MUNICIPAL CORPORATION OF GREATER MUMBAI AND ANR. versus KAMLA MILLS LTD.

Citation: [2003] SUPP. 1 S.C.R. 500 · Decided: 11-07-2003 · Supreme Court of India · Bench: RUMA PAL · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
MUNICIPAL CORPORA T!ON OF GREATER MUMBAI AND ANR. 
B 
v. 
KAM LA MILLS LTD. 
JULY 11, 2003 
[RUMA PAL AND B.N. SRIKRISHNA, JJ.] 
Mumbai Municipal Corporation Act; Section 154(1): Property Tax-
Assessment of rateable value after demolition of old building before 
C construction of new one-Rateable value-Criteria-Determination of-Held: 
rateable value is limited to standard rent-Rent/licence fee in excess of 
standard rent is illegal-Since the Act neither contains a definite clause nor 
a non-obstante clause nor lays down manner of computation of rateable 
value, it has to be determined as per relevant provision of Rent Restriction 
legislation-Bombay Rent Control Act-Sections 2(3)(g), 5(10) and 7. 
D 
Burden of proving what the standard rent was while objecting to 
rateable value fixed by Commissioner-Held, always on the assessee-
Attention of parties not focused on the core issue-Failure to produce relevant 
material-Jn the interests of justice, issue to be reconsidered after giving an 
opportunity to the respondent to discharge the burden placed upon it under 
E law. 
F 
Practice and Procedure: Appeal-Raising of new ground-Held: 
Normally not permitted when wider ramifications may arise-However, 
substantive justic2 requires overlooking of the rigid rule particularly when 
it does not cause prejudice to the opposite party. 
Words and Phrases: 
'standard rent', 'rateable value' and 'hypothetical tenant'-Meaning 
of in the context of Mumbai Municipal Corporation Act. 
G 
Respondent-assessee, a company, demolished some old structures of 
H 
buildings and got plans approved by the concerned authority for construction 
of a new building complex thereupon. The appellant-Corporation treated the 
entire land as land under construction for assessment of tax thereon and 
proposed to revise its rateable value accordingly. The respondent objected to 
500 
MUNICIPAL CORPN"OF GREATER MUMBAI v. KAMLA MILLS LTD. 
50 J 
the proposal of revision of the rateable value. The competent authority, upon A 
consideration of objections, reduced the rateable value of the land. Tiie 
respondent-assessee filed appeals for further reduction in the rateable value. 
Appeals were allowed by the Small Causes Court by further re:Vising the 
rateable value. Aggrieved, appellant-Corporation filed appeals, which were 
rejected by the High Court Hence, the present appeals. 
B 
It was contended for the appellant that since the b)lilding was assessed 
for the first time, the rateable value had to be ass¢ssed on the basis of 
'Contractor Method'; that actual rental value ofthebuilding was taken into 
account in calculating the rateable value; that the facts as to the letting out/ 
transfer of portion of the building to the occupants on certain amount in C 
consideration thereof were not disclosed in the appeals; that the Supreme 
Court in the matter of The Municipal Corporation of Greater Bombay v. Ms. 
Polychem Ltd., [1974) 2 SCC 198 has laid down that the rateable value after 
demolition of the old building should not be changed; and that after demolition 
of the old structure potential of the building increased tremendously. 
On behalf of the respondent, it was submitted that since the rateable 
value of a land must not exceed the standard rent as per provisions of law, the 
authority could not revise rateable value of the land·so also merely because 
the land had building potential, the appellant could not revise the rateable 
value on that ground. 
Allowing the appeals, the Court 
D 
E 
HELD: 1.1. The instant case is governed by the provisions of a Rent 
Restriction Legislation viz. The Bombay Rent Act. The Bombay Municipal 
Corporation Act neither contains a statutory definition of 'rateable value' nor 
does it lay down the manner in which the rateable value has to be computed. F 
The Bombay Municipal Corporation Act neither contains a defining clause, 
nor a non-obstante clause which would hold the field, notwithstanding the 
definition of 'standard rent' in the Bombay Rent Act Therefore,primafacie, 
this would be a case which would fall within the general principle laid down 
by a series of judgments of this Court. [513-H; 514-B) 
G 
East India Commercial Co. (P) Ltd. v. Corpn. of Calcutta, [1998) 4 SCC 
368; Asst/. G.M, Central Bank of India v. Commr. Municipal Corpn. for the 
City of Ahmedabad, [1995[ 4 SCC 696; Indian Oil Corpn. Ltd. v. Municipal 
Corpn., [1995[ 4 SCC 96; Srikant Kashinath Jituri v. Corpn. of the City of 
Belgaum, [1994[ 6 sec

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