IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.539 of 2010 (O&M) Date of decision:
14. h May, 2014 Municipal Council, Yamunanagar Appellant Versus Bharat Starch Industries Ltd. Respondent CORAM: HON’BLE MR. JUSTICE RAKESH KUMAR GARG1 Whether Reporters of Local Newspapers may be allowed to see the judgment?.
2. Whether to be referred to the Reporters or not?.
3. Whether the judgment should be reported in the Digest?. Present: Mr. Sunil Dhanda, Advocate for Mr. Rajesh Lamba, Advocate for the appellant. Mr. Rakesh Gupta, Advocate for the respondent. RAKESH KUMAR GARG, J.
Respondent filed the instant suit seeking the following relief: “Suit for permanent injunction restraining the defendants from forcing to obtain any other further licence in the same premises of the plaintiffs of the factory namely Bharat Starch Industries by depositing license fee for running Generator/engine and to take any coercive action against the plaintiff and its factory on the basis of illegal, arbitrary, null and void, inoperative, ineffective, Singh Rattan Pal 2014.05.26 11:11 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA No.539 of 2010 (O&M) 2 without jurisdiction and nonest in the eyes of law notice conveyed vide No.1869 dated 8.10.2001 and No.1989/Li dated 29.10.2001 or in any other manner whatsoever, inter-alia, on the ground that the factory of the plaintiff company has already obtained liecnce against payment of uptodate prescribed fee from the defendants uptill 31.03.2002 under the relevant provision of law”. It was pleaded on behalf of the plaintiff-respondent that the Company is having a manufacturing unit at Yamunanagar. The appellant-Municipal Council vide letter dated 24.07.2001 requested the respondent-Company for supply of information regarding number of generator sets installed therein. The said information was duly provided. However, the appellant sent a notice bearing No.1869 dated 08.10.2001 requiring the respondent-Company to deposit a sum of `2,33,400 as licence fee for the year 2001-02 within seven days and also to obtain a licence thereof for running the generator sets. Again vide notice dated 29.10.2001, the appellant required the respondent- Company to deposit the aforesaid amount on account of licence fee for generator sets and further threatened to initiate coercive action under the provisions of Land Revenue Act for getting the recovery thereof. Thus, the instant suit was filed alleging that the aforesaid notices issued by the appellants were not in conformity with law and suffer from grave illegalities and infirmities besides being arbitrary, without jurisdiction and competence, inter alia on the following grounds: Singh Rattan Pal 2014.05.26 11:11 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA No.539 of 2010 (O&M) 3 (i) That factory premises of plaintiff company are governed by the provisions of Factories Act and necessary licence has already been granted by the competent Authority upto 31.12.2001 against payment of requisite fee of Rs.12,000/-; (ii) That the Haryana State Pollution Control Board has also granted consent to the above factory under the provisions of Water (Prevention and Control of Pollution) Act, 1974 and Air (Prevention and Control of Pollution) Act, 1981, respectively, upto 31.03.2003 against payment of usual fee; (iii) That defendants had already granted licence to the plaintiff company for the year commencing from 01.04.2001 upto 31.03.2002 against payment of prescribed fee. Similarly, the defendants had granted licence to the plaintiff company during the past several years without any objection whatsoever; (iv) That the impugned notices are quite vague, indefinite, null and void and without jurisdiction being not covered by any Act or Bye-law; and are not applicable in the instant case, as the factory of the plaintiff company is governed under the provisions of Factories Act; (v) That the plaintiff company has already complied with the provisions of Section 128 of Haryana Municipal Singh Rattan Pal 2014.05.26 11:11 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA No.539 of 2010 (O&M) 4 Act, by adopting a licence till 31.3.2002, irrespective of the fact whether the said provision was applicable or not and there is no requirement for any other further licence; and (vi) That the impugned notices are also unwarranted and uncalled for, being bad in laws as the same are against the principles of natural justice, as no data or material was supplied to the plaintiff company in order to explain the illegality. Thus, it was prayed that the defendant-appellant be restrained from forcing the plaintiff-Company to obtain any other licence in the premises of the factory by depositing licence fee for running of generator sets and also from taking any coercive action against the plaintiff and its