Full Judgment Text
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PETITIONER:
SONIK INDUSTRIES, RAJKOT
Vs.
RESPONDENT:
MUNICIPAL CORPORATION OF THE CITY OF RAJKOT
DATE OF JUDGMENT02/04/1986
BENCH:
PATHAK, R.S.
BENCH:
PATHAK, R.S.
REDDY, O. CHINNAPPA (J)
MISRA, R.B. (J)
CITATION:
1986 AIR 1518 1986 SCR (2) 59
1986 SCC (2) 608 1986 SCALE (1)500
ACT:
Bombay Municipal Boroughs Act, 1925, section 77, scope
of - Whether the rules for the levy of a rate on buildings
and lands can be said to be published under section 77 of
the Act, if the notice published in a newspaper reciting the
sanction of the State Government to the rules mentions that
the rules themselves are open to inspection in the Municipal
office and that copies of the rules can also be purchased
there.
HEADNOTE:
The Rajkot municipality framed Draft rules for the levy
of rates on buildings and lands in Rajkot. The Draft Rules
were published and objections were invited and, thereafter
the State Government accorded its sanction to the rules. The
issue dated November 28, 1964 of "Jai Hind", a Gujarati
newspaper published from Rajkot carried a Notice purportlng
to be under section 77 of the Bombay Municipal Boroughs Act,
1925 as adopted and applied for the information of persons
holding buildings and immovable property within the
Municipal limits of Rajkot that the Municipality had
resolved to enforce the "Rules to the Rajkot Borough
Municipality for the levy of Rate (Tax) on buildings and
lands" sanctioned by the State Government of Gujarat, with
effect from January 1, 1965. Thereafter an assessment list
was prepared and steps were taken to demand the tax. F
The appellants, a registered partnership firm
instituted a suit in the Court of the Civil Judge, Senior
Division Rajkot for a declaration that the aforesaid Rules
were invalid. The Trial Court decreed the suit. An Appeal
against the decree of the Trial Court was dismissed by the
Extra Assistant Judge, Rajkot. A Second Appeal preferred by
the Municipality was referred to a larger Bench of the High
Court consisting of learned Judges who held that the
conditions of section 77 had been complied with. In
accordance with the said opinion, the learned Single Judge
allowed the Second Appeal. Hence the appeal by Special
Leave.
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Dismissing the appeal, the Court,
^
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HELD : 1.1 The general principle is that if the mode of
publication adopted is sufficient for persons affected by
the rules with reasonable diligence to be acquainted with
them, publication of the Rules has taken place in
contemplation of the law. [65 D-E]
1.2 In the case of Municipal taxation, the conventional
procedure enacted in most statutes requires publication of
the proposed rules providing for the levy and inviting
objections thereto from the inhabitants of the Municipality.
Thereafter when the rules are finalised and sanctioned by
the State Government, it is mandatory that they be published
so that the inhabitants of the Municipality should know how
the levy affects them in its final form. The rules, and
consequently the levy, take effect only upon publication in
accordance with the statute. The object of the requirement
is that a person affected by the levy must know precisely
the provisions of the levy and its consequences for him. [64
D-F]
1.3 The requirement of section 77 was complied with
inasmuch as information was thereby given to all persons
holding buildings and immovable property within the
Municipal limits of Rajkot that the rules mentioned therein
had been sanctioned by the State Government and that the
rules could be inspected in the Municipal office. The
mandatory requirement of section 77 was that the rules
should be published, which requirement the notice satisfies.
The mode of publishing the rules is a matter for directory
or substantial compliance. It is sufficient if it is
reasonably possible for persons affected by the rules to
obtain, with fair diligence, knowledge of those rules
through the mode specified in the notice. Had the Act itself
specified the mode in which the rules were to be published,
that mode would have to be adopted for publishing the rules.
In the opinion of the Legislature, that would have been the
mode through which the inhabitants of the Municipality could
best be informed of the rules. [64 H; 65 A-D]
1.4 Section 77 provides the final stage of the
procedure enacted in sections 75 to 77 for imposing a levy.
