Full Judgment Text
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PETITIONER:
MUNICIPAL CORPORATION, JABALPUR
Vs.
RESPONDENT:
KRISHI UPAJ MANDI SAMITI AND ANR.
DATE OF JUDGMENT25/01/1990
BENCH:
SHETTY, K.J. (J)
BENCH:
SHETTY, K.J. (J)
THOMMEN, T.K. (J)
CITATION:
1990 AIR 601 1990 SCR (1) 144
1990 SCC (2) 33 JT 1990 (1) 82
1990 SCALE (1)67
ACT:
M.P. Municipal Corporation Act, 1956: Section 415
"Anything done or intended to be done under the Act"--Inter-
pretation or--’Local Authority’--Refusal to pay
taxes--Whether obligatory on Corporation to refer dispute to
Government.
M.P. Municipalities Act, 1961: Section 334. Difference
between section 4 15 of 1956 Act and Section 334 of 1961 Act
explained.
M.P. Krishi Upaj Mandi Adhiniyam, 1973: Section 7 Krishi
Upaj Mandi Samiti--Whether a local authority.
HEADNOTE:
The appellant--Corporation assessed property tax in
respect of buildings belonging to the respondent--Market
Committee, which refused to pay the same. Proceedings were
commenced for recovery of the dues. The respondent moved the
High Court under Article 226 of the Constitution for quash-
ing the recovery proceedings.
The High Court following its earlier decision arising
under Section 334 of the M.P. Municipalities Act, 1961
allowed the petition, quashed the recovery proceedings and
directed the Corporation to refer the dispute to the Govern-
ment under Section 415 of the M.P. Municipal Corporation
Act, 1956.
Aggrieved by the aforesaid decision, the Corporation,
appealed to this court.
Allowing the appeal, this Court,
HELD: 1. The assessment of tax or demand of any fees by
the Corporation under the provisions of the M.P. Municipal
Corporation Act, 1956 could fail within the term "anything
done or intended to be done under the Act" as provided under
Section 415 of the Act. Even
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refusal of the Corporation to consider the objections
against assessment and recovery of tax or fees could also be
considered as "anything done or intended to be done under
the Act". But section 415 does not provide that the Corpora-
tion has to move the Government when the local authority has
refused to pay the tax or fees levied and demanded. [148GH;
149A]
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2. The structure of section 415 of the M.P. Municipal
Corporation Act, 1956 is different from section 334 of the
M.P. MuniCipalities Act; 1961. Section 415 speaks of dispute
between the Corporation and local authority as regards
anything done or to be done under the Act. And such a dis-
pute shall be referred to the Government for decision.
Section 334 refers to a dispute on a matter in which the
Municipal Council and local authority are jointly interested
and it states that such dispute shall be referred to the
State Government for decision. Section 334 does not refer to
the dispute as regards "anything done or to be done under
the Act." Section 415 does not speak of any dispute in which
the Corporation and the local authority are jointly inter-
ested. There are no rules framed for operation of section
415 while under section 334 the State Government has framed
Rules. In view of these differences the view taken by the
High Court that the Corporation must take steps to resolve
the dispute cannot be justified. It has apparently no sup-
port either from the terms of section 415, or from any rules
framed for the purpose. Therefore, the recovery proceedings
should not have been quashed by the High Court. And the
Corporation should not have been directed to refer the
dispute to the Government under section 415 of the M.P.
Municipal Corporation Act, 1956. [150F-H; 151A]
Jawahar Krishi Upaj Mandhi Samiti Gadarwara & Anr. v.
Municipal Committee Gadarwara & Anr. Misc.Petition No. 994
of 1981 decided by the M.P. High Court on 5.5.1983, distin-
guished.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 480 of
1986.
From the Judgment and Order dated 10.7.85 of the Madhya
Pradesh High Court in Misc. Petition No. 1235 of 1984.
D.N. Mukherjee and Ran jan Mukherjee for the Appellant.
S.S. Khanduja, Yashpal Dingra and Baldev Kishan for the
Respondents.
The Judgment of the Court w. as delivered by
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K. JAGANNATHA SHETTY, J. This appeal by leave from a
judgment of the M.P. High Court concerns the scope of Sec-
tion 415 of the M.P. Municipal Corporation Act, 1956 (’the
Act’ for short).
The circumstances can be shortly stated.
Within the Jabalpur Municipal Corporation limits, there
is a ’Mandi’ established under the M.P. Krishi Upaj Mandi
Adhiniyam, 1973 (’Adhiniyam’) covering an area of 55 acres.
