COMMON CAUSE REGISTERED SOCIETY versus UNION OF INDIA & ORS.

Citation: [1987] 3 S.C.R. 996 · Decided: 18-08-1987 · Supreme Court of India · Bench: RANGANATH MISRA, M.M. DUTT · Disposal: Dismissed

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Judgment (excerpt)

B 
COMMON CAUSE REGISTERED SOCIETY · 
v. 
UNION OF INDIA & ORS. 
AUGUST 18, 1987 
[RANGANATH MISRA AND MURARI MOHON DUTT, JJ.] 
Delhi Municipal Corporation Act, 1957: s.6--Property cons-
tructed in stages-Assessment of Property Tax-'Rateable value'-
Determination of-Market value of land not to be added over again. 
C 
In Dr. Balbir Singh & Ors. v. Municipal Corporation Delhi & 
Ors., [1985) 2 SCR 439 this Court while laying down principles for 
) 
determination of rateable value for making assessment of property tax 
of premises constructed in stages in Delhi, emphasised that "the 
formula set out in sub-ss. (l)(A)t2)(b) and (l)(B)(2)(b) of s. 6 of the 
Delhi Municipal Corporation Act, 1957 cannot be applied for determin-
D ing the standard rent of an additio11, as if that addition was the only 
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structure standing on the land. The assessing authorities cannot 
determine the standard rent of additional structure by taking the 
reasonable cost of construction of the additional structure and adding to 
it the market price of the land and applying the statutory percentage of 
7'h to the aggregate amount." 
The petitioner-society and the Municipal Corporation in their 
applications to this Court sought clarification of the above obser-
vations. 
Dismissing the applications, 
HELD: The matter has been categorically decided and th.,re is 
absolutely no ambiguity which requires clarification. When at a diffe-
rent stage, additional construction is raised on the property already 
valued, the market value of the land is not to be taken into account as it 
has already been considered while fixing the valuation of the pre· 
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existing construction. [IOOOD-E, GI 
ORIGINAL JURISDICTION: Civil Misc. Petition No. :18280 
of 1987 Etc. 
IN 
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Writ Petition No. 6945 of 1982. 
996 
.. _._. 
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' )I._ 
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COMMON CAUSE SOCIETY v. U.0.1. 
997 
(Under Article 32 of the Constitution of India). 
K.L. Rathee, S. Balakrishnan and Harish N. Salve for the 
Petitioner. 
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Ranjit Kumar, Pramod Dayal and R.B. Datar for the Respon-
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dents. 
The following Order of the Court was delivered: 
A three-Judge Bench of this Court in the case of Dr. Balbir Singh 
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& Ors. v. Municipal Corporation, Delhi & Ors., (1985] 2 SCR 439 
elaborately examined the provisions of the Delhi Municipal Corpora-
tion Act of 1957 for the purpose of ascertaining the manner of determi-
nation of "rateable value" which was necessary for making assessment 
of property tax under that Act. This Court classified the properties 
into four categories.:-
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(1) self-occupied; 
(2) partly self-occupied and partly tenanted; 
(3) restrictive lease-hold on which construction is raised; and 
( 4) where the property has been constructed in stages. 
So far as the fourth category is concerned (and these applications are 
concerned with that) this Court said:-
"The fourth category ot premises we must deal with 
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is the category where the premises are constructed 
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in stages. The discussion in the preceding paragraph of 
this judgment provides an answer to the question as to 
how the rateable value of this category of premises is to 
be determined when the premises at the first stage of 
construction are to be assessed for rateable value, 
the assessing authorities would first have to determine G 
the standard rent of the premises under sub-section (2) 
(a) or 2(b) or (l)(A)(2)(b) or (l){B)(2)(b) of Section 6 
as may be applicable and keeping in mind the upper limit 
fixed by the standard rent and taking into account the vari-
ous factors discussed above, the assessing authorities would 
have to determine the rent which the owner of the premises 
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A 
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c 
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998 
SUPREME COURT REPORTS 
[1987] 3 S.C.R. 
may reasonably expect to get if the premises are let out to a 
hypothetical tenant and such rent would represent the rate-
able value of the.premises." 
Having said so generally, this Court proceeded to examine the diffe-
rent facets of the question and stated:-
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"When any addition is made to the premises at a 
subsequent 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 e:xtension 
of the existing premises which are self-occupied. In such a 
case the original premises together with the additional 
structure would have to be treated as a single unit for the 
purpose of assessment and its rateable value would have to 
be determined on the basis of the rent whi

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