In the earlier post, we had
written about K.T. Appanna and how he had pioneered the hotel industry in Bangalore
Not many know that Appanna
was also among the first few entrepreneurs to take the then Bangalore City
Corporation to court for enhancing the licence fee for hotels and also challenge
the levy on the ground that it was not prescribed under the existing bye-laws.
Another ground was that the fee
was enhanced by way of a resolution passed by the corporation and that this was
illegal and arbitrary. The case gained wide currency and it was called as
K.T Appanna vs Corporation of
City of Bangalore and the judgment was delivered
by the High Court of Karnataka on January, 29, 1963.
The High Court Bench
comprised Justice A Somnath Iyer and Justice G.K. Govinda Bhat.
The judgment was written by Somnath
Iyer and Justice Bhat concurred with it.
Here goes the judgment:
Justice Iyer writes…….in the
judgment that ……
A hotel-keeper in Bangalore
who was called upon by the Corporation of the City of Bangalore to pay a
licence fee of Rs. 300/- for obtaining a licence for the year 61-62 to conduct
his hotel business, is the petitioner before us. The demand made by the
Corporation is called in question on more than one ground. The first submission
made is that since the licence fee which the petitioner is now called upon to
pay was not prescribed by a bye-law made for that purpose under Clause (13) of
Section 367 of the City of Bangalore
Municipal Corporation Act
2. It is common ground that
until April 1, 1954, the licence fee payable by the petitioner was only Rs.
200/-a year. By a resolution passed by the Corporation, that licence fee in the
case of the petitioner was enhanced to Rs. 300/- with effect from April 1,
1954. But till the year 1961-62 in consequence of a litigation between the
corporation and the petitioner, the only licence fee which was paid by the
petitioner to the Corporation was Rs. 200/-a year, and although for the year
1954-55 the petitioner did pay the enhanced fee, the excess licence fee was
refunded by the Corporation. After the termination of the litigation, the
Corporation has now demanded the payment of the enhanced licence fee, and it is
the validity of this demand which is challenged in this writ petition.
3. Before considering the
various submissions made before us by Mr. Venkataramaiah, it would be necessary
to advert to the relevant statutory provisions. Section 286 of the City of
Bangalore Municipal Corporation Act, 1949 which would be referred to as the
Corporation Act and by which the questions arising in this writ petition are
governed, prohibits a person from keeping a lodging house, eating-house, tea-shop,
coffee-house, cafe, restaurant, refreshment room, or any place, where the
public are admitted for repose or for the consumption of any food or drink or
any place where food is sold or prepared for sale, without or otherwise than in
conformity with the terms of a licence granted by the Commissioner in that
behalf. It is not disputed that since the petitioner's hotel falls within the
orbit of this section, it was necessary for him to obtain a licence for
conducting the business of a hotelier as he has been doing. Clause (13) of
Section 367 of the Corporation Act authorises the Corporation to make bye-laws
providing for the regulation and licensing of hotels, lodging houses,
boarding-houses and the other establishments referred to in that clause. Section
385 of the Corporation Act on the interpretation of which the decision in this
case primarily depends, reads:
385 (1) "Every licence
or permission granted under this Act or any rule or bye-law made under it shall
specify the period if any, for which and the restrictions, limitations and
conditions subject to which the same is granted, and shall be signed by the
Commissioner.
2(a) Save as otherwise
expressly provided in, or may be prescribed under, this Act for every such
licence or permission, fees shall be paid in advance on such units and at such
rates as may be fixed by the Corporation:
Provided that the
Commissioner may at his discretion consider any application for the grant or
renewal of any Licence or permission though the fee payable therefor has not
been paid in advance;
Provided further that not
more than one fee shall be levied in respect of any purpose specified in more
heads than one of Schedule V if such heads form part of a continuous process of
manufacture and the fee so charged shall not exceed the highest fee chargeable
in respect of any one of the said purposes.
