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2018 Supreme(Bom) 2528
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
A.S. Oka, Riyaz I Chagla, JJ.
Aegis Logistics Limited & Anr. - Appellants
Versus
Municipal Corporation Of Greater Mumbai & Ors. - Respondents
W.P. No. 2225 of 2015
Decided On : 20-07-2018
Navroz Seervai, Adv., Rohan Rajadhyakssha, Adv., Pooja Kshirsagar, Adv., Apporva Gupte, Adv., S.S. Pakale, Adv., Vandana Mahadik, Adv.
The central legal point established in the judgment is the limitation on the Rule making power of the Municipal Commissioner under Section 154 of the Act, and the requirement for rules to conform to the prescribed limits.
Headnote:
Rule 18 - Challenge to Rules framed by Municipal Commissioner under Section 154 of Mumbai Municipal Corporation Act, 1888 - Section 154 - Summary of Acts and Sections: The court discussed the constitutional validity of subordinate legislation and the grounds on which it could be challenged. It highlighted the provisions of Section 154(1A) and (1B) and their limitations, and concluded that Rule 18 exceeded the Rule making power conferred by the Act.
Fact of the Case:
The Petition challenged Rule 18 of the Rules framed by the Municipal Commissioner under Section 154 of the Mumbai Municipal Corporation Act, 1888, regarding the fixation of capital value of storage tanks for property taxes. The Petitioners objected to the rates fixed in the Rule and the subsequent property tax bills issued to them.
Finding of the Court:
The court found that Rule 18 exceeded the Rule making power conferred by the Act, specifically in clauses (b) of both sub rules 1 and 2, and declared them ultra vires the provisions of the Act. It directed the Municipal Corporation to revise the impugned bills and held that recovery on the basis of the impugned bills cannot be made unless revised.
Issues: The issues revolved around the constitutional validity of subordinate legislation, specifically Rule 18, and the authority of the Municipal Commissioner to frame rules under Section 154 of the Act.
Ratio Decidendi: The court's decision was based on the interpretation of Section 154(1A) and (1B) of the Act, which limited the Rule making power of the Commissioner to specific aspects. It concluded that Rule 18 exceeded the prescribed limits and declared it ultra vires the Act.
Final Decision: The court struck down clauses (b) of both Sub Rule 1 and Sub Rule 2 of Rule 18, directed the Municipal Corporation to revise the impugned bills, and provided guidelines for the revision and adjustment of amounts payable by the Petitioners.
JUDGMENT
A.S. Oka, J. - Notice for final disposal was issued and on the last date, the parties were heard. By this Writ Petition under Article 226 of the Constitution of India, the challenge is to the Rules purportedly framed by the Municipal Commissioner of the Brihanmumbai Municipal Corporation (for short "the said Corporation") in purported exercise of powers under sub-section 1(B) of Section 154 of the Mumbai Municipal Corporation Act, 1888 (for short "the said Act"). The challenge is to the provision of Rule 18 of the Rules framed in purported exercise of powers under sub-section 1B of Section 154 of the said Act. The said Rules are the Factors and Categories of Users of Buildings or Lands (Assignment of Weightages by Multiplication) Fixation of Capital Value Rules, 2010 (for short "the said Rules"). We may note that the said Rules were revised in the year 2015 and now Rule 18 has been deleted.
The challenge in this Petition is confined to Rule 18 of the said Rules mainly, on the ground that the Commissioner has framed the said Rule 18 by exceeding the limits of the authority conferred upon him by sub- section 1B of Section 154 of the said Act.
2. The grounds on which the constitutional validity of a statutory Rule could be challenged are well settled by several decisions of the Apex Court. We may refer only to one such decision in the case of State Of Tamil Nadu & Anr vs P. Krishnamurthy and Others. , (2006) 4 SCC 517. Paragraph 15 of the said decision reads thus:-
15. There is a presumption in favour of constitutionality or validity of a subordinate legislation and the burden is upon him who attacks it to show that it is invalid. It is also well recognised that a subordinate legislation can be challenged under any of the following grounds.:-
(a) Lack of legislative competence to make the subordinate legislation.
(b) Violation of fundamental rights guaranteed under the Constitution of India.
(c) Violation of any provision of the Constitution of India.
(d) Failure to conform to the statute under which it is made or exceeding the limits of authority conferred by the enabling Act.
(e) Repugnancy to the laws of the land, that is, any enactment.
(f) Manifest arbitrariness / unreasonableness (to an extent where the court might well say that the legislature never intended to give authority to make such rules)."
3. With a view to appreciate the submissions canvassed across the bar, a reference to few relevant provisions of the said Act will have to be made. Chapter VIII of the said Act deals with Municipal Taxes which include property tax. Section 139 A defines what property tax consists of. The property tax consists of water tax, water benefit tax, sewerage tax, sewerage benefit tax, general tax, education cess, street tax and betterment charges.
There are provisions made by the Maharashtra Act of 11 of 2009 by amending the said Act under which an option is provided to levy property taxes on the capital value of the properties instead of traditional rateable value. For that reason, by the said Act No.11 of 2009, Section 140 A was added which enables the said Municipal Corporation to pass a resolution to adopt levy of property taxes on buildings and lands on the basis of capital value of the buildings and lands on and from such dates and at such rates as the Municipal Corporation may determine in accordance with provisions of Section 128 of the said Act.
4. Section 154 is relevant for our consideration which reads thus:-
1) In order to fix the rateable value of any building or land assessable to a property tax, there shall be deducted from the amount of the annual rent for which such land or building might reasonably be expected to let from year to year a sum equal to ten per centum of the said annual rent and the said deduction shall be in lieu of all allowances for repairs or on any other account whatever.
[2] [(1A) In order to fix the capital value of any building or land assessable to a property tax the Commissioner shall hav
