Case: Martin Burn Ltd Vs. The Corporation Of Calcutta

Sarkar, J. (For himself and Raghubar Dayal, J.)1. These (two appeals arise out of proceedings for ascertainment of the annual value of premises No. 12, Mission Row, Calcutta, occupied by the appellant. The annual value was ascertained with a view to assess the municipal rates payable in respect of the premises. The appeals raise a common question of law making it unnecessary to deal with them separately, that question being whether the order of remand made by the High Court at Calcutta to the Court of Small Causes, Calcutta for ascertaining the annual value was justified.2. The annual value was ascertained under the Calcutta Municipal Act, 1923. This Act was repealed and replaced by the Calcutta Municipal Act, 1951 as from May 1, 1952, but as the valuation had originally been made by the respondent Corporation under the repealed Act it is that Act by which the question that arises will have to be determined.3. We may at this stage profitably refer to some of the sections in Ch. X of the Act for giving an idea of its scheme regarding the ascertainment of the annual value. Section 124 provides that a consolidated rate not exceeding twenty-three per cent on the annual valuation determined under Ch. X of the Act may be imposed by the Corporation upon all land and buildings in Calcutta. Clauses (a) and (b) of S. 127 lay down two mutually exclusive methods for ascertaining the annual value. The method prescribed in Cl. (a) is applicable where a building had been erected for letting purposes or was ordinarily let and under it the valuation has to be based on the rent which the land or building might reasonably fetch. Clause (b), on the other hand, covers all other cases and provides for the valuation being based on the cost of construction of the building and the value of the land. Section 131 (1) provides that the valuation made under the preceding Municipal Acts shall remain in force for the assessment of the consolidated rate under the Act until such time as the Executive Officer makes a fresh valuation under the Act and that fresh valuation shall have effect for a period of six years and may be revised thereafter at the termination of successive periods of six years. The Executive Officer mentioned is one of the officers of the Corporation appointed under the Act. Section 131 (2) (b) states that "any land or building the valuation of which has been cancelled on the ground of irregularity...... may be valued by the Executive Officer at any time during the currency of the period prescribed.........by sub-section (1), and such valuation shall remain in force ........ for the unexpired portion of such period." Section 136 to 138 lay down the procedure for the making of the valuation and of giving notices in respect thereof to the ratepayers. Under S. 139 a rate-payer dissatisfied with the valuation made by the Corporation may lodge with the Corporation his objections to it. Section 140 provides for an order being made by the Executive Officer on these objections after investigation on notice to the rate-payer. Section 141 gives the rate-payer dissatisfied with the order made under S. 140 a right to appeal against it to the Court of Small Causes. Under S. 142 (3) an appeal lies to the High Court from the decision of the Court of Small Causes under S. 141. Section 147 is in these terms : "When the valuation of any land or building is revised in consequence of an objection made under S. 139 or S. 146, sub-section (2), or an appeal is preferred under S. 141, the revised valuation shall take effect from the quarter in which the first-mentioned valuation would have taken effect, and shall continue in force for the period for which the said first-mentioned valuation was made, and no longer.Section 146 is not material for our purposes. Section 164 (1) states that "When an objection to a valuation has been made under S. 139, the consolidated rate shall, pending the final determination of the objection, be paid on the previous valuation." Under sub-section (2) of this section "if, when the objection has been finally determined, the previous valuation is altered", then any sum paid in excess shall be refunded or allowed to be set off against any demand of the Corporation against the rate-payer and any deficiency shall be deemed to be an arrear of rate and recoverable as such. There are sections which provide how the rates are to be realised but no reference to them is necessary. It is enough to say that the rates duly assessed impose a legal liability to pay them which can be enforced by distress or by proceedings in a court of law.4. Now in he present case the Corporation had assessed the annual value of the premises at a certain figure by applying the method prescribed in Cl. (b) of S. 127. The appellant lodged various objections to it under S. 139. We are concerned only with two of these objections which were (1) the valuation had been made on a wrong basis as it should have been made by the method prescribed in Cl. (a) of S. 127 and (2), the valuation was in any event unfair and excessive. The Deputy Commissioner of the Corporation, being the officer under the new Act which had then come into force who had replaced the Executive Officer under the Old Act, rejected all these objections except that he reduced the valuation slightly presumably on the ground of excessiveness. The appellant then appealed against the Commissioners decision to the Court of Small Causes, Calcutta under S. 141. The only point that the appellant raised in that Court was that the valuation