THE MADURAI MUNICIPALITY THROUGH ITS COMMISSIONER, D. GNANAOLIVU Vs. R. KAMAKSHISUNDARAM CHETTIAR AND ANR.

JUDGEMENT

(1.) THIS revision petition was first heard by Rajagopala Ayyangar, J. who directed it to be heard by a Bench, as he thought it was desirable to have an authoritative pronouncement on the question which arose in the case. The revision petition arose out of a suit brought by the first Respondent to recover a sum of Rs. 664 -9 -5, being the alleged excess amount of property tax collected by the Madurai municipality in respect of a house belonging to the Plaintiff and the second Defendant. The facts necessary for a disposal of this petition may be briefly stated. For the half -year ending with 30th September 1947, and subsequent half -years, the Municipality demanded and collected from the Plaintiff property tax based on a rental value calculated on the basis of the rent which was actually being paid by the tenant of the property, namely, Rs. 225 per month. In 1949, the tenant filed an application before the Rent Controller, Madurai, for fixing the fair rent of the house. The Rent Controller fixed the fair rent at Rs. 140 per month. Under the provisions of the Madras Buildings (Lease and Rent Control) Act, the Plaintiff as landlord was obliged to refund the rent collected in excess over and above the fair rent fixed from 1st October 1946 (i.e.) the date on which the Act came into force. The tenant claimed such refund, and the Plaintiff was obliged to refund a sum of Rs. 2,635. He thereafter filed the present suit for recovery of the excess amount of property tax collected from him by the municipality. The basis of the Plaintiff's claim was that, as the property tax collected from him was assessed on the rental value as calculated on the amount of rent actually being then paid, namely, Rs. 225, now that the fair rent had been fixed at Rs. 140, there should be, in effect, a revision of the assessment, and the municipality must be deemed to have collected an excess amount of property tax, i.e., more than that to which they were properly entitled. The learned Subordinate Judge decreed the suit. The municipality has filed the above revision petition.

(2.) SECTION 82 of the Madras District Municipalities Act, lays down the method of computation of the annual value of property for the purpose of levying the property tax. The annual value is deemed to be the gross annual rent at which lands and buildings may reasonably be expected to let from month to month or from year to year less a deduction, in the case of buildings, of ten per cent of that portion of such annual rent which is attributable to the buildings alone. Schedule IV to the Act, contains rules relating to the assessment of the property tax. Rule 6, says that the value of any land or building for purpose of the property tax shall be determined by the executive authority. Rule 8 provides for the revision of the assessment books at any time by inter alia altering the valuation of any property. Such amendment, when made, shall be deemed to have taken effect on the first day of the half -year in which it is made. There is provision for appeal, and Rule 28 declares that the assessment or demand of any tax, when no appeal is made, as provided (and when such an appeal is made, the adjudication of the council thereon) shall be final.

(3.) THE contention on behalf of the Plaintiff, so far as we are able to gather from learned Counsel's argument, is that the Court can interfere with the value fixed, by the executive officer when it is computed on a totally wrong principle. Under Section 82(2) of the Act the annual value shall be deemed to be the gross annual rent at which the building may reasonably be expected to let. The effect of the Rent Controller's decision that Rs. 140 is the fair rent is that that is the rent for which the building may reasonably be expected to let. In fact, the landlord will not be entitled to anything more. So, such fair rent must form the basis for a calculation of the annual value. In support of this contention, learned Counsel for the Respondent relied upon the judgment of Raghava Rao, J., in Coimbatore Municipality v. Govindayyar, (1953) 1 M.L.J. 128 . In that case, the Plaintiff was the owner of a house -property in Coimbatore. The Coimbatore municipality fixed the annual value of the building at Rs. 4,440, and levied property tax on that footing. The Plaintiff alleged that the said computation of value was capricious and unreasonable, because the fair rent for the house had been fixed by the District Collector of Coimbatore under the House Rent Control Order at Rs. 150, and on the basis of that rent, the annual rental value, properly computed, would only come to Rs. 1,665. The Plaintiff, therefore, claimed a refund of the amount of property tax collected in excess by the municipality. The learned Judge held that the suit was competent and that the Plaintiff was entitled to the relief sought by him. The learned Judge was of opinion that the order of the Collector fixing the fair rent should have been accepted by the municipality and the action of the municipality in disregard of the order was capricious and arbitrary and it must be held that the provisions of the Act had not been complied with, and therefore there was no bar to the suit under the terms of Section 354 of the Madras District Municipalities Act. The facts in the present case are slightly different from the facts in that case. In the case before us the assessment of the property tax was not made after the Rent Controller had fixed the fair rent. On the date of the levy and earlier when the rental value was fixed, there was no material except the actual rent being paid by the tenant. In the case before Raghava Rao, J., the rental value was apparently fixed after the Collector had fixed the fair rent under the House Rent Control Order. Nevertheless, it must be admitted that the reasoning on which the decision is based does help the Respondent in this case.