JUDGMENT
N.K. Parekh, J.
1. There are three petitions which have come up for hearing in which the same question is involved and Counsel for the parties in all the three petitions have agreed that the same be heard together.
2. The petitioners in Misc. Petition No. 1131 of 1977 are the heirs and legal representatives of one V.V.K. Sarma (now deceased) the original petitioner. The case of the petitioner in this Misc. Petition No. 1131 of 1977 is that V.V.K. Sarma (now deceased) was a railway employer. That a housing society known as ‘Shiv Darshan Central Railway Co-operative Housing Society Ltd.’, (that is the 3rd respondent herein) was floated. That this housing society put up a building. That on or about 13th January, 1974 the said Sarma (now deceased) was allotted Flat No. 5 in building ‘A’ thereof. That on or about 8th January, 1975, the said Sarma (now deceased) applied to respondent No. 3 to grant him permission to give this flat to a care-taker. By a letter dated 1st April, 1975, respondent No. 3 granted this permission. That thereupon in or about January 1975, the said Sarma (now deceased) entered into an agreement with Messrs Vijaya Bank Ltd. Under this agreement, the said Sarma gave out his flat i.e. Flat No. 5 on care-taker basis to the said Vijaya Bank Ltd. on their paying a sum of Rs. 750/- per month by way of compensation.
3. It is the petitioner’s case that the society put up about 7 buildings. That these buildings came to be assessed in or about the month of March 1975. That the rateable value of this Flat No. 5 was fixed at Rs. 1,920/- per annum. That the said Sarma was then served with a till by the respondent No. 3 ceiling upon him to pay the municipal taxes of Rs. 484.33 on the basis of the said rateable value. It is the petitioner’s case that this rateable value fixed, was on the basis of the standard rent.
4. That in or about May, 1977, the said Sarma received a circular dated 15th May, 1977 from the Hon. Secretary of respondent No. 3. By the said circular, the said Sarma was informed that since the flat was sub-let the rateable value of the said flat had changed. By the said circular, the said Sarma was also informed that the rateable value of the flat in question as also other flats were revised from 1st April, 1976. Furthermore, that respondent No. 3 had already received bills from the Municipal Authorities increasing the rates for the period 1st April, 1976 to 31st March, 1977 and the period from 1st April, 1977 to October 1977. Along with the said letter, the respondent No. 3 also forwarded a supplementary bills dated 15th May, 1977 for Rs. 2,212.80 and another bill dated 15th May, 1977 for Rs. 513.40. On a perusal of these bills, the said Sarma (now deceased) found that the rateable value in respect of his flat was sought to be increased on the footing that he was receiving Rs. 750/- per month by way of compensation.
5. That on the 4th June, 1977, the said Sarma and others similar situated addressed a letter to the Assistant Assessor and Collector, Bombay Municipal Corporation, protesting against the increase in the rateable value.
6. That on the 22nd June, 1977, the said Sarma addressed a letter in this connection to the Honorary Secretary and Chairman of respondent No. 3. Thereafter, the said Sarma (now deceased) and 35 other members made a request to respondent No. 3 to call a Special Annual General Meeting on the 2nd June, 1977 with a view to take a decision whether to contest this increase in rateable value and/or adopt proceedings in Court of Small Causes. However, this letter was returned. That on the 15th July, 1977, the said Sarma decided a letter to the District Deputy Registrar, requesting him to call a requisition meeting. The said Sarma also requested respondent No. 3 to give him information as regards the documents which had a bearing on the increase of the rateable value, and grant him inspection thereof. This correspondence was not replied to by respondent No. 3. The Deputy District Registrar, however, by his letter dated 29th July, 1977, advised respondent No. 3 to call a meeting, but nothing happened.
7. That the said Sarma then made a representation to the Municipal Authorities protesting against the increase in the rateable value, but be received no reply.
8. That on the 22nd July, 1977, the said Sarma went to the Mulund Office and met Respondent No. 2. That the respondent No. 2 refused to recognised the locus standi of the said Sarma and others, although it was pointed out to respondent No. 2 that the said Sarma and others were the actual aggrieved parties. However, on that day the hearing was adjourned. That the said Sarma and some other flat owners by their Advocate’s letter dated 11th August, 1977, addressed to the Assistant Assessor and Collector, placed the said facts on record and once again pointed out they as flat owners were vitally affected and had a right to be heard. That by a letter of even date addressed to the Deputy District Registrar of Societies, the said Sarma and other asked the Deputy Registrar to see that the society covered a meeting. That on the 19th August, 1977, the said Sarma again appeared before respondent No. 2. That at this hearing also the said Sarma was informed that he had no locus standi whatsoever. That the said Sarma however applied for an adjournment to enable him to engage a lawyer and adduce evidence in support of his case. That this plea was turned down on the ground he had no locus standi and the matter was proceeded with and an order came to be passed on that day. By a letter dated 31st August, 1977, addressed to the Assistant Assessor and Collector, the said Sarma and others similarly situated, placed on record the facts as to what happened on 19th August, 1977.
