Case: N.D.M.C Vs. Sohan Lal Sachdev (Dead)Thru.Lr

Sohan Lal Sachdev, deceased, represented by legal representative, was the landlord of the premises bearing No. 49, Golf Links, New Delhi. He occupied the ground floor of the said premises. In the month of September, 1981, he let out the first floor and the Barsati floor to Sachdeva Guest House for running a guest house. When this fact was intimated to the Corporation Authorities by the landlord, demands of electricity and water charges were made according to `non-domestic rates with effect from 1.10.1981. The landlord protested against the demand stating that the user of the premises for running a guest house cannot be said to be a commercial use of the premises and therefore the demand is unsustainable. Thereafter, the landlord filed a suit, Suit No. 230 of 1982, seeking a decree of injunction against the NDMC restraining it from raising demand on the basis of commercial user of the premises on the ground as notedcase of the NDMC was that use of the premises (first floor and Barsati floor) for running the `guest house cannot be said to be `domestic use; it is a commercial user and therefore demand of electricity on that basis is justified. The learned Trial Judge on the pleadings framed three main issuesWhether the user of the premises for running a guest house can be termed as commercial user ?(2) Whether the defendant is competent to charge the electricity consumption on non-domestic rates ?(3) Whether the plaintiff is entitled for the relief of injunctionon Section 23 of the Indian Electricity Act (the `Act for short), the Trial Judge held that NDMC was competent to convert the charges of electricity supply from one category to another i.e. from `domestic category to `commercial category. She, however, did not accept the contention of NDMC that the user of the premises in running residential guest house can be termed as commercial user and answered issue number one in favour of the plaintiff and against the defendant. The Trial Judge further held that even if the running of a guest house at the suit premises cannot be termed as commercial user, it cannot also be termed as `domestic user either. Therefore the NDMC had the right to charge rates at `non-domestic rates for supply of electricity and water at the premises being used for running the guest house. On the above finding the suit wasappeal by the landlord the learned Senior Civil Judge, Delhi, concurred with the finding of the trial Court that NDMC was competent to vary the electricity charges of the suit premises. The first Appellate Court further held that NDMC has the right to charge non-domestic rates for supply of electricity and water in the suit premises as the same was being used for running the guest house. The First Appellate Court dismissed thelandlord filed second appeal in the High Court of Delhi challenging the judgment and decree of the first appellate court confirming the judgment of the trial Court. The High Court reversed the concurrent decisions of the lower courts and decreed the suit. The High Court took the view that user of the suit premises for running the `guest house without any kitchen facility is user for residential purpose and, therefore, the NDMC is not entitled to charge electricity and water charges on the basis of commercial use. Being aggrieved by the decision of the High Court, the NDMC has filed this appeal challenging the judgment.

Court's reasoning:
In essence the question is, what is the character of the purpose of user of the premises by the owner or landlord and not the character of the place of user. For example, running a boarding-house is a business, but persons in a boarding-house may use water for `domestic purpose. As noted earlier the classification made for the purpose of charging electricity duty by the NDMC sets out the categories `domestic user as contra-distinguished from `commercial user or to put it differently `non-domestic user. The intent and purpose of the classification, as we see it, is to make a distinction between purely `private residential purpose as against `commercial purpose. In the case of a `guest house, the building is used for providing accommodation to `guests who may be travellers, passengers, or such persons who may use the premises temporarily for the purpose of their stay on payment of the charges. The use for which the building is put by the keeper of the guest house, in the context cannot be said to be for purely residential purpose. Then the question is, can the use of the premises be said to be for `commercial purpose ? Keeping in mind the context in which the phrases are used and the purpose for which the classification is made, it is our considered view that the question must be answered in the affirmative.