B.N Kirpal, J.— The challenge in this writ petition is to the order of the Additional District Judge, Delhi, who had allowed the appeal of the respondents filed under Section 169 of the Delhi Municipal Corporation Act.
2. Briefly stated the facts are that the respondent No. 1 is the owner of the house at Vasant Vihar, New Delhi. In respect of the year 1984-1985 the Assessor and Collector vide his order dated 7th January, 1987 fixed the rateable value at Rs. 86,670/- w.e.f 1st November, 1984 and Rs. 1,13,470/- w.e.f 1st February, 1985. In arriving at this value the Assessor and Collector took into consideration the cost of land and the cost of construction as well as the rent which was received for the part of the building which had been let out. The construction, in the instant case, had commenced in the year 1981. The Assessor & Collector took the market price of the land to be Rs. 1800 per sq. mtr. In arriving at the cost of the construction he applied the C.P.W.D rates. The Accessor & Collector further found that the net rent which was received by the respondents was Rs. 4428/- per month. He also noted that the respondents had received security deposit of Rs. 45,000/- and he then made an addition of Rs. 450/- per month, to the actual rent being received, by holding that this sum of Rs. 450/- per month was by way of interest on the security deposit.
3. An appeal was filed and the Addl. Distt. Judge. Delhi vide order dated 19th October, 1988 allowed the same. He came to the conclusion on the basis of a circular issued by the D.D.A where the land in question had been valued at Rs. 940/- per sq. mtr., that the said rate should be adopted instead of Rs. 1800/- per sq. mtr. The Additional District Judge further held that the Assessor & Collector should not have rejected the valuation report arbitrarily and if he was not satisfied then another valuation report should have been obtained under Section 135 of the D.M.C Act. The contention of the respondents herein against the addition of Rs. 450/- per month was also accepted.
4. In the present writ petition it is submitted by learned counsel for the petitioner that the aforesaid decision of the Additional District Judge is incorrect.
5. Our attention has been drawn to a judgment of a Division Bench of this Court in C.W.P No. 438 of 1988, Municipal Corporation of Delhi v. K.P Gupta, Decided On: 26th April, 1980. That case was also concerned with land in Vasant Vihar. Guidelines have been laid down by the Division Bench and the matter has been remanded to the Assessor & Collector for fresh determination of the market value of the land in accordance with the said guidelines. Following the aforesaid decision, we also hold that the Assessor & Collector should value the land afresh as on August 1, 1981.
6. As regards the cost of construction is concerned, in view of the fact that the case is being remanded for fresh valuation in respect of the land, it would, in our opinion, be appropriate that the Assessor & Collector determines the cost of construction afresh. It will be open to the respondent to produce evidence showing his cost of construction. In such circumstances it is not necessary to rely wholly on the valuation reports because the owner should be able to show, ordinarily, as to how much money has been spent in the construction of the house. Ofcourse if the Assessor and valuer comes to the conclusion, on the basis of some cogent evidence and material facts, that value shown is much less than what it ought to have been, then it may be open to the Assessor & Collector not to accept the cost of construction as indicated by the owner. In such a case it would be the duty of the Assessor & Collector to compute the cost of construction and in doing so, assistance can be had from C.P.W.D rates which should merely be taken as a guideline and not conclusive.
7. Coming to the last question, namely, the addition of Rs. 450/- per month, we find there is no justification that the Assessor & Collector to have presumed that there was an increase in rent which is represented by Rs. 450/- per month. A security deposit was undoubtedly furnished by the tenant. This was in addition to the rent which was being paid by the tenant to the landlord. In determining the rateable value we see no justification as to why it should be presumed that when the security deposit is furnished there will be any earning to the landlord by way of interest or otherwise. Even if it be assumed that the landlord from the security deposit so received, earns some income, by interest or otherwise, that interest or income cannot ipso facto be regarded as an addition to the rent received by the landlord. It is contended by learned counsel for the petitioner that there may be cases where the rent which is received is much below the market rate and disproportionally large amount to security deposit is received; so as to enable the landlord to earn interest thereon. The contention is that in such a case the real nature of transaction should be seen and it would be found that the income from the security deposit was meant to be a part of the rent. We need not go into the merits of this example because in the present case there is nothing to show that the rent which was being charged by the respondents was not the market rate. There is no evidence on the record to indicate that security deposit was furnished solely with the view that the rent is depressed and that has compensated by the landlord by earning income from the security deposit so received. It is to be borne in mind that the security deposit which was received by the landlord is refundable. The same has to be returned on the termination of the tenancy and it is merely a security against the nonpayment of rent. The Delhi Municipal Corporation Act does not empower the Corporation, in normal circumstances, to regard any income accruing on the security deposit so received and further to permit such frictional or actual income to be regarded as a part of the rent receipt. Normally any income from out of the security deposit cannot be regarded as being a part of the rent. The conclusion of the Additional District Judge with regard to this aspect is, therefore, unassailable.
8. For the aforesaid reasons, the writ petition is partly allowed. The order of the Additional District Judge, Delhi in regard to the valuation of the land and the building is set aside. We also set aside the original assessment order of the Deputy Assessor & Collector and we permit the Assessor & Collector to make a fresh assessment in accordance with law after notice to the respondents. There will be no order as to costs.
Petition partly allowed.