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PETITIONER: N.D.M.C.

       Vs.

RESPONDENT: MRS HIRINDER SACHDEV, W/O LATE SHRI SOHAN LAL SACHDEV.

DATE OF JUDGMENT:       09/02/2000

BENCH: S.B.Majumdar, D.P.Mohapatro

JUDGMENT:

     MOHAPATRA,J.

     Delay condoned.  Leave granted.

     The  core  question that arises for  determination  in this  case  is whether use of premises for the purpose of  a guest  house can be termed as domestic use for the purpose of  electricity  charges by the New Delhi Municipal  Council (NDMC)?

     The factual backdrop of the case, shorn of unnecessary details, may be stated thus:

     Sohan  Lal  Sachdev,  deceased, represented  by  legal representative,  was  the landlord of the  premises  bearing No.49,  Golf Links, New Delhi.  He occupied the ground floor of  the said premises.  In the month of September, 1981,  he let  out  the first floor and the Barsati floor to  Sachdeva Guest  House for running a guest house.  When this fact  was intimated  to  the Corporation Authorities by the  landlord, demands of electricity and water charges were made according to  non  domestic rates with effect from  1-10-1981.   The landlord  protested against the demand stating that the user of  the premises for running a guest house cannot be said to be a commercial use of the premises and therefore the demand is  unsustainable.   Thereafter, the landlord filed a  suit, Suit  No.230 of 1982, seeking a decree of injunction against the  NDMC restraining it from raising demand on the basis of commercial  user  of  the premises on the  ground  as  noted above.

     The  case  of  the NDMC was that use of  the  premises (first  floor  and  Barsati floor) for  running  the  guest house  cannot  be  said  to be domestic  use;   it  is  a commercial  user and therefore demand of electricity on that basis  is  justified.   The  learned   Trial  Judge  on  the pleadings framed three main issues;

     (1)  Whether  the user of the premises for  running  a guest house can be termed as commercial user ?

     (2)  Whether the defendant is competent to charge  the electricity consumption on non domestic rates?

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     (3)  Whether the plaintiff is entitled for the  relief of injunction?

     Relying  on  Section 23 of the Indian Electricity  Act (the  Act  for short), the Trial Judge held that NDMC  was competent  to convert the charges of electricity supply from one  category  to another i.e.  from domestic category  to commercial  category.   She, however, did not  accept  the contention  of NDMC that the user of the premises in running residential guest house can be termed as commercial user and answered  issue  number one in favour of the  plaintiff  and against  the  defendant.  The Trial Judge further held  that even  if  the running of a guest house at the suit  premises cannot  be  termed  as commercial user, it  cannot  also  be termed  as  domestic user either.  Therefore the NDMC  had the right to charge rates at non domestic rates for supply of  electricity  and  water at the premises being  used  for running  the guest house.  On the above finding the suit was dismissed.

     On  appeal  by the landlord the learned  Senior  Civil Judge,  Delhi, concurred with the finding of the trial court that  NDMC was competent to vary the electricity charges  of the  suit premises.  The first Appellate Court further  held that  NDMC  has the right to charge non domestic  rates  for supply  of electricity and water in the suit premises as the same  was being used for running the guest house.  The first Appellate Court dismissed the appeal.

     The  landlord filed second appeal in the High Court of Delhi  challenging  the  judgment and decree  of  the  first appellate  court confirming the judgment of the trial court. The  High  Court  reversed the concurrent decisions  of  the lower  courts and decreed the suit.  The High Court took the view  that user of the suit premises for running the  guest house  without any kitchen facility is user for residential purpose  and, therefore, the NDMC is not entitled to  charge electricity  and  water charges on the basis  of  commercial use.  Being aggrieved by the decision of the High Court, the NDMC has filed this appeal challenging the judgment.

     On  23-3-1998, this Court ordered :  Notice to  issue in  the  light of the decision of this Court in the case  of Municipal  Corporation  of  Greater   Bombay  v.    Mafatlal Industries  &  ors.   reported in (1996) 8 SCC  27.   Notice shall state that the SLP shall be disposed of finally at the notice  stage.   Notice  to  issue on  the  application  for condonation of delay also.

     The  main thrust of the submissions of learned counsel for the appellant NDMC is that user of the suit premises for running  the  guest house with arrangement for  boarding  of guests on payment cannot be said to be private domestic user of  the  premises.   It  is the further  contention  of  the learned  counsel  that  such  user of the  premises  can  be appropriately  classified  as commercial user.   The  High Court,  according to the learned counsel, committed an error in holding that the user of the suit premises is domestic.

