MUNICIPAL CORPORATION OF DELHI versus M/S EXPRESS NEWSPAPERS LTD.

Citation: [1998] 3 S.C.R. 685 · Decided: 16-07-1998 · Supreme Court of India · Bench: SUJATA V. MANOHAR · Disposal: Dismissed

Judgment (excerpt)

MUNICIPAL CORPORATION OF DELHi 
A 
"" 
v. 
I 
MIS EXPRESS NEWSPAPERS LTD. 
JULY 16, 1998 
[SUJATA V. MANOHAR ANDS. RAJENDRA BABU, JJ.] 
B 
Delhi Municipal Corporation Act, 1957/Delhi Rent Control Act, 1958: 
---.: 
S 114/s. 6.(1) (BJ-Property Tax-New building constructed on a 
portion of land of a pre-existing building-Rateable value. of new building- c 
Determination of-Held, While determining rateable value of new construction 
market value of land is not to be taken· into account again, as it has already 
been considered while fixing value of pre-existing construction. 
The respondent assessee acquired lease hold rights in respect of 
D 
certain land in the city of Delhi and constructed a building on a portion 
thereof. On completion of the construction the rateable yalue of the property 
was determined in the year 1958-59 and was subsequently revised. Later, in 
1978, the assessee started constructing a new building on the remaining 
portion of the said land and the construction completed in 1981, the assessee 
received notices proposing higher rateable value in respect of both the E 
buildings for subsequent assessment years. In respect of the new building, 
assessment years involved were 1981-82 to 1986-87. The assessee challenged 
the notices in the writ petitions before the High Court. 
Single Judge of the High Court held that in order to fix the rateable 
value under Delhi Municipal Corporation Act, 1957, the appellant-Corporation F 
was not justified in applying the provisions ofs.9(4) of Delhi Rent Control 
Act, 1958 for determining the standard rent of the new building and it should 
have determined the standard rent under s.6 of the Delhi Rent Control Act. 
The Single Judge, applying the ratio laid down by this Court in the case of 
Balbir Singh,* held that since the value of the land as in 1958 had been added G 
to the cost of construction of the old building for· arriving at its standard 
rent, the market price of a part of the same land as in 1978, when construction 
of the new building started, could not be added to the cost of construction of 
-1 
the new building while determining its standard rent. The appeals filed 
~· 
before the Division Bench of the High Court were dismissed. Aggrieved, the 
Corporation filed the present appeals. 
H 
685 
686 
SUPREME COURT REPORTS 
[1998] 3 S.C.R. 
A 
It was submitted for the appellant-Corporation that the ratio of Balbir 
Singh 's case would be applicable only when any addition was made to the 
existing structure and not in the case like the present one where a separate 
structure was erected subsequently on the same plot of land. It was also 
contended that when the new building camp up on the plot the lessors were 
entitled to levy conversion charges for change of user, and surh conversion 
B charges levied in 1978 should be added to the market price of land at the 
commencement of the old construction for arriving at the standard rent/ 
rateable value. 
c 
Dismissing the appeals, this Court 
HELD : 1.1. The High Court has rightly held that the correct section 
which has to be applied in the instant case is s.6 of Delhi Rent Control Act, 
1958. Since it is possible to calculate standard rent under s.6, there is no 
question of resorting to s.9 (4). (692-G-H) 
D 
1.2. The High Court was right in holding that the ratio of Balbir 
Si11gh 's* case applied to the instant case. In that case, this Court has 
considered the situation where premises are constructed in stages and has 
expressly dealt with different kinds of additions which may be made to the 
original structure at a subsequent stage. It has observed that in such additions 
three different situations may arise, in one of them the additions being of 
E a distinct and separate unit of occupation. It was observed that the basic point 
to be noted in such cases is that the formula set out in sub-sections (l)(A)(2)(b) 
and (1) (B) (2)(b) of s.6 could not be applied for determining the standard rent 
of an addition as ifthat addition was the only structure standing on the land. 
A distinct and separate unit of occupation can be either constructed on the 
F 
old existing structure or adjoining it on the same plot of land. (694-C-G] 
*Balbir Singh and Ors. v. Mis MC.D. and Ors., [1985] 1 SCC 167, 
relied on. 
1.3. In the present case, the premises were constructed in stages. 
G When the premises at the first stage of construction were to be assessed for 
rateable value, the assessing authority was to determi

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