Supreme Court of India

MUNICIPAL CORPORATION OF GREATER MUMBAI AND ANR.versusKAMLA MILLS LTD.

Citation: 2003 INSC 310
Decided: 11 July 2003
Disposal: Appeal(s) allowed
Bench: RUMA PAL

Holding

Rateable value must be limited to the standard rent determinable under the Bombay Rent Act, and the burden of proving that standard rent lies on the assessee, leading to the restoration of the assessment orders for further consideration.

Summary

The Municipal Corporation of Greater Mumbai reassessed the rateable value of land belonging to Kamla Mills Ltd. after the company demolished old structures and began constructing a new building. The corporation treated the land as "under construction" and raised its rateable value based on market rates, which the assessee contested, arguing that the rateable value must be limited by the standard rent under the Bombay Rent Act. The Supreme Court held that, in the absence of a defining clause or non‑obstante clause in the Municipal Corporation Act, the rateable value is governed by the rent‑restriction legislation and cannot exceed the standard rent; the burden of proving the standard rent lies on the assessee. The Court also allowed the raising of a new ground on appeal because it was a well‑settled legal proposition and did not prejudice the opposite party. Consequently, the appeals were allowed, the High Court and Small Causes Court judgments were set aside, and the assessment orders were restored for the assessor and collector to reconsider after giving the assessee an opportunity to produce evidence of the standard rent. Costs were awarded to the appellant.

Issues considered

The rateable value under Section 154(1) of the Bombay Municipal Corporation Act is limited by the standard rent under the Bombay Rent Act.
Whether demolition of a building and commencement of new construction permits reassessment of rateable value on the basis of market value or contractor's method.
The burden of proving the standard rent in objections to the rateable value assessment.
Whether a new ground of law (standard rent limitation) can be raised on appeal despite not being raised earlier.
Whether Section 11 of the Bombay Rent Act allows revision of standard rent due to demolition of a building.

Legislation cited

Bombay Municipal Corporation Acts. 139, s. 140, s. 146, s. 147, s. 154(1), s. 155, s. 156, s. 167, s. 217
Bombay Rent Acts. 11, s. 2(3)(g), s. 5(10), s. 7

Subjects

rateable valuestandard rentBombay Rent Actmunicipal property taxdemolition and reconstructioncontractor's methodburden of proofappeal procedurerent control

Judgment

A MUNICIPAL CORPORA T!ON OF GREATER MUMBAI AND ANR.
v.
KAM LA MILLS LTD.

JULY 11, 2003

B [RUMA PAL AND B.N. SRIKRISHNA, JJ.]

Mumbai Municipal Corporation Act; Section 154(1): Property Tax-
Assessment of rateable value after demolition of old building before
C construction of new one-Rateable value-Criteria-Determination of-Held:
rateable value is limited to standard rent-Rent/licence fee in excess of
standard rent is illegal-Since the Act neither contains a definite clause nor
a non-obstante clause nor lays down manner of computation of rateable
value, it has to be determined as per relevant provision of Rent Restriction
legislation-Bombay Rent Control Act-Sections 2(3)(g), 5(10) and 7.
D
Burden of proving what the standard rent was while objecting to
rateable value fixed by Commissioner-Held, always on the assessee-
Attention ofparties not focused on the core issue-Failure to produce relevant
material-Jn the interests ofjustice, issue to be reconsidered after giving an
opportunity to the respondent to discharge the burden placed upon it under
E law.
Practice and Procedure: Appeal-Raising of new ground-Held:
Normally not permitted when wider ramifications may arise-However,
substantive justic2 requires overlooking of the rigid rule particularly when
it does not cause prejudice to the opposite party.
F
Words and Phrases:

'standard rent', 'rateable value' and 'hypothetical tenant'-Meaning
of in the context of Mumbai Municipal Corporation Act.

G Respondent-assessee, a company, demolished some old structures of
buildings and got plans approved by the concerned authority for construction
of a new building complex thereupon. The appellant-Corporation treated the
entire land as land under construction for assessment of tax thereon and
proposed to revise its rateable value accordingly. The respondent objected to

H 500
MUNICIPAL CORPN"OF GREATER MUMBAI v. KAMLA MILLS LTD. 50 J
the proposal of revision of the rateable value. The competent authority, upon A
consideration of objections, reduced the rateable value of the land. Tiie
respondent-assessee filed appeals for further reduction in the rateable value.
Appeals were allowed by the Small Causes Court by further re:Vising the
rateable value. Aggrieved, appellant-Corporation filed appeals, which were
rejected by the High Court Hence, the present appeals.
B
It was contended for the appellant that since the b)lilding was assessed
for the first time, the rateable value had to be ass¢ssed on the basis of
'Contractor Method'; that actual rental value ofthebuilding was taken into
account in calculating the rateable value; that the facts as to the letting out/
transfer of portion of the building to the occupants on certain amount in C
consideration thereof were not disclosed in the appeals; that the Supreme
Court in the matter of The Municipal Corporation ofGreater Bombay v. Ms.
Polychem Ltd., [1974) 2 SCC 198 has laid down that the rateable value after
demolition of the old building should not be changed; and that after demolition
of the old structure potential of the building increased tremendously.
D
On behalf of the respondent, it was submitted that since the rateable
value of a land must not exceed the standard rent as per provisions of law, the
authority could not revise rateable value of the land·so also merely because
the land had building potential, the appellant could not revise the rateable
value on that ground.
E
Allowing the appeals, the Court

HELD: 1.1. The instant case is governed by the provisions of a Rent
Restriction Legislation viz. The Bombay Rent Act. The Bombay Municipal
Corporation Act neither contains a statutory definition of 'rateable value' nor
does it lay down the manner in which the rateable value has to be computed. F
The Bombay Municipal Corporation Act neither contains a defining clause,
nor a non-obstante clause which would hold the field, notwithstanding the
definition of 'standard rent' in the Bombay Rent Act Therefore,primafacie,
this would be a case which would fall within the general principle laid down
by a series of judgments of this Court. [513-H; 514-B) G
East India Commercial Co. (P) Ltd. v. Corpn. ofCalcutta, [1998) 4 SCC
368; Asst/. G.M, Central Bank of India v. Commr. Municipal Corpn. for the
City of Ahmedabad, [1995[ 4 SCC 696; Indian Oil Corpn. Ltd. v. Municipal
Corpn., [1995[ 4 SCC 96; Srikant Kashinath Jituri v. Corpn. of the City of
Belgaum, [1994[ 6 sec 572; Balbir Singh (Dr.) v. M.C.D., [1985[ l sec H
502 SUPREME COURT REPORTS (2003) SUPP. I S.C.R.

