NAGAR NIGAM, ALLAHABAD THROUGH ITS MUNICIPAL COMMISSIONER versus LIFE INSURANCE CORPORATION OF INDIA & ORS.

Citation: [2017] 7 S.C.R. 518 · Decided: 03-08-2017 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Dismissed
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Judgment (excerpt)

[2017] 7 S.C.R. 518 
A 
NAGAR NIGAM, ALLAHABAD THROUGH ITS 
B 
MUNICIPAL COMMISSIONER 
v. 
LIFE INSURANCE CORPORATION OF INDIA & ORS. 
(Civil Appeal No. 7460 of2009) 
AUGUST 03, 2017 
[R.F. NARIMAN AND SANJAY K.ISHAN KAUL, JJ.I 
C 
Uttar Pradesh Municipal Corporation Act, 1959 - ss.438, 
452, 541 - Licence Fee - Levy of - On business of insurance -
Propriety - Held: s.438 deals with licence fee which is chargeable 
for activities related.to functions of Municipal Corporations, which 
activities refer to premises in which goods or animals are kept for 
sale or any other purpose, and to premises in which manufacture of 
D 
goods takes place - Licence fee can be levied uls.438(d) only if 
any trade or operations connected with any trade are specified in 
bye-laws and expression 'trade' would not include business of 
insurance. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7460 
E 
of2009. 
F 
From the Judgment and Order dated 19.01.2005 of the High 
Court of Judicature at Allahabad in Civil Misc. Writ Petition Nos. 386, 
16861, 16948, 13287, 14251, 14253and14255 of2004 
T. N. Singh, Adv. for the Appellant. 
B. B. Sawhney, Sr. Adv. Ms. Indra Sawhney, Aditya Shandilya, 
Advs. for the Respondents. 
The Judgment of the Court was delivered by 
R.F. NARIMAN, J. I. Mr. T.N. Singh, learned counsel 
G 
appearing on behalf of the appellant-Nagar Nigam has assailed the 
judgment of the Allahabad High Court in which the respondent-Life 
Insurance Corporation of India was held not to be covered by the 
expression "insurance company" under a notification dated 30.01.1999 
issued by the appellant. 
H 
518 
NAGAR NIGAM, ALLAHABADTHR.ITS MUNICIPAL COMMR v. 
LIFE INSURANCE CORPORATION OF INDIA [ R. F. NARIMAN, l]. 
2. The judgment under appeal has held: 
"We also notice that in Item No. 25 of the Schedule annexed with 
the Nagar Nigam, Allahabad Notification dated 13.01.99/ 
Annexure-2 to the writ petition without an exception various 
establishments, undertakings etc. are all in essence pure and simple 
business or commercial units. In category Ga, Serial No.l of the 
list refers to Finance Company/Chit Fund. It is followed by Item 
No.2 referring to Insurance Company '(each Branch)'. It goes 
to show that respondents provided license fee with respect to 
business of a Company in the nature of 'Financial Companies' 
'Chit Fund Companies' and the like Insurance Companies dealing 
in general insurance (i.e. other than Life Insurance-exclusively 
carried on by LIC of India). 
Aforesaid conclusion is further discernible from the fact that 
the list does not embarrass in itself any charitable hospital or 
government hospital or other likewise establishments. 
In that view of the matter we do find a clear distinction between 
Insurance Company (carrying on business under Insurance Act 
1958) vis-a-vis the Life Insurance Corporation carrying business 
of life insurance under Life Insurance Corporation of India Act, 
1956. Otherwise also Principle of Interpretation. It is an accepted 
principle of Statutory Interpretation that in a case where two 
interpretations of a provision imposing tax/fee is possible, Court 
should accept the interpretation which leans in favour of the 
assessee i.e. the person who is sought to be burdened." 
3. Mr. B.B. Sawhney, learned Senior Counsel appearing on 
behalf of the respondents has sought to support the judgment under appeal 
by advancing slightly different arguments, which we have permitted him 
to advance. He has referred to the statutory authority to levy licence 
fee and read to us Section 438 of the Uttar Pradesh Municipal 
Corporations Act, 1959, which reads as follows:-
"438. Certain things not to be kept, and certain trades and 
operations not to be carried on without licence.- ( 1) Except under 
and in confonnity with the terms and conditions of a licence 
granted by the Municipal Commissioner, no person shall-
519 
A 
B 
c 
D 
E 
F 
G 
H 
520 
SUPREME COURT REPORTS 
[2017) 7 S.C.R. 
A 
(a) keep in or upon any premises any article specified in the bye-
laws in any quantity or in excess of the quantity specified in the 
bye-laws as the maximum quantity of such article which may at 
one time be kept in or upon the same premises without a licence; 
and 
B 
(b) keep in or upon any building intended for or used as a dwelling 
or within fifteen feet of such building cotton, in pressed bales or 
boras or loose, in quantity exceeding four hundred-weight; 
c 
D 
E 
F 
(c) keep, or allow to be kept, in or u
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