factory on the basis of impugned notices. Upon notice, the defendant-appellant appeared and filed written statement raising various preliminary objections with regard to maintainability and jurisdiction. On merits, it was submitted that the licences issued by the competent authority under the Factories Act or any other Authority, such as State Pollution Control Board etc. has nothing to do with the demand in question, which was raised under Notification dated 20.07.1998 (Ex.D4) issued by the State of Haryana exercising its powers under Sections 200 and 214 of the Haryana Municipal Act, 1973 (hereinafter referred to as, ‘the Act’). It was further pleaded that the respondent-Company was liable to pay licence fee under Haryana Municipal (Dangerous and Offensive Trades) Bye- Singh Rattan Pal 2014.05.26 11:11 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA No.539 of 2010 (O&M) 5 laws, 1982. Under Item No.3 of the aforesaid Notification, it is made clear that premises being used as shop or workshop or engine house driven by electric power or oil engine for 50 HP or more, having one or more engines, shall be licensed @ `60 per HP annually and further, it is provided at Item No.34 that the premises being used as commercial shop or workshop or factories covered by Indian Factories Act, whether specified elsewhere or not and from which nuisance, noise, smoke or unwholesome smell arises or manufacture is carried on contract or otherwise and its turnover is above `20,000 per annum, then Committee is entitled to claim licence fee @ `540 per year. Since the premises were being used as a shop or workshop or engine house driven by electric power of oil engine of 50 HP or more having one or more engines, and thus, the notices were issued by them validly and in accordance with the aforesaid provisions of law. All other averments were denied and dismissal of the suit was prayed for. In the replication, the respondent-Company controverted the averments contained in the written statement field by the appellant and reaffirmed the pleas taken in the plaint. On the basis of the pleadings of the parties, the following issues were framed by the trial Court:
1. Whether the plaintiff is entitled for permanent injunction, as prayed for?. OPP2 Whether the suit is not maintainable?. OPD3 Whether the Civil Court has no jurisdiction to entertain and try the present suit?. OPD Singh Rattan Pal 2014.05.26 11:11 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA No.539 of 2010 (O&M) 6 4. Relief. The parties led evidence and thereafter, the trial Court after considering the arguments raised on behalf of the parties, decreed the suit holding that the defendant-appellant has no right to claim the alleged licence fee from the respondent-Company as provided under Item No.3 of the Notification dated 20.07.1998 by way of its misinterpretation. Moreover, the impugned notices were issued raising demand without any opportunity of hearing. Issues No.2 and 3 were decided in favour of the plaintiff-respondent observing that in a suit for permanent injunction, Civil Court has got jurisdiction to entertain the suit. Aggrieved from the aforesaid judgment and decree of the trial Court, the defendants filed an appeal, which was also dismissed by the first appellate Court vide its judgment and decree dated 29.07.2009 observing that the plaintiff-respondent was having a licence from the Municipal Committee, Yamunanagar and licence fee was also being paid under Item No.34 of the Notification (Ex.D4) whereby the plaintiff was allowed to run the factory from which nuisance, noise, smoke or smell arises and nothing can, therefore, be charged by the defendants for the generators which cannot be termed as oil engines as per Item No.3 of the Notification. Moreover, the factory of the plaintiff-respondent was not working on generators so that they may have to pay extra fee for running the oil engine, and thus, the demand of licence fee as per Item No.3 of the Notification (Ex.D4) made by the defendant-appellant was illegal. It was further Singh Rattan Pal 2014.05.26 11:11 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA No.539 of 2010 (O&M) 7 held that no opportunity to show cause was given before making a demand vide impugned notices. Still not satisfied, the defendant-Municipal Council has filed the instant appeal submitting that the following substantial questions of law arise in this appeal:
1. Whether both the judgments and decrees passed by the Ld. Courts below are sustainable in the eyes of law?.
2. Whether respondent-plaintiff is governed by item No.3 of notification dated 20.07.1998?.
3. Whether the licence fee will be charged as per item No.3 specially when it has come in evidence that the respondent-plaintiff used to run generators installed in the factory premises?.
