LT. COL. P.R. CHAUDHARY (RETD.) ETC. versus MUNICIPAL CORPORATION OF DELHI AND ANR.

Citation: [2000] 3 S.C.R. 607 · Decided: 26-04-2000 · Supreme Court of India · Bench: D.P. WADHWA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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LT. COL. P.R. CHAUDHARY (RETD.) ETC. 
v. 
MUNICIPAL CORPORATION OF DELHI AND ANR. 
APRIL 26, 2000 
[D.P. WADHWAAND N. SANTOSH HEGDE, JJ.] 
Municipalities : 
Delhi Municipal Corporation Act, 1957/Delhi Rent Contrvl Act, 1958: 
Pmperty Tax-Assessment of-Rateable value-Dete1mination of-Prin-
ciple laid down by Supreme Cou11 in D1: Balbir Singh 's case-Rateable value 
of property not to exceed standard rent-Assessment without following the 
above principle-Upheld by High Cow1-Validity of-Held, if the principle 
laid down by the Supreme Cow1 in D1: Balbir Singh's case are not followed, 
: there would be wide disparity between rateable value of similarly situated old 
premises and new premises which would be irrational, illogical and unfair-
Law as interpreted by Supreme Cou/1 cannot be brushed aside on the ground 
that it is not in confonnity with the statut01y provisions-Matter remitted to 
Assessing Officerforfresh assessment in accordance with the principles laid 
down in Dr. Balbir Singh' s case. 
Constitution oflndia-A11icle 141-Law laid down by Supreme Court of 
India-Not to be brushed aside on the gmund that it does not conform to 
statut01y provisions. 
The issue involved in the present appeals was regarding determina-
tion of rateable value of property for the purpose of property tax. In Dr. 
Balbir Singh's case, this Court, to prevent disparity in reteable values of 
similarly situated old premises and new premises, laid down the principle 
that the rateable value of the property cannot exceed the standard rent. 
However, in the instant case, the Assessing Officer passed an assessment 
order without taking into consideration the above principle. Consequently, 
the reteable value adopted for the appellant's property was much higher 
than those in the neighbourhood. On appeal, Additional District Judge, set 
aside the assessment order holding that the principle laid down in Dr. 
Balbir Singh' s case was ignored. However, High Court, while allowing the 
writ petition of respondent-Corporation, restored the order of Assessing 
Officer holding that the principle laid down in Dr. Balbi1· Singh's case was 
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608 
SUPREME COURT REPORTS 
[2000] 3 SF.R. 
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not applicable. Hence the present appeals. 
·~4' 
Allowing the appeals, the Court 
HELD : 1.1. High Court was not justified in allowing the writ peti-
tion of respondent-Corporation holding that the principles laid down by 
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this Court in Dr. Balbir Singh' s case were not applicable. 
1.2. Law as interpreted by this Court cannot be brushed aside by saying 
that it is not in conformity with the statutory provisions. Law laid by this 
Court is explicit and admits of no doubt. For the purpose of arriving at the 
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rateable value, the basic principle is that the annual rent which the owner 
of the premises may reasonably expect to get if the premises were let out to 
a hypothetical tenant. It would depend on the size, situation, locality and 
condition of the premises and the amenities provided therein. All these and 
other relevant factors would have to be followed in determining the rate-
)(" 
.... 
able value. That, however, cannot be in excess of the standard rent which 
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would be the upper limit. But then considering the run away prices of land 
and building materials, if the standard rent were to be the measure of reteable 
value, there would be a huge disparity between rateable value of old premises 
and those recently constructed though they may be similar and situated in 
the same or even adjoining locality. Considering the same and similar serv-
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ices which are provided by the local authority, if there is vast a disparity 
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between the reteable value of the old premised and the new premises that 
would be wholly illogical and irrational. [616-E-G] 
Dr. Balbir Singh and Others v. Municipal Corporation, Delhi and 0th-
ers., [1985) 2 SCR 439, relied on. 
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1.3. The High Court was wrong in its reasoning that the Municipal 
......... 
Corporation of Delhi has no machinery, if required, to follow the princi-
pies laid down by this Court. No two premises can be similar. In all revenue 
matters, there is no adversary system. Assessment records of the rateable 
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value of the premises in the locality are certainly available in the records of 
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the Municipal Corporation of Delhi. It has a field staff on the reports of 
which notices for enhancement of the rateable value are issued. Assessing 
authority hears the objections

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