LexMUNICIPAL CORPORATION OF GREATER BOMBAY versus NEW STANDARD ENGINEERING CO. LTD.
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A MUNICIPAL CORPORATION OF GREATER BOMBAY v. NEW STANDARD ENGINEERING CO. LTD. DECEMBE.R 7, 1990 B [K. JAGANNATHA SHETTY, A.M. AHMADI AND R.M. SAHAI, JJ.] Bombay Municipal Corporation Act, 1888:. Property Tax. Section 154--Property tax-Rateable value of Respondent's C building-How to be determined-Whether it is to be determined under sub-section ( 1) or sub...section (3) of Section 154. Section 154--Explanation to Section 154(3)-"Recognised scheme of subsidised housing for industrial workers or persons belong- ing to lower income groups or poorer classes" -Consultation with D corporation-Effect of non-observance of statutory prescription of con.sultation-Held prior consultation mandatory. The Respondent Company an industrial concern constructed a building to provide housing accomodation for its workers under the Government Subsidised Scheme for Industrial Workers after obtaining E a certain amount of subsidy and loan from the Government under an agreement dated 12.11.1959. Clause 5 of the agreement required the Respondent Compnay to adhere to all the terms, conditions and stipula- tions as in force at the date of 'Government of India Subsidised Housing Scheme for Industrial Workers' Clause 8 of the agreement imposed limitation on the company not to charge rent exceeding Rs.26.50 per F month per tenement inclusive of municipal rates and taxes. For the purpose of charging property tax on the Company's said building, the Municipal Corporation made the assessment under sub- section (1) of Section 154 of the Act. In making the assessment the annual letting value was rIXed at an amount higher than the actual rent G charged for each tenement. The Company objected to the assessment raising the plan that the building bas been constructed under the recog- nised Government subsidised housing scheme for industrial workers and it is restrained from charging rent exceeding Rs.26.50 per month from each allottee. Therefore the Rateable Value should be fixed under sub-section (3) and not under sob-section (1) of Section 154. The Corpo- H ration rejected the contentions of the Company. Appeal preferred by 478 ,. MUNICIPAL CORPORATION v .. ENGG. CO. 479 the Repondent-Company to the Small Causes Court was uosuccesful. On further appeal the High Court upheld the Respondent's claim and · A directed the Municipal Corporation to revise the Rateable Value taking into account onl:y the actual rentals recoverable by the Respondent from . each tenant which would be the Standard Rent for each of the !JIQCks. On the crucial point of prior consultation, the High Court held that the same is more or less directive in nature and not to be regarded as B mandatory and therefore the omission on the part of the Government to consult the Corporation cannot take the case out of the Explanation to sub-section (3) of Section 154 of the Act and the Corporation would not be at liberty to take the Rateable Value more than the actual rentals charged. The Corporation bas appealed to this court challenging the correctness of the decision of the High Court. Allowing the appeal, setting aside the judgment of the High Court and restoring that of the C Small Causes Court, this Court, HELD: Procedural safeguards which are so often imposed for the benefit of persons affected by the exercise of administrative powers, are normally regarded as mandatory, so that it is fatal to disregard them. D Where there is a statutory duty to consult persons affected, this must genuinely be done and reasonable OPJIOrlunilL_for CO!Dment must be given. If the exercise of power is likely to impair the proprietary or financial interests of named bodies to be consulted, then generally the provision requiring consultation. before the statutory power is exercised is construed as mandatory. [485G-H, 484H-485A] E There must he opportunity for the Corporation to express its views on the recognised scheme and the terms thereof. The opinion expressed by it may not be binding on the Government which may take its own decision but nevertheless consultation with the Corporation must be there on the essential points- and the core of the subject F involved. If there is no such constiltation · the Corporation cannot be compelled to rix the rateable value of the building under sub-section (3). The High Court seems to have· erred in this regard. The right to be consulted in opposition io a claim or proposal which will adversely
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