Ludhiana District Cooperative Milk Producers Union Limited v. The State of Punjab & Anr.

CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. D.S.Patwalia, Advocate for the petitioner. Mr. H.S.Bakshi, Advocate for respondent No.2. Adarsh Kumar Goel,J.

This petition seeks quashing of notification dated 20.4.1999 issued by the State of Punjab imposing tariff on industries in the municipal limits of Ludhiana Municipal Corporation in violation of section 90 of the Municipal Corporation Act, 1976 (for short, ‘the Act’).

Case of the petitioner is that it is a Cooperative Society of Milk producers. It received bill Annexure P.1 for the water and sewerage charges. The petitioner made representation Annexure P.2 against the said bill stating that the State could not directly levy tax on water and sewerage. Exclusive jurisdiction to do so was of the Municipal Corporation. The State could come into picture only after the direction issued to the Municipal Corporation is not complied. Reliance has been placed on judgment of this Court in M/s Naranjan Dass Doomra Rice and General Mills v. The State of Punjab and others, CWP No.838 of 1991 decided on 19.8.1991, as affirmed by the Hon’ble Supreme Court in State of Punjab v. Naranjan Dass Doomra Rice and General Mills, AIR 1998 SC 537. Before the impugned notification was issued, no direction in terms of section 90 was issued to Municipal Corporation. Direction issued vide notification dated CWP No.16136 of 2000 2

2.9.1994 Annexure P.4 did not cover the subject matter of the impugned notification and the same related only to water supply. According to the petitioner, action under section 90(5) by the State Government was permissible only if the same was preceded by direction under section 90(4) followed by non-compliance of such a direction. The same having not been done, the impugned notification Annexure P.3 was illegal.

In the reply filed by the Municipal Corporation, the plea as to validity of impugned notification has been contested by relying upon judgment of this Court dated 24.4.1996 in CWP No.25 of 1995 Brahm Dutt and others v. State of Punjab etc. upholding notification dated 2.9.1994. It has been stated that notification dated 2.9.1994 prescribes rate of sewerage disposal charges which was also the subject matter of impugned notification Annexure P.3.

Question for consideration is whether the impugned notification is in violation of requirement of section 90(4) of the Act.

Learned counsel for the petitioner submitted that subject matter of consideration by this Court in Brahm Dutt which has been followed in Dayanand Medical College and Hospital, Ludhiana v. State of Punjab and others, CWP No.5629 of 2000 decided on 2.5.2002, was only validity of notification dated 2.9.1994 which is not the subject matter of consideration in the present proceedings. There is no earlier judgment on the issue of validity of notification dated 20.4.1999. The judgment of this Court in M/s Naranjan Dass considered the statutory requirement of procedure to be followed by the State Government for levying the tax covered by a provision similar to Section 90. Even though, learned counsel for the Municipal Corporation does not dispute that procedure under section 90 has to be followed, his submission is that the same has been followed. CWP No.16136 of 2000 3 Notification Annexure P.4 covered the charges for discharge of effluents which is also the subject matter of notification Annexure P.3.

Since there is confusion about the scope of two notifications and the State is not represented, learned counsel for the parties suggest that we direct the Principal Secretary, Local Government, Punjab to look into the scope of both the notifications and examine whether due procedure has been followed in levying the impugned tariff. If not, the State may take such further remedial steps as permissible under the law. The said Principal Secretary may give personal hearing to the petitioner and the Municipal Corporation. We direct accordingly. Let an appropriate order be passed within three months from the date of receipt of a copy of this order. The aggrieved party will be at liberty to challenge the same in accordance with law.

The parties may appear before the Principal Secretary, Local Government on April 18, 2011 for further proceedings.