Skip to content


New Delhi Municipal Committee Vs. Ishwar Dass Sahni and Bros. - Court Judgment

LegalCrystal Citation
SubjectOther Taxes
CourtDelhi High Court
Decided On
Case NumberRegular Second Appeal No. 254D of 1963 and 179 of 1967
Judge
Reported inILR1972Delhi535
ActsPunjab Municipal Act, 1911 - Sections 61(2)
AppellantNew Delhi Municipal Committee
Respondentishwar Dass Sahni and Bros.
Advocates: B. Dayal,; L.C. Vats and; F.C. Bedi, Advs
Cases ReferredShanmugha Oil Mill vs. Varadappa Chettiar
Excerpt:
(i) punjab municipal act (1911), (as extended to delhi) - section 61(2)--vires of--power to impose tax given to committee, members to which are not elected but are nominated by government--whether amounts to delegation of legislative power of the state--and whether is excessive and unguided delegation.; that section 61(2) had been enacted to invest the municipal committee with the legal authority to raise funds for itself by permissible taxation. the amount realised belongs to the municipal committee is not levying any tax on behalf of the legislature for the funds of the state and in enacting the provision, the legislature has not abdicated its own functions of taxation. the act which is a pre-constitution statue, is a result of the exercise of the power of the legislature to constitute.....b.c. misra, j. (1) this order will dispose of two regular second appeals no. 254-d of 1963 filed by the new delhi municipal committee against ishwar dass sahni and brothers relating to odeon cinema and no. 179 of 1967 filed by regal theatre, new delhi against the new delhi municipal committee. the question of law raised in both the appeals is the same and relates to the virus of sub-section (2) of section 61 of the punjab municipal act iii of 1911 as applied to delhi (hereinafter referred to as the act). (2) the decision of the lower appellate court in the first mentioned appeal was against the municipal committee and, the decision of the lower appellate court in the second mentioned appeal was in favor of the committee. (3) on 31st march, 1956, the municipal committee, while considering.....
Judgment:

B.C. Misra, J.

(1) This order will dispose of two regular second appeals No. 254-D of 1963 filed by the New Delhi Municipal Committee against Ishwar Dass Sahni and Brothers relating to Odeon Cinema and No. 179 of 1967 filed by Regal Theatre, New Delhi against the New Delhi Municipal Committee. The question of law raised in both the appeals is the same and relates to the virus of sub-section (2) of section 61 of the Punjab Municipal Act Iii of 1911 as applied to Delhi (hereinafter referred to as the Act).

(2) The decision of the lower appellate Court in the first mentioned appeal was against the Municipal Committee and, the decision of the lower appellate Court in the second mentioned appeal was in favor of the Committee.

(3) On 31st March, 1956, the Municipal Committee, while considering the budget estimates, proposed to levy an advertisement tax and required detailed proposals to be submitted, , 11th May, 1956, the Committee constituted a special Sub-Committee to examine the proposal and submit a report. The Special Sub-committee made detailed proposals and framed a schedule of rates (Exhibit D. 10) and also submitted that the approval of the State Government was necessary for its levy. The proposal of this Sub-Committee was approved by the Committee in its special meeting on 8th June, 1956 and it was decided to seek the approval of the Delhi State Government. In .its meeting held on 23rd November, 1956, the Committee noticed that the. Chief Commissioner of Delhi had approved the levy by letter dated 14th October, 1956; the Committee then decided to publish the proposals and invite objections and suggestions from the public. On 1st February, 1957, the Committee considered the objections which had been received and it suggested certain amendments. The Chief Commissioner by his notification dated 23rd January, 1958 sanctioned the levy of the advertisement tax including the rates and directed the same to come into effect on 1st May, 1958 vide Exhibit D.9. The Chief Commissioner in April, 1958 amended the schedule of rates (Exhibit D.20). Some suggestions were also received from a Municipal Commissioner for grant of further exemptions from the payment of proposed advertisement tax which were considered by the Committee and the amendments were referred to the Chief Commissioner for approval who by notification dated 1st September, 1958 finally approved the amendments which were noticed by the Committee on 30th September, 1958 and the tax was levied with effect from 1st May, 1958 subject to the amendments made by the Chief Commissioner in April and September, 1958. Subsequently the relevant bye laws were framed by the Committee and approved by the Chief Commissioner in September, 1960 and were noted by the Committee on 14th October, 1960 (Exhibit D.18) and the bye-laws came into force within six weeks from the date of the publication of the notification. The imposition of the advertisement tax by the Committee with the sanction of the Chief Commissioner has been challenged in this case as suffering from the vice of excessive delegation.