was illegal as it had been made under Cl. (b) of S. 127 while it should have been made under Cl. (a). It did not raise a contention that the valuation as reduced was still excessive and should in any event be further reduced. The Corporation contended that the valuation had properly been made under Cl. (b) of S. 127 and also that the appeal was incompetent as necessary court-fees had not been paid. The Court rejected both the points and allowed the appeal making the following order: "The appeal must, therefore, succeed; and the assessment as made by the respondent body have to be wholly set aside and fresh valuation have to be made in respect of the premises in accordance with the mode prescribed under clause (a) of S. 127, starting from the proceedings prescribed in clause (b) of sub-section (2) of S. 131 of the Act."5. The Corporation then appealed to the High Court at Calcutta under S. 142 (3) of the Act against the judgment of the Court of Small Causes and raised the same 2 points it had taken in that Court. Both these points were rejected by the High Court also and the order of the Court of Small Causes was maintained. These points no more survive because the Corporation has not taken any proceeding to challenge the judgment of the High Court. We are not, therefore, called upon to examine the merits of the decision of the Courts below on the applicability of Cl. (a) of S. 127 to the present case or as regards the court-fees payable by the appellant.6. In view of its decision that the valuation should have been made by the method laid down in Cl. (b) of S. 127 the High Court held that "the learned Judge of the Small Cause Court, Calcutta, therefore, rightly cancelled the assessment". Having done this, it observed that the order of the Court of Small Causes directing a revaluation by the Corporation was however infructous. It is not in dispute that the Corporation court only make a revaluation under S. 131 (2) (b), as indeed the Court of Small Causes directed it to do, and that the time limit for doing so prescribed by that section had expired. To prevent the Corporation being deprived of its rates the High Court made an order remanding the case to the Court of Small Causes and directing it to make the valuation itself thereby intending to avoid the difficulty arising out of the application of S. 131 (2) (b). It also gave certain consequential directions for the filing of a valuation before that Court by the Corporation and of objections thereto by the appellant and so on. It is this order of remand that the appellant challenges in this Court.6A. It is not contended that the High Court had any statutory power to make the order of remand but it is said that the High Court had an inherent power to do so. Whether the High Court had the inherent power in a case like this may well be doubted. Learned counsel for the appellant contended that in any case the order of remand was unjustifiable as it converted the appellants appeal to the Court of Small Causes into a proceeding wholly alien to what it originally was meant for. It was said that the inherent power of remand could be exercised only for deciding the disputes that arose in the case as it stood; it could not be exercised for the decision of a matter which the proceedings in the Courts below did not raise, namely, the making of a new valuation on a wholly different basis. These contentions, in our view, deserve serious consideration.7. We think that there are other more fundamental objections to the order of remand. The order was made so that a legal liability for rates assessed on the valuation made under it might fasten on the appellant. Indeed the High Court expressly stated that it was making the order so that the Corporation might not be deprived of its rates. The liability for rates is however a statutory liability under the Act; it is not a liability to be imposed by order of Court. So much is clear and not in dispute. In order that the statutory liability might arise, the valuation had to be made as provided in the statute. Now the Act nowhere states that rates may be fixed on the basis of a valuation made by a court; it does not at all contemplate a valuation made by a Court on its own. Such a valuation would be futile and would create no statutory liability. Therefore, the High Courts order sending the case "back to the Small Cause Court, Calcutta, with directions to that Court to ascertain the annual value" if it was intended to allow the Court to make an independent valuation itself, was useless; the valuation made under it would give rise to no liability for rates fixed on the basis of it. It would not be an order which can be sustained.8. Though the Act does not empower a Court to make a valuation itself, it does seem to contemplate, in Ss. 147 and 164 a valuation made by the Corporation being revised and a previous valuation altered, by a Court in an appeal. If, therefore, it could be said that the valuation which the Court of Small Causes was to make under the order of the High Court would be a revised valuation, that valuation would have been within the statute and the order of the High Court would then have been an effective order. We do not, however, think that that valuation can be said to be a revised or altered valuation. First, the High Court did not direct the Court of Small Causes to revise a valuation or to alter a previous valuation it directed that Court to make a fresh valuation itself. Secondly, it seems to us, irrespective of how the High Court described the valuation to be made under its order, that that valuation