It is enclosed by high boundary wall and is under the con-
trol and jurisdiction of the Krishi Upaj Mandi Samithi or
otherwise called the Market Committee. Under Section 7 of
the Adhiniyam, the market Committee is a body corporate with
power to provide facilities for regulation of buying and
selling of agricultural produce and establishment of proper
administration of the market. Section 7(3) of the Adhiniyam
provides that notwithstanding anything contained in any
enactment for the time being in force, every market commit-
tee shall for all purposes, be deemed to be a ’local author-
ity’. Inside the Mandi, the market committee appears to have
constructed office buildings, shop complexes, godowns,
market yards, shades and other buildings. The Jabalpur
Municipal Corporation assessed property tax in respect of
the buildings within the Mandi area and also demanded safai
tax, water tax, electricity charges, development charges for
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the years 1980-81 to 198384. The market committee has re-
fused to pay the same and claimed that the corporation has
no jurisdiction to levy and collect such taxes or charges.
The Corporation did not agree with that claim and initiated
proceedings to recover the dues. Challenging the action
taken, the Market Committee moved the High Court under
Article 226 of the Constitution for quashing the recovery
proceedings. The High Court following an earlier decision
arising under Section 334 of the M.P. Municipalities Act,
1961, allowed the petition and quashed recovery proceedings.
The High Court also directed the Corporation to take steps
in accordance with Section 4 15 of the Act for resolving the
dispute with the market committee. The order of the High
Court reads as follows:
"Section 415 of the M.P. Municipal Corporation Act, 1956
provides for adjudication of disputes between the Corpora-
tion and local authorities by the State Government on a
reference made to it for this purpose. The corresponding
provision in the M.P. Municipalities Act, 1961 is Section
334. In a similar situation, where recovery proceedings had
been commenced against a Krishi Upaj Mandi Samiti, like
147
the petitioner, by the Municipal Council, Gadarwara, a
Division Bench in Misc. Petition No. 994 of 1981 (Jawahar
Krishi Upaj Mandi Samiti, Gadarwara and another) decided on
5.6.1983 quashed the recovery preceedings and directed the
Municipal Council to take steps under section 334 of the
M.P. Municipalities Act, 1961 for adjudication of the dis-
pute between itself and the Krishi Upaj Mandi Samiti. Since
section 415 of the M.P. Municipal Corporation Act, 1956 is
in pari materia with section 334 of the M.P. Municipalities
Act, 1961 that decision has to be followed.
Consequently, this petition is allowed. The pending
recovery proceedings against the petitioner are quashed and
the respondent Municipal Corporation, Jabalpur is directed
to take steps in accordance with section 4 15 of the M.P.
Municipal Corporation Act, 1956 for resolving its dispute
with the petitioner. The parties shall bear their own
costs."
In this appeal, the Municipal Corporation, Jabalpur has
challenged the validity of the above order.
Before us, the core of the argument of learned counsel
for the appellant is that the Market Committee is not a
local authority either under the Municipal Corporation Act,
or under the M.P. General Clauses Act, 1957. It has been
declared to be a local authority only for purposes of the
Adhiniyam and that declaration could not be relevant for the
purpose of Section 415 of the Act. The Market Committee
unless it falls within the definition of ’local authority’
under the M.P. General Clauses Act, 1957, the dispute under
Section 415 of the Act could not be referred to the Govern-
ment. Counsel also referred to us the various provisions of
the Act which confer power on the Corporation to levy and
collect taxes and charges.
Indisputably, the respondent is not a local authority as
defined under M.P. General Clauses Act, 1957. Section 2(20)
of the said Act defines ’local authority’ to mean "a munici-
pal corporation, municipality, local board, Janapad Sabha,
village panchayat, or other authority legally entitled to,
or entrusted by the Government with the control of manage-
ment of a municipal or local fund." Counsel for the respond-
ent however, strongly relied upon Section 7(3) of the Adhi-
niyam which provides that the Market Committee shall be
deemed to be a local
148
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authority notwithstanding anything contained in any other
enactment.
It seems to us that it is not necessary to express any
opinion on this controversy and even if we assume in favour
of the respondent that it is a local authority without
deciding, the recovery proceedings could not have been
quashed by the High Court. And the Corporation could not
have been directed to refer the dispute to the Government
under Section 415 of the Act.
Section 4 15 of the Act reads:
"Disputes between Corporation and local authorities:
If any dispute arises between the Corporation and any local
authority as regards anything done or to be done under this
Act, it shall be referred to the Government for decision and
such decision may include an order as to costs of any en-
quiry ordered by the Government, and shall be final.
Provided that it shall be competent to the Corpora-
tion and the local authority to agree in writing that any
such dispute shall, instead of being referred to the Govern-
ment for decision, be referred to the decision of an arbi-
trator or arbitrators appointed under the Arbitration Act,
1940, or to a civil court under Section 20 of the Code of
Civil Procedure, 1908."
The Section is clear and provides that the disputes
arising between the Corporation and local authority as
regards anything done or to be done under the Act, shall be
referred to the Government for decision. It shall be compe-
tent also to the Corporation and local authority to agree in
writing that any such dispute shall, instead of being re-
ferred to the Government be referred to the decision of an
arbitrator under the Arbitration Act or to a civil court
under Section 20 of the Code of Civil Procedure. The assess-
ment of tax or demand of any fees by the Corporation under
the provisions of the Act could fall within the term "any-
thing done or intended to be done under the Act" as provided
under Section 415. Even refusal of the Corporation to con-
sider the objections against assessment and recovery of tax
or fees could also be considered as "anything done or in-
tended to be done under the Act". The question however, is
whether it would be obligatory for the Corporation in the
event of the local authority refusing to pay taxes or fees
to approach the Government or refer the dispute
149
to the Government for decision? The answer to the question
should be in the negative. Section 4 15 does not provide
that the Corporation has to move the Government when the
local authority has refused to pay the tax or fees levied
and demanded. There are also no rules framed by the Govern-
ment regulating the exercise of power under the Section and
at any rate our attention has been drawn to no statutory
rules framed under the section.
The High Court however, has followed its earlier deci-
sion arising under Section 334 of the Municipalities Act.
There the dispute arose between the Gadarwara Municipal
Council and Mandi Samiti Gadarwara as to the authority of
the former to collect takes and charges from the latter. The
Mandi Samithi was an authority constituted like the present
Market Committee under Section 7 of the Adhiniyam and func-
tioning within the Municipal limits. It challenged the
recovery proceedings initiated by the Municipal Council and
moved the High Court for appropriate relief under Article
226 of the Constitution. The High Court quashed the recovery
proceedings and directed the Municipal Council to approach
the Government under Section 334 of the Municipalities Act
to resolve the dispute. This decision, we think, overlooks
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the plain terms of Section 334 and even otherwise it is not
relevant for operation of Section 415 of the Act.
Section 334 of the M.P. Municipality Act, 1961 reads:
"Dispute between Council and other local body:
(1) In the event of any dispute arising between a Council
and any other local authority established under any State
Act on a matter in which they are jointly interested, such
dispute shall be referred to the State Government, whose
decision shall be final."
Under this Section the State Government has framed rules
called "Madhya Pradesh Municipalities (Regulation of Rela-
tions between Councils and other local Authorities) Rules,
197 1". Rules 2 and 3 are in these terms:
"Rule 2. Whenever a Council and any other authority are
jointly interested in any matter, such matter shall be
settled amicably between them and where they do not come to
a mutual agreement, the matter shall be referred to the
Collector.
150
Rule 3. The Collector shall then arrange a joint meeting of
the Council and Local Authority and manage to bring about an
amicable settlement."
The rules thus provide that the dispute in which the
Council and local authority are jointly interested in any
matter, but not possible to settle the dispute mutually, the
matter shall be referred to the Collector. The Collector
shall try to bring about an amicable settlement by arranging
a joint meeting of both the authorities. Rules 4 and 5 are
also relevant in this context and may be read:
"Rule 4. If the talk for amicable settlement fails, the
Collector shah persuade the Council and the local authority
to agree in writing to refer the matter to an arbitrator or
arbitrators appointed under the Arbitration Act, 1940 and if
they agree, the matter shall be referred to such arbitrator
or arbitrators, as the case may be.
Rule 5. When the Council and local authority do not agree to
refer the matter to arbitration the Collector shall refer
the matter to the State Government with his comments on it
and the decision of the State Government shall be final."
Under Rule 5, it would be for the Collector to refer the
matter to the Government with his comments, and not for the
Municipal Council to approach the Government.
By comparing the provisions of Section 415 of the Act
with Section 334 of Municipalities Act, it will be seen that
the structure of the former is different from the latter.
Section 4 15 speaks of dispute between the Corporation and
local authority as regards anything done or to be done under
the Act. And such a dispute shall be referred to the Govern-
ment for decision. Section-334 refers to a dispute on a
matter in which the Municipal Council and local authority
are jointly interested and it states that such dispute shall
be referred to the State Government for decision. Section
334 does not refer to the dispute as regards "anything done
or to be done under the Act." Section 415 does not speak of
any dispute in which the Corporation and the local authority
are jointly interested. Secondly, there are no rules framed
for operation of Section 415 of the Act. In view of these
differences the view taken by the High Court. That the
Corporation must take steps to resolve the dispute cannot be
justified. It has apparently no support
151
either from the terms of Section 4 15 or from any rules
framed for the purpose.
In the result, we allow the appeal and reverse the
judgment of the High Court.
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In the circumstances of the case, there will be no order as
to costs.
T.N.A. Appeal
allowed.
152