* * * * * * * *"
It is under the provisions of
Sub-section 2(a) of this Section that the petitioner was called upon to pay the
prescribed fee of Rs. 300/- in advance. The enhanced fee of Rs. 300/-was
prescribed by the Corporation purporting to act under this Clause of
Sub-section (2) of Section 385 by a resolution which it passed to that effect.
What the Corporation did was to prescribe the fee payable by each person
falling within Section 286, the fee payable by him depending upon the rental
value of the place where his business was being conducted. The lowest fee
payable was Rs. 15/- and the highest was Rs. 300/-.
4. That resolution passed by
the Corporation provided that in cases in which the rental value of the place
of business is Rs. 250/- and above, the licence fee payable by him was Rs.
300/-. Since the rental value of the premises at which the petitioner was
conducting his business exceeded Rs. 250/-, if the resolution passed by the
Corporation was within its competence, it is admitted, that the licence fee
payable by him was that specified in the resolution namely, Rs. 300/-. But what
was contended before us was that the only process for the prescription of a
licence fee payable in respect of a licence necessary under Section 286 of the
Corporation Act, was that specified in Clause (13) of Section 367 of the Act
viz., by the making of a bye-law for that purpose. It was said that unless the
fee was prescribed by a bye-law, it was not exigible and that a resolution by
the Corporation could not be the source of me authority to prescribe the
licence fee payable in respect of licences obtained under the Act. Sustenance
for this contention was sought to be drawn from Clause (13) of Section 367
which reads:
367. "The Corporation
may make bye-laws not inconsistent with this Act or with any other law to
provide--
* * * *
(13) for the regulation and
licensing of hotels, lodging houses, boarding houses, choultries, rest houses,
restaurants, eating houses, cafes, refreshment rooms, coffee houses and any
premises to which the public are admitted for repose or for the consumption of
any food or drink or any place where any food or drink is exposed for sale; * *
* * * * *"
5. It was argued that this
clause of Section 36/, which was an exhaustive and complete Code on the
regulation and licensing of hotels, also conferred power on the Corporation to
make a bye-law prescribing the fees payable for licences which may be obtained
under Section 286 of the Corporation Act. That the expression "for the
regulation and licensing of hotels" with which Clause (13) of Section 367
opens, was wide and comprehensive enough to include within its ambit, the power
to prescribe the fee payable in respect of a licence, and that that being so,
the only source of the authority for the prescription of the licence fee was a
by-law which could be made under its provisions, was the argument advanced. It
is the validity of this postulate with which we are concerned in this writ
petition.
6. Mr. Venkataramiah has
urged that if a bye-law could be made under Clause (13) of Section 367
regulating a note) or licensing it, there would be no justification for the
supposition that the power of regulation and licensing which may be exercised
through a bye-law under that clause, did not include the power to prescribe the
fee payable in respect of a license which a person was bound to obtain under
Section
286. In support of his
proposition that the power of "regulation and licensing" included
also the power to charge a reasonable sum for issuing a licence, our attention
was asked to paragraph 662 of Dillon's Book on Municipal Corporations Volume II
(Edition V).
It is true that in that
paragraph what was observed by the learned Author was that under the authority
"to license and regulate", a Municipal Corporation may by ordinance
require a licence to be first taken out and charge a reasonable sum for issuing
the same and for keeping the necessary record. It is, in my opinion, not very
useful to depend upon an observation to that effect which may be contained in a
Book on the general powers of Corporations, since the expression
"regulation and licensing" occurring in a statute must be interpreted
in a manner which best fits into the scheme of the law in which that expression
occurs having regard to its general scheme and object. Although the expression
"regulation" has, it cannot be disputed, reference to some kind of a
general power of control and may involve the power to impose restrictions on
the exercise of a trade which is regulated both as to time and as to place for
the prevention of nuisance or for the maintenance of order, that general
meaning to be given to that expression may not always be the only meaning which
could be given to it in every law in which that expression occurs.
Likewise, although the
expression "licensing" which refers to a power which may be exercised
for the governance of a trade or business which is sought to be licensed in
that way and although that expression may in conceivable contexts include the
power to prescribe a fee for the licence which is directed to be obtained or
has to be obtained, if the statutory provision in which that expression occurs
does not permit the understanding or interpretation of that expression in that
way and the law in which that expression Is employed contains other provisions
which make it clear that that expression does not include the power to presence
a fee, we should not, in my opinion, fall back upon the general meaning to be given
to the expression "licensing or regulation" and hold that the power
to prescribe a fee is one of the concomitants of the power of regulation and
licensing in every case.
7. Now, as ordinarily
understood, the licence which Is directed to be obtained under Section 286 of
the Act and the bye-law which authorises licensing of the trades referred to in
Clause (13) of Section 367 have reference to an authority or privilege to do
something which would be otherwise wrongful or illegal or inoperative. If
Section 286 of the Act says that a hotelier must obtain a licence, what It
expects the hotelier before he conducts his business is to obtain the authority
which is requisite for that purpose. Likewise if Clause (13) of Section 367
permits a bye-law to be made for licensing of a hotel or for its regulation,
what it empowers is to make a bye-law specifying many things which may be done
for the purpose for which that bye-law is authorised. The regulatory part of
the bye-law may include various acts of control which may be exercised by the
Corporation for the control of the hotel business. Likewise the licensing part
of the bye-law may specify the conditions, restrictions and limitations subject
to which the business of a hotel may be conducted.
8. But it was argued that a
bye-law may be made by the Corporation not only for this purpose but also for
the purpose of prescribing a fee which has to be paid by a licence before he
could obtain a licence or in order to obtain it. If nothing else could have
been said about this matter and if the question entirely rested on the
provisions of Section 286 and Clause (13) of Section 367 of the Corporation
Act, it might have been possible to think that Mr. Venkataramiah's submission
was without an answer.
9. But it seems to me that the
most complete and effective answer to this argument which was advanced before
us is what is contained in Section 385 (2) of the Act. Sub-section (1) of that
section enumerates the contents of a licence or permission granted under the
Act or under any rule made thereunder or under a bye-law made under Section
367. What it directs is the specification in that licences or the permission
the period for which the licence or permission was granted, the restrictions,
limitations and conditions subject to which the licence or the permission as
the case may be, was issued and further directs that the document should
contain the signature of the Commissioner. Sub-section (2) (a) then proceeds to
state that unless otherwise expressly provided, every application for such
licence or permission should be accompanied by the payment in advance of a fee
computed at the rates as may be fixed by the Corporation.
What makes me disposed to
take the view that Mr. Venkataramiah's argument should not be accepted is the
most revealing contrast between the language of Sub-section (1) of this section
and that of Sub-section (2). Sub-section (2) makes it clear and expressly
states that the rates at which the licence fee should be paid are those
"fixed by the Corporation", while Sub-section (1) refers to a licence
or permission granted "under this Act or any rule or bye-law made under
it". If Clause (13) of Section 367 which authorises a bye-law for the
regulation and licensing of a hotel does not in express terms state that that
bye-law may be made for the purpose of prescribing a fee payable for a licence
which is to be obtained by a hotelier, and, IT sub-section (2) of Section 385
says that that licence fee is what may be fixed by the Corporation, and if in
addition, the licence in respect of which that fee may be fixed by the
Corporation is referred to in Sub-section (1) as a licence which is required by
the Act or rule or bye-law, it seems to me that it would be impossible for
anyone to think that the fee has to be prescribed by the Corporation only by a
bye-law and not in the way in which it is generally fixed viz., by a resolution
to that effect.
Mr. Venkataramiah has not
explained to us satisfactorily why Sub-section (1) speaks of a licence
"under a bye-law" and why Sub-section (2) does not refer to a tee
fixed by such bye-law, and why on the other hand Sub-section (2) speaks of a
fee fixed by the Corporation. If Sub-section (1) refers to a licence required
by a bye-law and Sub-section (2) speaks of a fee fixed by the Corporation, what
I think abundantly clear, in my opinion, is that the fee payable in advance is
to be fixed by the Corporation and not by the bye-law. Any other interpretation
would leave unexplained why Sub-section (2) does not speak of a fee fixed by a
bye-law and why it speaks of a fee fixed by a Corporation.
10. In my opinion, the true
construction to be placed upon the provisions of Sub-section (2) of Section 385
is to treat that sub-section as the source of the authority of the Corporation
to fix the fee payable for a licence to be obtained under Section 286 or under
a bye-law made under Clause (13) of Section 367. While section 286 and Clause
(13). of Section 367 have reference to a licence and the latter statutory
provision has reference to a bye-law which may be made for the purpose of
licensing a hotel and therefore is in the nature of a general provision
relating to the licensing of a hotel, Sub-section (2) of Section 385 is a
special and independent provision creating in the Corporation the power to
prescribe a fee for a licence which may be required by a bye-law made under
Clause (13) of Section 367 and under Section 286. If therefore the Legislature
authorised a bye-law generally for the purpose of licensing and enacted a
special provision like Section 385 (2) confiding the power to fix a fee for
licences to the Corporation, the Corporation becomes the repository of the
power to fix a fee without being under the obligation to make a bye-law for
that purpose under Clause (13) of Section 367.
We must, in my opinion, place
upon the provisions or Section 286, Clause (13) of Section 367 and Sub-section
(2) of Section 385 an interpretation which will be an interpretation which
harmonises every one of these three statutory provisions giving effect to each
one of them and every part thereof. While the interpretation suggested by Mr.
Venkataramiah that the prescription of a licence fee may be made only by a
bye-law made for that purpose under Clause (13) of Section 357 will make the
expression "as may be fixed by the Corporation" occurring in
Sub-section (2) (a) of Section 385, unmeaning and devoid of content, the
interpretation that Section 385 (2) (a) is a special provision under which the
donee of the power to prescribe the fee to be paid in respect of a licence is
the Corporation which may exercise that power without recourse to a bye-law, is
what will not take away from Section 385 (2) (a) the content ascribable to the
words "as may be fixed by the Corporation" occurring in that clause.
11. I do not see any reason
why we should take the view that, although Sub-section (2) (a) of Section 385
expressly states that the licence fee may be fixed by the Corporation which
means that it may be fixed by the Corporation by a resolution, the power
exercisable by the Corporation in that way is only for the purpose of making a
bye-law under Clause (13) of Section 367. I do not also feel disposed to take
the view that what makes the licence fee exigible is the fixation of that fee
by a bye-law made under Clause (13) of Section 367 and not its determination by
the Corporation in the exercise of its power expressly conferred on it by
Section 385 (2) (a).
12. I am therefore prepared
to say that there is nothing in Clause (13,) of Section 367 and in the
Corporation Act, when it is interpreted in; the context of Sections 286 and 385
(2) of that Act, which would justify the interpretation that the scale of fees
in respect of a licence to be obtained under Section 286, should be prescribed
only by a bye-law and not by a resolution of the Corporation. In my opinion,
whatever may be the purpose for which a bye-law under Clause (13) of Section
367 may be made, once a licence is prescribed by a bye-law made for that
purpose it would be within the competence of the Corporation to prescribe the
fee payable in respect of such licence.
13. In the view that I take,
the argument founded on Section 370 of the Act which says that no bye-law made
by the Corporation under the Act shall have any validity unless and until it is
sanctioned by the Government can have little relevance. So long as it is not
necessary for the Corporation to make a bye-law for the prescription of the
licence fee and so long as a resolution passed by it is efficacious enough for
that purpose, the requirement of Section 370 that sanction should be obtained
of the Government for a bye-law made under Section 367 would have no
materiality.
14. The argument which was at
one stage advanced that that interpretation is likely to create a clash of
exercise of power under Sections 367 and 385 (2) is, to my mind, quite
insubstantial. What was envisaged by Mr. Venkataramiah was that it was not
inconceivable that a bye-law may be made under Clause (13) of Section 367
prescribing a particular scale of fees and a resolution prescribing an entirely
different scale of fees was equally possible under Section 385 (2) of the Act.
The apprehension, in my opinion, is utterly groundless since the authority
which makes the bye-law is the same which execcises the power under Section 385
(2) viz., the Corporation, and no one can suggest that that authority would
make a bye-law under Clause (13) of Section 367 entirely at variance with its
own resolution under Section 385 (2) of the Act.
I am also not impressed by
the submission made that the expression, "as may be fixed by the
Corporation" means as may be fixed by a bye-law made under Clause (13) of
Section 367 of the Act or as may be fixed as explained by Mr. Venkataramiah
under the other statutory provisions contained in the Act which have relevance
to the exercise of that power. This argument is really the same argument which
has been repelled by me put in a different form. Further, this argument suffers
from the same infirmity which 1 have already indicated viz., the absence in
Section 385(2) of words justifying that interpretation. Mr. Venkataramiah was
unable, to explain why is Sub-section (2) of Section 385 directed the fixation
by the Corporation of the licence fees in accordance with a bye-law made under
Sub-section (13) of Section 367 of the Act. there were no words to that effect
in that sub-section. That the Legislature was making a distinction between, the
power to make a bye-law and the power to prescribe a licence fee independent of
the bye-law is plainly revealed by the contrast between the language in which
Sub-section (1) is worded and that in which Sub-section (2) is worded.
15. There is one more reason
why we should come to the conclusion that, under the scheme of the Corporation
Act, the authority which has the competence to prescribe the licence fee is the
Corporation. Sub-section (1) of Section 385 speaks of the three categories of
licences. The first of them is a licence granted under the Act. The second is
one granted by the rules made under the Act, and the third is a licence granted
under a bye-law. Within the first category falls a licence which has to be
obtained under Section 297 of the Act which requires a person who wishes to use
his premises for any of the purposes mentioned in schedule V to the Act to
obtain a licence for such use. But Section 297 does not specify the fee to be
paid by such person for the licence to be so obtained by him. But according to
the provisions of Section 385 (2), the fee payable for that licence has to be
paid by the licensee in advance at the rate fixed by the Corporation.
The position, therefore, is
while the Act requires a licence, it does not prescribe the fee to be paid for
that licence, and when we asked Mr. Venkataramiah to tell us who under the Act
had the authority to prescribe the fee payable for such licence and whether it
was not the Corporation which was authorised to fix that fee under sub-section
(2) of Section 385 that could so fix it, Mr. Venkataramiah was driven to
construct an argument that the fee payable even for a licence under Section 297
of the Act had to be prescribed by a bye-law made for that purpose under Clause
(16) of Section 367 of the Act. It is plain that that clause of Section 367 on
which Mr. Venkataramiah depends can have no relevance whatsoever to the
fixation of the fee payable under Section 297 since that clause provides for
the sanitary control and supervision of places used for any of the purposes
specified in Schedule V and of any trade or manufacture carried therein. When
this was pointed out to Mr. Venkataramiah that this clause had no materiality
for the purpose of Section 297, he had to admit that it was so.
But, however, what is
abundantly clear is that while Section. 297 of the Act prescribes a licence,
there is no other provision in the Act save Sub-section (2) of Section 385
which provides for the prescription of a fee for that licence. Section 367 of
the Act which authorises bye-law to be made for various purposes does not
enumerate the prescription of a fee for a licence under Section 297 as one of
the purposes for which a bye-law could be made for that purpose. No other
provision was shown to us creating power in any one to prescribe the fee for a
licence under Section 297. If that be the position ana Section 385 (2) is the
only section which authorises the fixation of the fee and that sub-section says
that that tee may be fixed by the Corporation, what is more than perfectly
manifest would therefore be that the fixation of a fee for a licence under
Section 297 is what may be made by the Corporation in the exercise of the power
conferred under Section 385 (2) and that it may so fix the fee by passing a
resolution to that effect.
Likewise it is equally clear
that the position would be the same in respect of licences granted under the
rules under the Act although there has been no discussion about it before us in
the course of the argument. If therefore it becomes indisputable that the
Corporation is the authority which has the power to fix a fee for the licence
under Section 297 and that it may do so by a resolution under Section 385(2) of
the Act, there is, I think scant reason for thinking that the fixation of a fee
for a licence granted under Section 286 of the Act or for a licence which is
made obligatory by a bye-law made under Section 367 (13), was not within the competence
of the Corporation in the very same way in which it was within its competence
to pass a resolution for the fixation of a fee for a licence under Section 297.
We cannot interpret the expression "as may be fixed by the
Corporation" in one way for the purpose of Section 297 and in another way
for the purpose of Section 286 or for the purpose of Clause (13) of Section
367.
If that sub-section is the
source of the power of the Corporation to fix a fee for a licence under Section
297 it should also constitute the source for the fixation of a fee for a
licence under Section 286. It would be seen from Section 97 of the Act that
many taxes which may be imposed by the Corporation under its provisions, are
taxes which may be imposed by the Corporation. That the Corporation may impose
those taxes by a resolution to that effect passed under Section 98 of the Act
is plain. If the Corporation has been bestowed the power to impose taxes by a
resolution, it is not, in my opinion, right to think, although Section 385(2)
expressly confers the power on the Corporation to prescribe a fee for licences,
that the intention of the Legislature was that the prescription of that fee is
to be made only by a bye-law made under Clause (13) of Section 367 and
sanctioned by the Government under Section 370.
16. What I have said, in my
opinion, is an equally effective answer to the argument advanced by Mr.
venkataramiah that the prescription of a licence fee was a matter of such great
importance that the Legislative intent was that that fee should be prescribed
only by a bye-law with the sanction of the Government.
17. There is yet another
reason supporting the view that the Corporation was created by the Corporation
Act, the authority to prescribe the licence fee. Until the enactment of the
Corporation Act, the law operating in that regard was the Mysore City
Municipalities Act, 1933. Under Section 49 of that Act, the City Municipal
Council corresponding to the Corporation was authorised to make rules with the
approval of the Government, and, under Clause (n) of that section, power was
conferred on the Municipal Council to make a rule prescribing the fee for a
licence required by the Act. But under the Corporation Act, the corporation was
not required to make a rule to fix the licence fee nor was power to fix such
fee by a bye-law expressly conferred by Clause (13) of Section 367 of the
corporation Act, but, instead, that power was bestowed on the Corporation by
Sub-section (2) of Section
385. The fact that it was so
done is in my opinion, the clearest indication of the Legislative intent that
the prescription of a licence fee was taken out of the scope of a bye-law and
was entrusted to the Corporation to be made in the exercise of its power
conferred by Section 385(2).
18. The challenge to the
demand made to the competence of the Corporation to prescribe a licence fee
without recourse to a bye-law must, in my opinion, therefore fail.
19. The next question to
which I should proceed to refer is the argument that even if the Corporation
had the power to prescribe the licence fees, there has been an excessive
exercise of that power. It was urged that since the licence fee is a fee
between which and the services to be rendered in respect of the licence
obtainable on payment of such fee, there should be the necessary correlation,
and as there was no such correlation in this case, the fee demanded of the
petitioner, was not exigible. In the affidavit produced along with the
application the petitioner states that the value of the services rendered by
the Corporation to each of the many hotels of Bangalore, was not more than Rs.
