Ramchandra Laxmichand vs Municipal Council, Satna

P.V. Dixit, C.J.—This order will also govern Misc. Petition No. 325 of 1962.

These are two applications under article 226 of the Constitution for the issue of writs of certiorarl for quashing notices of demand issued to each of the Petitioners u/s 164 of the Madhya Pradesh Municipalities Act, 1961 (hereinafter referred to as the Act) by the Respondent Municipal Council of Satna calling upon them to pay the amount of fees due from each of the Petitioners in respect of of the use of municipal market and for quashing the proceeding''s initiated u/s 165 of the Act for recovery of the said amounts by sale of moveable and immoveable property belonging to the applicants.

The fee was levied by the Respondent Municipal Council on. all sellers bringing articles for sale in the municipal market and also on purchasers at a certain rate. The validity of this imposition, was upheld in Misc. Petition No. 107 of 1957 (decided on 21st March 1958) filed by the patitioners and also in L. P. A. No. 86 of 1958 (decided on, 27th March 1959) arising out of that petition. It was held that the imposition for the use of the municipal market fell within the meaning of the term ''fees'' as used in Section 120 of the Rewa State Municipalities Act, 1946. Thereafter the Municipal Council sought to recover the market fees due from the Petitioners as arrears of land revenue purporsing to act u/s 166 of the Rewa State Municipalities Act of 1494. The Petitioner M/s Ramchandra Laxmichand challenged the validity of the recovery of the amount as arrears of land revenue u/s 166 by filing an application under Article 226 of the Constitution (M. P. No. 314 of 1961 decided on 6th February 1962). That application was allowed by us and proceedings for the recovery of the market fee due from the said Petitioner at arrear of land revenue were quashed. We tool the view that under the Rawa State Municipalitie Act the market fees could not be recovered as arrears of land revenue as the amount of fees was not any rent due in respect of any and vested in or entrusted to the management the municipal council.

After the coming into force on 1st February 1962 of the M. P. Municipalities Act, 1961, which repealed the Rawa State Municipallttes Act, the Municipalty Council. Satna, commenced fresh proceedings for the recovery of the market fees due from each of the Petitioners. The Council sent to each of the applicants (sic) u/s 164 for the sum claimed as due. When the Petitioners failed to pa(sic) the sums claimed as due in the bills and did not show any cause to the satisfaction of the Chief Municipal Officer for non-payment, they were served with notices of demand u/s 164(3). The Petitioners still did not pay the amount claimed from them and thereupon the Respondent-Council applied u/s 165(1) to the First Class Magistrate, Satna, for the recovery of market fees from each of the Petitioners by seizure and sale of their removable and immovable property.

Before stating the contentions of the Petitioners, it is necessary to refer to the material provisions of the Act. The Rawa State Municipalities Act, 1946, was one of the Acts repealed by Section 2(sic) of the Act. Sub-section (2) of Section 2 inter alia provides that notwithstanding the repeal of the Acts mentioned in-Sub-section (1),fees fixed under the repealed Acts "shall in so far as they are not inconsistent with the provisions of this Act, be deemed to have been......fixed......under this Act". Section 2(2)(iii) says:

any action initiated for recovery of taxes under the said Acts or any enactments thereby repealed shall be continued in accordance with the provisions thereof.

The recovery, of municipal claims is dealt with by the provisions contained in Chapter VIII of the Acts Section 164 requires a municipal council to present to the person liable a bill for the amount due on account of taxes, rent and of(sic) aims. It is in these terms-

(1) when any amount -

(a) which, by or under any provisions of this Act is declared to be recoverable in the manner provided by this Chapter; or

(b) which, not being leviable under Sub-section (1) of Section 157 or payable on demand on account of an octroi or a toll, is claimable as an amount or instalment on account of any other tax which is being imposed or may hereafter be imposed in any Municipality; or

(c) which, on account of rent of any Municipal land, buildings, shops, Gumtis or any other property;

shall have become due, the Chief Municipal Officer shall with the least practicable delay, cause to be presented to the person liable for the payment thereof a bill for the sums claimed as due.

(2) Every such bill shall specify-

(a) the period for which; and

(b) the property, occupation or thing in respect of which the sum is claimed;

and shall also give notice of-

(i) the liablity incurred in default of payment; and

(ii) the time within which an appeal may be preferred as hereinafter provided against such claim.