cannot by any stretch of imagination be called a revised valuation or a previous valuation altered. What has happened here is that the previous valuation has been canceled. That valuation no longer exists. The Court of Small Causes has now to make a valuation of its own on a different basis and on different data. The valuation has now to be made on the basis of the letting value of the premises instead of on the market value of the land and the cost of construction of the building as had previously been done by the Corporation. It would hardly be appropriate to call such a process, the revising of a valuation or the altering of a valuation previously made. Nothing is here revised or altered; what is done is to create a new thing from the start and this without any reference whatsoever to any existing thing. We should suppose that a thing is revised or altered when it is retained with some modifications. Thus when the figures of rent, cost or value on which a valuation is based are altered as excessive, or unfair or a larger depreciation than given is allowed and the total is suitably altered, that would be a case of revising or altering a valuation. The present is a wholly different case. The valuation which the High Court ordered to be made cannot hence be a revised or altered valuation.9-10. It is necessary now to refer to Royal Asiatic Society of Bengal v. Corporation of Calcutta, 58 Cal WN 537. In that case, as in the case in hand, the rate-payer had appealed to the Court of Small Causes contending that the valuation had been made by the Corporation by applying a wrong method, namely, Cl. (a) of S. 127. The contention was rejected by the lower Court but upheld by the High Court. The High Court then remanded the case to the Court of Small Causes for a determination of t he annual value in terms of Cl. (b) of S. 127. The High Court took the view that in such an appeal the Court of Small Causes had the right to make a revised valuation as contemplated in S. 147. Basing itself on that section and S. 164 it put its reasoning in this way at p. 544:"the scheme of the Act is that where an assessee is aggrieved by a valuation made by the Corporation and prefers an objection, till the objection is finally adjudicated upon, the consolidated rate has got to be paid on the existing valuation and that after the objection is finally disposed of in appeal, the final valuation fixed will determine the consolidated rate payable and will, in terms of Section 147, remain in force for the period for which the first mentioned valuation was made."With respect, we are unable to agree that this is the scheme of the Act. Where the valuation is in fact revised, the observation quoted would no doubt be fully applicable. It would not apply to other cases. The fallacy of the reasoning lies in the assumption that once there is an appeal, there must always be a revised valuation. There is no warrant for that assumption. We have earlier stated that there is no scope for making a revised valuation where the appeal seeks an annulment of the existing valuation. Further, neither S. 147 nor S. 164, on which the reasoning was based, requires a valuations to be revised nor says when that is to be done. They deal only with cases where a valuation has in fact been revised and thereby indicate that there may be cases where the valuation is not revised. In Governor-General of India in Council v. Corporation of Calcutta, 51 Cal WN 517 : (AIR 1948 Cal 8 ), the High Court upheld the order of the Court of Small Causes cancelling a valuation as having been made under the wrong clause of S. 127 but did not direct the valuation to be made afresh by that Court. We may also observe here that in the case in hand the High Court referred to the Royal Asiatic Societys case, 58 Cal WN 537, only to support the proposition that it had a power of remand and for no other purpose. It did not say that in all appeals the Court must make a revised valuation.11. In considering the scheme of the Act, the Royal Asiatic Societys case, 58 Cal WN 537, further overlooked the fact that the Act required every valuation to be made by the Corporation under Ss. 131 and 136 to 138 and that it gave the rate payer a chance of attacking that valuation under S. 139, before coming to a Court for ventilating his grievance. These provisions would be ignored if the Court of Small Causes were to make the valuation itself. They indicate that the scheme of the Act was not as stated in that case. There it was also observed that the view taken received support from the observations of S. R. Das, J. in the unreported judgment in North British and Mercantile Insurance Co. Ltd. v. Corporation of Calcutta, Case No. 6 of 1943 (Cal), mentioned in that case. We think, however, that those observations tend quite the other way for they were inter alia that,"It, however, the Small cause Court only sets as aside the valuation made by the Corporation but does not itself fixed the valuation, them S. 147 does not apply The matter must in such circumstances be left to be governed by S. 131 (2) (b)."S. R. Das, J. clearly contemplated that the Court of Small Causes was not bound to make a revised valuation in all cases. In our opinion, it has not the power to do so in all cases. The same view of the judgment of S. R. Das, J. was taken in Corporation of Calcutta v. Chandoo Lal Bhai Chand Modi, 57 Cal wn 882 : (AIR 1953 Cal 773 ).12. If it was intended by the Royal Asiatic Societys case, 58 Cal WN 537, to hold that it was the appellate Courts power Courts power after cancelling a valuation to revise it if