IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE TUESDAY, THE 21ST APRIL 2009 / 1ST VAISAKHA 1931 WP(C).No. 10959 of 2007(D) -------------------------- PETITIONER(S): --------------- 1. THE KOTTAYAM DISTRICT PRIVATE BUS OPERATOR'S ASSOCIATION REGD.609/93, ASSOCIATION COMPLEX, RAILWAY STATION ROAD, NAGAMPADAM, KOTTAYAM- 686 001, REPRESENED BY THE GENERAL SECRETARY, T.K.JAYARAJ. 2. T.K.JAYARAJ, S/O.T.K.KESAVAN, THAMBITHARA, KANJIRAM P.O., KOTTAYAM. BY ADV. SRI.MATHEW JOHN (K) SRI.SUJESH MENON V.B. RESPONDENT(S): --------------- 1. THE MUNICIPAL COUNCIL, KOTTAYAM, REPRESENTED BY ITS SECRETARY. 2. THE SECRETARY, MUNICIPAL COUNCIL, KOTTAYAM. 3. P.M.HARIDAS, PANTHAPLAKKIL, CHIRAKKADAVU P.O., KOTTAYAM. ADV. SRI.SIBY MATHEW & SRI.B.PREMNATH FOR R1 & R2 SRI.A.A.MOHAMMED NAZIR FOR R1,R2 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 21/04/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX: EXT.p1 TRUE COPY OF THE NOTIFICATION ISSUED BY THE SECRETARY OF THE KOTOTAYAM MUNICIPALITY EXT.P1(A)TRUE COPY of the RESOLUTION DATED 31-1-2007 BY THE 1ST RSPONDENT. EXT.P2 TRUE COPYOFTHE REPRESENTATION DATED 9-11-2005 BY THE PETITIONER. EXT.P3 TRUE COPY OF DO. DTED 1-7-2006 BY DO. EXT.P4 TRUE COPY OF DO. DATED 31-7-2006 BY DO. EXT.P5 TRUE COPY OF DO. DATED 3-8-2006 BY DO. EXT.P6 TRUE COPY OF THE LETTER DATED 28-10-2006 BY THE PETITIONER. EXT.P7 TRUE COPY OF DO. DATED 27-2-2007 OF DO. EXT.P8 TRUE COPY OF THE REPRESENTATION DT.7-3-2007 BY THE PETITIONER. EXT.P9 TRUE COPY OF THE REPLY DT. 12-3-2007 //TRUE COPY// PS TO JUDGE. PIUS C. KURIAKOSE, J. ----------------------------------------------- W.P.(C)No. 10959 OF 2007 ----------------------------------------------- Dated this the 21st day of April, 2009 J U D G M E N T The Kottayam District Private Bus Operators Association and the Secretary of that Association who is an individual operator challenge in this writ petition under Article 226 the decision of the Kottayam Municipal Council to enhance bus stand fee currently levied at the rate of Rs.10/- per day per bus to Rs.15/- per day per bus. The first petitioner is a society registered under Act 12 of 1955 and its members are individual private stage carriage operators in the Kottayam District. The second petitioner, secretary of the 1st petitioner himself is operating a stage carriage on the Kottayam - Erattupetta route. Ext.P1 produced along with the writ petition is a notification issued by the Secretary of the Kottayam Municipality publishing the proposed enhancement of bus stand fee from Rs.10/- per day per bus to Rs.15/- per day per bus with effect from 1-4-2007. WP(C)N0. 10959/07 -2- Ext.P1(a) is copy of the municipal resolution dated 31-1- 2007 pursuant to which only Ext.P1 was issued by the Secretary. 2. The petitioners submit that new bus stand at Nagampadam was constructed by the Municipality about 15 years back. Though the bus stand was constructed no facilities were provided there by the Municipality except providing sufficient space for the stage carriages to be parked. No facilities were provided to the operators, their staff or to the passengers. By passage of time on account of complete disregard in the maintenance and repairs of the bus stand, the condition of the bus stand became deplorable. In that background representation Ext.P2 dated 9-11-2005 was submitted before the Chairman of the Municipality by the first petitioner. The Municipal authority did not take any steps to redress the grievance voiced in Ext.P2. Later in July 2006 vide Ext.P3 a fresh WP(C)N0. 10959/07 -3- representation was submitted to the Chair Person of the Municipality voicing the grievances of the stage carriage operators. Since Ext.P3 also did not evoke any response, Ext.P4 representation dated 31-7-2006 was submitted again to the Chair Person of the Municipality. In Ext.P4, attention of the Chair Person was drawn to the decision of the Road Safety Committee dated 26-6-2006, in which the Committee recommended that the bus way leading to the bus stand be substantially renovated. Ext.P4 also did not evoke any response. Therefore the second petitioner in his capacity as Secretary submitted Ext.P5 representation before the leader of the opposition of Kottayam Municipality. Ext.P5 also did not evoke any response. Since the condition of the bus stand continued to deteriorate and the likelihood of accidents appeared to be imminent second petitioner submitted Ext.P6 representation to the Chair Person of the Municipality requesting that action should be taken WP(C)N0. 