(3) .........

(4) ..........

The third Sub-section of Section 164 provides that if the bill is not paid within fifteen days of the presentation, the Chief Municipal Officer may serve upon the person liable a notice of demand in the prescribed form. If the person on whom a notice of demand has been served does not within fifteen days from the service of such notice pay the sum demanded in the notice, then u/s 165 the Municipal Council can apply to a Magistrate having jurisdiction within the limits of the Municipality for the recovery of the amount due together with interest "by distress and sale of any movable property or attachment and sale of immovable property" belonging to the person within the limits of the Magistrate''s jurisdiction. Section 176 lays down that-

No distraint shall be made and no suit shall be instituted for the recovery of any sums due to a Council under this Act after the expiration of six years from the date on which such sum became due.

The Petitioners contend that as the proceedings initiated by the Respondent Council under the Act for the recovery of the market fees were not pending when the Act came into force, Section 2(2)(iii) of the Act had no applicability and the amount claimed from them could not be recovered in accordance with the provisions of the repealed Act; that the recovery could not be made even u/s 164 of the Act as the market fee imposed under the repealed Act did not fall under any of the categories mentioned in Section 164(1); that in any case Section 164 applied only to the recovery of the amounts becoming due after the coming into force of the Act; that the bills issued to each of the Petitioners were not in conformity with Section 164(2), and that having regard to the provisions of Section 176 no recovery could at all be made of any sum which became due to the Council more than six years before the issue of the warrant of distress.

In our judgment, there is no substance in the contention that the recovery of the market fees due from the Petitioners could not be made u/s 164 of the Act. It is quite true that when the Act of 1961 came into force no proceedings under the repealed Rewa State Municipalities Act for recovery of the market fees were pending. The impugned proceedings were initiated after the Act came into force and after we had quashed in Misc. Petition No. 314 of 1961 recovery proceedings under the repealed Act. In the case of some of the Petitioners the bills issued to them under the repealed Act were cancelled and fresh bills under the new Act were issued to them u/s 164. There is, therefore, no question of the applicability of Section 2(2)(iii) and of the recovery of the market fees in accordance with the provisions of the repealed Act. But this does not leave the Municipal Council without a remedy. The market fees claimed from the Petitioners may not be an ''amount'' falling under Clause (a) or Clause (c) of Section 164(1). But it is clearly an amount of tax falling under Clause (b) of section 164(1) of the Act. That clause can be invoked for the recovery of "an amount or instalment" of any tax imposed by the Municipality which is not leviable u/s 157(1) or payble on demand on account of an octroin or a toll. The word "tax" has not been used in Clause (b) in a restricted sense as equivalent to a tax proper as distinguished from a fee levied in respect of services rendered. It means any compulsory exaction of money imposed by a municipal council. This becomes clear from the fact that in Section 127, which deals with the power of a municipal council to impose taxes and fees, no such distinction has drawn by the Supreme Court in The Commissioner, Hindu Religious Endowments, Madras Vs. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt., , Ratilal Panachand Gandhi Vs. The State of Bombay and Others, , Mahant Sri Jagannath Ramanuj Das and Another Vs. The State of Orissa and Another, , and The Hingir-rampur Coal Co. Ltd. and Others Vs. The State of Orissa and Others, between a tax and a fees has been made. Section 127(1) runs as follows-

(1) A Council may from time to time,.........impose in the whole or in any part of the Municipality any of the following taxes, for the purposes of this Act. namely:

(vii) market fees on persons exposing goods for sale in any market or in any place belonging to or under the control of the State Government or of the Council;

The several clauses of Section 127(1) speak of taxes as well as of fees. The language of section 127 is plain enough to show that the said provision regards market fees and other fees as a kind of tax. In the expression "any of the following taxes" occurring in Section 127(1), the word ''tax'' has clearly been used in a wider sense meaning a compulsory exaction of money. The same meaning must be given to the word ''tax'' as used in Clause (b) of Section 164(1). The amount of market fees due from the Petitioners being thus a tax amount within the meaning of Clause (b) of Section 164(1), its recovery can be made in the manner laid down in Section 164.

The market fees sought to be recovered is not any amount on account of rent in respect of municipal land, buildings etc., and consequently Clause (c) of Section 164(1) has no applicability. This was not disputed by Shri G. P. Singh, learned Counsel appearing for the Municipal Council. He, however, suggested that it was an amount falling under Clause (a). The argument was that the market fees imposed under the repealed Act were, u/s 2(2)(i), deemed to be fees fixed under the new Act; that so also the byelaws framed under the repealed Act, which were being continued, must be deemed to have been framed under the new Act; that byelaw 9 authorized the Muncipal Council to recover the amount by recourse to Section 154 of the Rewa State Municipalities Act: and that by virtue of Section 13 of the Madhya Pradesh General Clauses Act, 1957, the reference to Section 154 of the Rewa State Municipalties Act must be read as reference to Section 164 of the Act of 1961. We are unable to accept this contention. Though the market fees fixed and the byelaws framed under the repealed Act must u/s 2(2)(i) of the Act be regarded as fixed and framed under the new Act, the amount of market fees does not become an amount which by or under any provisions of the Act of 1961 is declared to be recoverable in the manner provided by Chapter VIII. Clause (a) of Section 164(1) relates to the recovery of only such an amount. The argument that the reference in bye-law 9 to Section 154 of the repealed Act must be read as reference to Section 164 of the Act docs not advance the matter any further. Even if the reference in the byelaw to Section 154 of the repealed Act is read as reference to Section 164 of the new Act, the amount of market fees does not become an amount "which, by or under any provisions of this Act, is declared to be recoverable" in the manner provided by Section 164. The amount becomes one which, under the byelaws, is declared to be recoverable in the manner provided by Section 164. It is well settled that byelaws made under a power conferred by a statute are not parts of the statute (see Dukhuram v. Co-ope. Agril., Asson., Kawardha 1960 JLJ 340). Therefore, if the amount is declared by the byelaws to be recoverable in the manner provided in Section 154 of the repealed Act, it cannot be held that the amount has been declared to be so recoverable by or under any provision of the Act of 1961. It is, however, not necessary to pursue the matter any further; for we are of the opinion that even if Clause (a) does not apply to the present case, the amount of market fees sought to be recovered from the applicants falls within Clause (b) of Section 164(1) of the Act. It can, therefore, be recovered by recourse to Section 164.

Shri Sen, learned Counsel appearing for the Petitioners in M. P. No. 325 of 1962, submitted the additional argument that Section 164 applied only to the recovery of an amount of a tax becoming due after the coming into force of the Act of 1961. It was said that the words

when any amount......shall have become due.

in Section 164(1) indicated that the section was not retrospective in its operation. This is not, we think, a sound contention. The words "shall have become due" are not ambiguous. They connote amounts becoming due in the past as well as in future. In Lane v. Lane (1896) Probate Division 133, the provision of Section 4 of the Summary Jurisdiction (Married Women) Act, 1895, giving jurisdiction under the Act to a court of summary jurisdiction in the case of any married woman "whose husband shall have been convicted summarily of an aggravated assault upon her", was held to be retrospective in operation so as to cover convictions in the past as well as in future. There can, therefore, be no doubt that the expression "When any amount...shall have become due" means not only amounts becoming due after the coming into force of the Act but also those which became due before the date of the Act. Section 164 does not create a new remedy. A similar remedy existed in the repealed Act. It cannot, therefore, be contended that it is prospective in its operation. It is noteworthy that Section 2(2)(iii) only saves an action already initiated and pending for recovery of taxes under the repealed enactment. There is no special provision with regard to recovery of taxes becoming due before the coming into force of the new Act and for the recovery of which on action was initiated and pending when the Act came into force. The effect of accepting the construction suggested by the learned Counsel would be to give a statutory indemnity to all persons from whom tax amounts became due before the Act of 1961 came into force and against whom no action for the recovery of tax amount could be taken before the coming into force of the Act. It is very difficult to hold that the Legislature intended to give such an indemnity by making Section 164 prospective in its operation.

