Municipal Council vs Manager, Bombay Co., Ltd.

Kunju Raman, C.J.—An interesting question is raised for decision in this criminal revision case presented on behalf of the Municipal Council l of Alleppey. The facts that led up to the filing of the petition are briefly as follows: Toe Municipal Council charged the Respondent, who is the manager of the Bombay Company Ltd., at Alleppay, with having committed the offence punishable under the bye-laws framed u/s 326(13) and Section 334, District Municipalities Act (Travancore). The Petitioner''s case was that the Respondent did not apply for and take out a license in respect of a canteen which ho was conducting for the benefit of the workmen employed in the Bombay Company at Alleppay at which such workmen could get refreshment. According to the Petitioner, for running such a canteen it is necessary that a licence should be obtained from the Municipality the fee for which is Rs. 30 The Respondent not having obtained such a license has become liable to punishment under the provisions of law mentioned above.

The First Class Bench of Magistrates at Alleppey tried the case and arrived at the conclusion that the accused was not guilty and acquitted him. There were three Magistrates who presided at the trial. Two of them took the view that:

there is no provision in the District Municipalities Act, XXIII [23] of 1116, under which the prosecution was launched which entitled the Municipality to require a license to be taken or to charge a fee for such license.

The bye-laws framed by the Municipal Council which require the taking of such license in the view of the two Magistrates were ultra vires of the powers given to the Municipal council and, therefore, cannot be enforced in law. Any contravention or breach of the bye-laws cannot, therefore, be regarded as an offence in law. The third Magistrate while agreeing with the conclusion reached by his two colleagues stated that the question as to whether the bye-laws were ultra vires or not need not be considered in deciding the case, but that in his view Section 326(13), District Municipalities Act which empowers the Municipality to make bye-laws for the regulation of the places mentioned therein to which the public ara admitted for repose or for the consumption of any food or drink does not apply to the Respondent''s canteen which is run only for the comfort of the labour hands in the employment of the company. Only such labour hands have access to the canteen. It is not a place to which the public are admitted and, therefore, the bye-laws framed u/s 326(13) will not apply to the canteen. For that reason he agreed with the other two Magistrates in their conclusion that the accused was not guilty.

The facts alleged in the complaint were not disputed and the Bench of Magistrates acted on the assumption that all those facts are admitted. In their view there was only a question of law that arose for determination in the case, viz., whether the accused had contravened the provisions of the District Municipalities Act or the bye-laws framed thereunder by the Municipality in the professed exercise of the powers vested in it by the Act.

It is argued on behalf of the Municipality by their learned Counsel Mr. T.K. Joseph, that the view taken by the Bench of Magistrates is erroneous in law inasmuch as neither of the two reasons given by the Magistrates is well-founded. To appreciate this contention it is necessary to read the provisions of law relied upon by Municipality and which came for consideration at the trial of the case in the Court below. Section 326, District Municipalities Act, XXIII [23] of 1116, occurs under the Sub-heading ''Bye-laws". The relevant portion of the section is as follows:

The Councll may make bye laws, not inconsistent with this Act of with any other law to provide:

(13) for the regulation of hotels, lodging houses boarding houses, choultries, rest houses, emigration depots, restaurants, eating houses, cafes, refreshment rooms coffee houses, and any premises to which the public ace admitted for repose or for the consumption of any food or drink

It is conceded that nearly 300 workmen are employed in the Respondent company Alleppey who resort to this canteen for food and drink. Therefore, It is a place to which they are admitted "for respose or for the consumption of any food or drink" under Sub-clause. 13 read above. The reason given by one of the Magistrates that the canteen is not open to the public but only to the workmen employed in the Respondent company can easily be disposed of. The Petitioner''s learned Counsel relies upon the definition of the word ''public'' in the General Clauses Act (Travancore), According to this definition, "public1 includes any class or section of the public." The provisions of the General Clauses Act will apply to the District Municipalities Act and if the word ''public'' as used in Section 326(13) is understood in the sense in which it is explained in Section 2(15) (present Section 2(28) of Act VII[7] of 1125) of the General Clauses Act, II[2] of 1073, then it is obvious that the reason given by on" of the Magistrates that the canteen not being open to the public does not require a license cannot be supported. Although it is not open lo the public, it is open to a section of the public and that is sufficient according to the definition of the word "public" to attract the provisions of Clause 13.

