Case: Municipal Corporation of Greater Bombay Vs. Bombay Tyres International Ltd. & Others

S. Rajendra Babu, J. C.A. 1179/94 and SLPs (C) Nos. 15507/87, 853/88 and 14597/87 : 1. In SLPs leave granted. 2. In this batch of cases, the appellant is Municipal Corporation of Greater Bombay, which has made provisions for Water Charges by framing appropriate Rules and Bye-laws pursuant to Section 141 and Section 169 of the Bombay Municipal Corporation Act, 1888. The scope of these provisions was considered in Muncipal Corporation of Greater Bombay v. Nagpal Printing Mills, and another, 1988(3) SCR 274, by this Court and the view of the Bombay High Court that Rule III(d)(i) to be invalid and beyond the rule-making power of Corporation was upheld. It was made clear by this Court in the said decision that the said provisions of the Act would empower the Corporation to levy charge only in respect of water that has in fact been supplied to and consumed by the consumer and it is to be levied on the basis of measurement or estimated measurement. It is also noticed that an estimated amount could be fixed on the basis of sound guidelines and the power given to the Commissioner to fix a quota has no guidelines. On the basis of this decision, the High Court disposed of several matters. Challenging the correctness of those decisions, these appeals have been preferred before this Court contending that the decision in Nagpals case requires reconsideration and the provisions of the Municipal Corporation Act considered earlier have been relied upon to contend that the appellant has competence to frame Rule III(d)(i) while the respondents have reiterated the view expressed in Nagpals case. On hearing this aspect, a Bench of two learned Judges referred this matter to a larger Bench for consideration of the correct scope of the provisions that were considered in Nagpals case. Thus the matter is before us. 3. We do not think that there is any good reason to reconsider the decision in Nagpals case. The view taken by this Court in Nagpals case is a plausible one and subsequently that Rule having been deleted is now replaced by a new rule. We respectfully follow the view expressed by this Court in Nagpals case and uphold the order made by the High Court. 4. However, Shri S.K. Dholakia, learned Senior Advocate for the appellant submitted that at any rate this Court had no occasion to examine the scope of the quota rule, and, therefore, it need not have made the observations to the following effect:- "The bye-laws made in 1968 here empower the Commissioner to fix a quota. But no guideline is indicated. That is bad and unwarranted." This aspect also need not be re-examined because subsequently by the rules framed in 1994 the definition of quota has been altered and whether this present rule answers the objections noticed by this Court in Nagpals decision need not be examined as the new Rules are not in question before us.5. The High Court having allowed the petitions has directed the refund of the amounts with certain rates of interest and if those amounts have already been refunded to the parties concerned, we do not think it appropriate to allow the appellants to recover such amounts again but if, however, such amounts have not been refunded and are retained by the Corporation, such amount shall not be refunded. We are making this order being conscious of the fact that the rule had been struck down not on the ground that it was incompetent to frame such Rule but on account of clear provisions not having been framed. Further, we are not sure in the absence of investigation as to whether the respondents had included in their price structure the amounts paid to the Corporation pursuant to the demand raised under the invalidated rules and whether the burden had been passed on to the consumers, in which event it will be wholly inequitable to allow respondents to claim such amounts back from the Corporation.

Decision reasoning: 1[ds]5. The High Court having allowed the petitions has directed the refund of the amounts with certain rates of interest and if those amounts have already been refunded to the parties concerned, we do not think it appropriate to allow the appellants to recover such amounts again but if, however, such amounts have not been refunded and are retained by the Corporation, such amount shall not be refunded. We are making this order being conscious of the fact that the rule had been struck down not on the ground that it was incompetent to frame such Rule but on account of clear provisions not having been framed. Further, we are not sure in the absence of investigation as to whether the respondents had included in their price structure the amounts paid to the Corporation pursuant to the demand raised under the invalidated rules and whether the burden had been passed on to the consumers, in which event it will be wholly inequitable to allow respondents to claim such amounts back from the Corporation.