ahmedabad v. Canara Bank (supra) that if the Municipal Tax paid by the tenant directly to the Corporation, the said amount has to be included in the annual letting value of the rented premises. The principle enunciated by the Full Bench of this Court has been confirmed by the Supreme Court in the case of Canara Bank and Anr. v. Municipal Corporation of Ahmedabad (supra). In view of the settled principle of law enunciated by the Full Bench of this Court, which has been confirmed by the Supreme Court, it has to be held that, if the Municipal Tax paid by the tenant directly to the Municipal Corporation, the said amount has to be included in the annual letting value of the rented premises.

Seen in the above context, the impugned judgment and order passed by the learned Judge, Small Causes Court, Ahmedabad, deserves to be quashed and set aside by allowing this Appeal and thereby restoring the GRV of the premises in question fixed at Rs. 4,70,336/- by the Assessor and Tax Collector of the Ahmedabad Municipal Corporation for the Assessment Year 1989-90.

For the foregoing reasons, the Appeal succeeds and accordingly it is allowed with no order as to costs.

The impugned judgment and order dated 4.6.1990, rendered in Municipal Valuation Appeal No. 17692 of 1989 passed by the Judge, Small Causes Court, Ahmedabad, is hereby quashed and set aside.

Resultantly, the Gross Rateable Value of the premises in question fixed at Rs. 4,70,336/- by the Assessor and Tax Collector, Ahmedabad Municipal Corporation for the Assessment Year 1989-90 is hereby confirmed and restored.