NAGAR MAHAPALIKA VARANASI Vs. DURGA DAS BHATTACHARYA

JUDGEMENT

(1.) This appeal is brought, by certificate, from the judgment of the Allahabad High Court dated November 23, 1961 in First Appeal No. 315 of 1958 by which the appeal of the respondents was allowed and the suit was decreed with costs throughout.

(2.) On March 26, 1956, the plaintiff respondents who are rickshaw owners and rickshaw drivers filed a representative suit in the court of Civil Judge, Varanasi praying for a decree against the appellant to restrain it by means of a permanent injunction from charging any licence fee or preventing the respondents from plying rickshaws for hire without paying license fee within the municipal limits of Varanasi. Purporting to act under S. 289 (2) , List I - H of the U. P. Municipalities Act, 1916 (Act No. II of 1916) , hereinafter referred to as the 'Act', the Municipal Board of Varanasi framed certain bye-laws relating to the plying of rickshaws. The bye-laws were first published by Government order No. 3471/XXIII-9994 dated March 10, 1941 and were subsequently amended by two notifications No. 4022/XXIII-445 dated February 2, 1950 and No. 5834-XXIII-745 dated September 6, 1951. Under these bye-laws, as they stood amended, the owner of each rickshaw had to pay an annual licence fee of Rs. 30/- and each driver of a rickshaw had to pay an annual fee of Rs. 5/-. The respondents challenged the validity of these bye-laws mainly on the ground that considering the amount that was being levied what should have been only a fee was really a tax which the Municipa1 Board had no authority to levy. It was contended on their behalf that a licence fee could be levied only for services rendered or advantages provided and the imposition must be commensurate with the services and advantages so rendered or provided, it was urged that so far as the rickshaws that were being plied within the municipal limits of Varanasi were concerned no advantages or services were provided which could justify the levy of a. fee at such a rate. The suit was contested by the appellant Municipal Board on the ground that services and advantages were, in fact, provided and their cost was much more than the total amount that was being realised from the rickshaw owners and drivers. By his judgment dated March 26, 1958 the 1st Additional Civil Judge, Varanasi dismissed the suit of the respondents, holding that the bye-laws in question were not invalid. The respondents took the matter in appeal to the Allahabad High Court, being First Appeal No. 315 of 1958. The appeal was first placed before Gurtu and Srivastava, JJ. who referred it for consideration by a larger Bench. The appeal was finally heard by the Chief Justice, Jagdish Sahai and Bishambhar Dayal, JJ. By a majority judgment dated November 23,,1961, the appeal of the respondents was allowed, the judgment of the trial court was set aside and the suit of the respondents decreed. It was held by Sahai and Dayal, JJ, who delivered the majority judgment that the imposition of the license fee at the rate of Rs. 30/- on each of the rickshaw owners and Rs. 5/- on each of the rickshaw drivers was ultra vires and a permanent injunction was accordingly granted restraining the appellant from realising the license fees at this rate for the period in question. It was, however, made clear that it was open to the Municipal Board to reduce the fee to a reasonable figure and co-relate it to the services rendered by the Municipal Board.

(3.) Chapter V of the Act deals with Municipal Taxation. Section 128 falls within that Chapter and reads as follows: