JUDGMENT
Raj Kishore Prasad, J.
1. This appeal by the plaintiffs involves the interpretation of Section 98 (1) and (2) of the Bihar and Orissa Municipal Act, 1922 (Bihar and Orissa Act VII of 1922), hereinafter referred to as “the Act”.
2. The plaintiffs brought a suit, out of which the present appeal arises, for declaration that the assessment made by the defendant –Commissioners of the Dhanbad Municipality –on holding No. 594, in Ward No. 3, of the Dhanbad Municipality, was ultra vires and without jurisdiction. The plaintiffs’ case was that holding No. 594 is a Cinema House known as “Ray Talkies” built in March, 1948, and, it was assessed with quarterly municipal tax of Rs. 900/-, and, a notice thereof dated the 31st of March, 1948 was served on the plaintiffs, as proprietors of the aforesaid Cinema House, under Section 115 (2) of the Act. The plaintiffs, thereafter, applied under Section 116 (1) for a review of the assessment, whereupon the Review Committee was constituted, and, it gave its decision by reducing the municipal tax to Rs. 810/- per quarter. The plaintiffs’ further case was that the assessment should have been made under Section 98 (2), and not under Section 98 (1), of the Act, and, as such, the assessment was ultra vires.
3. The suit was contested by the defendant-Municipality. Its defence was that a portion of the building, on the holding in question, was let out to stall keepers, and, other vendors on a monthly rental of Rs. 600/-, and, another portion of it was used as residential quarters for the servants and staff of the Cinema, and therefore, the assessment had rightly been made under Section 98 (1) of the Act. The defendant also challenged the jurisdiction of the Civil Court to try the suit in view of Section 119 of the Act.
4. The trial Judge negatived the plaintiffs’ objections to the assessment made by the defendant and upheld it. He found that a portion of the building was let out to the tenants, who wore holding cold drink and sweetmeat stalls as monthly tenants, and, therefore, he held that the assessment had rightly been made under Section 98(1) of the Act. He however, held that the suit was barred under Section 119 of the Act, and, accordingly, he dismissed the suit.
5. On appeal, the learned Subordinate Judge, who heard the appeal of the plaintiffs, agreed with the trial Judge that the Civil Court had no jurisdiction in view of Section 119 of the Act which expressly ousted the jurisdiction of the Civil Court to try the present suit. On the merits, he held that the Review Committee was legally justified in assessing the holding under Section 98 (1) of the Act. He further found that the stall keepers were holding the stalls after payment of reasonable rent to the plaintiffs, and, therefore, when a portion of the building was let out to tenants, the assessment was rightly made under Section 98 (1) of the Act. On these findings, he affirm-ed the judgment and decree of the first Court, and dismissed the plaintiffs’ appeal.
6. The plaintiffs, therefore, have come up in second appeal to this Court, which has been referred to a Division Bench by Kanhaiya Singh, J.
7. Mr. B.C. De, who represented the appellants, conceded that if it was established that the impugned assessment was ultra vires and without jurisdiction and beyond the competence of the defendant-Municipality, then certainly the Civil Court will have jurisdiction to examine this question and to entertain the suit. It is not, therefore, necessary to consider in this appeal the question of jurisdiction of the Civil Court to entertain the present suit in view of Section 119 of the Act.
8. The sole question, therefore, for determination in the present appeal is whether the impugned assessment is with or without objection? If it is found to be with jurisdiction, then certainly the plaintiffs’ suit must fail. If, however, it is found that the assessment was ultra vires and beyond the powers of the defendant-Municipality, then the plaintiffs’ suit must succeed.
9. In order to decide the controversy between the parties, and, to determine the question at issue between them, it is necessary at this very stage to read Section 98 of the Act. Section 98 of the Acti is to the following effect:
“98. (1) The annual value of a holding shall be deemed to be the gross annual rental at which the holding may reasonably be expected to let.
(2) If there be on the holding a building or buildings, the actual cost of erection of which can be ascertained or estimated and which is or are not intended for letting or for the residence of the owner himself, the annual value of such holding shall be deemed to be an amount which may be equal to, but not exceed, seven and a half per centum on such cost, in addition to a reasonable ground rent for the land comprised in the holding :
Provided that, where the actual cost so ascertained or estimated exceeds one lakh of rupees, the percentage on the annual value to be levied in respect of so much of the cost as is in excess of one lakh of rupees shall not exceed one-fourth of the percentage determined by the Commissioner under Section 104.
(3) The value of any machinery or furniture which may be on a holding shall not be taken into consideration in estimating the annual value of such holding under this section.”
10. The true meaning and correct interpretation of Section 98 (2) of the Act will supply the key to the riddle. The crucial question, therefore, is : What is the true meaning of Section 98 (2) of the Act?
