Paradip Port Trust Vs. Notified Area Council, Paradip and anr. - Court Judgment

G.B. Patnaik, J.

1. The notices issued by the Notified Area Council, Paradip (opposite party No. 1) under different provisions of the Orissa Municipal Act levying the demand which have been annexed as Annexure 5 series are sought to be quashed in this writ application filed at the instance of the Paradip Port Trust. In fact, under Annexure 5 series, levy has been made towards holding tax on the buildings of the petitioner situated within the Notified Area Council, The main plank of the petitioner's argument is that the property in question belongs to the Union of India and, therefore, exempted from all taxes imposed by either the State or any authority within the State, under Article 285(1) of the Constitution of India. The stand of the Notified Area Council, on the other hand, is that the property which was the property of the Union at one point of time vests fully upon the Paradip Port Trust and the Union no longer remains the owner of the property and, therefore, the exemption provided under Article 285(1) of the Constitution will not apply. In view of the rival stands of the parties, the short question for our consideration is as to who is the owner of the property in respect of which levy has been made towards holding tax.

2. Mr. B. M. Patnaik, the learned counsel for the petitioner, referring to several provisions of the Major Port Trusts Act and the preamble of the said Act, contends that the expression 'vest' used in Section 29 of the Act does not connote vesting of absolute title, but on the other hand, has been used in a limited sense, namely, the administration, control and management have been conferred on the Board and the property continues to belong to the Union Government to claim immunity from taxation by the State or any local authority under the State, under Article 285 of the Constitution. In support of the aforesaid contention, reliance has been placed on the decision of the Gujarat High Court in Special Civil Application No. 748 of 1974 (Board of Trustees of the Port of Kandla, Gandhidham, Kutch v. State of Gujarat). We shall, therefore, examine the different provisions relied upon by Mr. Patnaik to find out what is the true meaning of the expression 'vest' used in Section 29 of the Major Port Trusts Act.

3. Mr. Patnaik with reference to the preamble of the Major Port Trusts Act contends that the preamble makes it abundantly clear that the Act was enacted to provide for the constitution of Port Authorities and to vest the administration, control and management of such ports in the authority. It is further urged that since the preamble provides the key to the statute, the conclusion is inescapable that the Board has been created under the statute for the limited purpose of vesting therein the administration, control and management of the Port and not the property itself. In fact, the learned single Judge of the Gujarat High Court very much relied upon the aforesaid preamble in coming to the conclusion that the property continues to be the property of the Union. The preamble of a statute is not an enactment, though it recites the intent of the framer and the purpose for which the enactment was enacted. It is only when the enacting part is open to doubt, the preamble may be looked into to find out the true meaning of the statute. But if the enacting part is free from doubt, then the preamble can neither restrict nor extend the meaning of the enacting part. It is a cardinal principle of construction that if the words of the statute are not themselves precise and unambiguous, then no more can be necessary than to expound the words in their natural and ordinary sense. The words themselves alone best declare the intention of the lawgiver. In this view of the matter, one cannot start with the preamble for constructing the provisions of an Act, though one may justifiably look to the preamble only if it is found that the language of the enacting part is ambiguous or too general. The Supreme Court in the case of State of Rajasthan v. Mrs. Leela Jain, AIR 1965 SC 1296, reversing the decision of the Rajasthan High Court, held

'.......... But we do not consider it possible to reject words used in an enactment merely for the reason that they do not accord with the context in which they occur, or with the purpose of the legislation as gathered from the preamble or long title. The preamble may, no doubt, be used to solve any ambiguity or to fix the meaning of words which may have more than one meaning, but it can, however, not be used to eliminate as redundant or unintended, the operative provisions of a statute........'

In yet another case, R. Venkataswami Naidu v. Narasram Naraindas, AIR 1966 SC 361, their Lordships of the Supreme Court observed that the preamble to the Act, no doubt, states that the Act was passed to give protection to tenants who have constructed buildings on others' lands in the hope that they would not be evicted. But no resort to the preamble would be justified in interpreting the word 'tenant' in Section 2(4) of the Act (Madras City Tenants Protection Act (3 of 1922)), as the words used in it are clear and unambiguous.

In the case of A. C. Sharma v. DelhiAdministration, (1973) 1 SCC 726 : (AIR1973 SC 913 at p. 917) their Lordships of theSupreme Court observed :--

'Statement of objects and reasons for introducing a Bill in the Legislature is not admissible as an aid to the construction of the statute as enacted; far less can it control the meaning of the actual words used in the Act. It can only be referred to for the limited purpose of ascertaining the circumstances which actuated the sponsor of the Bill to introduce it and the purpose for doing so. The preamble of a statute which is often described as a key to the understanding of it may, legitimately be consulted to solve an ambiguity or to ascertain and fix the meaning of words in their context which otherwise bear more meanings than one. It may afford useful assistance as to what the statute intends to reach, but if the enactment is clear and unambiguous in itself then no preamble can vary its meaning. ......'