(4) The powers of the Committee relating to taxation are contained in Chapter V of the Act and section 61 thereof reads as follows:-

'61.Taxes which may be imposed- Subject to any general or special orders which the State Government may make in this behalf, and to the rules, any committee may, from time to time for the purpose of this Act, and in the manner directed by this Act, impose in the whole or any part of the municipality any of the following taxes, namely:- Sub-section (1) provides various items which end with a proviso reading as follows:- 'Provided that a committee shall not impose any tax without the previous sanction of the State Government when- (i) it consists of members less than three-fourths of whom . have been elected, or (ii) its cash balances have, at a'ny time within the three months preceding the date of the passing of the resolution imposing the tax, fallen below Rs. 20,000.00 or one tenth of the income accrued in the previous financial year whichever amount shall be less.'

Sub-section (2) of section 61 reads as follows and this is the impugned provision:

'SAVE as provided in the foregoing clause, with the previous sanction of the State Government any other tax which the State Legislature has power to impose in the State under the Constitution.'

(5) Before examining the virus of the provisions, it may be mentioned that the New Delhi Municipal Committee is a wholly nominated body of the Government constituted under section 61 of the Act. It consists of a number of members who are representatives of some interest but all of whom are nominated by the Government. It may also be mentioned that the expression 'State Government' occurring in this provision, in its application to the Union territory of Delhi at the relevant time, means the Central Government which has delegated its powers under Article 239 to the Chief Commissioner who later on came to be known as Administrator and then Lt. Governor. The State Government has the power to levy a tax on advertisements other than advertisements published in the newspapers under entry 55 of List Ii of the Seventh Schedule of the Constitution. There is, thereforee, no doubt about the competence of the State Legislature to impose the tax.

(6) The question that arises for determination is whether the Legislature in enacting sub-section (2) of section 61 permitting the Committee to impose a tax which the State could impose has caused the vice of excessive and unguided delegation.

(7) The scheme of the Act is that under section 52 of t Act, the objects for which the funds of the Municipal Committee must or can be spent are specified. Under sections 54 and 56, the municipal funds and property vest in the Committee. Naturally, for providing funds on the objects of the Committee, a scheme of taxation had to be prescribed. The same occurs in section 61. The governing clause of section 61 provides that subject to any general or special orders which the State Government may make in this behalf, and to the rules, any committee may, for the purposes of this Act, from time to time and in the manner provided by the Act, impose in the whole or in any part of the municipality any of the following taxes. Then follow items (a) to (f) under sub-section (1) which specify the taxation to be levied. It may be noticed that the maximum limit is mentioned in the statute only in clause (a) of sub-section (1) dealing with a tax on buildings and lands, but in respect of other taxes specified in clauses (b), (c), (d), (e) and (f),no maximum has been prescribed. Sub-section (2) lays down that the tax can be imposed only with the previous sanction of the State Government and not without it and the Committee will not have any power to levy a tax which the State Legislature was not competent to impose. It appears that the guide-lines for the imposition of the tax are contained in the relevant provision itself. It is strongly limited by the purposes of the Act and is severely controlled by the previous sanction of the State Government and it has been enacted for the purpose of providing funds to the municipality.

(8) The question of excessive delegation came up for consideration before the Supreme Court in a number of decisions. In Western India Theatres Limited vs . Municipal Corporation of the City of Poona. : AIR1959SC586 , the provision which came up for consideration was similar to the one before us. In section 59 of the Bombay District Municipalities Act of 1901, after enumerating 10 special heads of taxation, a residuary category was added in the words 'any other tax to the nature and object of which the approval of the Govemor-in-Council shall have been obtained prior to the selection.' S. R. Das, C.J., speaking for the Court, held that the provision did not suffer from the vice of excessive delegation and was not unconstitutional. It was observed that in the first place, the power of the Municipality could not exceed the power of the Provincial Legislature itself and in the next place, the Municipality could impose the taxes for purposes of the Act only which had been set forth in other parts of the statute and lastly the Legislature had not abdicated in favor of the Municipality for the taxing power was. definitely subject to the approval of the Govemor-in-Council. In this case, an argument was advanced before the Court that the Govemor-in- Council there meant the Governor-in-Executive Council and not the Governor-in-Legislative Council. This argument did not find favor with the Court, but was not finally repelled and the Court observed that the principle and standard in imposing the tax had been fixed and the delegation was within permissible limits.

(9) In Corporation of Calcutta vs . Liberty Cinema, : [1965]2SCR477 , the question for consideration was the increase of the levy of license fee on cinema house from Rs. 400.00 to Rs. 6,000.00 per year under section 548(2) of the Calcutta Municipal Act. 33 of 1951. Amongst other grounds, the provision was attacked as suffering from the vice of illegal delegation. By majority, the Court held that fixing the rate of tax was not of the essence of the legislative function and that such a power could be delegated even to a non-legislative body and that the provisions which limited the power to levy taxes to the extent of the statutory needs of the Corporation furnished sufficient control and guidance for exercise of delegated power. The minority view in this decision felt that the power to fix the rate of tax was an essential legislative function, but the same could be delegated provided sufficient guidance had been provided by the Legislature laying down the policy and the principles in the Act. In this decision, the previous decision of the Court in Banarsi Dos vs . State of Madhya Pradesh. : [1959]1SCR427 was discussed, and relied upon.

(10) In another case M/s Devi Dos Gopal Krisknan vs . State of Punjab and others, : [1967]3SCR557 the provision which came up for consideration was section 5 of the Punjab General Sales Tax Act 46 of 1948 which, before its amendment provided that subject to the provisions of the Act, there shall be levied on the taxable turnover every year on a dealer a tax at such rates as the Provincial Government may, by a notification, direct. This was struck down on the ground that the Act did not prescribe any policy. The Act was, however, amended by providing a maximum of the rate and the amended law was upheld as valid. A number of authorities of the Supreme court were discussed in this case.

(11) Next a Bench of seven Judges of the Supreme Court in the Municipal Corporation of Delhi vs . Birla Cotton Spinning and Weaving Mills, Delhi, and another : [1968]3SCR251 was faced with the problem of the virus of section 150 of the Delhi Municipal Corporation Act 66 of 1957 which had been challenged on the ground of excessive delegation. The Court considered all the authorities on the subject and the learned Chief Justice (K. N. Wanchoo, C. J.) with whom Shelate J. agreed, laid down the factors which constituted guidance to prevent the delegation becoming invalid, namely-(1) the delegation was to an elected body responsible to the people including those who paid taxes and to whom the municipal councillors have, every four years, to turn to for being elected; (2) the limit of taxation were to be found in the purposes of the Act, for the implementation of which alone taxes can be raised; (3) the impugned s. 150 itself contained a provision which required that the maximum rate fixed by the Corporation should have the approval of the Government; (4) the Act contained provisions which required adoption of budget estimates by the Corporation annually and (5) there was a check. by the Courts of law where the tax was unreasonable or in noncompliance of or breach of the provisions and objects of the Act. In this decision, Hidayatulla J. (as his lordship then was) and Ramaswami J. agreed with the learned Chief Justice but observed that the proper test to apply to judge the unconstitutionality of the delegation was not the existence of safeguards but whether the legislative will to impose the tax had been adequately expressed. They observed that power to impose the tax was one of the attributes of local-self-government and that the doctrine that the Parliament cannot delegate its powers had to be understood in a limited way as it only meant that the Legislature must not efface itself but must give legislative sanction to the imposition of the tax and most keep control in its own hands and there was no specific provision to show that the Parliament cannot delegate to a certain special instrumentalities the power to effectuate its own will and the question always was whether the legislative will had been exercised or not. Their lordships also observed that local bodies were subordinate branches of governmental activity and they are intended to carry on the local-self government and possess a power of taxation as a necessary adjunct to their own powers which is done under the supervision of the Government and to insist that the Legislature should provide for every matter connected with municipal taxation would make Municipalities mere tax collecting departments of .the Government and not self-governing bodies.

(12) The question agala came up for consideration before the Supreme Court in Gulabthand Banalcd Modi vs. Municipal Corporation of Ahmedabad. (1971) I SCC 823. The Court took notice of its previous decisions in Western India Theatres' case (1), Pandit Benarsi Dass Bhanot vs . State of Madhya Pradesh : [1959]1SCR427 , Devi Dass's case (supra) (4) and Birla Mills' case {supra) (5), and it observed that in all statutes dealing with local administration municipal authorities have inevitably to be delegated the power of taxation which was a necessary adjunct to a system of local-self government and whether such delegation was excessive and amounted to abdication of an essential legislative function had to be considered from the scheme, objects and provisions of the statute and the power to fix rates could be delegated if the statute in doing so contained a policy or principles furnishing guidance to the delegate in exercising such power and that the absence of a provision laying down the maximum rate was by itself not sufficient to render the delegation of power illegal in view of the control exercised by the Government in sanctioning: the levy. The Court further observed that if the Municipal Corporation were to misuse the flexibility of the power given to it in fixing the rate, the State Legislature can at any moment withdraw that flexibility by fixing the maximum limit.

(13) A case very much similar to the one before us came up for consideration before a Full Bench of the High Court of Punjab in Messrs Mangat Ram Roshan Lal vs. The Punjab State and others 1962 Pun L.R 342 where the challenge had been directed against section 30 of the Punjab District Boards Act Xx of 1883 which reads as follows-

'30. A District Board may, with the previous sanction of the State Government, impose any tax which the State Legislature has power to impose in the State under the Constitution: Provided that- (a) the State Government may empower any District Board to impose without such sanction one or more of such taxes subject to such limitations as it may prescribe; * * * * *'

(14) Section 31 of the Act prescribes a procedure very much similar lo sec. 62 of the Punjab Municipal Act. The High Court relying upon the authority of the Supreme Court in Western India Theatres case (supra)(l), held that the Legislature had not abdicated its -essential function and that the delegation was not unguided or uncontrolled; that the first limitation inherent in the provision was that the tax could be imposed by the Board only for the purposes of the District Boards Act and the second limitation was that the power could not exceed the power of the State Legislature and then there was the further limitation that tax could be imposed only with the previous sanction of the State Government. The Court concluded that those did not constitute a District Board a parallel Legislature to exercise the legislative power to impose the tax. The Court also observed that it was impossible for the legislature to visualise before hand what kind of tax would be suitable for the purpose of a particular District Board arid instead of arbitrarily limiting the scope of taxation to named items, it was considered proper and convenient to leave the whole field open to the District Board and the same could not be struck down as unreasonable, particularly when the Legislature had taken care to impose certain restrictions in this behalf.

(15) Punjab authority, fully supports the case of the Municipal Committee before us. The counsel for the opposite party has cited Surat Chandra Chatak vs . Corporation of Calcutta. : AIR1959Cal36 . In this case, a advertisement tax had been imposed under section 229 of the Calcutta Municipal Act 1951. The Court found that no policy had been laid down by the statute and the power resolved itself into the naked and arbitrary power of taxing whomever the Corporation wished and leaving hers similarly situate outside the mischief of the section and the statutory provision was struck down on the ground of hostile discrimination following, the decisions of the Supreme Court in State of West Bengal vs . Anwar Ali, : 1952CriLJ510 , and Dwarka Prosad Laxminarain vs . State of UP., : [1954]1SCR803 . This decision is of no assistance to us as the challenge in this case has not been made on the ground of hostile discrimination and in the case before us we find that the policy and the guidelines have been laid down by the Legislature.

(16) The next authority relied upon by Mr. Bedi is Shanmugha Oil Mill vs. Varadappa Chettiar (1960) I M.L.J 298. In the statutory provision under consideration in that ca.se, a maximum fee had been fixed under the rules before the amendment of the statute, but after the amendment, no maximum or minimum had been fixed and the Court found that the enactment did not provide any guidance to the assessing authority. In view of the authorities of the Supreme Court mentioned above, we are unable to derive any support for Mr. Bedi's client in this case.

(17) The next authority relied upon by the counsel for the opposite party is Standard Motor Union (Private) Limited vs . State of Kerala and others, : AIR1962Ker298 , which was decided by C. A. Vaidialingam, J. (as his lordship then was). The Court struck down section 12 of the Travancore-Cochin Vehicles Taxation Act 14 of 1950 as exceeding the limits of valid delegation on 'the ground that a maximum levy had riot been .specified by the Legislature and it was open to the Government to treat acircumstance as a special circumstance and the only requirement was that the Government should be so satisfied and his lordship considered the case within the rule laid down by the Supreme Court in Hamdard Dawakhana vs . Union of India, : 1960CriLJ671 . This was also the minority view expressed in the Supreme Court (J. C. Shah and Vaidialingam JJ.) in Birla Cotton Mills' case (5), but the same did not find favor with the majority and cannot be relied upon to help the party.

(18) After most carefully considering all the authorities cited before us at the bar, it appears to us that the Act, which is a preconstitution statute, is aresult of the exercise of the power of the Legislature to constitute and empower municipalities and other local bodies and the exercise of this power includes as a necessary adjunct the provision to enable the local authority concerned to raise funds for itself by taxation. This provision hardly attracts the doctrine of excessive delegation. As observed by Hidayatullah, J. (as his lordship then was) in paragraph 52 of the report in Birla Cotton Mills' case (supra)(5), that self-governing units created by the Legislature must have resources for their administration and duties and there are only two methods by which money can be made available, one is to give them a grant and the other is to allow them to raise funds by fees and taxes and generally the second method is followed and the Legislatures in India at times out of number had invested these local-governing units with powers of taxation and no such legislation has been questioned on the ground that it offends against the competence of the Legislature. A similar argument was advanced by Mr. G. S. Pathak before the Supreme Court in Liberty Cinema's case (supra) (2), and the majority of the Court found the argument worthy of consideration, but did not find it necessary to finally pronounce upon it. The argument there was that the Legidatore under entry 5 of List Ii of the Seventh Schedule of the Constitution was authorised to pass a law concerning the constitution and powers of the Municipal Corporation and this entry must necessarily include the provision for power to levy the tax and its conferment did not require any guidance for its exercise to make it valid as it did not constitute any delegation of the delegator, since delegation of the delegated power must relate to the use of the power of the delegator, but in this case, the power of taxation was conferred for the purpose of the Corporation itself and the amount collected by taxation belonged to the Corporation and not to the State.

(19) We are very favorably impressed by this argument. In our opinion, the impugned provision has been enacted to invest the municipal committee with the legal authority to raise funds for itself by permissible taxation. The amount realised belongs to the municipal committee and is to be spent by it for its purposes. The municipal committee is not levying any tax on behalf of the Legislature for the funds of the State and in enacting the provision, the Legislature has not abdicated its own functions of taxation. In this view of the matter, no question of illegal delegation arises.