The period referred to in section 77, after which alone the
tax can be 3 imposed, is intended to enable persons affected
by the levy to acquaint themselves with the contents of the
rules, and to
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take preparatory measures for compliance with the rules. The
period has not been particularly prescribed in order to
enable a person to take advantage of the benefit of section
102 before the tax is imposed. [66 B-D]
Chunni Lal v. The Municipal Board, Shri Madhopur,
[1956] I.L.R. Rajasthan 568; Gokaldas Amarshi v. Porbandar
City Municipality, [1971] 12 G.L.R. 603; Commissioner of
Sales-tax, Uttar Pradesh v. The Modi Sugar Mills Ltd.,
[1961] 2 S.C.R. 189; The Municipal Corporation Bhopal, M.P.
v. Misbahul Hasan and Ors., [1972] 1 S.C.C. 696; Govindlal
Chhaggan Lal Patel v. The Agricultural Produce Market
Committee, Godhra and Others, [1976] 1 S.C.R. 451; and
Municipal Council, Rajahmundry v. Nidamarti Jaladurga
Prasadarayudu and Anr., 1926 A.I.R. Madras 800 referred to.
OBSERVATION
(It would have been more desirable for the Municipality
to have published the rules in the Newspaper along with the
notice reciting the sanction, though the omission to do so
and notifying instead that inspection of the rules was
available in the Municipal office still constitute
sufficient compliance with the law.)
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JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1242 of
1980.
From the Judgment and Order dated 2nd May, 1980 of the
Gujarat High Court in Second Appeal No. 110 of 1978.
T.U. Mehta, D.H. Kothari, S.K. Dholakia and R.C. Bhatia
for the Appellant.
Dr. Y.S. Chitale, Vimal Dave and H. Mehta for the
Respondent.
The Judgment of the Court was delivered by
PATHAK, J. This appeal by special leave raises the
question whether the rules for the levy of a rate on
buildings and lands can be said to be published under s.77
of the Bombay Municipal Boroughs Act, 1925 if the notice
published in a
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newspaper reciting the sanction of the State Government to
the rules mentions that the rules themselves are open to
inspection in the Municipal office and that copies of the
rules can also be purchased there.
The Rajkot Borough Municipality framed Draft rules for
the levy of rates on buildings and lands in Rajkot. The
Draft rules were published and objections were invited, and
there after the State Government accorded its sanction to
the rules. In the issue dated November 28, 1964 of "Jai
Hind", a Gujarati newspaper published from Rajkot, a notice
was published purporting to be under s.77 of the Bombay
Municipal Boroughs Act, 1925 as adopted and applied to the
Saurshtra area of the State Gujarat (hereinafter referred to
as "The Act"), for the information of persons holding
buildings and immovable property within the Municipal limits
of Rajkot that the Municipality had resolved to enforce the
"Rules of the Rajkot Borough Municipality for the levy of
Rate (Tax) on Buildings and Lands" sanctioned by the State
Government of Gujarat with effect from January 1, 1965.
Notice recited the date and serial number of the sanction.
It also stated :
"These rules can be inspected at the office of the
Municipality on all days other than Holidays
during office hours; moreover copies of the rules
can be purchased at the Municipal Office".
It appears that thereafter an assessment list was prepared
and steps were taken to demand the tax.
The appellant, a registered partnership firm,
instituted a suit in the Court of the learned Civil Judge,
Senior Division, Rajkot, praying for a declaration that the
aforesaid rules were invalid, and that the consequent
assessment list and the related notices of demand were
without authority of law. A permanent injunction was also
sought to restrain the Municipality from giving effect to
the rules. The trial court decreed the suit and granted the
declaration and injunction prayed for. An appeal against the
decree of the trial court was dismissed by the learned Extra
Assistant Judge, Rajkot. A second appeal was filed by the
Municipal Corporation of Rajkot (the Municipal Borough of
Rajkot having been so renamed) in the High Court, and at the
time of admission a learned Single
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Judge of the High Court formulated three questions of law
arising in the appeal. The appeal was referred subsequently
to a larger Bench. A Bench of three learned Judges of the
High Court took up the case and observed at the outset that
the only question which required consideration at that stage
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was whether the courts below had erred in striking down the
rules on the ground that they had not been published as
required by s.77 of the Act. The learned Judges held that
the courts below had taken an erroneous view of the statute
and that, in their opinion, the conditions of s.77 of the
Act had been satisfied in the case. The case was sent back
to the learned Single Judge with that opinion for disposal
in accordance with law.
