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Judgment
Vimlesh Kumar Shukla, J.—Petitioners, who are six in number, are engaged in business of setting of advertisement in form of roof top hoardings, ground hoardings, and pole kiosks etc. within the municipal limits of Jhansi.
Petitioners are before this Court, praying for following reliefs:-
(i) issue a writ, order or direction in the nature of certiorari quashing the impugned notices dated 20.08.2015, 26.05.2015, 06.08.2015, 26.05.2015.
(ii) issue a writ, order or direction in the nature of mandamus, restraining the respondents from enforcing of Jhansi Municipal Corporation, Rules, 2015 after declaring the same to be ultra vires of Article 14 , 19(1)(a)(g) of Constitution of India and not saved by the provisions of sub-clauses (2) and (6) of Article 19 of Constitution of India.
To consider such request, constitutional provisions as well as statutory provisions are being looked into.
Constitution of India was amended by means of the Constitution (Seventy Forth Amendment) Act, 1992 and Part IX-A comprising of Article 243-P to 243Z(G) has been inserted in the Constitution alongwith other related matters. Article 243-Q(1)(C) in Part IX-A of the Constitution provides for constitution of Municipal Corporations in larger urban areas of every State. Article 243-X of the Constitution empowers the legislature of State to frame a law authorizing municipality to levy, collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such limits as may be specified in the law.
In pursuance of the provisions of part IX-A of the Constitution, the State Legislature of U.P. amended the "U.P. Nagar Mahapalika Adhiniyam, 1959" and the said Act was re-named as the "U.P. Municipal Corporations Act" providing for the establishing of Municipal Corporations for certain cities in U.P. and other related matters. Nagar Nigam, Jhansi is a Municipal Corporation constituted for a city under sub-clause C of Clause (1) of Article 243-Q of Constitution under the provisions of U.P. Municipal Corporation Act, 1959.
At this juncture, the relevant provisions of U.P. Municipal Corporation Act, 1959 are being looked into. Entire Act has been divided into 25 Chapters dealing with provisions with regard to various issues which falls within the domain of Corporation, which are as under:-
"Chapter I - Definition Clause (II) Constitution and Governance of Corporation (III) Proceedings of the Mahapalika, Executive Committee, Development Committee and other committee (IV) Officers and Staff (V) Duties and Powers of the Corporation and Corporation Authorities (VI) Property and Contracts and Chapter VI-A- Finance Commission (VII) Corporation and other Funds (VIII) Borrowing Powers (IX) Corporation Taxation (X) Drains and Drainage (XI) Water supply (XII) Streets (XIII) Building Regulations) (XIV) Improvement Scheme (XV) Sanitary Provisions (XVI) Regulation of Markets, Slaughter-Houses, Certain Trades and Acts, Etc. (XVII) Vital Statistics (XVIII) Compensation (XIX) Penalties (XX) Proceedings Before Judge, District Judge, Magistrate and others (XXI) Recovery of Taxes and other Corporation dues (XXII) Control (XXIII) Rules, bye-Laws and Regulations (XXIV) Miscellaneous (XXV) Transitory provisions repeals and amendments.
21- Under Section 2(1) of Definition Clause, advertisement has been defined which is as under:-
"Advertisement" means any word, letter, model, sign, placard, board, notice, device, or representation whether illuminated or not, in the nature of and employed wholly or in part for the purpose of advertisement, announcement or direction and includes any hoarding or similar structures used or adapted to be used for the display of advertisement.
Under Section 2(11-A) definition of Corporation or Municipal Corporation has been given, which is as under:-
"Corporation" or "Municipal Corporation" means the Municipal Corporation constituted for a city under Sub-clause (c) of Clause (1) of Article 243-Q of the Constitution.
Under Section 2(39) of the Act meaning of the Municipal Commissioner has been given, which is re-produced as under:-
"Municipal Commissioner" means the Municipal Commissioner appointed under Section 58 and includes an ''Additional Municipal Commissioner'' appointed under the said section, a ''Deputy Municipal Commissioner'' and a ''Assistant Municipal Commissioner'' appointed under Section 107 while exercising powers and performing duties under Section 112 .
22- According to Section 4 a Corporation shall be a body corporate and the Corporation Authorities means charged with carrying out the provisions of the Act. Sections 4 and 5 are reproduced as under:-
4- Municipal Corporation to be a body corporate:- A Municipal Corporation constituted under Sub-clause (C) of Clause (1) of Article 243-Q of the Constitution in accordance with Part IX-A thereof shall be known as the Municipal Corporation of......(Name of the city) and be a body corporate.]
5- Corporation Authorities--The Corporation authorities charged with carrying out the provisions of this Act for each City shall be--
(a) The Corporation;
4(aa) the Ward Committees
(b) an Executive Committee of the Corporation;
5(bb) the "Mayor
(c) a Development Committee of the Corporation;
(d) a "Municipal Commissioner" and one or more "Additional Municipal Commissioners" appointed for the Corporation under this Act; and
(e) in the event of the Corporation establishing or acquiring electricity supply or public transport undertaking or other public utility services, such other committee or committees of the Corporation as the Corporation may with the previous sanction of the State Government establish with respect thereto."
Section 172 of the aforesaid Act provides for the taxes that can be imposed under the aforesaid Act and Section 172(2)(h) provides for tax on advertisements not being advertisements published in newspapers. Section 192 of the aforesaid Act provides for taxes on advertisements and both reads as under:-
"Section 172 . Taxes to be imposed under this Act:- (1) For the purposes of this Act and subject to the provisions thereof and of Article 285 of the Constitution of India, the Corporation shall impose the following taxes, namely.-
(a) Property taxes;
(b) a tax on vehicles other than mechanically propelled vehicles, and other conveyances plying for hire or kept within the City or on boats moored therein:
(c) a tax on helicopters or any other type of planes, when they land on or take off from the helipads, airports, airstrips or places made for this purpose situated within the Corporation. The tax so imposed shall be paid by the airport authority or person or persons, or managers, or director or institution or department or agency involved in the maintenance, management and supervision of the airport, airstrip, helipad or the place as the case may be;
(d) a tax on trades and professions;
(e) a tax on deeds of transfer of immovable property situated within the city;
(f) a tax on vacant land situated within the city;
(2) In addition to the taxes specified in Sub-section (1) the Corporation may for the purposes of this Act and subject to the provisions thereof impose any of the following taxes, namely,
(a) a tax on callings and on holding a public or private appointment.
(b) [***]
(c) (***]
(d) [***]
(e) a tax on dogs kept within the City;
(f) a betterment tax;
(g) [***]
(h) a tax on advertisements not being advertisements published in newspapers;
(i) a theatre tax; and
(j) [***]
[***]
(3) The corporation taxes shall be assessed and levied in accordance with the provisions of this Act and the rules and bye-laws framed thereunder.
(4) Nothing in this section shall authorize the imposition of any tax which the State Legislature has no power to impose in the State under the Constitution of India:
Provided that where any tax was being lawfully levied in the area included in the City immediately before the commencement of the Constitution of India such tax may continue to be levied and applied for the purposes of this Act until provision to the contrary is made by Parliament.
