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Biswanath Bhukta Vs. Executive Officer, Talcher Municipality and ors. - Court Judgment

LegalCrystal Citation
SubjectMunicipal Tax
CourtOrissa High Court
Decided On
Case NumberOriginal Jur. Case No. 1126 of 1974
Judge
Reported inAIR1977Ori1; 42(1976)CLT1097
ActsOrissa Public Demands Recovery Act, 1963; Orissa Municipal Act, 1950 - Sections 169; Talcher Municipality (Validation) Ordinace, 1976 - Sections 2; Constitution of India - Article 245
AppellantBiswanath Bhukta
RespondentExecutive Officer, Talcher Municipality and ors.
Appellant AdvocateA.K. Padhi, Adv.
Respondent AdvocateP. Palit and ;J. Patnaik, Advs. and ;Addl. Govt. Adv.
DispositionApplication partly allowed
Cases ReferredHill v. East
Excerpt:
- motor vehicles act, 1988 [c.a. no. 59/1988]section 173(1) proviso; [d. biswas, amitava roy & i.a.ansari, jj] appeal without statutory deposit but within limitation/or extended period of limitation maintainability - held, if the provision of a statute speaks of entertainment of appeal, it denotes that the appeal cannot be admitted to consideration unless other requirements are complied with. the provision of sub-section (1) of section 173 permits filing of an appeal against an award within 90 days with a rider in the first proviso that such appeal filed cannot be entertained unless the statutory deposit is made. the period of limitation is applicable only to the filing of the appeal and not to the deposit to be made. it, therefore, appears that an appeal filed under section 173 cannot.....r.n. misra, j.1. jajangi hat is a municipal market located within the talcher municipal area in the district of dhenkanal. the executive officer of the said municipality settled the said market on licence basis with the petitioner for the years 1965-66 and 1967-68. petitioner having failed to pay up the dues, the certificate officer of talcher instituted certificate case no. 29 of 1969-70 for the recovery of the outstanding sum. petitioner challenged the tenability of the certificate proceeding on several grounds, but the certificate officer overruled the same. petitioner carried an appeal to the collector of dhenkanal and being unsuccessful moved the revenue divisional commissioner at sambalpur in revision and having failed before that authority moved the member, board of revenue, in a.....
Judgment:

R.N. Misra, J.

1. Jajangi Hat is a municipal market located within the Talcher Municipal area in the district of Dhenkanal. The Executive Officer of the said Municipality settled the said market on licence basis with the petitioner for the years 1965-66 and 1967-68. Petitioner having failed to pay up the dues, the Certificate Officer of Talcher instituted certificate case No. 29 of 1969-70 for the recovery of the outstanding sum. Petitioner challenged the tenability of the certificate proceeding on several grounds, but the Certificate Officer overruled the same. Petitioner carried an appeal to the Collector of Dhenkanal and being unsuccessful moved the Revenue Divisional Commissioner at Sambalpur in revision and having failed before that authority moved the Member, Board of Revenue, in a further revision who also dismissed his revision petition. This writ application has thereafter been filed asking for a writ of certiorari for quashing of the certificate proceeding.

2. Though several contentions had been raised in the writ application, one single question has been, canvassed before us as pleaded in paragraph 13 of the writ application in the main and that ground is that this Court having already quashed the constitution of the Talcher Municipality and there being no Municipal Council in law, the provisions of the Orissa Municipal Act are not applicable and no fee or tax said to be due to the Municipal Council is collectible. Therefore, the certificate proceeding is not maintainable. It has also been argued that the demand for interest from 1-3-1968 till August, 1969 amounting to Rs. 1,039.69 paise is not collectible in view of the fact that the certificate has been signed on 10-9-1969. Reliance is placed on Section 14 of the Orissa Public Demands Recovery Act in support of this contention. It has also been alleged that in view of the specific provision in Section 169 of the Orissa Municipal Act, recourse to certificate proceeding could not be taken. The next contention on behalf of the petitioner is that even if the dues-are collectible as arrears of land revenue, the amount being payable to a person other than Collector, a requisition as envisaged under the statute was necessary to enable the Certificate Officer to initiate the proceeding and in the absence of a requisition, the certificate proceeding is not tenable.