25/- and no expense exceeding that amount was being incurred by the Corporation
in respect of the services rendered by it. But in para 3 of the counter
affidavit of the Corporation, that allegation has been more than sufficiently
traversed. It has been explained in that part of the counter affidavit that
while in the year 1951 when the maximum licence fee payable was Rs. 200/-which
the petitioner was paying, there were only 589 hotels, that number had
increased to 945 in the year 1961 which is the year with which we are concerned
in this writ petition.
It is also further explained
that while for the year 1950-51 the licence fee recovered in respect of those
hotels was Rs. 21,395/- at the old rates, that recovered for the year 1960-61
at the same old rates was Rs. 46,620/-. For the year 1961-62, according to the
statement contained in the counter affidavit, the licence fee recovered at the
new rates was Rs. 63,556/-. It is thus seen that the fee which is recovered by
the Corporation at the enhanced rate during 1961-62 does not exceed Rs.
17,000/- over and above the licence fee which was recovered at the old rates
and does not represent more than about a third of the licence fee which was
being originally recovered In Clause (d) of that paragraph of the counter
affidavit what the Corporation proceeds to explain is that the expenditure
incurred on the Health Department of the corporation has increased from Rs.
19,73,771/- which was the expense incurred in the year 1950-51 to Rs.
44,54,353/-which was the expenditure incurred for the year 1960-61. It will
thus be seen that the expenditure incurred on the Health Department has
increased by more than 125 per cent whereas the licence fee which was increased
from Rs. 200/- to Rs. 300/- in the case of the petitioner has not been enhanced
by more than 50 percent.
20. In Clause (e) of that
paragraph of the counter affidavit the Corporation has enumerated the various
items of services rendered to the hoteliers. They are as follows:
"(a) Environmental
sanitation;
(b) Clearance of refuse and
garbage;
(c) Spraying surrounding
areas with insecticides;
(d) Personal services by the
examination of food and food handlers working in the establishment;
(e) Prevention of food
adulteration;
(f) Periodical inspections by
the various Health Officers and Inspectors;
(g) Issue of licences;
(h) Propogation of Health
Education by pamphlets, pesters etc; and
(i) Underground drainage and
water supply." That every one of these 9 items of services referred to in
that part of the counter-affidavit is what a Corporation is obliged to render
to a hotelier is, in my opinion, indisputable.
21. In Clause (f) of the
counter affidavit, what is next adverted to by the Corporation is the increase
in the salaries of the staff, and according to the allegation, there is an
increase of 300 percent during the last ten years. That clause proceeds to
state that the expenditure on conservancy has increased from Rs. 12 lakhs to
Rs. 27/-lakhs during the relevant period.
22. In Clause (g) what has
been pointed out is the expenditure incurred amounting to 2 1/2 lakhs of rupees
for the purchase of lorries for the clearance of refuse which has been steadily
accumulating and to the appointment of additional staff in the Health
Department of the corporation.
23. The other clauses of this
paragraph of the counter-affidavit refer to the establishment of health centres
in the different areas of the Corporation for medical examination of food
handlers and for their education in their spheres of work, and to the increase
in expenditure in the drainage system and to the employment of additional staff
to facilitate the disposal and scrutiny of applications for licences ana their
issue.
24. This counter affiadvit
which refers to all these items of expenditure is accompanied by a tabular
statement enumerating under each item of service rendered by the Corporation
the expenses incurred.
25. It seems to me that the
material contained in the counter affidavit is more than a complete answer to
the argument advanced on behalf of the petitioner that the enhancement of the
licence fee is not attributable to the increase in the cost of the expenditure
which the Corporation has to incur for the various services to be rendered by
them to the hoteliers within its area.
26. Mr. Venkataramiah,
however, contended that the expenses incurred over the food handlers cannot be
taken into consideration for the purpose of deducing the existence or otherwise
of the correlation between the services and the amount of fee. He stated that
in respect of each of the food handlers appointed by Corporation, every
hotelier is asked to pay annually Rs. 2/-. But Mr. Venkataramiah had to admit
that what was paid by the hoteliers for these food handlers did not exceed Rs.
