Royal Asiatic Society of Bengal vs Corporation of Calcutta

Das, J.—This is an appeal by the Assessee, the Royal Asiatic Society of Bengal, u/s 142(3) of the Calcutta Municipal Act, 1923, against a decision of Shri S.C. Biswas, Judge, Third Bench, Court of Small Causes, Calcutta, dated January 7, 1952.

The disputed property being premises No. 1A, Park Street,, Calcutta, measuring 33 cottas belonged to the Appellant, the Royal Asiatic Society of Bengal. At the general revaluation the disputed premises were assessed at an annual value of Rs. 21,600 to come into effect from January 1948. Against the assessment made by the Corporation of Calcutta the Assessee did not prefer an appeal to the Court of Small Causes u/s 141 of the Calcutta Municipal Act. In 1948-1949 there was an intermediate revaluation of the disputed premises. The Assessment Department valued the disputed premises u/s 127(a) of the Calcutta Municipal Act, the annual value was ascertained to be Rs. 27,000 to take effect from April 1, 1948. The letting value per month was determined to be the sum total of Rs. 465 the ground rent of the disputed premises, Rs. 850 royalty payable on advertisement hoardings, Rs. 685 consideration for the use of the hoarding by the lessee and Rs. 500 rent of a pump house erected by the lessee on the disputed premises. Against the assessment so made the Assessee filed an objection u/s 139 of the Calcutta Municipal Act. The objection was heard by Janab A. Sattar, Deputy Executive Officer (I) of the Corporation of Calcutta u/s 140 of the Calcutta Municipal Act. By his order, dated May 16, 1949 the annual value was reduced to Rs. 17,782 to take effect from April 1, 1949. The ground rent was taken to be Rs. 465, the royalty of the hoarding Rs. 850 and the rent of the pump house Rs. 350, that is, in all Rs. 1,665. No letting value was fixed for the hoarding in question. The Assessee preferred an appeal u/s 141 of the Calcutta Municipal Act. The appeal was dismissed by the Chief Judge, Court of Small Causes, Calcutta, by an order, dated September 3, 1949. The learned Chief Judge did not enter into the merits of the case but dismissed the appeal on the preliminary ground that the Appellant (the Assessee) was disentitled to question the intermediate revaluation as the Assessee had not preferred an appeal against the order of the Assessment Department passed in January 1948. Against the decision of the Chief Judge the Assessee preferred an appeal to this Court. The appeal was allowed and the case was remitted to the Court of Small Causes, Calcutta, for re-hearing on the merits. The case was then placed before the learned Judge, Fourth Bench, Court of Small Causes, Calcutta. Before the learned Judge two points were raised on behalf of the Assessee.

In the first place, it was contended that the advertisement hoarding was not a building and that in ascertaining the annual value the royalty received by the Assessee should not have been taken into consideration. It was next contended that the basis of assessment was wrong, that the Corporation of Calcutta was not right in assessing the disputed premises u/s 127(a), the assessment should have been made u/s 127(b) of the Calcutta Municipal Act. The learned Judge overruled both these objections and affirmed the assessment made by the Corporation of Calcutta.

Against the decision of the learned Judge the present appeal has been taken. Mr. Banerjee on behalf of the Assessee has reiterated the two contentions which were pressed on behalf of the Assessee before the Court of Small Causes, Calcutta.

I shall deal with the second point first because if it succeeds there will be no necessity at the present stage to go into the first question.

