KANDIVALI COOPERATIVE INDUSTRIAL ESTATE AND ANOTHERversusMUNICIPAL CORPORATION OF GREATER MUMBAI AND OTHERS

                    [2015) 1 S.C.R. 989


 KANDIVALI COOPERATIVE INDUSTRIAL ESTATE AND                      A
                      ANOTHER
                           v.
MUNICIPAL CORPORATION OF GREATER MUMBAI AND
                       OTHERS
         (Civil Appeal No. 1431 of 2015 etc.}                     B
                   FEBRUARY 04, 2015
      [M.Y. EQBAL AND SHIVA KIRTI SINGH, JJ.]

     Mumbai Municipal Corporation Act, 1988 - s.368(5) -          C
Trade Refuse Charges - Imposition - Revised by the Circular
dated 11.10.2011 issued by Municipal Corporation of Greater
Mumbai - Propriety of - Held: The competent authority under
the Act has the power to notify Trade Refuse Charges to be
collected from its trade /icencees - However, provision under     D
clause (6) of the Notification to increase trade refuse charge
by 10% every year from the year 2009 is arbitrary, without
guidelines and violative of principles of natural justice -
Therefore, the authority directed not to recover any increased
Trade Refuse Charges without giving opportunity of hearing        E
to the licencee or to the persons liable to pay such increased
charges - Constitution of India, 1950 - Article 14 - Principles
of Natural Justice - Audi Alteram Partem.

    Disposing of the appeal, the Court
                                                                  F
     HELD: 1. 1. From a conjoint reading of the provisions
u/ss. 367, 368, 394 and 479 of Mumbai Municipal
Corporation Act, 1888, it is manifestly clear that the
Commissioner may from time to time inter alia specify
conditions and restrictions while granting trade licence.         G
The Commissioner may notify the charges including
trade refuse charges i.e. to be collected from the trade
licencees. [Para 17] [1005-D]

                             989                                  H
    990     SUPREME COURT REPORTS            [2015) 1 S.C.R.


A     2. In almost all the statute dealing with legal
  administration, Municipal Authorities have inevitably to be
  delegated the power of taxation. The aim and object of
  the scheme have to be taken into consideration while
  deciding the question as to the excessive exercise of
B power in the matter of collection of fees and charges.
  [Para 23] [1010-F-G]

      The Commissioner, Hindu Religious Endowment,
  Madras vs. Sri Lakshmindra Tirtha Swamiar of Shirur Mutt
C (1954) 1 SCR 1005 - referred to.

       3. A fee is a payment primarily in public interest, but
  for some special services rendered or some special work
  done for the benefit of those from whom payments are
  demanded. In other words, fees must be levied in
D consideration of certain services which the individual
  accepts willingly or unwillingly. It is also necessary that
  fees or charges so demanded must be appropriated for
  that purpose and must not be used for other general
  public purposes. Further, the legislature can delegate its
E power to statutory authority, to levy taxes or fees and fix
  the rate in regard thereto. An Act delegating power to the
  local body without providing a maximum rate does not
  by itself render the delegation excessive or invalid.
  [Paras 25 and 27] [1011-E, F; 1012-A, B]
F      4. The element of compulsion or coercion is present
  in all impositions, though in different degrees and that it
  is not totally absent in fees. The compulsion lies in the
  fact that payment is enforceable by law against a man in
  spite of his unwillingness or want of consent and this
G element is present in taxes as well as in fees. [Para 26]
  [1011-G]

      5. In Clause (4) of the impugned Circular, provision
  has been made for making application by persons in
H respect of particular business who do not agree with the
KANDIVALI COOPERATIVE INDUS. ESTATE v. MUNICIPAL 991
           CORPN. OF GREATER MUMBAI

revised trade refuse charge may approach the authority       A
by making necessary application and on such application
or representation, appropriate response shall be given to
those persons, who have any grievance to that effect.
Therefore, the respondent-authority is directed to follow
the procedure mentioned in clause (4) of the circular.        B
[Para 29] (1012-F-G]

     6. Increasing trade refuse charge by 10% every year
from 2009 as provided by Clause (6) of the impugned
Circular, is highly arbitrary and without any guidelines.    C
The automatic increase irrespective of the nature of
business carried on by the Licencee also violates
principles of natural justice. Therefore, the respondent
shall not recover any increased trade refuse charges
with effect from 2009 without giving reasonable
opportunity of hearing to the licencee or persons liable      D
to pay such increased charges. The actual increase can
be ascertained and realized in future but not without
giving reasonable opportunity of hearing to the licencee
or the persons liable to pay the said increased charges.
[Paras 30 and 31) [1012-H; 1013-A-B]                          E

    Doran Bomanji Ghadiali vs. Jamshed Kanga and others
AIR 1992 Born. 13; Ahmedabad Urban Development
Authority vs. Sharadkumar Jayantikumar Pasawal/a, (1992)
3 SCC 285: 1992 (3) SCR 328; Gupta Modern Breweries F
vs. State of J& K (2007) 6 sec 317: 2001 (5) SCR 343;
Leelabai Gajanan Pansare vs. Oriental Insurance Co. Ltd.
(2008) 9 SCC 720: 2008 (12) SCR 248; Consumer Online
Foundation vs. Union of India (2011) 5 SCC 360: 2011 (5)
SCR 911; B. C. Banerjee & Ors. vs. State of M.P. & Ors. (1970) G
2 SCC 467: 1971 (1) SCR 844; Corporation of Calcutta and
Anr. v. Liberty Cinema, Assam (1965) 2 SCR 477;
Gulabchand Bapalal Modi vs. Municipal Corpn. of
Ahmedabad City (1971) 1 SCC 82: 2011 (13) SCR 26;
Union of India vs. Nitdip Textile Processors (P) Ltd. (2012) 1
                                                               H
sec 226 - cited.
    992       SUPREME COURT REPORTS               [2015] 1 S.C.R.


A                        Case Law Reference:
          AIR 1992 Bom. 13          cited           Para 11
          1992 (3) SCR 328          cited           Para 11
          2007 (5) SCR 343          cited           Para 11
B
          2008 (12) SCR 248         cited           Para 11
          2011 (5) SCR 911          cited           Para 12(vi)
          (1965) 2 SCR 477          cited           Para 12(vi)
c
          1971 (1) SCR 844          cited           Para 12(vi)
          2011 (13) SCR 26          cited           Para 12(vi)
          c2012) 1 sec 226          cited           Para 13
D         (1954) 1 SCR 1005         referred to     Para 24

        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    1431 of 2015.

E        From the Judgment and Order dated 30.07.2013 of the
    High Court of Judicature at Bombay in Writ Petition No. 1263
    of 2013.

                                WITH

F   Civil Appeal Nos. 1433, 1436, 1434 and 1435 of 2015

         Shyam Divan, Chander Uday Singh, Jatin Zaveri, Neel
    Kamal Mishra, Somnath Padhan (For Anagha S. Desai), Pratap
    Venugopal, Sonal Doshi, Surekha Raman, Gaurav Nair (For K.
    J. John & Co.) for the Appellants.
G
        L. Nageshwar Rao, ASG, J. J. Xavier, Bhargava V. Desai,
    Vishal Chaudhary for the Respondents.

          The Judgment of the Court was delivered by
H
    KANDIVALI COOPERATIVE INDUS. ESTATE v. MUNICIPAL 993
               CORPN. OF GREATER MUMBAI

        M.Y. EQBAL, J. 1. Leave granted.                               A
       2. These appeals are directed against the common
   judgment and order dated 30.7.2013 passed by the High Court
   of Bombay in the writ'petitions preferred by the appellants.

        3. By the impugned judgment and order, the High Court          B
   dismissed the writ petitions preferred by the appellants
   challenging the Circular dated 12th December, 2011 and the
   respective entries made in the schedule appended thereto
   issued by the Respondent-Municipal Corporation of Grater
   Mumbai as also the respective entries in the schedule               C
   appended thereto, thereby questioning the levy of 'trade refuse
   charges' and the rates thereof.

        4. The appellants are traders, carrying on activities of
   warehouse keepers, godown keepers, bank mukadam, carriers           D
   of stores, material and goods required to be stored and kept
   safe from insects, ants, rodents, moisture, rain, heat, fire etc.
   For this purpose, the appellants from time to time have been
   obtaining trade licences issued under Section 394 of the
   Mumbai Municipal Corporation Act, 1888 (in short, 'MMC Act').       E
   According to the appellants, the respondents recover 'trade
   refuse charges' (hereinafter referred to as 'TRC'), by making
   the payment thereof a condition for renewing the trade licences
   under the MMC Act on a yearly basis.

        5. Respondent Corporation, vide circular dated 5.6.1999        F
   fixed the pattern of Trade Refuse Charges (TRC) to be collected
   from the owners/occupiers of trade premises. On receiving
   various representations from the traders, Municipal
   Commissioner took the decision of modifying the earlier
   charges levied on the trade refuse. Therefore, the TRC were         G
   revised by the Respondent Commissioner vide a circular dated
-- 14~ 1.2008 w.e.f.1.1.2008 by almost 300% of the trade licence
   fees. It was further stated that the same was required to be
   collected once in a year along with the Licence fees at the time
   of renewal of licences issued under section 394 of the Mumbai       H
    994      SUPREME COURT REPORTS                 [2015] 1 S.C.R.


A Municipal Corporation Act, 1888. The appellants and several
  other parties made representations and preferred writ petitions
  urging reconsideration of the rates, which were disposed of by
  the Bombay High Court by an order dated 12.4.2010 upon the
  statement being made on behalf of the respondents that they
B would reconsider the rates of TRC.

       6. Respondent Corporation gave a hearing to the
  representations and instructed the department concerned to
  submit the detailed report. A Core Committee was constituted
C which submitted its report in 2010. On consideration of Core
  Committee report, TRC were modified by the impugned
  Circular dated 12.12.2011. The circular stipulated that the TRC
  would be collected with retrospective effect from 1.1.2008
  onwards.

D      7. Although there was very significant reduction in rates of
  trade refuse charges to be collected, the appellants, being
  dissatisfied, again moved the Bombay High Court by way of
  writ petitions, contending that they merely receive goods from
  the customers for purposes of safe custody and upon receipt
E of the prescribed charges, return such goods to the customers
  in the same conditions. For this purpose, they provide
  adequate space, security and safeguards against fire, rain,
  water, etc. In the process, neither any solid waste, nor any trade
  refuse is generated. In the circumstances, it is their case that
F levy of TRC upon them and that too with retrospective effect
  i.e. from 2008 is illegal, arbitrary and unconstitutional.
  The appellants further contended that they do not generate any
  trade refuse and, therefore, question of payment of TRC does
  not arise.
G        8. The High Court by the impugned common order
    dismissed the writ petitions of the appellants holding that there
    is nothing illegal, arbitrary, unreasonable or unconstitutional in
    the levy of TRC by the respondents. It was observed that the
    question as to whether the appellants generate 'trade refuse'
H
 KANDIVALI COOPERATIVE INDUS. ESTATE v. MUNICIPAL 995
    CORPN. OF GREATER MUMBAI [M.Y. EQBAL, J.]
or not is a disputed question of fact, which cannot be A
adjudicated in proceedings under Article 226 of the
Constitution of India. The High Court did not find any merit in
the contention that the levy of TRC is invalid, because according
to the Appellants there is no element of 'quid pro quo'. The
Appellants are certainly benefited, in as much as they have B
been called upon to pay TRC at reduced rates with effect from
the year 2008. No retrospectivity is involved in the
implementation of the Circular dated 12th December, 2011. If
the contention is upheld, it is the appellants who would suffer a
higher TRC. The High Court has further held that provisions of c
Sections 368(5) and 394(5) read with Section 479 of the MMC
Act entitle the respondents to impose restrictions and ·
conditions at the time of grant of licence. The same principle
will be applicable even at the stage of renewal of licences. At
this juncture, we consider it appropriate to reproduce the
                                                                  0
reasoning of the High Court in this regard:

    "The linkage which is challenged by the appellants in the
    present petition is more concerned with the manner of
    recovery of TRC and not competence of the respondents
    to recover TRC. In deciding the manner, we are once.              E
    again of the opinion that this is a policy matter and
    sufficient free hand is required to be conceded to the
    respondents in formulation of such policy. The respondents
    are right in submitting that it is not possible to monitor each
    and every establishment for purposes of determining the           F
    precise quantity and quality of 'trade refuse' generated. So
    also the respondents are right in contending that there is
    nothing illegal, arbitrary or unconstitutional in respondents
    recovering TRC at the stage of renewal of licences. From
    the averments made by the appellants themselves, it               G
    appears that this has always been the manner in which the
    respondents have been collecting TRC. In matters of
    policy, merely because some other system of collection
    may be better, is no ground to exercise power of judicial
     review. As long as it is not demonstrated that the manner        H
    996       SUPREME COURT REPORTS                [2015] 1 S.C.R.


