Akola Municipal Corporation vs. Zishan Hussain Azhar Hussain

2025 INSC 1398
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO(S). 12488-12489 OF 2024


AKOLA MUNICIPAL
CORPORATION AND ANR. ….APPELLANT(S)

VERSUS

ZISHAN HUSSAIN
AZHAR HUSSAIN AND ANR. ….RESPONDENT(S)

J U D G M E N T
Mehta, J.

1. Heard learned counsel for the parties and
perused the material available on record.
th
2. The judgment dated 9 October, 2019 in Public
Interest Litigation No. 42 of 2018 and order dated
th
24 January, 2020 in MCA (Review) No. 42 of 2020
passed by the Division Bench of the High Court of
1
Judicature at Bombay, Nagpur Bench are subject
Signature Not Verified
Digitally signed by
SONIA BHASIN
Date: 2025.12.08
18:41:58 IST
Reason:

1
Hereinafter, being referred to as “High Court”.
1


matter of challenge in these appeals filed by the Akola
2
Municipal Corporation .
3. The aforesaid writ petition in public interest
came to be filed by respondent No.1-Dr. Zishan
3
Hussain with the following prayers.
“i) Issue any appropriate writ, order or direction in
the nature of mandamus and thereby declare that
the revision of property tax by the respondent no.2
Municipal Corporation for the year 2017-18 to 2021-
22 is illegal, contrary to law and the revision of
property tax is made without following due process
of law;
ii) Issue any appropriate writ, order or direction and
thereby quash and set aside revision of property tax
by respondent no.2 Municipal Corporation for the
year 2017-18 to 2021-22 in the interest of justice;
iii) Stay the effect and operation of the revision of
property tax by respondent no.2 Municipal
Corporation for the year 2017-18 to 2021·22 in the
interest of justice”

4. The appellant-Corporation took a specific
objection in its written submissions filed before the
High Court regarding the grievances sought to be
agitated by way of the public interest litigation, viz .,
the challenge to the jurisdiction of the Corporation to
levy/revise the rates of property tax. Specific
averments made in paragraph Nos. 9 and 11 of the
written submissions filed by the appellant-

2
Hereinafter, being referred to as “appellant-Corporation”.
3
Hereinafter, being referred to as “respondent-writ petitioner”.
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CIVIL APPEAL NO(S). 12488-12489 OF 2024

Corporation explaining the detailed procedure for
increasing the rate of property tax are germane to the
controversy. For the sake of ready reference, the
aforesaid paragraphs are reproduced hereinbelow: -
“9. The Petitioner has rightly stated in Para 5 of his
petition that the assessment, revaluation of taxable
values was not done from the year 2002 by Akola
Municipal Corporation. It is submitted that the
property tax is the main source of income of Akola
Municipal Corporation. To strengthen the tax
recovery system there was necessity to re-assess the
taxable values for the year 2015-2016 till 2020-2021
and therefore by the Written Communication dated
01/12/2015 the Respondent No.3 made a request to
Assistant Director of Town Planning, Akola to
propose the rate of expected Annual Letting Value
and ratable value of properties for various categories
of buildings depending upon their age, location, type
of constructions, use etc. within the limits of Akola
Municipal Corporation Accordingly by the Written
Communication dated 01/01/2016 (Annexure 7)
the rates wore proposed by the in-charge Assistant
Director Town Planning, Akola. On the basis of these
details and other documents, official note (Annexure
B) was prepared by then Municipal Commissioner
regarding taking decision of revised rates of
calculation and valuation of expected letting values
for entire properties (Buildings and Lands) situated
within Municipal Limits for the calculation and
assessment of their ratable value for the period from
2017-18 till 2021-22 and forwarded it to the
Municipal Secretary. This official note doesn’t show
any intention of Respondent Municipal Corporation
to make changes or fixation of tax rates, i.e.,
property tax, road tax, fire tax, etc. Since, there was
no question of fixing the rates of taxes as envisaged
in Section 99 of the Act, the prior proposal or
suggestion from the Standing Committee was not
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required and therefore, the Municipal Secretary
prepared agenda for the General Body Meeting held
on 03/04/2017. If the subject No.5 of General Body
Meeting dated 03/04/2017 (Annexure A) is perused,
then it will show that it only says about taking
decision, about the revised rates of entire properties
(Building and Lands) situated within Municipal
Limits for calculation of their expected taxable value
for various, categories and the various policies for
assessment of taxable. values for the period from
2017 till 2021-22. Therefore, the objection of the
petitioner that the criteria mentioned in Sections
127 and 129 is not followed, is incorrect and
baseless. At the cost of repetition, the respondent
Municipal Commissioner says that the rates of taxes
already fixed in the year 2002 are not disturbed of
changed or revised by the resolution dated
03/04/2017.
[……….]
11. The earlier verification of the properties and
assessment of tax was done during the period of the
then Akola Municipal Council. After the formation of
Akola Municipal Corporation on 01/10/2001,
verification of properties was not done and neither
the procedure for assessment of tax was carried out.
In last more than 20 years there was increase in the
built-up area, changes in use of property, additional
and new construction on large scale. The revenue
generated by the old assessment was not sufficient
to meet the demands of public and development of
city. Therefore, there was pressing and extreme need
for setting up an efficient, qualitative and stronger
tax recovery system. Therefore, in the larger interest
of Akola City a decision was taken to engage some
expert agency. who will assist and help the officers,
of Akola Municipal Corporation it this work. Hence,
e-tender notice dated 18/02/2016 bearing No.1059
was published on official website of Government of
Maharashtra inviting tenders for appointment of
technical consultant for assisting Municipal
Corporation for conventional comprehensive door to
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CIVIL APPEAL NO(S). 12488-12489 OF 2024