A 167; Dewan Dau/at Rai Kapoor v. New Delhi Municipal Committee, [1980[
I SCC 685; Municipal Corpn., Indore v. Ratnaprabha, [19761 4 SCC 622;
v.
Guntur Municipal Council Gzmtur Town Rate Payers' Assn., 1197012 SCC
803; Corpn. of Calcutta v. LIC of India, [19701 2 SCC 44 and Corpn. of
Calcutta v. Padma Debi, AIR (1962) SC 151, relied on.

B 1.2. The contention, that rateable value to be fixed under Section 154(1)
of the Bombay Municipal Corporation Act is limited by the measure of the
standard rent within the meaning of Section 5(10) of the Bombay Rent Act, is
justified, since Section 7 of the Bombay Rent Act makes it illegal to claim
any rent or any licence fee in excess of the standard rent Thus, in determining
C "the amount of the annual rent for which such land or building might
reasonably be expected to let from year to year" for the premises, meaning
thereby land or building, since both are included in the definition of premises
in Section 2(3)(g), it has to be kept in mind that determining anything contrary
to law could not be "reasonable" as a hypothetical tenant would hardly be
inclined to pay a rent in excess of the standard rent, though, on account of
D circumstances which may be peculiar to the property, the reasonable rent
which may be offered by the hypothetical tenant could even be less than the
standard rent [514-C-EJ

1.3. Though, as a normal rule, this Court does not permit in appeal the
raising of a totally new ground, particularly when wider ramifications may
E arise. Raising of ground of fair rent/standard rate is permissible for more
than one reason. Firstly, the proposition of law that rateable value is limited
by the amount of the standard rent, per se, does not require actual
investigation, as it appears to be well settled by catena of decisions of this
Court. Secondly, the High Court and the Courts below focused their attention
F merely on the ratio laid down in the judgment by this Court in Polychem case*
without adverting to the proposition of law which appears to be well established.
Thirdly, substantive justice requires over-looking of the rigid rule,
particularly when the contention, if permitted to be urged, does not cause
prejudice to the opposite party. [514-F-H; 515-AI

G *The Municipal Corporation a/Greater Bombay v. Mis. Polychem ltd.,
[197412sec198, distinguished.

1.4. It cannot be contended that no rateable value can be fixed in respect
of the premises occupied by the owner himself. In fact, Section 154(1) of
Mumbai Municipal Corporation Act would apply equally to such premises. Even
H in such a situation, the rateable value has to be ascertained on the basis of
MUNICIPAL CORPN. OF GREATER MUMBAI v. KAMLA MILLS LTD. 503
what a hypothetical tenant would offer for it as reasonable rent. If it is accepted A
that Section 6(1) of the Mumbai Rent Act makes the provision of Part-II
inapplicable to such premises, then no taxes would be payable by any owner
for self-occupied property. (515-D-EI

1.5. The concept of reasonableness would necessarily include the concept
of an owner and a tenant who are both law abiding and do not indulge in "black B
marketing". If there is a Rent Restriction Legislation which imposes a limit
on the rent which can be charged, then the concept of"reasonableness" would
include that restriction also. This is the reason why in a series of judgments
of this Court it has been laid down that the rateable value is limited by the
standard rent determined or determinable under the provisions of the Rent C
Restriction Legislation. Barring the two exceptional cases of Municipal
Legislation containing non-obstante clause or deeming clause, rateable value
must he limited by the standard rent determined or determinable under the
applicable Rent Control Legislation. (516-B-DI

Commissioner v. Griha Yajmanule Samk:ya and Ors .. (200115 SCC 561, D
distinguished.

1.6. It is undoubtedly true that this Court in *Malpe Vishwanath Acharya
and Ors v. State of Maharashtra and Anr., had held Section 5(10)(b) and
Section 11 of the Bombay Rent Act to be unreasonable and liable to be struck
down as unreasonable, arbitrary and violative of Article 14. However, this E
Court refrained from striking down the same in view of the fact that the
existing Act was to lapse on 31.3.1998. The instant case is concerned with
the period prior to 31st March, 1998, at which time the concerned sections
were not held to be bad by this Court despite noticing the infirmity in the
Sections of the Act. [516-H; 517-A, DI
F
*Malpe Vishwanath Acharya and Ors. v. State ofMaharashtra and Anr.,
(1998) 2 sec 1, distinguished.

2.1 In the instant case, the first letting rate of the premises in question
is not ascertainable from the record. Thus, the assessor and Collector G
determined the standard rent by taking the market value of Rs. 3,000 per sq.
mtr. as a fair value with a reasonable return of 12% thereupon. Besides, the
respondent failed to lead any evidence to show why Rs. 3,000 per sq. mtr. was
not a reasonable market value, nor did it adduce any evidence to show that
Rs. 2,500 per sq. mtr. was the reasonable market value. In fact, even the
respondent suggested only Rs. 2,500 per sq. mtr. as the fair market value H
504 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A and did not raise any dispute with regard to the fair return. (520-A-Cf
Harilal Parekh v. Jain Coop. Housing Society, AIR (1957) Born. 207
and Saipansaheb Wd Dawoodsaheb v. Laxman Venkatesh Naik. (57 BLR
413), relied on.

B National and Grindlays Bank Ltd. v. The Municipal Corporation of
Greater Bombay, (196911 SCC 541; Ramji Keshavji v. Municipal Corporation
for Greter Bombay, (56 Born. LR 1132); and AGM, Central Bank of India v.
Commr. Municipal Corporation, (199514 SCC 696, referred to.

