Annual value assessment may depart from standard rent where no rent control fixation exists and hearing was adequate.

The municipal authority determining annual value under section 138(b) of the Madhya Pradesh Municipal Corporation Act, 1956 was not bound to confine valuation to standard rent under the Madhya Pradesh Accommodation Control Act, 1961, because the provision operates with a non-obstante clause and has independent effect. Standard rent may guide reasonable letting value where it has been fixed and there is no fraud or collusion, but where the building had never been let and no standard rent existed, the authority could adopt another suitable criterion for reasonable rent. The challenge based on lack of proper hearing also failed because the record showed adequate opportunity and consideration of relevant circumstances.

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Issues: Whether, for determining the annual value of a building under section 138(b) of the Madhya Pradesh Municipal Corporation Act, 1956, the municipal authority was bound to limit the valuation to the standard rent concept under section 7 of the Madhya Pradesh Accommodation Control Act, 1961, and whether the valuation in the present case was vitiated for want of proper hearing or principle.

Analysis: Section 138(b) requires annual value to be based on the gross annual rent at which the building might reasonably be expected to let from year to year, but it expressly operates notwithstanding anything contained in any other law. That non-obstante clause gives the provision an independent field of operation. Where standard rent has already been fixed under the rent control law and there is no fraud or collusion, such standard rent may furnish the reasonable letting value. But where, as here, the building had never been let and no standard rent had been fixed, the municipal authority was not compelled to adopt the rent control standard as the basis of valuation and could determine reasonable rent on another suitable criterion. The precedents relied upon were distinguished on the ground that they concerned premises actually let, and in some cases provisions without a non-obstante clause. The finding of the High Court that no proper hearing was given was also found unsustainable, as the record showed that the respondents had been given ample opportunity and relevant circumstances had been considered.

Conclusion: The municipal authority was entitled to assess the annual value without confining itself to the standard rent under the accommodation control law, and the challenge to the valuation on procedural grounds also failed.

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