11. In order to attract the provisions of Section 98 (2) of the Act to a holding, the following conditions are necessary (1) on the holding there should be a building or buildings; (25 the actual cost of the erection of such building or buildings’ can be ascertained or estimated; (3) such building or buildings is or are not intended for letting, or (4) such building or buildings is or are not intended for the residence of the owner himself. If the first three, or first two, and, the fourth conditions, postulated by Section 98 (2) of the Act, are satisfied, then in such a case the method of assessment of such a holding is provided in Section 98 (2) of the Act. In such a case, the annual value of such a holding shall be deemed to be the amount, which may be equal to, but not exceed, seven and a half per centum on such cost, in addition to a reasonable ground rent for the land comprised in the holding. There is also a Proviso to Section 98 (2), but we are not concerned therewith, and, therefore, it is not necessary to deal with it.
12. The scheme of Section 98 of the Act, therefore, is that if the conditions envisaged by Section 98 (2) of the Act are present in a particular case, then the annual value of such a holding shall be as provided in Section 98 (2) of the Act; otherwise the annual value of such a holding shall be deemed to be the gross annual rental at which the holding may reasonably be expected to let, as provided in Section 98 (1) of the Act. The contention put forward by Mr. De, in support of his argument that Section 98 (2), and not Section 98 (1) will apply to the present case, is that the mere fact that a few rooms, out of many in the building on the holding, are let out, that would not indicate that the main building is “intended for letting”. He, therefore, urged that if on a holding there is one building consisting of several rooms, then the mere fact that a few rooms, out of many rooms which are in that building, are let out will not change the character of the main building, and, make it “intended for letting”, unless the main building. or a substantial portion of it is let out.
He, therefore, argued that, in the present case, simply because a few rooms, out of many rooms in the building, which is really a Cinema House, have been let out, will not change the character of the building and make it “intended for letting” within the meaning of Sub-section (2) of Section 98 Of the Act. He reinforced his argument by contending that admittedly this building on the disputed holding is not meant for the residence of the owner himself, nor, the main building is intended for letting, as it is a Cinema House, owned and run by the plaintiffs. But as the main building is used for Cinema, it is necessary for running such a Cinema that a few rooms in that building should be made available to stall keepers. The stall keepers have only been given the use of these rooms, and, they have no interest in the rooms so given, apart from the mere use of the same, and, therefore, such a use of these rooms will not come within the meaning of “to let”, used in Section 98 (1), or, “for letting” used in Section 98 (2) of the Act. In support of his contention, he placed reliance on a decision of the Court of Appeal in Frank Warr & Co., Ltd. v. London County Council, (1904) 1 KB 713 (A).
13. In the case just mentioned, by a contract made between the lessees of a theatre and the plaintiffs, it was agreed that the plaintiffs should have the exclusive right for a term of years to supply refreshments in the theatre, and for that purpose should have the necessary use of the refreshment rooms, bars, and wine cellars of the theatre, and that they should have an exclusive right to advertise, and let spaces for advertisements, in certain parts of the theatre. The Court of Appeal held that the contract did not confer on the plaintiffs an interest in land which could form the subject of compensation under Section 68 of the Lands Clauses Consolidation Act, 1845.
14. Collins, M. R., in the above-mentioned case, at page 719, observed :
”The tenants were to pay the landlords a weekly rental of 35 I., but, if from any cause whatsoever no performance was given in the theatre on any day or days of the week other than Sunday, the tenants were to be entitled to a remission of one-sixth from the weekly rent in respect of each such day. Though the word ‘let’ is used, the subject-matter of the letting is so defined, it seems to me, as most carefully to exclude the idea that any interest in land is to be given. Instead of letting the refreshment rooms or the cellars, the agreement provides merely for the use, of them by the plaintiffs so far as necessary for its purposes. Even if some of the provisions of the agreement, which have been more particularly relied on by the plaintiffs’ counsel, such as those which give the right to advertise, and let spaces for advertisements, and to use cellars, taken alone, might seem to involve an exclusive use of parts of the premises, and prima facie to point to a demise of those parts, they must, I think, be read in connection with the context, and, taking the agreement as a whole, in my opinion, the effect of it is merely to provide for the exercise of privileges by the plaintiffs by way of licence, and not to create an interest in land.”
15. Their Lordships of the Court of Appeal reached the above conclusion on the construction of the agreement under which the plaintiffs in that case claimed, and, on the construction of the agreement in that case, their Lordships found that the agreement only gave a licence, strictly and properly so called, to the persons claiming under it, and did not create any estate or interest in land in their favour, and that it did not amount to a demise, nor to a parting, in respect of any portion of the premises, with the possession, which the lessees of the theatre had, when the agreement was made. It was, therefore, held on the construction of the agreement in that case that the possession of the theatre, and of every part of it remained in the lessees, subject only to the right of the plaintiffs under the agreement to use certain parts of the premises for its purposes.
In that case, an argument was advanced, by relying upon the words “necessary use of the refreshment rooms and bars and cloak rooms and wine cellars”, by the plaintiffs’ counsel that the agreement amounted to a demise, and it created an interest in the land in favour of the plaintiffs. This contention was repelled by their Lordships of the Court of Appeal, and, they held upon the construction of the agreement in that case, that it only conferred a privilege or licence, and did not amount to a demise or create an interest in the land.