10959/07 -4- immediately for effecting repairs to the bus way and for suitably modifying hump constructed in the way leading to the bus stand. Since Ext.P6 also turned on deaf years Ext.P7 letter was submitted by the first petitioner to the Chairman of the Road Safety Committee with copy to the Chair Person of the Municipality. Ext.P7 also did not produce favourable results. Petitioners submit that it is in the back ground of the Municipality's refusal to provide any facility to the operators, operating staff and to the passengers that the petitioners have decided to challenge the proposal of the Municipality to enhance the bus stand fee by 50%. Petitioners would quote section 472 of the Kerala Municipalities Act which enables the Municipality to collect fee from the users of places like bus stand. The petitioners contend on the authority of the judgment of the Supreme Court in Commissioner, H.R.E. v. Sri.Lakshmindra Thirtha Swamiar of Sri.Shirur Mutt, (AIR 1954 SC 282) and WP(C)N0. 10959/07 -5- the judgment of the Supreme Court in Belsund Sugar Co. Ltd. v. State of Bihar and others, (1999) 9 SCC 620 that unless a good and substantial portion of the amount collected on account of fees is shown with reasonable certainty as being spent for rendering services to those who are called upon to pay fees the levy cannot partake character of the fees, but will be akin to a tax. It is pointed out that at an average about 700 buses enter the Kottayam Municipal Bus Stand every day and at the present rate of Rs.10/- per day, fee collected would consolidate to Rs.25,55,000/- an year. Out of this amount the solitary expenditure incurred by the Municipality is the meagre amount spent by them for sweeping the bus stand engaging 3 or 4 casual employees which will cause the Municipality an amount of Rs.500/- per day, totaling a maximum of Rs.1,82,500/- an year which is even lesser than 10% of the amount annually collected by the WP(C)N0. 10959/07 -6- Municipality from the stage carriage operators under the cover of fee within the meaning of section 472. The petitioners point out that the above fact would show that the levy presently made by the Municipality loses the character of a fee, but instead it partakes the character of a tax. Levy of tax is totally unauthorised since what is statutorily permissible in terms of section 472 is only levy of fee and not levy of tax. The petitioners contend that in this back ground, validity of the resolution Ext.P1(a) has to be tested. It is pointed out that there has not been any additional expenditure on the part of the Municipality in the matter of maintaining the Municipal Bus Stand for the financial year in question. That being the position the Municipality will lose its power or jurisdiction to suggest any enhancement to the amount which was being collected from the stage carriage operators for entering the Municipal Bus Stand. Petitioners submit that they have submitted Ext.P8 representation on WP(C)N0. 10959/07 -7- 7-3-2007 to the Chair Person of the Municipality not to enforce the proposal to enhance the bus stand fee from Rs.10/- to Rs.15/-. To Ext.P8 the Municipality has given Ext.P9, a casual reply turning down the petitioners' request. It is submitted that after issuing Ext.P9 the Municipality proceeded with the matter and has auctioned the right to collect fees and confirmed the auction in favour of the third respondent raising various grounds the petitioners pray for the following reliefs in the writ petition. 1. Call for the records leading upto Ext.P9 and to issue a writ in the nature of certiorari or any other appropriate writ, direction or order quashing clause I of Ext.P1, Ext.P1(a) in so far as it has decided to enhance the bus stand fee from Rs.10/- to Rs.15/-. 2. Issue a writ in the nature of mandamus or any other appropriate writ, direction or order commanding respondents 1 and 2 to immediately take steps to redress the grievances of the petitioners voiced in Exts. P2 to P7 representations. 3. A detailed counter affidavit has been filed by the Municipal Council and the Secretary of the Municipality who WP(C)N0. 10959/07 -8- are respondents 1 and 2 in the writ petition justifying the decision of the Municipality to enhance the bus stand fee. It is submitted that the bus stand at Nagampadam was constructed 20 years back. The allegation that except for providing enough space for parking the vehicles no other facilities are provided to the operators, the staff and the passengers is disputed. It is contended that imposition of Rs.10/- twenty years back does not mean that the same cannot be enhanced. It is contended that in the bus stand the Municipality has provided toilets for ladies and gents. Staff have been appointed to do the cleaning work in the toilets as well as the bus stand and the premises. A number of buses are daily parked in the bus stand during night hours. The compound of the bus stand is being cleaned daily. It is pointed out that the main grievance highlighted in the representations Exts.P1 to P4 was regarding a hump which was constructed at the entry point WP(C)N0. 