it liked, that again would be a view to which we are unable to subscribe. Such a view indeed appears to have been taken by the High Court in the case in hand for it made the order of remand only because the corporation could not make a valuation any more, the time limit prescribed for it under Section 131 (2) (b) having expired. If the Corporation could make the valuation, presumably the High Court would not have made the order of remand. Now Section 131 (2) (b) provides that when a valuation is cancelled on the ground of irregularity, a fresh valuation may be made by the Executive Officer. It would be an unnatural construction of the Act to say that the operation of this provision would depend on the discretion of the appellate Court to proceed or not to proceed to make a valuation itself after cancelling the valuation previously made by the Corporation. We think that in view of this provision, once a valuation is cancelled a fresh valuation can only be made in terms of it and not in any other way. That is what S. R. Das, J. said and with it we agree. That is another reason for saying that when a valuation is cancelled, the Act does not contemplate a fresh valuation being made by the Court, for if it did so, S. 131 (2) (b) would have operation only when the Court decided it to have. We are not prepared to accept as correct an interpretation of the Act leading to such an unnatural result.13. While on S. 131 (2) (b) we observe that it was not contended that a Court had on power to cancel a valuation; all that was said was that after cancellation the Court must or may proceed to make a fresh valuation. This we have held to be an untenable view. A point was, however, made that S. 131 (2) (b) applied only to a cancellation on the ground of irregularity, that is, a procedural defect such as, absence of notice, omission to give a hearing, etc. There is, however, no reason to restrict the ordinary meaning of the word "irregularity" and confine it to procedural defects only. None has been advanced. Such a contention was rejected, and we think rightly, in 57 Cal WN 882: (AIR 1953 Cal 773 ). That word clearly covers any case where a thing has not been done in the manner laid down by the statute, irrespective of what that manner might be. In principle there would be nothing to justify a special provision like S. 131 (2) (b) being made to cover a case of procedural irregularity only.14. We can now deal with the reasoning on which the High Court in the present case justified its order of remand. It realised that by making the order it was depriving the appellant of one of its chances to object to the valuation, namely, the chance under S. 139, but it felt that by upholding that right of the appellant it would be depriving the Corporation of its rates wholly as the time limit prescribed by S. 131 (2) (b) had expired. It thought that it was faced with two evils and that it would be choosing the lesser of the two if it allowed the Corporation a chance to collect its rates. With great respect, we find this line of reasoning altogether unsupportable. A result flowing from a statutory provision is never an evil. A Court has no power to ignore that provision to relieve what it considers a distress resulting from its operating. A statute must of course be given effect to whether a Court likes the result or not. When the High Court found that S. 131 (2) (b) had been attracted to the case, it had no power to set that provision at naught.15. It remains to deal with one other argument advanced for the Corporation. It was said that the entire proceeding in connection with the ascertainment of the valuation was one and continuous and its only object was to ascertain the valuation and therefore, the Court annulling a valuation made on a wrong basis, must have power to make a new valuation itself on the correct basis. We are not impressed by this contention. The conclusion does not follow form the premise. The proceeding for making the valuation, whether it is continuous on not must be in terms of the statute. If the statute does not give the Court the power to make the valuation, it cannot be said to possess that power so that the supposed object may be achieved. Further the object is not to make a valuation anyhow but to make it only in terms of the Act.16. We think we have now considered all the different aspects of the matter that were placed before us by learned counsel on either side. Our conclusion for the reasons earlier stated is that looked from all points of view, the order remand is not justifiable in law; it was not within the inherent power of the High Court to remand the case for the doing of a thing which the Act did not countenance. The remand was futile. It offended the Act as it deprived the appellant of one of its statutory rights. The order has to be set aside.17. Before concluding we may state that the Corporation had made two valuations of the premises, one called a general valuation for the entire six yearly period mentioned in S. 131 (1) and the other an intermediate valuation made later but within that period to have effect for the remainder of the period, on account of certain additional construction in the premises put up since the earlier assessment. Objections had been taken by the appellant to both these valuations under S. 139 by independent proceedings and separate appeals filed under S. 141 from the order made in each of the proceedings. As earlier stated, the appeals raised the same point. They were therefore, dealt with in one judgment by both the Courts below, hence the two appeals before us.

