Grover, J. - (1.) This is an appeal from a judgment of the Bombay High Court in the matter of valuation of the premises belonging to the respondent made under the provisions of the Bombay Municipal Corporation Act 1888, hereinafter called "the Act of 1888."
(2.) For the years 1957-58 and 1958-59 the rateable valuation of the building was fixed by the Municipal Corporation at Rs. 1,66,410. On April 1, 1958 an additional tax known as educational cess was imposed by the Municipal Corporation at the rate of 11/2 per cent of the rateable value on all properties within its limits. This was done under Section 140 of the Act of 1888. As the landlord became entitled to increase the rent recoverable from the tenant to the extent of the increase in the tax payable to the Corporation under the provisions of Section 10-AA of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (Act No. LVII of 1947) hereinafter called the Rent Act, the Assessor and Collector of the Corporation served a notice on the respondent proposing to increase the rateable value of the building in question to Rs. 1,68,585. The respondent objected to the above increase. The Assessor and the Collector, however, raised the rateable value of Rs.1,66,180. The amount thus fixed was at a lesser figure than the one for the year 1958-59 but that was by reason of certain other deductions which had been claimed by the respondent and which were allowed. The claim of the respondent for non-inclusion of the amount of educational cess in the rent was disallowed. The matter was taken in appeal to the court of Small Causes at Bombay which was dismissed. The respondent preferred an appeal to the High Court. The High Court held that the rateable value could be fixed only on the basis of the standard rent provided by the Rent Act and the amount of permitted increases could not be included in rent for the purposes of valuation. It was not disputed by the respondent before the High Court that the rents of the tenants had been increased by it to the extent of the educational cess but the contention that was put forward and which prevailed was that the same was not being recovered as a part of the rent.
(3.) The controversy between the parties is a narrow one. According to the appellant the amount of educational cess which is recoverable by the landlord under the Rent Act from the tenants should be deemed to be a part of the annual rent for which the building might reasonably be expected to be let from year to year within the meaning of S. 154 (1) of the Act of 1888. On the other hand the respondent has maintained throughout that the educational cess levied under section 140 of the aforesaid Act cannot be included for the purpose of valuation under S. 154 (1) in the annual rent.;