KANDIVALI COOPERATIVE INDUSTRIAL ESTATE AND ANOTHER versus MUNICIPAL CORPORATION OF GREATER MUMBAI AND OTHERS

Citation: [2015] 1 S.C.R. 989 · Decided: 04-02-2015 · Supreme Court of India · Bench: M.Y. EQBAL · Disposal: Disposed off

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Judgment (excerpt)

[2015) 1 S.C.R. 989 
KANDIVALI COOPERATIVE INDUSTRIAL ESTATE AND 
A 
ANOTHER 
v. 
MUNICIPAL CORPORATION OF GREATER MUMBAI AND 
OTHERS 
(Civil Appeal No. 1431 of 2015 etc.} 
B 
FEBRUARY 04, 2015 
[M.Y. EQBAL AND SHIVA KIRTI SINGH, JJ.] 
Mumbai Municipal Corporation Act, 1988 - s.368(5) -
C 
Trade Refuse Charges - Imposition - Revised by the Circular 
dated 11.10.2011 issued by Municipal Corporation of Greater 
Mumbai - Propriety of - Held: The competent authority under 
the Act has the power to notify Trade Refuse Charges to be 
collected from its trade /icencees - However, provision under D 
clause (6) of the Notification to increase trade refuse charge 
by 10% every year from the year 2009 is arbitrary, without 
guidelines and violative of principles of natural justice -
Therefore, the authority directed not to recover any increased 
Trade Refuse Charges without giving opportunity of hearing 
E 
to the licencee or to the persons liable to pay such increased 
charges - Constitution of India, 1950 - Article 14 - Principles 
of Natural Justice - Audi Alteram Partem. 
Disposing of the appeal, the Court 
F 
HELD: 1. 1. From a conjoint reading of the provisions 
u/ss. 367, 368, 394 and 479 of Mumbai Municipal 
Corporation Act, 1888, it is manifestly clear that the 
Commissioner may from time to time inter alia specify 
conditions and restrictions while granting trade licence. 
G 
The Commissioner may notify the charges including 
trade refuse charges i.e. to be collected from the trade 
licencees. [Para 17] [1005-D] 
989 
H 
990 
SUPREME COURT REPORTS 
[2015) 1 S.C.R. 
A 
2. In almost all the statute dealing with legal 
administration, Municipal Authorities have inevitably to be 
delegated the power of taxation. The aim and object of 
the scheme have to be taken into consideration while 
deciding the question as to the excessive exercise of 
B power in the matter of collection of fees and charges. 
[Para 23] [1010-F-G] 
The Commissioner, Hindu Religious Endowment, 
Madras vs. Sri Lakshmindra Tirtha Swamiar of Shirur Mutt 
C (1954) 1 SCR 1005 - referred to. 
3. A fee is a payment primarily in public interest, but 
for some special services rendered or some special work 
done for the benefit of those from whom payments are 
demanded. In other words, fees must be levied in 
D consideration of certain services which the individual 
accepts willingly or unwillingly. It is also necessary that 
fees or charges so demanded must be appropriated for 
that purpose and must not be used for other general 
public purposes. Further, the legislature can delegate its 
E power to statutory authority, to levy taxes or fees and fix 
the rate in regard thereto. An Act delegating power to the 
local body without providing a maximum rate does not 
by itself render the delegation excessive or invalid. 
[Paras 25 and 27] [1011-E, F; 1012-A, B] 
F 
4. The element of compulsion or coercion is present 
in all impositions, though in different degrees and that it 
is not totally absent in fees. The compulsion lies in the 
fact that payment is enforceable by law against a man in 
spite of his unwillingness or want of consent and this 
G element is present in taxes as well as in fees. [Para 26] 
[1011-G] 
5. In Clause (4) of the impugned Circular, provision 
has been made for making application by persons in 
H respect of particular business who do not agree with the 
KANDIVALI COOPERATIVE INDUS. ESTATE v. MUNICIPAL 991 
CORPN. OF GREATER MUMBAI 
revised trade refuse charge may approach the authority 
A 
by making necessary application and on such application 
or representation, appropriate response shall be given to 
those persons, who have any grievance to that effect. 
Therefore, the respondent-authority is directed to follow 
the procedure mentioned in clause (4) of the circular. 
B 
[Para 29] (1012-F-G] 
6. Increasing trade refuse charge by 10% every year 
from 2009 as provided by Clause (6) of the impugned 
Circular, is highly arbitrary and without any guidelines. 
C 
The automatic increase irrespective of the nature of 
business carried on by the Licencee also violates 
principles of natural justice. Therefore, the respondent 
shall not recover any increased trade refuse charges 
with effect from 2009 without giving reasonable 
opportunity of hearing to the licencee or persons liable 
D 
to pay such increased charges. The actual increase can 
be ascertained and realized in future but not without 
giving reasonable opportunity of hearing to the li

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