NAGARPANCHAYAT,UNA v. UNA 'fALUKA SAHAKARI KHARID VECHAN SANGH

So long as Una Mu,nicipality r~mained, a municipality as con· stituted under the Act of J 901, there was 110 difficulty in the matter of collection of the octroi. After the Act came into force the Na~ Panchayat replaced the Municipality in Una. · It continued to collect the octroi till 1967 when the respondent, for the first time, raised an objection that it waS' not entitled to do so. As the Nagar Panchayat persisted in making the collection a petition. under Art. 226 of the Constitution was filed in the Gujarat High Court. It has been held by the High Court that since in the Rules promulgated under the Ordinance in Gujarati the collecting agency has been described as Sudhrai which means a municipality the octroi the Nagar Panchayat was not competent to collect under the Ordinan9e as it did not fall within the meaning or definition of the term "municipality" I'll our judgment the High Court was in error in coming to the conclusion that the Nagar Panchayat was not entitled to carry on the work of collection of octroi under the Ordinance even though the Ordinance which imposed liability to pay remained in force. Under s. 307 of the Act where any local area was declared to !><' a gram or nagar under s. 9 and if that area was .:o-extensive with the limits of a municipal district or municipal borough the muni cipality functioning in such local area was to cease to exist and in to be constituted. its place an Interim Grart1 Panchayat was According to clause ( c) of that section the unexpended balance of the municipal fund and property including arrears ·of rates. ta~es and fees belonginl'? to the municipality and all rights and powers which vested in the municipality were to vest in the Interim Gram or Nagar Panchayat fund until a new panchayat was constituted in accordance with the provisions of s. 308 ( 1). Clause ( g) provid ed that all officers and servants in the employ of the municipality were to become officers and servants of the Interim Panchavar under the Act. Clause (k) was in the following terms : - -4 l 0 SUPREME COURT REPORTS [1971) 2 S.C.ll. "Any law (other than the municipal law) or any rule, by-law, notification or order issued under such Jaw, which was applicable to and in force in the local area immediately before it was declared as a gram or nagar Ullder section 9, shall continue to apply to and to be in force in the local area until it is superseded". .A B ·:section 308 dealt with the term of office of an Interim Panchay11t . .and the steps to be taken to hold election for a new Gram or Nagar Panchayat. The appellant in the present case is indisputably the .duly coastituted Nagar Panchayat. Section 307 of the Act leaves no room for doubt that wherever C .a Nagar Panchayat was constituted in place of the municipality· the municipality disappeared and all its funds including the right .to realise taxes etc., vested in the Nagar Panchayat. In. other · words it was the Nagar Panchayat which was to function as the local body in the area previously constituted. as a municipality. <Clause (k) of s. 307 clearly saved all laws or rules which were .applicable to the local area which formed a municipality and they D ·were to continue to apply and to remain jn force in the area for ·which the Nagar Panchayat came to be constituted. By no stretch ':'of reasoning could ii be said that the Ordinance did not become :lipplicable to the cities and towns spe'"afied ion Schedule I which It is ..came to be cons'tituted as Grams or Nagars under the Ar!. :true that no fresh rules were promulgated under the Ordinance .adapting the new terminology but even about the word Sudhrai 'it is a moot point whether it means only a municipality as consti tute4 under the Act of 1901. I; A~ argument was raised before the High Comt that .the Guja rati expression "sudhrai" meant any local-self governing authority. 'The High Court observed that this expression as used in the Octroi rules could not . have a wider CODIIOtati<?n the expression ·"municipality" in s. 9 of the Ordinance. When s. 307 (k) of the Act saved the opcratioo: of all laws and rules etc., other than the "municipal law the intention of the legislature was precise and it is futile to suggest that the Ordinance was not ·definite and ·covered by this saving clause. The object underlying clause ( c) of s. 307 was to vest in the Nagar Panchayat the entire municipal · fund mcluding the arrears of taxes and fees as also the powers and rights relating thereto which previously vested in the municipality. The octroi which w·as being collected under the Ordinanee clearlv fell within the ambit of clause ( c). The pQ.wer and the right. ·therefore, had passed to the Nagar panchayat add it was entitled to exercise it. Even if in the rules framed µJide!' the ·Ordinance certai·n expression created a difticultv that c<*d aot clefeat the right and the power COllferred on the Nagar Plllldlayat F H NAGAR PANCHAYAT v. s. K. v. SANGH (Grover, I.) 41 r. A · by the Act of realising and collecting· the octroi which was being: done under the Ordinance as saved by clause (k) of s. 307. If on account of the abseru:e of proper adaptation in the rules made under the Ordinance any difficulty is being experienced in · the collection of octroi iu is always open to the State Government. B . to mako those clarifications and adaptations and indeed it would be expedient and desirable to do so. So long as the n\lW rules. are not framed under the Ordinance or adaptations are not made: thereunder the Nagar Panchayat can certainly make the r,ollection and through the officers who discharge the same duties as were· being performed by their counterparts mentioned in the rules •. This is what seems to have been done uptill 1967 without any C objection by any one. In the result the appeal succeeds and it is allowed with costs. in this Court as also in the High Court. R.K.P.S. Appeal al/owed ..