The question which thus calls for our decision is whether the annual value of the disputed premises has been properly ascertained u/s 127(a) of the Calcutta Municipal Act. The Assessee-Appellant contends that the annual value should have been ascertained u/s 127(b) of the Calcutta Municipal Act. In order to decide this contention it is necessary to set out certain facts. The Royal Asiatic Society of Bengal (that is the Appellant) is the owner of the land appertaining to the disputed premises No. 1A, Park Streets Calcutta. On April 10, 1930 the Appellant granted a lease of the land appertaining to the disputed premises to the Standard Vaccum Oil Company for a term of ten years to run from December 1, 1929 with an option of renewal for further terms of ten years and five years. The rent payable per month was settled at Rs. 400. Clause 3 of the indenture of lease provides that the lessees will at their own cost erect upon the demised premises certain structures to be approved by the lessor and petrol storage tanks and pumps and all necessary equipments appertaining thereto to be used as a service station for the sale and supply to the public of petroleum products and motor accessories. Clause 5 provides inter alia that the lessees shall not be entitled to erect any advertisement boards or signs or structures for advertising purposes in the demised premises without the express consent in writing of the lessor. Clause 18 provides that at the expiration of the respective terms granted by the lease or sooner determination thereof the lessees will yield up unto the lessor the demised premises with all buildings, petrol storage tanks, pumps and other equipments including all the fixtures. Before the lease had run out and in pursuance of a covenant for renewal of the lease, the Appellant leased out to the Standard Oil Company the demised premises for a further term of ten years to run from December 1, 1939 the rent being fixed at Rs. 465. The lease contains further covenants for renewal as also covenants in terms similar to Clause 18 of the indenture of lease, dated April 10, 1930 to which I have already made a reference. The assessment proceedings which are now in question commenced during the currency of this lease. On March 7, 1940 an agreement was entered into between the Appellant, the Royal Asiatic Society of Bengal and the lessees the Standard Vacuum Oil Company whereby in consideration of the receipt of a sum of Rs. 850 per month to be paid to the lessor by the lessees the lessor consented and granted permission to the lessees to erect advertisement boards.

The position, therefore, is that at the time of the assessment the Assessee the Royal Asiatic Society of Bengal was the owner of the disputed premises. The disputed premises were in the occupation of the lessees, the Standard Vacuum Oil Company for the period December 1, 1939 to December 30, 1949 with covenants for further renewal, and that the lessees, the Standard Vacuum Oil Company had built a pump house at their own cost on the disputed premises, not for'' letting purposes but for their own occupation. The lessees also put up an advertisement hoarding under the agreement with their lessor to which reference has already been made. The question now is whether in this state of the facts the ascertainment of the annual value should be made u/s 127(a) or 127(b) of the Calcutta Municipal Act.

Section 124 of the Act empowers the Corporation of Calcutta to impose a consolidated rate on the annual valuation as determined under Chap. X on all lands and buildings in Calcutta. Section 127 provides for ascertainment of annual value of land or building. Section 127(a) provides for ascertainment of animal'' value of land and the annual value of any building erected for letting purposes or ordinarily let. As already stated the building such as was erected on the land was not erected for letting purposes and was not ordinarily let. The annual value cannot, therefore, be ascertained u/s 127(a). It has to be ascertained u/s 127(b) of the Act. This view is supported by a Bench decision of this Court in the case of The Governor-General of India in Council v. The Corporation of Calcutta (1947) 52 C.W.N. 173 (176). The observations of Mukherjea J. in the case last cited at p. 176 were followed by a Bench of this Court in the case of Dominion of India representing East Indian Railway Administration v. The Corporation of Caldutta (1949) 53 C.W.N. 620.

Mr. Grhose, the learned Advocate, appearing for the Corporation of Calcutta, however, contended that in the facts of the present case the principle of De minimis non Gwrat lex which was referred to by the privy Council in the case of Corporation of Calcutta v. Moti Chand Chowdhwy and Ors. (1938) L.R. 66 IndAp 42 : 43 C.W.N. 314 should be applied. In our opinion the maxim has no application in the facts of the present case. In the present case the rent of the pump- house is Rs. 350 per month. The total sum payable by the lessees to the lessor is Rs. 1,665 per month. It is impossible to say that the rent payable in respect of the pump house is a mere trifling sum compared with the total sum payable by the lessees to the lessor.

My conclusion, therefore, is that the annual value of the disputed premises has to be determined in accordance with the provisions of Section 127(b) of the Calcutta Municipal Act. The Corporation of Calcutta assessed the premises u/s 127(a) of the Act and the assessment so made by the Corporation of Calcutta was affirmed on appeal by the learned Judge, Court of Small Causes, Calcutta. The assessment so made cannot, therefore, be sustained.

