EAST INDIA COMMERCIAL CO. PVT.LTD. ETC. versus CORPORATION OF CALCUTTA

Citation: [1998] 2 S.C.R. 543 · Decided: 30-03-1998 · Supreme Court of India · Bench: A.S. ANAND · Disposal: Appeal(s) allowed
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Judgment (excerpt)

I 
EAST INDIA COMMERCIAL CO. PVT.LTD. ETC. 
v. 
CORPORATION OF CALCUTTA 
MARCH 30, 1998 
[DR. A.S. ANAND, CJ. AND B.N. KIRPAL, JJ.] 
Municipalities-Calcutta Municipal Act, 195 I-Section 168-Property 
Tax-Assessment-Determination of Annual Value of the building-Prov1:sions 
A 
B 
of Municipal Act have to be read alongwith Rent Restriction Act for 
determination of fair rent or standard rent-Ratable value cannot be more C 
than fair or standard rent except when Municipal Act itself provides mode 
of determination or contains a non-obstante clause-Section I 68 of Calcutta 
Municipal Act does not contain any such provision or non-obstante clause--
Held, for fixation of a1111ual value, fair rent determinable under Section 
8(/)(d) of West Bengal Premises Tenancy Act, to be taken into consideration. D 
West Bengal Premises Tenancy Act, 1956--Section 8(/j(d)-Fair rent-
By virtue of proviso to Section 8(/)(d), such fair rent will be the annual 
value of building for a period of eight years ji-0111 date of first letting and 
thereafter, the annual value will have to be revised as per formula contained 
in Section 8(/)(d), when the provisio will no more be applicable. 
E 
The respondent issued a notice under Section 180 of Calcutta Municipal 
Act, 1951 and assessed the annual value of the building constructed by the 
appellants at Rs. 63,365. Special Officer disposed off the objection filed by 
the appellants reducing the value to Rs. 49,368. In appeal before the Court 
of Small Causes, the appellants contended that the annual value of the F 
property ought to have been fixed on the basis of fair rent and not on the basis 
of actual rent and also moved an application for permission to examine an 
expert valuer to prove the cost of construction of the building. The application 
was rejected and Revision filed against the order was also dismissed. The 
appellants again approached the Court of Small Causes for recalling its G 
earlier order. Relying on Dew1111 D1111!11t R11i case, the Court of Small causes 
.r. 
recalled its earlier order. On appeal, the High Court reversed the said order. 
In appeal to this Court it was contended on behalf of the appellants that 
the fair rent determinable under Section 8(l)(b) of the Tenancy Act would 
be the basis of the annual value. 
543 
H 
544 
SUPREME COURT REPORTS 
[ 1998] 2 S.C.R. 
A 
The respondent submitted that the actual rent received by the appellants 
could alone be the basis for determining the annual value and the principle 
of fixation of fair rent under Section 8 of the Tenancy Act is wholly irrelevant. 
~. 
Allowing the appeal, this Court 
B 
HELD: I. The annual value under Section 168 of the Calcutta Municipal 
Act has to be fixed on the basis for the fair rent determinable under Section 
8 of the Tenancy Act as the Municipal Act does not contain any non-obstante 
Clause so as to make Tenancy Act inapplicable nor does the Act provide the 
method or basis for determining annual value. 1554-GI 
C 
De11·an Dau/at Rai Kapoor etc. v. Nell' Delhi Municipal Cammi/lee & 
another etc., 119801 2 SCR 607, relied on. 
Dr. Balbir Singh & Ors. v. MCD & Ors., 119851 2 SCR 439; Morvi 
Municipality'" State of Gujarat & Ors., 119931 2 SCC 520; Bhagivant Rai 
D & Ors. v. State of Punjab, 119951 5 SCC 440 and NDMC v. M.N. Soi & Anr., 
1197711 SCR 731, cited. 
2. For determination of Annual Value, the provisions of Municipal Act 
has to be read along with Rent Restriction Act which provides for 
determination of fair rent or standard rent. The Reteable Value cannot be 
E more than fair rent or standard rent. 1554-EI 
F 
3. When Municipal Act provides the mode of determination of the 
annual letting value or contains 11011-obstante clause then the annual letting 
value will be determined according to the terms of Municipal Act. 1554-FI 
Municipal Corporation, Indore & Ors., v. Smt. Raina Prabha & Ors., 
119771 I SCR 1017 and Ass/I. Ge11eral Ma11ager, Central Bank of India & 
Others v. Commissioner and /\.funicipal Corporation for the City of 
Ahmedabad a11d Others, 119951 4 SCC 696, referred to. 
The Corporation of Calcutta'" Smt. Padma Devi & Ors., 1196213 SCR 
G 49; G1111tur M1111icipal Co1111ci/ v. Guntur Town Rate Players Association, 
119711 2 SCR 423; Co1jJOration of Calcutta v. LIC, j19701 2 SCC 44 and 
Indian Oil Corporation Ltd. '" Municipal Corporation & Ors., 119951 4 SCC 
96, cited. 
4. For fixation of annual value fair rent determinable under Section 
H 8(1)(b) of West Bengal Tenancy
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