IN RE: CITY MUNICIPAL ACT, IV OF 1919 AND OF SECTION 99 CLAUSE 2 THEREOF; IN RE: SPECIFIC RELIEF ACT, SECTION 45 AND MR O THANIKACHALLAM CHETTIAR Vs. AND

JUDGEMENT

(1.) This is an application by Rao Bahadur O. Thanikachalam Chettiar, one of the Commissioners of the Corporation of Madras and also a rate, payer, for an order directing that the President of the Corporation of Madras do allow the Municipal Councillors to consider and vote upon the proposition referred to in the Notice of Motion, which proposition was formally moved and seconded at a meeting of the Corporation and which the President ruled out of order. The resolution which was moved and seconded runs as follows: "This Council resolves that a reduction be, made of property tax to the extent of per cent, and if the financial position of the Corporation would not admit of such reduction, then the proposals for increase to the staff, increased grants and for revision of the Works Department sanctioned during the budget discussion be suspended from being given effect to during the coming year.

(2.) The facts which led to the present application as appear from the affidavits are shortly as follows Under the Municipal Act a budget has to be prepared by the Commissioners containing a detailed estimate of income and expenditure for the ensuing year, together with a statement as to whether it is necessary to raise any additional taxation or raise any fresh loans. This budget framed by the Commissioners has to go to the Standing Committee and that Committee has to consider the budget and prepare a budget for the consideration of the Corporation. Section 155 of the City Municipal Act, which refers to the duties of the Standing Committee as to budget, states that the proposals made by the Commissioners shall be considered and the budget shall be framed for the next year. Two essentials are prescribed in such a budget, namely, (1) a provision for payment, as they fall due, of all instalments of principal and interest for which the, Corporation may be liable on account of loans, and (2) allowance for a cash balance at the end of the year of not less than one lakh of rupees. The budget so framed by the Standing Committee has to be printed and circulated to each Municipal, Commissioner. Section 156 provides for a meeting to be held some day in February, at which meeting the budget has to be laid before the entire body of Councillors. Section 157 refers to the procedure to be followed when such budget is laid before the Commissioners. It runs as follows: "The Council may refer the budget-estimate to the Standing Committee for further consideration and re-submission within a specified time, or adopt the budget estimate or any revised budget estimate submitted to it, either as it stands or subject to such alteration as it deems expedient; provided that the budget estimate finally adopted by the Council" shall make adequate and suitable provision for each of the matters referred to in Clauses (a) and (b) of Section 155, Sub-section (2)" Section 158 refers to the Council finally passing the budget estimate and submitting a copy to the Governor in council. In pursuance of these provisions of the Act, a budget was prepared by the Commissioner, was considered by the Standing Committee and was printed and circulated to the Municipal Commissioners and came on for discussion at a meeting of the Commissioners held on the 1 March. At that meeting Mr. Renganatham Chetty, an elected Councillor, wanted to move a reduction of the tax on property appearing in the budget by 1 per cent, but according to the affidavit of Mr. Thanikachellam Chetty, the President asked him not to move it then and stated that the question of the reduction of tax might be considered after the items of expenditure had been considered by the Council. Mr. Thirumalai Pillai in his counter-affidavit admits this fact, but states that the sense of the meeting was that the expenditure should be considered first and that the Council would then be able to know what the closing balance would be and be in a position to decide the extent to which, if any, property tax could be reduced. Mr. Thirumalai Pillai admits that he requested Mr. Renganatham Chetty to move his proposition when they came to the item of receipts. On this assurance the proposition was not pressed and the Corporation went on with the consideration of the items of expenditure. The work not having been finished on that day, the meeting was adjourned to Saturday, the 8 March, when the further items of expenditure were discussed and there were increases made in the items of expenditure. The meeting was adjourned to the 12 March for further consideration of the budget. On the 12 March, after the items of expenditure were considered, Mr. Renganatham Chetty moved his resolution for the reduction of property tax by 1 per cent, and that was duly seconded. The President, Mr. Thiramalai Pillai, however, refused to put it before the meeting and ruled it out of order. On his being ruled out of order, Mr. Thanikachellam Chetty proposed the proposition which I have already set out in the opening of my judgment. He moved it and his proposition was seconded by Mr. Narayanswamy Chetty. Then one of the Commissioners, Mr. Venugopala Chetty drew the attention of the President that there was a proposal for the reduction of property tax the previous year, and while he was proceeding, he was interrupted by the President who observed that the proposition had been moved and seconded and that Mr. Venugopala Chetty should wait and see whether the President was going to allow it or not and that it was possible that he might rule it out of order. He then read the provisions of Secs.99 and 157 of the Act. His objection to the consideration of the amendment moved by Mr. Thanikachellam Chetty was that, having voted the items of expenditure and the statutory balance of one lakh of rupees not being maintained if there was a reduction of property tax, the proposition was out of order. He also thought that they cannot send the budget back to the Standing Committee for further consideration. No definite ruling was given. But at this stage another Councillor intervened and wanted to know whether it would be practicable if the budget was referred to the Standing Committee without discussing it there. Then there, were further discussions and the mover gave his reasons against the view that the procedure he followed was not in conformity with the Act. Meantime one of the Councillors interrupted and said that a ruling had been given and the President stated that the ruling given stood, but so far as the proceedings go, till that stage there seems to have been no ruling one way or the other beyond a discussion with several interruptions. Then again one of the Commissioners said that in his view the Council could refer it back to the Standing Committee for further re-consideration and the President stated that after having been considered by the Standing Committee, it could not be referred back for further consideration, Mr. Vysa Rao expressed some surprise and the President said that it could not be done and that was his ruling. Then there was further discussion and eventually the proposition was not placed before the meeting, the President ruling it out of order.