10959/07 -9- to the bus stand. A hump was provided so that the buses while they enter the bus stand premises slows down, lest accident should happen. It is stated that the issue of reducing the height of the hump has been placed before the Road Safety Committee and the decision taken by the Committee will be implemented. It is then stated that the premises of the bus stand have been tarred and very huge amounts were incurred for tarring the premises of the bus stand where the buses are parked. It is pointed out that compound wall has been provided on all sides of the bus stand. Lighting facilities have been provided in the bus stand as well as the bus stand premises. During night hours the lights are put on and burnt through out the night not only in the bus stand but also in the premises of the bus stand. A number of workers of the buses use the toilets for their daily necessities and many of them take bath in the toilets provided by the Municipality. The Municipality has WP(C)N0. 10959/07 -10- constructed a number of stalls in the Municipal Bus Stand. In a few stalls, hotels are being run so that the general public can benefit from the same. The premises of the bus stand are whitewashed every year and are kept clean. Arrangements have been made for the parking of the vehicles. Security Guards have been provided at the bus stand to prevent heavy rush and the safety of passengers. The averments made by the petitioner regarding the alleged non-repair of the road leading to the bus stand and the premises are totally irrelevant since that road belongs to the PWD. Those averments have been made for the purpose of misleading this court with the object of ensuring that the levy of Rs.15/- per day per bus is reduced to the old rate of Rs.10/-. It is submitted that the rate of Rs.10/- per bus was fixed in the year 1987 and due to passage of time the cost of maintenance increase in salary, maintenance expenses, all have increased and therefore the increase by WP(C)N0. 10959/07 -11- an amount of Rs.5/- cannot be said to be exorbitant in any way. 4. It is then contended in the counter affidavit that all facilities are being provided by the Municipality to the operators, staff and and passengers who are using the bus stand and are travelling by the stage carriages which are entering the bus stand. The intention of the petitioners is to see that their staff should be provided with facilities of a dormitory in the bus stand. It is submitted that Municipality has no duty to provide any dormitory to the staff of the petitioners. Section 472 of the Municipalities Act has no relevance in this regard. It is contended that the element of quid pro quo in its strict sense is not a sine qua non for a fee and the co-relationship of the levy and services rendered or expected is one of general character and not of mathematical exactitude. It is pointed out that the traditional concept of quid pro quo has undergone a WP(C)N0. 10959/07 -12- transformation. Now a mere casual relationship between the fee and the services may be enough and it is not even necessary to establish that those who pay fee must receive direct benefit of the services rendered. General benefit from the authority levying the fee will satisfy the element of service required for collecting the fee. It is claimed that a good and substantial amount collected on account of fees is being spent for the benefit of the petitioners, their staff , their vehicles and their passengers. 5. Disputing the claim of the petitioners regarding the number of the buses entering the bus stand a day it is stated that roughly 200 buses only enter the Kottayam Municipal Bus Stand. It is contended that it is an exaggerated amount which has been calculated by the petitioners. Six staff have been appointed in the bus stand to do the cleaning work including the building which houses the bus stand, compound and toilets. It is submitted that WP(C)N0. 10959/07 -13- more one Rs.1,82,500/- is spent by way of salary and other benefits including pension. It cannot be said that the amounts spent by the Municipality is below 10% of the amount annually collected. Electricity charges for the lights and fans in the building as well as the maintenance charges incurred annually to white wash and also to tar the bus stand premises every year are not included. Therefore the enhancement presently made is by any standard exorbitant. It is also pointed out that additional expenses also arise every year due to the escalation of D.A. and other benefits and also maintenance charges. 