9. That in the meantime, respondent No. 3 addressed a letter to the Deputy District Registrar of Co-operative Societies, stating that no meeting was necessary. That on the 25th August, 1977, the said Sarma received a notice of demand from the Honorary Secretary, inter alia, informing him that a decision had been taken on 19th August, 1977 by the Office of the Assessor and Collector and the rateable value in respect of his flat was fixed at Rs. 6, 255/- and calling upon him (the said Sarma) to pay a sum of Rs. 263/- per month by way of tax instead of Rs. 69.19 per month, with effect from 1st April, 976. That being aggrieved by the said order, the said Sarma filed this Misc. Petition No. 1131 of 1977, to quash the proceedings.
10. It is the petitioner’s case that the said Sarma died pending this petition and the petitioners were brought on record.
11. As regards the Misc. Petition No. 1252 of 1977, one A.S. Ninan is the petitioner. It is the say of A.S. Ninan that he is a railway employee. That he is a member of the 3rd respondent society. That on or about 19th January, 1974 he was allowed to occupy a flat being Flat No. A/4 in the buildings put up by the 3rd respondent. That on or about 19th November, 1974, he the petitioner had applied that he should be permitted to give out his flat on a caretaker basis. That the 3rd respondent exceeded to this request. That thereupon he entered into an agreement with Messrs Pressure Cooker and Appliances Private Ltd. Under this agreement, the said company was allowed to house one of its employees in this premises as a care-taker. Under this agreement, he the petitioner was also to receive a sum of Rs. 750/- Per month by way of compensation.
12. It is his case that prior to the occupation of this flat by the said company, the rateable value of this flat was Rs. 1,930/-. However, this rateable value was changed in the manner and circumstances which are identical to the Misc Petition No. 1131 of 1977. That being aggrieved by the fact that this rateable value was to be increased and since the said Sarma and others were going to make a representation to the Assessor and Collector, he authorised the said Sarma (now deceased) the other to reprehend his case also. In so far as what transpired before the Assessor and Collector is concerned and what happened thereafter, Ninan’s case is identical to that of Sarma. It is Ninan’s case that he too being aggrieved by the increase of the rateable value, he has filed this Misc. Petition No. 1252 of 1977.
13. As regards Misc. Petition No. 1254 of 1977 is concerned, one D.E. Pillay is the petitioner. It is the case of the said Pillay that he is a railway employee and a member of the 3rd respondent society. That in or about January 1974 he was allotted a flat bearing No. D-2 in the buildings put by the 3rd respondent society. That he went into occupation of that flat. That the rateable value of the said flat was fixed at Rs. 1,210/- per year. That he thereafter applied to respondent No. 3 to allow him to give out this flat on caretaker basis. That respondent No. 3 granted this permission. That in or about November 1974 he entered into an agreement with Messrs Mody Rubber Limited. Under this agreement Mody Rubber Ltd. were granted a licence to house one of their employees in this flat. Mody Rubber Ltd., was also to pay a sum of Rs. 500/- per month in respect of the said premises by way of compensation.
14. It is his case that in or about the month of May 1977, he received a circular from the 3rd respondent inter alia informing him (the said Pillay) that the rateable value of the flat was being increased. That he thereupon joined Sarma and others in protesting against this increase and also joined them in addressing various letters to the Assessor and Collector and also to the society. It is his case that he along with the said Sarma had appeared before the Assessor and Collector to point out that the authorities were not entitled to increase was rateable value on the footing of the compensation they received but would only assess the premises on the basis of the standard rent available. It is his case that the authorities turned him out by station that he had no locus standi and proceeded to pass an order of assessment. It is his case that being aggrieved by this order, the members of the society wanted a meeting to be held wherein a decision was to be taken viz. if an appeal was to be preferred against the order of the Assessor and Collector. That the 3rd respondent society, however, did not co-operate in these proceedings. It is his case that he was then served with a notice of demand by the 3rd respondent asking him to pay taxes on the basis of the newly fixed rateable value. That since the respondents threatened further action, he filed the present petition viz. Misc. Petition No. 1254 of 1977.