Decision reasoning: 1[ds]13. While on S. 131 (2) (b) we observe that it was not contended that a Court had on power to cancel a valuation; all that was said was that after cancellation the Court must or may proceed to make a fresh valuation. This we have held to be an untenable view. A point was, however, made that S. 131 (2) (b) applied only to a cancellation on the ground of irregularity, that is, a procedural defect such as, absence of notice, omission to give a hearing, etc. There is, however, no reason to restrict the ordinary meaning of the word "irregularity" and confine it to procedural defects only. None has been advanced. Such a contention was rejected, and we think rightly, in 57 Cal WN 882: (AIR 1953 Cal 773  ). That word clearly covers any case where a thing has not been done in the manner laid down by the statute, irrespective of what that manner might be. In principle there would be nothing to justify a special provision like S. 131 (2) (b) being made to cover a case of procedural irregularity only.14. We can now deal with the reasoning on which the High Court in the present case justified its order of remand. It realised that by making the order it was depriving the appellant of one of its chances to object to the valuation, namely, the chance under S. 139, but it felt that by upholding that right of the appellant it would be depriving the Corporation of its rates wholly as the time limit prescribed by S. 131 (2) (b) had expired. It thought that it was faced with two evils and that it would be choosing the lesser of the two if it allowed the Corporation a chance to collect its rates. With great respect, we find this line of reasoning altogether unsupportable. A result flowing from a statutory provision is never an evil. A Court has no power to ignore that provision to relieve what it considers a distress resulting from its operating. A statute must of course be given effect to whether a Court likes the result or not. When the High Court found that S. 131 (2) (b) had been attracted to the case, it had no power to set that provision at naught.15. It remains to deal with one other argument advanced for the Corporation. It was said that the entire proceeding in connection with the ascertainment of the valuation was one and continuous and its only object was to ascertain the valuation and therefore, the Court annulling a valuation made on a wrong basis, must have power to make a new valuation itself on the correct basis. We are not impressed by this contention. The conclusion does not follow form the premise. The proceeding for making the valuation, whether it is continuous on not must be in terms of the statute. If the statute does not give the Court the power to make the valuation, it cannot be said to possess that power so that the supposed object may be achieved. Further the object is not to make a valuation anyhow but to make it only in terms of the Act.16. We think we have now considered all the different aspects of the matter that were placed before us by learned counsel on either side. Our conclusion for the reasons earlier stated is that looked from all points of view, the order remand is not justifiable in law; it was not within the inherent power of the High Court to remand the case for the doing of a thing which the Act did not countenance. The remand was futile. It offended the Act as it deprived the appellant of one of its statutory rights. The order has to be set aside.17. Before concluding we may state that the Corporation had made two valuations of the premises, one called a general valuation for the entire six yearly period mentioned in S. 131 (1) and the other an intermediate valuation made later but within that period to have effect for the remainder of the period, on account of certain additional construction in the premises put up since the earlier assessment. Objections had been taken by the appellant to both these valuations under S. 139 by independent proceedings and separate appeals filed under S. 141 from the order made in each of the proceedings. As earlier stated, the appeals raised the same point. They were therefore, dealt with in one judgment by both the Courts below, hence the two appeals before us.