http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5  

PETITIONER: INDIAN OIL CORPORATION LTD.

       Vs.

RESPONDENT: MUNICIPAL CORPORATION & ANR.

DATE OF JUDGMENT07/04/1995

BENCH: J.S. VERMA & MRS. SUJATA V. MANOHAR, JJ.

ACT:

HEADNOTE:

JUDGMENT: ORDER 1.   Heard the learned Additional Solicitor  General. 2.   The impugned judgment by a Full Bench   of  the  Madhya Pradesh  High  Court overrules the decision  of  a  Division Bench  in Municipal Corporation, Indore and Others  v.  Smt. Ratnaprabha  Dhanda, Indore and Another, 1989 MPLJ 20.   The challenge   in  this  special  leave  petition  is  to   the correctness  of  the  Full  Bench  decision.   The  question involved  relates to the construction of Section  138(b)  of the Madhya Pradesh Municipal Corporation Act, 1956 629 (for short the "M.P. Act") which reads as under:-               "The  annual  value  of  any  building   shall               notwithstanding  anything  contained  in’  any               other  law  for  the time being  in  force  be               deemed  to be the gross annual rent  at  which               such building, together with its appurtenances               and  any furniture that may be let for use  or               enjoyment  therewith might reasonably  at  the               time of assessment be expected to be let  from               year  to  year,  less  any  allowance  of  ten               percent  for the cost of repairs and  for  all               other  expenses  necessary  to  maintain   the               building  in  a state to  command  such  gross               annual rent."                            (emphasis supplied) 3.   In the High Court the matter was not res integra  being concluded  by the authority of the direct decision by  a  3- Judge  Bench of this Court in Municipal Corporation,  Indore and  Others v. Smt.  Ratna Prabha and Others, 1977  (1)  SCR 1017,  on the correct construction of Section 138(b) of  the M.P. Act.  No other direct decision of this Court is to  the contrary.  However, the Division Bench of the High Court  in a later case between the very same parties took a  different view  on  the  construction of the  same  provision  placing reliance  on some other decisions of this Court wherein  the question  arose  for decision in the context  of  a  similar provision  in  some other statutes applicable in  the  other States  wherein there was no non-obstante clause as  in  the M.P.  Act.   The Division Bench took the view that  the  de-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5  

cision of this Court in Ratna Prabha (supra) was not binding on  it  even though it related to construction of  the  same provision,  namely, Section 138(b) of the M.P. Act since  it was  in conflict with later decisions of this Court  by  co- equal  Benches wan Daulat Rai Kapoor etc. etc. v. New  Delhi Municipal  Committee & Another etc. etc., 1980 (2)  SCR  607 and  Dr.  Balbir  Singh  and Ors.  etc.  etc.  v.  Municipal Corporation, Delhi and Ors., 1985 (2) SCR 439.  Accordingly, it proceeded on the basis that the decision of this Court in Ratna  Prabha (supra) is no longer good law binding  on  it. This  situation  gave rise to the need for a Full  Bench  to consider  the correctness of the view taken by the  Division Bench.   The  Full Bench has overruled the decision  of  the Division Bench.  In our opinion, the Full Bench was right in its  view  that the decision of this Court in  Ratna  Prabha (supra)  binds  the  High  Court.  There  is  no  ground  to entertain  this special leave petition which challenges  the decision of the Full Bench of the High Court. 4.The   only,   direct  decision  of  this  Court   on   the construction  of Section 138(b) of the M.P. Act, with  which we  are concerned, is Ratna Prabha (supra).  It referred  to the earlier decision in The Corporation of Calcutta v.  Smt. Padma Debi and Others, 1962 (3) SCR 49 and distinguished  it on the ground that Section 127(a) of the Calcutta  Municipal Corporation  Act, 1923 on which the decision in  Padma  Debi (supra)  was  based, did not contain a non  obstante  clause like  that  in Section 138(b) of the M.P.  Act.   The  other earlier  decisions  of this Court in which  construction  of similar  provision in other statutes was involved were  also referred  and distinguished in Ratna Prabha (supra); and  it was then held as under:-               "As has been stated, clause (b) of section 138               of  the Act provides that the annual value  of               any building shall " notwithstanding  anything               contained in any other law for the time  being               in  force"  be deemed to be the  gross  annual               rent for               630               which  the building might "reasonably  at  the               time  of the assessment be expected to be  let               from  year  to  year".   While  therefore  the               requirement of the law is that the  reasonable               letting  value  should  determine  the  annual               value  of  the  building,  it  has  also  been               specifically  provided that this would  be  so               "notwithstanding  anything  contained  in  any               other  law for the time being in  force".   It               appears  to  us  that it  would  be  a  proper               interpretation of the provisions of clause (b)               of  section 138 of the Act to hold that  in  a               case where the standard rent of a building has               been  fixed  under  section 7  of  the  Madhya               Pradesh  Accommodation Control Act, and  there               is  nothing to show that there has been  fraud               or  collusion,  that would be  its  reasonable               letting value, but, where this is not so,  and               the  building  has never been let out  and  is               being  used in a manner where the question  of               fixing  its standard rent does not  arise,  it               would  be  permissible to fix  its  reasonable               rent  without regard to the provisions of  the               Madhya  Pradesh  Accommodation  Control   Act,               1961.   This view will, in our  opinion,  give               proper  effect to the non-obstante  clause  in               clause  (b),  with  due regard  to  its  other