(3.) So far as the proceedings, which have been filed before me, of the meeting of the 12th March are concerned, the reasons given by the President for ruling the motion out of order were that the Commissioners could not refer the budget back for consideration by the Standing Committee and that to allow the resolution would involve a breach of the condition in Section 155, as to the statutory requirement of one lakh to be shown as balance in the budget. Out of all the discussions and interruptions that took place at the meeting of the 12th March, these two facts emerge as the reasons given by the President for his ruling. It seems to me to be clear that if this proposition had been moved on the 1 March, before the items of expenditure were taken into consideration, it would have been in order. So far as the property tax is concerned, the provisions of the Municipal Act are clear. Section 99 which deals with property tax refers to the tax being levied, at a consolidated rate on all buildings and lands within the city save those exempted and states that it shall comprise a water and drainage tax, lighting tax and tax for general purposes and that subject to the special exemptions there, or alterations referred to in Section 102, that tax shall be levied at rates fixed at percentages of the annual value of lands arid buildings, such rates being determined by the Council", so that the rates of the property tax are a matter to be determined by the Council and it is open to the Council within the sliding scale prescribed by the Act to state what the tax is. The budget which was framed and which was for discussion took the basis of the tax at the rates which were in force in that year. On page 10 of the printed budget the heading "Municipal rates and taxes" comprises Clauses (a) to (h), the tax on properties being Clauses (b) to (g). They give the percentage. Having regard to Section 99 of the Act, it seems to me there is a statutory duty on the Councillors to fix what the rates of the taxes are. It is open to them to have the same rates as in the previous year or to vary the tax in their discretion. If before the expenditure was considered at the meeting of the first March, a Councillor proposed that this tax should be reduced, I think he would have been perfectly in order. What happened was that as they had to begin either income or expenditure in the first instance, the President or the majority of the members thought that it would be better to proceed with the expenditure first. But it is perfectly obvious that, there was this resolution tabled before them for consideration, which they had to consider either then or afterwards and it is obvious that a reduction in the income would necessitate a re-adjustment in the expenditure, especially where the statutory minimum of one lakh had to be maintained. The only reasonable view to take in this matter is that the items of expenditure which were dealt with first were provisionally dealt with on the assumption that a reduction might have to be made in them if the income was to be reduced. I am unable "to see how with a postponement of the discussion of the reduction of the income it can be said that there was a final decision as to expenditure. So far as I can see, the proper stage at which anybody should have moved, the proposition which was tabled to come on at the opening of the discussion on the 1 March would be a time when according to the sense of the meeting or ruling of the. President on the 1 March, the expenditure had been considered, and that was the opportunity first taken by Mr. Renganatham Chetty to move his propostiion. I find it difficult to see how, having deferred the consideration of the reduction of the tax which was moved on the 1st, till the expenditure was considered, anybody can turn round and say, "Very well, you have considered the expenditure. Now your motion automatically goes", without any discussion, or without the Council being given an opportunity of considering, whether on the merits that proposition was sound or unsound. To do so would, I think, be obviously unjust, as it puts off the discussion of an important matter till the discussion as to expenditure and then rules out the motion, not on the merits but because something was done in the meantime, though the original proposition itself was held in abeyance.