The question now is as to the form of the order which should be made. The materials on record are hardly sufficient for a fixation of the annual value in terms of Section 127(b). A further enquiry on evidence has got to be made and a remand to the learned Judge, Court of Small Causes, Calcutta, is necessary.

Mr. Banerjee appearing for the, Assessee contends that an order for remand to the Court of Small Causes, Calcutta, should not be made. It is pointed out that revision of an assessment can be made only by the Executive Officer u/s 131 of the Calcutta Municipal Act; further, the procedure laid down in the procedural sections has to be followed. Mr. Banerjee also points out that the Calcutta Municipal Act does not empower the Small Cause Court Judge to remit the question of assessment to the Executive Officer. It is accordingly contended that the order of remand would not lead to any result and should not therefore be made.

The question is one of some importance and requires careful consideration. Section 131(1) of the Act provides that the valuation of land or building under the Bengal Municipal Act or the Act which preceded the present Calcutta Municipal Act and which was in force when the Calcutta Municipal Act, 1923, was enacted, shall be deemed to be the valuation under the Act and will remain in force till a fresh valuation is made by the Executive Officer and that such fresh valuation by the Executive Officer shall remain in force for a term of six years "and may be "revised thereafter by the Executive Officer at the termination "of successive periods of six years". Section 131(2)(b) provides that any land or building the valuation of which "has been "cancelled on the ground of irregularity, or which for any other "reason has no annual value assigned to it under this Act" may be valued by the Executive Officer at any time mentiosxeu? in Section 131(2) and such annual value shall remain in force, and the consolidated rate shall he levied according to it, for the unexpired portion of such period. The above rule applies when there is no existing annual value fixed for the premises.

It is contended that the effect of the order which I propose to make will be to cancel the valuation on the ground of irregularity and as such it can only remain in force for the unexpired portion of the currency of the present valuation. It is pointed out that the currency of the present valuation has come to an end. It is, therefore, argued that the remand would seine no useful purpose and this Court ought not to make an order of remand which would be infructuous.

The procedure for assessing land or building is set forth in Section 136 of the Calcutta Municipal Act, 1923, onwards. Section 136(1) provides inter alia that the Executive Officer may require an owner or occupier to furnish a return in the manner specified in the section. Section 136(3) empowers the Executive Officer to inspect the premises. Section 131 to which I have already referred empowers him to value the disputed premises. After the premises have been so valued a public notice has to be issued. Section 138 further provides that in case the value so ascertained by the Executive Officer is in excess of the current valuation a special notice on the owner and occupier has got to be served. Section 139 enables the Assessee to prefer objections. Such objections may be made on the quantum of valuation or on the ground of non-liability Section 140 confers on the Executive Officer the power to determine such objections. Section 141 provides for an appeal to the Court of Small Causes, Calcutta, against the determination made by the Executive Officer u/s 140. Section 142(3) provides for a further appeal to this Court. In other words, in case of disputed valuation the Act provides for a complete machinery for the filing of objections, for the hearing thereof by the Executive Officer and for further investigation by way of an appeal to the Court of Small Causes and an appeal to this Court. Thus the question of valuation cannot be said to have been finally determined unless a final decision by the court of appeal is reached in the matter of hearing objections. Section 146(2) empowers the Executive Officer to amend the assessment. Section 147 then provides as follows:

When the valuation of any land or building is revised in consequence of an objection made u/s 139 or Section 146, Sub-section (2) or an appeal is preferred u/s 141, the revised valuation shall take effect from the quarter in which the first-mentioned valuation would have taken effect, and shall continue in force for the period for which the said first mentioned valuation was made, and no longer.

It has to be noted that the valuation which may be fixed on an appeal preferred is expressly stated to be a revision of the valuation made by the Corporation of Calcutta. In a case where the valuation is revised in consequence of an appeal u/s 141, the revised valuation takes effect retrospectively from the quarter in which the first mentioned valuation would have taken effect and such revised valuation continues in force for the entire period in which the first-mentioned valuation was made. Accordingly, the cancellation of annual valuation which is referred to in Section 131 has reference to cases other than those which come within Section 147. It has also to be noted that u/s 164(1) of the Calcutta Municipal Act where an objection to a valuation has been made u/s 139, the consolidated rate shall, pending the final determination of the objection, be paid on the previous valuation. Section 164(2) provides for an adjustment when the objection has been finally determined. In other words, the scheme of the Act is that where an Assessee is aggrieved by a valuation made by the Corporation and prefers an objection, till the objection is finally adjudicated upon, the consolidated rate has got to be paid on the existing valuation and that after the objection is finally disposed of in appeal the final valuation fixed will determine the consolidated rate payable and will in terms of Section 147 remain in force for the period for which the first mentioned valuation was made.