2.2. It is true that Section I l(a) of the Bombay Rent Act is intended to
C enable the Court, upon an application in any suit or proceeding, to modify the
standard rent as a result of structural alteration or change in the amenities
involving further capital investment of the owner. Demolition ofa building is
not one such contingency contemplated by Section ll(a) of the Act. (520-EI

2.3. There was no material produced on record at any stage by the
D respondent-assessee to show that the standard rent was either in respect of
the vacant land or in respect of the land on which the building was constructed
and demolished, or in respect of the building after it was constructed. The
contention of the appellant-Corporation that the burden of proving this fact,
·While objecting to the rateable value fixed by the authority, is always on the
E respondent-assessee; that the respondent was less than fair to the appellant
in not disclosing that its property had been in occupation and in not disclosing
the amounts paid by them, are accepted. The respondent ought to have
disclosed the fact, fairly and fully, and urged the legal contentions open to it
based thereupon. These facts would have justified allowing the appeal fully
and restoring the assessment orders made by the appellant officers. However,
F the attention of the parties has not been focused on the core issue, as a result
of which, perhaps, there was failure to produce relevant material before the
assessor to show what was the standard rent. Hence, the interests .of justice
would require that the issue be reconsidered after giving an opportunity to
the respondent to discharge the burden placed upon it under law. The
G proceedings are restored before the Assessor and Collector who shall hear
and dispose the complaints after giving an opportunity to the respondent to
produce such material as they may desire in support of their objections to
the assessments made by the appellant. (520-G, H; 521-A-DI

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2452 of2000.
H
MUNICIPAL CORPN. OF OREA TER MUMBAI 1•. KAM LA MILLS LTD. [SRIKRISHNA,J.] 505
From the Judgment and Order dated 21.10.1999/25.11.1999 of the Mumbai A
High Court in F.A. No. 659 of 1999.

WITH

C.A. No. 2477 of2000.
B
K.K. Singhvi, Bhim Rao Naik, Aspi Chinoy, Harish N. Salve, Pallav
Shishodia, D.N. Mishra, Paresh Shah, E.R. Kumar, Rohit M. Alex and Nikhil
Mehra for the appearing parties.

The Judgment of the Court was delivered by

SRIKRISHNA, J. The central issue involved in both these appeals is:
c
When a building constructed upon land previously assessed to Municipal tax
is demolished for construction of new building, is it open to the Municipal
Corporation to assess the rateable value of the land till the construction of
the building by taking the market value of the land?
D
Facts:

The facts relevant for appreciating the controversy, shortly stated, are
,. as under :

The respondent is a company whose main business was running of a E
textile mill known as Mis Kamla Mills Limited in Mumbai. It owned a large
area of land comprising approximately 38,000 sq. mtrs. In the city of Mumbai
on which structures were standing. The entire property (i.e. land & buildings)
was assessed under Ward No. G/S 1955 ( 1) at rateable value of Rs. 3, 70,505.

The prolonged general strike of the textile workers in Bombay affected F
financial position of all the textile mills in Mumbai and a policy decision was
taken by the Government of Maharashtra to permit construction of residences
in the industrial zone in the Bombay Metropolitan Region. As a result of the
newly adopted policy, textile mills which had extensive land, and were hitherto
not permitted to build thereupon, were granted permission to demolish old G
structures upon the land and construct residential buildings and sell them on
condition that the finances thereby generated would be utilized for paying off
the dues of the textile employees. Taking advantage of this liberalised industrial
policy, the respondent company demolished some of the old structures standing
on a part of its land in or about June, 1995 and got plans approved for
construction of a new building complex thereupon consisting of three wings H
506 SUPREME COURT REPORTS [2003) SUPP. I S.C.R.

A A, Band C.
On 3 lst January, 1996, the Investigating Officer of the appellant -
Corporation made a Tabulated Ward Report (TWR) No. 441 proposing a
revision of the assessable value of the respondent's property. The appellant
was of the view that the land under the demolished structures fo1ms a suitable
B buildable plot of land whereupon construction work of the building in phases
had been started, and considering the building potential of the land which
had become available, the appellant bifurcated the entire plot of land falling
within Ward No. G/S 1955 (I) into two plots. By another Tabulated Ward
Report No. 442 of 31.1.1996 it was proposed that the land under the demolished
C structures formed from June, 1995 a buildable vacant plot of 15014 sq. mtr. on
which construction had commenced. It was proposed to "treat the whole plot
of land admeasuring 15014 sq. mtr. as plot of land under construction" and
to revise its rateable value to Rs. 53, 50,990 by adopting a rate of Rs. 3300
per sq. mtr. Consequently, the rateable value of the residual plot was reduced
from Rs. 3,70,505 to Rs. 2,36,130. The respondent filed complaints objecting
D to the proposed revision of the rateable value in respect of both the plots.
These complaints were heard by the appropriate officer. By an order made on
12.2.1998, the concerned officer reduced the rateable value by adopting the
rate at Rs. 3,000 per sq. mtr. He also assessed the property in two parts i.e.,
'A' Wing "as plot of land under construction" and 'B' & 'C' Wings "as plot
E of land". He adopted the uniform rate of Rs. 3,000 per sq. mtr. for both the
plots and assessed the rateable value at Rs. 31,11,595 w.e.f. 1.12.1995. By
another order made on 11.3.1998, the appropriate officer of the appellant -
Corporation fixed the rateable value w.e.f. 1.10.1996. The order made by the
appropriate officer of the appellant - Corporation records that during the
hearing of the complaints though the respondent suggested that the value
F of the land be determined by taking the rate of Rs. 2500 per sq. mtr., the
respondent did not adduce any evidence or reasons for reducing the market
rate of the buildable vacant land from Rs. 3000 per sq. mtr. to Rs. 2500 per
sq. mtr. Co~sequently, this suggestion of the respondent was not accepted
and the concerned officer fixed the rateable value of both the plots of land
G at Rs. 31,11,595 w.e.f. 1.6.1995 by adopting the market rate ofland at Rs. 3000
per sq. mtr.

The respondent filed two appeals before the Small Causes Court.
Municipal Appeal No. 367 of 1998 was directed against the order of the
Investigating Officer dated 11.3.1998 passed in Complaint No. 140of1996/97
H fixing the rateable value w.e.f. I. I0.1996. Municipal Appeal No. 370 of 1998
MUNICIPALCORPN. OF GREATER MUMBAI 1·. KAMLA MILLS LTD. [SRIKRISHNA. J.] 507

was directed against the order of the Investigating Officer dated 12.2.1998. A
The Small Causes Court heard the appeals and by a common judgment held
that the appellant - Corporation was not entitled to revise the rateable value
by adopting the market rate. It was also held that the Investigating Officer
had failed to follow the principle laid down by this Court in the case of The
Municipal Corporation of Greater Bombay v. Mis. Polychem ltd., [1974] 2 B
SCC 198, that the rate adopted by the Investigating Officer was excessive and
exorbitant, and that the proper rate of assessment should be Rs. 654 per sq.
mtr.