Section 192 . Tax on advertisements.--Where a Corporation imposes a tax mentioned in Clause (h) of Sub-section (2) of Section 172 , every person who erects, exhibits, fixes or retains upon or over any land, building, wall, hoarding or structure any advertisement or who displays any advertisement to public view in any manner whatsoever, in any place whether public or private, shall pay on every advertisement which is so erected, exhibited, fixed, retained, or displayed to public view, a tax calculated at such rates and in such manner and subject to such exemptions as may be provided by the Act or rules made thereunder:
Provided that no tax shall be levied under this section on any advertisement or a notice--
(a) of public meetings, or
(b) of an election to any legislative body or the Corporation, or
(c) of a candidature in respect of such an election:
Provided also that no such tax shall be levied on any advertisement which is not a sky-sign and which--
(a) is exhibited within the window of any building, or
(b) relates to the trade or business carried on within the land or building upon or over which advertisement is exhibited, or to any sale or letting of such land or building or any effects therein or to any sale, entertainment or meeting to be held upon or in the same, or
(c) relates to the name of the land or building upon or over which the advertisement is exhibited, or the name of the owner or occupier of such land or building, or
(d) relates to the business of any railway administration, or
(e) is exhibited within any railway station or upon any wall or other property of a railway administration except any portion of the surface of such wall or property fronting any street.
Explanation 1--The word "structure" in this section shall include any movable board on wheels used as an advertisement or an advertisement medium.
Explanation 2--"Public place" shall, for the purpose of this section mean any place which is open to the use and enjoyment of the public, whether it is actually used or enjoyed by the public or not."
Section 193 of the U.P. Municipal Corporation Act prohibits setting up of an advertisement without written permission of the Municipal Commissioner, Section 194 provides for permission of the Municipal Commissioner to become void in certain cases and Section 195 provides that the beneficiary from advertisement to be deemed responsible. The said provisions read as under:-
"Section 193 --Prohibition of advertisement without written permission of Municipal Commissioner--(1) No advertisement shall, after the levy of the tax under Section 192 has been determined upon the Corporation, be erected, exhibited, fixed or retained upon or over any land, building, wall, hoarding or structure within the City or shall be displayed in any manner whatsoever in any place without the written permission of the "Municipal Commissioner".
(2) The "Municipal Commissioner shall not grant such permission if,
(i) the advertisement contravenes any bye-law made by the Corporation under [Clause (48) of Section 541 , or
(ii) the tax, if any, due in respect of the advertisement has not been paid.
(3) Subject to the provisions of Sub-section (2) in the case of any advertisement liable to the advertisement tax, the "Municipal Commissioner shall grant permission for the period to which the payment of the tax relates and no fee shall be charged in respect of such permission:
Provided that the provisions of this section shall not apply to any advertisement erected, exhibited, fixed or retained on the railway premises or relating to the business of any railway administration."
Section 194 . - Permission of the "Municipal Commissioner to become void in certain cases. - The permission granted under Section 193 shall become void in the following case, namely:
(a) if the advertisement contravenes any bye law made by the Corporation under [Clause (48) of Section 541 ;
(b) if any addition to the advertisement be made except for the purpose of making it secure under the direction of the "Municipal Commissioner;
(c) If any material change be made in the advertisement or any part thereof;
(d) if the advertisement or any part thereof falls otherwise than through accident;
(e) if any addition or alteration be made to, or in the building, wall or structure upon or over which the advertisement is erected, exhibited, fixed or retained if such addition or alteration involves the disturbance of the advertisement or any part thereof; and
(e) if the building, wall or structure upon or over which the advertisement is erected, exhibited, fixed or retained be demolished or destroyed.
Section 195 --Beneficiary from advertisement to be deemed responsible:-- Where any advertisement shall be erected, exhibited, fixed or retained upon or over any land, building, wall, hoarding or structure in contravention of the provisions of Section 192 or Section 193 or after the written permission for the erection, exhibition, fixation or retention thereof for any period shall have expired or become void, the person for whom or for whose purposes the advertisement has prima facie been so erected, exhibited, fixed or retained shall be deemed to be the person who has erected, exhibited, fixed or retained such advertisement in such contravention unless he proves that such contravention was committed by a person not in his employment or under his control or was committed without his connivance."
Sections 199 to 206 of the U.P. Municipal Corporation Act provides for the manner of imposition of taxes. The said provisions reads as under:-
"Section 199 --Framing of preliminary proposals.--(1) When a Corporation desires to impose a tax specified in Sub-section (2) of Section 172 it shall by resolution direct the Executive committee to frame proposals specifying--
(a) the tax, being one of the taxes described in Sub-section (2) of Section 172 which it desires to impose;
(b) the persons or class of persons to be made liable, and the description of property or other taxable thing or circumstances in respect of which they are to be made liable, except where and in so far as any class or description is already sufficiently defined under Clause (a) or by this Act;
(c) the amount or rate leviable from each such person or class of persons;
(d) Any other matter referred to in Section 219 which the State Government requires by rule to be specified.
(2) Upon a resolution being passed under Sub-section (1) the Executive Committee shall frame the proposals and also prepare a draft of the rules which it desires the State Government to make in respect of the matters referred to in Section 219 .
(3) The Executive Committee shall, thereafter, publish in the manner prescribed by rule the proposals framed under Sub-section (1) and the draft rules framed under Sub-section (2) alongwith a notice in the form to be prescribed by rule.
Section 200 --Procedure subsequent to framing proposals--(1) Any inhabitant of the city may, within two weeks from the publication of the said notice, submit to the Corporation an objection in writing to all or any of the proposals framed under the preceding section, and the Corporation shall take any objection so submitted into consideration and pass orders thereon by special resolution.
(2) If the Corporation decides to modify the proposals of the Executive Committee, or any of them the "Municipal Commissioner shall publish the modified proposals and, if necessary, revised draft rules along with a notice indicating that the proposals and rules (if any) are in modification of proposals and rules previously published for objection.
(3) Any objection which may be received to the modified proposals shall be dealt with in the manner prescribed in Sub-section (1).
(4) When the Corporation has finally settled its proposals, the "Municipal Commissioner shall submit them along with the objections (if any) made in connection therewith to the State Government.
Section 201 . Power of State Government to reject, sanction or modify proposal - Upon receipt of the proposals and objection under the preceding section the State Government may either refuse to sanction the proposals or return them to the Corporation for further consideration or sanction them without modification or with such modification not involving an increase of the amount to be imposed, as it seems fit.
Section 202 . Resolution of Corporation directing imposition of taxes:- (1) When the proposals have been sanctioned by the State Government, the State Government, after taking into consideration the draft rules submitted by the Corporation, shall proceed forthwith to make such rules in respect of the tax as far the time being it considers necessary.
(2) When the rules have been made the order of sanction and a copy of the rules shall be sent to the Corporation, and thereupon the Corporation shall by special resolution direct the imposition of the tax with effect from a date to be specified in the resolution.
Section 203 - Imposition.--(1) A copy of resolution passed under Section 202 shall be submitted to the State Government.
(2) Upon receipt of the copy of the resolution the State Government shall notify in the official Gazette, the imposition of the tax from the appointed date, and the imposition of tax shall in all cases be subject to the condition that it has been so notified.
(3) A notification of the imposition of a tax under Sub-section (2) shall be conclusive proof that the tax has been imposed in accordance with the provisions of this Act.