(20) However, assuming that the impugned provision constitutes delegation of the legislative power of the State for taxation, we are of the opinion that it is not excessive. Five tests have been laid down by the majority of the Court (Wanchoo, C. J.) in Birla Cotton Mills' case (supra){5). The impugned provision satisfied four of them. The power is limited by the purposes of the Act and is restricted by the competence of the State Legislature to levy the taxes. The same is subject to the previous sanction of the State Government. As a further safeguard, elaborate provisions have been made in section 62 of the Act whereby the proposals for taxation are published to the public and objections are invited (some objections were actually received in this case and concidered) and the proposal as well as the objections are submitted to the State Government which, after examining them fully, including the rates proposed to be levied, grants its sanction and after the same has been accepted by the. municipal committee, a notification is published in the Gazette. This has happened in the present case. thereforee, out of the tests laid down by Wanchoo C. J. in the above mentioned case, safeguards Nos. 2 and 3 with regard to purposes of 4he Act and approval of the Government are fully satisfied. So far as the provision of safeguard for adoption of budget estimates propounded by the Supreme Court is concerned, it amply exists in the present case. Moreover, under Rule 8 of Punjab Municipal General Rules framed under section 240 of the Act, the Committee has to furnish an account of its income, expenditure, balance and liabilities annually to the local Government through the Deputy Commissioner which shows that the Government keeps itself posted with all necessary information about the financial affairs of the Committee and is in a position to exercise effective control.

(21) The last safeguard laid down by the Suprerme Court is the check -by the Oourts to strike down the provisions. This, we believe, applies to all statutes and it exists in this case as in any other case. In our opinion, the limitation of the taxing power to the objects of the Act and restrictions on its exercise without previous sanction of the State Government constitute ample guidelines and safeguards to prevent the vice of excessive delegation, if any, and the impugned provision must be held to be valid.

(22) Mr. Bedi, counsel for the opposite party has very strongly urged that out of the five safeguards suggested by Wanchoo, C.J. in Birla Cotton Mills case(5) the one treated in that case as the most important, is conspicuous by its absence, namely, that the delegation has not been made to an elected body responsible to the people since the municipal committee in this case is entirely constituted of the nominees of the Central Government. This is no doubt true. The New Delhi Municipal Committee is wholly nominated by the Central Government under section 12 of the Act in view of the fact that .New Delhi is the seat of the Central Government and although diverse interests are represented on the Committee, they do not have to seek any election from the voters at large. Mr. Bedi urges that in the absence of this safeguard, the impugned provision must be struck down. It may be noticed that in Gulubchand Banalal Modi's case (supra)(6), the Supreme Court found that safeguard No. 3, namely, the approval of the Government for the maximum rate fixed by the Corporation was missing, still in view of the other safeguards, the delegation was held to be within permissible limits and valid. It, thereforee, follows that it is not a rule of law that all the safeguards laid down in Birla Mill's case (5), must exist in all cases and so each case will depend on its particular facts and circumstances., However with regard to the first safeguard (relating to the exercise of power by elected representatives) in Birla Mills' case(5), itself, Sikri J. (as his lordship then was) observed in paragraph Iii of the report that he had found adequate guidance and policy in the expression 'purposes of the Act' which had pointed out the objectives or the results to be achieved and the tax, was levied only for the said purposes and this was a sufficient guidance especially to a self-governing body and it was not necessary to rely on the safeguards mentioned by Wanchoo, C. J. to sustain the delegation. Sikri, J., however, agreed with the majority view in upholding the validity of the impugned provision. On the other hand. Shah, J. in his minority judgment in the said case observed that the circumstance that the affairs were administered by the elected representatives responsible to the people was wholly irrelevant in determining whether the rule againist excessive delegation had been departed from. In the present case, we are of the view that the entrustment of power to levy the tax to elected representatives is certainly, as observed by Wanchoo C. J. in the leading judgment, a very strong practical safeguard, still its absence will legally not visit the delegation of the power with any vice of excessiveness. As held by us, sufficient guidelines are provided in the statute itself and there is no unbridled or excessive delegation of power to raise the tax and the legislature has not abdicated its legislative functions and the imposition of the tax must be held to be constitutionally valid.

