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Satya Pal Singh v. State Of U.P. & Others - WRIT TAX No. 1315 of 2002  RD-AH 11397 (6 July 2007)
Civil Misc. Writ Petition No. 2435 of 2002
Phool Chand Gupta and others
Nagar Nigam, Allahabad and others.
Civil Misc. Writ Petition Nos. 1315, 3694 of 2001, 41, 198, 2401, 2467, 2583, 2664, 2665 of 2002, 1229 of 2003, 583, 1245 and 1376 of 2006.
Hon'ble R.K.Agrawal, J.
Hon'ble Vikram Nath, J.
(Delivered by R.K.Agrawal,J)
In all these writ petitions the petitioners, who are licensees of retail vend of country liquor and beer in the various districts of State of Uttar Pradesh, have challenged the levy and demand of licence fee by the concerned Nagar Nigam/ Nagar Palika Parishad. Civil Misc. Writ Petition No. 2435 of 2002 is being treated as the leading case. The facts giving rise to Civil Misc. Writ Petition No. 2435 of 2002 are as follows:
The said writ petition has been filed by 8 persons who are holders of licence in Form FL-5B for retail vend of beer/country liquor at various places in the Municipal limit of Nagar Nigam, Allahabad. The licence relating to the Excise Year 2001-2002 i.e. the period from 1.4.2001 to 31.3.2002 has been issued by the Collector, Allahabad after obtaining sanction from the Excise Commissioner, U.P. Allahabad. According to the petitioners they are required to pay licence fee to the State Government for obtaining the licence as consideration for parting with the exclusive privilege. Their activities of selling country liquor and beer are governed and controlled by the provisions of U.P. Excise Act, 1910 (herinafter referred to as the Excise Act) and the Rules framed thereunder. The Officer Incharge Licensing/Advertisement, Nagar Nigam, Allahabad- respondent no.2 issued separate notice dated 1st August, 2002 to each of the petitioners by which they were directed to obtained licence from the Nagar Nigam, Allahabad after paying the licence fee of Rs. 6,000/- for running the liquor shops. The Nagar Nigam, Allahabad has framed bye-laws on 13th January, 1999 which has been published in the Official Gazette on 30th January, 1999 under which Item No.3 of Category -C pertains to the licence fee for a beer shop which has been fixed at Rs. 6,000/- per shop, Item No. 6 relates to country liquor shops for which licence has been fixed at Rs. 6,000/- per year per shop and Item no. 7 pertains to foreign liquor shops for which licence has been fixed at Rs. 12,000/- per year per shop. The aforesaid bye-laws has been framed under Section 541 of the Uttar Pradesh Municipal Corporations Adhiniyam, 1959 (hereinafter referred to as the 1959 Adhiniyam). The demand notice as also the bye-laws relating to Item Nos. 3,6 and 7 of Category-C have been challenged on the ground that they do not empower the Nagar Nigam to charge any fee on excise shop which are exclusively covered by the provisions of the Excise Act and further sub-sections (26), (36), (41) and (43) of Section 541 are not attracted in the case of excise licence. The provisions of Sections 199 to 203 of the 1959 Adhiniyam have not been complied with and further no service whatsoever is being rendered by the Nagar Nigam Allahabad to the petitioners and as there is no element of quid pro quo the licence fee is wholly illegal, arbitrary and without any authority of law. The excise business is being regulated under the provisions of the Excise Act and the Nagar Nigam cannot exercise any power to regulate the business of the petitioners.
In the counter affidavit filed by the Nagar Nigam it has been stated that the bye-laws framed by the Nagar Nigam, Allahabad is absolutely in accordance with law. Same bye-laws, wherein the licence fee has been challenged by owners of Nursing Home, has been upheld by this Court holding that the Nagar Nigam has rightly imposed the licence fee for regulating the business of the petitioners therein in any Nagar Nigam area and the bye-laws has been framed strictly in accordance with law. Reliance was also placed upon a Division Bench decision of this Court in Civil Misc. Writ Petition No. 37686 of 2002 Radhey Charan Gupta and others vs. State of U.P. decided on 9th September, 2002 wherein the writ petition filed by the other liquor licensees challenging the levy and demand of licence fee has been dismissed. It has further been stated that the Nagar Nigam has to incur considerable amount for keeping the vicinity and the locality clean where these shops are situate. So far as the licence fee imposed by the Nagar Palika Parishad in other districts are concerned it has been imposed under the bye-laws framed under Section 298 of the Municipalities Act, 1916 (hereinafter referred to as the 1916 Act).
We have heard the learned counsel for the parties.
Learned counsel for the petitioners submitted that under Section 541 of the 1959 Adhiniyam the Nagar Nigam has no power to regulate the trade of beer/ country liquor as the same is being regulated by the provisions of the Excise Act. Thus the question of payment of licence fee does not arise. He submitted that in any event as no service was being rendered by the Nagar Nigam to the petitioners' trade and there was no element of quid pro quo the levy and demand of licence fee was wholly unjustified. In support of the aforesaid pleas they have relied upon the following decisions:
1. Nagar Manapalika, Varanasi vs. Durga Das Bhattacharya and others (AIR 1968 SC 1119);
2. Kamaljeet Singh and others vs. Municipal Board, Pilkhwa and others (AIR 1987 SC 56);
3. A.P. Bankers and Pawn Brokers Association vs. Municipal Corporation of Hyderabad (AIR 2001 SC 1356).
Learned counsel for the Nagar Nigam, on the other hand submitted that under sub-sections (26), (36), (41) and (43) of Section 541 of the 1959 Adhiniyam the Nagar Nigam is entitled to charge licence fee as services are being rendered. Further the Nagar Nigam is regulating the business of country liquor by imposing the conditions that the proprietors/owners of such business would be liable to remove the garbage and other waste materials etc. connected with their business and also ensures that they have to carry on business on their own premises without encroaching upon the Nagar Nigam footpath, drainage, road and without causing any hindrance to the general public. The fee in effect is the regulatory fee and the same is liable to be upheld. In support of his pleas he has relied upon the following decisions:
1. Doctors' Jankalyan Society vs. State of U.P. and others (1999 (3) AWC 2328);
2. Dr. Chankresh Kumar Jain and others vs. State of U.P. and others ((2002) 3 UPLBEC 2483);
3. United India Insurance Company Limited vs. Nagar Nigam, Allahabad (Civil Misc. Writ Petition No. 14037 of 1999) decided on 19th May, 2003.
We have given our anxious consideration to the various pleas raised by the learned counsel for the parties.
We find that under Section 541 of the Adhiniyam, 1959 the Nagar Nigam has been empowered to make bye-laws with respect to certain matters specified therein. Sub-sections (26), (36), (41) and (43) empowers the Nagar Nigam to make bye-laws for the following:
"(26) securing the efficient inspection of the markets and slaughter-houses and of shops in which articles intended for human food are kept or sold;
(36) securing the protection of public markets, gardens, public parking places and open places vested in or under the control of the Corporation from inquiry, or misuse, regulating their management and the manner in which they may be used by the public and providing for the proper behaviour of persons in them;
(41) fixing of fees for any licence, sanction or permission to be granted by or under this Act.