3. The opposite parties have filed counter-affidavits. Opposite party -- Executive Officer -- has raised several factual aspects. On behalf of the State, an affidavit has been filed wherein it has been stated that Government have constituted the Talcher Municipality afresh by notification dated 17-2-1975 after the quashing of the constitution by this Court and the Municipal Council, therefore, is in existence. In an additional counter-affidavit, reliance has been placed on an Ordinance entitled 'The Talcher Municipality (Validation) Ordinance, 1976' issued by the Governor of Orissa which validates the actions of the Municipal Council of Talcher and its Chairman during the period from 12th of March, 1969 to 5th of February, 1972 and of the Sub-divisional Officer, Talcher, from 6th February, 1972 till the 20th of February, 1975, during the period the Municipal Council was in supersession and the said officer was functioning as the Municipal Council. The Ordinance prohibits challenge of actions of the Municipal Council and its Chairman during the relevant period merely on the ground that the said Municipality was not validly constituted.

In regard to the allegation regarding payability of interest, there has been no reply. It is, however, claimed that the arrear amount could be collected as a public demand and, therefore, a certificate proceeding under the Orissa Public Demands Recovery Act is maintainable. There has been no clear answer in regard to the allegation regarding want of a requisition under the statute.

4. We propose to briefly deal with the three specific contentions advanced on behalf of the petitioner against the certificate proceeding. Admittedly under Section 14 of the Public Demands Recovery Act, statutory interest is payable from the date of signing of the certificate till recovery of the certificate dues. The petitioner had raised this specific contention before the Board of Revenue as would appear from the grounds of the revision application--vide Annexure 2, but the Board did not deal with the point. In the absence of any reply on the point and there being no adverse finding in the order of the Board of Revenue, we are prepared to hold that the claim of interest is not justified and the petitioner is entitled to the limited relief of deletion of interest.

There is absolutely no force in the contention of Mrs. Padhi that the proceeding under the Public Demands Recovery Act is not maintainable until appropriate steps under the Municipal Act are taken for realisation of the arrear dues.

So far as the third contention is concerned, admittedly the amount is not payable to the Collector but is due to the Municipality under the statute. What are public demands have been indicated in Schedule I of the Public Demands Recovery Act and when by the Municipal Act, the dues are collectible as public demand, Clause (ix) of Schedule I would apply. The question for consideration is whether a requisition would be necessary to maintain the certificate proceeding. Petitioner seems to have been agitating the question, but there does not appear to have been a clear decision. We would accordingly require the Certificate Officer to pointedly examine this objection of the certificate debtor and in case he is of the view that there has been no requisition for entertaining the certificate, the certificate proceeding must, be thrown out as not maintainable, leaving parties to work out their rights in accordance with law. We would, therefore, require the Certificate Officer to examine this question and in case he entertains the certificate being satisfied that there is a requisition which enabled him to initiate the certificate case, he would delete the interest claimed up to signing of the Certificate and thereafter proceed to recover the legitimate dues in accordance with law.

5. The main question which has been canvassed at length may now be taken up. Mrs. Padhi for the petitioner challenges the validity of the Validation Ordinance 'on two grounds:--

(i) The Ordinance could have removed the basis of the decision rendered by this Court by amending the provisions in the Municipal Act for the non-compliance of which the Court had quashed the constitution of the Municipality. Having not done so, the Ordinance could not, in effect, override the decision by making a direct inroad into the judicial powers of the State; and

(ii) Without a Municipal Council in existence during the material period, the actions of the Municipal Council and the Chairman cannot be validated.

