Case: Krishna Mohan Pvt. Ltd Vs. Municipal Corporation of Delhi &amp; Others

w.e.f. 1.7.1970. For the purpose of arriving at the rateable value the assessing authority added the cost incurred by the appellants towards installation of plant and machinery, furniture and fixtures to the cost of the building. The appellant challenged the assessment order by a statutory appeal under Section 169 of the DMC Act contending that the costs incurred towards plant and machinery, furniture and fixtures could not be added to the cost of the building for the purpose of rateable value as they are moveable items and not part and parcel of the building. It was also contended that there was no specific notification issued by the Commissioner of the Municipal Corporation for including the value of moveable items, plant and machinery for arriving at a rateable value. The appeals filed by the appellant were allowed by the appellate court by a judgment dated 1.6.1991. The appellate court upheld the contention of the appellant and directed the Municipal Corporation to work out rateable value by deleting the cost of plant and machinery, furniture and fixtures from the cost of the building. Aggrieved by the aforesaid judgment the respondent Municipal Corporation challenged the judgment by a batch of writ petitions before the High Court of Delhi. The writ petition together with other writ petitions challenging similar orders was disposed of by a common judgment dated 19.2.1999. The High Court relying upon its own judgment in Municipal Corporation of Delhi vs. Pragati Builders & others, (45 (1991) D.L.T. 264) and the judgment of this Court in Hindustan Lever Ltd. vs. Municipal Corporation of Greater Bombay and others (1995(3) SCC 716) took the view that the matter had to be remitted back to the assessing authority to determine the rateable in accordance with law as pronounced in the aforesaid judgments. Although, it was specifically contended by the appellant before the High Court that a notification under Section 116(3) of the DMC Act declaring that the lift shall be deemed to form part of land and building, was published in the Newspaper on 23.10.1989 and 24.10.1989 and therefore, could have only prospective effect, the High Court did not decide the said issue. After setting aside the judgment of the appellate authority, the issues were remitted back to the assessing authority with a direction to determine the rateable value in accordance with law leaving open all contentions to be urged before the assessing authority. This judgment is challenged by these appeals.  Civil Appeal No. 3312 & 3334 of 2000  3. In these two appeals the facts are almost same as in the previous group except that here an additional contention as to the constitutional validity of Section 116(3) of the D.M.C. Act was raised before the High Court while challenging the order of the Joint Assessor and Collector fixing the rateable value for different years. The writ petitions were disposed of by the High Court by two separate judgments dated 19.2.1999. The High Court negatived the challenge to the validity of Section 116(3) of the D.M.C. Act by holding that it is only an enabling provision and that the judgment of this Court in New Menak Chowk Spg. And Wvg. Mills Co. Ltd. etc. vs. Municipal Corporation of the City of Ahmedabad and others (AIR 1967 SC 801 ) was distinguishable. The High Court also relied on its own judgment in Municipal Corporation of Delhi vs. Pragati Builders & others, (supra), and the judgment of this Court in Hindustan Lever Ltd. vs. Municipal Corporation of Greater Bombay and others (supra), set aside the judgment of the appellate authority and remitted the assessment to the assessing authority for making afresh assessment orders. The appellants are in appeal before this Court.  Civil Appeal Nos.3 of 2002  4. The appellants in these cases are owners of certain premises in which either lifts ors or both have been installed. The Commissioner of Municipal Corporation of Delhi exercising his powers under Section 116(3) of the Act issued a notification dated 23.10.1989/ 24.10.1989 to the following effect:Municipal Corporation of Delhi  Public Notice  Lift containing or situated in or upon any building form an integral part of such building for its more beneficial enjoyment and is not plant or machinery contained or situated in or upon any land or building. However, to put this matter beyond any point of doubt, with the approval of Standing Committee, it is hereby notified undern (3) of Section 116 of the Delhi Municipal Corporation Act, 1957 that lift shall be deemed to form part of land and building for the purpose of determining the reteable value of such land and building undern (1) of Section 116 of the Delhi Municipal Corporation Act, 19575. Although the notification applied to the lift installed in the building, admittedly, no notification was issued in respect of. This group of writ petitions was filed by the assessees contending that Section 116(3) of the DMC Act confers unguided, uncontrolled and arbitrary powers in the Commissioner without laying down any guidelines whatsoever, and was consequently invalid. When the assessees were faced with the judgment of the Division Bench in Pragati Builders (supra), the assessees urged that Pragati Builders be reconsidered as it was it was in conflict with the judgments of this Court in New Manek Chowk, (supra) and the judgment of this Court in Hindustan Lever Limited (supra). The writ petitions were therefore placed before a Full Bench to consider the correctness of the Pragati Builders (supra). The Full Bench of the High Court by the judgment impugned before us took the view that Pragati Builders (supra) has laid down the law correctly and the writ petitions were dismissed. Aggrieved thereby the appellants challenge the judgment of the Full Bench.