     The  learned  counsel  appearing  for  the  respondent landlord  on  the other hand supported the judgment  of  the High  Court reiterating the reasons stated therein.  On  the case  of  the  parties and the rival contentions  raised  on their  behalf,  the question formulated earlier  arises  for consideration.   The  two terms domestic and  commercial

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are  not  defined in the act or the rules.   Therefore,  the expressions are to be given common parlance meaning and must be  understood in their natural, ordinary and popular sense. In  interpreting  the phrases the context in which they  are used  is  also  to be kept in mind.   In  Strouds  Judicial Dictionary  (Fifth Edition) the term commercial is defined as  traffic, trade or merchandise in buying and selling  of goods. In the said dictionary the phrase domestic purpose is stated to mean use for personal residential purposes.  In essence  the  question  is,  what is the  character  of  the purpose of user of the premises by the owner or landlord and not  the  character  of  the place of  user.   For  example, running  a  boarding-house is a business, but persons  in  a boarding-house  may  use water for domestic purposes.   As noted  earlier  the classification made for the  purpose  of charging  electricity  duty  by  the   NDMC  sets  out   the categories  domestic  user  as  contra-distinguished  from commercial  user  or to put it differently  non  domestic user.   The intent and purpose of the classification, as we see  it,  is to make a distinction between  purely  private residential  purpose  as against commercial purpose.   In the  case  of  a  guest house, the building  is  used  for providing  accommodation  to guests who may be  travelers, passengers,  or  such  persons  who  may  use  the  premises temporarily  for the purpose of their stay on payment of the charges.   The  use  for which the building is  put  by  the keeper  of the guest house, in the context cannot be said to be  for  purely residential purpose.  Then the question  is, can  the  use of the premises be said to be for  commercial purpose?   Keeping in mind the context in which the phrases are  used  and the purpose for which the  classification  is made,  it  is our considered view that the question must  be answered in the affirmative.  It is the user of the premises by  the  owner  (not necessarily absolute  owner)  which  is relevant  for  determination  of the question  and  not  the purpose  for which the guest or occupant of the guest  house uses  electric  energy.  In the broad classification  as  is made  in  the  rules,  different types  of  user  which  can reasonably   be   grouped  together   for  the  purpose   of understanding the two phrases domestic and commercial is to be made.  To a certain degree there might be overlapping, but  that has to be accepted in the context of things.   The High  Court was not right in setting aside the order of  the learned senior Civil Judge merely on the ground that the use of  electricity for running the guest house does not  come under  the category of commercial use.  The High Court has not  discussed  any reason for holding that user in  such  a case comes under the category of domestic use.

     In the case of Municipal Corporation of Greater Bombay vs.  Mafatlal Industries and Others, 1996 (8), Supreme Court Cases,   27,   this  Court    interpreted   the   expression exclusively  used  as a private residential  premises  (In Bombay  Electricity  Duty Act, 1958).  To connote  that  the premises  in  question  must  be   exclusively  used  as   a residential  premises which in other words would mean  where the  premises which is used by any person privately for  his own  residence  for a sufficient continued period and not  a premises  where a person can come and spend a day or a night and then go back.  This Court further held that guest houses are  maintained  by company or commercial undertakings as  a part  of its commercial venture.  The test of profit  making as  well as the test of the work private in  contradiction to   public  have  no   relevance  for  interpreting   the expression  exclusively  used  as   a  private  residential

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premises.  This court concluded that in the case of a guest house  category  R  which applies to premises  used  as  a private  residential premises is not applicable and category C  would  apply as a residuary category to premises  which does  not  come within the categories R, S, RC (LV) and  SL. Though the fact situation in the case and the question which was  considered by this Court therein are not the same as in the  case  on  hand, the discussions in the  judgment  throw light on the controversy raised in this case.

     On  the discussions made and the reasons stated in the foregoing  paragraphs,  we are clearly of the view that  the judgment  of the High Court is unsustainable.   Accordingly, the  appeal  is allowed.  The impugned judgment of the  High Court  of  Delhi  is  set aside.  The  New  Delhi  Municipal Council  is  entitled  to charge for use of  electricity  in Sachdeva  Guest House at the rate applicable to commercial use.  No cost.