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2019 Supreme(Cal) 954

IN THE HIGH COURT OF CALCUTTA
Shampa Sarkar, J.
Chitta Ranjan Chatterjee - Appellants
Vs.
Kolkata Municipal Corporation and Ors. - Respondent
W.P. 23195 of 2015
Decided On : 18-09-2019

Advocates Appeared:
For the Appellant : Saptangshu Basu, Nilanjan Bhattacharjee and Dipanjan Sinha Roy
For the Respondents: Alok Kumar Ghosh, Piyali Sengupta, Manisha Nath, Sumit Kumar Panja, Subrata Banerjee and Sumana Sinha

KMC, as a statutory body, must act within the provisions of the statute and is not authorized to claim LUC for displaying advertisements on structures under the control and management of another statutory body, HRBC.

Headnote:

LUC - Land Utilisation Charges - Kolkata Municipal Corporation Act 1980 Chapter XIV - The court quashed the demand for LUC by KMC for display of advertisements, hoarding glow signs etc. on structures erected on flyovers and bridges on sites which had vested in HRBC and were under the control and management of HRBC. KMC being the creature of a statute must act within the four corners of the statute. An overall analysis of the provisions of Section 130, 202, 203 and 204 (as applicable at the relevant point of time) of the KMC Act, makes it abundantly clear that KMC is not authorized to claim LUC from the petitioner.

Fact of the Case:

The petitioner, the proprietor of M/s. Mahamaya Advertising, impugned the demand for an amount of Rs. 41,77,989/- as Land Utilisation Charges (LUC) issued by the Kolkata Municipal Corporation (KMC) for displaying advertisements on structures erected on flyovers and bridges under the control and management of Hooghly River Bridge Commissioners (HRBC). The petitioner had participated in the tendering process and had paid the required fees and taxes to HRBC as per the terms and conditions of the contract.

Finding of the Court:

The court found that KMC did not have the authority to impose land utilization charges for display of advertisements on structures erected on flyovers and bridges on sites which had vested in HRBC and were under the control and management of HRBC. The court quashed the demand for LUC by KMC.

Issues: The main issue was whether the petitioner was liable to pay LUC to KMC for displaying advertisements on structures erected on flyovers and bridges under the control and management of HRBC.

Ratio Decidendi: The court's decision was based on the provisions of Section 204 of the KMC Act and the consequent power of the KMC to claim tax on advertisement. The court concluded that KMC was not authorized to claim LUC from the petitioner as it must act within the four corners of the statute.

Final Decision: The writ petition was allowed and the demand for LUC by KMC was quashed. There was no order as to costs.

ORDER :

Shampa Sarkar, J.

1. The petitioner is the proprietor of M/s. Mahamaya Advertising. In this writ petition, the petitioner has impugned the demand for an amount of Rs. 41,77,989/- as Land Utilisation Charges (in short LUC) vide Bill Nos. 2013-2014L00833, 2014-2015L02716, 2014-2015L02717, 2014-2015L02718, 2014-2015L02719, 2015-2016L00566, 2015-2016L00567, 2015-2016L00568, 2015-2016L00569, 2013-2014L00834, 2014-2015L02720, 2015-2016L00570, 2015-2016L00571, 2015-2016L00572 and 2015-2016L00573 dated July 24, 2015 issued by the Kolkata Municipal Corporation.

2. The respondent No. 2, namely, Hooghly River Bridge Commissioners (in short HRBC) through the office of the respondent No. 3, that is, the Director (Pr. and Co.) issued notices, inviting tenders. Agencies, individual firms and' individual advertisers, who had adequate capacity to fabricate, erect and illuminate different types of display boards, hoardings, kiosks on different structures over bridges, flyovers, piers etc. were called upon to participate in the tender process.

3. The petitioner participated in the tendering process and the HRBC by two letters of acceptance dated June 12, 2013 and July 22, 2013 accepted the petitioner as the successful bidder for the job described in the tender notices. Agreements to that effect were also executed between the petitioner and the HRBC. HRBC permitted the petitioner to erect hoardings, kiosks, gantries etc., at their allotted site as described in the agreement out of the sites at Vidyasagar Setu, Gariahat Flyover, A.J.C. Bose Road Flyover, Beck Bagan Ramp, Park Street Flyover, Nager Bazar Flyover (Dum Dum), Kidderpur Flyover and Bridge all under the Hooghly River Bridge Commissioners. The petitioner was also required to erect installation and structures in order to display the advertisements on the basis of the terms and conditions of the tender process. The original site allotted was subsequently replaced. The petitioner in lieu of such selection had to pay to HRBC, the accepted value of each of the contracts as mentioned in the bid document. The contractor was also required to pay the amount as contained in terms and conditions of contract and instructions to bidders. Clauses 7, 8 and 12 of the instructions are set out below being relevant in this context.

    "7. A security deposit @ 10% of the value of the accepted contract should be submitted by the successful bidder along with his bid money, which should be valid for 3 years i.e upto 6 months beyond the stipulated period of contract (the contract period is 36 months i.e 3 Years in this case). After expiry of contract and subsequent removal of hoarding structure within stipulated time the security deposit will be refunded without interest.

8. On issue of LOI (Letter of Intent) after completion of the structure the entire sum covering the chargers for 3 years (36 months) commencing from 61st day from the date of issue of LOA or date of erection of display board (whichever is earlier) as has been stipulated in the foregoing paragraphs No. 3, has to be deposited. '

On completion of the period of 3 years (36 months) the successful bidder will have to remove all his structures and displays at his own const within 15 days commencing from - the date of completion of 3 years. Failure to remove the structures/displays after the expiry of the contract period plus 15 days as mentioned above, shall be at the risk and const of the successful bidder. The bidder will have no right on the display board or materials left on the structures or at the ground the HRBC. shall have full authority to remove those and dispose as will be considered appropriate by HRBC Authorities. The security deposit will be forfeited.

It is to be clearly understood by the tenderers that during the currency of their contract, access to the structures of flyover has to be made available to HRBC by temporary removal of the structures for carrying out maintenance work, at no cost to HRBC and there will be no rebate for such i

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