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TMI Blog2010 (7) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... cation as per Section 341F of the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965 (for short Act of 1965 ). The petitioners also challenge the demand notices issued by the NMMC as also the Memorandum of Understanding (for short MOU) dated December 1, 2005 entered into between the MIDC and the NMMC. 2. The petitioner No.1 is a Small Scale Entrepreneurs Association having Registration No.SMAH/2505/THN F-3418 THN. The Petitioner No.2 is Mahape Industries Welfare Association having Registration No.Mah/37/2001/Thane. The Petitioner Nos.3 4 are the Managing Directors of the units in Mahape. The petitioner Nos.1 to 4 collectively, hereinafter, will be referred as the petitioners. 3. The core issues that arise in the present petition are as follows:- (1) Whether after the Constitution (74th) Amendment Act 1992 and Amendment to the 'Act of 1965' which came into force on May 31, 1994 the Government of Maharashtra can indefinitely postpone the issue of notification for the formation of Industrial Townships? (2) Whether it was the bonafide decision of the State Government, not to constitute TTC TBIA known to be the oldest and the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the Notification dated August 16, 1973 issued by the Urban Development, Public Health Housing Department of the State of Maharashtra, additional area was included in the site designated for New Bombay in the final Plan for Bombay Metropolitan Region and consequently the Government felt that in the public interest, the said added area should be developed as an integral part of the site and accordingly, included this added area in the proposed New Town viz.New Bombay. By another Notification dated August 16, 1973 issued by the Urban Development, Public Health and Housing Department, the State Government designated CIDCO as New Town Development Authority for the additional area as well. 8. By a draft Notification dated August 27, 1991 issued by the Urban Development Department of the State of Maharashtra u/s.3 (2) of the BPMC Act, proposed that the local areas of 30 villages to constitute NMMC. On December 12, 1991 an Addendum to the said Notification was issued by the Urban Development Department of the State of Maharashtra adding 14 villages constituting the NMMC. None of the petitioners or any member raised any objection to these notifications. After considering the objec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be carried out by the MIDC and the same shall be handed over to the local authority, free of cost, for maintenance. Till then the present system of providing water supply, fire fighting arrangements etc. be continued to be provided by the local authority. The Property Tax, Octroi etc. shall be collected by the local authority. Similarly, licenses required under the local authority shall be issued by the concerned local authority. On September 28, 2000, CIDCO issued notice u/s.37 of the M.R. T.P.Act proposing the modifications to regulation 16.3(1-a) C of General Development Control Regulations for Navi Mumbai. 12.It is the case of the petitioners that on the assumption that the MIDC area is included within its jurisdiction on August 23, 2001 final notice was issued by NMMC giving 48 hours time to the members of the petitioners for depositing the arrears of property tax. It is at this stage, the above petition was filed on June 11, 2001. 13.The petition, as was originally filed, claimed for declaration that the levy and collection of the property taxes by the NMMC from the petitioners is not for the purposes of the BPMC Act and hence without the authority of law and bad in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... training the NMMC from in any manner demanding, levying, collecting and or recovering any rates or taxes including the property tax and sales tax from the petitioners. By an order dated August 19, 2005, the Court allowed the Civil Application only in so far prayer of amendment concerned. Pursuant to the said order, the petitioners carried out amendment in the original petition and added paragraph Nos. 5A to 5N after paragraph No.5. The added paragraphs refer to the Exhibits K to X. The petitioners added words rates and cess after the words property taxes in prayer clauses (A) and (C). 17. The MIDC and the NMMC entered into MOU on December 1, 2005 for handing over the maintenance of infrastructure facilities within the TTC area to the NMMC. On January 24, 2006 this Court dismissed the petition on the ground that the petitioners have an equally efficacious alternate remedy of appeal u/s.406 of the BPMC Act. The petitioners carried the matter to the Apex Court and by an order dated May 8, 2006 the Apex Court set aside the order of this Court dated January 24, 2006 and remanded the matter to this Court for disposal on merits. All the contentions of both the parties, except the q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed on September 29, 2008. Pursuant to that order, the petitioners added:- (1) paragraph (A-3) (2) prayer (A1) after prayer (A) and before prayer (B) in paragraph No.8 of the petition. 