Section 204 - Procedure for altering taxes. - The procedure for abolishing a tax, or for altering a tax in respect of the matters specified in Clauses (b) and (C) of Sub-section (1) of Section 199 shall, so far as may be, be the procedure prescribed by Sections 199 to 202 for the imposition of a tax.
Section 205 - Power of State Government to remedy or abolish tax - (1) Whenever it appears, on complaint made or otherwise to the State Government, that the levy of any tax is contrary to the public interests or that any tax is unfair in its incidence, the State Government may, after considering the explanation of the Corporation concerned, by order require such Corporation to take measures within a time to be specified in the order, for the removal of any defect which it considers to exist in the tax or in the method of assessing or collecting the tax.
(2) Upon the failure or inability of the Corporation to comply, to satisfaction of the State Government, with an order made under Sub-section (1), the State Government, may by notification, suspend the levy of the tax, or of any portion thereof, until the defect is removed, or may abolish or reduce the tax.
Section 206 :- Power of State Government to require Corporation to impose taxes:- (1) The State Government may, by general or special order, published in the official Gazette, require a Corporation to impose any tax mentioned in Sub-section (2) of Section 172 not already imposed, at such rate and within such period as may be specified in the notification, and the Corporation shall thereupon act accordingly.
(2) The State Government may require a Corporation to increase, modify or vary the rate of any tax already imposed and thereupon the Corporation shall increase, modify or vary the tax as required.
(3) If the Corporation fails to carry out the order passed under Sub-section (1) or (2), the State Government may pass suitable order imposing, increasing, modifying or varying the tax and thereupon the order of the State Government shall operate as if it had been a resolution duly passed by the Corporation."
Section 219 of the Municipal Corporation Act provides for rules for assessment, collection and other matters relating to taxes to be imposed under the provisions of the aforesaid Act. In addition, Section 227 empowers the State Government to frame rules for giving effect to the provisions of Chapter IX of the aforesaid Act. The said provisions read as under:-
"219. Rules as to assessment, collection and other matters. The following matter shall be regulated and governed by rules except in so far as provision therefore is made by this Act, namely-
(a) the assessment, collection or composition of taxes and
(b) the prevention of evasion of taxes;
(c) the system on which refunds shall be allowed and paid;
(d) the fees for notices demanding payments on account of a tax and for execution of warrants of distress;
(e) the rates to be charged for maintaining livestock distained; and
(f) any other matters relating to taxes in respect of which this Act makes no provision or insufficient provision and provision is in the opinion of the State Government necessary.
Section 227 :- Power to make rules:- (1) The State Government may make rules for the purposes of carrying into effect the provisions of this Chapter.
(2) Without prejudice to the generality of the foregoing power such rules may provide for-
(a) matters referred to in Section 219 ;
(b) maintenance and inspection of register regarding taxes on vehicle, boat and animal;
(c) (Omitted by U.P. Act No. 9 of 1991)
(d) (Omitted by U.P. Act No. 9 of 1991)
(e) advance payment of taxes;
(f) summary disposal of objections to distress and attachment;
(g) the conditions on which exemptions and refunds of taxes shall be allowed;"
Sections 305 and 306 of the U.P. Municipal Corporations Act regulates sky-signs and advertisements. The said provisions read as under:-
"Section 305 :- Regulation as to sky-signs:- (1) No person shall, without the written permission of the "Municipal Commissioner", erect, fix or retain any sky-sign of the kind prescribed by rules whether existing on the appointed day or not. Such written permission shall be granted, or renewed, for any period not exceeding two years from the date of each such permission or renewal, subject to the conditions that such permission shall be deemed to be void if-
(a) any addition is made to the sky-sign except for the purpose of making it secure under the direction of the "Municipal Commissioner";
(b) any change is made in the sky-sign or any part thereof.;
(c) the sky-sign or any part thereof fall either through accident, decay or any other cause:
(d) any addition or alteration is made, to or in, the building or structure upon or over which the sky-sign is erected, fixed or retained, involving the disturbance of the sky-sign or any part thereof;
(e) the building or structure upon or over which the sky-sign is erected, fixed or retained becomes unoccupied or be demolished or destroyed.
(2) Where any sky sign shall be erected, fixed or retained after the appointed day upon or over any land, building, or structure, save and except as permitted as hereinbefore provided the owner or person in occupation of such land, building or structure shall be deemed to be the person who has erected, fixed or retained such sky-sign in contravention of the provisions of this section, unless he proves that such contravention was committed by a person not in his employment or under his control, or was committed without his connivance.
(3) If any sky-sign be erected, fixed or retained contrary to the provisions of this section, or after permission for the erection, fixing or retention thereof for any period shall have expired or become void, the "Municipal Commissioner may, by written notice, require the owner or occupier of the land, building, or structure upon or over which the sky sign is erected, fixed or retained, to take down and remove such sky sign.
Section 306 :- Regulation and control of advertisements:- (1) "The Municipal Commissioner" may, by notice in writing, require the owner or the person in occupation of any land, building, wall hoarding or structure to take down or remove within such period as is specified in the notice, any advertisement upon such land, building, wall, hoarding or structure.
(2) If the advertisement is not taken down or removed within such period the "Municipal Commissioner" may cause it to be taken down or removed, and the expenses reasonably incurred on taking down or removal thereof shall be paid by such owner or person.
(3) The provisions of this section shall not apply to any advertisement which--
(a) is exhibited within the window of any building;
(b) relates to the trade or business carried on within the land or building upon which such advertisement is exhibited or to any sale or letting of such land or building or any effects therein, or to any sale entertainment or meeting to be held upon or in the same;
(c) relates to the business of any railway administration;
(d) is exhibited within any railway station or upon any wall or other property of a railway administration, except any portion of the surface of such wall or property fronting any street."
In addition to the aforesaid provisions, Section 540 of the U.P. Municipal Corporations Act empowers the State Government to frame rules for and Section 541 empowers the State to frame bye-laws for carrying out the purposes of the aforesaid Act. Section 540 of said Act and relevant provisions of Section 541 reads as under:-
"Section 540 :- Making of rules by State Government - (1) In addition to the power conferred upon the State Government under the preceding Chapters of this Act to make rules the State Government may make rules to carry out the purposes of the Act and may also make model rules for the guidance of a Corporation in any manner connected with the carrying out of the provisions of this or any other enactment.
Explanation - The power conferred by this sub-section includes the power to make rules regulating the holding of meetings of the Corporation and its Committees and the conduct of business at such meetings till bye-laws are framed under the Act for the purpose.
(2) The power of the State Government to make rule under this Act shall be subject to the condition of the rules being made after previous publication and of not taking effect until they have been published in the official Gazette.
(3) Any rule made by the State Government may be general for all Corporations or may be special for any one or more Corporations to be specified.
Section 541 :- Bye-laws for what purpose to be made:- The Corporation may from time to time make bye-laws, not inconsistent with this Act and the rules. Sub-clause 41, 48 and 49 reads as under:-
(41) Fixing of fees for any license, sanction or permission to be granted by or under this Act;
(48):- Prohibition and regulation of advertisements: and
The provision and the manner for allotment of land to the person engaged traditionally in the vocation of making earthen pottery.
Explanation:- A person shall be deemed to be engaged traditionally in such vocation if he belongs to such class of persons as may be notified by the State Government.
(49) Carrying out generally the provisions and intentions of this Act.
