DR. BALBIR SINGH AND ORS. ETC. ETC. v. MUNICIPAL CORPORATION, DELHI AND ORS.

We may also in this connection refer to the statement made by the \finister of State for Home Affairs on the floor of the Lok Sabha on 8th April 1981 where the Minister observed: E ' "The Municipal Corporation of Delhi has intimated ' that 494 general objections for the year 1980-81 filed by the assessees for the revision of assessment of their properties in accordance with Supreme Court Judgment were consi- . dered by the Corporation. The requests for reassessment on F the basis of standard rent under Section o of the Rent Control Act, 1958, were considered and not found accept- able to the Corporation as the assessees failed to produce documentary evidence as regards the aggregate amount of the reasonable cost of con;truction and the market price of the land comprised in the premises on the date of com- mencement of the construction as provided under Section 6 G (2)(b) ·Of the Delhi Rent Control Act, 1958. Accordingly, assessments were made as provided uuder section 9 of the , Delhi Rent Control Act, 1958. The details of the proper- ties, locality-wise, are given in the statement attached."

It is i.ndeed strange that the assessing authorities should have B' declined to assess the rateable value of 494 properties in South

BALBIR SINGH v. M.C.D. ( Bhagwatl, J.) 473 Delhi on the basis of standard rent determinable on the principles . ,. laid down in sub-section (1) (A) (2) (b) or (ll (Bl (2) <b) of Section 6, merely on the ground that in the opinion of the assessing autho- A

rities ''the assessees failed to produce the documentary evidence as regards the aggregate amount of reasonable cost of construction and the market price of land comprised in the premises on the date of conimencement of the construction." If the assessees failed to B produce the· documentary evidenc~ t•"> ·~stablish the reasonabli;; cost of construction of the premises or the market prico of the land comprised in the premises, th~ assessing authorities could arrive at their own estimate of these two constituent items in the applicatic>n of the principles set out in sub-section (!) (Al (2J (b) or {() (BJ (2) 'bl of Section 6. But on this account, the assessing authorities could c not justify res,,rt to sub-section (4l of Section 9. It is only where for any reason it is not possible to determine the standard rent of any premises on lhe principles set-forth in Section 6 that the stan- dard rent may be fixed under sub-section (4J of Section 9 and merely because the owner does not produce satisfactory evidence showing what was the reasonable cost of construction of the premises or the market price of rhe land at the date of commencement of the const- ruction, it cannot be said that ;t is not possible to determine the standard rent on the principles set out in sub-sectio'1 ([) (Al (2) (b) or (!) (Bl (2) lb) of Section 6. Take for example a case where the ... owner produces evidence which is found to be incorrect or which docs not appear to be satisfactory; Can the assessing authorities in such a case resort to sub-section( 4) of Section 9 stating that it is not possible to determine the standard r'nt on the prmciples set out in sub-section (l) (A) (2) (b) or (I) (BJ (2> (b) of Section 6. The assessing authorities would obviously have to estim1te for them- selves, on the basis of such material as may be gathered by them, the reasonable cost of construction and the market price of the land and arrive at their own determination of the standard rent. This is an exercise with which the assessing authorities are quite familiar and it is not something unusual for them or beyond their compe- tence and capability. It may be noted that even while fixing stan- • dard rent under sub-section (4) of Section (9), the assessing autho- rities have to rely on such material as may be available with them and determine the standard rent on the basis of such material by a process estimation.

The fourth category of premises we must deal with is the category where the premises are construded in stages. The discussion in the preceding paragraph f this Judgment provides an answer to H

474 SUPRJlMll COURT REP OR TS [1985] 2 s.c.R.

" A- the question as to how the rateable value of this category of pre- mises is to be determined when the premises at the first stage of construction arc to be assessed for rateable value, the assessing authorities would first have to determine the standard rent of the premises under sub.section (2) (a) or 2 (b) or (I) CA) (2) (b) or (!) (B\ (2) (bl of Section 6 as may ·be applicable and keeping in mind B the upper limit fixed by the standad rent and taking into account the various factors discussed above, th" assessing authorities would have to deiermine the rent which the owner of the premises may reasonably expect to got if the premises are let out to a hypothetical tenant and such rent would represent the rateable value of the premises. When any addition is made to the premises at a rnb- c_ sequent stage, three different situations may arise. Firstly, the addition may not be of a distinct and separate unit of occupation but may be merely by way of extension of the existing prem~ses which are self-occupied In such a case the original premises together with the additional structure would have to be treated as a D single unit for the purpose of assessment and its rateable value would have to be determined on the basis· of the rent which the owner may reasonably expect to get, if the premises as a whole are let out, subject to the upper limit of the standard rent determinable under the provisions of sub-section (J) (A) (2) (b) of Section 6. Secondly, the existing premises before the add di ti on might be tenanted and the addition might be to the tenanted premises so that E the additional structure also_ form part of the same tenancy. Where such is the case, the standard rent would be liable to increase under Section 7 and such increased rent would be the standard rent of the premises as a whole and within the upper limit fixed by such stan- dard rent, the assessing authorities would have to determine the rent which the owner may reasonably expect to get if the premises as a F whole are let out as a single unit to a hypothetical tenant and in . such a case, the actua.1 rent received would be a fair measure of the rent which the owner may reasonably expect to receive from such hypothetical tenant unless it is influenced by extra-commercial considerations. .Lastly, the addition may be of a distinct and sepa- rate unit of occupation and in such a case, the rateable value of the ' G premises would havo to b; determined on the basis of the formula laid down by us for assessingthe rateable value of premises which are partly self-occupied and partly tenanted. The same principles for determining of rateable . value would obviously apply in case of subsequent additions to the existing premises. The basic point to be noted in all these cases is-and _this is_ what we have already H emphasised earlier-that the formula set out in sub-section

. _, BALBIR SINGH v. M.C.D. (Bhagwatl, J.)

(!)(A) (2) <bl and(!) (B) (2l (b) of Section 6 cannot be applied for 415

A determining the standard rent of an addition, as if that addition was the only structure standing on the land The ~ssessing 3uthori- ties cannot determine the standard rent of the additional structure by taking the reasonable cost of construction of the additional structure and add'ng to it the market price of the land and applying B the statutory percentage of 7! to the aggregate amount. The market price of the land cannot be added twice over, once while determining the standard rent of the original structure and again while determin- ing the standard rent of the additional structure. Once the addition is made, the formula set out in sub-section (!)(Al <21 (b) and (!) (B) (2) (bl of section 6 can be applied only in relation to the .. premises as a whole and where the additional structure consists of a distinct and separate unit of eccupation, the standard rent would have to be apportioned in the manner indicated by us in the earlier )l part of this Judgment.

These are the principles on which the rateable value of different categories of properties is liable to be assessed under the Delhi Municipal Corporation Act 1957. The same principles would a fortiorari apply also in relation to assessment of rateable value under

• the Punjab Municipal Act, 1911. Since there are a number of writ petitions and appeals before us and they involve different fact situations we do not think it would be convenient to dispose them c

of finally by one single Judgment. We would therefore direct that these writ petitions and appeals shall be placed on Board on some convenient date so that they can be disposed of in the light of the principles laid down in this Judgment. D

• ML.A .