15. Each of these petitions, is resisted by the respondent No. 1. In so far as respondent No. 1 is concerned, it is their case that the rateable value of each flat has been computed on the grievances regarding principles of natural justice made by the petitioners, the 1st respondents have contended that a proper hearing was granted to the parties and the rateable value has been correctly fixed. The 1st respondent have contended and the petitioners are not entitled to any relief whatsoever. In so far as respondent No. 3 are concerned, they have not appeared.
16. In these petitions, the order of assessment in challenged mainly on the following grounds:
a) that the authorities wrongly held that the petitioners had no locus standi to appear in the assessment proceedings;
b) that no hearing was granted to the petitioners and the principles of natural justice were violated;
c) that the assessment has proceeded on wrong basis i.e. the authorities could only have assessed the property on the basis of the standard rent available and not on the basis of the compensation received by the petitioners from their respective licensees;
d) that the order passed by the Assessing Authorities is not a speaking order;
e) that the same not having been communicated to the petitioners, the same was bad in law.
The petitioners have contended that in view of this, they would be entitled to several reliefs prayed for in their respective petitions.
17. The respondent Nos. 1 and 2 have, on the other hand, contended (a) that the petitioners have no locus standi and they are not entitled to file these petitions; (b) that if the Assessor and Collector had objected to the petitioners appearing in the proceeding, as having no locus standi, he was right in doing so. That, even if it was assumed that the petitioners has a locus standi and were entitled to take part in the proceedings before the Assessor and Collector, then what had in fact transpired was that the petitioners were allowed to take part in the proceedings and were heard and were called upon to plead their case and adduce evidence. That the principles of natural justice were hence fully observed before assessing the premises in which the petitioners were interested, and the order passed was hence proper (d) that the order passed was and is a speaking order and the same was passed in the presence of the petitioners. That the petitioners knew the contents of the order on the day when the order was passed or thereafter, as is borne out by the correspondence annexed to the petition (e) that, in the circumstances, the petitioners would not be entitled to any relief whatsoever.
18. In view of the controversy, the first question that arises for consideration is whether the petitioners had a locus standi to appear before the Assessor and Collector and/or whether the petitioners have a locus standi to adopt the present proceedings. On this aspect, it may be stated that it is not in dispute that the petitioners are tenant members of the 3rd respondent society. The 3rd respondent are not a partnership society. It is also not in dispute the petitioners were and the allottees of the flats in question. Hence, what comes about is that whilst the society continues to be the owner of the flats, the petitioners would have a right or interest to occupy their respective flats. As observed in the case of Ramesh Himmatlal Shah v. Harsukh Jadhavji Joshi, , “this right or interest to occupy is a species of property and is attached”. Hence the petitioners must be held to have a proprietary right.
19. Now section 209-A of the Bombay Municipal Corporation Act provinces as follows :
“(1) Notwithstanding anything contained in the Maharashtra Co-operative Societies Act, 1960 or any other law for the time being in force, if any sum due on account of any property tax, in respect of any property owned by a co-operative housing society registered under the Act, remains unpaid, after a bill for the same has been duly served on the society primarily liable for the payment thereof, the Commissioner may serve a bill on each of the tenant members of the society for such portion of the sum due as bears to the whole amount due the same into ratio which the rent estimated under section 154, in respect of his tenement bears to the aggregate amount of estimated rent for the whole property.
(2) If the tenant-member fails within fifteen days from the service of any such bill to pay the amount therein claimed, the same amount may be recovered from him, as if the amount were a property due by him.
(3) If any sum if paid by, or recovered from a tenant member under this section, he shall be entitle do credit thereof in account with the society primarily liable for the payment of the same”.
A plain reading of this section makes it clear that the Bombay Municipal Corporation i.e. respondents Nos. 1 and 2 can recover the assessment tax in respect of the flat occupied by the respective petitioners either by attaching the flat in his occupation or hold him personally liable for the same. In other words, the property rights of such of the petitioners whose flats are attached would certainly be affected. It is, therefore, difficulty to conceive that the petitioners should have no locus standi to take part in the assessment proceedings, i.e. atleast in so far as the assessments of their respective flats are conceded, more so, in view of the fact that by reason of the aforesaid section, their flats are liable to be sold in satisfaction of the tax for which their flats are assessed.