This being the position of law with regard to the role of preamble in interpreting the meaning of a statute, it is difficult for us to take the preamble into consideration and hold that what vests in the Port Trust under Section 29 is merely the control, administration and management and not the property itself. In our considered opinion, the language of Section 29 is clear and unambiguous and, therefore, it is not necessary to restrict its meaning by looking at the preamble. Disagreeing with the view expressed by the Gujarat High Court in the case referred to earlier, we would reject the first submission of Mr. Patnaik and hold that in the present case, the preamble of the Major Port Trusts Act cannot restrict the meaning of the expression 'vest' used in Section 29 of the said Act.

4. Mr. Patnaik for the petitioner then contends that the scheme of the Act indicates that it is the Central Government which exercises full control over the Board and continues to be the owner of the property divesting itself of only control and management over the property with the Board. In this connection he places reliance on Sections 109, 110 and 111 of the Act. Under Section 109, the Central Government keeps within itself the power to carry out the incomplete work where the Board fails in its primary function of completing any work undertaken by it. Under Section 110, the Central Government retains the power to supersede a Board under certain circumstances and the consequences of such super session have been enumerated in Sub-section (2) of Section 110. Under Section 111, the Central Government is empowered to issue directions to the Port Trust Boards on matters of policy. These powers retained by the Central Government, in our opinion, are in the nature of a supervisory power and can be performed by the Central Government in the special contingencies provided for exercise of the same under the statute itself. But that does not mean that the Central Government continues to be the owner of the property of the Board. There is no manner of doubt that the Central Government exercises certain amount of control, but exercise of such control does not make the Union Government owner of the assets of the Board. Section 29 of the Act clearly enumerates that all property, assets and funds and all rights to levy, rates vested in the Central Government shall vest in the Board from the appointed day in relation to any port. It unequivocally declares that the property in question vests in a corporate body created under the statute and thus divests the Central Government of all its right of proprietorship or ownership over the property. There is no justification to give any restrictive meaning to the language used in Section 29. The language, on the other hand, is clear and unambiguous and vests the entire title in respect of the property on the port with effect from the appointed day. On a plain reading of Section 29 and giving grammatical and literal construction to the same, disagreeing with the view expressed by the Gujarat High Court in the case referred to supra, we hold that the property which was the property of the Union Government stood vested in the Board with effect from the appointed day and the Union Government was fully divested of its right but retaining only some control as provided in the Act itself. The very fact that under Section 110(2)(c), upon a notification of supersession of the Board under Sub-section (1), the property which had vested in the Board revests in the Central Government until the Board is reconstituted under Clause (b) or Clause (c) of Sub-section (3), supports our conclusion that the property, in fact, vested for all purposes with the Board and not only for the purpose of administration, control and management, as held by the Gujarat High Court.

5. In this connection, Mr. Patnaik for the petitioner places reliance on the decision of the Supreme Court in the case of Fruit and Vegetable Merchants Union v. Delhi Improvement Trust, AIR 1957 SC 344, wherein the word 'vest' came up for consideration. Their Lordships of the Supreme Court while considering the provisions of the U.P. Town Imprvement Act, wherein the said word 'vest' has been used came to hold that the word 'vest' has not got a fixed connotation, meaning in all cases that the property is owned by the person or the authority in whom it vests. It may vest in title, or it may vest in possession, or it may vest in a limited sense, as indicated in the context in which it may have been used in a particular piece of legislation. It was also held that the word 'vest' is a word of variable import and so far as the said expression used in U.P. Town Improvement Act is concerned, it was held that the vesting in question was for a limited purpose, namely for excluding any improvement scheme which it has undertaken, but it did not clothe complete title with the trust. There is no dispute with the enunciation and exposition of the true and correct meaning of the word 'vest', but applying the said ratio to the present case, we are not in a position to accept that the word 'vest' in Section 29 of the Major Port Trusts Act also has a limited meaning. In our opinion, the entire assets and liabilities which the Union Government had with it stood vested in the Board with effect from the appointed day and, therefore, the Union cannot be said to be continuing as owner of the property so as to claim immunity from taxation by the State Government or any local authority within the State, within the meaning of Article 285(1) of the Constitution. In this view of the matter, disagreeing with the view expressed by the Gujarat High Court in the case referred to supra, we hold that the Union Government does not continue to be the owner of the property and it is the Paradip Port Trust which is the owner and, therefore, the Municipality or the Notified Area Council, as the case may be, is entitled to make the levy in question under the provisions of the Orissa Municipal Act and the immunity from taxation in respect of the property of the Union contained in Article 285 of the Constitution will have no application.

6. We would accordingly reject the submission of Mr. Patnaik for the petitioner and hold that the writ application has no merits and the same is accordingly dismissed, but in the circumstances, there will be no order as to costs.