The main legal point established in the judgment is that the municipality's right to charge licence fee for occupation of land or property depends on ownership rights vested in the municipality under Section 138 of the Rajasthan Municipalities Act, 1959. The court concluded that the municipality did not have the right to charge licence fee for the use of subsoil without permission or bye-laws.

R. BALIA, J.

( 1 ) HEARD learned counsel for the parties.

( 2 ) ). This writ petition relates to the claim made by the petitioner-Municipal Board, rajsamand to charge an amount by way of purported licence fee for the user of subsoil of land within the land adjacent to public road situated within the limits of Municipal Board, Rajsamand, by the respondent no. l.

( 3 ) THE respondent No. l had laid an underground pipeline of 4 Kms. in length with the pipe of two feet circumference from rajsamand to its factory gate situated at kankroli. This pipeline runs throughout all along the pipeline laid by Public Water works. The pipeline was laid in the year 1976. The permission for laying down such an underground pipeline from Rajsamand lake to the factory gate of the respondent no. 1 was granted by the Public Works Department, Udaipur vide letter dated 7-1- 1975.

( 4 ) ). On an audit objection being raised in the year 1982-83 that the respondent is using the land of Municipality by laying down the pipeline 4 Kms. without making any payment to the Board and required the board to charge Rs. 96. 57. 200/- as fees from the respondent No. l company for the period commencing from 1-1-1976 to 31st march, 1984 @ 25 Paise per running feet for the entire distance of pipeline. This amount appears to have been scaled down to Rs. 7,30. 620/- for the same period by the audit Department itself, finding a calculation mistake.

( 5 ) ). The audit objection has initially been raised that monthly rent for the land occupied by pipeline beneath ground was rs. 7,800/- per month or Rs. H. ,73,600/- per year. The computation of rent per annum on the basis of rent fixed per mensem was apparently erroneous. This amount was scaled down by reducing the amount of demand as per the audit objection for the period between January, 1976 to 31st March, 1984 proportionately after issuing the notice for raising the demand in pursuance of the aforesaid objection vide Annexure/6 dated 26-7-1984. A demand notice was issued by the Municipal Board, Rajsamand vide Annexure/7, dated 2-3-1985 calling upon the respondent No. 1 company to pay the amount of arrears up to 31st March, 1984 ajid annual licence fee for the year 1984-85 as Rs. 11,73,600/ -.

( 6 ) ). This demand was challenged by way of appeal before the Sub-Divisional Officer, rajsamand under S. 139 of the Rajasthan municipalities Act, 1959,

( 7 ) ). The S. D. O. , Rajsamand vide order dated 8-12-1987 allowed the appeal and set aside the demand dated 17-4-1985 which is Annexure/8 containing the subsequent demand up to 31-3-1985.

( 8 ) ). The respondent-company has raised multiple objection which included that the road in question which leads to Kankroli railway Station is maintained by P. W. D. and it is not vesting in Municipality. It was pointed out that as per the Notification issued by the State Govt. in exercise of its powers under S. 92 (2) of the Act of 1959 the road in question along with 15 meter land on both sides of the road has been reserved by the State Government and it does not vest in the Municipal Board in view of the provisions of S. 92 (2) of the Act of 1959; that under S. 138 the Municipal Board has no right to issue licence or grant permission for laying pipeline beneath the ground; and that without framing bye-laws no licence fee under S. 138 (2) can be claimed. Along with these objections, specific plea was taken that while audit objection was raised for recovering rent, demand has been created on the basis of audit objection for charging licence fee which is not leviable.

( 9 ) ). The S. D. O. affirmed that in terms of notification dated 1-12-1968 published in rajasthan Gazette dated 1-5-1969, the land in question does not vest in Municipality and the land within 15 meters on both sides of the road was not available for grant of lease and, therefore, question of raising any demand on account of licence fee or rent does not arise. The S. D. O. also found that there is no difference b