Chapter VII of the Act provides for Municipal taxation.
While the different taxes which can be levied by a
Municipality are enumerated in s.73, sections 75 to 77
detail the procedure to be observed when the Municipality
proposes to levy a tax. Before imposing a tax the
Municipality is required by s.75 to pass a resolution
deciding which one or other of the taxes specified in s.73
would be imposed and to approve rules specifying the classes
of persons or property or both which are proposed to be made
liable, the amount or rate proposed for assessment, the
basis of valuation on which such rate on buildings and lands
is to be imposed and other related matters. The rules so
approved by the Municipality are required to be published
with a notice in a prescribed form. Objections are invited
from the inhabitants of the Municipal borough, and the
Municipality is required to take the objections into
consideration, and if it decides to pursue the levy it
submits the objections with its opinion thereon and any
modifications proposed by it, together with the notice and
rules to the State Government. Section 76 empowers the State
Government to sanction the rules with or without
modification, or to return them to the Municipality for
further consideration. Section 77 provides :
"77. Rules sanctioned under section 76 with the
modifications and conditions, if any, subject to
which the sanction is given shall be published by
the Municipality in the Municipal borough,
together with a notice reciting the sanction and
the date and serial number thereof; and the tax as
prescribed by the rules so published shall, from a
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date which shall be specified in such notice and
which shall not be less than one month from the
date of publication on such notice, be imposed
accordingly, ............"
It is contended by learned counsel for the appellant
that the rules sanctioned by the State Government should
have been published along with the notice reciting the
sanction in the same newspaper and there was no publication
for the purposes of s.77 if the notice merely mentions that
the rules can be inspected in the Municipal Office and that
copies of the rules can be purchased. Our attention is
invited to s.192 which provides for the mode of service of
notice under the Act, and it is urged that the publication
of the rules in this case is not in conformity with any of
the modes prescribed therein. It is contended that the
provisions of s.77 call for strict construction inasmuch as
the rules are intended to levy a tax on the inhabitants of
the Municipality.
In the case of Municipal taxation, the conventional
procedure enacted in most statutes requires publication of
the proposed rules providing for the levy and inviting
objections thereto from the inhabitants of the Municipality.
Thereafter when the rules are finalised and sanctioned by
the State Government, it is mandatory that they be published
so that the inhabitants of the Municipality should know how
the levy effects them in its final form. The rules, and
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consequently the levy, take effect only upon publication in
accordance with the statute. The object of the requirement
is that a person affected by the levy must know precisely
the provisions of the levy and its consequences for him.
Section 77 requires that the sanctioned rules should be
published by the Municipality in the Municipal borough
together with the notice reciting the sanction. The notice
published in the newspaper mentioned that the "Rules of
Rajkot Borough Municipality for the levy of Rate (Tax)
levied on Buildings and Lands" had been sanctioned by the
State Government and the notice recited also the date and
serial number of the sanction. It was open to the
Municipality to publish the sanctioned rules also in the
newspaper, but what it did was to state in the notice that
the rules could be inspected in the Municipal office, and
also that copies of the rules could be purchased at the
Municipal Office. In our opinion, the requirement of s.77
was complied with inasmuch as
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information was thereby given to all persons holding
buildings and immovable property within the Municipal limits
of Rajkot that the rules mentioned therein had been
sanctioned by the State Government and that the rules could
be inspected in the Municipal Office. The mandatory
requirement of s.77 was that the rules should be published
and it seems to us that the notice satisfies that
requirement. The mode of publishing the rules is a matter
for directory or substantial compliance. It is sufficient if
it is reasonably possible for persons affected by the rules
to obtain, with fair diligence, knowledge of those rules
through the mode specified in the notice. Had the Act itself
specified the mode in which the rules were to be published,
that mode would have to be adopted for publishing the rules.