24. The Petitioners have come out with the case that the MIDC area does not fall within the territorial jurisdiction of the NMMC and consequently the NMMC has no power to levy and recover taxes and cess in the MIDC area. The petitioners rely upon Notification dated December 17, 1991 and the draft Notifications dated August 27, 1991 and the Addendum dated December 2, 1991. Comparing the language employed in the draft notifications and the final notification dated December 17, 1991, it is submitted that the MIDC area does not form part of the municipal limits of the NMMC. The petitioners also rely upon the directives dated September 7, 1994 and December 16, 1994 issued by the State Government in support of the submissions. The petitioners rely upon various maps produced by the parties to this petition, the boundaries described in these maps as compared to the boundaries set out in the final Notification dated December 17, 1991 to contend that the MIDC area does not form part of the municipal l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial Township, it was contended that as per Article 243(Q) of the Constitution of India, it is left to the discretion of the State Government and consequently the petitioners cannot pray for writ of mandamus. It was denied that the NMMC levied the property taxes with retrospective effect. On these among other grounds, it was contended that the petition is liable to be dismissed. 28. The MIDC filed its first reply dated July 29, 2002 through Mr.Sanjay D.Patil, Chief Planner, interalia contending that the correspondence was exchanged between the authorities of the MIDC and the State Government for establishment of the Industrial Township. The subject of formation of the Industrial Township is, however, within the domain of the State Government. 29. On behalf of the NMMC, Mr.Prakash Kulkarni, Joint Commissioner (Property Tax), made 2nd affidavit, interalia contending that pursuant to the Government Notification dated December 17, 1991 the NMMC was constituted w.e.f. January 1, 1992, which includes TTC Industrial area. By Notification dated December 16, 1994 issued by the Urban Development Department of the Government of Maharashtra, the NMMC was designated as a Planning Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Notification dated June 8, 2007 were enclosed. It was further brought on record that the NMMC declared its intention u/s.38 of the M.R. T.P.Act to revise the development plan and to that effect Notification dated September 26, 2007 was published. 32. The petitioners filed their affidavit in rejoinder to the affidavit of NMMC on July 15, 2008 contending that the area of MIDC does not form part of the municipal limits of the NMMC. The petitioners extracted table, which according to them establishes that the area admeasuring 24.690 sq.kilometers of the MIDC does not form part of the NMMC and that the authorities of NMMC have manipulated the area calculations. 33. On behalf of the State Government, Ms.Ujwala Dandekar, Desk Officer, Urban Development Department, made an affidavit on November 5, 2008 setting out therein that the area of NMMC is 109.59 Sq.Kilometers comprising 30 erstwhile revenue villages in Thane District. To this affidavit, Notifications dated December 17, 1991 issued under sections (i) 3(2) of the BPMC Act, (ii) 4(1) read with Section 254 (1) (a) of the Maharashtra Zilla Parishad and Panchayat Samities Act, 1961 (for short the Act of 1961 ), (iii) 256 (1) (b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned AGP on behalf of Respondent Nos.1 to 4 being the State of Maharashtra and its authorities, Mr.R.S.Apte, learned Senior Counsel with Mr.A.A.Garge for Respondent No.6- NMMC, Ms.Deepa Chavan, learned counsel with Mr.Kiran Gandhi and Mr.Ravindra Chilay on behalf of Respondent Nos.5 and 7 being the MIDC and its Area Manager. Learned counsel for the parties invited our attention to the various Notifications, Maps and other material on record. We have also gone through the written submissions filed by the parties. With the assistance of the learned counsel, we have carefully gone through the material on record and have examined minutely the case made out by the respective parties. 37. Writ petition was placed for directions on June 22, 2010 in view of the precipe dated June 18, 2010 filed on behalf of the petitioners. During the course of hearing, learned counsel for the NMMC stated that he may be permitted to delete the points regarding Section 15 of the Census Act, as also the notice dated 26th September, 2007 from the written statement submissions filed on behalf of the NMMC on June 7, 2010. We have recorded the said statement in our order dated June, 22, 2010. 38. In suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NMMC by CIDCO shall be transferred by CIDCO to the NMMC and the NMMC was appointed as the Planning Authority for some of the nodes developed by CIDCO and handed over to NMMC. However, it was not mentioned that the NMMC is also to act as a Planning Authority in any of the areas of the MIDC. Thus, the NMMC has no local authority in the MIDC area. (ii) In so far as a directive dated December 16, 1994 issued by the State Government u/s.154 of the MR TP Act is concerned, it provided transfer of certain areas by CIDCO to NMMC that are overlapping between CIDCO and NMMC to enable the NMMC to act as a sole Planning Authority in the areas falling within its jurisdiction. The intention in issuing this directive was obviously to avoid dual Planning Authority operating in respect of the same area. The petitioners also relied upon the Notification dated September 28, 2000 issued by CIDCO u/s.37 of the M.R. T.P.Act for modification of the regulation, which also reinforces the fact that the MIDC area does not fall within the NMMC. While excluding 14 villages from the NMMC under the Notification dated June 8, 2007, the expression whole area was used. None of the 14 villages which were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been providing all the services upto the year 2005 and thereafter also some of the services in the MIDC area are provided by the MIDC, the NMMC has no power to levy and recover taxes from the petitioners. 40.III - Quid Pro Quo and the Local Authority Even assuming for the sake of arguments while denying that MIDC falls within the municipal limits of NMMC, in the light of the Division Bench Judgment of this Court in the case of Jalgaon Municipal Corporation in Writ Petition No.1012 of 2003, the NMMC is barred from providing any services in the MIDC area. It is statutory obligation of the MIDC to provide the services. It is therefore not open to the NMMC to contend that the principal of quid pro quo is not applicable to the taxes levied and collected by the NMMC. It was also submitted that Section 63 of the BPMC Act provides obligatory duties and section 66 provides discretionary duties. None of the duties specified either in Section 63 or Section 66 of the BPMC Act are discharged by the NMMC in so far as MIDC area is concerned. Even otherwise the NMMC cannot levy and recovery any taxes from the petitioners. 41.IV- NMMC cannot contract out of its statutory functio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s conferred upon the NMMC under the provisions of the BPMC Act. He further submitted that, the contention raised by the petitioners based upon clause 7 of the Schedule I of the M.R. T.P.Act, has no substance. In support of this submissions, he invited our attention to the provisions of the BPMC Act as also the MID Act and the M.R. T.P.Act. Countering the contention raised by the petitioners that the NMMC is not rendering any services, he submitted that the concept of tax means compulsory exaction of money by the public authority for the public purposes enforceable by law and is not the payment for the services rendered. The essence of taxation is compulsion and it is imposed under the statutory power. The other characteristic of tax is that it is an imposition made for public purposes, without reference to any special benefits to be conferred on the payer of the tax. The levy of the tax is for the purpose of general revenue, which when collected forms part of the public revenues of the State. As the object of the tax is not to confer any special benefit upon any particular individual, there is no element of quid pro quo between the tax payer and the public authority. In support o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evelopment Department, dated November 5, 2008 and submitted that the MIDC area/ TTC area is part of the municipal limits of the NMMC. 47. We will deal with the contentions raised by the petitioners serially as under:- I - Territorial Jurisdiction:- (i) It was contended on behalf of the petitioners that in the schedule appended to the draft Notification dated August 27, 1991, the expression entire area within the limits of the revenue villages as mentioned in (1) to (30) were constituted in the municipal limits of the NMMC. By Addendum dated December 2, 1991 in addition to 30 villages, it was decided to add 14 villages thereby meaning that in all 44 revenue villages constituted the municipal limits of the NMMC. However, in the final Notification dated December 17, 1991 the expression local areas of the revenue villages (1) to (44) constituting the municipal limits of the NMMC was used. It was therefore submitted that since the draft Notification uses the expression entire area and the final Notification uses the expression local area on the face of it, these terms are different and denote different dimensions. The expression local area of the revenue villages is d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r) and then along the Southern boundary of village Karave; West - Along the Western boundaries of villages Karave, Nerul and Sarsole and then along part of the Northern boundary of village Sarsole and then along part of the Southern boundary of village Sonkhar and then along the Western boundary and part of Northern boundary of village Sonkhar and then along the part of the Western boundary of village Turbhe and then along the Southern-Western and Northern boundary of village Ju and thereafter along Southern, Western and Northern boundary of village Kopar-Khairane and then along the Southern and Western boundary of village Ghansoli and thereafter along the Western boundary of village Tetavali and along part of the Western boundary of village Gothivali and then along the Southern and Western boundary of village Airoli upto the boundary junction of village Dighe. (iii) Addendum to the draft Notification dated August 27, 1991 was issued on December 2, 1991 and the relevant portion of the said Addendum is reproduced for ready reference:- Addendum In the Schedule to the draft notifications contained in the Government Notification, Urban Development Department, No.NBC 1091/140/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, are forming part of the NMMC. The question is whether the expression entire area and the expression local area connote different areas as contended by the petitioners or they represent one and the same areas. Now it is not in dispute that the daft Notification dated August 27, 1991 uses the expression entire area and the final Notification dated December 17, 1991 uses the expression local area . In view thereof, we have to consider what the expression local area means. The expression local area is used in various statutes viz. (1) Act of 1958 and in particular Sections 4(2)(a), (b), Section 157, Section 159, (2) Section 4(1)(v) of the Code, (3) Act of 1961 and in particular Sections 4, 5, 254(1) (a),(b), 255, 256(1) (b), 256(2) thereof, (4) Constitution of India and in particular Article 277 and Entry No.52 of List II-State List of Schedule 7. (vi) On behalf of the petitioners, by placing reliance upon the judgment of the Apex Court in the cases of Collector, Central Excise (supra) and Orient Traders (supra), it was submitted that all these Notifications are to be construed strictly as per the wording thereof and the different words specifically used in Notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in dispute that the villages 1 to 19 by which the MIDC area is constituted are included in the final Notification dated December 17, 1991. We are therefore of the opinion that the MIDC area is part of the municipal limits of the NMMC. 49. The petitioners relied upon the Government order dated September 7, 1994 and the directive dated December 16, 1994 issued u/s.154 of the M.R. T.P.Act and the Notification dated September 28, 2000 issued by CIDCO u/s.37 of the M.R. T.P.Act proposing modifications to Regulation 16.3(1) (a) C of the General Development Control Regulations for Navi Mumbai. In our opinion, the reliance placed on these Notifications/order is wholly misconceived. The Government Order dated September 7, 1994 was issued by the State Government in exercise of power conferred by Article 201(i) of the Memorandum of Association and the Articles of Association of CIDCO directing the CIDCO to transfer 50% of the amount of development charges collected from the NMMC are so far, to the NMMC immediately and further directed that the NMMC shall act as a Planning Authority for development of nodes of Vashi, Sanpada, Nerul, Belapur-CBD and Airoli as provided u/s.2 (15) (a) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he light of boundaries of revenue villages of eastern boundary, it is abundantly clear that there is no discrepancy whatsoever. The petitioners have not properly appreciated the following description in the eastern boundary:- then along Western boundary at Turbhe, Bonsari and Kukshet thereafter part of Eastern boundary of Shirawane and then along the Eastern boundary of village Shahabaj . 52. The contentions raised by the petitioners that the boundary jumps from eastern boundary of Adavli-Bhutwali directly to the western boundary of Turbhe is not correct and on the other hand it clearly includes the MIDC area if we take into consideration boundaries set out in the final Notification dated December 17, 1991. We are also satisfied that the boundary of the NMMC area as notified in the final Notification dated December 17, 1991 is contiguous and it encompasses all the 30 villages set out therein. We therefore do not find any discrepancy in respect of the boundary set out in the final Notification dated December 17, 1991. 53. The petitioners have also contended that the area admeasuring 24.690 sq.kilometers that of MIDC area, even otherwise does not form part of the NMMC ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government, shall be binding on the local authority and the relevant authority. (ii) On the other hand Mr.Apte, submitted that clause 7 provides that whenever the relevant authority (in the present case MIDC) itself provides in the area within the jurisdiction of the local authority (in the present case the NMMC) all or any of the amenities which the local authority provides, the relevant authority shall not be liable to pay the taxes including the property taxes, if any, but it shall be lawful to the local authority to arrive at the agreement with the relevant authority with the prior sanction of the State Government to receive lump sum contribution from the relevant authority in lieu of all or any of the taxes levied or services rendered by the local authority. He submitted that clause 7 provides exemption to the relevant authority (in the present case the MIDC) if the relevant authority itself provides all or any of the amenities. It however does not exempt the unit holders in the MIDC