20. In view of this, it must be held that the petitioner had a locus standi to appear before the Assessing Authority and have locus standi to adopt the present proceedings.
21. However, in so far as these petitions are concerned, this question of locus standi is immaterial. From the exhibits annexed to Misc. Petition No. 1131 of 1977, Misc. Petition No. 1252 of 1977 and Misc. Petition No. 1254 of 1977, what is clear is that each of the petitioners came to know from respondent No. 3 that the rateable value was to be enhanced. That thereupon by a letter dated 4th June, 1977, the petitioners informed the Assessor and Collector and requested the Assessor and Collector that they may be given an opportunity to be heard and place their views before him. The said letter, inter alia, read as follows :
“On the basis of the above, we hereby strongly protest against the proposed increase in the rateable value of our flats and request you that we may be given an opportunity to be heard of and place our views before you on the matter along with our legal representatives before the case is finally disposed of at out level”.
(reproduced as per exhibit).
By letter dated 22nd June, 1977 addressed to the society, the petitioners along with others, informed the society as follows :—
“the society will be called for hearing for the purpose before the rateable value is finally decided. You are, therefore, requested to intimate the first signatory when the society is called for hearing and to authorise some of the affected members to assist you in explaining and convincing the authorities to the best advantage of the society and affected members in particular.” (Underlining mine).
In other words, the petitioners did not themselves choose to make any independent representatives but rather informated the society that they should be allowed to appear at the time when the society was appearing, so that the case of the society could be canvassed by one of them. Then again, Exhibit 1 to the affidavit in reply of respondents Nos. 1 and 2 shows that a hearing took place on 22nd July, 1977. That the petitioners along with some other flat owners and/or allottees appeared and asked for a date to enable them to produce evidence. The record of the officer on the date reads as follows :
“Shri G.S. Gowlani Jt. Secretary of the Society, Shri R.C. Agarwala, Chairman of the society with members Shri J., Fernandes, Shri D.E. Pillay, Shri V.K. Sharma, P.D. Nimkar, and Shri V.R. Mehta appeal. They request for a suitable and long adjournment so as to come fully prepared at the next hearing. I, therefore, adjourned the hearing to 19-8-1977”. (Underling mine).
This shows that their presence was recognised. Then again it is an admitted position that the next hearing was to take place on 19th August, 1977. The record of the officer shows that at this second hearing only the said Sarma and one more (from amongst the allottees of their flats, were present. That an adjournment was asked for on behalf of the petitioners. That the officers concerned then pointed out that an application for adjournment had already been entertained on the previous occasion and a long adjournment had been granted to the petitioners to prepare themselves. The record also shows that thereafter Sarma (the petitioner in Misc. Petition No. 1131 of 1977) was invited “to plead his case”. That the said Sarma the petitioner in Misc. Petition No. 1131 of 1977) thereupon made a statement. The relevant record reads as follows :
“He states and admits that he is recovering Rs. 750/- from his present occupant. He has not cared to produce any documentary evidence before me even then the superintendent in his proposal has given 20% deduction for furniture and facilities and adopted Rs. 600/- for assessment. I consider this amount as the fair letting value of the flat from year to year considering the cost of the flat paid by the flat owner. The cost of the flat is repeatedly Rs. 48,000/- exclusive of the cost of land”.
This again goes to show that the petitioners were given a hearing. If all the petitioners herein did not care to appear to the second hearing and did not care to adduce evidence in connection with their respective flats and the officer proceeds to pass his orders on such date as was before him, no fault can be found with the officer more especially when he had on an earlier occasion granted a long adjournment only to enable the petitioners to collect evidence in support of their respective stands. It may here be observed that after the second hearing Sarma had approached an Advocate who purported to record that throughout the hearing the petitioners were brushed aside on the ground that they had no locus standi. In view of what is stated hereinabove, it is apparent that the recording was false.
22. The next point taken by the petitioners is that the principles of natural justice were violated. This contention is believed by the aforesaid landlord and this contention must now be negatived.
23. The third contention taken up by the petitioners was that it is admitted position that at the earlier stage the rateable value was fixed at Rs. 1920/-. That this rateable value was enhanced to Rs. 6,255/-. that the basis of arriving at this figure was that the authorities had computed the rateable value taking into consideration not the standard rent but the actual compensation received by the petitioners from their respective care takers. That the Assessing Authorities were not concerned with what profit the petitioners made. That the Assessing Authorities had, therefore, erred in law.