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5  

             provision  that  the letting value  should  be               reasonable ".               We  have  gone through the decision  in  Padma               Debi’s case (supra).  There the premises  were               on   rent  and  section  127(a)  of   Calcutta               Municipal  Corporation  Act,  1923,  did   not               contain  a  non-obstante  clause.   That   the               section  provided,  inter alia, was  that  the               annual  value shall be deemed to be the  gross               annual  rent  at which the  land  or  building               might at the time of assessment "reasonably be               expected  to  let from year to year.   "  This               Court  examined the significance of  the  word               "reasonable"   and  held  that  it  would   be               incongruous  to  consider  fixation  of   rent               beyond  the limits fixed by penal  legislation               as  reasonable.   That  view  was  taken  with               reference  to  the  provisions  of  the   Rent               Control  Act which penalised the taking  of  a               higher  rent, and also made it  irrecoverable.               While, therefore, we are in agreement with the               view  taken in Padma Debi’s case (supra)  that               it   would  not  be  reasonable  to   consider               fixation  of rent beyond the limits  fixed  by               the  Rent Control Act as reasonable, it  would               not  be  a proper  interpretation  of  section               138(b)  to hold that as no standard  rent  has               been  fixed  so far in respect  of  die  Viram               Lodge,   the   Municipal   Commissioner    was               justified   in   adopting   another   suitable               criterion for determining the annual value  of               the building.  There is in fact nothing in the               Act to make it obligatory for the Commissioner               to follow the provisions of the Madhya Pradesh               Accommodation Control Act in spite of the non-               obstante clause and to limit the annual  value               to  any standard rent that the building  might               fetch under that Act.               xxx       xxx        xxx               The High Court did not properly appreciate the               difference between the wording of section  127               of  the  Calcutta Municipal  Corporation  Act,               1923,  and  section  138(b) of  the  Act,  and               committed an error in thinking   that this was               virtually similar to Padma Debi’s case.  "               (at pages 10 1 9-20 of SCR)               (emphasis supplied) 5.   In Dewan Daulat Rai (supra), an other 3-Judge Bench  of this  Court  while  construing a similar  provision  in  the Punjab  Municipal  Act,  1911 referred to  the  decision  in RatnaPrabha (supra) and distinguished it on the ground  that there was n non-obstante clause in the relevant provision of the  Punjab  Municipal Act and therefore,  the  decision  in Ratna  Prab (supra) had no application.  No doubt,  i  doing so, a reservation was expressed 631 about the view taken in Ratna Prabha (supra) on the basis of the  existence of the non-obstante clause in Section  138(b) of  the  M.P.  Act  but  that  cannot  have  the  effect  of overruling  the  decision  of this  Court  in  Ratna  Prabha (supra)  inasmuch  as  a  later  co-equal  Bench  could  not overrule it and could only refer it for reconsideration to a larger Bench, which it did not do. 6.   In  Dr. Balbir Singh (supra), after pointing  out  that the  relevant provisions in the Delhi Municipal  Corporation

