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1998 DIGILAW 494 (KAR)

S. CHANDRASHEKAR v. BANGALORE CITY CORPORATION

1998-07-31

CHANDRASHEKARAIAH

body1998
CHANDRASHEKARAIAH, J. ( 1 ) THE petitioners in all these petitions have sought for quashing of the demand notice issued by the Bangalore City Corporation (hereinafter referred to as 'the Corporation') and a resolution resolving to collect surcharge at the rate of Rs. 4/- per sq. ft. in respect of premises measuring 30' x 40' and in respect of area less than 30' x 40' at the rate of Rs. 2/- per sq. ft. Some of the petitioners have also sought for refund of the amount already collected towards Cauvery Water Supply IV Stage (hereinafter referred to as 'the Scheme' ). ( 2 ) ). In all these petitions, the question that arises for consideration is : Whether the Corporation has the authority to collect money by way of cess/fee or surcharge towards implementation of the Scheme? ( 3 ) THE facts of the cases are :-THE Bangalore Water Supply and Sewerage Board (hereinafter referred to as 'the Board') has undertaken the work of Cauvery 3rd stage water supply scheme in order to provide water to the residents of Bangalore City. But, as the Board has no financial capacity to implement the said Scheme, the Government has informed the local bodies such as, Corporation, Bangalore Development Authority to contribute certain sum of money. Pursuant to that the Corporation on 3-3-1994 took a decision by passing the resolution to pay Rs. 25 crores to the Board and it was also decided to levy cess/fee or surcharge on all persons who intended to put up new construction in Bangalore City at the rate of Rs. 4 per sq. ft. in respect of site measuring 30' x 40' and at Rs. 2 per sq. ft. in respect of site measuring less than 30' x 40'. Again the Corporation passed a resolution dated 20-10-1994 cancelling the resolution dated 30-3-1994. Thereafter, the Government in its order dated 2-2-1995 cancelled the second resolution dated 20-10-1994. In view of the cancellation of the resolution dated 20-10-1994 the resolution passed by the Corporation dated 30-3-1994 remained intact. Thereafter, the State Government by its order dated 28-6-1995 accorded sanction for the estimate amounting to Rs. 1072/- crores for execution of the Scheme and has also provided funding pattern to raise the abovesaid sum. Under this order, the Corporation is required to contribute a sum of Rs. 33/- crores. ( 4 ) IN order to raise Rs. Thereafter, the State Government by its order dated 28-6-1995 accorded sanction for the estimate amounting to Rs. 1072/- crores for execution of the Scheme and has also provided funding pattern to raise the abovesaid sum. Under this order, the Corporation is required to contribute a sum of Rs. 33/- crores. ( 4 ) IN order to raise Rs. 33/- crores, the Corporation by resolution dated 30-3-1994 levied water cess, surcharge, on the persons who filed applications for grant of licence and for approval of the plan to construct the building in Bangalore City. This action is called in question by the petitioners in these petitions. ( 5 ) THE grievance of the petitioners is that the Corporation has no authority whatsoever under the provisions of the Karnataka Municipal Corporations Act, 1976 (hereinafter referred to as 'act 1976') to collect any money for the purpose of the impementation of the Scheme. ( 6 ) IN order to consider the contentions raised in these petitions, it is necessary to refer to some of the provisions of the Act, and the Bangalore Water Supply and Sewerage Act, 1964 (hereinafter referred to as the Act 1964 ). Chapter XIII of the Act 1976 provides for Water Supply and Sewerage, Section 186 of the Act, 1976 reads thus :-"186. Application of Chapter. This Chapter shall not apply to any city for which separate water supply and sewerage arrangements are made by or under any law for the time being in force. "in the case of Bangalore Metropolitan City, the State Government has enacted a law called the Bangalore Water Supply and Sewerage Board Act, 1964. The object of this Act is to make provision for water supply, sewerage and sewage disposal in Bangalore Metropolitan area and for matter connected therewith. Section 15 of the Act, 1964 provides for general duties of the Board. Under this section, the Board is charged with the general duty of providing water supply and improving the existing supply of water in the Bangalore Metropolitan Area and of making adequate provision for the sewerage and disposal of the sewage in the Bangalore Metropolitan Area. S. 27 of the Act 1964 reads as follows :-"27. Under this section, the Board is charged with the general duty of providing water supply and improving the existing supply of water in the Bangalore Metropolitan Area and of making adequate provision for the sewerage and disposal of the sewage in the Bangalore Metropolitan Area. S. 27 of the Act 1964 reads as follows :-"27. Construction of water works - (1) The Board may construct, lay, or erect filtration plants, reservoirs, machinery conduits, pipes or other works in any place in the State for supplying the Bangalore Metropolitan Area with water, and may provide tanks, reservoirs, machinery, mains, fountains and other conveniences within the Bangalore Metropolitan Area for the use of the inhabitants. (2) The Board may cause existing water works to be maintained and supplied with water or it may close any such works and substitute other such works and may cause them to be maintained and supplied with "water". From a reading of the abovesaid provisions, it is clear that one of the duties of the Board is to take steps to provide water supply to the inhabitants of the Bangalore Metropolitan Area. Therefore, the Corporation has no power or authority whatsoever to collect any money either by way of cess/fee or surcharge for the purpose of providing water to the inhabitants of