In the opinion of the Legislature, that was the mode through
which the inhabitants of the Municipality could best be
informed of the rules. But the Act is silent as to this.
Section 102 specifies the modes in which service of a notice
contemplated by the Act should be served. There is nothing
in the section prescribing the mode for publishing the rules
in question here. Nor does s.24 of the Bombay General
Clauses Act help us. We must, therefore, fall back upon the
general principle that if the mode of publication adopted is
sufficient for persons, affected by the rules, with
reasonable diligence to be acquainted with them, publication
of the rules has taken place in contemplation of law. It is
necessary to emphasise that we are dealing with a stage
defining the final shape of the rules, after objections to
the draft rules have been considered and the State
Government has accorded its sanction.
Learned counsel for the appellant and learned counsel
for the Interveners have referred us to s. 102 of the Act,
which empowers the State Government on complaint made or
otherwise that any tax leviable by the Municipality is
unfair in its incidence, or that the levy thereof, of any
part thereof, is obnoxious to the interest of the general
public, to require the Municipality to take measures for
removing any objection which appears to it to exist to the
said tax. If, within the period so fixed, such requirement
is not carried into effect to the satisfaction of the State
Government, it may, by notification in the Official Gazette,
suspend the levy of the tax, or of such part thereof, until
such time as the objection thereto is removed. It is urged
that the rules published under
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s.77 of the Act are still open to challenge under s.102 of
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the Act and it is for that reason that s.77 provides that
the notice published thereunder should prescribe a date, not
less than one month from the date of such publication, as
the date on which the tax as prescribed by the rules shall
be imposed. It is said that this period is intended to
enable persons affected by the levy to object again under
s.102 of the Act, and therefore the rules must be set forth
in the newspaper itself. We are unable to agree. To our
mind, s.77 provides the final stage of the procedure enacted
in sections 75 to 77 for imposing a levy. The period
referred to in s.77, after which alone the tax can be
imposed, is intended to enable persons affected by the levy
to acquaint themselves with the contents of the rules, and
to take preparatory measures for compliance with the rules.
The period has not been particularly prescribed in order to
enable a person to take advantage of the benefit of s.102
before the tax is imposed. We are of opinion that it would
have been more desirable for the Municipality to have
published the rules in the newspaper along with the notice
reciting the sanction, but while saying so we are unable to
hold that its omission to do so and notifying instead that
inspection of the rules was available in the Municipal
Office does not constitute sufficient compliance with law.
Reliance was placed by the appellant on Chunni Lal v.
The Municipal Board, Shri Madhopur, [1956] I.L.R. Rajasthan
568 before us. In that case, on a difference of opinion
between two learned Judges of the Rajasthan High Court, a
third learned Judge of the High Court held that the
provision for inspection of the rules in the Municipal
Office did not constitute publication within the meaning of
s.62 of the Rajasthan Town Municipalities Act, 1951. The
High Court in that case was influenced by the particular
evidentiary material before it, on the basis of which it
reached the conclusion that it was not reasonably possible
for a member of the public to acquaint himself with the
contents of the rules. No such difficulty has been placed
before us. Out attention was also invited to Gokaldas
Amarshi v. Porbandar City Municipality, [1971] 12 G.L.R. 603
but in that case the High Court was concerned with the stage
of publication of the draft rules, that is to say the
preliminary procedure enacted under the Act before imposing
a tax. Learned counsel for the
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appellant has referred to Commissioner of Sales-tax, Uttar
Pradesh v. Modi Sugar Mills Ltd., [1961] 2 S.C.R. 189, The
Municipal Corporation Bhopal, M.P. v. Misbahul Hasan and
Ors., [1972] 1 S.C.C. 696, Govindlal Chhaggan Lal Patel v.
The Agricultural Produce Market Committee, Godhra and Ors.,
[1976] 1 S.C.R. 451 and Municipal Council, Rajahmundry v.
Nidamarti Jaladurga Prasadarayudu and Anr., [1926] A.I.R.
Madras 800, but nothing said therein appears to us to be of
any assistance to the appellant in this case.
There is no force in this appeal and it is accordingly
dismissed with costs.
S.R. Appeal dismissed.
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