4. Whether the principle of natural justice have not been complied in the case specially when Ex.D1 is the letter written by the appellant, Ex.D2 request of the respondent-plaintiff Ex.D3 another letter, Ex.D5 another letter, have been proved as communication between the appellant and respondent-plaintiff?. In support of his case, counsel for the appellant has vehemently argued that the courts below have committed a grave error in not relying upon Item No.3 of the Notification dated 20.07.1998 (Ex.D4), which is the governing Item regarding licence fee to be charged from the plaintiff-respondent and Item No.34 is independent Singh Rattan Pal 2014.05.26 11:11 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA No.539 of 2010 (O&M) 8 of the aforesaid Item. According to learned counsel for the appellant, both the Courts below have failed to appreciate that no place within the Municipality can be used for any of the purposes mentioned in Section 128 of the Haryana Municipal Act, 1973, except under a licence obtained by the owner or occupier of the place from the Committee. So it shows that obtaining of licence under this provision of law is mandatory irrespective of the fact that a person is having a licence under the Factories Act with regard to air/water pollution etc. It is further case the appellant that the courts below have committed an error in returning the finding that the plaintiff-respondent has obtained licence by making payment as per the requirements of Item No.34 of the Notification dated 20.07.1998, as both the Courts below have overlooked that each item given in the said Notification is an independent item and there is no bar for the Municipal Council to restrain any person from using any place within the Municipality for any purpose mentioned in Section 128 of the Act without obtaining licence for a particular purpose given in this Act. As the plaintiff- respondent had been using the generator sets within the premises of its factory, they are bound to obtain a licence from the appellant as without such a licence, the respondent cannot use the premises for the said purpose and this is the reason that the Notification dated 20.07.1998 has provided categories of works item-wise. Learned counsel for the appellant has also made an attempt to argue that the demand was raised after giving an opportunity of hearing to the plaintiff-respondent as the plaintiff- Singh Rattan Pal 2014.05.26 11:11 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA No.539 of 2010 (O&M) 9 respondent has admitted in its pleadings that before raising the demand, the appellant had issued notice to the plaintiff seeking information and plaintiff-respondent replied the same, and thus, principles of natural justice stood complied with. On the basis of the aforesaid arguments, it has been submitted that the substantial question of law, as raised, do arise in this appeal and the judgments and decrees of the Courts below are liable to be set aside. It is not in dispute that the plaintiff-respondent has got a valid licence for running the factory. The plaintiff-Company is also paying the licence fee and abiding by the conditions laid down in Water (Prevention and Control of Pollution) Act and Air (Prevention and Control of Pollution) Act and is paying the fee regularly. It is further not in dispute that the plaintiff-respondent is also paying the licence fee to the appellant as per Item No.34 of the Notification dated 20.07.1998 for running the factory from which nuisance, noise, smoke or unwholesome smell arises. However, the only point of discord between the parties is with regard to payment of licence fee for running the generator sets. At this stage, it may further be noticed that the respondent- Company has installed generator sets in its premises only for a limited purpose of ensuring regular electric power supply and are used only when electricity supply is shut off. It is not the case of the appellant that the aforesaid generator sets are being used for generating electricity for the purpose of manufacturing goods. Singh Rattan Pal 2014.05.26 11:11 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA No.539 of 2010 (O&M) 10 For deciding the point in question, it is necessary to refer to the provisions of Section 128 of the Haryana Municipal Act, 1973, as relied upon by the appellant which reads as follows: “128.Regulation of offensive and dangerous trade. – (1) No place within a municipality shall be used for any of the following purposes, namely:- (a) melting tallow, dressing raw hides, boiling bones, offal or blood; (b) soap house, oiI-boiling house, dying house or tannery; (c) brickfield, brick-kiIn, charcoal-kiln, pottery or Iime-kiln; (d) any other manufactory, engine-house, storehouse or place of business from which offensive or unwholesome smells, gases, noises or smoke arise; (e) yard or depot for trade in unslaked lime, hay, straw, thatching-grass, wood charcoal or coal or other dangerously inflammable material; (f) store-house for any explosive or for petroleum or any inflammable oil or spirit; except under a licence obtained by the owner or occupier from the committee which shall be renewable annually. (2) The licence shall not be withheld unless the committee considers that the business which it is intended to establish or maintain would be the cause of annoyance, offence, or danger to persons residing in or frequenting, the immediate neighbourhood, or that the Singh Rattan Pal 2014.05.26 11:11 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA No.539 of 2010 (O&M) 11 area should be for general reasons kept clear of the establishment of such business. (3) The committee may charge any fees according to a scale to be approved by the Deputy Commissioner for such licences, and may impose such conditions in respect thereof as it may think necessary. Among other conditions it may prescribe that any furnace used in connection with such trade shall, so far as practicable, consume its own smoke. (4) Whoever, without a licence uses any place for any such purpose as is specified in this section or in contravention of the conditions of any such licence, shall be punishable with a fine which shall not be less than twenty five rupees and more than two hundred rupees and with a further fine of ten rupees for every day during which the offence is continued.”
. Under the aforesaid provision of the Act, the appellants have further framed bye-laws known as “The Haryana Municipal (Dangerous and Offensive Trades) Bye-laws, 1982”. as published in the Gazette on 14.09.1982. The said Bye-laws were further amended vide Notification dated 20.07.1998 (Ex.D4). Item No.3 and 34 of the said Notification read as under: Item No.3: “Premises used as shop or workshop or engine house driven by electric power or oil engine for 50 HP for having one or more engine.”