Bangalore under the provisions of the Act, 1976. ( 7 ) IN the statement of objections filed by the Corporation it is stated that the Corporation has framed the bye laws regulating the construction of the buildings by virtue of the power conferred on it under Section 423 of the Act, 1976 under the abovesaid bye-laws the Corporation may levy licence fee for the purpose of granting licence to construct the building in Bangalore City. The impugned demand made by the Corporation cannot be said to be licence fee for the construction of the building, since the demand made is not at the rate specified in the bye-laws framed for that purpose. ( 8 ) FROM the resolution of the Corporation dated 30-3-1994 it is seen that the levy of surcharge at the rate of Rs. 4/- per sq. ft. and at Rs. 2/- per sq. ft. as aforesaid is for the purpose of raising the money to advance loan to the Board for the purpose of execution of the Cauvery Water Supply Scheme by the Board. 4/- per sq. ft. and at Rs. 2/- per sq. ft. as aforesaid is for the purpose of raising the money to advance loan to the Board for the purpose of execution of the Cauvery Water Supply Scheme by the Board. Therefore, it cannot be said that the demand made by the Corporation is a fee/cess or surcharge as contended by the Corporation in its statement of objections. ( 9 ) THIS Court had an occasion to consider the levy of water cess towards Cauvery Water Supply Scheme 3rd stage under the Planning Act, in the case of v. State of Karnataka, ILR (1965) Kant 2331 : (1996 AIHC 3022 ). In the said decision, it is held as follows :"any fees or cess or whatever impost that is levied by virtue of an executive order, is invalid in law, as the same do not have the sanction of law. The Planning Authority, as stated above, would not support its action of levy and collection of the water cess and ring road surcharge under any statutory provision, though derive support from the executive order. "in the case on hand the State Government has not even issued any order in exercise of its executive power authorising the State Government to levy water cess, fee or surcharge for the purpose of spending the money by the Board to execute scheme. In the absence of any provisions under the Act, 1 976, the Corporation has no right to demand the money from the inhabitants of the Bangalore City towards executing the Scheme. ( 10 ) THEREFORE, I am of the considered view that the Corporation has no authority whatsoever to demand any money from the petitioners as per the impugned resolution and also the notices. ( 11 ) THE next question that arises for consideration is : Whether the Corporation which has collected the money for the purpose of contributing it to the Board as per the funding pattern suggested by the State Government in its order is liable to refund the same to the persons from whom money is collected ? ( 12 ) THE Corporation after collecting the money has transferred most of the money collected to the Board and the Board in turn has spent for the purpose of executing the scheme framed by it. ( 12 ) THE Corporation after collecting the money has transferred most of the money collected to the Board and the Board in turn has spent for the purpose of executing the scheme framed by it. Most of the persons who have paid the money as per the demand made by the Corporation are not before this Court. An individual interest shall always yield to the public interest. Bangalore City is one of the fastest growing cities in the country. In the statement of objections it is stated that the water supply in this city is around 100 litres per person per day which is less than the National Water Supply which is at 150 to 200 litres per person per day. Under these circumstances the commencement of Cauvery Water IV Stage scheme is absolutely necessary and inevitable. The financial position of the Board is not so sound so as to undertake the said work. Therefore, keeping in view of these facts Government in its order provided funding pattern for the purpose of providing money by the local bodies to the Board. Pursuant to this the Corporation is not in a position to contribute the said money from out of its revenue has resolved to levy surcharge in its resolution dated 30-3-1994. Accordingly it has collected money and paid the same to the Board and the Board in turn has spent the said amount towards the work undertaken. Under these circumstances if there is any direction to the Corporation to refund the money the Corporation may not be in a position to refund the same as it has already been transferred to the Board. ( 13 ) THE Supreme Court in the case of Orissa Cements Ltd. v. State of Orissa, AIR 1991 SC 1676 has held as follows :-"it is sufficient to point out that all the decided cases unmistakably show that even where the levy of taxes is found to be unconstitutional, the Court is not obliged to grant an order for refund. It is entitled to refuse the prayer for good and valid reasons. "in view of the abovesaid decision, I hold that the petitioners are not entitled for refund of the money already paid. It is entitled to refuse the prayer for good and valid reasons. "in view of the abovesaid decision, I hold that the petitioners are not entitled for refund of the money already paid. ( 14 ) FOR the reasons stated above I pass the following order :writ petitions are allowed : Rule is made absolute; (II) The Corporation has no authority to levy cess/fee or surcharge towards the Cauvery Water Supply IV stage scheme; (III) The impugned notices demanding money from the petitioners towards the Cauvery Water Supply Scheme IV Stage are hereby quashed; (IV) The petitioners are not entitled for refund of the money if they have already paid to the Corporation pursuant to the demand made by the Corporation as per resolution dated 30-3-1994 ; (V) In the circumstances of the case, no order as to costs. --- *** --- .