Case Note & Summary
The dispute concerned the levy of fee by the Municipal Board, Hapur, for use of a bus stand established by the Board. The respondents were transport operators using the bus stand for their stage carriages. The Board had been charging a fee of Rs 0.50 per day, but later demanded Rs 0.75 per day. The transport operators challenged the enhanced demand before the Allahabad High Court, contending that the municipality lacked the power to levy such fee. The High Court, relying on the decision in Jagdish Prasad Bindla v. Municipal Board Atroli, allowed the writ petition and quashed the demand, holding that the municipality was devoid of power. The Municipal Board appealed to the Supreme Court. The Supreme Court examined the statutory provisions. Section 293 of the U.P. Municipalities Act, 1916 empowered the Board to charge fee for the use or occupation of any immovable property vested in or entrusted to its management, including public streets and places. Section 298 authorized the Board by special resolution to make bye-laws for promoting health, safety and convenience of inhabitants and for furtherance of municipal administration, including regulation of traffic. The Court found that the municipality had set up the bus stand pursuant to directions from the State Government in 1959 and 1960, incurring considerable expenditure. A resolution dated February 25, 1961 prescribed a fee of Rs 0.75 per day for parking of stage carriages. The Court held that the municipality had clear statutory power to levy the fee. It further referred to the Constitution (Seventy-third Amendment) Act, 1992, which inserted Part IXA and the Twelfth Schedule. Entry 17 of the Twelfth Schedule lists public amenities including street lighting, parking lots, bus stops and public conveniences. The Constitution thus imposes a duty on municipalities to provide such amenities, and users of these amenities are liable to pay fee for the services rendered. The Supreme Court concluded that the High Court was clearly in error in striking down the fee demand as ultra vires. Accordingly, the appeal was allowed, the order of the Division Bench of the High Court was set aside, and the fee demand was upheld, without any order as to costs. A connected appeal arising from SLP (C) No.4006/80 was also allowed in the same terms.
Headnote
A) Municipal Law - Power to Levy Fee - Sections 293 and 298 of U.P. Municipalities Act, 1916 - A municipal board is statutorily empowered to charge fee for use of immovable property vested in or entrusted to it, including public streets and places, and to make bye-laws for regulation of traffic and for public convenience - The High Court erred in holding that the municipality was devoid of power to levy fee for use of the bus stand; the demand was not ultra vires - Held that the fee demand was valid and the High Court's order was set aside (Paras 3-4). B) Constitutional Law - Municipal Governance - Article 243P(d), Article 243W(a)(i), Twelfth Schedule Entry 17 of the Constitution of India, inserted by Constitution (Seventy-third Amendment) Act, 1992 - Municipalities are endowed with powers and responsibilities to function as institutions of self-government and to provide public amenities including street lighting, parking lots, bus stops and public conveniences - Since the municipality provided bus stand as a statutory duty, users of the amenity are liable to pay fee for services rendered - Held that the Constitution mandates preparation of plans for economic development and social justice, including provision of public amenities, and the imposition of fee for such services is justified (Para 4). C) Municipal Law - Bye-law Validity - Resolution dated February 25, 1961, Item No.3 of Schedule A, U.P. Municipalities Act, 1916 - The municipality prescribed fee of Rs 0.75 per day for stage carriages through a resolution which was in the nature of a bye-law - The bye-law was within the competence of the board under Sections 293 and 298 - Held that the prescribed fee for use of the bus stand was valid and enforceable (Para 2).
Issue of Consideration
Whether the municipality has power to levy fee for use of the bus stand and demand payment thereof; whether the High Court correctly struck down the fee demand as ultra vires the municipality's power.
Final Decision
Appeal allowed; the order of the Division Bench of the Allahabad High Court was set aside; the municipality's power to levy fee for use of the bus stand was upheld; the demand of Rs 0.75 per day was valid; no order as to costs. The connected appeal in C.A. No. 12299/96 was also allowed in the same terms.
Law Points
- A municipal board has statutory power under Sections 293 and 298 of the U.P. Municipalities Act
- 1916 to levy fee for use of immovable property vested in or entrusted to the board and to make bye-laws for regulation of traffic and public amenities
- fee may be fixed by bye-law
- the Constitution (Seventy-third Amendment) Act
- 1992 and Twelfth Schedule Entry 17 impose duty on municipalities to provide public amenities including bus stops and parking lots
- users of such amenities must pay fee for services rendered
- the fee of Rs 0.75 per day for stage carriages was validly prescribed by resolution dated February 25
- 1961