2/- a year and that the total payment thus made by the hoteliers did not exceed
Rs. 40,000/- a year which is a very small fraction of the total expenditure
incurred by the Corporation in regard to the very many services rendered by it,
as stated above.
27. But it was said that the
expenditure incurred by the Corporation amounting to more than Rs. 44 lakhs
over Health Department and Rs. 27 lakhs over the conservancy and for other
purposes, was not an expenditure incurred exclusively for the establishments of
the hoteliers or for the services to be rendered to them but for the services
rendered by the Corporation generally to all the rate payers within the area
and could not form the criterion for the determination of the existence or otherwise
of the required correlation.
28. But Mr. Venkataramiah had
to admit that it was not possible for the Corporation to set apart an exclusive
establishment for the services to be rendered to the hotelier or to the
establishments owned by them, and that since the services rendered by the
Corporation to the hoteliers were of the same nature if not more extensive than
those which were rendered to the other rate payers within the area of the
Corporation, it was inevitable that the total expenditure incurred by the
Corporation in that way must necessarily include the expenditure incurred for
the services rendered to the other rate payers. In a case like this it is not
necessary for the Corporation to establish with mathematical nicety the exact
correlation between the fee prescribed and the services rendered. What should
be established is that the prescribed fee, on a proper construction of the
materials produced before us, is commensurate with the services rendered. If it
could be said as was said in Varadachari v. State of Madras, , on which Mr.
Venkataramiah depended that the entire expenditure incurred by the Corporation
over all the rate payers within its area had been debited to the hoteliers in
the form of fees or that a grossly disproportionate share had been demanded of
them, it would of course follow that the required correlation did not exist.
But it is, I think,
impossible for Mr. Venkataramian to insist upon the Corporation producing
before court precise information as to the expenditure which is attributable to
the hoteliers as distinct from the expenditure incurred over the other rate
payers. In the nature of things, it is impossible for an authority like the
Corporation to produce proof of correlation in that way. What is indisputable
from the counter affidavit produced by the corporation is that the totality of
the expenditure incurred over the various spheres of the Corporation activities
has increased by 125 per cent during the period between 1950 and 1960, In some
instances the increase has been even greater as in the case of the expenditure
over the conservancy arrangements. If the enhancement of the licence fee is
only by 50 percent and the fee recovered by the Corporation by reason of such
enhancement was just about Rs, 17,000/- over and above the fee collected during
the year 1960-61, I am not prepared to say that production of any further proof
was necessary by the Corporation of the existence of the required correlation.
29. It was, however,
contended that not more than a sum of Rs. 25/- was the expenditure incurred by
the Corporation for each of the 945 hoteliers and that being so, the demand for
payment of 3 sum of Rs. 300/- by the petitioner was indefensible. This
submission, in my opinion, was only to be made to be repelled for its own
unreasonableness. Mr. Venkataramiah could not explain why if what was incurred
over the petitioner was only Rs. 25/- a year in the form of services, the
petitioner continued to pay during all these many years a sum of Rs.
200/-towards the licence fee and why that impost was not questioned by the
petitioner on the ground of unreasonableness, until now. It is also significant
to observe that even in this writ petition what is challenged by the petitioner
is only the enhancement of the fee from Rs. 200/- to Rs. 300/-.
30. There remains only one
more submission to be considered, and that was an argument founded on the
omission on the part of the Corporation to claim licence fee at the enhanced
rate between the years 1954 and 1961. The explanation for this inaction on the
part of the corporation was that there was a pending litigation which
terminated in this Court only in the year 1961 between the Corporation and the
petitioner. However that may be, if the prescription of the licence fee
demanded for the year 1961-62 under Section 385 (2) was within the competence
of the Corporation as indeed it was, it is no answer to the demand to say that
the Corporation acquiesced in the payment of a smaller fee during the preceding
years.
31. In the result, this
petition is dismissed. In the circumstances, there will be no order as to
costs.
G.K. Govinda Bhat, J.
32. I agree.
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