. Singh Rattan Pal 2014.05.26 11:11 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA No.539 of 2010 (O&M) 12 Item No.34: “Commercial shop or workshop or Factories covered by the Indian Factories Act whether specified elsewhere or not and from which nuisance, noise, smoke or unwholesome smell arises or manufacture is carried on contract or otherwise or self related ”. A perusal of the aforesaid Provision would show that no place within the Municipality shall be used for any of the purposes as mentioned in Clauses (a) to (f) of Section 128(1), except under a licence from the Committee, which shall be renewable annually. Learned counsel for the appellant has very fairly stated that the plaintiff-respondent is not involved in manufacturing with regard to any of the works mentioned in Clauses (a) to (c), (e) & (f) of Section 128(1) of the Act. It is the case of the appellant that Notification dated 20.07.1998 has been issued under Clause (d) of Section 128(1) of the Act and according to Item No.3 of the said Notification, no place within the Municipality shall be used as shop or workshop or engine house driven by electric power or oil engine for 50 HP or having one or more engines. Since the generator sets are used for power supply it will be covered by Item No.3 of the Notification being engine house driven by electric power. It is further contention that Entry as Item No.34 operates in different and independent sphere and relates to a commercial shop or workshop or factory from which nuisance, noise, smoke or unwholesome smell arises. Singh Rattan Pal 2014.05.26 11:11 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA No.539 of 2010 (O&M) 13 A plain reading of the aforesaid provisions would show that the first part of said entry has to be read in conjunction with the latter part and both cannot be bifurcated into two parts by showing two items as Entry No.3 and Entry No.34 of the Notification. In fact the argument raised on behalf of the defendant- appellant is that the respondent-Company is using its factory premises as engine house, which is driven by electric power/oil engine and therefore, the demand raised by way of the notices was correct. However, it cannot be disputed that the aforesaid premises are neither being used as shop nor workshop and moreover the respondent- Company was already having a licence for running the generator sets from the Electricity Board, and thus, the respondent which is a factory does not come under the ambit of item No.3 of the Notification dated 20.07.1998 (Ex.D4) as it is not a shop/workshop/engine house being run with the help of electric power or oil engine of 50 HP or more, having one or more engines. There is nothing on record to show that the factory in question is covered by Item No.3, rather it being a manufacturing unit is a factory and is covered by Item No.34 of the said Notification (Ex.D4), which provides that the premises being used as commercial shop or workshop or factories covered by Indian Factories Act whether specified elsewhere or not and from which offensive or unwholesome nuisance, noise, smoke, smell arises or manufacture is carried on the basis of contract or otherwise, and for that admittedly, the respondent-Company is having a licence and is paying the licence fee. Even the appellant has admitted in its written Singh Rattan Pal 2014.05.26 11:11 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA No.539 of 2010 (O&M) 14 statement that the respondent-Company is a factory covered under the provisions of the Factories Act. Section 128 of the Act does not empower the Municipal Committee to regulate the running of generator sets independently except in the manner as provided under Section 128(1) of the Act. It has already come in the evidence that the respondent- Company uses the generator sets installed in its factory premises only on failure of electricity. It is further not in dispute that the plaintiff- respondent is paying the electricity charges to the Electricity Board. In case, there is any noise or nuisance, smoke or unwholesome smell being created in the factory premises of the plaintiff-respondent by use of the generator sets, then in that case they are already paying a licence fee under Item No.34 of the Notification to the appellant. The Haryana Pollution Control Board is also empowered to issue notices to the respondent-Company for removal of such pollution, if any, and thus, the defendant-appellant cannot charge any licence fee on account of installation of the generator sets by the plaintiff-respondent. Moreover, there is nothing on the case file to show that before raising the demand in question, any opportunity of hearing was granted to the plaintiff-respondent. The information sought by the appellant prior to issuance of the impugned notices cannot be said to be an opportunity of hearing to the respondent-Company. Accordingly, it can safely be said that the impugned notices have been issued by the defendant-appellant without adopting the principles of natural Singh Rattan Pal 2014.05.26 11:11 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA No.539 of 2010 (O&M) 15 justice and in view thereof, the findings of the courts below are correct and need no interference by this Court. No other argument has been raised. Thus, the substantial questions of law, as raised, do not arise at all in this appeal. Dismissed. (RAKESH KUMAR GARG) JUDGE May 14, 2014 rps Singh Rattan Pal 2014.05.26 11:11 I attest to the accuracy and integrity of this document Punjab & Haryana High Court