After setting aside the order of the Investigating Officer dated 11.3.1998,
the Small Causes Court determined the rateable value of wing 'A' at C
Rs. 26,96,355 w.e.f. 1.10.1996, and for wing 'B' & 'C' (as vacant land) at
Rs. 89,396, w.e.f. the same date. The appellants were directed to issue fresh
bills accordingly with a direction to refund the excess amount paid after
adjusting against taxes due.

The appellant - Corporation challenged the judgments of the Small D
Causes Court before the High Court by filing two appeals. First Appeal No.
660199 against the judgment in Municipal Appeal No. 370/98 was summarily
rejected on the ground that no interference was called for. First Appeal No.
659199 directed against the judgment of the Small Causes Court in Municipal
Appeal No. 367 /98 was also rejected by taking the view that in Dewan Dau/at
Raj Kapoor v. New Delhi Municipality, AIR (1980) SC 541 this Court has laid E
down that the annual value at which the building can reasonably be expected
to let must be limited to the measure of standard rent determined under the
Rent Act and cannot be determined on the basis of the higher rent actually
received by the landlord from the tenant.
F
Being aggrieved by the said two judgments of the High Court, the
appellant is before this Court. The appellant filed an application for pr()ducing
certain additional documents before this Court vide I.A. No. 2 of2000. It was
pointed out that in response to notices issued by the appellant - Corporation
under Section 155 of the Bombay Municipal Corporation Act, the letters dated
16.12.1999 and 24.12.1999 were received from National Stock Exchange of G
India Limited and National Securities Depository Ltd., respectively, indicating
the actual amounts paid by them for occupation of certain portions of the
building known as "Trade World" which had been constructed by the
respondent after demolition. Since these documents became available after
the High Court had delivered its judgment, the appellants craved leave to rely H
508 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A upon them. This application was allowed by an order dated 3.4.2000 made by
this Court.

Contentions:

The appeals pertain to two different aspects. One pertains to the
B completed building 'A' wing and the other pertain to the vacant land. With
regard to the completed building 'A' wing, learned counsel for the appellant
contends that the assessee deliberately failed to furnish the particulars of
leave and license I rent at which the premises had been given to the occupants.
It is only after the notice issued under Section 155 that the appellant was able
to gather information that at the material time National Stock Exchange of
C India Limited was paying Rs. 53,92,049.46 to the respondent for occupation
of basement and three upper floors and similarly National Security Depository
Ltd. was using and occupying 4th and 5th floors of 'A' wing on ownership
basis. The learned counsel contends that the judgment of this Court in
Polychem (supra) merely holds that when a building on land, previously
D rated, is demolished, and new construction is commenced, the land upon
which the construction is being made, should continue to be rated as vacant
land. However, this Court has not laid down that its rateable value should be
the same as prior to the demolition of the building. It is contended that even
if the rateable value of a building is to be held limited to the standard rent,
and the assessment of the rateable value has to be done on the said basis,
E the evidence on record clearly shows that the building was being assessed
for the first time and, therefore, the actual letting value of the premises has
to be taken as the basis for working out the rateable value irrespective of the
fact that it was styled as' leave and license compensation'. The actual amount
paid by the National Stock Exchange India Limited and National Securities
F Depository Limited must be taken as the basis for working out the rateable
value of the land under construction from I. I 0.1996 onwards.

With regard to the assessment for rating of the vacant land, the learned
counsel for the appellant contends that, after demolition of the structures on
the land, the character of the land changed inasmuch as its building potential
G increased tremendously. Since the land as such had not been assessed
previously, it had to be assessed for rateable value on the basis of"Contractor's
Method" by taking a suitable percentage of the market value, which was one
of the known methods of assessing the rateable value. Hence, from I. I 0.1996
the appellant had rightly proposed the rateable value on the basis of the
H market value of the land at Rs. 3300 per sq. mtr. while the respondent had
MUNICIPAL COJY'N. OF GREATER MUMBAI 1·. KAMLA MILLS LTD. [SRIKRISHNA, J.] 509

made a counter suggestion that it should be 2500 sq. mtr. as fair and reasonable A
value without producing any evidence in suppmt. In the circumstances, the
appellant's orders that the rateable value should be worked out by taking
market value of land at Rs. 3,000 per sq. mtr. was not liable to be disturbed.
The learned counsel contends that both the Small Causes Court and the High
Court have misunderstood the judgment of this Court in Po/ychem (supra). B
Jn Polychem (supra) this Court has merely laid down that once the building
is demolished, the land does not cease to have rateable value (as the doctrine
of sterility does not hold good in India), but continues to be rateable as
"vacant land". This Court has nowhere laid down that the land should be
rated only at the rate prevalent prior to the demolition of the structures. Since
"contractor's method" is a known method of assessing the rateable value of C
land, no fault could be found with the rateable value arrived at by the
appellant - Corporation.

The learned counsel for respondent urged the following propositions of
law to support the judgments of the courts below:
D
(i) The rateable value of land and building is limited by the measure
of standard rent arrived at by the assessing authority by applying
the principles laid down in the Bombay Rent Act and cannot
exceed the figure of the standard rent so arrived at by the assessing
authority.
E
(ii) The standard rent of premises (land or land & building) is based
on allowing the landlord a reasonable return on his investment.
It is linked to the capital investment of the landlord and not
linked to the market value of the premises. Under the Bombay
Rent Act the standard rent of premises always remains fixed.
(iii) As the standard rent (of premises land or building) remains fixed F
under the Bombay Rent Act, the Corporation could not have
revised the rateable value of land under construction, even if it
is treated as vacant la!l'd under the ratio of the judgment in
Polychem case, on the basis of the current market value of the
land or the current market value of the building. G
According to the learned counsel for the respondent, Polychem holds
that once the building is demolished and reconstruction is commenced on the
land, the land must be treated as vacant land for the purpose of rateable value
and its rating has to remain frozen at what it was earlier unless there has been
additional investment or improvement therein. In the instant case, what was H
510 SUPREME COURT REPORTS [2003) SUPP. I S.C.R.

A being assessed for rateable value was subject to the limit of standard rent
applicable under the Bombay Rent Act and merely because the land had
building potential, the Corporation was not entitled to revise the rateable
value.

