Harilal Kania, Kt. , C. J. - (1.)THIS is an appeal from a judgment of the High Court of Judicature at Fort William in West Bengal. The material facts are these.
(2.)PREMISES No.4, Diamond Harbour Road, which is within the municipal limits of Calcutta, comprise 69 bighas, 10 cottas, 8 chittacks and 18 square feet of land with buildings thereon. The respondents who are the Governors of St. Thomas' School are the owners of the land and of the buildings which were constructed thereon before April 1942. Those premises have been assessed to consolidated rates under Section 127 (6) of the Calcutta Municipal Act. An assessment at the general six yearly re-valuation was made in 1938-39. Unless re-valued in the interval that would remain in operation till December 31, 1944.
In April, 1942, the said premises were requisitioned, under Rule 70 (Rule 75-A of the Amended Rules) of the Rules made under the Dafence of India Act, for the purposes of the Government of the Federation, and possesion was taken by the Central Government on April 12, 1942. A memorandum of agreement between the respondents and the Governor-General in Council was executed on February 26, 1943. It recited' that the immoveable property, particulars whereof were set out in the schedule thereunder, had been requisitioned under the Defence of India Act, 1939, and the Rules framed thereunder, and that on April 12, 1942, possession was taken under the authority of the Government and that as the owners had represented that all compensation in respect of the said property was payable to them and to no other person, it was mutually agreed to settle the amount of compensation at Rs. 4,500 per month with effect from April 12, 1942, so long as the Government should remain in possession thereof and the requisition continued. It was further stipulated that except an advance of Rs. 5,000 the owners were not to claim or be entitled to any other compensation in connection with that requisition. Clause 8 provided as follows : The owners shall meet and pay the revenue, rent, Municipal taxes and all other outgoings relating to the said property whether payable by the owners or the occupier thereof.

The schedule was in these terms: Premises No.4, Diamond Harbour Road, St. Thomas' Girls' School situated in the city of Calcutta.

(3.)THEREAFTER the Central Government erected several buildings on the premises at a cost of about Rs. 3 lakhs. In the last quarter of 1944-45 there was an intermediate re-valuation under Section 131 (c) and (d) of the Municipal Act and an enhanced amount was imposed on the premises by the appellants from the first quarter of 1944-45 up to the third quarter of that year. This intermediate assessment is not the subject of the proceedings in this appeal.
After this intermediate re-valuation, the Central Government put up further structures at an additional cost of about Rs. 50,000. At the general re-valuation made under Section 131 (1) of the Municipal Act in the last quarter of 1944-45, the cost of all the additional structures erected by the Central Government, of the total value Rs. 3,50,000, was taken into account and the annual value under Section 127 (b) of the Municipal Act was determined at Rs. 93,370. The respondents objected to this assessment before the Chief Executive Officer of the appellants. The Deputy Executive Officer reduced the valuation of the land, with the result that the annual value was reduced to Rs. 77,873. He rejected the respondents' contention that the value of the buildings put up by the Government should be excluded in the re-valuation. From that decision an appeal was riled in the Court of the Small Causes under Article 144 (1) of the Municipal Act. That Court accepted the contention of the respondents and held that the structures put up by the Government were exempt from Municipal taxes and therefore should not be included in the valuation. The Court thus reduced the annual value to Rs. 60,374. The Court rejected the contention of the respondents that the whole assessment should be set aside. From that judgment an appeal was preferred by the Corporation to the High Court. Pending that appeal, in Gov.-Gen. of India v. Corporation of Cal. (1947) 52 C. W. N. 173 a Division Bench of the Calcutta High Court decided that Section 154 of the Government of India Act applied to buildings constructed under similar circumstances in that case and the proviso was not applicable. Treating that decision as binding, the Division Bench, which decided the appeal in the present case, dismissed the appellants' appeal. As the case involved an interpretation of Section 151 of the Government of" India Act, 1935, the High Court however granted a certificate under Section 205 (2) of that Act. The appellants have therefore brought this appeal to this Court.