MUNICIPAL CORPORATION, INDORE AND OTHERS versus SMT. RATNA PRABHA AND OTHERS

Citation: [1977] 1 S.C.R. 1017 · Decided: 29-10-1976 · Supreme Court of India · Bench: A.N. RAY · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

1017 
MUNICIPAL CORPORATION, INDORE AND OTHERS 
A 
v. 
SMT. RATNA PRABHA AND OTHERS 
October 29, 1976 
[A. N. RAY, C.J., M. H. BEG AND P. N. SHINGHAL, JJ.] 
Madhya Pradesh Municipal Corporation Act 1956-Sec. 138(b)- Madhya 
Prac!c-11 Accommodation Control Act 1961-Sec. 7-Must re11tal value under 
1he Municipal Act follow the standard rent under Accommodation Control Act 
when premises lei out-When used by owner. 
· 
• 
The respondents are the, owner of a bµilding known as Viram Lodge. 
.T~ey 
run a hotel in the said building. The annual gross rental value of the bmldmg 
was determined at Rs. 6,600/- in 1956. It was revised to Rs. 43,405 /- by the 
Assessment Officer in 1965. Section) 138(b) of the Madhya Pradesh Municipal 
Corporation Act, 1956, provides that notwithstanding anything contained in any 
other law for the time being in force, the annual value of any building shall be 
deemed to be the gross annual rent at which such building might be reasonably 
at the time of assessment be expected to1 let from year to year at the time of 
the less an allowance ofi 10 per cent for repairs etc. The respondent challenged 
the valuation on the ground that the rental value ·of the premises could not be 
fixed at a rate higher than the standard rent under section 7 of the Madhya 
Pradesh Accommodation Control Act, 
1961. 
The 
Municipal 
Commissioner 
negatived the respondents' contention. 
An appeal filed by the respondents to 
the Additional District Judge also failed. 
The High Court however allowed the 
Revision filed by the respondents. 
Allowing the appeal by Special Leave held : 
B 
c 
D 
1. In the present case the building in question was never let on rent and 
is being nsed by the owners as a hotel. [1019 A] 
E 
2. On a proper construction of section 138 (b) where the standard rent 
<'>f a building has been fixed, under section 7 of the Accommodation 
Control Act, and there is nothing to show that there has been fraud 
or collusion that would be its reasonable letting value but where the 
building has never been let out the question of fixation standard rent 
does not arise. In that case it wonld be permissible to fix its reason-
able rent withont regard to the provisions of Madhya Pradesh Aecom-
F 
modation Control Act. 
This view gives proper effect to the non-
obstante clause in section 138(b ). [1019 D·F] 
The Corpora/ion of Calcutla v. Smt. Padma Debi and 
others 
[1962] 3; 
S.C.R. 49, Corporation of Calcutta v. Life Insurance Corporation of India [1971] 
1. S;C.R. 246, Guntur Municipal Cou!Jcil v. Guntur Town Rate Payers' 
Asso-
ciation [1971] 2 SC~ 423 and New Delhi Municipal Commitlee v. M. N. Soi 
and another [1977] 1 S.C.R. 731, distinguished. 
CIVIL APPELLATE JURISDICTION : Civil Appeal 
No. 2111 
of 
1969. 
(Appeal by Special Leave from the Judgment and Order dated 
26-9-1968 of the Madhya Pradesh High Court in 
Civil 
Revision 
No. 711/66). 
V. S. Desai, P. C. Bhartari and D. N. Misra for the Appellants. 
B. N. Lokur and Rameshwar Na:~h for the Respondents. 
G 
H 
A 
1018 
SUPREME COURT REPORTS 
[ 1977] 1 S.C.R. 
The Judgment of the Court was delivered by 
• 
SHINGHAL, J.-This appeal by special leave is directed against the 
judgment of the Madhya Pradesh High Court dated September 26, 
1968 setting aside the appellate order or the Second Additional 
District Judge, Indore, dated October 29, 1966 and remitting 
the 
" 
matter to the Municipl!l Commissioner for a fresh determination of 
B 
the annual value of the building. 
c 
n 
E 
F 
G 
H 
The building in question is known 
as 
"Viram 
Lodge", 
on 
Ravindra Nath Tagore Marg, Indore. 
It belongs to the 
respon~nt 
and has been used by them as a hotel. 
The annual gross 
r~ntal 
value of the building was determined at Rs. 6600/ in 1956. It was 
revised by the Assessment Officer on June 3, 1965 and was.raised 
to Rs. 43,405.20. 
The respondents, filed objections to the valuation, 
but the Municipal Commissioner· fixed 
the annual value 
at 
Rs. 43,405.20. 
He held that, in view of the "11011-obstante" clause 
in section 138(b) of the Madhya Pradesh Municipal Corporati9n 
Act, 1956, hereinafter referred to as the Act, there was no justifica-
tion for the argument that the rental value of the premises could not 
be fixed at a rate higher than the standard rent under section 7 of 
the Madhya Pradesh Accommodation 
Control 
Act, 
1961. 
An 
appeal was taken to the Second 
Additional District Judge, 
but 
without success. 
The respondents then filed an applic

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