16. In this connection, in the same case, Romer, L. J., at page 721, observed :
“I think “necessary use” only means use so far as is necessary to enable the plaintiffs to sup-ply refreshments in the theatre at the proper times when it is being used as a theatre, and certainly does not involve an absolute parting with the possession of those parts of the theatre by the lessees to the plaintiffs. Again, the fact that the lessees appear to have entrusted the key of the cellars to the plaintiffs for the purpose of preventing strangers from getting in makes to my mind no difference. It appears to have been a voluntary act on the part of the lessees, and could not amount to the creation of any interest not expressed by the agreement itself, which prima facie created a licence only in favour of the plaintiffs.”
17. We, therefore, find that, in the above mentioned case, although the word “let” was used in the agreement under consideration before their Lordships, they held, on the construction of the agreement in question, that it provided merely for the use of the subject-matter of the agreement.
18. In my opinion, therefore, the above case can have no application to the present case. In the present case, both the Courts below have concurrently found that the rooms had been let out to the stall keepers, who were holding their stalls after payment of reasonable rent to the plaintiffs. The trial Judge found relying on the evidence of P.W. 1 that one room was allowed to be occupied by the sweetmeat vendor and another room was allowed by a person who used to supply cold drink and coffee; and the rooms aforesaid were actually let out at the time when the assessment was made. The Court of Appeal below has also found, in agreement with the first Court, that a portion of the building was let out to the tenants. On the concurrent findings of the Courts below, therefore, it is quite clear that a portion of the building was let out on rent, and not that merely its use was made available to the tenants concerned.
19. The question then arises, whether the mere fact that a portion of the building is let out on rent will alone attract the provisions of Section 98 (1). and make Section 98 (2) inapplicable? The controversy therefore, narrows down to the question: Whether in such a case, the assessment on the holding in dispute, should be made under Section 98 (2) or Section 98 (1) of the Act?
20. “Building” has been defined in Section 3 (1) of the Act thus :
“3. In this Act, unless there be something repugnant in the subject or context,–
(1) ‘building’ means any house, hut, shed, or other roofed structure, for whatsoever purpose and of whatsoever material constructed, and every part thereof, but does not include a tent or other portable and merely temporary shelter;
X XX XX" 21. ''Holding" has also been defined in Section 3 (9) of the Act in the following terms : "3. In this Act, unless there be something repugnant in the subject or context, X XX XX (9) 'holding' means land held under one title or agreement and surrounded by one set of boundaries :
Provided that, where two or more adjoining holdings form part and parcel of the site of premises of a dwelling-house, manufactory, warehouse or place of trade or business, such holdings shall be deemed to be one holding for the purposes of this Act other than those mentioned in Clause (a) of Sub-section (1) of Section 82;
Explanation.–Holdings separated by a road or other means of communication shall be deemed adjoining within the meaning of this proviso.
X XX XX”
22. In the present case, admittedly, there is one holding on which one building stands which has many rooms. The above definition of “building” in Section 3 (1), however, does not mean one single piece of building only. It means any house, hut, shed or other roofed structure, for whatever purpose and of whatever material constructed, and ‘every part thereof, put does not include a tent or other portable and merely temporary shelter. The words “and every part there-of used in Section 3 (1) in the definition of “building” would clearly connote that each room in a building would be a “building” within the meaning of Section 3 (1) of the Act. If this be the true meaning of the word “building” as defined in Section 3 (1) of the Act, then on this true interpretation of the word “building”, it must be held that the fact that one or two rooms of a house with many rooms are let out on rent will obviously make the holding, on which such a house stands liable to be assessed under Section 98 (1), and not under Section 98 (2) of the Act.
The mere fact that a portion of the building standing on the holding has been let out on rent is enough to take the holding out of the purview of Sub-section (2) of Section 98 and attract the operation of Sub-section (1) of Section 98 of the Act. Here, therefore, it cannot be said that the building was not “intended for letting” within the meaning of Section 98 (2) of the Act although the main building, of which the rooms let out formed part, was not “intended for letting”, but was a Cinema House owned and run by the plaintiffs themselves.
23. In Patna City Municipality v. Kapur Chand Lall, AIR 1942 Pat 417 (B), Mr. Justice Dhavle, held that the definition of the word “holding” in Section 3 (9) contains nothing to exclude parti land or land with a house on it in a dilapidated condition, and Section 98 (1) covers holdings with buildings of a character outside Section 98 (2) or holdings without any buildings on them at all, and, that the Act does not exempt from municipal taxation holdings merely because they may have no habitable buildings on them. I respectfully agree with his Lordship in his interpretation of Section 98 (1) and Section 3 (9) of the Act.
24. In my judgment, therefore, the true meaning and construction of Section 98 of the Act is that if there is a holding on which even when there is one single house, consisting of several rooms, and, if one or two or some of the rooms of such house are let out on rent, although the main house is not intended for letting, or, for the residence of the owner himself, then even in such a case the assessment of tax on the annual value of the holding will be in accordance with Section 98 (1), and not Section 98 (2), because to such a case Section 98 (2) will not apply.
25. For the reasons given above, I hold that the Court of Appeal below has correctly decided the appeal, and, I would, therefore affirm its decision, and, overrule the objection of the appellants.
26. In the result, the appeal fails and is dismissed with costs.
Ramaswami, C.J.
27. I agree.