CORPORATION OF CALCUTTA versus LIFE INSURANCE CORPORATION OF INDIA

Citation: [1971] 1 S.C.R. 248 · Decided: 09-04-1970 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Dismissed

Cited by 3 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

248 
CORPORATION OF CALCUTTA 
v. 
LIFE INSURANCE CORPORATION OF INDIA 
April 9, 1970 
[J. C. SHAH AND K. S. HEGDE, JJ.] 
West Bengal Premises Rent Control (Temporary Provisions) Act (11 
of 1950), s. 2(10) (b) and Calcutta Municipal Corporation Ac11 (33 of 
1951), s. 168(1}-Premises let 
out-Sub-letting for. larger 
1·ent by 
tenant-Fixation of annual value-Standard rent payable by tenant or rent 
r.!Ceived by lenant from sub-tenants to be considered. 
The respondent was the owner of a building whose tenant was paying 
a ""'°tain amount as rent. 
No standard rent under s. 9 of the 
West 
Bengal Rent Control (Temporary. Provisions) Act, 1950 was fixed but 
the amount of rent was such that it would have been fixed as standard 
rent if application for such fixation was made under that Act. The tenant 
had sub-let the premises and was receiving a much larger sum from the 
sub-tenants. 
For the purpose of assessment to the 
consolidated 
rate 
under s. 168(1) of the Calcutta Municipal Corporation Act, 1951, the 
annual rent at which the building might be reasonably expected to be let 
from year to 
year should be taken into consideration. The appellant 
determined the ann.ual value of the building on the basis of the rental 
received by the tenant from its sub-tenants. In appeal by the respondent 
the Court of Small Causes held that only tho rent paid by the tenant to 
the respondent should be taken as the basis; and the High Court confirmed 
the order. 
In appeal to this Court it was contended that under the proviso to 
· s. 168 (I), if standard rent had been fixed under the West Bengal Rent 
Control (Temporary Provisions) Act, it would form the. basis of annual 
rent, but, if there was no such fixation, the appellant was competent to 
take into account all relevant circumstances including the rent at which 
the buildini: \\'.as sub-let. 
HELD: (1) The corresponding section, s. 127(a) of the Calcutta 
Municipal Act, 1923, did not contain a proviso similar to 
the one in 
s. 168(1) of the 1951-Act. But the decision in Corporation of Calcutta v. 
Smt. Padma Debi, [1962] 3 S.C.R. 49, interpreting s. 127(a) of the 1923-
Act and holding that the annual value should be determined only on the 
footing of the standard rent applies. 
In determining 
th~ annual rent 
statutory limitation of rent circumscribes the scope of the bargain in the 
market and the rent at which the premises could be let out from year to 
year can ne\.·er exceed the standard rent. 
Under s. 2(10) of the 
West" 
Bengal Premises Rent Control {Temporary Provisions) Act, when there 
is no order of the Controller fixing the standard rent under s~·9 of that 
Act, the standard. rent would be the amount at which it wou1d have been 
fixed if application were made for sue,h fixation. Therefore, in the
1 present 
case the annual rent at which the building, might reasonably be expected 
to be let from year to year, would be rent which the tenant was 
paying 
to the respondent and not the rent which the tenant was receiving from 
the sub-tenantS. [251 D-H] 
· 
(2) Section 193 of the Calcutita Municipal Corporation Act, which 
only provides for apportionment of consolidated rates, is irrelevant 
in 
determining the annual value. [252 G] 
A 
B 
c 
D 
E 
F 
G 
H 
B 
c 
D 
E 
F 
G 
H 
CORP. OF CALCUTTA V. L.I.C. (Shah, J.) 
249 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1559 of 
1966. 
Appeal from the judgment and order dated February 15, 1963 
of the Calcutta High Court in Appeal from original order No. 6 
of 1959. 
P. K. Mukherjee, A. N. Sinha and Rathin Das, for the appel-
lant. 
G. L. Sanghi and K. L. Hathi, for the respondent. 
The Judgment of the Court was delivered by-
Sbah, J, Messrs. A. Firpo Ltd. held as tenants premises No. 
11, Government Place East, Calcutta, belonging to the Asiatic 
Assurance Company Ltd., under. a lease dated August 6, 1941, 
at a monthly rental of Rs. 2,000. 
The rent was increased .by 
mutual agreement with effect from November 1953 to Rs. 2,800 
per month. 
Messrs. A. Firpo Ltd. had sublet a major part of the 
premises to five different tenants and the aggregate rent received 
from the sub-tenants amounted to Rs. 4,520. 
The Corporation of Calcutta assessed the annual value of the 
premises at Rs. 32,076 for six years prior to Aprill, 1955. 
With 
effect from April l, 1955, the. Corporation assessed the annual 
value of the premises at Rs. 62, 7 61. 
The objection raised by the 
owner against the determination of annual value was r

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