24. In reply to this contention, Mr. Dalal, the learned Counsel for the respondent Nos. 1 and 2 stated that it is not in dispute that the rateable value has to be fixed on the basis of standard rent. That the definition of “standard rent” is to be found in section 5(10) of the Bombay Rents, Hotel and Lodging House Rate (Control) Act, 1947, which reads as follows :—
“standard rent” in relation to any premises means—
a) Where the standard rent is fixed by the Court and the Controller respectively under the Bombay Rent Restriction Act, 1939 (Bom.XVI of 1939), or The Bombay Rents, Hotel and Lodging House Rates (Control) Act, 194 (Bom. VII of 1944) such standard rent; or
b) Where the standard rent is not so fixed subject to the provisions of section 11
(i) the rate at which the premises were let on the first day of September 1940 or
(ii) where they were not let on the first day of September 1940 the rent at which they were last let before the day or
(iii) where they were first let after the first day of September 1940 the rent at which they were first let, or
(iv) in any of the cases specified in section 11, the rent fixed by the Court”.
25. Hence, what had to be considered by the Assessing Authorities was as to what and when was the sub-letting. That the petitioners had come forward with the case that after the petitioners were allotted flats they had applied to respondent No. 3 society to allow them to give out their respective flats on “care-taker basis”. That the respondent No. 3 society had acceded to this request. However, none of the petitioners had produced a copy of his application nor had any of the petitioners asked the society to produce this application. That there is nothing to support this plea. On the other hand, the circular of the society dated 15th May, 1977 issued by the society (and a copy whereof is annexed as Exhibit ‘C’ to Misc. Petition No. 1131 of 1977) shows that the requests made by the allottees of the flats to the society was to be sub-let the flats. That it was in view of such requests that the society had granted permission to “let out” premises to persons other than the members of the society. That it was not in dispute that this circular was received by the petitioners. That it is on this basis that the petitioners who were and the allottees of flats gave out their respective flats to one or the other companies gathering from them a monthly return.
26. That in the case of Sarma (deceased) (i.e. original petitioner in Misc. Petition No. 1131 of 1977) he was and is getting a return of Rs. 750/- per month on his admission. That it was not even the case of the said Sarma before the Assessment and Collector that what he was receiving was compensation, for, the record shows that his only statement was that he was receiving Rs. 750/-. That if the Assessor and Collector has then treated this as a “first letting” then he was right in assuming that it was the ‘standard rent’ and if the assessment has proceeded on this basis, his assessment cannot be faulted. Mr. Dalal’s submission is in order and I accept the same.
27. Mr. Dalal further submitted that insofar as the other petitioners (i.e. other than Sarma) are concerned, they did not care to adduce any evidence and if they have their position is the same as Sarma’s. The authorities have clearly proceeded on the basis of the data available to them, and in the circumstances, the decision of the authorities cannot be faulted.
28. I may here and that at the hearing of these petition, Mr. Dhanuka, the learned Counsel for the petitioners, produced an agreement entered into between the said Sarma (i.e. the original petitioner in Misc. Petition No. 1131 of 1977) and the said Messrs Vijaya Bank Ltd. purporting to be an agreement of licence, having been granted to the said Messrs. Vijaya Bank Ltd. Mr. Bhanuka strenuously urged that the document must satisfy the position that what was granted to the said Messrs. Vijaya Bank Ltd. was a licence and not that the Vijaya Bank Ltd. was granted a tenancy.
29. In reply to this, Mr. Dalal pointed out that it is an admitted position that the flat allotted to Sarma was handed over to the said Vijaya Bank Ltd. That the bank is in sole and exclusive possession thereof. That a monthly payment is being made in respect of this flat. That the flat has been used by this Bank under this agreement for a number of years. That although this agreement was labelled as a licence, its true intent was and is that a tenancy was created in favour of Vijaya Bank Ltd.
30. Now so far as this controversy is concerned, it is not necessary for us to decide the same. But suffice to observe that in the proceedings before the Assessor and Collector the petitioner herein (i.e. the said Sarma) did not prefer to produce this evidence. On the other hand, he was content by saying that he was receiving Rs 750/-. If then the Assessor and Collector proceeded on this basis, then his decision cannot be faulted. I may here add that should the petitioners choose to challenge the assessment hereinafter, they would be liberty to take up this contention before the authorities concerned.
31. In view of this discussion, that comes about is that the petitions must fail and the rule discharged.
32. Respondent Nos. 1 and 2 will not proceed to recover the taxes for a period of eight weeks from today. There will be however no order as to costs in all the petitions.