The Petitioners contention that the bills issued to them were not in conformity with Section 164(2) is altogether unsubstantial. AM the bills specified the period for which the amount claimed was due, the "thing in respect of which" the sums were claimed, and also informed each of the Petitioners the liability they would be incurring in default of payment and the time within which they could appeal. Their contention that no amount which became due from them more than six years before the date of distraint must, however, be given effect to. Section 176 in plain words says that no distraint shall be made and no suit shall be instituted for the recovery of any sums due to a Council after the expiration of six years from the date on which such sum became due. In accordance with bye-law 9 the market fees becomes due and payable within twenty-four hours of the transaction of purchase or sale on which the fee is levied. It follows, therefore, that the recovery of the market fee must be before the expiration of six years from the date on which it became due under the aforesaid byelaw. The date on which the distraint was made against each of the Petitioners is not clear from the record. It seems that it was made sometime in May or June of 1962. The bills issued to the Petitioners included some amounts when became due in 1953, 1954 and 1955. The Respondent-Council cannot recover any amount which has become barred by time u/s 176. The fact that in the bills some amount which has become barred by time has been included does not, however, make the bills and the notices of demand illegal in toto. They remain valid so far as the demand for payment of amounts within time is concerned. In Governors of Bristol Poor v. Wait 1 Adolphus and Ellis Law Reports 264, it has been held that if a joint distress be made under four several warrants, for four several rates of which one is bad, the distress does not become void. From this authority it is clear that if in a bill issued to a party a part of the (sic) demanded is barred by time, the bill, and the notice of demand issued on its strength< for the payment of the amount within time, do not become void.

Shri Singh, learned Counsel for the Municipal Council, urged that the limitation, prescribed by Section 176 was only with regard, to the institution of a suit and for the issue of distress process for sale of immoveable property, and that the Municipal Council could: at any time recover any sum due to it (sic) attachment and sale of immovable property belonging to the person from whom the amount was due. We are unable to accept this argument which is founded on the assumption that the word ''distraint'' as used in Section 176 means only seizure and sale of movable property. No doubt, the technical meaning of the word ''distress'' is ''taking into possession of a movable property of a person to secure satisfaction of a demand against him.'' But the ''distraint'', as used in Section 176. does not mean the technical seizure of movable property. The meaning of the word ''distraint'' occurring in Section 176 must be gathered from the process of distress described in Section 165(1) and Section 167. In both these provisions, recovery by seizure and sale of movable property has has not been described by the use of the one word ''distress'', but by the expression by distress and sale of any movable property. Section 165(1) says inter alia: "such Magistrate may order recovery by distress and sale of any movable property or attachment and sale of immovable property belonging to such person within the limits of his jurisdiction". So, also Section 167 speaks of recovery under a warrant in the prescribed form "by distress and sale of movable property belonging to such person; or by attachment and sale of the immovable property belonging to him". The ordinary meaning of the word ''distress'' is the same as ''distraint'', namely, ''seizure''. The word ''attachment'' means ''taking into the custody of the law the property''. Thus in both Section 165(1) and Section 167 whereas the seizure of movable property is described by the use of the word ''distress'', the seizure of immovble property has been described by using the word ''attachment''. It is noteworthy that in Section 176 the expression used is "no distraint" and not the experssion'' no distress and sale of any movable property''. When, therefore, in the earlier sections recovery by the method of seizure and sale of movable property has been described by the expression "by distress and sale of any movable property" and when Section 176 uses the words "no distraint", it stands to reason to hold that the word ''distraint'' as used in Section 176 has the general meaning of seizure, whether of movable or immovable property. Learned: counsel''s argument, if accepted, would produce the strange anomaly that even when the municipal council''s remedy of a suit for recovery of any sum due to it is barred and its rights are gone, it can still recover the sum due by the summary process of attachment and sale of immovable property prescribed in Chapter VIII. We do not think that the Legislature intended to produce this anomaly and interfere with the general principle that a person whose suit for recovery of money is barred by time and who cannot thus obtain a decree has no further remedy of levying any execution for the recovery of the amount.

For the foregoing reasons, the Petitioner''s prayers for the issue of writs of certiorari for quashing notices of demand issued to them cannot be granted. Under those notices of demand, the amount of market fees that is within time u/s 176 of the Act can be recovered. Before proceeding to sell any property of the Petitioners in accordance with sections 167, 168 and 169 of the Act, the competent authority must determine the amount the recovery of which is within time. In consequence, both these petitions are dismissed. In the circumstances of the case, we made no order as to costs. The outstanding amount of security deposit shall be refunded to the Petitioners.