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The Sholapur Municipality Vs. Shivram Bhagwant Sarode - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberSecond Appeal No. 736 of 1926
Judge
Reported inAIR1928Bom282; (1928)30BOMLR715
AppellantThe Sholapur Municipality
RespondentShivram Bhagwant Sarode
DispositionAppeal dismissed
Excerpt:
.....land, is correct, the appeal must consequently fail. in the present case, the auction was held on the 16th and if the fee bad been below.....patkar, j.1. [his lordship, after stating facts of the case, proceeded:] the right to levy fees for temporary occupation of open sites vested in the municipality is authorized under section 70 of the bombay district municipal act, iii of 1901, and the municipality is empowered under section 46(i) and 48(n) to make rules and by-laws in connection therewith. it is not urged that the rules and by-laws notified by public notice, exhibit 81, are ultra vires. the municipality, therefore, had a right to levy fees on the scale fixed by exhibit 31.2. it is urged on behalf of the municipality that the right to levy fees is included in the right to levy toll within the meaning of section 81a of the bombay district municipal act, iii of 1901.3. section 3, clause (14), defines 'tax' as including any.....
Judgment:

Patkar, J.

1. [His Lordship, after stating facts of the case, proceeded:] The right to levy fees for temporary occupation of open sites vested in the Municipality is authorized under Section 70 of the Bombay District Municipal Act, III of 1901, and the Municipality is empowered under Section 46(i) and 48(n) to make rules and by-laws in connection therewith. It is not urged that the rules and by-laws notified by public notice, Exhibit 81, are ultra vires. The Municipality, therefore, had a right to levy fees on the scale fixed by Exhibit 31.

2. It is urged on behalf of the Municipality that the right to levy fees is included in the right to levy toll within the meaning of Section 81A of the Bombay District Municipal Act, III of 1901.

3. Section 3, Clause (14), defines 'tax' as including any toll, rate, case, fee or other impost leviable under the Act. A toll is, therefore, quite distinct from a fee referred to in Section 3, Clause (14). The toll, however, referred to in Section 81A must refer to the toll dealt with in part (5) of Chapter VII of the Bombay District Municipal Act, HI of 1901. Sections 75 to 81A deal with octroi and tolls, whereas the right to charge fees for occupation of Municipal lands is dealt with in part (3) of Chapter VII, and is authorized under Section 70 of the Bombay District Municipal Act. The toll, referred to in Section 81 A, there fore, cannot include the fee authorized under Section 70.

4. It is further contended that the Municipality has a right under Section 40 of Act III of 1901 to enter into a contract which they may consider necessary or expedient in order to carry into effect the provisions and purposes of the Act. The purpose of the Bombay District Municipal Act is to levy fees authorized under Section 70, and the auction sale or the right to lease the levy of such fees does not fall within the ambit of any of the provisions or the purposes of the Municipal Act. It is stated in Halsbury's Laws of England, Vol. VIII, Article 805, page 359, as follows :-

Where a corporation is created by statute, its powers are limited and circumscribed by the statute creating it, and extend no further than is expressly stated therein, or is necessarily and properly required for carrying into affect the purposes of its Incorporation. What the statute does not expressly or impliedly authorize is to be taken to be prohibited. If, for instance, the subject-mater of a contract is beyond the scope of the constitution of the corporation, it is ultra vires, that is, it is beyond the powers of the corporation to make the contract, which is therefore void ab initio and cannot be ratified.

5. We may also refer here to the cases of Municipal Council, Kumbahonam v. Abbahs Sahib I.L.R.(1911) Mad. 113 and Dundee Harbour Trustees v. D. & J. Nicol. (1915) A.C. 550

6. We have, therefore, to look to the statute in order to find out whether any power is given to the Municipality, either expressly or by necessary implication to lease or auction the right to levy the fees due for temporary occupation of Municipal land, and it appears that there is no such provision in the Act. The express power to farm out tolls negatives an implied power to farm out or auction the levy of fees for occupation of Municipal laud, Under Section 140 of the Act the Municipality has the right to sell by public auction only the privilege of occupying any stall in a market. The action of the Municipality in putting up to auction the right to levy the fees in question on March 16, 1924, was ultra vires and the contract in suit is, therefore, unenforceable.

7. We think, therefore, that the lower Court was right in dismissing the plaintiff's suit on that ground.

8. It is, therefore, unnecessary to go into the question whether the re-sale was premature, but we think that the view of the lower Courts that the re-sale was premature because it was held on March 28, 1924, is erroneous. Under the first condition of the sale, Exhibit 30, the person to whom the right is knocked down has to pay the whole amount within two days if it is within Rs. 100, bat if it is more than Rs. 100, then he has to pay a deposit, which would be equivalent to two months' instalments, either on that day or on the next day. Then reference is made to the future instalments and the time limit of eight days refers to the subsequent instalments, and not to the payment of the deposit which is payable either on that day or on the next day. The deposit ought to have been made either on March 16 or 17. Condition No. 3 however says :-

If the said auction is knocked down for a sum exceeding Rs. 500, the same should be taken to have become final after it receives the approval of the General Committee.

9. Assuming, however, that the sale became final in this case on March 20, 1924, the deposit ought to have been paid either on that day or on the next, that is, on March 20 or 21, 1924. The re-sale, therefore, held on March 28, 1924, cannot be said to be premature. Even if the view of the lower Courts is wrong on this point, we think that the suit must fail, because the Municipality had no right to lease the levy of the fees on lands belonging to the Municipality.

10. We, therefore, dismiss the appeal with costs.

Baker, J.

11. I agree. The question in this case is as to the right of the Municipality to sell or lease to contractors the right of collecting fees from persons selling fodder on land belonging to the Municipality. The right to collect such fees is given to the Municipality by Section 70 of the District Municipal Act (Bom. Act III of 1901). It has been contended by the learned pleader on behalf of the appellant that under Section 40 of the Act, the Municipality has a right to enter into and perform all such contracts as they may consider necessary or expedient in order to carry into effect the provisions and purposes of the Act, and that will cover the lease or sale in question. That power, however, is subject to the proviso that it should be exercised so far as is not inconsistent with the provisions and purposes of the Act. The question is, therefore, whether the sale of the right to levy fees on persons selling fodder is inconsistent with the provisions and purposes of the Act. It is admitted that the powers of a corporation must be limited by the Act which creates it. Section 70 forms part of Chapter VII of the Act which refers to Municipal taxation. That chapter is divided into five parts, and part (5) refers to octroi and tolls. In Section 59 the taxes imposable under the Act are enumerated, and tolls are expressly defined as referring to vehicles and animals used for riding, draught or burden, and entering into the Municipal district and not liable to tax under the preceding clause. It is under a 81A of the Act which was inserted by Act VIII of 1914, that the Municipality is authorized to lease the levy of any toll that may be imposed under this Act. Section 70 defines the impost in question in the present case as a fee, and in view of the distinction between it, and a toll, which is defined in Section 59, I am of opinion that the special provision made by Section 81A of the Act cannot be extended so as to cover the fee with which we are now concerned; and, it will appear that if Section 40, as contended by the learned pleader for the appellant, gives the Municipality the power to lease or sell the right to collect taxes, there would have been no necessity for the addition of Section 81A to the Municipal Act to legalize the leasing of the levy of tolls. The same view has been taken by the Madras High Court in the case of Municipal Council, Kumbakonam v. Abbahs Sahib I.L.R. (1911) Mad. 113 but as that decision was based on the local law in force in Madras, I prefer to base my decision on the conclusions arising from the terms of our own Bombay District Municipal Act.

12. It follows that if the view of the lower Court, that the Municipality had no power to lease or sell the right to collect the fees leviable from persons selling fodder on Municipal land, is correct, the appeal must consequently fail.

13. As regards the other point, I agree that the second auction by the Municipality wag not premature, as, on reference to the terms of the conditions of sale, I am of opinion that the person whose bid was accepted was bound to pay a deposit either on the day of the auction or on the next day. In the present case, the auction was held on the 16th and if the fee bad been below Rs. 100 the defendant had to pay it on the 16th or 17th, but as the fee was above Rs. 100, the sanction of the Municipality was necessary, and until the sanction was given, the bid was not accepted. This does not advance the case further, for the sanction was admittedly given on the 20th, and the deposit should, therefore, have been paid on the 20th or 21sfc. The reference to eight days in the conditions of sale appears to refer to subsequent instalments and not to the deposit which is to be made at the time of the bid being accepted. This point, however, is of small importance is view of the finding on the first point as to the legality of the action of the Municipality in putting up to auction the right to levy fees.

14. I agree, therefore, that the decree of the lower appellate Court should be confirmed and the appeal dismissed with costs.


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