Bacchu Singh vs Municipal Commissioner, Ramanujganj

K.L. Pandey, J.—This is a petition under Articles 226 and 227 of the Constitution for a writ of certiorari to quash a resolution of the Municipal Committee, Ramanujganj (respondent 1) dated 19 February 1960 authorising imposition of octroi tax and the sanction accorded thereto by the State Government (respondent 3). The petitioner has also prayed for a writ in the nature of prohibition or mandamus directing the Municipal Committee to forbear from imposing, levying or collecting any octroi tax

The petitioner resides and carries on business within the limits of Ramanujganj Municipality and is also a voter for the purpose of electing members of the Municipal Committee, Ramanujganj, which is a body corporate constituted under the provisions of the Central Provinces and Berar Municipalities Act, 1922 (hereinafter called the Act). At the relevant time the Committee had twelve members, including the President (respondent 2) and the two Vice-Presidents. By two resolutions dated 29 July 1958 and 3 January 1959, the Committee resolved to impose, u/s 66 (1) (e) of the Act, octroi tax on all animals and goods, which would be brought within the limits of the Municipality for the purpose of sale, consumption or use within those limits, and, having approved the draft rules relating to the rates, assessment and collection of the tax, forwarded a copy of the resolutions and the draft rules to the State Government for publication in the Madhya Pradesh Gazette as required by Section 67 (2) of the Act and Rule 1 made thereunder. These were duly published in the Madhya Pradesh Gazette dated 28 August 1959. Thereafter, by a resolution dated 3 October 1959, the draft rules were confirmed on the statement of the President that no objection to, or suggestion for modification of those rules was received. However, the committee met on 24 October 1959 and 27 October 1959 to consider certain objections which had been received but not placed before the Committee on 3 October 1959. The two meetings had to be adjourned because the President was not present. Even so, it was resolved on 27 October that the operation of the resolution dated 3 October 1959 would remain suspended Until the omission to place the objection before the Committee was considered and decided. At the meeting held on 21 December 1959, the President declined to disclose why he did not place before the Committee the objections which he had received before 3 October 1959. Then, on 13 February 1960, a meeting of the Committee attended by nine members unanimously resolved to consider the objections on 19 February 1960. At the meeting held on the last-mentioned date, eleven members were present. The objection that the tax was likely to have adverse effect on the local market in view of the nearness of another market-only two furlongs away-in Bihar State was accepted as valid by six out of the eleven members. Two of them were neutral. Only the remaining three voted in favour of imposition of the tax. The President ruled that, since five of the six members voting against imposition of the tax were traders, who would be prejudicially affected by the tax, their votes were contrary to the provision of Section 34-B of the Act and so liable to be discarded. Accordingly, taking the view that there were three votes in favour of imposition of the tax as proposed and only one vote against it, the President declared that the Committee, by a majority, affirmed the proposal to impose the tax. In due course, a copy of the resolution dated 19 February was sent to the State Government who, on 3 October 1960, sanctioned the proposed rules u/s 67 (5) of the Act and directed that the rules would come into operation from the date of their publication in the Madhya Pradesh Gazette [20 October 1960].

The question for consideration here is whether there was a valid resolution dated 19 February 1960 constituting the foundation for the sanction accorded to the proposed rules by the State Government. The learned Government Advocate endeavoured to show that there was a valid resolution dated 3 October 1959, that the subject having been finally disposed of on that date, it could not in view of Section 34A of the Act, be reconsidered within six months and that the fresh resolution dated 19 February 1960 was incompetent and invalid. There are two obvious answers to this contention. The earlier resolution dates 3 October 1959 was not forwarded to the State Government as required by Section 67 (4) of the Act. Also, not only the operation of that resolution was suspended but, when three-fourths of the Committee''s members consented, to its reconsideration, the bar u/s 34A was removed. In our opinion, the argument seeking to justify the imposition of the tax on the basis of the earlier resolution dated 3 October 1959 is, on the facts of this case untenable.

The main argument against the validity of the resolution dated 19 February 1960 is that the votes of five out of the six members, who voted against it, were illegally discarded u/s 34-B of the Act. That Section reads as follows:

"No member of a committee shall vote on, or take any part in the discussion of any matter in which he has directly or indirectly any pecuniary interest".

Having regard to this provision, the precise question is whether a member, who is carrying on a trade within the limits of a Municipality, can be said to have, directly or indirectly, a pecuniary interest in a proposal to impose octroi tax on goods in general, including the goods on which he trades. The words of the Section are undoubtedly wide and would include interest in a contract or any other matter which a member may have as a rate-payer or inhabitant of the town or as an ordinary consumer of water or electricity or as a participant in any other service offered to the public. Indeed in this wide sense, every consumer of goods in the town is thus interested in the proposal to impose octroi tax. However, we are not aware of any case in which such interest was put forward or accepted as disqualifying a member u/s 34-B of the Act. We think that the words ''''in which he has directly or indirectly any pecuniary interest" have no very definite meaning and should be reasonably interpreted with due regard to the object intended to be attained. The obvious object is to guard against the deflection of public policy in favour of private interest and to avoid a conflict between duty and such interest. In our opinion, the pecuniary interest postulated by the provisions is interest of a more personal character which is not shared by the public generally or by a class of inhabitants of the town concerned. If this be, as we think it is, the meaning of the words, the five members, whose votes were discarded, were not disentitled to take part in the discussion of the proposal to impose octroi tax or to vote on it merely because, like numerous other persons engaged in trade in the town, they would be prejudicially affected by the tax. Actually, the traders, who usually pass on the octroi tax to the consumers, should not be regarded as so affected by it. Indeed, the President himself took the same view and allowed the trader-members to participate in the discussion and voting on the proposal at the earlier meetings and also at the meeting held on 19 February 1960. Only when he found that there was an adverse majority vote, he invoked the aid of Section 34-B of the Act as a device to discard five of the six votes recorded against the proposal. In the circumstances, it must be held that the resolution dated 19 February 1960, over-ruling objections against the proposal to impose octroi tax and finally deciding to impose it, was not validly passed and it could furnish no basis for the sanction of the State Government accorded to the proposal for its imposition.

In the view we have taken of this case, the petition succeeds and is allowed. A writ of mandamus shall issue directing the Municipal Committee, Ramanujganj, to forbear from imposing, levying or collecting any octroi tax in pursuance of its resolution dated 19 February 1960 and the sanction accorded by the State Government on 3 October 1960 to its proposal to impose octroi tax and published in the Madhya Pradesh Gazette dated 28 October 1960. In the circumstances of this case, the parties are left to bear their own costs. The security amount shall be refunded.