R.G. SHASTRI Vs. RAJKOT BOROUGH MUNICIPALITY

JUDGEMENT

(1.) THIS second appeal arises out of a suit brought by 26 plaintiffs, who are the appellants in this Court, for a declaration that the levy of a license fee on lodging and boarding houses by the Municipal Borough of Rajkot was illegal. The appellants did not ask for a permanent injunction in the plaint. This defect was noticed by them in the lower appellate Court, and they made an application in that Court for amendment of the plaint by adding a prayer for a permanent injunction. The amendment was granted by the learned appellate Judge, and no question is raised about that amendment in this Court. The trial Court held that the levy was legal and dismissed the suit on. January 13, 1958. The appellants preferred an appeal to the District Court. The learned District Judge, by his judgment, dated December 26, 1958, dismissed the appeal.

(2.) THE plaintiffs -appellants, who are owners of lodging and boarding houses, carry on business in the limits of Rajkot Borough Municipality They formed themselves into an association, and, the present suit was filed by them as representing all the owners of lodging and boarding houses who carry on their business within the municipal area of Rajkot. It appears that, in 1914, the then Municipality of Rajkot had introduced a license fee of Rs. 6 per annum to be collected from lodging and boarding houses. That fee was raised in 1926 to Rs. 20. After Rajkot Borough Municipality was constituted by a notification of the Government of Saurashtra, which notification brought into existence the municipality with effect from July 1, 1949, the General Board of the Municipality decided on November 19, 1951, to publish by -laws, which had been drafted by its Rules Committee on March 29, 1951, and invited objections. The Municipality purported to frame the by -laws under Section 61, Sub -section (1), Clause (b), Sub -clause (ii) of the Bombay Municipal Boroughs Act (hereafter called the Boroughs Act). A public notice, exh. 10, dated November 22, 1951, was published in the local newspapers. This was done under Section 61, Sub -section (2), of the Boroughs Act. The by -laws which the municipality intended to frame concerned a number of trades and businesses. In the present appeal, I am concerned only with the by -laws relating to lodging and boarding houses. These by* laws proposed to levy a license fee on such houses. For this purpose, lodging and boarding houses were divided into two classes -for houses, which contained twenty or less beds, the license fee proposed was Rs. 75 per annum, and, for houses, which had over 20 beds, a license fee of Rs, 100 was proposed. On December 20, 1951, the appellants' association filed objections. Those objections were over -ruled, and, on February 26, 1952, the General Board approved the by -laws as proposed by its Rules Committee. These by -laws required the sanction of the Government under Sub -section (2) of Section 61 of the Boroughs Act. Therefore, the municipality sent the by -laws for sanction, on April 29,1952, to the Government of Saurashtra through the Collector of Madhya Saurashtra. Government, by their letter exh. 59, dated September 6, 1952, informed the municipality that its proposal regarding the license fee aforesaid and one more license fee was likely to be challenged on legal grounds. Therefore, Government suggested that the municipality should adopt a uniform system of fees in respect of these two matters, and should forward the same for sanction of the Government. It appears that, in the meantime, the municipality was superseded, and an Administrator was appointed. The letter of Government was considered by the Administrator, who enjoyed all the powers of the General Board. The Administrator, on October 5, 1952, took the communication of the Government into consideration and resolved to fix a uniform fee of Rs. 75 for all classes of lodging and boarding houses. It is an admitted fact that, after this new resolution was passed, amending the quantum of license fee, the procedure prescribed by Section 61(2) was not followed by the Administrator. Instead, the Administrator forwarded that resolution, by his endorsement, dated October 8, 1952, to the Government and requested them to sanction the amended by -laws. Accordingly, on October 15, 1952, Government sanctioned the by -laws as amended by the resolution of the Administrator. On October 24, 1952, the Administrator decided to put the by -laws into force with effect from January 1, 1953, and passed a resolution to give a notice thereof to the public. Accordingly, a public notice was published on November 16, 1952, in the issue of 'Jai Hind'. The appellants' association, thereupon, filed objections on December 13, 1952. It appears from the record that the President of the Association was called for interviews by the Administrator on December 22, 1952, and December 31, 1952. As a result of these interviews, the Administrator decided to shift the date from which the by -laws were to come into force from January 1, 1953, to April 1, 1953, and sanction to this change was accorded to him by Government on Feb -iraary 13, 1953. On February 20, 1953, a public notice was given by the municipality, intimating to the public that the by -laws would be brought into force with effect from April 1, 1953. The appellants gave two notices to the munici -pality challenging the levy before filing the present suit. The first notice was dated May 14, 1954, and the second notice was dated May 20, 1954. Thereafter, they instituted the suit from which this second appeal arises. The appellants challenged the levy of the license fee on several grounds. All these grounds were negatived by the two lower Courts.

(3.) IN this Court, Mr. Rajani Patel, learned Counsel for appellants, has made only two submissions. The first submission is that the levy of the license fee was bad, because, after the by -laws were altered on October 5, 1952, they were not published as required by Section 61(2) of the Boroughs Act. The second submission is that the license fee was, in reality, a tax, and that the municipality had no power to levy a tax without undergoing the procedure prescribed by Chapter VII of the Boroughs Act. Both these contentions were raised by appellants in the two lower Courts, and both of them were negatived.