(23) Lastly, Mr. Bedi argued that the. power of the State Government under section 61(2) of the Act had in the present case been exercised by the Chief Commissioner and the same was invalid. The power to sanction the imposition of the tax was exercised by the Chief Commissioner in 1958 after the commencement of the Constitution (Seventh Amendment) Act which came into force on 1st November, 1956.

(24) Under section 3(60) of the General Clauses Act, the word State Government' in respect of matters done after the commencement of the Seventh amendment, has been defined to mean in a Union territory, the Central Government. The expression 'Central Government' is defined by clause (8) of section 3 of the General Clauses Act in article (Hi) of clause (b) in relation to the administration of the Union Territory as the Administrator acting within the scope of the authority given to him under Article 239 of the Constitution while prior to the seventh amendment, it means the Chief Commissioner. Under Article 239 of the Constitution, it is provided that save as otherwise provided by Parliament by law every Union territory shall be administered by the President acting to such extent as he thinks fit through an Administrator to be appointed by him with such designation as he may Specify.

(25) It may here be conveniently mentioned that Delhi was as a separate province carved out of the part of the province of Punjab and part of the territories of the United Provinces of Agraand Oudh under two proclamations dated 17th September, 1912 and 22nd February, 1915. The province of Delhi was administered by the Chief Commissioner and under section 3 of Delhi Laws Act, 1912 and sections 2 and 3 of Delhi Laws Act, 1915, various enactments were extended with certain modifications to the province of Delhi and they included the Punjab Municipal Act Iii of 1911. On 1st April, 1937, by Notification No. F. 126/37-Pub., the Governor-General in Council in pursuance of sub-section (3) of section 94 of the Government of India Act, 1935, provided that the functions of the Chief Commissioner or the local authority which were transferred to the Central Government would continue to be discharged by the Chief Commissioner subject to the control of the Governor-General in Council. The position of the Chief Commissioner remained substantially the same after the advent of the Constitution when the province of Delhi was known as a Part 'C' State administered by the Chief Commissioner. After the commencement of the seventh amendment, a notification was issued under Article 239(1) of the Constitution dated 1st November, 1956, bearing No. S.R.O. 2536 which provided that the powers and functions of the Chief Commissioner of the State of Delhi shall be exercised by the Chief Commissioner of the Union territory of Delhi subject to the control of the President. Subsequently, after the commencement of the Delhi Administration Act 19 of 1956, another notification dated 7th September, 1966 was issued which provided that the powers and functions of the Chief Commissioner of the Union territory of Delhi shall be exercised and discharged by the Lieutenant Governor subject to the control of the President.

(26) Accordingly, it follows that the Chief Commissioner of Delhi who at various stages has been known as Administrator or Lieutenant Governor, exercises all powers of the local Government and the Central Government subject to the control of the President and the word 'State Government' occurring in section 61(2) of the Municipal Act legally in effect means the Chief Commissioner for purposes of Union territory of Delhi. Consequently. the sanction accorded by him in this case is valid and no infirmity can be found with the same.

(27) Finally, our conclusion is that the Chief Commissioner was empowered to sanction the advertisement tax which occurs in entry 55 of List Ii of the Seventh Schedule of the Constitution and which could be levied under section 61(2) of the Punjab Municipal Act, which provision is a valid piece of legislation and does not suffer from any vice of excessive delegation. We hold that no legal infirmity attaches to the imposition of the impugned tax which New Delhi Municipal Committee has validly levied. 6-2 H. C. Delhi/72

(28) As a result, the appeal of the New Delhi Municipal Committee succeeds and the other appeal of the Regal theatre fails and both the suits of the parties against the Municipal Committee stand dismissed. In the circumstances of the case, the parties are left to bear their respective costs throughout.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //