Sonik Industries, Rajkot vs. Municipal Corporation of the City of Rajkot

Facts

Rajkot Borough Municipality framed Draft rules for the levy of rates on buildings and lands in Rajkot. The Draft rules were published and objections were invited, and thereafter the State Government accorded its sanction to the rules. In the issue dated November 28, 1964 of "Jai Hind", a Gujarati newspaper published from Rajkot, a notice was published purporting to be under Section 77 of the Bombay Municipal Boroughs Act, 1925 as adopted and applied to the Saurashtra area of the State Gujarat (the Act), for the information of persons holding buildings and immovable property within the Municipal limits of Rajkot that the Municipality had resolved to enforce the "Rules of the Rajkot Borough Municipality for the levy of Rate (Tax) on Buildings and Lands" sanctioned by the State Government of Gujarat with effect from January 1, 1965.

The appellant, a registered partnership firm, instituted a suit in the Court of the learned Civil Judge, Senior Division, Rajkot, praying for a declaration that the aforesaid rules were invalid, and that the consequent assessment list and the related notices of demand were without authority of law. A permanent injunction was also sought to restrain the Municipality from giving effect to the rules. The trial court decreed the suit and granted the declaration and injunction prayed for. An appeal against the decree of the trial court was dismissed. A second appeal was filed by the Municipal Corporation of Rajkot in the High Court which was referred subsequently to a larger Bench. A Bench of three learned Judges of the High Court took up the case and observed at the outset that the only question which required consideration at that stage was whether the courts below had erred in striking down the rules on the ground that they had not been published as required by Section 77 of the Act. The learned Judges held that the courts below had taken an erroneous view of the statute and that the conditions of Section 77 of the Act had been satisfied in the case.

Key Takeaways for Students

Legal Issue

Whether the rules for the levy of a rate on buildings and lands were rightly struck down on the ground that they had not been published as required by Section 77 of Bombay Municipal Boroughs Act, 1925?

Holding

The mandatory requirement of Section 77 was that the rules should be published and it seems to us that the notice satisfies that requirement. The mode of publishing the rules is a matter for directory or substantial compliance. It is sufficient if it is reasonably possible for persons affected by the rules to obtain, with fair diligence, knowledge of those rules through the mode specified in the notice. In the opinion of the Legislature, that was the mode through which the inhabitants of the Municipality could best be informed of the rules. Section 77 provides the final stage of the procedure enacted in Sections 75 to 77 for imposing a levy. The period referred to in Section 77, after which alone the tax can be imposed, is intended to enable persons affected by the levy to acquaint themselves with the contents of the rules, and to take preparatory measures for compliance with the rules. Court is of opinion that it would have been more desirable for the Municipality to have published the rules in the newspaper along with the notice reciting the sanction, but while saying so court is unable to hold that its omission to do so and notifying instead that inspection of the rules was available in the Municipal Office does not constitute sufficient compliance with law.

Final Decision Appeal Dismissed