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5  

Act,  1957  and the Punjab Municipal Act, 1911  were  almost identical,  the  decision in Dewan Daulat  Rai  (supra)  was followed  by another 3-Judge Bench.  No reference  was  made therein  to  the  decision of this  Court  in  Ratna  Prabha (supra). 7.   Recently, another 3-Judge Bench of this Court in  Morvi Municipality v. State of Gujarat and Ors., 1993 (2) SCR 803, dealt   with  the  same  question  with  reference  to   the provisions  of  the Gujarat Municipalities  Act,  1963.   It referred  to  the earlier decisions and indicated  that  the presence   of  the  non-obstante  clause    "notwithstanding anything  contained in any other law"  in Section 138(b)  of the  M.P.  Act distinguished the decision of this  Court  in Ratna Prabha (supra); and since in the Gujarat act there was no such non-obstante clause that decision had no application to the Gujarat Act. 8.   It  is  thus clear that the decision of this  Court  in Ratna  Prabha (supra) on the construction of Section  138(b) of the M.P. Act has all along been understood and  justified on  the basis of the presence of the non-obstante clause  in Section 138(b) of the M.P. Act and the later decisions  have distinguished it on that ground.  That is the basis on which the  decision  in Padma Debi (supra)  was  distinguished  in Ratna Prabha (supra) itself It is also obvious that a  Bench of  3-Judges only in the later decisions could not  overrule the decision of this Court in Ratna Prabha, 1977 (1) SCR  10 1 7 and, therefore, none of the later decisions could be  so read  to have that effect.  The Division Bench of  the  High Court in 1989 MLJ 20 was clearly in error in taking the view that the decision of this Court in Ratna Prabha (supra)  was not  binding on it.  In doing so, the Division Bench of  the High  Court did something which even a later co-equal  Bench of  this Court did not and could not do.  The view taken  by the  Division Bench of the High Court in 1989 MPLJ  20  pro- ceeds  on a total misunderstanding of the law of  precedents and  Article 141 of the Constitution of India, to  which  it referred.   But for the fact that the view of  the  Division Bench  of the High court proceeds on a  misapprehensions  of the  law of precedents and Article 141 of the  Constitution, it  would  be exposed to the criticism of an  aberration  in judicial discipline.  The decision of the Division Bench  of the High Court was, therefore, rightly overruled by the Full Bench in the impugned judgment. 9.   The   other  submission  of  the   learned   Additional Solicitor  General  is  a plea for  reconsideration  of  the decision  of this Court in Ratna Prabha, 1977 (1) SCR  1017, which can arise only in this Court and was not available  in the  High Court.  The decision in Ratna Prabha (supra),  the only  direct decision of this Court on the  construction  of Section 138(b) of the M.P. Act has held the field for a long time  and has formed the basis of assessment of  the  annual value  in  the  State of Madhya Pradesh  since  then.   That decision is based 632 on  the presence of the non-obstante clause in the M.P.  Act and distinguishes the earlier larger Bench decision in Padma Debi (supra) on that ground.  There can be no doubt that the view  taken  by  this Court in Ratna  Prabha  (supra)  is  a reasonably permissible construction of Section 138(b) of the M.P.  Act.   In  the later decisions of  this  Court,  Ratna Prabha (supra) was invariably distinguished and not referred for  reconsideration  by a larger Bench.  There is  thus  no ground  now  for reconsideration of the  decision  in  Ratna Prabha (supra). 10.  In The Keshav Mills Co. Ltd. v. Commissioner of Income-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5  

tax, Bombay North, 1965 (2) SCR 908, the correct approach in this behalf was indicated as under:-               "........  In exercising this inherent  power,               however,  this Court would naturally  like  to               impose  certain  reasonable  limitations   and               would be reluctant to entertain pleas for  the               reconsideration  and revision of  its  earlier               decisions,  unless it is satisfied that  there               are  compelling and substantial reasons to  do               so  When  it is urged that  the  view  already               taken  by  this Court should be  reviewed  and               revised it may not necessarily be an  adequate               reason  for such review and revision  to  hold               that  though the earlier view is a  reasonably               possible  view, the alternative view which  is               pressed  on  the subsequent occasion  is  more               reasonable.   In  reviewing and  revising  its               earlier decision, this Court should ask itself               whether in the interests of the public good or               for any other valid and compulsive reasons, it               is necessary that the earlier decision  should               be revised.......".                            (at page 921 of SCR)                            (emphasis supplied) 11.In  our  opinion,  the test  indicated  in  Keshav  Mills (supra)  for reconsideration of a decision of this Court  is not  satisfied  in the present case and, therefore,  we  are unable  to  entertain the plea for  reconsideration  of  the decision in Rama Prabha. 12.The  special leave petition is, therefore, dismissed  for the above reasons.