Both sides cited a large number of authorities in support of their
B respective cases which we shall presently notice.

law:

Under Section 139 of the Bombay Municipal Corporation Act, the
Corporation is inter alia empowered and obligated to impose property taxes.
C The property taxes comprise general tax, water tax, sewage tax and so on. All
these taxes are leviable at such percentage of the rateable value as determined
by the Municipal Corporaticn. The manner of determination of rateable value,
therefore, becomes crucial to the debate before us. The material portion of
Section 154 of the Mumbai Municipal Corporation Act relevant for our
D discussion reads as under:

"Section 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
E 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."

The key words of Section 154( I) are "the amount of the annual rent for
which such land or building might reasonab(v by expected lo let from year
to year" (emphasis added). Considerable forensic skill and judicial talent have
F been expended to ascertain the meaning of these words. Depending upon
whether the area in question is subject to Rent Restriction Legislation or not,
the Courts have answered the question differently.

Counsel placed reliance on the following judgments in support of the
proposition that the rateable value of a premises is limited by the standard
G rent determined or determinable under the provisions of the Rent Restriction
Legislation.

I. (1998] 6 SCC 381, Govt. Servant Coop. House Building Society
lid. v. Union of India.
H 2. (1998] 4 SCC 368, East India Commercial Co. (P) ltd v. Corpn.
MUNICIPALCORPN. OF GREATER MUMBAI v. KAMLA MILLS LTD. [SRIKRISHNAJI 51 J
of Calcutta. A
3. ( 1995] 4 SCC 696, Ass/I. G.M., Central Bank of India v. Commr.,
Municipal Corpn. For the City of Ahmedabad

4. (1995] 4 SCC 96, Indian Oil Corpn. ltd v. Municipal Corpn.
5. [l 994] 6 SCC 572, Srikant Kashinath Jiluri v. Corpn. of the City B
of Belgaum.

6. (1985] I SCC 167, Balbir Singh (Dr.) v. MCD.
7. (1980] I SCC 685, Dewan Dau/at Rai Kapoor v. New Delhi
Municipal Committee

8. [1976] 4 SCC 622, Municipal Corpn., Indore v. Ratnaprabha.
c
9. [1970] 2 SCC 803, Guntur Municipal Council v. Guntur Town
Rate Payers' Assn.

10. [1970] 2 SCC 44, Corpn, of Calcutta v. LIC of India.
11. AIR (1962) SC 151, Corpn. of Calcutta v. Padma Debi.
D

We are, fortunately, spared the effort of having to analyse these
judgments in detail and ascertain their ratios, as two judgments of this Court
have already anticipated and carried out this task for us.

In East India Commercial Co. (P) ltd v. Corpn of Calcutta, [1998] 4 E
SCC 368 all these judgments were analysed by this Court and the position
in law was neatly summed up as under:

"From the aforesaid decisions, the principle which is deducible is that
when the Municipal Act requires the determination of the annual F
value, that Act has to be read along with Rent Restriction Act which
provides for the determination of fair rent or standard rent. Reading
the two Acts together the rateable value cannot be more than the fair
or standard rent which can be fixed under the Rent Control Act. The
exception to this rule is that whenever any Municipal Act itself provides
the mode of detennination of the annual letting value like the Central G
Bank of India case relating to Ahmedabad or contains a non obstante
clause as in Ratnaprabha case then the determination of the annual
letting value has to be according to the tenns of the Municipal Act.
In the present case, Section 168 of the Municipal Act does not
contain any non obstante clause so as to make the Tenancy Act
H
512 SUPREME COURT REPORTS [2003) SUPP. I S.C.R.

A inapplicable and nor does the Act itself provide the method or basis
for determining the annual value. This Act has, therefore, to be read
along with Tenancy Act of 1956 and it is the fair rent determinable
under Section 8 (I) (d) which alone can be the annual value for the
purpose of property tax." (Vide paragraph 17).

B Since that was a case pertaining to the Calcutta Municipal legislati.:in,
the reference therein is thus to Section 8(1) (d) of the West Bengal Tenancy
Act, 1956.

Despite the law having been thus clearly laid down in East India
Commercial Co. (P) Ltd (Supra), thanks to ingenuity of counsel, the issue
C was reagitated before this Court in India Automobiles (1960) Ltd v. Calcutta
Municipal Corpn., (2002] 3 SCC 308. This Court once again carried out a
survey of the judgments and culled out the law as under (vide paragraph 21 ):

"A perusal of various judgments, relied upon by the learned counsel
for the parties, clearly shows that this Court has taken a consistent
D view regarding the determination of annual value of land or building
for the purposes of determination of taxes under the Municipal Acts.
On the basis of various statutes relating to the determination of the
annual value for the purposes of the Municipal Acts, this Court has
devised two distinct groups. One such group deals with the municipal
E laws of some States which do not expressly exclude application of the
Rent Restrictions Acts in the matter of determination of annual value
of a building for the purposes of levying municipal taxes and the
other group deals with the municipal laws which expressly exclude
application of the rent Restriction Acts in the matter of determination
of annual value of land or building on rental method. Whereas in the
F first category of cases the determination of annual value has to be
made on the basis of fair or standard rent notwithstanding the actual
rent, even if it exceeds the statutory limits. In the other group where
the restriction in the rent Acts has been excluded, the determination
of annual value of the building on rental method is referable to the
G method provided under the relevant Municipal Act. Whereas Padma
Debi case, LIC case, Guntur Town Rate Payers case and Dewan
Dau/at Rai case deal with the first group of municipal laws, the cases
in Ratnaprabha case, AGM, Central Bank of India case, East India
Commercial Co. case, Balbir Singh case, Indian Oil Corpn. Case
and Srikant case deal with the second group. As already noticed, th is
H
MUNICIPAL CORPN. OF GREATER MUMBAI v. KAMLA MILLS LTD. [SRI KRISHNA, J.] 513

Court in LIC case dealt with the first category as in Section 168 of the A
Calcutta Municipal Corporation Act, there existed no non obstante
clause. The observations of the Bench of this Court which dealt with
the case on 10.10.2001 cannot be.taken in isolation."

