SCA/11125/2006 1/7 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 11125 of 2006 For Approval and Signature: HONOURABLE MR.JUSTICE M.R. SHAH ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= SURAT MUNICIPAL CORPN. THR' ITS COMMISSIONER & 1 - Petitioner(s) Versus RAMESHCHANDRA ISHWARLAL GHEEWALA & 1 - Respondent(s) ========================================================= Appearance : MR AS ASTHAWADI FOR MR PRASHANT G DESAI for Petitioner(s) : 1 - 2. NOTICE SERVED BY DS for Respondent(s) : 1 - 2. RULE SERVED BY DS for Respondent(s) : 1 - 2. ========================================================= CORAM : HONOURABLE MR.JUSTICE M.R. SHAH Date : 06/08/2008 ORAL JUDGMENT 1. By way of this petition under Article 227 of the Constitution of India, the petitioner - Surat Municipal Corporation has prayed for appropriate writ, order and/or directions, for quashing and setting aside the judgement SCA/11125/2006 2/7 JUDGMENT and order dtd.10/1/2006 passed by the learned Presiding Officer, FTC No.4, Surat in Regular Civil Appeal No.49 of 2003 in dismissing the same and confirming the judgement and order dtd. 5/5/2001 passed by the learned Civil Judge (S.D.), Surat in Municipal Tax Appeal No.25 of 1999. 2. The respondents are owners of property situated in Chauta Bazar, Surat. The petitioner – Surat Municipal Corporation assessed ratable value of the property of the respondent and issued notice to the respondent dtd.10/8/1999, the respondent raised objection and thereafter the petitioner - Surat Municipal Corporation assessed rent of the property in question at the rate of Rs.1200 per month and the annual assessment was fixed at Rs.14,400. Being aggrieved by and dissatisfied with the said assessment, the respondent preferred Original Tax Appeal under secs.406 and 407 of the Bombay Provincial and Municipal Corporation Act. It was the contention on behalf of the respondent that standard rent of the premises in question was fixed at the rate of Rs.201 per month and therefore, the Surat Municipal Corporation cannot go beyond the standard rent and arbitrarily fixed the annual assessment at Rs.14,400. It SCA/11125/2006 3/7 JUDGMENT was also contention on behalf of the respondent that the Surat Municipal Corporation had not given them opportunity and arbitrarily fixed the rent and therefore, it was prayed to quash and set aside the notice dtd.10/8/1995 and consequently to quash and set aside the assessment order dtd.10/9/1999. That the learned Civil Judge (S.D.), allowed the said appeal and directed the Surat Municipal Corporation to fix the assessment / tax considering the rent at the rate of Rs.201 per month of the property in question. Being aggrieved by and dissatisfied with the order passed by the learned Civil Judge (S.D.), Surat in directing the Surat Municipal Corporation to fix the tax at the rate of Rs.201 per month considering the standard rent, the petitioner preferred Regular Civil Appeal No.49 of 2003 before the appellate court, which came to be heard by the learned Presiding Officer, FTC No.4, Surat. It was the contention on behalf of the Surat Municipal Corporation that reliance placed upon the order passed by the learned Civil Judge fixing the standard rent at the rate of Rs.201, was consent decree and it was not fair standard rent and the same was not fixed by the Civil Court after adjudication on merits and therefore, the same cannot be relied upon. SCA/11125/2006 4/7 JUDGMENT 3. The petitioner also relied upon the decision of the learned Single Judge of this Court in the case of P.M. Parmar Vs. Ambaben Hargovandas, reported in 1995 (1) G.L.H. 950. However, the learned appellate court dismissed the said application confirming the order passed by the learned Civil Judge (S.D.), Surat by observing that the decision of this Court in the case of P.M. Parmar Vs. Ambaben Hargovandas (supra) would not be applicable as it is applicable to Small Cause Judge who has fixed the standard rent. Being aggrieved by the order passed by both the courts below in directing the petitioner – Surat Municipal Corporation to fix the assessment / tax considering the rent at the rate of Rs.201 per month, as determined by the Court while deciding the standard rent, the petitioner – Surat Municipal Corporation has preferred present Special Civil Application under Article 227 of the Constitution of India. 4. Heard Mr.Asthawadi, learned advocate appearing on behalf of Mr.Prashant G.Desai, learned advocate for the petitioners. Though served no body appears on behalf of the respondents. 5. Considering the impugned order passed by both the courts below, it appears that both the courts below have SCA/11125/2006 5/7 JUDGMENT heavily relied upon the decision of the rent court determining the standard rent at the rate of Rs.201 per month and thereby quashed the impugned assessment/tax bill issued by the petitioner – Corporation. However, it is to be noted that so far as the decision of the rent court fixing the standard at the rate of Rs.201 per month is concerned, the same is a consent decree and the said rent is not decided after adjudication on merits. Under the circumstances, both the courts below have materially erred in assessing and/or considering the fair rent at the rate of Rs.201 per month. Identical question came to be considered by the learned Single Judge of this Court in the case of P.M. Parmar (supra). In the said case consent terms were relied upon while deciding the dispute with respect to the standard rent and the standard rent was accordingly fixed without recording any evidence and without assigning any reason whatsoever and in the said case it is observed by the learned Single Judge of this Court that “It is undoubtedly true that the consent decree is nothing but contract between the parties to which is superseded the seal of the Court, but the Court which is called upon to perform its statutory duty of fixing the standard rent shall have to SCA/11125/2006 6/7 JUDGMENT be more vigilant, judicious and conscious when it is without any support, documentary or otherwise, raising standard rent.” It is also to be noted that even the said consent decree on the basis of the consent terms and/or agreement was by and between the landlord and the tenant – respondents herein, in which the petitioner Corporation was not a party and therefore, even otherwise the said consent decree cannot bind the petitioner Corporation. The said consent decree fixing the standard rent at the rate of Rs.201 per month cannot be the base to consider the assessment / tax. Under the circumstances, it appears that both the courts have materially erred in relying upon the decision of the Civil Court / Rent Court determining the standard rent at the rate of Rs.201 per month, which was on the basis of consent terms between the landlord and the tenant and the said rent was not adjudicated on merits. Under the circumstances, both the impugned orders passed by the courts below require to be quashed and set aside and the matter is required to be remanded to the learned trial court for deciding the Municipal Tax Appeal No.25 of 1999 afresh in accordance with law and on merits and ignoring the decision of the rent court determining the rent of SCA/11125/2006 7/7 JUDGMENT Rs.201 per month fixed by consent terms. 6. For the reasons stated above, the petition succeeds. The order dtd.5/5/2001 passed by the learned Civil Judge (S.D.), Surat in Municipal Tax Appeal No.25 of 1999 as well as the judgement and order dtd.10/1/2006 passed by the learned Presiding Officer, FTC No.4, Surat in Regular Civil Appeal No.49 of 2003, are hereby quashed and set aside and the matter is remanded back to the learned Civil Judge (S.D.), Surat to decide and dispose of Municipal Tax Appeal No.25 of 1999 afresh, in accordance with law and on merits, in light of the observations made hereinabove. The said exercise to be completed within a period of six months from the date of receipt of this order. Registry to send the writ of this order to the trial court immediately. Rule is made absolute accordingly. In the facts and circumstances of the case, there shall be no order as to costs. [M.R. SHAH, J.] rafik