MUNICIPAL COMMISSIONER FOR GREATER BOMBAY Vs. SANGAM CINEMA

JUDGEMENT

(1.) THESE are appeals under section 218-D of the Bombay Municipal Corporation Act, being Bombay Act No. III of 1888.

(2.) THE assessee-respondent before us-is the owner-conductor of the Sangam Theatre which screens feature and other films, the theatre being situated at 127, Kurla Andheri Road, Andheri (East), Bombay 400 059. One of the taxes which the appellants-hereinafter to be referred to as the "bmc"-are entitled to impose is the property tax on a building or land. The preliminary step towards the fixing of the property tax is the fixing of a rateable value on the building or land assessable to such property tax. Section 154 (1) of the Act says that in order to fix the rateable value of any building or land. . . there shall be deducted from the amount of the annual rent for which such land or building might reasonably be expected to let. . Some difficulty has been encountered, and not only in India, in respect of fixing the rateable value for theatres being conducted by the owners of the structures in which the films are screened. To get over this difficulty, the method evolved is that known as the apportionment of a certain percentage of the gross takings. The validity of this method has been accepted by this High Court in (The Globe Theatres Ltd. v. The Chief Judge of Small Causes Court)48 Bombay Law Reporter 691. The BMC fixed the rateable value of the Sangam Theatre at 71/2 per cent of the gross takings. On the sum representing the said 71/2 per cent, property tax was assessed and being aggrieved by the assessment made, the respondent preferred appeals under section 217 of the Act. The stand taken before the learned Chief Judge of the Small Causes Court by the respondent was that in respect of the other cinema theatres in the area, the BMC had fixed only 5 per cent of the gross takings for determination of the rateable value. There was no reason to discriminate against the respondent by fixing the rateable value at 21/2 per cent more as compared to that percentage accepted in the case of other theatres. The BMCs reply to this was that the Sangam Theatre was in a far more advantageous situation vis-a-vis other cinema theatres in the area. Its construction was superior and of more recent origin. It had a central air-conditioning system as also an escalator. These amenities were decisive in the matter of getting the respondent a better and more lucrative attendance as compared to the cinema-goers frequenting the other theatres in the area. In support of their rival contentions, parties examined some witnesses. Having considered the evidence and having heard Counsel for the parties, the learned Chief Judge sustained the contention advanced by the respondent. The rateable value was slashed from 71/2 per cent to 5 per cent annum of the gross takings. A consequential reduction in the property tax was made and all the five appeals having been allowed, it is the BMC which is now the aggrieved party before us.

(3.) MR. Walawalkar representing the BMC submits that the learned Chief Judge of the Small Causes Court proceeded on an erroneous basis. True, the gross-takings criterion was applicable in the matter of fixing the rateable value vis-a-vis cinema theatres, but this was only as a measure for fixing the hypothetical rent which a willing tenant might offer for the occupancy and use of the property assessable to property tax. Here, the potential of Sangam Theatre could not be overlooked irrespective of what reasons there may have been for the central air-conditioning system not being used and the escalator not being repaired. The Sangam Theatre was a more recent construction vis-a-vis the other theatres in the locality and in an arms-length bargain, a tenant would offer much more of a rent for the Sangam Theatre as compared to the other theatres which did not have the advantages of the former. Mr. Makhija for the respondent answers this submission by pointing to the testimony recorded in the appeals. One of the partners of the respondent B. K. Tandon has testified that the Sangam Theatre falls in the IInd or IIIrd Class - the classification being based upon various considerations like location, class of patrons frequenting the cinema, nature of films screened etc. Tandon has testified that the central air-conditioning unit is not functioning because of the financial difficulties being faced by him and his partners-the respondent being a partnership concern. At a later stage Tandon changed the reason for the non-functioning of the central air-condictioning unit, to an alleged power cut. The later reason given out by Tandon does not appear to be true. Be that as it may, and, to go ahead with the analysis of Tandons testimony, he has said that the Sangam Theatre is classified as falling into IInd or IIIrd Class because of it being at a considerable distance from the railway station and because of it being in a labour populated area. No exception has been taken to this statement of Tandon. At a later stage Tandon has testified that the other theatres in the are Usha, Akash and Bharat. The building in which Usha functions was constructed sometime in 1950. It is not air-conditioned. The appearance of Usha Theatre is inferior as compared to The Sangam Theatre. Sangam scores over all other theatres in Bombay in that it is the only one having an escalator. Akash is no better than the Usha Theatre. Bharat is a renovated theatre and Tandon finds no difficulty is asserting that the renovated Bharat Theatre is superior to Sangam Theatre in the matter of status and decoration. Be that as it may, the point made by Tandon is that Usha, Akash and Bharat have all been assessed to property taxes on the basis of 5 per cent of the box-office collections. Some attempts was made by learned Counsel representing the BMC to contend that the respondent has suppressed vital information in that documents which their Accountant Shinde had promised to produce, were later on not produced on the flimsy pretext of the documents not being traced or having been eliminated. The practice of calling upon witnesses while under cross-examination to produce this or that document is at variance with the procedure laid down in law. The Code of Civil Procedure speaks of steps to be taken for production of documents in the possession or custody of ones opponent. Normally, the first step in this process is an application to the Court for a direction to the opponent to discover the documents in its custody or control. After the discovery is made, the opponent is given notice to produce such documents as the applicant desires to inspect. If the opponent is unwilling to produce the required documents for inspection, an application is made to the Court to obtain a direction against the opponent for the production of the relevant documents. But the practice followed in this case was which is something in the nature of practice generally prevalent in the city of Bombay to call upon witness Shinde to produce this or that document said to be in the custody of his masters. At the stage at which the answers were given by Shinde, he had assumed that the documents were in existence. At a later stage - so says Shinde - he found that the documents were untraceable or had been eliminated. There is no reason to disbelieve the explanation given by Shinde. In fact, the fault lies with the appellants in having following the wrong procedure by flooding Shinde with questions and obtaining answers based on assumptions made by Shinde. These answers were given by Shinde without first having taken a search of the records available with his masters. No case for the alleged suppression of documents is thus made out.