area from payment of taxes including the property taxes. He further submitted that clause 7 of the First Schedule is enabling provision, which enables the local authority and the relevant auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the term 'amenity' as under:- Section 2 - In this Act, unless otherwise requires - (a) amenity includes road, supply of water or electricity, street lighting, drainage, sewerage, conservancy and such other convenience as the State Government may, by notification in the Official Gazette specify to be an amenity for the purposes of this Act. (v) As noted earlier, under the provisions of the MID Act, what can be levied and recovered is the fees or service charges. However, there is no provision empowering the MIDC to levy and recover the taxes. Now, coming to clause 7 of the First Schedule under the M.R. T.P.Act, it lays down that whenever the relevant authority (MIDC in the present case) itself provides in the area within the jurisdiction of the local authority (NMMC in the present case) all or any of the amenities, which the local authority provides, the relevant authority shall not be liable to pay taxes including the property taxes, if any, but it shall be lawful to the local authority to arrive at an agreement with the relevant authority with the prior sanction of the State Government to receive the lump-sum contribution from the relevant authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IDC, the local authority having jurisdiction over such area can levy and collect taxes from those who set up industries in the area. In our opinion, to avoid this virtual dual control and administration which might impede the growth and development of Industries that provision of Clause 7 of Schedule I of the M.R. T.P. Act is made, which provides that the NMMC and the MIDC may arrive at an agreement with prior sanction of the State Government to receive all or any of the taxes levied or services rendered by the NMMC. This is clearly an enabling provision, which however, cannot be interpreted to mean that the plot holders in the jurisdiction of the MIDC are not liable to pay taxes. (vi) The provisions of the BPMC Act, MID Act and the M.R. T.P.Act are required to be construed harmoniously. In view thereof, we do not find any substance in the contentions raised by the petitioners that the petitioners are not liable to pay the taxes. Since we have already held that the MIDC area is part of the municipal limits of the NMMC, the NMMC undoubtedly has power to levy and recover taxes from the petitioners. 55. III - Quid Pro Quo :- (i) The petitioners contend that even assuming t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Bench judgment of this Court in the case of Jalgaon Municipal Corporation V/s.State of Maharashtra and Ors., in Writ Petition No.1012 of 2003 decided on 9th October, 2006. In that case it was contended on behalf of the petitioners that neither the Municipal Corporation nor the MIDC are performing the functions of maintaining the infrastructural amenities. On behalf of the Corporation, affidavit was made contending that the MIDC is special development authority constituted u/s.3 of the MID Act. It was also contended that the MIDC is the special planning authority under the M.R. T.P.Act and has to discharge its functions as a planning authority and provide necessary infrastructural amenities. The MIDC made an affidavit and accepted that it is functioning as a planning, development and management agency for the industrial area. It has provided basic infrastructural amenities like roads, street lights, water etc. The Court held that under the provisions of Section 40 (1A) of the M.R. T.P.Act, the MIDC is a special planning authority and is under obligation to carry out the functions of providing infrastructural amenities within the area of its operation. (v) It is not in disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the MIDC. Under this MOU, the MIDC handed over the maintenance of roads, drains, street lights etc. Having regard to the provisions of the MID Act, the MIDC cannot abdicate its statutory duties and functions and since the MIDC handed over the maintenance of these amenities the said MOU is illegal and void ab initio and consequently, is liable to be set aside. (ii) Ms.Deepa Chavan, learned counsel for the MIDC invited our attention to the provisions of the MID Act and submitted that the MIDC has not abdicated its statutory duties. The MOU dated December 1, 2005 is not contrary to the provisions of the MID Act and in fact it is in consonance with the express provisions, which permit the MIDC to enter into such type of agreements. She invited our attention to the provisions of Section 14 (ii) (d), Section 15(c) (i) (k). In the light of these provisions the MIDC is well within its right, to cause to be provided the amenities in the MIDC area. It further enables the MIDC to enter into any agreement with the local authority, which does not breach and violate any law or statutory provisions. She further submitted that the perusal of the MOU dated December 1, 2005 indicates that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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