By means of a notification dated 24.12.2009, the Governor of U.P. promulgated the U.P. Municipal Corporation (Assessment and Collection of Tax on Advertisement) Rules, 2009 relating to assessment and collection of advertisement tax. According to Rule 1(2) of the aforesaid rules, the rules extended to every Municipal Corporation of the State of Uttar Pradesh meaning thereby that the aforesaid rules extended to all Municipal Corporations in the State of Uttar Pradesh including the Nagar Nigam, Lucknow and Nagar Nigam, Varanasi. Rule 2(ii) defined the term ''advertiser'' and according to the said definition, the advertiser would also include the owner of the land and building on which was set up. Rule 3 of the aforesaid rules constituted a Committee for selection of suitable sites for advertisement for hoarding and also for selection of the size, height and aesthetic aspect of hoardings. The Committee was to be chaired by the Municipal Commissioner. According to Rule 3(3) of the aforesaid rules applications were to be invited by the Municipal Commissioner for granting permission for setting up advertisement on the sights identified by the aforesaid Committee. According to Rule 4(1) of the aforesaid rules, no advertisement could be set up on any house, etc. without the written permission of the Municipal Commissioner. According to Rule 4(2) of the aforesaid rules an owner or occupier of any land or building could also not allow setting up of an advertisement on the land owned or occupied by him without the written permission of the Municipal Commissioner. According to Rule 7 of the aforesaid rules, the Municipal Commissioner was empowered to fix the minimum premium to be collected from every site on which an advertisement was set up. Such a site would include a private land or building nor owned by the Municipal Corporation. Rule 10 of the aforesaid rules empowered the Municipal Commissioner to grant permission to set up an advertisement or hoarding on sites which were allotted by public auction or by inviting tenders. The implication of the aforesaid Rule was that private property not belonging to the Municipal Corporation could be allotted for setting up an advertisement by public auction or by inviting tenders. The application for permission to install an advertising sign was according to Rule 5(1) of the aforesaid rules, to be in the form as prescribed in Schedule-1. According to Clause 9(i) of the format of the application if the advertisement was being set up on a private land or building written permission from the owner of the land or building was required for granting permission to set up an advertisement on such land or building. According to Clause 9(ii) of the aforesaid format an undertaking was required in writing from the owner of a land or building that in case of any default in payment of advertisement tax the owner would be liable to pay such tax.
The validity of the aforesaid rules was challenged before this Court both at Lucknow as well as at Allahabad in several writ petitions. At Allahabad, the aforesaid rule was challenged in Civil Misc. Writ Petition No. 373 of 2010 (Taj Advertising and others vs. State of U.P. and others). At Lucknow the validity of the aforesaid rules was challenged in a number of writ petitions including Writ Petition No. 2716 (M/B) of 2010 (Purvanchal Advertising Association and others vs. State of U.P. and others), Writ Petition No. 2394 (M/B) of 2010 (M/s. R.D. Associates and others vs. State of U.P. and others), Writ Petition No. 2534 (M/B) of 2010 (Anurag Bansal and others vs. State of U.P. and others), Writ Petition No. 2846 (M/B) of 2010 (Samsung India Electronics Pvt. Ltd. vs. State of U.P. and others), Writ Petition No. 2709 (M/B) of 2010 (Selvel Media Services Pvt. Ltd. and others vs. State of U.P. and others), Writ Petition No. 2710 (M/B) of 2010 (Origins Advertising Pvt. Ltd. Lucknow vs. State of U.P. and others), Writ Petition No. 2714 (M/B) of 2010 (U.P. Advertiser Association and others vs. State of U.P. and others), Writ Petition No. 3054 (M/B) of 2010 (Outdoor Advertising Agencies Association vs. The State of U.P. and others), Writ Petition No. 3070 (M/B) of 2010 (Samsung India Electronics Pvt. Ltd. Vs. State of U.P. and others), Writ Petition No. 3336 (M/B) of 2010 (Anurag Bansal and others vs. The State of U.P. and others), Writ Petition No. 3938 (M/B) of 2010 (M/s. Aditi Synez Systems and others vs. State of U.P. and others), Writ Petition No. 7128 (M/B) of 2010 (Anil Handa and others vs. The State of U.P. and others).
At Allahabad, the validity of Rules has been upheld in the case of Taj Advertising and Others Vs. State of U.P. and Others, , whereas in matters that were taken up at Lucknow, Division Bench of this Court expressed its disagreement to the earlier judgment and accordingly, reference was made to larger bench on 28.10.2010.
A Full Bench of this Court accordingly after considering the aforesaid question referred, by means of a judgement and order dated 20.04.2011 in the case of Anurag Bansal Vs. State of U.P. and Others, , answered the reference as under:-
"In view of above, the judgment of the division bench in the case of Taj Advertising (supra) does not seem to lay down the correct law and questions No. 1, 2, 6 and 7 are answered as under;-
(1) State Government has got legislative competence to frame rules but subject to fulfilment of necessary conditions and procedure prescribed under Chapter IX of the Act (supra).
(2) Government could not have framed impugned rules for all the Municipal Corporations without taking recourse of not only Section 206 of the Act but other statutory provisions contained in Chapter IX of the Act.
(6) Impugned rule 209 is invalid and ultra vires to the Act being framed without following the provisions of Sections 199 to 203 of the Act and other statutory provisions discussed in the body of judgment (supra).
(7) Provision contained in the Rule 2009 requiring the owner of building to face penal consequences is invalid and violative of Section 195 of the Act."
Thereafter, it is reflected from the record that in consonance with the Full Bench Judgment of this Court, the Nagar Nigam, Jhansi through its Municipal Commissioner published bye-laws and objections have been invited to the same and thereafter, after considering the objections in question, proceeded to make a public notification on 5th June, 2015 wherein terms and conditions have been fixed by means of bye-laws in respect of selection of place of advertisement, the procedure to be adhered in the matter of making selection and the tax that is to be levied. This much is also reflected that after imposition of the aforementioned bye-laws in question, notices have been issued (filed as annexure-1 to the writ petition), wherein petitioners have been asked to make the deposits in question at the point of time when renewal was being accorded in their favour and same has impelled the petitioners to be before this Court.
A supplementary affidavit has also been filed and alongwith the same copy of the bye-laws existing prior to enforcement of impugned bye-laws has been filed alongwith copy of public notice published in daily Dainik Jagran.
On the matter being taken up today, requisite instructions in question have been obtained by Shri Umesh Narain Sharma, Senior Advocate appearing alongwith Shri Chandan Sharma and Shri S.M. Shukla, Advocates and it has been stated that as the issue that is being raised is a pure legal issue, the same be decided, in view of this, with the consent of parties, the present matter is being heard and finally decided.
Shri Somesh Khare, Advocate submitted with vehemence that, in the present case, the premium in question that is being charged is not at all subscribed either by the U.P. Municipal Corporation Act or the Rules framed thereunder and same is Ultra Vires on the face of it for the reason that by subordinate legislation Act/Rules cannot be permitted to be by-passed, in view of this, once financial liability is being sought to be saddled without any statutory backing, such action has to be declared as ultra vires.