6. A short reply affidavit is filed by the petitioner on 12th April 2007 to point out that the first respondent Municipality has auctioned the right to collect bus stand fee to third respondent for a sum of Rs.23.5 lakhs. Thereafter an additional reply affidavit was filed on the 20th May 2007. It is submitted that the original amount which was collected WP(C)N0. 10959/07 -14- from the members of the petitioner association by way of bus stand fee was Rs.5/-. This was the fee which was prevailing for the period from 1997-2000. Thereafter for the period 2000 – 2001 it was revised and re-fixed at Rs.7/- per bus. Later, from the year 2002 onwards the same was enhanced and fixed at Rs.10/- per bus. Therefore it is contended that the revision is for the first time after a lapse of 20 years is incorrect. Answering the averments in paragraph 3 of the counter affidavit it is contended that the inadequacy of the facilities provided by the Municipality in the bus stand at Nagampadam is clear from the fact that there has been a series of writ petitions before this court complaining about the total inadequacy of the facilities provided in the bus stand. It is stated that though the Municipality has provided separate toilet facilities for ladies and gents separate fee viz., 50 paise per person is collected from the persons who are using the facilities. Therefore WP(C)N0. 10959/07 -15- provision of toilet facilities cannot be a defence to justify the enhancement imposed under the present proceedings. It is contended that no buses are parked in the bus stand at night hours. The bus stand is practically empty after 8.30 p.m. The only services rendered by the Municipality in the matter of maintenance of the bus stand is the cleaning activity undertaken by it. The same will not incur an expenditure of more than Rs.500/- per day, totaling to Rs.1,82,500/- per year. It is then pointed out that the Road Safety Committee has no role in the matter of correcting the structural defect in the construction of the hump inside the bus stand. The claims in the counter affidavit regarding expenditure of amounts for tarring the premises are disputed. It is pointed out that no details are furnished by the respondents. The expenditure for tarring cannot be a recurring one since the tarring properly done should continue in tact for at least 5 or 6 years. The averment that WP(C)N0. 10959/07 -16- compound wall has been constructed on all the sides of the bus stand is disputed. It is contended that the railway authorities have constructed a compound wall on the boundary between the railway property and the bus stand property. Claim regarding lighting arrangements and expenditure incurred towards electricity charges are denied. It is submitted that except regular signal lights no separate lighting facilities worth mentioning have been provided by the Municipality in the bus stand. The stalls constructed have been auctioned out in favour of prospective vendors and large amounts are collected from then by way of licence fee. It is reiterated in the reply that except the amounts expended towards sweeping, nothing is expended for the benefit of users of the bus stand including members of the first petitioner association. Ultimately it is reiterated that as against a collection of Rs.23,50,000/- an amount of Rs.2 lakhs alone has been spent by the Municipality. It it WP(C)N0. 10959/07 -17- reiterated in the reply that at an average of 662 – 700 buses enter the bus stand every day. 7. It was very extensive submissions which were addressed before me by Sri.Mathew John.K., learned counsel for the petitioners and Sri.Siby Mathew and Sri.B.Premnath, learned counsel for the Municipality. Both the learned counsel would rely on a catena of decisions both of the Supreme Court and of this court in support of their arguments. The judgment of the Supreme Court in Belsund Sugar Co. Ltd v. State of Bihar and Others (1999(9) Supreme Court Cases 620), in Jindal Stainless Ltd. (2) and Another v. State of Haryana and Others (2006(7) SCC 241), in Agriculture Market Committee v. Rajam Jute & Oil Millers Assn. (2003(4) SCC 187), in Vijayalakshmi Rice Mill and Others v. Commercial Tax Officers, Palakol and others (2006 (6) Supreme Court Cases 763), in State of H.P. and Others v. Shivalik Agro WP(C)N0. 10959/07 -18- Poly Products and Others (2004(8) Supreme Court Cases 556) and the judgment of the Division Bench of this court in O/E/N Connectors Ltd. v. Chottanikara Grama Panchayat (2007(4) KLT 342) were a few decisions which were cited before me by Sri.Mathew John.K who argued on the authority of these decisions that though the initial concept of quid pro quo as laid down by the Supreme Court has undergone a substantial change, the Supreme Court is consistent in its view that at least a good and substantial portion of the amount collected on account of fees namely 2/3 of ¾ should be shown with reasonable certainty as being spent for rendering services to the payees of the fees. Sri.Mathew John argued that the Municipality is not spending even a small fraction of the amount being collected from the payees of the fees for rendering services to them. 8. Sri.B.Premnath also did not log behind in citing WP(C)N0. 