Case Note & Summary
The Municipal Corporation, Faridabad appealed against a Division Bench of the Punjab & Haryana High Court order dated 21.12.2015, which dismissed its intra-court appeals against a Single Judge's order dated 19.02.2015. The Single Judge had set aside the Corporation's levy of user charges on two schools (Modern School and another) for discharging waste water from privately installed tubewells into the municipal sewer. The schools were allotted land by Haryana Urban Development Authority on leasehold basis for educational purposes. The Corporation issued an office order on 14.06.1999 for regularisation of tubewells, imposing charges based on tubewell diameter. Notices were served on the schools in 2000 demanding user charges. The schools challenged the levy in writ petitions, arguing that it was a fee under Section 88 of the Haryana Municipal Corporation Act, 1994, requiring prior State Government approval, which was not obtained. The Corporation contended that the charges were for use of the municipal drain, not a tax or fee, and fell under Section 205 of the Act. The High Court accepted the schools' argument and quashed the levy. The Supreme Court, after hearing arguments, examined relevant provisions including Sections 43, 177, 193-196, and 205 of the Act. It held that the user charges were not a tax under Section 87 or a fee under Section 88, but were charges for the service of allowing discharge of waste water into the municipal drain, which is within the Corporation's competence under Section 205. The Court noted that Section 205 requires written permission for connections with drains or water works, and the levy of charges for such use is permissible without prior State Government approval. Accordingly, the Supreme Court allowed the appeals, set aside the High Court's order, and upheld the Corporation's levy of user charges.
Headnote
A) Municipal Law - Levy of User Charges - Sections 87, 88, 205 Haryana Municipal Corporation Act, 1994 - The dispute pertains to the validity of user charges imposed by the Municipal Corporation on schools for discharging waste water from private tubewells into the municipal sewer. The High Court had set aside the levy on the ground that it was a fee under Section 88 requiring prior State Government approval. The Supreme Court held that the charges are not a tax or fee under Sections 87 or 88 but are charges for the use of municipal drain, falling within the scope of Section 205, which does not require prior approval. The Court allowed the appeals and set aside the High Court's order. (Paras 11-14) B) Municipal Law - Interpretation of Statutory Provisions - Sections 43, 177, 193-196, 205 Haryana Municipal Corporation Act, 1994 - The Court examined the scheme of the Act, noting that Section 43 imposes obligatory functions on the Corporation for drainage and water supply, Sections 193-196 vest drains in the Corporation and regulate their use, and Section 205 prohibits connections without permission. The Court reasoned that the user charges are for the service of allowing discharge into the municipal drain, which is a regulatory function under Section 205, not a tax or fee under Sections 87 or 88. (Paras 13-14)
Issue of Consideration
Whether the levy of user charges on schools for discharging waste water from privately installed tubewells into the municipal sewer is a tax or fee requiring prior approval of the State Government under Section 88 of the Haryana Municipal Corporation Act, 1994, or is a permissible charge under Section 205 of the Act.
Final Decision
The Supreme Court allowed the appeals, set aside the High Court order dated 21.12.2015 and the Single Judge order dated 19.02.2015, and upheld the levy of user charges by the Municipal Corporation.
Law Points
- User charges for discharge of waste water into municipal sewer are not tax or fee under Sections 87 and 88 of Haryana Municipal Corporation Act
- 1994
- Section 205 of the Act empowers Corporation to regulate connections with drains and water works
- Levy of user charges for use of municipal drain is within Corporation's competence.
