COMMON CAUSE REGISTERED SOCIETYversusUNION OF INDIA & ORS.

               COMMON CAUSE REGISTERED SOCIETY ·
                                          v.
                         UNION OF INDIA & ORS.

                              AUGUST 18, 1987

B    [RANGANATH MISRA AND MURARI MOHON DUTT, JJ.]

          Delhi Municipal Corporation Act, 1957: s.6--Property cons-
    tructed in stages-Assessment of Property Tax-'Rateable value'-
    Determination of-Market value of land not to be added over again.

C        In Dr. Balbir Singh & Ors. v. Municipal Corporation Delhi &
  Ors., [1985) 2 SCR 439 this Court while laying down principles for              )
  determination of rateable value for making assessment of property tax
  of premises constructed in stages in Delhi, emphasised that "the
  formula set out in sub-ss. (l)(A)t2)(b) and (l)(B)(2)(b) of s. 6 of the
  Delhi Municipal Corporation Act, 1957 cannot be applied for determin-
D ing the standard rent of an additio11, as if that addition was the only ~
  structure standing on the land. The assessing authorities cannot
  determine the standard rent of additional structure by taking the
  reasonable cost of construction of the additional structure and adding to
  it the market price of the land and applying the statutory percentage of
  7'h to the aggregate amount."
E                                                                           .. _._.
         The petitioner-society and the Municipal Corporation in their
  applications to this Court sought clarification of the above obser-
  vations.

          Dismissing the applications,
F
          HELD: The matter has been categorically decided and th.,re is
    absolutely no ambiguity which requires clarification. When at a diffe-
    rent stage, additional construction is raised on the property already
    valued, the market value of the land is not to be taken into account as it
    has already been considered while fixing the valuation of the pre·
G   existing construction. [IOOOD-E, GI

          ORIGINAL JURISDICTION: Civil Misc. Petition No. :18280
    of 1987 Etc.
                                         IN

H        Writ Petition No. 6945 of 1982.

                                         996
                             COMMON CAUSE SOCIETY v. U.0.1.                     997

                 (Under Article 32 of the Constitution of India).
                                                                                      A

                  K.L. Rathee, S. Balakrishnan and Harish N. Salve for the
            Petitioner.

                  Ranjit Kumar, Pramod Dayal and R.B. Datar for the Respon-           B
            dents.


                 The following Order of the Court was delivered:

-                 A three-Judge Bench of this Court in the case of Dr. Balbir Singh C
            & Ors. v. Municipal Corporation, Delhi & Ors., (1985] 2 SCR 439
            elaborately examined the provisions of the Delhi Municipal Corpora-
            tion Act of 1957 for the purpose of ascertaining the manner of determi-
            nation of "rateable value" which was necessary for making assessment
•           of property tax under that Act. This Court classified the properties
            into four categories.:-                                                 D

                 (1) self-occupied;
                  (2) partly self-occupied and partly tenanted;
                  (3) restrictive lease-hold on which construction is raised; and
                  ( 4) where the property has been constructed in stages.
    ')I._                                                                             E
            So far as the fourth category is concerned (and these applications are
            concerned with that) this Court said:-

    r                          "The fourth category ot premises we must deal with
                        is the category where the premises are constructed F
                        in stages. The discussion in the preceding paragraph of
                        this judgment provides an answer to the question as to
                        how the rateable value of this category of premises is to
                        be determined when the premises at the first stage of
                        construction are to be assessed for rateable value,
                        the assessing authorities would first have to determine G
                        the standard rent of the premises under sub-section (2)
                        (a) or 2(b) or (l)(A)(2)(b) or (l){B)(2)(b) of Section 6
                         as may be applicable and keeping in mind the upper limit
                         fixed by the standard rent and taking into account the vari-
                         ous factors discussed above, the assessing authorities would
                         have to determine the rent which the owner of the premises H
    998                   SUPREME COURT REPORTS            [1987] 3 S.C.R.

               may reasonably expect to get if the premises are let out to a
A
               hypothetical tenant and such rent would represent the rate-
               able value of the.premises."

    Having said so generally, this Court proceeded to examine the diffe-
    rent facets of the question and stated:-                                   ~
B
                     "When any addition is made to the premises at a
               subsequent stage, three different situations may arise.
               Firstly, the addition may not be of a distinct and separate
               unit of occupation but may be merely by way of e:xtension