6. We shall presently examine the tenability of these contentions, but for convenience we may first reproduce the text of the Ordinance:--

'Orissa Ordinance No. 1 of 1976

The Talcher Municipality (Validation)

Ordinance, 1976.

An Ordinance

To validate the action of the Municipal Council of Talcher Municipality and its

Chairman.

Whereas the Legislature of the State of Orissa is not in session;

And Whereas the Governor of Orissa is satisfied that circumstances exist which render it necessary for him to take immediate action in the matter of validation of the actions of the Municipal Council of Talcher Municipality and its Chairman in the manner hereinafter appearing:

Now, therefore, in exercise of the powers conferred by Clause (1) of Article 213 of the Constitution of India the Governor of Orissa is pleased to make and promulgate the following Ordinance in the Twenty-Seventh Year of the Republic of India:--

1. (1) This Ordinance may be called the Talcher Municipality (Validation) Ordinance, 1976.

(2) It shall come into force at once.

2. Notwithstanding anything contained in the Orissa Municipal Act, 1950 or in any judgment, decree or order of any Court, all actions taken and orders passed by--

(a) the Municipal Council of the Talcher Municipality in the district of Dhenkanal and by its Chairman during the period from the 12th March 1969 to the 5th February 1972 (both the days inclusive); and

(b) the Sub-divisional Officer, Talcher during the period from the 6th February 1972 to the 20th February 1975 (both the days inclusive) on being appointed to exercise the powers and perform the functions of the said Municipal Council and its Chairman, in the belief or purported belief that the Talcher Municipality was validly constituted, shall, for all intents and purposes, be deemed to have been validly taken and passed, and no such action or order shall be questioned in any Court of law or otherwise open to challenge merely on the ground that the said Municipality was not validly constituted.

Dated the 2nd June, 1976.

Shiv Narain Shankar,

Governor of Orissa.'

7. On 1-5-1954, the Talcher Notified Area Council was constituted which existed until by notification dated 12th of March, 1969, the State Government in exercise of their powers conferred under the Orissa Municipal Act of 1950, constituted the area hitherto covered by the Notified Area Council to be a municipality known as the Talcher Municipality. The constitution of the Municipality was assailed in a writ application before this Court and by decision in the case of N.C. Mohanty v. State of Orissa, (1974) 1 Cut WR 562, this Court found that when in the year 1969. decision was taken to convert the Notified Area Council into a Municipality, the requirement of population of ten thousand as per the Proviso to Section 4 (1) (a) of the Municipal Act was not satisfied and, therefore, the constitution of the Municipality was not in accordance with law. Accordingly the notification of 12th March, 1969 constituting the Talcher Municipality was quashed and it was left to the State Government to take such steps as appeared appropriate in accordance with law. The judgment was delivered on 14th of March, 1974, and the State Government by notification dated 17th of February, 1975, constituted the Talcher Municipality afresh with effect from 21-2-1975. The fresh constitution of the Municipality is not assailed,

8. We now proceed to examine the two contentions raised by counsel for the petitioner. As already noticed, the first contention is that the Validation Ordinance has the effect of overriding the judicial decision without rectifying the defect in the statute and this is not permissible. It-is not disputed at the Bar that a statute can be amended retrospectively and thereby the basis of the decision rendered by a court can be removed and thus the judicial determination may be nullified. In the case of Tirath Ram v. State of U. P., AIR 1973 SC 405, the Court held that such an action was within the permissible limits and validation of an old Act by amending it retrospectively did not constitute an encroachment on the functions of the Judiciary. Reliance is, however, placed on a series of decisions of the Supreme Court for the contention that while the defect as per the judicial decision persists, if the Legislature seeks barely to validate the action contrary to statute, the validation would be ineffective. In the case of Janapada Sabha, Chhindwara v. C. P. Syndicate, AIR 1971 SC 57, the Court pointed out:--

'The nature of the amendment made in Act 4 of 1920 has not been indicated. Nor is there anything which enacts that the notifications issued without the sanction of the State Government must be deemed to have been issued validly under Section 51 (2) without the sanction of the Local Government. On the words used in the Act, it is plain that the Legislature attempted to overrule or set aside the decision of this Court. That, in our judgment, is not open to the Legislature to do under our constitutional scheme. It is open to the Legislature within certain limits to amend the provisions of an Act retrospectively and to declare what the law shall be deemed to have been, but it is not open to the Legislature to say that a judgment of a Court properly constituted and rendered in exercise of its powers in a matter brought before it shall be deemed to be ineffective and the interpretation of the law shall be otherwise than as declared by the Court.'

To the same effect is the decision of the Supreme Court in the case of State of Tamil Nadu v. M. Rayappa, AIR 1971 SC 231. The Madras High Court had held that the provisions of the Madras Entertainments Tax Act, 1939, had no provision for re-assessment. The decision had not been appealed against, nor its correctness was challenged before the Supreme Court. Section 7 of the Amending Act which was impugned did not change the law retrospectively. All that it provided was that notwithstanding anything contained in the principal Act or in the Amending Act or in any judgment, decree or order of any Court, no assessment or re-assessment or collection of any tax due on any payment for admission to any entertainment or any cinematograph exhibition which had escaped assessment to tax, or which had been assessed at a rate lower than the rate at which it was assessable under Section 4 or Section 4-A of the principal Act made at any time after the date of the commencement of the principal Act and before the date of the publication of the Amending Act in the Gazette would be deemed to be invalid or ever to have been invalid on the ground that such assessment or re-assessment or collection was not in accordance with law and such tax assessed or re-assessed or collected or purporting to have been assessed or reassessed or collected should for all purposes be deemed to be and to have always been validly assessed or re-assessed or collected. The Court observed:--

'...... The effect of this provision is to overrule the decision of the Madras High Court and not to change the law retrospectively. What the provision says is that notwithstanding any judgment of the court, the re-assessment invalidly made must be deemed to be valid. The Legislature has no power to enact such a provision. A question similar to the one before us came up for consideration before this Court in the Municipal Corporation of the City of Ahmedabad v. The New Shrock Spg. & Wvg. Co. Ltd., AIR 1970 SC 1292. Dealfng with that question this is what this Court observed:--

This is a strange provision. Prima facie that provision appears to command the Corporation to refuse to refund the amount illegally collected despite the orders of this Court and the High Court The State of Gujarat was not well advised in introducing this provision. That provision attempts to make a direct inroad into the judicial powers of the State. The Legislatures under our Constitution have within the prescribed limits, powers to make laws prospectively as well as retrospectively. By exercise of those powers, the Legislature can remove the basis of a decision rendered by a competent court thereby rendering that decision ineffective. But no Legislature in thus country has power to ask the instrumentalities of the State to disobey or disregard the decision given by courts. The limits of the power of Legislatures to interfere with the directions issued by courts were considered by several decisions of this Court. In Shri Prithvi Cotton Mills Ltd. v. The Broach Borough Municipality, AIR 1970 SC 192, our present Chief Justice speaking for the Constitution Bench of the Court observed:--

'Before we examine Section 3 to find out whether it is effective in its purpose or not we may say a few words about validating statutes in general. When a Legislature sets out to validate a tax declared by a court to be illegally collected under an ineffective or an invalid law, the cause for ineffectiveness or invalidity must be removed before validation can be said to take place effectively. The most important condition of course, is that the Legislature must possess the power to impose the tax, for, if it does not, the action must ever remain ineffective and illegal. Granted legislative competence, it is not sufficient to declare merely that the decision of the court shall not bind for that is tantamount to reversing the decision in exercise of judicial power which the Legislature does not possess or, exercise. A court's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances. Ordinarily, a Court holds a tax to be invalidly imposed because the power to tax is wanting or the statute or the rules or both are invalid or do not sufficiently create the jurisdiction. Validation of a tax so declared illegal may be done only if the grounds of illegality or invalidity are capable of being removed and are in fact removed and the tax thus made legal. Sometimes this is done by providing for jurisdiction where jurisdiction had not been properly invested before. Sometimes this is done by re-enacting retrospectively a valid and legal taxing provision and then by fiction making the tax already collected to stand under the re-enacted law'.'

9. Reliance has been placed by counsel for the opposite parties on the decision of the Supreme Court and a Full Bench decision of the Allahabad High Court in support of the proposition that the Legislature has full powers within its legislative field to deal with the position. We may now briefly refer to them : In the case of State of Orissa v. Bhupendra Kumar, AIR 1962 SC 945, the validity of the Ordinance validating the election to the Cuttack Municipality was impugned before this Court and the Ordinance was struck down mainly on the ground that it contravened Article 14 of the Constitution. The State and the Council went in appeal before the Supreme Court. Gajendragadkar, J. as the learned Judge then was, spoke for the Constitution Bench thus:

'...... The Cuttack Municipal Election had been set aside by the High Court and if the Governor thought that in the public interest having regard to the factors enumerated in the Preamble to the Ordinance it was necessary to validate the said elections, it would not necessarily follow that the Ordinance suffers from the vice of contravening Article 14.........'

Challenge had been directed against the Ordinance mainly on the ground of Article 14. The question as to whether the Ordinance made inroads into the judicial field had not been directly considered though it is true that the defect pointed out by the Court in vacating the elections had not been remedied.

Next is the case of Udai Ram v. Union of India, AIR 1968 SC 1138. Certain acquisitions under the Land Acquisition Act of 1894 stood quashed on the basis of the rule laid down by the Supreme Court in the case of State of M. P. v. Vishnu Prasad, AIR 19:66 SC 1593. In January, 1967, an Ordinance was promulgated by the President and in April, 1967, Parliament came with the validating statute. Section 4 thereof ran thus :

'(1) Notwithstanding any judgment, decree or order of any court to the contrary,--

(a) no acquisition of land made or purporting to have been made under the principal Act before the commencement of the Land Acquisition (Amendment and Validation) Ordinance, '1967, and no action taken or thing done (including any order made, agreement entered into or notification published) in connection with such acquisition shall be deemed to be invalid or ever to have become invalid merely on the ground--

(i) that one or more Collectors have performed the functions of Collector under the principal Act in respect of the land covered by the same notification under Sub-section (1) of Section 4 of the principal Act;

(ii) that one or more declarations have been made under Section 6 of the principal Act in respect of different parcels of land covered by the same notification under Sub-section (1) of Section 4 of the principal Act;

(b) any acquisition in pursuance of any notification published under Sub-section (1) of Section 4 of the principal Act before the commencement of the Land Acquisition (Amendment and Validation) Ordinance 1967 may be, made after such commencement and no such acquisition and no action taken or thing done (including any order made, agreement entered into or notification published), whether before or after such commencement, in connection with such acquisition shall be deemed to be invalid merely on the grounds referred to in Clause (a) or any of them.

(2) Notwithstanding anything contained in Clause (b) of Sub-section (1), no declaration under Section 6 of the principal Act in respect of any land which has been notified before the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 19,67, under Sub-section (1) of Section 4 of the principal Act, shall be made after the expiry of two years from the commencement of the said Ordinance.

(3) Where acquisition of any particular land covered by a notification under Sub-section (1) of Section 4 of the principal Act, published before the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 1967, is or has been made in pursuance of any declaration under Section 6 of the principal Act, whether made before or after such commencement and such declaration is or has been made after the expiry of three years from the date of publication of such, notification, there shall be paid simple interest calculated at the rate of six per cent per annum on the market value of such land, as determined under Section 23 of the principal Act, from the date of expiry of the said period of three years to the date of tender of payment of compensation awarded by the Collector for the acquisition of such land :

Provided that no such interest shall be payable for any period during which the proceedings for the acquisition of any land were held up on account of stay of injunction by order of a court;

Provided further that nothing in this sub-section shall apply to the acquisition of any land where the amount of compensation has been paid to the person interested before the commencement of this Act.'

Three contentions had been raised by counsel for the petitioners:--

(i) The Validation Act does not revive the notification under Section 4 which had become exhausted after the first declaration under Section 6 and no acquisition could be made without a fresh notification under Section 4.

(ii) The Validation Act violated Article 31(2) of the Constitution inasmuch as it purported to authorise acquisition without fresh notifications under Section 4 thereby allowing compensation to be paid on the basis of the dead notification under Section 4.

(iii) The Validation Act violated Article 14 of the Constitution in various ways.

On behalf of the Union Government, it was contended that the legislative competence of Parliament is only circumscribed by the scope of the entries in the appropriate Lists under the Seventh Schedule and the fundamental rights enshrined in Part III of the Constitution. The power of Parliament to make laws for the whole or any part of the territory of India is dealt with by the Constitution in Articles 245 to 250, 252 and 253. Acquisition and requisitioning of property is an entry in List III and Parliament is competent to make laws enumerated in that List under Article 246(2) of the Constitution.

In dealing with the rival contentions, the Constitution Bench referred to a series of decisions of the Federal Court and its own and Mitter, J. speaking for the Court summarized the position thus:--

'All these decisions lay down that the power to legislate for validating actions taken under statutes which were not sufficiently comprehensive for the purpose is only ancillary or subsidiary to legislate on any subject within the competence of the Legislature and such Validating Acts cannot be struck down merely because courts of law have declared actions taken earlier to be invalid for want of jurisdiction. Nor is there any reason to hold that in order to validate action without legislative support the Validating Act must enact provisions to cure the defect for the future and also provide that all actions taken or notifications issued must be deemed to have been taken or issued under the new provisions so as to give them full retrospective effect. No doubt Legislatures often resort to such practice but it is not absolutely necessary that they should do so, so as to give full scope and effect to the validating Acts. By way of illustration reference may be made to the following Acts. (1) The Professions Tax Limitation (Amendment and Validation) Act, 1949 where Section 3 (1) provided that.........'

In the judgment, reference was made to the Professions Tax Limitation (Amendment and Validation) Act, 1949 and the Hindu Marriages (Validation of Proceedings) Act, 1960, and thereafter it was observed:--

'In our opinion the contentions raised about the invalidity of the Amending Act on the ground that Section 3 thereof was not made expressly retrospective or that it encroached upon the domain of the judiciary by seeking to nullify judicial decisions cannot be sustained. The American doctrine of well-defined separation of legislative and judicial powers has no application to India and it cannot be said that an Indian Statute which seeks to validate invalid actions is bad if the invalidity has already been pronounced upon by a court of law.

In view of the decisions of the Judicial Committee, the Federal Court and this Court referred to above, it must be held that the absence of a provision in the Amending Act to give retrospective operation to Section 3 of the Act does not affect the validity of Section 4 as contended for. It was open to Parliament to adopt either course, e.g. (a) to provide expressly for the retrospective operation of Section 3, or, (b) to lay down that no acquisition purporting to have been made and no action taken before the Land Acquisition (Amendment and Validation) Ordinance, 1967 shall be deemed to be invalid or ever to have become invalid because inter alia of the making of more than one report under Section 5-A or more than one declaration under Section 6 of the Land Acquisition Act, notwithstanding any judgment, decree or order to the contrary. Parliament was competent to validate such actions and transactions, its power in that behalf being only circumscribed by the appropriate entries in the Lists of the Seventh Schedule and the fundamental rights set forth in Part III of the Constitution. As shown above, there have been instances where the latter course had been adopted by the Indian Parliament in the past.''

Strong reliance has been placed by learned counsel for the opposite parties on the passage extracted last and it is contended that the ratio of the case is that it is competent for the legislature to annul a decision rendered by a court of competent jurisdiction by the process of validation without removing the defect which formed the basis of the judicial pronouncement. We do not think, the Constitution Bench intended to say so. Taking into consideration the terms of the validating statute and the detailed manner in which validation had been done and the general change in the legal scheme brought about thereby, the Court had upheld the action. The two instances given in paragraph 25 of the judgment refer to legislative action to support and uphold judicial pronouncements and not to make inroads thereinto. Counsel also relied upon the decision of the Supreme Court in the case of Kanta Kathuria v. Manak Chand, AIR 1970 SC 694 and the Full Bench decision of the Allahabad High Court in the case of Behariji Dass v. Chandra Mohan, AIR 1969 All 594 (FB). It is unnecessary to advert to them any longer. That the legal position continues to be what had been indicated by a series of earlier decisions relied upon by the petitioner clearly appears from two later cases of the Supreme Court. In the case of Govt. of A. P. v. Hindusthan Machine Tools. AIR 1975 SC 2037, a Division Bench of three learned Judges was considering the validity of the Andhra Pradesh Gram Panchayats (Amendment) Act of 1974., The Court found:--

'In the instant case, the Amending Act of 1974 cures the old definition contained in Section 2 (15) of the vice from which it suffered. The amendment has been given retrospective effect and as stated earlier the Legislature has the power to make the laws passed by it retroactive. As the Amending Act does not ask the instrumentalities of the State to disobey or disregard the decision given by the High Court but removes the basis of its decision, the challenge made by the respondent to the Amending Act must fail.........'

It is thus clear that the Court was prepared to adopt the same ratio as had prevailed in several cases of the Supreme Court referred to above.

The Constitution Bench in the Prime Minister's election matter. (AIR 1975 SC 2299, Smt. Indira Nehru Gandhi v. Raj Narain) examined the self-same question. The learned Chief Justice in paragraph 138 of the judgment at page 2332 of the Reporter in clear terms observed:--

'......The rendering of a judgment ineffective by changing the basis by legislative enactment is not encroachment on judicial power because the legislation is within the competence of the Legislature.'

In paragraph 606 of the judgment, another learned Judge referred to both the decisions reported in AIR 1962 SC 945 and AIR 1968 SC 1138 and yet did not differ from the rule indicated by the learned Chief Justice.

The settled legal position, therefore, is that a judgment of a competent court cannot be reversed as such by legislative process, but the Legislature is competent to change the law retrospectively by weeding out the defect or changing the law so as to remove the basis of the judgment and thereby rendering the judgment ineffective.

10. The impugned Ordinance, however, does not suffer from the vice of the aforesaid ratio. This Court declared the constitution of the Talcher Municipality as ultra vires the Act, because the requisite statutory pre-condition was absent. The Ordinance does not purport to validate the constitution of the Municipality. In fact, accepting the decision of this Court, a fresh Municipal Council has been constituted in the year 1975 and as already pointed out, the said constitution is not challenged as infringing the statute. What has been validated are the acts of the Municipal Council and its Chairman. It has been claimed that the real effect of the validation is nullification of the decision of this Court, We do not think, there is force in the submission. The Municipal Council has been brought into existence by a notification having prospective operation. The past acts only have been validated by a deeming provision. This process, in our view, does not hit the ratio laid down by the Supreme Court. On the other hand, this would be covered by the principle indicated in the decision reported in AIR 1968 SC 1138. The first ground of attack must, therefore, fail.

11. The Ordinance introduces a legal fiction by saying that the acts saved must be deemed to have been of the named authorities. The Judicial Committee of the Privy Council in the case of Commr. of Income-tax, Bombay v. Bombay Corporation, AIR 1930 PC 54, observed:--

'...... Now when a person is deemed to be something the only meaning possible is that whereas he is not in reality that something the Act of Parliament requires him to be treated as if he were...' The celebrated observation of Lord As-quith in the case of East End Dwelling Co. Ltd. v. Finsbury Borough Council, (1951) 2 All ER (HL) 587 at p. 599 of the Reporter, runs thus:-- 'If one is bidden to treat an imaginary state of affairs as real, one must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. One of these in this case is emancipation from the 1939 level of rents. The statute says that one must imagine a certain state of affairs. It does not say that, having done so, one must cause or permit one's imagination to boggle when it comes to the inevitable corollaries of that state of affairs......'

This dictum has been quoted with approval by the Supreme Court in the case of Atherton West & Co. v. S. M. Mazdoor Union, AIR 1953 SC 241 and again in the case of Venkatachalam, I.T.O. v. Bombay D. & M. Co. Ltd., AIR 1958 SC 875. The same principle was also approved in the case of I.- T. Commr. v. S. Teja Singh, AIR 1959 SC 352, Venkatarama Aiyer, J. before quoting with approval the passage in question observed:--

'...... It is a rule of interpretation well settled that in construing the scope of a legal fiction it would be proper and even necessary to assume all those facts on which alone the fiction-can operate...' Even in a later decision of the Supreme Court in the case of Daya Singh v. Dhan Kaur, AIR 1974 SC 665, the same view has been reiterated.

Petitioner has contended that when the Municipality was not in existence during the material period, the acts of the non-existent Municipal Council or its Chairman could not be validated. This contention suffers from the defect of ignoring the effect of the deeming provision. The deeming provision necessarily implies to assume the existence of the Municipal Council and its Chairman at the material points of time because when the legislation holds out a mandate by a leg-al fiction that the actions be deemed to have been the actions of the notified instrumentalities, those must be assumed to have been in existence at the relevant time, so that the legal fiction can have effect. We agree and that has been the rule indicated by James L. J. in Hill v. East & West India Dock Co., (1884) 9 AC 448 (HL) and by the Supreme Court in the case of Bengal Immunity Co. v State of Bihar, AIR 1955 SC 661 (at p. 680) that when a statute enacts that something shall be deemed to have been done, which in fact and truth was not done, the court is bound to ascertain for what purpose the fiction is to be resorted to and after ascertaining the purpose, to give full effect to the fiction so that the statutory purpose may be served.

12. Another aspect of the matter must also be kept in view. Government constituted a Municipality for Talcher and with the constitution of the Municipality came in the instrumentalities provided by statute and the Municipality and its Chairman acted in several ways and their actions brought into existence rights and liabilities, contracts, statutory orders having the force of law which have operated; ell or most of these activities must have been bona fide entered into in normal course of discharging administrative or other statutory functions. Subsequently when the Court nullified the notification instituting the Municipality for the absence of a statutory precondition, a vacuum was created. In realisation of the fact that if the bona fide acts are not saved or protected, several innocent persons would suffer irreparably and certain persons would also unduly benefit themselves, the validating statute stepped in Petitioner's case is one where he has derived advantages under licences. It is in situations like this when the law-maker is confronted with the difficulty that resort is taken to the legal fiction theory for overcoming the impasse. Counsel for the petitioner has not been able to show any authority in support of, the proposition that when the instrumentality does not exist, the fiction theory does not operate and actions cannot be validated by the deeming provision. In fact, that contention runs counter to the series of authorities we have referred to above and, therefore, should not be entertained.

13. Both the contentions raised by the petitioner accordingly fail. The only conclusion which emerges from these premises is that the Ordinance is not open to challenge. In view of what we have already said in the beginning of the judgment, the petitioner, however, would be entitled to the, relief of deletion of the claim of interest up to signing of the certificate and the Certificate Officer shall be required to examine whether there has been a requisition from the appropriate authority to enable him to initiate the certificate proceeding. In case, he finds that there is a requisition, he will proceed to recover the amount in accordance with law and in case there be no requisition, the certificate proceeding must fail.

We make no order as to costs.

Mohanti, J.

14. I concur.


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