Shri Umesh Narain Sharma, Senior Advocate, on the other hand, contended that the proceedings in question are not at all ultra vires and in order to generate revenue of municipal corporation so that better facilities are extended to citizens staying within the municipal limits of Jhansi, such a procedure has been adopted and as far as premium is concerned, it is backed by law and municipal corporation has full authority to charge premium for the sites in question that would be handed over to the petitioners for carrying out business activity of Advertising in view of this, to say that action taken is per-se bad, cannot be accepted.
Amendment in the Act and other Statutes dealing with the matters of local bodies were made by the 73rd amendment of the Constitution which came into force w.e.f. 24.4.1993 by adding Part IX in Chapter VI of the Constitution of India. The another amendment was done in the constitution by the 74th Amendment which came into force from 1st June, 1993 by adding Part IX-A in Chapter VI of the Constitution of India. Article 243-P contains definition Clause, Article 243(Q) relates to constitution of municipalities and Article 243(ZE) relates to constitution of committee for metropolitan planning.
The three Articles (supra) are reproduced as under:-
"Article 243 P :- Definitions:-- In this Part, unless the context otherwise requires:-
(a) ''Committee'' means a Committee constituted under article 243S ;
(b) ''district'' means a district in a State;
(c) ''Metropolitan areas'' means an area having a population of ten lakhs or more, comprised in one or more districts and consisting of two or more Municipalities or Panchayats or other contiguous areas, specified by the Governor by public notification to be a Metropolitan area for the purposes of this part;
(d) ''Municipal area'' means the territorial area of a Municipality as is notified by the Governor;
(e) ''Municipality'' means an institution of self-government constituted under article 243-Q ;
(f) ''Panchayat'' means a Panchayat constituted under article 243B ;
(g) ''population'' means the population as ascertained at the last preceding census of which the relevant figures have been published;
Article 243Q :- Constitution of Municipalities:- (1) There shall be constituted in every State--
(a) a Nagar Panchayat (by whatever name called) for a transitional area, that is to say, an area in transition from a rural area to an urban area.
(b) a Municipal Council for a smaller urban area, and
(c) a Municipal Corporation for a larger urban area, in accordance with the provisions of this Part:
Provided that a Municipality under this clause may not be constituted in such urban area or part thereof as the Governor may, having regard to the size of the area and the municipal services being provided or proposed to be provided by an industrial establishment in that area and such other factors as he may deem fit, by public notification, specify to be an industrial township.
(2) In this article, ''a transitional area'' ''a smaller urban area'' or ''a larger urban area'' means such area as the Governor may, having regard to the population of the area, the density of the population therein, the revenue generated for local administration, the percentage of employment in non-agricultural activities, the economic importance or such other factors as he may deem fit, specify by public notification for the purposes of this Part.
Article 243 ZE :- Committee for Metropolitan Planning:- (1) There shall be constituted in every Metropolitan area, a Metropolitan Planning Committee to prepare a draft development plan for the Metropolitan area as a whole.
(2) The Legislature of a State may, bylaw, make provision with respect to-
(a) the composition of the Metropolitan Planning Committees;
(b) the manner in which the seats in such Committees shall be filled:
Provided that not less than two-thirds of the members of such Committee shall be elected by and from amongst the elected members of the Municipalities and Chairpersons of the Panchayats in the Metropolitan area in proportion to the ratio between the population of the Municipalities and of the Panchayats in that area;
(c) the representation, in such Committees of the Government of India and the Government of the State and of such organizations and institutions as may be deemed necessary for carrying out the functions assigned to such Committees;
(d) the functions relating to planning and coordination for the Metropolitan area which may be assigned to such Committees;
(e) the manner in which the Chairpersons of such Committees shall be chosen.
(3) Every Metropolitan Planning Committee shall, in preparing the draft development plan-
(a) have regard to-
(i) the plans prepared by the Municipalities and the Panchayats in the Metropolitan area;
(ii) matters of common interest between the Municipalities and the Panchayats, including coordinated spatial planning of the area, sharing of water and other physical and natural resources, the integrated development of infrastructure and environmental conservation;
(ii) the overall objectives and priorities set by the Government of India and the Government of the State;
(iv) the extent and nature of investments likely to be made in the Metropolitan area by agencies of the Government of India and of the Government of the State and other available resources whether financial or otherwise;
(b) consult such institutions and organizations as the Governor may, by order, specify.
(4) The Chairperson of every Metropolitan Planning Committee shall forward the development plan, as recommended by such Committee, to the Government of the State."
The constitution was amended to extend more autonomy and self rule to the local bodies and corporations. The purpose was sharing of power by the common people at the lower strata of democratic polity so that it may be convenient to deal with the local problems and provide a system which may suit to local inhabitants of the cities or urban area.
Under definition Clause, the Corporation or Municipal Corporation has been interpreted as Corporation constituted under sub-Clause- C of Clause 1 of Article 243Q . Section 4 of the Act provides that the Municipal Corporation constituted under Article 243Q of the Constitution shall be a body corporate. Article 243(Q) itself provides that the Municipal Corporation shall be constituted for an urban area. Some of the Corporations of Metropolitan Cities are attracted by Article 243(ZE) of the Corporation. Article 243(ZE) speaks for the Constitution of Metropolitan Planning Committee to prepare the plans for the development which includes financial matters.
The Full Bench in the case of Anurag Bansal (Supra) has considered the word "Corporation" and eventually concluded that Government should not treat local bodies and corporations as its regular departments. Provision contained in Article 243(Q) and the use of the word "Corporation" is indicative of the fact that there must be some anatomy to the local bodies and co-operatives to discharge their statutory obligations in pursuance to decision taken by its Board or its elected representatives. Relevant extract of said judgment is as follows:-
"The word ''Corporation'' in ENCYCLOPAEDIC LAW DICTIONARY by Dr. A.R. BISWAS, page 366 has been defined as under:-
"Corporation" - ''Corporation'' means the municipal authorities of a town or city; a body formed and authorized by law to act as a single person although constituted by one or more persons and legally endowed with various rights and duties including the capacity of succession owning properties etc.
A corporation aggregate has been defined as a collection of individuals united into one body under a special denomination, having perpetual succession under an artificial form, and vested by policy of the law with the capacity of acting in several respects as an individual, particularly of taking and granting property, of contracting obligations and of suing and being sued, of enjoying privileges and immunities in common, and of exercising a variety of political rights, more or less extensive, according to the design of its institution, or the powers conferred upon it, either at the time of its creation or at any subsequent period of its existence. HALSBURY''s Laws of England, 3rd ed. vol. 9 p. 4. A company registered under the Companies Act, 1956, is a corporation aggregate.
A corporation sole is a body politic having perpetual succession, constituted in a single person, who, in right of some office or function, has a capacity to take, purchase, hold and demise lands, tenements and hered it aments as also to take and hold personal property. HALSBURY''S Laws of England, 3rd ed. vol. 9 p. 7. The Administrator General under Section 5 of the Administrator-General''s Act, 1918, is a corporation sole.
In STROUD''S JUDICIAL DICTIONARY OF WORDS AND PHRASES: SEVENTH EDITION, Page 570 the word Corporation has been defined as under:-
"Corporation" ''Corporation'' is that which the civilians call universitatem, or collegium, and is a body politick authorized to take and grant, having a common seal, &c. These are constituted either by prescription, by Letters Patent, or by Act of Parliament" (Cowel; see also Termes DE LA Ley; JACOB). They are either (1) spiritual, e.g. bishops, deans with their chapters, parsons and vicars; or (2) temporal, e.g. municipal corporations, and companies incorporated by charter or Act of Parliament; or (3) mixed, i.e. composed of spiritual and temporal persons, as in some colleges and hospitals. Again, they are either (1) sole, e.g. bishops, parsons and vicars; or (2) aggregate, e.g. deans with their chapters, municipal corporations, and incorporated railway, water, gas, or trading, companies. Cp. BODY CORPORATE; BODY UNINCORPORATE.