door survey of land and buildings in the Municipal
jurisdiction capturing all the details and parameters
of those properties which are relevant for levy and
collection of property tax and other Municipal taxes.
It was also made clear that the selected agency shall
have to provide property numbers on the satellite
imaginary and linking the property tax and basic
information on the satellite image of the properties
for quick reference by providing the Integrated
Property information on GIS module in the software
to be a provided for the property tax assessment by
the agony. The agency selected will use own
registered for the purpose of preparation of database
for assessment and taxation. The software should be
capable to calculate and adopt the taxation on
capital value method/ratable value method as per
the law. After survey, the data should be entered in
software for calculation of assessment on any one
method as per corporation viz. capital or ratable
value based, along with the automated property tax
assessment software module as per the
requirements of the Municipal Corporation. Total
GIS work should be completed from contractor. The
total number of properties in the Municipal Area
were approximately shown 1,50,000 in the tender.”

5. A bare perusal of the aforesaid assertions made
by the appellant-Corporation would clearly indicate
that the property tax, which is the main source of
revenue for the appellant-Corporation to undertake
its welfare, and developmental activities had not been
revised since the year 2001.
6. It cannot be disputed that the tasks assigned to
every municipal body includes urban planning,
public health and sanitation, waste management,
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CIVIL APPEAL NO(S). 12488-12489 OF 2024

provision of essential services, upkeep of
infrastructure of the cities/towns. These activities
are vital for public welfare and for maintaining the
standard of life of citizens in every city or town, which
are fundamental to ensuring health and dignified
living, core requirements of the constitutional
obligations owed to the citizens. Any lapse in these
duties/activities may cause chaos, spread of diseases
and in general adversely affect the quality of life of the
citizens, for the welfare whereof the municipal bodies
are formed to work.
7. Without the generation of revenue, the
municipal bodies cannot be expected to sustain all
these functions and perform their statutory
obligations. It cannot be denied that the cost of all
these activities/functions rises with passage of time
and hence, revision in the tax structure on a regular
basis to match the rising costs is unexceptionable. If
the taxes are not revised in keeping with the rise in
cost of infrastructure, human resources, etc., that
would make the municipal bodies defunct and non-
functional.
8. Municipal bodies, being autonomous
institutions constituted under statutes, are
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CIVIL APPEAL NO(S). 12488-12489 OF 2024