c
               of the existing premises which are self-occupied. In such a
               case the original premises together with the additional
               structure would have to be treated as a single unit for the
                                                                                   -
               purpose of assessment and its rateable value would have to
               be determined on the basis of the rent which the owner may
               reasonably expect to get, if the premises as a whole are Jet
               out, subject to the upper limit of the standard rent deter-
D              minable under the provisions of sub-section (l)(A){Z)(b) of
               Section 6. Secondly, the existing premises before the addi-
               tion might be tenanted and the addition might be to the
               tenanted premises so that the additional structure also form
              part of the same tenancy. Where such is the case, the
              standard rent would be liable to increase under Section 7
E             and such increased rent would be the standard rent of the
              premises as a whole and within the upper limit fixed by
              such standard rent, the assessing authorities would have to
              determine the rent which the owner may reasonably expect
              to get if the premiSes as a whole are let out as a single unit
              to a hypothetical tenant and in such a case, the actual rent
F             received would be a fair measure of the rent which the
              owner may reasol)ably expect to receive from such hypo-
              thetical tenant unless it is influenced by extra-commercial
              considerations. Lastly, the addition may be of a distinct
              and separate unit of occupation and in such a case, the
              rateable value of the premises would have to be determined
G             on the basis of the formula laid down by us for assessing the Y
              rateable value of premises which are partly self-occupied
              and partly tenanted. The same principles for determining
              of rateable value would obviously apply in case of subse-
              quent additions to the existing premises. The basic point to
              be noted in all these cases is-and this is what we have
H             already emphasised earlier-that the formula set out in
                      COMMON CAUSE SOCIETY v. U.0.1.                   999

               sub-section ( l)(A)(2)(b) and (l)(B)(2)(b) of Section 6 can-
                                                                              A
               not be applied for determining the standard rent of an addi-
               tion, as if that addition was the only structure standing on
               the land. The assessing authorities cannot determine the
               standard rent of the additional structure by taking the
               reasonable cost of construction of the additional structure
               and adding to it the market price of the land and applying     B
               the statutory percentage of 7-1/2 to the aggregate amount."

    Initially an application was made by Common Cause, petitioner in
    original Writ Petition No. 6945 of 1982 for clarification of the judg-
    ment confined to the last category of the fourth group referred to
•
    above. Later the Corporation itself made an application for the same      C
    purpose and impleaded the Government Servants Cooperative House
    Building Society as a party to that application. On October 1, 1985, a
    little more than 10 months after the original judgment, these cases
    were listed for directions. A two-Judge Bench consisting of Bhagwati,
    CJ and Pathak, J., as the learned Chief Justice then was, (both of them
    being parties to the three-Judge Bench decision) gave the following       D
    direction:-

               "The assessments made on the properties involved in these
               cases are set aside if and only if any appeals were filed
               against such assessments or objections were raised to the
               draft or provisional assessments and in such cases, fresh E
               assessments are directed to be made in accordance with the
               law laid down by this Court, save and except in those cases
               where the question in regard to the valuation of the land in
               relation to the subsequently constructed additional struc-
               tures is involved, which question we have yet to decide in
               CMP. 12513/83 in Writ Petition No. 6945!82 and other con- F
               nected matters fixed for hearing on 29 .10 .85. Where no
               appeals were preferred against the assessments and no
               objections were filed against draft or provisional assess-
               ments, the assessments will not be liable to be set aside and
               in such cases, the writ petitions and appeals will, to that
               extent, stand dismissed.                                      G

    That is how these applications have now been placed for consi-
    deration.

         Long arguments have been advanced before us by Mr. Datar,
    appearing for the Municipal Corporation; Common Cause and the             H
    1000                  SUPREME COURT REPORTS           [ 1987) 3 S.C.R.

A   Government Servants Cooperative House Building Society have
    resisted the application by advancing counter arguments through their
    respective counsel. Mr. Datar stated that clarification is confined to
    cases of subsequent construction raised upon existing construction and
    the manner of valuing the land for determination of the valuie of the
    property. This question was pointedly examined by the three-Judge
B   Bench and at page 475 of the Reports, this Court held:-

                       The market price of the land cannot be added twice
               over, once while determining the standard rent of the origi-
               nal structure and again while determining the standard rent
               of the additional structure. Once the addition is made, the
c              formula set out in sub-section (l)(A)(2)(b) and (l)(B)(2)
               (b) of section 6 can be applied only in relation to the pre-
               mises as a whole and where the additional structure con-
               sists of a distinct and separate unit of occupation, the
               standard rent would have to be apportioned in the manner
               indicated by us in the earlier part of this judgment."
D
  This Court bad, therefore, clearly indicated that when at a different
  stage, additional construction was raised on the property already
  valued, the market value of the land was not to be taken into account
  as it had already been considered while fixing the valuation of the
  pre-existing construction. The Corporation did not challenge the
E correctness of the decision but only wanted clarification. Since the
  matter bas been directly decided and there is absolutely no ambiguity,
  an application of this type on behalf of the Corporation does not lie.
  We were told by Mr. Salve, learned counsel for Common Cause that
  their application bad emanated when the Corporation wanted to act
  contrary to the judgment of this Court in regard to this category of
F constructions. Later on the Corporation wanted the cover of a
  clarificatory order of this Court for the procedure adopted by it for
  reflecting the market value of the land more than once in situations
  appertaining to the category.

        On our finding that this Court has categorically decided that the
G market value of land is not to be added over again, there is no ambi-
  guity which requires clarification. We decline to make any clarificatory
  order as there is no necessity. All the Civil Misc. Petitions are accord-
  ingly dismissed.

    P.S.S.                                             Petitions dismissed.