It was further observed (vide paragraph 23):
B
"As already noticed even without specific detennination, the standard
rent was held to have been statutorily determined under Section 2 (I 0)
(b) of the Rent Act. Upon analysis of the various municipal laws and
the judgments of this Court it is held that in cases where the municipal
laws exclude the applicability of the Rent Acts by incorporating non
obstante clause in the taxing statute, the powers of the authorities C
under the Municipal Acts are not circumscribed by the limits indicated
in Padma Debi case and followed in that group of cases. In cases
where the fair rent payable by the tenant has been determined and
there is no justification for refusing to accept that fair rent as rental
value of the premises, the municipal authorities should generally accept D
the standard rent fixed, notwithstanding the non-applicability of the
Rent Acts because such a view would be a reasonable guideline to
detennine the rate of rent at which such land or building might, at the
time of assessment, be reasonably expected to let from year to year.
The rent which the tenant is receiving from his subtenant is also an
important statutory consideration for detennining the rent at the time E
of assessment to which the property might reasonably be expected to
be let from year to year. Such a consideration is also justified on the
principles of reasonableness. We cannot agree that in all cases,
notwithstanding the non obstante clause the annual rental value
cannot be fixed beyond the standard rent determined or determinable F
under the rent statute. We also find it difficult to hold that in all cases
the rent actually paid by the sub-tenant to the tenant be taken as a
sole criterion for detennining the annual value on the assumption that
such land or building might, at the time of assessment, is reasonably
expected to get the aforesaid amount of rent if let from year to year."
G
Now that the law has been culled out to the exercise of applying it.

The case before us is governed by the provisions of a Rent Restrictions
Legislation viz. The Bombay Rent Act. The Bombay Municipal Corporation
Act neither contains a statutory definition of 'rateable value', nor does it lay
down the manner in which the rateable value has to be computed,. as H
514 SUPREME COURT REPORTS [2003] SUPP. I S.CR.

A distinguished from the situation in Commissioner v Griha Yajmanu/e Samkya
and Ors., (200 l] 5 SCC 56 I. The Bombay Municipal Corporation Act neither
contains a defining clause, nor a non-obstante clause, which would hold the
field, notwithstanding the definition of 'standard rent' in the Bombay Rent
Act. Therefore, prima facie, this would be a case which would fall within the
B general principle laid down by the series of judgments commencing Padma
Devi (supra) and ending with Srikant Kashinath Jituri (supra).

The contention of the learned counsel for the respondent that the
rateable value to be fixed under Section 154(1) of the Bombay Municipal
Corporation Act is limited by the measure of the standard rent within the
C meaning of Section 5 (I 0) of the Bombay Rent Act appears to be justified,
particularly in view of the fact that Section 7 of the Bombay Rent Act makes
it illegal to claim of any rent or any licence fee in excess of the standard rent.
Thus, in determining what would be the "amount of the annual rent for which
such land or building might reasonably be expected to let from year to year"
for the premises, meaning thereby land or building, since both are included
D in the definition of the premises in Section 2 (3) (g), one has to keep in mind
that determining anything contrary to law could not be "reasonable" as a
hypothetical tenant would hardly be inclined to pay a rent in excess of the
standard rent, though, on account of circumstances which may be peculiar
to the property, the reasonable rent which may be offered by the hypothetical
E tenant could even be less than the standard rent.
Mr. Singhvi, learned counsel for the appellant, urged that this contention
cannot be accepted for several reasons. First, he urged that such a contention
was never raised at any stage of the proceedings either before the
Investigating Officer, Small Causes Court, or even before the High Court. He
F contends that 'standard rent' is a pure question of fact, or, at any rate, a mixed
question of law and fact, and ought not to be permitted to raise before this
Court first time. He, therefore, urged upon us to decline permission for this
ground to be raised. Though, as a normal rule, this Court does not permit in
appeal the raising of a totally new ground, particularly when wider ramifications
may arise, we are inclined to permit raising this ground for more than one
G reason. First, that the proposition of law that rateable value is limited by the
amount of the standard rent, per se does not require actual investigation, as
it appears to be well settled by catena of decisions of this Court. Secondly,
we find that the High Court and the courts below focused their attention
merely on the ratio laid down in the judgment by this court in Polychem
H (supra) without adverting to this proposition of law which appears to be well
MUNICIPAL CORPN. OF GREATER MUMBAI 1•. KAMLA MILLS Lm. [SRIKRISHNA, J.] 515

established. Thirdly, substantive justice requires over-looking of the rigid A
rule, particularly when the contention, if permitted to be urged, does not
cause prejudice to the opposite party.

Mr. Singhvi then contended that under Part-II of the Mumbai Rent Act,
which contains the provisions with regard to the standard rent, the restrictions
imposed under Section 7 would apply in respect of the premises only if they B
are let. He contended that entire Part - II of the Rent Act would not apply
to the premises of Kamla Mills since the premises was never let out at any
time earlier and, therefore, the restrictions under Section 7 of the Mumbai Rent
Act would not apply. In our view, the argument is untenable. What we are
required to consider is what would a hypothetical tenant be willing to offer C
as reasonable rent for the premises in question. Upon the premises being
offered to be let, there would be hypothetical tenant; that hypothetical tenant
would look at the restrictions applicable under the rent legislation and make
a reasonable offer. Section 6 in Part-II of the Mumbai Rent Act, therefore, is
hardly of relevance. We may examine the question from another angle. It
surely cannot be contended that no rateable value can be fixed in respect of D
the premises occupied by the owner himself. In fact, Section 154 (I) of
Mumbai Municipal Corporation Act would apply equally to such premises.
Even in such a situation, the reteable value has to be ascertained on the basis
of what a hypothetical tenant would offer for it as reasonable rent. If Mr.
Singhvi's argument that Section 6(1) of the Mumbai Rent Act makes the E
provisions of Part-I! inapplicable to such premises is accepted, then no taxes
would be payable by any owner for self-occupied property. We, therefore,
reject this contention.