The next question is whether the framing of bye-laws requiring the taking out of a license on payment of the prescribed fee of Rs. 30 is ultra vires of the provisions of the Act. The reason given in the judgment of the lower Court on this point is that the bye law relied upon by the Petitioner imposes a pecuniary burden on people coming within its purview and that since there is no express provision in the statute or indication in it that the legislature contemplated conferring such a power upon the corporation the bye-law is ultra vires. They point out that chapter XII of the Act deals with the general provision for licensing and fees and that neither in this chapter nor in schedule 3 attached to it can be traced any provision that hotels, lodging houses etc. can be licensed. They refer to the provisions of the City Municipal Act, IV[4] of 1116, which was enacted prior to the District Municipalities Act in Travancore. The provision corresponding to Section 326 Clause (13) is Section 365, Clause (12) of the City Municipal Act. It makes express provision for licensing of hotels, lodging houses etc., because the clause reads ''''for regulation and licensing of hotels, lodging houses... "They, therefore, adopt the reasoning that in the absence of similar words in the District Municipalities Act, it must be presumed that no power is conferred upon the District Municipalities to insist upon a license being taken or upon a license fee being paid in the case of hotels, lodging houses etc. According to them, although the bye-law was properly passed by the Municipality and it has been accepted and confirmed by the Government, it cannot have any binding force in the view that they have taken of the powers of the Municipality. To meet the contention that there is no provision in the District Municipalities Act which empowers the Municipality to insist upon a license being taken on payment of a license fee. Mr. Joseph for Petitioner invites the attention of the Court to Section 261, and the items in Schedule 3 of the District Municipalities Act. According to Section 261, the council is given the power of publishing a notification.

that no place within municipal limits or at a distance within three miles of such limits shall be used for any one or more of the purposes specified In Schedule 3 without the license of the executive authority and except in accordance with the conditions specified therein.

In Schedule 3 the following items are specifically relied upon by the Petitioner municipality in support of this contention. The General heading of the schedule is "Purposes for which premises may not u/s 261 be used without a license". The items relied on are the following:

* * * * * Articles made of flour - Baking, preparing, beeping or storing for human consumption for other than domestic use.

Biscuits-Baking, preparing, keeping or storing for human consumption (for other than domestic use).

Bread - Biking, preparing, keeping ''or storing for human consumption (for other than, domestic use).

Comestibles -Baking, preparing, keeping or storing for human consumption (for other than domestic use).

Confectionery - Baking, preparing, keeping or storing for human consumption (for other than domestic use).

The learned Counsel contends that in the canteen these articles are stored for hum in consumption or other than domestic use and consequently under this section which occure in chapter XII of the Act entitled "Licenses and Fees" the Municipality is expressly authorised to insist on a license and to levy a license fee in respect of a canteen like the Respondent''s. Beading these provisions along with Section 326, the bye-law which requires the taking out of a license on payment of a fee of Rs. 30 for conducting the canteen comes strictly within the purview of the powers vested in the Municipality by the Act and it cannot be said to be inconsistent with the Act. This is in conformity with She well recognised principle that a tax must be distinguished from the fee raised from the licenses and permits which may be issued for regulating trades and occupations. The power to regulate the particular branch of business carried on by the Respondent is vested in the Municipality and the exercise of such a power carries with it the power to collect a fee for the issue of licenses and permits to cover the probable expenses that may have to be incurred in regulating the business. We are satisfied that this contention is well founded.

Reference was made by the Respondent''s learned Counsel to the decision reported in M.S. Ayyar and Co. v. Srinivasalu Naidu A.I.R 1941 Mad. 749 : (43 Cr. L.J. 78) and in South Indian Railway Co. Ltd., Trichina. poly v. The Panchayat, Board, Mandapam 1943-2 M.L.J. 307 : (A.I.R. 1943 Mad. 733 ). The first of these decisions refers to the legality of collecting an advertisement tax which can be distinguished from the present case inasmuch as there is express provision here for insisting upon a license and payment of a fee, therefor, when certain kinds of articles of food not meant for domestic consumption are manufactured or stored in a place. The learned Judge refers to the absence of a similar provision with regard to advertisements in the corresponding provisions of the Madras District Municipalities Act V(5) of 1950, chapter XII, in which licenses and fees are comprehensively dealt with. In the second case to which I was a party the decision was based upon the construction of the Railways Act IX[9] of 1890 which required a notification by the Government of India as a condition precedent to the levying of a property tax. Since such a notification was absent it was held that the tax could not be collected. In the judgment in that case I quoted the decision of the Privy Council in AIR 1940 183 (Privy Council) The Judicial Committee of the Privy Council in that case summarised the principle applicable to taxation cases as follows:

The subject is not taxable by inference or any analogy, but only by the plain words of a statute applicable to the facts and circumstances of this case.

Their Lordships quoted the observations of Lord Cairns in Partington v. Attorney-General (1868) 4 H.L. 100 : (38 L.J. Ex. 205):

As I understand the principle of fiscal legislation it a this, If the parson sought to be taxed comes within be letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown, seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of the law the case might otherwise appear to be." In the present case where it is a license fee and not a tux which is objected to we have attempted to show that the levying of the license fee comes within the letter of the law and, therefore, the Municipality was justified in demanding under the bye-law framed by it that the fee should be paid and a license taken for running a canteen. In these circumstances, the order made by the Court below is set aside (...).