(43) regulating admission to and use by members of the public of, Corporation hospitals, dispensaries, infirmaries, homes and similar institutions and the levy of fees therein;"
The bye-laws dated 13th January, 1999 has been framed by the Nagar Nigam after following the provisions of Sections 542 and 543 of the Adhiniyam, 1959. The proposals were made on 11th July, 1998 and 28th October, 1998 and as no objection has been received, the proposals were accepted and had been published in the official gazette on 30th January, 1999. The Apex Court in the case of the Municipal Board Maunath Bhanjan vs. M/s Swadeshi Cotton Mills Co. Ltd and others (AIR 1977 SC 1055) has held that with the publication of the proposals in the official gazette it would be deemed that the procedure prescribed under law has been complied with. We further find that under the bye-laws the petitioners are required to observe the following conditions for carrying on their business:
"1& QkbusUl dEiuh fpV Q.M] bU'ksjUl dEiuh dh 'k[kk vkbl QSDV~zh] iathd`r fcYMlZ] ns'kh 'kjkc] fons'k 'kjkc fc;j ckj vkfn ds O;olk;ksa dh viuh&viuh nqdku ij tu&lkekU; dh lqfo/kk ds fy, jsV cksMZ ij vU; 'krZ Hkh vafdr djuh gksxhA
2& le;≤ ij mDr lanHkZ esa Hkkjr ljdkj@mRrj izns'k ljdkj o ftyk iz'kklu ds fu;e o vkns'kksa dk vuqikyu djuk vfuok;Z gksxkA
3& mfYyf[kr O;olk;h viuk&viuk O;olk; Hkw&Hkou lhek ds vUrxZr gh djsaxs vFkkZr uxj fu;e dh QqVikFk] ukyh] lMd ij fdlh izdkj dk vfrdze.k] izkstsD'ku djds vojks/k ughs djsaxsA
4& mDr O;olk; ls lEcfU/kr xUnxh vkfn gVokus dk nkf;Ro lapkydksa dk gksxk vFkkZr O;olk; ls lEcfU/kr xUnxh lMd ;k QqVikFk ij ugha MkysaxsA
5& mDr ds lEcU/k esa le;≤ ij Hkkjr ljdkj@mRrj izns'k ljdkj@ ftyk iz'kklu@uxj fuxe }kjk fuxZr vkns'kksa@funsZ'kksa dk vuqikyu djuk vfuokZ; gksxkA
In the case of Doctors' Jankalyan Society (supra) this Court has upheld the levy of licence fee on nursing homes, clinics etc. by the Nagar Palika Parishad, Mirzapur under Section 298(1)/List I Section 1 item (h) of the Municipalities Act, 1916. The same view was taken by this Court in the case of Dr. Chakresh Kumar Jain (supra) wherein the licence fee has been held to be regulatory and reasonable.
In the case of United India Insurance Company Limited (supra) this Court following the decision in the case of Dr. Chakresh Kumar Jain (supra) has held that for a regulatory fee quid pro quo is not necessary. The Court has taken note of the fact that the Nagar Nigam is rendering a lot of service to the residents and due to business transaction of the petitioners they are crowded by the customers at their business place and there are sanitation problems disproportionate to the other areas and for this the Nagar Nigam bears extra cost. This Court has distinguished the decision of the Apex Court in the case of A.P. Bankers and Pawn Brokers Association (supra).
In the case of Durga Das Bhattacharya (supra) the Apex Court has held that the impostion of annual licence fees at the rate of Rs. 30/- on each rickshow owner and Rs. 5/- on each rickshaw driver by the Nagar Mahapalika, Varanasi cannot be justified as there is no sufficient quid pro quo. The Apex Court has not considered the question of being regulatory in nature.
In the case of Kamaljeet Singh(supra) the Apex Court has held that the expenditure incurred on maintenance of the connecting road and the nallah cannot be justified as quid pro quo for levy of toll tax by the Municipal Board from vehicle and other conveyance passing through the municipal limit.
In the case of A.P. Bankers and Pawn Brokers Association (supra) the Apex Court has struck down the levy of licence fee on money lending and pawn broking on the ground that there is no provision empowering the Municipal Corporation to either carry out inspections or to take any measures to ensure that such trade and operations are run properly and that exploitation is avoided nor the said trade is dangerous or likely to create nuisance. However, in the present case we find that certain obligations have been placed upon the persons engaged in the business of country liquor and beer/foreign liquor which are necessary in the maintenance of public health and safety. The fee of Rs. 6,000/- per year cannot be said to be unreasonable or highly excessive. The mere fact that the liquor trade is being controlled by the Excise Commissioner under the provisions of U.P. Excise Act, 1910 would not come in the way of the Nagar Nigam Authorities from levying licence fee as a regulatory measure for maintaining sanitation and other allied matters in the interest of general public residing in the locality where such shops are situate. Moreover, we find that this Court in the case of Radhey Charan Gupta and others vs. State of U.P. (supra) which involved similar controversy has been pleased to dismiss the writ petition by following the judgment of this Court in the case of Dr. Chakresh Kimar Jain (supra). The present cases are fully covered by the decisions of this Court in Dr. Chakresh Kimar Jain (supra) and Radhey Charan Gupta (supra). We are in respectful agreement with the view taken by this Court in the aforesaid decisions.
In view of the foregoing discussions, we do not find any merit in these writ petitions which are dismissed with costs.
July 6 ,2007
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