entrusted with extensive and multifaceted
responsibilities that bear a direct and immediate
nexus to the daily lives, welfare and safety of the
citizens residing within their territorial limits. Their
functional efficacy, financial stability and
administrative independence are integral to the
discharge of these statutory obligations. It is
therefore imperative that such municipal bodies
possess adequate and independent sources of
revenue to sustain and strengthen their operational
capacities. A municipal administration that is
compelled to depend upon the State for grants, doles
or other forms of financial largesse would be
structurally weakened and rendered incapable of
performing its statutory duties in a timely and
efficient manner. The scheme of municipal
governance envisages financial autonomy as a
necessary concomitant of administrative autonomy;
without such independent revenue-generation
mechanisms, including periodic revision of taxes and
charges as permissible in law, the very purpose for
which these bodies are constituted would stand
frustrated.
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CIVIL APPEAL NO(S). 12488-12489 OF 2024

9. It is in these facts and circumstances, the
respective Municipal Legislations and the Rules
framed thereunder give powers/authorize the
municipal bodies to take steps for revision in the
rates of property taxes so that adequate revenue may
be generated and the functioning of the municipal
bodies may not be adversely affected for lack of funds.
The fact that the tax structure in respect of properties
falling within the jurisdiction of the appellant-
Corporation had not been revised and the verification
of the properties situated within its jurisdiction, had
not been done from the year 2001-2017, by itself,
depicts gross laxity on part of the authorities
concerned.
10. It must be noted here that while entertaining
the present appeals at the instance of appellant-
th
Corporation, this Court order dated 13
vide
October, 2020, stayed the operation of the impugned
th
judgment and order dated 9 October, 2019 passed
by the High Court.
11. We have heard and considered the submissions
advanced by learned counsel for the appellant-
Corporation and learned counsel representing the
respondent-writ petitioner.
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CIVIL APPEAL NO(S). 12488-12489 OF 2024

12. At the outset, we feel that the very locus of the
respondent-writ petitioner in filing the writ petition
before the High Court was questionable. The
respondent-writ petitioner, in his writ petition, did
not claim that he was representing the entire
populace of the Akola city. For ready reference, the
opening paragraphs of the writ petition wherein the
respondent-writ petitioner adverted to his locus and
grievances needs to be reproduced hereunder: -
“Being aggrieved by the apparent and manifest
irrationality in the arbitrary increase of property tax
by the respondents no.2 and 3 without following due
procedure of law and the grave procedural
impropriety in the arbitrary assessments of property
tax done by the respondent no.2 and 3 through
Private Contractors contrary to law, the petitioner is
challenging the arbitrary. Increase of property tax by
the present writ petition under Article 226 of the
constitution of India in public interest, as the
petition does not have any of the efficacious remedy
available than the present one for the redressal of
grievances raised in the present petition. The facts
which lead to present petition are as follows:
1. That, the petitioner is a citizen of India and
permanent resident of Akola. The Petitioner is a
practicing doctor having M.D. (medicine) degree and
a social worker and corporator of the Akola
Municipal Corporation.”


13. The respondent-writ petitioner, himself being a
corporator in the appellant-Corporation, it can be
presumed that he would be privy to the functioning
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CIVIL APPEAL NO(S). 12488-12489 OF 2024

of the autonomous institution including the tax-
generation structure.
14. A perusal of the opening paragraph (supra) of
the writ petition would clearly indicate that the
grievance of the respondent-writ petitioner is prima
facie directed at the purported irrational and
arbitrary increase of property tax by the appellant-
Corporation by passing a resolution and allegedly
without following the procedure established by law.
The contents of the writ petition would further
indicate that the respondent-writ petitioner never
claimed that he had been authorised or was acting
on behalf of the citizens of the Akola city for
challenging the action of the appellant-Corporation in
revising the tax structure. Thus, apparently the
respondent-writ petitioner has raised his individual
grievance against the action of increase of tax by the
appellant-Corporation by filing a writ petition under
the garb of a public interest litigation.
15. Though it requires to be noted that as per the
respondent-writ petitioner, the public at large,
protested to and filed objections against the issuance
of the public notice by the appellant-Corporation but,
at the same time, the respondent-writ petitioner has
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CIVIL APPEAL NO(S). 12488-12489 OF 2024

admitted that these complaints were disposed of
albeit mechanically.
16. There is no dispute that there exists a
mechanism of statutory remedy provided under
Section 406 of the Maharashtra Municipal
Corporations Act, 1949, for challenging the decision
of the Corporations established under the aforesaid
Act. Thus, the writ petition purportedly in public
interest was in fact, nothing but an action taken as a
subterfuge to avoid filing of the appeals against the
proposal to increase the property tax.
17. We may further note that another Division
Bench of the High Court examined a similar
controversy in Writ Petition No. 1115 of 2018 which
came to be dismissed in the following terms: -
“1. Heard.
2. Admittedly, the Municipal Council, Akola-
Municipal Corporation, Akola has not revised
property tax after 2000-01. Hence, grievance that
revision proposed on 3/4/2017 exceeds by 60% and
therefore violates statutory provision, is
misconceived.
3. Learned Government Pleader has pointed out that
Municipal Corporation has specifically looked into
this facet in Resolution dated 3/4/2017 and has
noted that since 2001-02 there is no regular
revision.
4. The petitioner did not come to this Court to
enforce obligation of Municipal Council-
Municipal Corporation to revise property tax
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CIVIL APPEAL NO(S). 12488-12489 OF 2024

after every five years. He has chosen to approach
Government or this Court only after the
Municipal Corporation started efforts to revise
the property tax.
5. It is apparent that the Municipal Corporation
has to revise property tax from 2001-02 and
recover the same as per law from the residents.
6. We, therefore, find present writ petition
erroneous. It is dismissed. No costs.”
[Emphasis supplied]

18. Furthermore, the respondent-writ petitioner in
the writ petition has challenged/questioned the
tender floated and work order issued by the
appellant-Corporation to the firm named Sthapatya
Consultancy Pvt. Ltd., for the purpose of survey of
properties situated within the jurisdictional limits of
the appellant-Corporation and assessment of tax. We
are, therefore, of the view that possibility of the writ
petition having been filed to agitate a conflict of
business interest cannot be ruled out.
19. Having gone through the impugned judgment
and the material placed on record, we are of the view
that in the instant case the High Court exceeded the
well-settled tenets of scope of judicial review in
effectively substituting its own opinion for that of the
appellant-Corporation. The matters of tax revision fell
squarely within the domain of the appellant-
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CIVIL APPEAL NO(S). 12488-12489 OF 2024

Corporation, and the High Court ought not to have
reassessed the merits of the policy decision as if it
was sitting in appeal over the said decision. Trivial
errors in the process of revision would not vitiate the
entire regime of tax revision and collection.
20. This Court in a catena of decisions has held that
the Court cannot substitute its judgment for that of
the legislature or its agents as to matters within the
province of either. In this respect, we may gainfully
refer to the observations of a Constitution Bench of
this Court in the case of Shri Sitaram Sugar Co.
4
Ltd. v. Union of India : -
“ 57. Judicial review is not concerned with matters of
economic policy. The court does not substitute its
judgment for that of the legislature or its agents as to
matters within the province of either. The court does
not supplant the “feel of the expert” by its own views.
When the legislature acts within the sphere of its
authority and delegates power to an agent, it may
empower the agent to make findings of fact which are
conclusive provided such findings satisfy the test of
reasonableness. In all such cases, judicial inquiry is
confined to the question whether the findings of fact are
reasonably based on evidence and whether such findings
are consistent with the laws of the land. As stated by
Jagannatha Shetty, J. in Gupta Sugar Works [1987 Supp
SCC 476, 481] : (SCC p. 479, para 4)
“... the court does not act like a chartered
accountant nor acts like an income tax officer.
The court is not concerned with any individual

4
(1990) 3 SCC 223.
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case or any particular problem. The court only
examines whether the price determined was
with due regard to considerations provided by
the statute. And whether extraneous matters
have been excluded from determination.”
58. Price fixation is not within the province of the
courts. Judicial function in respect of such matters
is exhausted when there is found to be a rational basis
for the conclusions reached by the concerned
authority . ………”


21. This Court has also held that judicial
interference by way of public interest litigation is
available only if there is injury to public because of
dereliction of constitutional obligations on the part of
the Government. The writ jurisdiction of the High
Court cannot be exercised in public interest for
questioning the economic/fiscal policy or reforms
sought to be undertaken by the Government or its
functionaries. In this regard, we may gainfully refer
to the following observations made by a three-Judge
Bench of this Court in the case of BALCO Employees’
5
Union v. Union of India : -
“ 93. Wisdom and advisability of economic policies are
ordinarily not amenable to judicial review unless it
can be demonstrated that the policy is contrary to
any statutory provision or the Constitution. In other
words, it is not for the courts to consider relative
merits of different economic policies and consider

5
(2002) 2 SCC 333.
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whether a wiser or better one can be evolved . For
testing the correctness of a policy, the appropriate forum
is Parliament and not the courts. Here the policy was
tested and the motion defeated in the Lok Sabha on 1-3-
2001.
[……….]
97. Judicial interference by way of PIL is available if
there is injury to public because of dereliction of
constitutional or statutory obligations on the part of
the Government. Here it is not so and in the sphere
of economic policy or reform the court is not the
appropriate forum. Every matter of public interest or
curiosity cannot be the subject-matter of PIL
. Courts
are not intended to and nor should they conduct the
administration of the country. Courts will interfere only
if there is a clear violation of constitutional or
statutory provisions or non-compliance by the State
with its constitutional or statutory duties. None of
these contingencies arise in this present case.
98. In the case of a policy decision on economic
matters, the courts should be very circumspect in
conducting any enquiry or investigation and must be
most reluctant to impugn the judgment of the experts
who may have arrived at a conclusion unless the
court is satisfied that there is illegality in the
decision itself. ”
[Emphasis supplied]

22. Recently, in the case of Kirloskar Ferrous
6
Industries Ltd. v. Union of India , this Court held
as below: -
“ 54. The doctrine of judicial restraint, which is central to
this discussion, emphasizes that courts should exercise
caution and avoid involvement in policy decisions, as
these are complex judgments that require a balancing of
diverse and often competing interests. Policies are crafted
based on thorough analysis of social, economic, and
political factors, considerations beyond the court's

