BHAGWANT RAI AND ORS. versus STATE OF PUNJAB AND ORS

Citation: [1995] SUPP. 2 S.C.R. 798 · Decided: 17-08-1995 · Supreme Court of India · Bench: K. RAMASWAMY, B.L. HANSARIA · Disposal: Appeal(s) allowed

cites 1 · see the full citation network in Lexace

Judgment (excerpt)

A 
BHAGWANT RAI AND ORS. 
v. 
STATE OF PUNJAB AND ORS.-
AUGUST 17, 1995 
B 
(K. RAMASWAMY AND B.L. HANSARIA, JJ.) 
The Punjab Municipal Act, 1911 
Ss.3(1)(b), 61-House Tax-Assessment-Annual Value-Basis of-
C Held; should be reasonable standard rent and not actual rent received-Ad-
mission wrongly made by landlord, not a ground to deny statut01y benefit. 
The respondents, for the assessment year 1987-88, assessed the 
rateable value of appellants' house at Rs. 1,50,472.50 on the basis of the 
rent received in respect thereof, after giving standard deductions under 
D 
s3(1)(b) of the Punjab Municipal Act, 1911. 
E 
F 
In the appeal before this Court, it was contended by the respondents 
that in view of the admission of the appellants that they were prepared to 
pay the tax on the basis of the actual rent received from the tenant, ~he 
respondents had rightly made the rent as a measure of assessing the 
rateable value. 
On the question : whether the actual rent received by the landlord 
from the tenant would be the measure for determining annual value. 
Allowing the appeal, this Court 
HELD : 1. The actual rent received from a tenant is not the measure 
for determination of the annual rateable value, but the reasonable stand-
ard rent expected to be received under the relevant Rent Act. [802-D] 
G 
Diwan Daulat Rai Kapur v. New Delhi Municipal ~ommittee, [1980] 
2 SCR 607; Mrs. Shiela Kaushish v. Cl. T., [1981] 4 SCC 121; New Delhi 
Municipal Committee v. M.N. Soi and Anr., [1976] 4 SCC 535 and Balbir 
Sil~gh v. Mis. M.C.D., AIR (1985) SC 339- relied on. 
2. There is no estoppel against the statute. When the statute 
H prescribes particular mode to determine the annual rental value, it has to 
798 
BHAGWANTRAI v. STATE 
799 
be done in that manner. Admission wrongly made by the landlord or the A 
owner would not be a ground to deny the statutory benefit. [802-F] 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7511 of 
1995. 
From the Judgment and Order dated 22.7.92 of the Punjab & 
B 
Haryana High Court in W.P. No. 19209 of 1991. 
Anant Palli, Atul Sharma, Mrs. Rekha Palli and Ms. Purnima Bhat 
for the Appellants. 
S. Ujagar Singh, Davendra Verma and Mrs. Naresh Bakshi for the C 
Respondents. 
The following Order of the Court was delivered : 
Leave granted. 
The appeal by special leave arises from the order of the High Court 
of Punjab and Haryana in Civil W.P. No.19209/91 dismissing the writ 
petition in limine. 
D 
The admitted facts are that the appellant 
is having a house in 
Sangrur. For the assessment year 1987-88, the respondents have assessed E 
the rateable value of the house at Rs. 1,50,472.50 after giving standard 
deductions under s.3(1)(b) of the Punjab Municipal Act, 1911 (for short, 
'the Act'). The basis on which the property was assessed was the rent being 
received by the appellant from State Bank of India to whom they had let 
out at Rs. 12,687 per month. The question is whether the actual rent F 
received by the appellants from the tenant would be the measure for 
determining annual value. Section 3(1)(b) of the unamended Act reads 
thus: 
"3(1) "annual value" means -
xxxxxxxxxxxxxxxxxxxxxx 
(b) in the case of any house or building, the gross annual rent at 
which such house or building together with its appurtenances and 
G 
any furniture that may be left for or enjoyment therewith, may 
reasonably be expected to let from year to year subject to the H 
A 
B 
c 
D 
E 
F 
G 
H 
800 
SUPREME COURT REPORTS [1995] SUPP. 2 S.C.R. 
following deductions : 
xxxxxxxxxxxxxxxxxxxxx" 
This provision was subject of interpretation by this Court in Diwan 
Daulat Rai Kapur v. New Delhi Municipal Committee, [1980] 2 SCR 607, 
which was followed in Mrs. Shiela Kaushish v. C.l.I., [1981] 4 SCC 121. The 
question therein was whether the actual rent received from the tenant 
would form basis to determine the annual value. This court considered the 
controversy and held thus : 
"The argument ·of the municipal authorities was that since the 
standard rent of the building was not fixed by the Controller under 
Section 9 of the Rent Act in any of the cases before the Court and 
in each of the cases the period of limitation prescribed by Section 
12 of the Rent Act for making an application for fixation of the 
standard rent had expired, the landlord in each case was entitled 
to continue to receive the contractual rent from the tenant without 
_ any legal impediment and hence the annual value of the building 
was not limi

Excerpt shown. Read the full judgment & AI analysis in Lexace.