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Pasumarthy Kuppu Reddy and 2 ors. Vs. the Corporation of Madras Represented by the Commissioner - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Reported in(1964)1MLJ128
AppellantPasumarthy Kuppu Reddy and 2 ors.
RespondentThe Corporation of Madras Represented by the Commissioner
Cases ReferredAnem Pedda v. Executive Officer
Excerpt:
- .....for the respondent, rightly realizing the distinction between a taxing power and a power to levy licence fees, states that, as licence fee, it cannot be supported on the basis of a correlation between the enhanced rate and the value of the services rendered by the corporation. but the contention for the-corporation is that the fee levied at the enhanced rate should not be understood in the ordinary sense of fees, but in the sense that it is a sort of consideration for the licence granted to the petitioners for the continued existence of their relative encroachments by way of the balconies. it is argued that this consideration is in the nature of a rent and that even if it is not so, it is in the nature of an amount which the corporation is empowered to collect for granting of.....
Judgment:
ORDER

K. Veeraswami, J.

1. These petitions are directed against levy by the respondent Corporation of Madras, of licence fee Upon each of the petitioners for licence for balconies. In Writ Petition No. no of 1961, the fee collected prior to the year 1960-61 was rupees twenty-six and fees collected in the other writ petitions were rupees ten and rupees fifty-one respectively. For the first time in the year 1960-61 the Corporation of Madras in purported exercise of its power under Section 365(2) increased the rate of licence fee leviable under Section 223 of the Madras City Municipal Act, 1919. While the rate prior to 1960-61, was rupees two per annum for the first 10 square feet or part thereof and rupee one for every additional, 10 square feet or part thereof for a projection over the street like a balcony, the rate was. enhanced for the year 1960-61, by raising it to rupee one per square foot or part thereof for the first projection of balconies, rupees two per square foot or part thereof for the second foot of projection and rupees four per square foot or part thereof for the projection beyond two feet. The licence fees for the year 1960-61, applying that rate, were raised in the case of the petitioners from Rs. 26, Rs. 10 Rs. 51 respectively to Rs. 595, Rs. 210 and Rs. 1,674 respectively. It is this enhancement which is challenged in these petitions as illegal.

2. The contention for the petitioners is that what is chargeable under Section 223 is only a licence fee, and that a fee being not a tax but an amount, collected to compensate the services rendered in enforcing the regulatory provisions in relation to-encroachments on streets under the said Act, there is in the enhancements no correlation between the fees now levied and the value of the services rendered by the Corporation. Learned Counsel for the respondent, rightly realizing the distinction between a taxing power and a power to levy licence fees, states that, as licence fee, it cannot be supported on the basis of a correlation between the enhanced rate and the value of the services rendered by the Corporation. But the contention for the-Corporation is that the fee levied at the enhanced rate should not be understood in the ordinary sense of fees, but in the sense that it is a sort of consideration for the licence granted to the petitioners for the continued existence of their relative encroachments by way of the balconies. It is argued that this consideration is in the nature of a rent and that even if it is not so, it is in the nature of an amount which the Corporation is empowered to collect for granting of licences for balconies.

3. Once it is found that as a fee the enhancement cannot be supported because the element of correlation is totally absent, it seems to me that the levy cannot be justified in any other way. The levy should partake of either tax or a rent or a consideration for use and occupation of the open space. It is not contended for the Corporation that the space above the street or road is a property vested in the Corporation. The case of the surface of the street or road is different as was held by this Court in S. Sundaram Ayyar v. The Municipal Council of Madras and the Secretary of State for India in Council (1901) 12 M.L.J. 37 : I.L.R. 25 Mad. 635. It is obvious that the levy is not also a tax and in fact it is not supported on that ground. The argument, however, for the Corporation is that Sections 220 to 222 regulate encroachments on streets, that as the Corporation can totally prohibit encroachments as in Section 220, or remove encroachments in the circumstances mentioned in Section 222, and as in that event the Corporation would be liable to pay damages only where the licensee proves a prescriptive title or consent on the part of the Corporation to continue the balcony over a period of time, the Corporation while granting a licence for an encroachment is entitled in exercise of its powers under Section 365(2), to stipulate its own terms for grant of such a licence. This argument appears to ignore the scheme of the City Municipal Act. The Act makes a clear-cut distinction between fees, taxes and rent where leases are granted by the Corporation. For instance, street margins are permitted to be leased out and in such a case the Corporation will be entitled to collect rent. But so far as the space above a road or street is concerned, there is no indication any where in the Act, that it is vested in any manner in the Corporation. Its powers in respect of space over a street or road is merely regulatory. That being the case the power that has been granted to the Corporation under Section 223 read with Section 365 is no more than to levy a licence fee which is intended to compensate the Corporation for the expenses it would have to incur in enforcing the regulatory provisions in relation to encroachments.

4. I fail to see any substance in the c6ntention that apart from licence fee or tax or rent, there is an independent head of power in exercise of which the Corporation is entitled to stipulate whatever it likes for grant of a licence under Section 223. It follows, therefore, that unless the Corporation is in a position to justify the enhancement in the rate charged for the year 1960-61, the enhancement will have to be set aside. That was the view that the Orissa High Court expressed in Anem Pedda v. Executive Officer : AIR1957Ori203 on analogous statutory provisions, with which I find myself in respectful agreement. That was a case arising under the Madras District Municipalities Act and related to levy of the licence fee for a licence for an encroachment over a road. The learned Judges found that what was levied in connection with the grant of such a licence was only fee as generally understood and was not rent or a levy in the nature of a tax.

5. The petitions are allowed, and the enhancement is struck down but the Corporation is entitled to collect and the petitioners are liable to pay licence fees for the years in question at the rate obtaining prior to 1960-61. No costs in any of the petitions.


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