I.t is next contended by Mr. Singhvi that Bombay Municipal Corporation
Act, 1888 is a complete code for determination of the rateable value and is p
not subject to the provisions in the Bombay Rent Act, 1947. Our attention
was drawn to the fasciculus of Sections 139, 140, 146, 147, 154, 155, 156 to
167 and 217 of Bombay Municipal Corporation Act in support of the contention.
In our view, the contention is unsustainable. No doubt the Bombay Municipal
Corporation Act is a legislation for fixing of the rateable value and imposing
of property tax, but it nowhere defines what 'rateable value' is, except in G
general terms under Section 154 (1). If the statute had defined 'rateable value'
in specific terms, then the argument may have been sustainable, as sustained
in Griha Yajmanule Samkhya and Ors. (supra). It must be remembered that
the principle of 'standard rent' has not been invoked by reason of any
requirement or declaration under the Municipal Corporation Act, but by H
516 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A reason of the fact that if the rateable value is the reasonable annual rent at
which the property may be expected to be let, then we must consider what
a hypothetical tenant would be willing to offer as rent for the property let.
As has been pointed earlier, the concept of reasonableness would necessarily
include the concept of an owner and a tenant who are both law abiding and
B do not indulge in "black marketing". If there is a rent restriction legislation
which imposes a limit on the rent which can be charged, then the concept of
"reasonableness" would include that restriction also. This is the reason why
in a series of judgments of this Court it has been laid down that the rateable
value is limited by the standard rent determined or determinable under the
provisions of the Rent Restriction Legislation. The only exception made was
C in a situation like Griha Yajmanule Samkya and Ors. (supra), where the
Municipal Corporation Act has a detailed method to fix the rateable value. As
already noticed by the judgments of this Court, barring the two exceptional
cases of Municipal Legislation containing non-obstante clause or deeming
clause with regard to the rateable value, it must necessarily be held to be
limited by the standard rent determined or determinable under the applicable
·D rent control legislation.

We are unable to accept the contention of Shri Singhvi that this case
falls within the ratio of Griha Yajmanule Samkya and Ors. (supra). In that
case the municipal legislation in Hyderabad specifically contained detailed
E provisions for fixation of monthly or yearly rent. Examining the statute before
it, this Court took the view that the statutory provisions required the tax to
be levied on the basis ofrateable value as fixed by the Corporation and there
was further provision in the Act as to the method or manner of determination
of the rateable value. Hence, this Court observed (vide paragraph 35), "the
act mandates that the Commissioner shall determine the tax to be paid by the
F person concerned in the manner prescribed under the statue and the rules.
It is our view that the Act and the Rul.es provide a complete code for
assessment of the property tax to be levied upon buildings within the Municipal
Corporation. There is no provision in the statute that the fair rent determined
under the Rent Control Act in respect of a property is binding on the
G Commissioner. The legislature has wisely not made such a provision because
determination of annual rent depends on several criteria". We are, therefore,
unable to accept the contention of Shri Singhvi in this regard.

It is next contended by Shri Singhvi that Section 5 (10) (b) and Section
11 of the Mumbai Rent Act, 1947 have been declared to be ultravires Article
H 14 of the Constitution by this Court in Malpe Vishwanath Acharya and Ors.
MUNICIPALCORPN. OF GREATER MUMBAI v. KAMLA MILLS LTD. [SRIKRISHNA,J.] 517

V. State of Maharashtra and Anr., [1998] 2 sec l. It is undoubtedly true that A
this Court held the aforesaid provisions of the Bombay Rent Act to be
unreasonable and liable to be struck down as unreasonable and arbitrary.
However, this Court refrained from striking down the same in view of the fact
that the existing Act was to lapse on 31.3.1998. Hence, this Court made the
following directions:
B
"We however refrain from striking down the said provisions as the
existing Act elapses on 31.3.1998 and we hope that a new Rent
Control Act will be enacted with effect from J.4.1998 keeping in view
the observations made in this judgment insofar as fixation of standard
rent is concerned. It is, however, made clear that any further extension C
of the existing prov is ions without bringing them in line with the views
expressed in this judgment, would be invalid as being arbitrary and
violative of article 14 of the Constitution and therefore of no
consequence. The respondents will pay the costs."

This judgment need not detain for another reason. We are concerned D
with the period prior to 31st March, 1998, at which time, admittedly, the
concerned sections were not held to be bad, by this Court despite noticing
the infirmity in the sections. For this reason also, we are unable to accept the
contention.

Shri Singhvi then contended that the appeals must fail for failure to E
place the requisite evidence on record. He contends that there is no warrant
for the assumption and assertion of the respondent that the rateable value
for the property of the respondent for the years 1994-95 and 1995-96 was
based on "standard rent", nor is there any warrant for the assertion that the
land had been separately valued as contended. There appears to be merit in
this contention. While the material on record shows that prior to 1994-95 the F
rateable value of the entire property before the demolition was fixed .at Rs.
3,70,505, there is no evidence on record to show either that this was based
on standard rent or that there was any assessment of the land arid structures
separately. Learned counsel relied on the judgment of this Court in National
and Grindlays Bank Ltd. v. The Municipal Corporation of Greater Bombay, G
[ 1969] I SCC 541, a case arising under the Bombay Municipal Corporation
Act, 1888 itself, in which the court observed that the Act was passed in the
year 1888 and Municipal Corporation had a practice for a very long time of
treating the land and the building constructed upon it as single unit and
charging the property tax upon the owner of the land in a case where the land
is let for a period of less than one year to a tenant who has constructed a H
518 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A building thereupon, approving the observations made by the Division Bench
of the Bombay High Court in Ram.Ji Keshavji v. Municipal Corporation for
Greater Bombay, [56 Bom. LR 1132]. Relying on this judgment the learned
counsel for the appellant contended that, far from there being material to
suggest that rateable values were fixed separately for land and building,
B judicial notice has been taken of the fact that the land and buildings were
rated as a composite unit by the Bombay Municipal Corporation as matter of
practice. Placing reliance on the judgment of this Court in AGM. Central Bank
of India v. Commr. Municipal Corporation, (1995] 4 SCC 696 it is urged that
once the Commissioner of the Corporation has fixed the rateable value, the
burden is upon the tenant to show as to what should be the correct rateable
C value. In the present case the respondent failed to lead any evidence to show
why Rs. 3,000 per sq. mtr. was not a reasonable market value, nor did it adduce
any evidence to show that Rs. 2500 per sq. mtr. was the reasonable market
value. In the circumstances, Shri Singhvi contends that taking the market
value at Rs. 3,000 per sq. mtr. was perfectly justified for assessing the rateable
value.
D
It is next contended by the appellant that even if we assume that the
provisions of Bombay Rent Act apply, 'standard rent' is differently defined
by the Bombay Rent Act. Section 5(10) (b) defines standard rent as under:

"Section 5 (I 0) (b) - When the standard rent is not so fixed, - subject
E to the provisions of Section 11,
(i) the rent at which the premises were let on the first day of
September, 1940 or
(ii) where they were not let on the first day of September, 1940, the
p rent at which they were last let before that day, or
(iii) where they were first let after the first day of September, 1940, the
rS!nt at which they were first let, or
[(iii-a) notwithstanding anything contained in paragraph (iii), the rent
of the premises referred to in sub-section (1-A) of Section 4 shall,
G on expiry of the period of five years mentioned in that sub-
section, not exceed the amount equivalent to the amount of net
return of fifteen per cent, on the investment in the land and
building and all the outgoings in respect of such premises; or]
(iv) on any of the cases specified in section 11, the rent fixed by the
H court;
MUNICIPALCORPN. OF GREATER MUMBAI v. KAMLA MILLS Lm. [SRIKRISHNA,J.] 5J9

Section 11 contemplates that the Court may fix the 'standard rent' in A
certain cases which are indicated by clauses (a) to (e) of sub-section) (I) and
sub-section (2), when an application for fixing the standard rent is made.
Section 11 reads as under:

"Section 11 ( 1) - [Subject to the provisions of Section IIA in any of
the following] cases the Court may, upon an application made to it for B
that purpose, or in any suit or proceedings, fix the standard rent at
such amount as, having regard to the provisions of this Act and
circumstances of the case, the Court deems just -
(a) where any premises are first let after the first day of September,
1940 and the rent at which they are so let is in the opinion of the C
Court excessive; or
(b) where the Court is satisfied that there is not sufficient evidence
to ascertain the rent at which the premises were let in any one
of the cases mentioned in [paragraph (i) to (iii) of sub-clause (b)
of clause (10)] of ~ction 5; or D
(c) where by reason of the premises having been let at one time as
a whole or in parts and at another time in parts or as a whole,
or for any other reason, any difficulty arises in giving effect to
this Part; or
(d) where any premises have been or are let rent free or at a nominal E
rent or for some consideration in addition to rent; or
(d-1) without prejudice to the provisions of sub-section (A) of Section
4 and paragraph (iii-a) of sub-clause (b) of clause ( 10) of Section
5, where the Court is satisfied that the rent in respect of the
premises referred to therein exceeds the limit of standard rent laid F
down in the said paragraph (iii-a); or]
(e) where there is any dispute between the landlord and the tenant
regarding the amount of standard rent."
"Section - 11(2) - lfthere is any dispute between the landlord and the G
tenant regarding the amount of standard rent."

Section 11 read with Section 5 (10) (b) of the Bombay Municipal Act,
1947 makes it clear that where premises were let before, on or after the first
September, 1940 the first letting rate shall be the standard rent subject to the
provisions of Section 11. H
520 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A In the present case, as to whether the premises in question were let
before first September, 1940, or thereafter, and, if so, what was the first letting
rate, is not ascertainable from the record. In the circumstances, Shri Singhvi
submits that the other alternative method of finding out the standard rent is
"contractor's method" which has been judicially approved. Under this method
the market value of the land has to be ascertained and reasonable return fixed
B thereupon to determine the standard rent. This is precisely what was done
by the assessor and Collector by taking the market value Rs. 3,000 per sq.
mtr. as a fair value with a reasonable return of 12% thereupon. In fact, even
the respondent suggested only Rs. 2500 per sq. mtr. as the fair market value
and did not raise any dispute with regard to the fair return. The Bombay High
C Court in Harilal Parekh v. Jain Coop. Housing Society, AIR ( 1957) Bom. 207
and Saipansaheb Wd Dawoodsaheb v. Laxman Venkatesh Naik, 57 BLR 413,
pointed out that under Section 5 (10) (b) (I) the first letting on first September,
1940 becomes the standard rent subject to the provision of Section 11 of the
Act and, when the occasion arises, the Court has the jurisdiction to re-
D determine it under Section 5 (I 0) (b) (I), where the case falls under Section
11 (I) (e) of the Bombay Rent Act. It was also pointed in Harilal Parekh
(supra) that the premises were first let after first September, 1940 and the rent
shall be equivalent to 6% on the valuation of land and 8.2/3% on the valuation
of building.

E It is true that Section 11 of the Rent Act provides that even standard
rent can be altered and re-fixed if there is any structural alteration or change
in the amenities. It is urged by Shri Singhvi that demolition of the building
and increasing the building potential of the land is one such change
contemplated by Section 11 (a). This contention, we are unable to accept.
Section 11 (a) is intended to enable the Court, upon an application in any suit
F or proceeding, to modify the standard rent as a result of structural alteration
or change in the amenities involving further capital investment of the owner.
We do not think that demolition of a building is one such contingency
contemplated by Section 11 (a) of the Act.

In the result, though we accept the proposition urged by the respondent
G that in the facts of the present case the standard rent would be the limit of
the rateable value, we find that there was no material produced on record at
any stage by the respondent to show what the standard rent was either in
respect of the vacant land or in respect of the land on which the building was
constructed and demolished, or in respect of the building after it was
H constructed. We accept the contention of the appellant that the burden of
MUNICIPALCORPN. OF GREATER MUMBAI 1·. KAMLA MILLS LTD. [SRIKRISHNA. J.] 52 J
proving this fact, while objecting to the rateable value fixed by the A
Commissioner, is always on the respondent-assessee. We also accept the
contention of the appellant that the respondent was less than fair to the
appellant in not disclosing that its property had been occupied by National
Stock Exchange of India Ltd. and National Security Depository Ltd. and in not
disclosing the amounts paid by them. The respondent ought to have disclosed B
the fact, fairly and fully, and urged the legal contentions open to it based
thereupon. These facts would have justified our allowing the appeal fully and
restoring the assessment orders made by the appellant vfficers. However, we
are not inclined to do so for the reason that the attention of the parties has
not been focused on the core issue, as a result of which, perhaps, there was
failure to produce relevant material before the assessor to show what was the C
standard rent. The interests of justice would require that the issue be
reconsidered after giving an opportunity to the respondent to discharge the
burden placed upon it under law.

In the result, we allow the appeals and set aside the judgments of the
High Court and Small Causes Court. The concerned proceedings are restored D
before the Assessor and Collector who shall hear and dispose the complaints
after giving an opportunity to the respondent to produce such material as
they may desired in support of their objections to the assessments made by
the appellant.

In the circumstances of the case, the appeals are thus allowed with E
costs quantified at Rs. 50,000.

S.K.S. Appeals allowed.

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