Mr. Banerjee who has appeared on behalf of the Assessee has referred us to an unreported decision of S.R. Das, J., dated May 13, 1943, in Matter No. 6 of 1943, Original Side. (In the matter of North British and Mercantile Insurance Company, Ltd. v. The Corporation of Calcuttaand has contended that the effect of our decision will be to cancel the valuation made by the Corporation of Calcutta and thus to attract the provisions of Section 131(2)(b) of the Calcutta Municipal Act. In order to appreciate the effect of the decision of S.R. Das, J. it is necessary to set out the facts of that case. In that case the Insurance Company was the owner of premises No. 101/1 Clive Street. The Company was assessed by the Corporation of Calcutta u/s 127(a) of the Act. The Insurance Company filed an objection u/s 139. The Second Executive Officer who heard the objection rejected the same. On an appeal to the Court of Small Causes Calcutta, u/s 141 of the Act it was held by the learned Judge by an order dated August 18, 1942, that the premises were not ordinarily let and that the assessment should, therefore, have been made u/s 127(b). The Corporation of Calcutta did not prefer an appeal against that decision. The order made by the Small Cause Court Judge became final. Thereafter the Corporation of Calcutta split up the premises and issued separate demand bills. The question thereafter arose whether the Corporation of Calcutta was entitled to revalue the premises during the currency of the existing valuation. It was held by S.E. Das, J. that where a particular valuation is set aside the effect thereof is to be determined u/s 131(2)(b) of the Calcutta Municipal Act. The observations of the learned Judge are as follows:

If the Small Cause Court sets aside the valuation made by the Corporation and at the same time arrives at a valuation of its own, then Section 147 with apply and until the final determination of the objection by the Small Cause Court fixing a figure of valuation Section 164 will apply. If, however, the Small Cause Court only sets aside the valuation made by the Corporation and does not itself fix the valuation, then Section 147 does not apply. In such a case Section 164 may be applied during the period up to the time when the valuation is set aside and cannot apply to the period after the Small Cause Court sets aside the valuation for as I have said the setting aside of the valuation without fixing a new valuation has the effect of finally determining this also. The matter must in such cases be governed by Section 131(2)(b).

The observations just quoted do not militate against the view which we have taken, they rather support the same. In the present case the valuation has not been finally determined. It is still awaiting adjudication. It is, therefore, open to this Court to have the matter investigated by the Small Cause Court Judge.

I may point out that the decision of S.E. Das, J. was affirmed on appeal in Appeal No. 48 of 1943 on November 9, 1943.

Mr. Banerjee also referred us to a Bench decision of this Court in the case of Corporation of Calcutta Vs. Chandoolal Bhai Chand Modi, . The facts of that case are clearly distinguishable because in that case the valuation made by the Corporation, was set aside by the Small Cause Court on December 13, 1947 on the ground that the assessment should have been made u/s 127(b) and no appeal was taken from the decision of the Small Cause Court Judge. The cancellation of the assessment became final on December 13, 1947. Section 147 was not, therefore, attracted in that case. The case fell to be decided u/s 131(2)(b) of the Calcutta Municipal Act, 1923.

In the result this appeal succeeds. The order of the Small Cause Court Judge is set aside and this case is remitted to the Court of Small Causes, Calcutta, for a determination of the annual value, in terms of Section 127(b) of the Calcutta Municipal Act, 1923. The valuation will be revised in terms of the decision of the learned Judge u/s 127(b) of the Act. If necessary, the learned Small Cause Court Judge will allow the parties to lead further evidence in this matter.

Costs of this appeal and of the hearing before the Small Cause Court Judge will abide the final result.

Guha Ray, J.

I agree.