H.R.Sodhi, J. - (1.) THIS judgment will dispose 6f two connected writ petitions Nos. 1526 of 1964 and 1540 of 1968. The learned Counsel for both the parties are agreed that common questions of law and fact arise in both these petitions and arguments have been advanced only in the former writ petition. The only difference on facts in regard to the two writ petitions is that Civil Writ No. 1526 of 1964 is directed against the assessment of house tax levied by Municipal Committee, Dhariwal, in respect of certain property of the Petitioner company for the years 1962 -63 and 1963 -64, whereas in the latter writ petition the challenge is against the enhanced assessment made in similar circumstances for the year 1966 -67.
(2.) IT is alleged in Civil Writ No. 1526 of 1964 that the town of Dhariwal was first a Notified Area Committee and was subsequently declared a Small Town Area Committee. It continued as such up to the year 1952 -53 when it was converted into a Committee to which provisions of the Punjab Municipal Act, 1911, as amended up to date and hereinafter called the Act, became applicable. There was an assessment of house -tax made for various items of the property owned by the Petitioner company on the basis of gross annual rent worked out by the Small Town Area Committee constituted under the Punjab Small Towns Act, 1921. The total amount of annual value assessed for the year 1952 -53 was Rs. 60,032 and from 1953 -54 it was increased to Rs. 64,194 on which amount the house tax was being paid by the company up to the year 1961 -62. It occurred to the Respondent Municipal Committee to revise the rental value of the various buildings owned by the Petitioner Company and by its resolution passed on 21st May, 1962, notices were sent to the Petitioners under Section 65 of the Act. The objections had to be filed within thirty days and a sub -committee was appointed to hear those objections. The subcommittee did hear the objections and recommended an increase in the amount of the annual rental value from Rs. 64,194 to Rs. 75,900. The Municipal Committee considered this report at its meeting held on 11th January, 1963, but thought the amount to be too low and decided to increase the same to Rs. 94,070. A copy of the resolution passed by the Municipal Committee, whereby the recommendations of the sub -committee were accepted with variations enhancing the amount to Rs. 94,070, has been attached with the writ petition as Annexure 'C. The Petitioner company preferred an appeal under Section 84 of the Act to the Deputy Commissioner, Gurdaspur, who allowed the same on 24th April, 1963, and set aside the assessment made by the Respondent Municipal Committee. A copy of the order of the Deputy Commissioner so passed had not been placed on record by either of the parties, but it has been produced now by Mr. D. N. Aggarwal, counsel for the Respondent Municipal Committee. The Deputy Commissioner was of the opinion that no opportunity as envisaged by law was given to the Petitioner company to be heard by the Municipal Committee itself and that hearing of objections by the sub -committee was not a sufficient compliance with law. A fresh assessment was accordingly ordered after giving an opportunity to the Petitioner to be heard. The Municipal Committee again considered the matter and after hearing the representatives of the Petitioner company and going through their objections, passed a resolution on 30th September, 1963, confirming the same assessment as had been made in its earlier resolution of 11th January, 1963. An appeal was again filed under Section 84 by the Petitioner company before the Deputy Commissioner but it was dismissed on 18th of April, 1964. Hence the present writ petition. Mr. Bhagirath Dass, learned Counsel for the Petitioner has raised three contentions. It has been submitted that it was incumbent upon the Municipal Committee to have fixed gross annual rent of the buildings in question by keeping in view the provisions of the East Punjab Urban Rent Restriction Act, 1949 (East Punjab Act No. 3 of 1949), hereinafter called the Rent Control Act. According to the learned Counsel, the Rent Control Act is applicable to the town of Dhariwal and in such a situation the gross annual rent of any house or building at which such house or building can be let for use or enjoyment or can reasonably be expected to be so let cannot be more than what is the fair rent of such a building or house as fixed by a Rent Controller and if any such rent is not so fixed, the Municipal Committee must, in the matter of working out the gross annual rent, be guided by the principles laid down in the Rent Control Act for the determination of fair rent. The other contention is that the assess -ment made in the instant case is highly arbitrary and gives no formula or basis on which the increase has been worked out. It is submitted in this connection that there must be some objective data on which the increase is based, and in the absence of that the impugned assessment is liable to be quashed. The third contention is that the annual assessment for the year 1962 -63 was made on 30th September, 1963, when actually the financial year 1962 -63 (from 1st April, 1962 to 31st March, 1963), had run out itself and in regard to assessment year 1963 -64, it is urged that the assessment having been made on 30th September, 1963, could also not be valid since in terms of Section 66 read with Section 68 of the Act it could operate only prospectively with effect from the first day of January or the first day of April of the following year and not retrospectively with effect from January or April, 1963. Emphasis has been laid on the words "ensuing year" as appearing in Section 66(1), and "in the following year" as used in Section 68 of the Act. Section 66 (1) and Section 68 are in the following terms: 66. (1) After the objections have been enquired into and the persons making them have been allowed an opportunity of being heard either in person or by authorised agent as they may think fit, and the revision of the valuation and assessment has been completed, the amendments made in the list shall be authenticated by the (signatures of not less than two members of the committee), who shall at the same time certify that no valid objection has been made to the valuation and assessment contained in the list, except in the cases in which amendments have been entered therein; and, subject to such amendments as may thereafter be duly made, the tax so assessed shall be deemed to be the tax for the year commencing on the first day of January or first day of April next ensuing as the committee may determine, or in the case of a tax then imposed for the first time for the period between the date on which the tax comes into force and such first day of January or April, as the case may be." 68. New list need not be prepared every year. - -It shall be in the discretion of the committee to prepare (for the whole or any part of the municipality) a new assessment list every year or to adopt the valuation and assessment contained in the list for any year, with such alterations as may in particular cases be deemed necessary, as the valuation and assessment for the year following, giving to persons affected by such alterations the same notice of the valuation and assessment as if a new assessment list had been prepared.
(3.) MR . D. N. Aggarwal, learned Counsel for the Municipal Committee, controverts the contentions of the learned Counsel for the Petitioner company and firstly submits that the premises in dispute have not actually been let out to the employees, the amount described as rent is being paid only by way of maintenance charges, and that it is only when the premises have been let out and fair rent actually fixed that it can be said that the letting value, which an owner may reasonably be expected to have, is the fair rent. According to the learned Counsel, the reasonable letting value to the owner of the building is what a hypothetical tenant would be prepared to offer keeping in view the economical conditions prevailing in the society and the matter of demand and supply. The contention is that when fair rent has been fixed, the landlord is prohibited under the Rent Control Act from recovering more than that rent and unless it is done, a Municipal Committee is not bound to take fair rent as the basis of the reasonable letting value.;