JAGATRAM DASWANI Vs. STATE OF MADHY PRADESH

JUDGEMENT

(1.) THIS is a petition under Article 226 of the Constitution by a number of merchants doing business within the limits of Municipal Council, Murwara (Katni), challenging the validity of imposition of octroi duty on certain articles by that municipality. Many questions have been raised and we will deal with those questions giving the relevant facts in respect thereof separately.

(2.) MURWARA municipality was first established under the C. P. andBerar Municipalities Act (hereinafter referred to as the old Act), and the last elections to that municipality took place in 1958. With effect from 1st February 1962 the M. P. Municipalities Act came into force (hereinafter referred to as the new Act). Section 2 (2) of the new Act continued all the municipalities which had been constituted and elected under the old Act. Fresh elections were held under the new Act in 1964, but they were set aside by the High Court and the body elected under the old Act continued to hold office. In view of the fact that in a large number of towns old bodies elected long back were holding office, the State Government issued an ordinance whereby a new section 36-A was added to the M. P. Municipalities Act. The effect of adding this section was, and there is no dispute about it, that the municipal council which was then in power stood dissolved. The relevant part of this section is as follows :- "......then such deemed council shall on the date of commencement of the said Ordinance stand dissolved and the provision of section 328 shall apply in respect thereof." By this addition of section 36-A two effects were created-(1) that the Municipal Council, MURWARA stood dissolved ; and (2) that section 328 of the M. P. Municipalities Act became applicable to this municipal Council. This section 328 gives power to the State Government either (1) to dissolve a council; or (2) to suspend a council; or (3) to supersede a council for a period. By sub-section (6) of this section, in all these cases, the State Government has been given the power to appoint an administrator. Therefore, the effect of the ordinance adding section 36-A to the new Act and thereby applying section 328 of that Act to this council was that this council stood dissolved and the powers given to the State Government under section 328 became applicable to this council. Clause (b) of the said sub-section (6) authorises the State Government as follows:-

(3.) IN this connection the learned counsel further contended that the municipal council itself acts as a delegate from the legislative body and the procedure prescribed by the Municipalities Act is the only safeguard against the municipal council exercising the powers arbitrarily. Where a municipal council does not exist and a single person has to exercise the powers, that safeguard disappears and any exercise of delegated power must be deemed illegal. We do not see any force in this contention because in this particular case a mere proposal was made by the administrator. The objections filed by the public were later considered by an elected body and the tax was ultimately imposed by a resolution of the elected body. Moreover, this municipality was highly indebted to the State Government. Under section 162 of the Act the State Government has the power to require a council to impose a particular tax and the Government had in fact threatened to exercise this power if the council did not proceed with the imposition of this octroi duty. This imposition was therefore not merely a freak of the mind of the administrator but in the circumstances of this council the tax had to be imposed and the State Government was in full concurrence with this imposition. Even the proposals were submitted by the administrator to the State Government and had been approved by it. We therefore do not agree that the proposals made by the administrator were wholly non est and consequently the imposition is vitiated.