K. Jagannatha Shetty, J. - (1.) The essential question raised by these appeals relates to the determination of rateable value of the respondent's building; whether it is to be determined under sub-section (1) or under sub-section (3) of Section 154 of the Bombay Municipal Corporation Act, 1888 ("Act").
(2.) The facts giving rise to these appeals briefly are as follows:The respondents M/ s. New Standard Engineering Co. Ltd. is an industrial concern. It has constructed a building for providing housing accommodation for its labourers under a scheme known as the "Government Subsidised Scheme for Industrial Workers". Under the Scheme, the respondent has obtained certain amount by way of subsidy together with a loan advanced by the Government. The subsidy and loan were advanced under an agreement dated 12 November, 1959 entered into between the Government and the respondent. The agreement inter alia, provides that the Government being satisfied that the proposed construction would be helpful in implementing the Government's scheme for giving an impetus to industrial housing with a view to relieving the acute shortage of houses intended for industrial workers, has agreed to grant a subsidy not exceeding a sum of Rs. 75,400 / - and a loan not exceeding a sum of Rs. 1,50,000/-, Clause 5 of the agreement requires the respondent to observe and perform all the terms,'conditions and stipulations as in force at the date of 'Government of India Subsidised Housing Scheme for Industrial Workers 'including the 'Subsidised Housing Allotment Rules 'contained therein. Clause 8 of the agreement reads as under: "8. The rent which the loanee shall charge to the allottee for the occupation of one tenement shall not exceed Rs. 26.50 per month, such monthly rent being inclusive of municipal rates and taxes."
(3.) For the purpose of payment of property tax the Corporation fixed the rateable value of the building by a special notice No. 528 of 1959-60 dated 17 March, 1960 issued under sub-settion (2) of Section 162 of the Act at Rs.33, 155/-and by as special notice No. G-558 of 1962-63 dated 18 March, 1963 at Rs.33,495/-. Apparently the annual letting value was fixed at an amount higher than the actual rent charged for each of the tenements. It was indeed determined under sub-section (1) of Section 154 of the Act. It reads: "154. (1) In order to fix the rateable value of any building or land assessable to a property tax there shall be deducted from the amount of the annual rent for which such land or building might reasonably be expected to let from year to year a sum equal to ten per centum of the said annual rent and the said deduction shall be in lieu of all allowances for repairs or on any other account whatever." ;