P. LAKSHMANA RAO AND OTHERS Vs. VIJAYAWADA MUNICIPALITY

JUDGEMENT

(1.) These nine second appeals arise out of three suits instituted by three different hotel-keepers carrying on business within the Municipality of Vijayawada. From the year 1940 upto the year 1948, every person in management of a hotel within the Municipality would seem to be paying a licence fee to the Municipality of about Rs. 16. In the year 1949, the Municipal Council passed a resolution that from that year onwards, the hotel-keepers should be charged a fee proportionate to the out-turn of their business and the result was that in the case of each of the plaintiffs there was a levy of a licence fee which is admitted to be about 15 or 16 times the fee previously levied. The suits were instituted : (1) for a declaration that this levy was illegal, (2) for a refund of the sum improperly collected, and (3) for a permanency injunction restraining the Municipality from enforcing the resolution. The first Court gave a declaration in each of the cases but refused the other reliefs of refund and injunction. On appeal by the plaintiffs, the learned Subordinate Judge gave each of the plaintiffs a decree for refund while refusing the permanent injunction. There were also appeal presented to the lower appellate Court by the Municipality against the relief of declaration granted to the plaintiffs. These appeals of the Municipality were dismissed by the learned Subordinate Judge. Both the Municipality as well as the plaintiffs have come up in second appeal to this Court. S.A. Nos. 1022 to 1024 of 1954 are filed by the plaintiffs who seek the injunction declined to them by the lower appellate Court; they further dispute the correctness of the decree of the lower appellate Court in so far as that Court declined to award them costs. S.A. Nos. 31 to 36 of 1955 are the second appeals presented by the Municipality; S.A. Nos. 31 to 33 of 1955 are appeals against the reliefs of declaration and refund granted to the plaintiffs while the other appeals are directed against the dismissal of their own appeals to the District Court in which they had attacked the relief of declaration granted in favour of the plaintiffs.

(2.) So far as the appeals filed by the plaintiffs, i.e., S.A. Nos. 1022 to 1024 of 1954 are concerned, I may state at once that there is no substance in the plaintiffs' claim for a permanent injunction. The Municipality is statutorily authorised to levy licence fees and it cannot be prevented from levying them. In any case, where it exceeds its powers, the citizens can always approach the Courts. It would be absurd to direct the Municipality generally not to transgress the law. The only other point argued is that the lower appellate Court erred in declining to award them costs in accordance with the result of their appeals. It is true that the learned Judge has given no reasons. While the Municipality failed in regard to two reliefs prayed for, it succeeded in regard to one and the exercise of discretion in the award of costs was therefore clearly called for and I cannot say it was exercised so perversely as to call for my interference.

(3.) Coming to S.A. Nos. 31 to 33 of 1955, which are the appeals directed against the relief of declaration and the refund granted to the plaintiffs, I am satisfied that the declaration was rightly given and that the relief of refund necessarily followed as a matter of course. It is clear from the terms of the Madras District Municipalities Act and indeed it is not challenged before me that all the Municipality is entitled to do is to levy a fee and not a tax. A fee is in the nature of a charge by way of compensation for services rendered to party from whom it is collected. It is true that there can be no exact coincidence between the amount collected by the Municipality and the amount actually expended by it for exercising supervision and for other incidental purposes. Still there should be a substantial and reasonable agreement between the charges it levies and the service it renders. Now in this case, where for several years the fee did not exceed Rs. 16 it would be contrary to all reasons to suppose that suddenly in the year 1949 the expenses incurred by the Municipality for such service as they render have gone up 15 of 16 times of what they were just a year before. In a case almost similar on the facts reported in The Corporation of Madras v. Messrs. Spencer and Co., Ltd., Mount Road, (1929) 57 M.L.J. 71 decided by a Divisional Bench of the Madras High Court, a decision which is binding upon me, their Lordships held that the raising of a licence fee by the Corporation of Madras for storing spirits from Rs. 25 to Rs. 200 was so unreasonable that the Court declared it an illegal levy and directed a refund of the sum of Rs. 175. It is true that the Court may not be justified in taking upon itself the power conferred by the Act upon the Council, that is to say, the power of determining the proper amount of the fee; but where an enhancement of kind I am dealing with is made, the Court can declare the enhancement illegal, the result of which would be to restore the fee formerly leviable. The refund therefore, directed by the lower appellate Court is in consonance with the decision cited above and must be upheld as perfectly proper. Second Appeals Nos. 31 to 33 must therefore fail.