IMPORTANT POINT
A Municipality has no right to demand service charges from Union of India, if such a demand is made it is clearly ultra vires its power. Early summary dismissal in WP/SLP does not constitute res judicata in deciding the controversy.

ORDER

Leave granted.

2. We have heard learned counsel on both sides.

3. The respondent-Municipality had made a consolidated outstanding demand for a sum of Rs. 1,01,501/- for years 1993-94, 1994-95 on December 16, 1993 towards the service charges. The appellants challenged the validity of the demand. On reference, the Division Bench in the impugned order dated May 15, 1995 in CWJC No. 3223/94 upheld the demand of the Municipality. Thus this appeal by special leave.

4. The controversy is no longer res integra. This Court in Union of India v. Purna Municipal Council & Ors.1, had held that Section 135 of the Railways Act is subject to the provisions of Article 285 of the Constitution. Therefore, the respondent-Municipality was restrained from demanding any payment by way of service charges from the Railways. Shri M.P. Jha, learned counsel appearing for the Municipality sought to rely on Clause (4) of Section 135 of the Railway Act which contemplates a contract between the Central Government and the Municipality and payment thereof on the basis of the said contract. In this case the contract now sought to be relied upon is only to relieve distress warrant pending disposal of the dispute in the High Court. Therefore, it cannot be construed that there is any contract between the Union of India and the Municipality. In view of the fact that the Municipality has no right to demand service charges from the Union of India, the demand made by the Municipality is clearly ultra vires its power. It is true that ealier W.P. No. 2844/92 was filed and was dismissed by the High Court and the special leave was refused by this Court on ground of gross delay.

5. It is now settled law that the summary dismissal does not constitute res judicata for deciding the controversy. Moreover, this being recurring liability which is ultra vires the power, earlier summary dismissal of the case does not operate as a res judicata.

6. The appeal is accordingly allowed. Writ is issued as prayed for. Whatever amount has been paid by now cannot be recovered from the Municipality. No costs.

Appeal allowed.

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Parallel Citations of other Journals : .

Union of India & Anr. v. Ranchi Municipal Corporation, Ranchi & Ors., 1996(2) Supreme 518

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