JUDGMENT
Norman Macleod, Kt., C.J.
1. The plaintiff sued to get a refund of Rs. 52 from the defendant Municipality, and for an injunction restraining the defendant from levying double house-tax for the plaintiff’s land bearing Survey Nos. 209 and 210. The suit was dismissed by the trial Court, but on appeal a decree was passed that the defendant should refund to the plaintiff Rs. 51, and the plaintiff was granted the injunction prayed for.
2. The facts which are not disputed are that the plaintiff is the owner of two Survey Numbers for which he pays assessment to Government. He has let out the lands in these Survey Numbers to 350 tenants who have built their own houses on them, each paying a ground rent to the plaintiff which is less than Ra. 10 The Municipality has assessed the plaintiff for these Survey Numbers on the aggregate rental which he received per annum from all his tenants.
3. Two questions arise, first, whether the levying of the rate on plaintiff a land was illegal; secondly, whether the rate could be levied on the aggregate rental received from all the tenants, or whether the plaintiff was not entitled to a separate assessment for each plot let out, in which case the rate could not be levied, as each plot was not capable of yielding a rent of Rs. 10 a year. Undoubtedly under the bye-laws passed by the Municipality under Section 59 of the Bombay District Municipal Act III of 1901, the Municipality may impose a rate on buildings, or lands, or both, situated within the Municipal district, and under the ‘Bye-laws, which have not been assailed, a general rate on buildings and lands on the scale defined therein was recoverable in respect of all buildings and lands which were not the property of Government. In the case of every building or any plot of land yielding or capable of yielding a yearly rent of more than Rs. 10, but not more than Rs. 15, the rate is 12 annas per annum. Further rates are given for buildings or lands yielding higher rents, but it is provided that buildings or lands yielding or capable of yielding a yearly rent not exceeding Rs. 10 should be exempted from the payment of the rate on buildings and lands.
4. Unfortunately an important question which should have been found for the purpose of this case has altogether stopped the notice of the Courts and the parties, namely, how have the tenements of the various owners to whom the plaintiff has let out building plots been assessed? If they have been assessed at the full letting value of the tenements, then that would include the value of the land, and obviously in levying a rate on the full letting value, the Municipality would be levying a rate not only on the buildings but also on the land, but it may safely be presumed that the Municipality have assessed these houses at their full letting value, because that is the only way in which buildings are assessed, and morever it provides the easiest way for collecting the rate. If an owner of a house has to pay ground rent, he pays that ground rent out of the rent which he receives from his tenants. That rent, therefore, is made up of the ground rent and the return on the capital expended by the owner of the house. Therefore, unless it has been made clear that the Municipality were levying from the owners of those various buildings on the plaintiff’s land a rate calculated on that part of the hypothetical rental which represented merely the return on the cost of building, it would be most probable that the Municipality were already taxing these particular properties at their full amount.
5. If it were necessary, we would send down the case in order to obtain a finding on this particular question of fact. But on the other question, we think the lower appellate Court came to a right decision. The Municipality can levy a rate either on the building or land on which the building stands, or it can levy one rate for both building and land. But it cannot levy a rate which would include the rate on building and land and a second rate on the land itself. It cannot include in the land on which the building stands other land surrounding that building plot which may belong to the same owner. We think it is clear from the bye-law that if an existing building is to be taxed separately from the land, then the Municipality can only levy a rate on the plot on which the building stands. It is a different matter ii; the plot of land is vacant, and the rate is levied on it because it is capable of yielding a rental of more than Rs. 10. Then if after the land has been rated a portion of it is let out for building purposes, that portion would be deducted from the whole, and the rate on the land would suffer a proportionate reduction, while the plot of land on which the building was erected, with the building, would be rated at the annual letting value of the building and the land. If in this case before the plaintiff had let out his land to these 350 tenants, the Municipality had levied a rate, then no doubt they might continue to levy a rate on the laud, and as the plots were let out and the buildings were erected they could levy either the rate on the land according to the number of plots let out, or they might continue the rate on the land and rate the buildings, taking care to see that they did not include in that rate the rate of the land. But as things are in this particular case, no rates having been levied on these Survey Numbers before they were let out, it seems to us that the Municipality have been levying a rate on the building and the land in one, and having done that, they cannot levy a separate rate on the land. If they did, they will have to do so on each plot underneath each building and not on the whole Survey Numbers. It seems to us, therefore, (in these grounds, the appeal should be dismissed with costs.