Court's reasoning:
37. We regret we are unable to subscribe to the view of the Full Bench of the High Court. As to the construction of Section 116(3), the reasoning given by Chief Justice Chhagla in Poona Municipal Corporation (supra) and the reasoning in Hindustan Lever (supra) appeals to us. The Full Bench has laid great emphasis on the definition of land under Section 2(24) of the Act while approving the reasoning given in Pragati Builders (supra). As pointed out by the Bombay High Court, in Poona Municipal Corporation (supra), if such a wide meaning were to be given to land, defined in Section 2(24) of the Act, Section 2(3) defining building would be wholly rendered otiose. We agree with the reasoning of Chhagla, C.J., as to the respective functions of the two definitions, and the observations made in this regard, which we have quoted earlier38. In our judgment, the Full Bench of the High Court fell into error in not keeping in mind the respective functional roles of the definitions of land, building and premises and conceptually allowing them to overlap39. In any event, it cannot be forgotten that Section 116 itself indicates, in terms, how the rateable value of land and building assessable to the property taxes is to be determined.n (3) of Section 116 lays down the general rule that a no account shall be taken of the value of any plant or machinery in or upon any land or building subject only to the one exception namely that if such plant or machinery has been notified by a public notice by the Commissioner, with the previous approval of the Standing Committee, then it shall be deemed to form a part of such land or building for the purpose of determination of the rateable value. The words used inn (3) of Section 116 of the DMC Act are land or building. Hence, the principle of interpretation evolved in Poona Municipal Corporation (supra) was very much relevant and applicable. In any event, the definition of premises was wholly irrelevant for interpretation ofn (3) of Section 11640. The legislative history unmistakably points towards out to this manner of interpretation. Legislation, like history, has the habit of repeating itself. Legislative practice, which was noticed by this Court in New Manck Chowk (supra), showed that both in England and in India Municipal legislation had uniformly tended to exclude the cost of plant and machinery for the purpose of computation of rateable value of land or building subject to exceptions made by statute, examples beingn (3) of Section 116of DMC Act, Section 154(2) of the BMC Act, Rule 7(2) made under the BPMC Act, 1949 and similar statutory provisions. The Full Bench laid great emphasis on the word premises used in the Act and the enlarged meaning given to the term under the 1994. In the first place, rateable value is defined in Section 2(47) as the value of any land or building fixed in accordance with the provisions of the Act and thes made thereunder for the purposes of assessment to property tax. Section 2(47) does not even make a reference to premises. It is true that the expression premises is defined in Section 2(38) as inclusive of any fittings affixed to a building for the more beneficial enjoyment thereof. Even assuming the contention which appealed to the High Court to be correct, we must reconcile the definition of the term premises in Section 2(38) with the express words used inn (3) of Section 116of the Act. Learned counsel for the appellant is, therefore, right in his contention that whatever be the amplitude of the expression premises or the expression fittings used in clause (b) of Section 2(38) of the Act, it cannot include plant or machinery which have been expressly excluded under Section 116(3), except to the extent it is notified. This contention appears justified, on principle and precedent, and deserves acceptance41. We are unable to accept the view of the High Court that the notification dated 23.10.1989 was issued by the DMCi cautela, nor are we in agreement with its view that lifts ands are not plant or machinery, but fittings and fixtures. We also cannot accept the view that a lift being permanently embedded in the land duly forms part of building for computation of rateable value of the building. In our view, lifts ands are neither fittings, nor fixtures, but are plant and machinery. The concept of rateable value, as generally understood, does not admit the inclusion of the cost of such plant or machinery in the computation of the rateable value of the building. The legislature has, therefore, made a specific provision that if their cost has to be included, a previous notification has to be issued underThis was purportedly done by the notification dated 23.10.1989 and, if at all valid, it would become operative from the said date and not from any date earlier42. The High Court also seems to have lost sight of the fact that the Explanation II of 1994s was struck down by the High Court and its invalidity was upheld by this Court.