The powers of a corporation, created by Act of Parliament, are limited to those which are expressly conferred by the Act, or which by necessary implication (see NECESSARY) are included in the express powers."
In BLACK''S LAW DICTIONARY, NINTH EDITION, Page, 391, the word Corporation has been defined as under:-
"Corporation, n. (15)c An entity (usu. a business) having authority under law to act as a single person distinct from the shareholders who own it and having rights to issue stock and exist indefinitely; a group or succession or persons established in accordance with legal rules into a legal or juristic person that has a legal personality distinct from the natural persons who make it up, exists indefinitely apart from them, and has the legal powers that its constitution gives it,-Also termed corporation aggregate; aggregate corporation; body corporate; corporate body. See Company [Cases: Corporations incorporate, vb.-incorporate, adj.
The NEW LEXICON WEBSTER''S DICTIONARY OF THE ENGLISH LANGUAGE COPYRIGHT (year 1987) Lexicion Publication, INC, Page 218, the word ''Corporation'' has been defined as under:-
"Corporation - a body or society entitled to act as a single person, esp. a body of municipal authorities (law) an artificial person created by charter etc,. Made up of many persons (corporation aggregate) or one (corporation sole) [fr. L. corporatio (corporationis, action of incorporating]."
44- Thus, in view of reading the definition given in various dictionaries (supra) it is evident that the corporation is a body of municipal authorities entitled to act as a single person and discharging its obligation in accordance with the statutory powers conferred by the Act of Parliament or State Legislature as the case may be. Thus the Corporations have got autonomy to some extent to manage their affairs within four corner of law under the power conferred by statutory provision. That is why the Constitution has used the word "body corporate" or "corporate body"
The Stroud''s Judicial Dictionary (supra) defines ''body corporate'' as "Every body politic, or corporate, and person and persons include parishes.
In the case of Devi Dayal Marwah Vs. The State of Andhra Pradesh, the Hon''ble Supreme Court held that one of the tests to find out whether an institution is a corporation or a department of the Government is to enquire whether the undertaking functions as a responsible independent organization and not as part of any department of the State. Another test would be to see whether it is endowed with the capacity of contracting obligations, and of suing and being sued.
The Supreme Court in a case reported in Virendra Kumar Srivastava Vs. U.P. Rajya Karmachari Kalyan Nigam and Another, held that the Corporation is not engaged in any State function of vital importance making available daily needs of the Government servants which is an activity like any other commercial activity.
48- In one another case reported in Union of India and Another Vs. Azadi Bachao Andolan and Another, , the Supreme Court held that a ''Corporation'' has administrative activities, directors and managers who reside, meet and take decisions in one or several places. It has activities and carries on business.
From the scheme given in the Act, it is evident that various duties have been assigned to the officers of municipalities headed by Municipal Commissioner and ultimate policy maker is the municipal body containing its members.
In one other case reported in P.C. Agarwala Vs. Payment of Wages Inspector, M.P. and Others, , the Supreme Court observed that a ''Corporation'' is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who for some purposes may be called an agent, but who is really the directing mind and will of the corporation, the very ego and centre of the personality of the ''corporation''.
The Bombay High Court in the case reported in 2000-I LLJ 1123 State of Maharashtra vs. Dr. Rustom Franroze Hakim held that the Corporation is a body corporate and is not the same as the State Government.
Madhya Pradesh High Court in the case reported in 2001-II LLJ 1679 Food Corporation of India vs. Employees of FCI held that the Corporation is a public utility establishment.
Throughout the government system, it has often been found convenient to confer corporate power on a particular body that performs public functions. According to Professor H.W.R. Wade (Administrative Law Tenth Edition) to quote:- "whenever Parliament is willing to grant a sufficient measure of autonomy, the public corporation is commonly employed. It has a legal existence of its own, and can be given statutory functions which can operate outside the normal organization of the service of the Crown. It offers scope for many kinds of governmental experiment, under which central control, local control, particular expertise and independence can be blended in the desired proportions".
Learned author further observed that there is a wide range of other public corporations of a governmental character, mostly with regulatory functions, which operate independently (supra). It has further been observed that when the question arises whether a public authority is acting lawfully or unlawfully, the nature and extent of its power or duty has to be found in most cases by seeking the intention of Parliament as expressed or implied in the relevant Act. The principles of administrative law are generalised rules of statutory interpretation. Thus, the dominating source of power is Parliament i.e. constitution. The local authorities enjoy a wide ''incidental'' power under the Local Government and they may do anything ''which is calculated to facilitate, or is conducive or incidental to the discharge of any of their functions.
A Corporation or the local body constituted in pursuance to constitutional mandate and statutory provision by Act of Parliament or State Legislature may have difference to some extent. In the word of Professor Wade (supra) in England the corporation was incorporated by royal charter in the year 1627 in the reign of King Charles I. The fact that it is incorporated by royal charter is of importance, because a corporation so constituted stands on a different footing from a statutory corporation. The difference being that the latter species of corporation can only do such acts as are authorised directly or indirectly by the statute creating it, whereas the former can, speaking generally, do anything that an ordinary individual can do.
In the Administrative Law by I.P. Massey the statutory public corporation has been defined "as an agency created by an Act of legislature, operating a service on behalf of the government, but as an independent legal entity with funds of its own and largely autonomous in management. The learned author incapsuled the ingredients with regard to statutory corporation, (page 437) as under, to quote:-
"Statutory corporation is a creature of a statute which lays down its rights, duties and obligation. Therefore, a corporation can have those rights and exercise those functions only which are authorised by the statute either expressly or by necessary implication, provided it is not expressly prohibited. Actions of a corporation outside the authorised area of operation are ultra vires and cannot bind the corporation. Such ultra vires acts cannot be ratified and the doctrines of estoppel or acquiescence do not apply in such cases.
It has a separate legal entity and, therefore, can sue or be sued in its corporate name. It can hold and dispose of property by such name.
Depending on the provisions of the statute of its creation a corporation is largely autonomous in finance and management. It has funds of its own.
It operates an activity on behalf of the government which may be regulatory, benefactory, commercial or development.
The statute may delegate rule making power to a corporation; such rules and regulations are binding if they are within the authority, made in the manner laid down by the statute and do not violate any provision of the Constitution.
A statutory corporation is a ''State'' within the definition of the term in Article 12 of the Constitution, and therefore, is subject to the writ jurisdiction of the Supreme Court and high Courts under Articles 32 and 226 of the Constitution.
Keeping in view the constitutional provisions (supra) and definition of word ''corporation'', there appears no doubt that though the corporations discharge their obligations in pursuance to statutory provisions contained in the Act but that too subject to only limited interference of the State Government. The government may issue appropriate guidelines, frame rules or regulations without substantially affecting the autonomy of the corporations and also without interfering day-to-day business. Otherwise the purpose of 74th amendment of the Constitution shall frustrate. In any case it is not permissible for the government to treat the local bodies and corporations as its regular departments. The provision contained in Article 243(Q) and the use of word ''Corporation'' is indicative of the fact that there must be some autonomy to the local bodies and corporations, to discharge their statutory obligations in pursuance to decision taken by its Board or its elected representatives."
After respective arguments have been advanced, the factual situation that is so emerging that after Constitution (Seventy Forth Amendment) Act 1992, part IX-A comprising of Articles 243-P to 243Z(G) municipal corporations, in consonance with the provisions of Article 243-X , are empowered to levy, collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such limits as may be specified in the law.
The power conferred on the Corporation under Section 172 of the Act contains the power to impose tax on trades, professions, transfer of property, tax on vacant land and so on. Sub-section (2) of Section 172 empowers the Corporation to impose tax in addition to the tax specified in Sub-section (1) for the purposes of Act and subject to the provisions thereof. The power contained in Sub-section (1) of Section 172 is quite exhaustive and empowers the Corporation to impose tax on any matter in furtherance of the Act. Sub-section (4) of Section 172 of the Act further clarifies that the power of the Corporation to impose tax shall be similar as of the State Government, meaning thereby, power of State Government to impose tax under List 2 of Schedule-7 of the Constitution, shall be available to the Corporations to impose taxes within their jurisdiction.
Apart from Sub-section (2) of Section 172 , Section 192 confers additional power to the Corporation empowering it to impose tax on the advertisement.
Further Section 193 provides that without written permission of the Municipal Commissioner, no advertisement shall be exhibited. It further provides that in case advertisement contravenes any bye-law made by the corporation under Clause (48) of Section 541 of the Act, no permission shall be granted. It further provides that the permission shall be granted only for the period for which tax is paid.
Section 194 of the Act further provides that the permission granted under Section 193 of the Act shall be void in case advertisement contravenes any bye-law made by the corporation under Clause (48) of Section 541 of the Act. Section 195 further provides that it is the beneficiary of the advertisement, who shall be responsible to face punitive action in the event of contravention of provision or bye-laws with regard to advertisement. Section 196 authorizes Municipal Commissioner to undertake exercise for removal of unauthorised advertisements, where any advertisement is erected, exhibited, fixed or retained contrary to the provisions of Section 192 or Section 193 , or after the written permission for erection, exhibition, fixation or retention thereof for any period has expired or became void.
The issue that is being raised before us is primarily and principally the issue that Municipal Corporation has got no competence to ask for premium as has been done in the present case by means of bye-laws in question.
Premium in the Law Lexicon, IIIrd Edition 2012 pg.1398 has been defined as follows:-
''Premium'' means a sum paid as consideration for grant of lease. It represents capitalized rent which in fact is the difference between the actual rent and the rent that may be otherwise be obtained by the lessor.
''Premium'' is defined as ''periodical payment for the property''. Premium is charged from the advertisers, for using property where advertisement is done, is owned by Nagar Nigam or it has been leased in favour of the Nagar Nigam and in reference of properties that are not owned by Nagar Nigam or that has not been leased by Nagar Nigam, no premium is being charged. The Nagar Nigam, in its wisdom, on the same criteria as a private owner on premium gives its property for advertisement on its land and is charging the premium that has to be determined/fixed by auction/tender, which is not refundable by the Nagar Nigam as owner of the property over which any person wants some advertisement. In lieu of providing site to display advertisement, premium is being charged.
Under U.P. Municipal Corporation Act, chapter XXXIII deals with the power to make rules, bye-laws and regulations. Under this Chapter, section 540 deals with power of State Government to frame rules and section 541 deals with the power of Corporation to make bye-laws and item No. 48 clearly authorizes the U.P. Municipal Corporation to frame bye-laws in respect to the field of advertisement in reference of prohibition and regulation of advertisement and clause 41 empowers Municipal Corporation to fix fee for any license, sanction or permission to be granted under this Act. Clause 49 talks of framing bye-laws for carrying out generally the provisions and intention of the Act and the said bye-laws should not at all be inconsistent with the Acts and Rules.
Bye-laws can be framed for regulating the Advertisements. Regulations in the shape of that are subordinate legislation validly made becomes part of the Act and should be read as such. Apex Court in the case of U.P. Power Corporation Ltd. Vs. National Thermal Power Corporation Ltd. and Others, , has considered the concept of Regulation as follows:-
"The concept of regulatory jurisdiction provides for revisit of the tariff. It is now a well-settled principle of law that a subordinate legislation validly made becomes a part of the Act and should be read as such.
There cannot be any doubt whatsoever that the word ''regulation'' in some quarters is considered to be unruly horse. In Bank of New South Wales v. Commonwealth [(1948) 76 CLR 1] Dixon, J. observed that the word "control" is an unfortunate word of such wide and ambiguous import that it has been taken to mean something weaker than "restraint", something equivalent to "regulation". But, indisputably, the regulatory provisions are required to be applied having regard to the nature, textual context and situational context of each statute and case concerned.
The power to regulate may include the power to grant or refuse to grant the licence or to require taking out a licence and may also include the power to tax or exempt from taxation. It implies a power to prescribe and enforce all such proper and reasonable rules and regulations as may be deemed necessary to conduct the business in a proper and orderly manner. It also includes the authority to prescribe the reasonable rules, regulations or conditions subject to which the business may be permitted or may be conducted. [See Deepak Theatre, Dhuri Vs. State of Punjab and others, ].
Even otherwise the power of regulation conferred upon an authority with the obligations and functions that go with it and are incidental to it are not spent or exhausted with the grant of permission. [See State of Uttar Pradesh and Others Vs. Maharaja Dharmander Prasad Singh and Others, In that sense, the power of Central Commission stricto sensu is not a judicial power.
This Court in Sri Venkata Seetaramanjaneya Rice and Oil Mills and Others Vs. State of Andhra Pradesh etc., held:
"20. Then it was faintly argued by Mr. Setalvad that the power to regulate conferred on the respondent by Section 3(1) cannot include the power to increase the tariff rate; it would include the power to reduce the rates. This argument is entirely misconceived. The word "regulate" is wide enough to confer power on the respondent to regulate either by increasing the rate, or decreasing the rate, the test being what is it that is necessary or expedient to be done to maintain, increase, or secure supply of the essential articles in question and to arrange for its equitable distribution and its availability at fair prices..."
In Hotel and Restaurant Assocn. and Another Vs. Star India Pvt. Ltd. and Others, , in regard to the role of TRAI as a regulator, this Court said:
"55. TRAI exercises a broad jurisdiction. Its jurisdiction is not only to fix tariff but also laying down terms and conditions for providing services. Prima facie, it can fix norms and the mode and manner in which a consumer would get the services.
The role of a regulator may be varied. A regulation may provide for cost, supply of service on non-discriminatory basis, the mode and manner of supply making provisions for fair competition providing for a level playing field, protection of consumers'' interest, prevention of monopoly. The services to be provided for through the cable operators are also recognised. While making the regulations, several factors are, thus required to be taken into account. The interest of one of the players in the field would not be taken into consideration throwing the interest of others to the wind."
In K. Ramanathan Vs. State of Tamil Nadu and Another, , this Court held:
"18. The word "regulation" cannot have any rigid or inflexible meaning as to exclude "prohibition". The word "regulate" is difficult to define as having any precise meaning. It is a word of broad import, having a broad meaning, and is very comprehensive in scope. There is a diversity of opinion as to its meaning and its application to a particular state of facts, some courts giving to the term a somewhat restricted, and others giving to it a liberal, construction. The different shades of meaning are brought out in Corpus Juris Secundum, Vol. 76 at p. 611:
"''Regulate'' is variously defined as meaning to adjust; to adjust, order, or govern by rule, method, or established mode; to adjust or control by rule, method, or established mode, or governing principles or laws; to govern; to govern by rule; to govern by, or subject to, certain rules or restrictions; to govern or direct according to rule; to control, govern, or direct by rule or regulations.
''Regulate'' is also defined as meaning to direct; to direct by rule or restriction; to direct or manage according to certain standards, laws, or rules; to rule; to conduct; to fix or establish; to restrain; to restrict."
In Central Power Distribution Co. and Others Vs. Central Electricity Regulatory Commission and Another, , this Court held:
"22.3. As already noticed, the Central Commission has the power and function to evolve commercial mechanism such as imposition of UI charges to regulate and discipline. It is well settled that a power to regulate includes within it the power to enforce..."
Regulations thus can be framed to regulate the Advertisement business and in the said direction, Municipal Corporation has the authority to lay down terms and conditions for providing advertising sites on non-discriminatory basis, making provision for competition providing for a level playing field to all in the field of advertising business to obtain Advertising sites belonging to Municipal Corporation or leased out in favour of Municipal Corporation. Fixation of minimum premium and offering of advertising sites owned by Municipal Corporation or leased out in favour of Municipal Corporation on premium to generate the revenue of Municipal Corporation falls within the regulatory powers of Municipal Corporation.
Once there is an authority to frame bye-laws and bye-laws in question have been framed providing for a transparent procedure to auction the sites belonging to Nagar Nigam or leased out in favour of Nagar Nigam to be used by advertisers for carrying out advertisement and in order to make the system more transparent, more revenue generating and more competitive, procedure has been prescribed that it would be done only by a tender/auction and a minimum premium would be fixed and then on the basis of price offered, the bids would be finalized, then to say, in the facts of the case, that Jhansi Municipal Corporation lacks authority to ask for premium, cannot be accepted, inasmuch as, Section 541(41) , (48) and (49) clearly authorizes the Jhansi Nagar Nigam to make bye-laws and nothing has been brought before us which would go to show that the bye-laws that has been subjected to challenge before us and has been subjected to criticism in any way are inconsistent to the provisions of U.P. Municipal Corporation Act and the Rules framed thereunder rather same is in the direction to ensure free/fair/transparent manner in the direction of regulation of advertisement sites, and premium is being charged only in reference of property belonging to Nagar Nigam or leased out in favour of Nagar Nigam to generate the revenue of Municipal Corporation and in order to ensure transparency, then to say that U.P. Municipal Corporation lacks legislative competence cannot be accepted rather such an exercise is for fulfilling the aim/object of the Act.
Premium and tax have been dealt with differently and there should be no confusion on this issue of the matter that tax is to be charged on each and every advertisement whereas premium in question is to be charged only in reference to the properties that belong to Nagar Nigam or such properties that has been leased out in favour of Nagar Nigam. Premium amount is paid for privilege to use the site for advertisement purpose belonging to Nagar Nigam or leased out in favour of Nagar Nigam. Payment of premium is a voluntary act. Chief purpose of tax is to raise funds for the support of Municipal Corporation or for public purpose, while premium is charge for the privilege/benefit conferred. While charging premium there is admittedly quid pro quo as Municipal Corporation in lieu of premium is according permission to use the site for the purposes of Advertisement that belongs to Nagar Nigam or that has been leased out to Nagar Nigam.
The word "Premium" as has been spelt out in By-Law No. 7 is a terminology used in Section 105 of the Transfer of Property Act wherein lessor, lessee, premium and rent has been defined, and as per the same transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent and once the property in question belonging to Nagar Nigam or leased out to Nagar Nigam is being parted for specific purpose and in lieu of the same, the amount in question is being asked for, then to say that Nagar Nigam would have no jurisdiction or authority in law to ask for the premium or the price for the same, cannot be accepted. Demand of premium is fully subscribed under law and at the point of time when bye-laws in question have been framed, there is no inconsistency reflected qua the Act and Rules, rather it is in consonance with the provision of the Act, as Section 193 clearly provides that in case advertisement contravenes any bye-law made by Corporation under Clause (48) of Section 541 of the Act, then no permission shall be accorded and Section 194 makes permission accorded as void. In view of this, the challenge made on this score is turned down.
Counsel for the petitioners has placed reliance on following decisions:-
(i) Kalyani Mathivanan Vs. K.V. Jeyaraj and Others ;
(ii) Jai Prakash Vs. District Magistrate and Others, ;
(iii) JCLR 399 : 2014(6) ADJ 18 : 2014 AllCJ 2179 (Ramji and others vs. Settlement Officer of Consolidation and others);
(iv) Prabhu Narayan Vs. A.K. Srivastava,
Said judgments, so cited are not at all applicable or attracted in the facts of the present case, specially keeping in view the specific provision contained under Section 541(41) , (48) and (49) of U.P. Municipalities Act that empowers Municipal Corporation to frame bye-laws to carry out the purpose of the Act. Bye-laws has its traces under the aforementioned provisions, at no place has overridden or is inconsistent with the provision of the Act. Bye-laws at no place have crossed the limits, rather the subject of Advertisement has been dealt with in one go, with provision of premium and tax dealt with specially but both independent to each other. Hence there has been no excessive delegation, rather bye-laws have been framed within the statutory framework to best serve the objects and purpose of the Act by adopting procedure for distribution of Municipal resources in utmost transparent manner based on public trust doctrine. Apex Court in In Re: Special Reference No. 1 of 2012, has clearly ruled that action of State whether it relates to distribution of largesse, grant of contracts or allotment of land, is to be tested on the touchstone of Article 14 .
Petitioners'' counsel has also tried to question before us the validity of demand notice. One such notice as appended in the writ petition provides for as follows:
Notice has been assailed by contending that premium was also included therein and on this aspect of the matter instructions have been received sent by the Municipal Commissioner, Municipal Corporation of Jhansi and therein a categorical mention has been made that as per the notices that have been subject matter of challenge, therein the demand in question does not include premium from any quarter whatsoever and there are two parts of the said notice wherein demand has been raised on two different facets:-
(i) for the period before enforcement of bye-laws, the demand is as per the old bye-laws.
(ii) for the period after the enforcement of the bye-laws in question, tax has been demanded at the new rate.
Categorical mention has also been made therein that no premium has been asked for in respect of Demand Notice No. 237/V.V./N.N./2015 dated 07.11.2015 and the fact that notices issued are strictly in consonance with the prevailing bye-laws.
Faced with this, Shri Somesh Khare, Advocate has proceeded to give up his challenge to the said demand made by said notices.
Once such is the factual situation that Jhansi Municipal Corporation has got legislative competence by means of bye-laws to demand payment of premium in order to generate resources and in order to maintain much more transparency in the matter of allotment/public auction of advertising sites and the demand that has been so made is per-se justifiable, then no case for quashing of impugned notices is made out.
With these observations, writ petition is dismissed.