TMI Blog1961 (8) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... e said assessment under s. 139 of the Act. Meanwhile under the West Bengal Premises Rent Control (Temporary Provision) Act, 1950 (W.B. XVII of 1950), (hereinafter called the Rent Control Act), the standard rent of the said premises was fixed by the Rent Controller: the rent was fixed at Rs, 550 per month with effect from April, 1951, and at Rs, 632-8-0 per month with effect from August, 1951. One of the objections raised was that the Corporation had no power to fix the annual valuation at a figure higher than the standard rent. The' Special Officer disallowed all the objections and confirmed the assessment. Being aggrieved by the said order, respondent No. 1 filed an appeal in the Court of Small Causes, Calcutta, and the learned Small Causes Judge allowed the appeal and fixed the annual valuation, for the purpose of assessment, at ₹ 6,831. That was on the basis of the standard rent of ₹ 632-8-0 per month. The Corporation of Calcutta questioned the correctness of the said Judgment by preferring an appeal to the High Court at Calcutta. The High Court by a majority agreed with the Small Causes Judge and dismissed the appeal. Hence the present appeal. The main conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the land on the basis of rental value of land in the neighborhood. It was argued that the premises ought to be valued on the basis of rent which would be paid by a hypothetical tenant who must be presumed to keep the land vacant, or at the most use it as an imperfect golf course. The Judicial Committee rejected the contention and made the following observations at p. 5 : Indeed, it provides a striking example of the danger attending an injudicious use of precedent. The owner of land in England is not chargeable with rates, as owner, at all. If he leaves land vacant and unoccupied, he pays no rates. Under the Calcutta Act mere, ownership carries with it a liability to pay one-half of the rate assessed on the annual value of the land. It is impossible to construe s.127 as meaning that, when land is unoccupied, its annual value must be taken to be the rent at which it might be expected to be let to a tenant who was- precluded from occupying it. There is nothing in the words of the section to suggest that a hypothetical tenancy of so improbable a character was contemplated, and the elaborate provisions of s.151 can hardly have been framed in order to reduce by half, for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be irrecoverable notwithstanding any agreement to the contrary. Section 33(a) thereof provides inter alia that ,whoever knowingly receives, whether directly or indirectly, any sum on account of the rent of any premises in excess of the standard rent will be liable to certain penalties. Standard rent has been defined in 2(10)(b) to mean that where the rent has been fixed under s. 9, the rent so fixed, or at which it would have been fixed if application were made under the said section. A combined reading of the said provisions leaves no room for doubt that a contract for a rent at a rate higher than the standard rent is not only not enforceable but also J. that the landlord would be committing an offence if he collected a rent above the rate of the standard rent. One may legitimately say under those circumstances that a landlord cannot reasonably be expected to let a building for a rent higher than the standard rent. A law of the land with its penal consequences cannot be ignored in ascertaining the reasonable expectations of a landlord in the matter of rent. in this view, the law of the land must necessarily be taken as one of the circumstances obtaining in the open market pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be levied upon every occupier of lands, houses, etc. The distinction between occupier and owner, in this connection, is of primary importance. The occupation value of property may be, and often is, distinct from its value to the owner. This distinction would probably be emphasized where an artificial statutory maximum is fixed, and a statutory restriction prevents an owner from recovering from any tenant a, greater amount, as rent, than the statutory maximum. These passages bring out in bold relief the distinction between the English and the Indian law which has already been pointed out by the Judicial Committee in Bengal Nagpur Railway Company Limited v. Corporation of Calcutta ((1946)L.R.74 I.A.I.). That is why, while in England the value of occupation by a tenant is the criterion for fixing the, standard rent under the rating law, under the Act the letting value of a building to the landlord is the standard in fixing the, rental value. If this distinction is borne in mind much of the cloud cast in this case is dispelled. It would be instructive to quote the weighty observations of Atkin, L. J., as he then was, which were approved by Lord Carson in his dissenting judgment ; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Courts are based upon a correct appreciation of the distinction between the law of rating in England and that under the Act. It is said that, as under s. 9(1)(b) of the Rent Control Act the landlord can get the standard rent raised by an amount equivalent to the increase in taxes, rates or cesses, there would not be any prejudice even if the annual value of the building is fixed on the basis of a rate of rent higher than that permissible under the said Act. But this reasoning would land us in a vicious circle and would enable one to circumvent the provisions of the Rent Control Act, for though a tenant if; not liable under an Act to pay a rent higher than the standard rent, by this process he would be compelled to pay a higher rent. On the other hand, the scope of that section can legitimately be confined to situations giving rise to increase of taxes such as the increase in the rate, etc. Nor are we impressed by the argument that the omission of a specific provision, as in s.26 of the Calcutta Rent Act of 1920, prohibiting the Calcutta Corporation from making assessment of any rent higher than the rent fixed by the Rent Controller in the subsequent Acts would inevitably lead t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hose three years or even there- after, would have expressly made a provision to that effect in the Municipal Act, 1923. On the other hand, the phraseology of the section must have been designedly used wide enough to comprehend such a prohibition. Indeed, when the Act was repealed in 1951 by Act XXXIII of 1951, what was implicit in s.127(a) was made explicit in the proviso to s.168(1) of that Act. We cannot, therefore, draw any implied prohibition from the history of the legislation. In the result, we hold, on a fair reading of the express provision of s.127 (a) of the Act in the light of the decisions considered, that the rental value cannot be fixed higher than the standard rent under the Rent Control Act. The next question is, what is the meaning of the phrase at the time of assessments occurring in s.127(a) of the Act. The majority view of the High Court was that assessment commences with the making of the valuation under B. 131 of the Act and ends with the determination of the objection under s.140 thereof, and that an event which took place during this period may be relied upon for assessing the annual value under s.127(a) of the Act. The correctness of this view has not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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