6
(2025) 1 SCC 695.
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purview. The court is tasked with ensuring that
policies do not breach constitutional provisions or
statutory limits; however, they should not replace
policymakers' judgments with their own unless
absolutely necessary.
55. Policy decisions often require the expertise of
professionals and specialists in fields such as economics,
public health, national security, and environmental
science. These domains involve specialized knowledge
that judges, as generalists in legal matters, may lack. For
instance, in economic policy, the executive may decide on
trade tariffs or subsidies based on extensive data and
projections that aim to balance domestic industry
support with global trade commitments. The courts,
lacking the same level of economic expertise and without
the authority to make trade-offs among competing policy
objectives, is typically not equipped to second-guess
these kinds of decisions.
56. While courts have the power of judicial review to
ensure that executive actions and legislative
enactments comply with the Constitution, this power
is not absolute. Judicial review is meant to act as a
safeguard against actions that overstep legal
boundaries or infringe on fundamental rights, but it
does not entail a comprehensive re-evaluation of the
policy's wisdom. The judicial review of policy
decisions is limited to assessing the legality of the
decision making process rather than the substantive
merits of the policy itself. For example, if a government
policy infringes on fundamental rights or discriminates
against a particular group, the courts have a duty to
strike down such policies. However, in the absence of
constitutional or legal violations, the courts should
respect the policy choices made by the executive or
legislature.
57. The duty of the court in policy-related cases is
primarily to determine whether the policy falls within
the scope of the authority granted to the relevant
body. If the policy decision is within the executive's
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23. Considered in light of the authoritative
pronouncements of this Court in the precedents cited
supra , we are of the firm opinion that the High Court
was not justified in invoking powers of judicial review
in a public interest litigation so as to interfere in the
economic policy decision taken by the appellant-
Corporation to increase the rates of the property
taxes and particularly when such revision was made
after a considerable gap of about 16 years.
24. We have also gone through the reasoning
assigned by the High Court for quashing and setting
rd
aside the resolution dated 3 April, 2017 as modified
th
by the subsequent resolution dated 19 August,
2017 passed by the appellant-Corporation
determining the mode and manner in which the
property taxes are to be imposed for a period of five
years, i.e., from 2017-18 to 2021-22, thereby
increasing the tax rates in respect of properties
situated within the jurisdictional limits of appellant-
Corporation. , we are of the opinion that the
Ex facie
aforesaid exercise was not permissible to be
undertaken in the extraordinary writ jurisdiction of
the Court and the decision of the appellant-
Corporation regarding economic policies was beyond
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the scope of power of judicial review. There is no
finding by the High Court that the decision to
increase the tax rates was perverse or
unconstitutional.
25.
A perusal of the counter affidavit filed by the
respondent-writ petitioner before this Court leaves no
room for doubt that the respondent himself
acknowledged the limited scope of the challenge
before the High Court. It stands admitted that the
Public Interest Litigation did not call into question
the authority or competence of the appellant-
Corporation to revise municipal taxes, and that the
grievance was confined exclusively to the procedure
and manner adopted in effectuating such revision.
For sake of ready reference, relevant paragraphs from
the counter affidavit filed by the respondent-writ
petitioner before this Court are reproduced
hereinbelow: -
“b. It is most respectfully submitted that the
question whether or not to revise or levy or otherwise
Municipal Taxes is admittedly a pure question of
Policy and is within the domain of the Corporation.
It is submitted that however, since the aforesaid is
not the issue raised in the Public Interest Litigation,
the answering Respondent No. 1 is not commenting
upon the power of the High Court under Article 226
& 227 of Judicial Review of such decision.
[………]
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e. It is at the cost of repetition that the Respondent
No. 1 seeks to point out that the Public Interest
Litigation and the lis did not pertain to the power or
the decision of the Corporation to revise the rate of
Municipal Taxes, but it pertained to the mode and
manner of revision of the rates which is regulated by
Statutory Provisions and hence the Public Interest
Litigation is maintainable and has been rightly
adjudicated by the High Court.”

26. In light of the above express admissions, it
becomes evident that the power of the appellant-
Corporation to revise the rate of municipal taxes was
never the subject matter of challenge before the High
Court. The only issue that was urged before the High
Court pertained to the procedure and mode adopted
by the appellant-Corporation while effecting such
revision. In the absence of any challenge to the
substantive authority of the appellant-Corporation to
revise municipal taxes, the scope of scrutiny before
the High Court stood confined solely to examining
whether the statutory procedure had been complied
with. We are of the considered view that the High
Court ought not to have embarked upon a roving
inquiry into the merits or wisdom of the decision to
revise the tax rates unless it was demonstrated that
the procedure adopted by the appellant-Corporation
was ex-facie arbitrary, perverse, unreasonable or in
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blatant derogation of the governing statutory
provisions. No such material was placed before the
Court, nor does the record disclose any such
infirmity. In these circumstances, the High Court
transgressed the permissible limits of judicial review
in interfering with the decision of the appellant-
Corporation to revise the rate of property taxes.
27. As an upshot of the above discussion, we are of
the firm view that the appellant-Corporation having
kept the taxes at a stagnant rate for almost 16 years
was indeed justified and rather under a statutory
obligation to revise the tax rates. Had the exercise
been taken on regular basis, perhaps the cumulative
increase of tax rates by the appellant-Corporation in
the year 2017 would have been much higher than
40% done under the subject exercise and the abrupt
shock could have been avoided.
28. In this background, we are of the opinion that
th
the impugned judgment dated 9 October, 2019 in
Public Interest Litigation No. 42 of 2018 and order
th
dated 24 January, 2020 in MCA (Review) No. 42 of
2020 passed by the High Court is unsustainable in
the eyes of law. Hence, the same deserves to be and
are hereby set aside.
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29. The appeals are allowed in the aforesaid terms.
No order as to costs.
30. Pending application(s), if any, shall stand
disposed of.

….……………………J.
(VIKRAM NATH)


...…………………….J.
(SANDEEP MEHTA)
NEW DELHI;
DECEMBER 08, 2025.

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