10959/07 -19- judicial precedents in support of their arguments which were founded on the counter affidavit filed by the Municipality. The judgment of the Supreme Court in Sreenivasa General Traders and others etc., v. State of Andhra Pradesh and others etc. (1983 SCC 1246), The City Corporation of Calicut v. Thachambalath Sadasivan and others (1985 SCC 756), in Vijayalakshmi Rice Mill and Others v. Commercial Tax Officers , Palakol and others (2006)6 SCC 763) were among the decisions cited by him. 9. Having very anxiously considered the rival submissions addressed before me in the light of the ratio which emerge from the various judgments of the Supreme Court and of the judgment of the Division Bench in O/E/N Connectors Ltd. v. Chottanikara Grama Panchayat (2007(4) KLT 342), I find much force in the submission of Sri.Mathew John.K. that the amount which is collected by the Kottayam Municipality from the members of the first petitioner WP(C)N0. 10959/07 -20- association can partake the character of fees only. There necessarily has to be a co-relation between the amount collected by way of fees and the services rendered by the collector of the fees to the payees of the fees. Going by the facts which emerge from the pleadings raised by the parties in this case it becomes clear to my mind that the impugned enhancement of bus stand fees from Rs. 10 to Rs. 15 is highly dis-proportionate to the additional amounts which the Municipality has become liable to spend towards rendering services for the beneficiaries of the bus stand- the general public, passengers, the stage carriage operators, its staff etc. At the same time, I notice that the petitioners are not entitled to contend that levy of Rs. 10/- per day per vehicle is exorbitant since they were paying at that rate till the present enhancement was imposed. What they are impugning is only the present enhancement by 50% over the existing rate of Rs. 10/-. I am therefore inclined to WP(C)N0. 10959/07 -21- proceed on the basis that the sum of Rs. 10 per vehicle per day prevailing before the present enhancement is reasonable by all parameters including the principle of quid pro quo. Considering the passage of time and the reduction in the purchasing power of money since the rate was fixed at the rate of Rs.10/- there is some justification for the Municipality in claiming a hike. At the same time, while deciding as to what extent the rate can be increased from Rs. 10/-, the expenditure actually incurred by the Municipality for rendering services to the users of the bus stand will be a relevant consideration. The materials placed before me are insufficient for arriving at the correct percentage of increase to which the Municipality will be entitled for. There is considerable dispute before me regarding the nature of the services rendered and expenses actually incurred by the Municipality for rendering the services. These disputes of fact cannot be settled by this WP(C)N0. 10959/07 -22- court under this jurisdiction. The disputes will have to be settled either in a regular civil suit instituted in that regard by either of the parties or by mediation in terms of Section 89(2) of the Code of Civil Procedure or by procedure adopted for a pre-litigation settlement under the auspices of the District Legal Service Authority, Kottayam. I am inclined to dispose of this writ petition relegating the parties to have a settlement of the dispute either in a regular civil suit or by any alternative dispute resolution method. At the same time, considering the merit, I have noticed in the argument of Sri.Mathew John that enhancement by 50% of the existing rate is illegal and unreasonable. Regard being had given to the nature of the levy and the extent of the extra services rendered during the period after the previous rate of Rs. 10 per day was fixed, I am inclined to quash Ext. P9 and also Ext.P1(a) to the extent the Municipality has decided to enhance the bus stand fees from Rs. 10 to 15 WP(C)N0. 10959/07 -23- and to direct respondents 1 and 2 to explore the possibilities of a settlement of the dispute as to the percentage of increase which the Municipality can levy by way of bus stand fee per vehicle over the existing rate of Rs. 10 by involving the petitioners and the party respondent. If the negotiation fails, it would be open to the petitioners to go in