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2006 Supreme(Cal) 627
High Court Of Calcutta
BHASKAR BHATTACHARYA AND PRABUDDHA SANKAR BANERJEE, JJ.
DIVISIONAL RAILWAY MANAGER, EASTERN Railway, SEALDAH - Appellant
Versus
KALIGHAT RAILWAY PLOT-HOLDERS ASSOCIATION - Respondent
COT 2984 Of 2006
Decided On : 09/21/2006
Aparajita Rao, ASIT KUMAR BANERJEE, P.K.GHOSH, R.N.DAS, RATNAKA BANERJI
Enhancement of license fees by the Railway authority is not arbitrary if based on land valuation and business use of the property, but imposing enhanced fees retrospectively is not permissible as the licensee has the right to decide whether to retain the license or vacate the property based on the new rate.
Headnote:
LICENCE FEES - ENHANCEMENT - RAILWAY LAND - ARBITRARINESS - RETROSPECTIVE EFFECT - PROSPECTIVE OPERATION - RAILWAY BOARD CIRCULAR DATED 29TH AUGUST, 1995 - INTERPRETATION - SECTION 16 OF THE CONTRACT ACT, 1872 - APPLICABILITY.
Fact of the Case:
The Railway authority enhanced the license fees for commercial plots with retrospective effect from 1st April, 1986, by increasing 10% land valuation every year and taking 6% thereof as the license-fees per annum per cottah. The licensees challenged the enhanced fees as arbitrary and violative of Article 14 of the Constitution.
Finding of the Court:
The court held that the policy decision of the Railway authority to assess valuation by fixing 6% of the land value and by enhancing the land-value at the rate of 10% every year cannot be said to be arbitrary. However, imposing new license fees at an enhanced rate from an anterior date is not permissible, as the licensee has the right to decide whether to retain the license or vacate the property based on the new rate.
Issues: 1. Whether the Railway authority's policy decision to enhance license fees is arbitrary and violative of Article 14 of the Constitution? 2. Whether the enhanced license fees can be imposed retrospectively?
Ratio Decidendi: 1. The court held that the policy decision of the Railway authority to enhance license fees is not arbitrary, as it is based on the valuation of the land and the licensees' use of the property for business purposes. 2. The court held that imposing new license fees at an enhanced rate from an anterior date is not permissible, as the licensee has the right to decide whether to retain the license or vacate the property based on the new rate.
Final Decision: The court allowed the mandamus appeal and set aside the order of the learned single judge. However, the court also allowed the cross-objection filed by the respondents and held that the policy decision of enhancement of license-fees would be applicable prospectively from the date of communication of the decision to the licensee.
( 1 ) THIS mandamus-appeal is at the instance of the union of India and is directed against order dated 10th August, 2001 passed by a learned single Judge of this Court by which his Lordship allowed a writ application filed by the respondents and directed the appellant, the railway authority, to issue fresh demand notice for the purpose of realisation of the licence-fees involved therein and to determine the licence-fees in terms of the circular dated August 29, 1995 being annexure 'x' to the affidavit-in-opposition subject to the condition that enhancement of the licence-fees should be made once in five years and not in every year.
( 2 ) BEING dissatisfied, the railway authority has come up with the present mandamus appeal and at the same time, the writ-petitioners have also filed a cross objection alleging that the learned single Judge ought to have held that the licence fees could not be claimed at the enhanced rate with retrospective effect from an earlier date.
( 3 ) THE facts giving rise to filing of the present mandamus appeal may be precised thus :
a) Kalighat Railway Plot Holders Association and its Secretary were the writ-petitioners. By Annexure 'a' to the writ-application, the writ-petitioners have set out the details of the plots of land occupied by the members of the petitioners' association which according to them are held by them on licence under Eastern Railway. Names of 22 licensees with plot numbers were specified in Annexure 'a'. The licensees, according to the writ-petitioners, have been using the said plots of land in connection with the business of various natures, like, dumping of stone chips, coal, cement etc. by raising structures and/or erecting stalls in the plots.
b) The main controversy in the writ-application was with regard to the increase of annual licence-fees. The writ-petitioners questioned the notices, 12 in number collectively marked as Annexure 'h', by which the railway authorities have demanded payment of arrear dues in respect of the revised licence-fees with effect from April 1, 1986 up to 1996-97. the licence-fees determined for the respective years have been specified and after deducting the amount paid towards licence fees by the respective licensees for the period from 1986-87 to 1996-97, the balance amount arrived at has been determined and consequently, claimed.
c) By those notices, respective licensee was informed that the revision of licence fees had been under active consideration since 1st April, 1986 at the rate of 10 per cent per annum as fixed by the railway board which had already been intimated to the petitioners vide demand notice for the year 1995-96. According to the railway authority, since L. A. Collector had furnished the land-valuation of the area in question and the standing committee of the railways approved the same, the petitioners were required to pay the arrear-dues within the time specified therein.
d) According to the writ-petitioners, such revision of licence fees was unjust and was liable to be set aside on the ground of violation of Article 14 of the Constitution of India. Moreover, according to the writ-petitioners such revision of licence fees with retrospective effect from a day ten years ago is totally arbitrary.
(e) In the affidavit-in-opposition filed on behalf of the appellant, it was contended that the members of the association as shown in annexure 'a' were not the authorised licensees and only those persons or concerns whose names appeared in the said list against the serial Nos. 2, 3, 6, 8, 10, 15, 19 and 22 were the authorised-licensees whose licences had been renewed and the modified demand notices for payment of the enhanced rate had been served only upon those eight persons. It was, therefore, contended that other members mentioned in the list appearing as Annexure 'a' to the writ application had no locus standi to move the writ application since their licences had been cancelled in the year 1987.
(f) It was fu
