Important Point
Nagpal’s case 1988(3) SCR 274 does not require reconsideration. However, as Rule III(d)(i) was struck down not on the ground that Bombay Municipal Corporation was incompetent to frame such Rule but on ground that clear provisions not having been made, thus, if Municipal Corporation has refunded water charges to the parties it cannot recover it back from them. However, if such amounts are not refunded and are retained by Corporation, such amounts shall not be refunded to the parties.

Headnote:(i) Bombay Municipal Corporation Act, 1888-Sections 141 and 169-Water charges-Rules III(d)(i) framed under-Vied of Bombay High Court that said rule was invalid and beyond the Rule making power of Corporation was upheld by Supreme Court in Nagpal’s case 1988(3) SCR 274-Appeals to Supreme Court contending that Nagpal’s case requires re-consideration-Whether correct? (No).
       Held : We do not think that there is any good reason to reconsider the decision in Nagpal’s case. The view taken by this Court in Nagpal’s case is a plausible one and subsequently that Rule having been deleted is now replaced by a new rule. We respectfully follow the view expressed by this Court in Nagpal’s case and uphold the order made by the High Court. (Para 3)
       (ii) Bye-Laws made in 1968-Rule III(d)(i)-Scope of the quota Rule of water charge-Rule struck down not on the ground that it was incompetent but on the ground that such rule had been framed inarticulately and was not clear enough -Effect-Refund if made cannot be recovered by Corporation but if refund is yet to be made, it need not be made-Appeals partly allowed.
       Held : The High Court having allowed the petitions has directed the refund of the amounts with certain rates of interest and if those amounts have already been refunded to the parties concerned, we do not think it appropriate to allow the appellants to recover such amounts again but if, however, such amounts have not been refunded and are retained by the Corporation, such amount shall not be refunded. We are making this order being conscious of the fact that the rule had been struck down not on the ground that it was incompetent to frame such Rule but on account of clear provisions not having been framed. Further, we are not sure in the absence of investigation as to whether the respondents had included in their price structure the amounts paid to the Corporation pursuant to the demand raised under the invalidated rules and whether the burden had been passed on to the consumers, in which event it will be wholly inequitable to allow respondents to claim such amounts back from the Corporation. (Para 5)
       (iii) Contract Act, 1872-Section 72-Refund of Payment made under mistake of law-Petitioner paid water charges under Rule-Rule later struck down-Refund claimed after expiry of reasonable period-Whether can be allowed? (No).
       Held : This is not a case where the provisions of the rule which enabled the levy of water charges was struck down on the ground that it was incompetent but on a ground that such rule had been framed inarticulately and was not clear enough. Payment made by the petitioner should be treated as having been made by mistake but once a declaration of law had been made by the Bombay High Court on 16th September, 1987, it was open to the petitioner to claim for recoveries and the same should have been made within a reasonable time thereafter. In ascertaining what is reasonable time for claiming refund, the courts have often taken note of the period of limitation prescribed under the general Law of Limitation for filing of suits for recovery of amount due to them. In the present case also that standard adopted by the High Court is the same in ascertaining whether there has been laches on the part of the appellant in seeking relief in due time or not. The finding clearly recorded is that long after the charges had been paid and law had been declared by the Court, the writ petition has been filed and, therefore, such a refund should not be allowed. We do not think such a view taken by the High Court calls for interference under Article 136 of the Constitution. Hence we dismiss the petition. (Para 9)

Judgment

S. Rajendra Babu, J.-

C.A. 1179/ 94 & SLPs (C) Nos. 15507/87, 853/88 and 14587/87

In SLPs leave granted.

2. In this batch of cases, the appellant is Municipal Corporation of Greater Bombay, which has made provisions for Water Charges by framing appropriate Rules and Bye-laws pursuant to Section 141 and Section 169 of the Bombay Municipal Corporation Act, 1888. The scope of these provisions was considered in Municipal Corporation of Greater Bombay v. Nagpal Printing Mills & Anr.1, by this Court and the view of the Bombay High Court that Rule III(d)(i) to be invalid and beyond the rule making power of Corporation was upheld. It was made clear by this Court in the said decision that the said provisions of the Act would empower the Corporation to levy charge only in respect of water that has in fact been supplied to and consumed by the consumer and it is to be levied on the basis of measurement or estimated measurement. It is also noticed that an estimated amount could be fixed on the basis of sound guidelines and the power given to the Commissioner to fix a quota has no guidelines. On the basis of this decision, the High Court disposed of several matters. Challenging the correctness of those decisions, these appeals have been preferred before this Court contending that the decision in Nagpal’s case requires reconsideration and the provisions of the Municipal Corporation Act considered earlier have been relied upon to contend that the appellant has competence to frame Rule III(d)(i) while the respondents have reiterated the view expressed in Nagpal’s case. On hearing this aspect, a Bench of two learned Judges referred this matter to a larger Bench for consideration of the correct scope of the provisions that were considered in Nagpal’s case. Thus the matter is before us.

3. We do not think that there is any good reason to reconsider the decision in Nagpal’s case. The view taken by this Court in Nagpal’s case is a plausible one and subsequently that Rule having been deleted is now replaced by a new rule. We respectfully follow the view expressed by this Court in Nagpal’s case and uphold the order made by the High Court.

4. However, Shri S.K. Dholakia, learned Senior Advocate for the appellant submitted that at any rate this Court had no occasion to examine the scope of the quota rule, and, therefore, it need not have made the observations to the following effect:-

“The bye-laws made in 1968 here empower the Commissioner to fix a quota. But no guideline is indicated. That is bad and unwarranted.”

This aspect also need not be re-examined because subsequently by the rules framed in 1994 the definition of quota has been altered and whether the present rule answers the objections noticed by this Court in Nagpal’s decision need not be examined as the new Rules are not in question before us.

5. The High Court having allowed the petitions has directed the refund of the amounts with certain rates of interest and if those amounts have already been refunded to the parties concerned, we do not think it appropriate to allow the appellants to recover such amounts again but if, however, such amounts have not been refunded and are retained by the Corporation, such amount shall not be refunded. We are making this order being conscious of the fact that the rule had been struck down not on the ground that it was incompetent to frame such Rule but on account of clear provisions not having been framed. Further, we are not sure in the absence of investigation as to whether the respondents had included in their price structure the amounts paid to the Corporation pursuant to the demand raised under the invalidated rules and whether the burden had been passed on to the consumers, in which event it will be wholly inequitable to allow respondents to claim such amounts back from the Corporation.

6. We, therefore, partly allow appeals to the limited extent of allowing the appellants to retain amounts not refunded to the respondents, at the same time maki

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1998 Supreme(SC) 399

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