- (1.)Aggrieved by the determination of annual valuation made in terms of S. 174 of the Calcutta Municipal Corporation Act, 1980 (hereinafter called "the 1980 Act"), the appellant-owner of a nine storeyed building, admittedly, used for commercial purposes, filed an appeal before the Municipal Assessment Tribunal who vide its order dated 26th February, 1999 allowed the appeal and fixed the annual value on the basis of rent actually received by the appellant-owner. Feeling aggrieved, the respondent-Corporation approached the High Court under Art. 227 of the Constitution of India who, vide the order impugned in this appeal, set aside the order of the Tribunal and directed it to hear the appeals on merits keeping in mind that total amount paid by the sub-tenants to the tenant of the appellant should also be taken into consideration in assessing the annual valuation.
(2.)It is not disputed that the property in question was leased out by the appellants to their tenant, named Banwarilal Pasari at a rental of Rs. 75,000/- per month vide a duly executed lease deed (Annexure P-1). There is also no dispute that the building is a nine storeyed building and is used for commercial purposes. The respondent-Corporation carried out the general revision of the annual valuation of the premises effective from fourth quarter of 1984-85 and also for the period from fourth quarter of 1990-91. Proposed valuation was communicated to the owner vide two notices issued under the 1980 Act directing them to attend the hearing before the Hearing Officer of the Corporation on the date specified in the notice. The appellant submitted objections to the notices and objected to the same challenging the proposed valuation and the basis thereof. The Hearing Officer vide his two orders dated 1 5-4-1996 fixed annual valuation from fourth quarter of 1984-85 at Rs. 18,80,600/- and from fourth quarter of 1990-91 at Rs. 21,63,560/-. The annual valuation assessment was made under S. 174 of the 1980 Act by taking into consideration the rent paid by the sub-tenants. The Municipal Assessment Tribunal accepted the appeal of the owners by relying upon the judgment of this Court in Corporation of Calcutta v. Life Insurance Corporation of India (1970 (2) SCC 44). Not satisfied with the judgment of the Tribunal, Municipal Corporation moved the High Court by way of a petition under Art. 227 of the Constitution of India, which was allowed by setting aside the order of the Tribunal vide judgment impugned in this appeal. The High Court held that the aforesaid decision of this Court had no application to an assessment made under S. 174 of the 1980 Act which was found to be materially different from S. 168 of the Calcutta Municipal Act, 1951 under which the assessment had been made in Life Insurance Corporation's case (supra). The High Court further held that under 1951 Act the annual valuation in no case could exceed the standard rent fixed by the West Bengal Premises Rent Control (Temporary Provision) Act, 1950 but under the 1980 Act which had a non obstante clause, the annual valuation can be fixed notwithstanding anything contained in the West Bengal Tenancy Act, 1956 or any other law for the time being in force. It has been further held that under the 1980 Act, the consolidated rate is primarily leviable, if the land and building is let upon lessor and if the land and building is sub-let, still upon the superior lessor under S. 193 of the Act, and for that reason S. 194 of the Act has conferred a right upon the lessor, lessee or the sub-lessee to recover the excess amount from their respective tenants for the excess payable by them due to creation of tenancy or sub-tenancy. It was further held that the Municipal Corporation is in no way bound by the fixation of standard rent or fair rent by the Rent Controller and the rent realised by a tenant from the sub-tenant or by a sub-tenant from his tenant is required to be taken into consideration and such amount to be treated as gross rent of the land or building for the purposes of S. 174 of the 1980 Act. Finding that the appellate Tribunal had acted illegally and with material irregularity in holding that in assessing annual valuation of the building the amount realised from the sub-tenants cannot be taken into consideration, the matter was remanded to the Tribunal to hear the appeal afresh on merits and decide the same in the light of the observations made by the High Court. Not satisfied with the judgment of the High Court, the owners of the building have preferred this appeal. When this appeal was listed in the Court on 10th November, 2001, the Judges constituting the Bench felt that following observations of this Court in the case of LIC required reconsideration :
"But under the Act the quantum of the consolidated rate depends upon the annual value of land or building on the gross rent for which the land or building might reasonably be expected to let and not the gross rent at which the subordinate interest of a tenant may be expected to sub-let."

The Bench directed the Registry to place the matter before the Hon'ble Chief Justice for listing this matter before a Bench of three-Judges. In such circumstances this appeal has come before us.

(3.)It is contended on behalf of the appellant that the order passed by the Municipal Assessment Tribunal was strictly according to law and did not suffer from any infirmity with which the High Court could have interfered. It is submitted that while assessing the valuation of the property, the amount taken by the tenant from a sub-tenant cannot be taken into consideration in view of the judgment of this Court in LIC's case (supra). According to the appellant, the annual value of the land and building has to be deemed to be gross annual rent including service charges as contemplated under S. 174 of the 1980 Act which does not include the rent received by a tenant from the sub-tenant. According to the appellant annual value has to be determined on the basis of the actual rent received by the owner unless it is established that such rent is not bona fide paid and that the same is shown fraudulently only for the purposes of depriving the authorities from assessing the annual rental value. It is argued on behalf of the appellant that despite the changes made in the 1980 Act, the law laid down in Padma Debi's case is still valid for the purpose of determining the gross annual rent of a building under the Calcutta Municipal Corporation Act. As in the present case the assessment made by the Tribunal proceeds on the basis of the actual rent received by the appellant and in the absence of any allegations of extraneous circumstances, the order of the Tribunal has to be upheld by setting aside the impugned judgment. It is also stated that in the present case there is no difference between the standard rent and the actual rent realized by the landlord from the tenant because of application of S. 2 and S. 9 of the West Bengal Premises Tenancy Act. The issue as to whether the standard rent is the upper limit of the reasonable rent does not fall for decision, under the circumstances of the present case.