A         of collection is ex-facie, absurd, unreasonable or
          disproportionately oppressive, we are unable to uphold the
          seventh challenge as to the linking. We find nothing
          absurd, unreasonable or disproportionately oppressive in
          the policy adopted by the respondents or the manner of
B         collection of TRC."

         9. Being aggrieved, the appellants call in question the
    correctness of the common judgment and order passed by the
    High Court in a batch of Writ Petitions dated 30.7.2013.

C      10. Mr. Shyam Divan, learned senior counsel appearing
  for the appellant in SLP No.30485 of 2013, assailed the
  impugned Circular dated 11.10.2011 as being illegal, ultra
  vires and unconstitutional. Learned counsel submits that the
  respondents cannot demand, levy or recover any tax, cess or
D compulsory exaction without authority of law as mandate under
  Section 265 of the Constitution. According to the learned
  counsel, Section 368(5) empowers the Commissioner to fix the
  charges only when the owner or occupier of trade premises
  seeks permission to deposit trade refuse temporarily upon any
E place appointed by the Commissioner in this behalf and upon
  such permission granted by the Commissioner. It was urged
  that none of the members of appellant had ever sought such
  permission from the Commissioner and, therefore, the question
  of levy of trade refuse charges under Section 368(5) of the Act
F does not arise. According to the learned counsel any
  compulsory exaction whether it be a fee or tax or any other levy
  must be backed by law. The Circular dated 12.12.2011
  imposing trade refuse charges is irrational and arbitrary.

        11. Mr. Divan, learned senior counsel, submitted that the
G levy of TRC is contrary to the judgment of Bombay High Court
  in Doran Bomanji Ghadiali vs. Jamshed Kanga and others,
  AIR 1992 Bombay page 13 whereby the High Court has held
  that the only charge that can be levied on traders is to the limited
  extent provided under Section 368(5) of the Act. The Court
H further held that the fee imposable by Section 479 of the said
 KANDIVALI COOPERATIVE INDUS. ESTATE v. MUNICIPAL 997
    CORPN. OF GREATER MUMBAI [M.Y. EQBAL, J.]

Act must relate to licence or written permission for any purpose   A
required under the Act and, therefore, the charge could only be
for permission to deposit the trade refuse temporarily at a
particular place and would not apply to traders not seeking such
permission to dump their refuse at any place. Learned counsel
drew our attention to various sections of the Act and submitted    B
that the manner in which the imposition or levy of charges
contemplated under Section 368(5) of the Act, is ultra vires.
Learned counsel relied upon the decision in the case of
Ahmedabad Urban Development Authority vs. Sharadkumar
Jayantikumar Pasawalla, (1992) 3 SCC 285, which was                c
subsequently followed in the case of Gupta Modem Breweries
vs. State of J& K, (2007) 6 SCC 317 and Leelabai Gajanan
Pansare vs. Oriental Insurance Co. Ltd., (2008) 9 SCC 720.

    12. Mr. Chander Uday Singh, learned senior counsel,
appearing on behalf of appellants in SLP (C) Nos. 35558,           D
35589 and 35593 of 2013, after referring relevant provisions
of Municipal Corporation Act, made the following submissions:-

    (i). The appellants are engaged in the warehousing
    business and they do not generate any trade refuse, thus       E
    entitling the Respondents to levy the TRC. Neither they are
    conducting any manufacturing activity due to which solid
    waste can be generated and, hence, the term TRC has
    been misinterpreted and equated to garbage. It was
    asserted that the Appellants merely receive goods from the     F
    customers for the purpose of safe custody and upon
    receipt of the prescribed charges, return such goods to the
    customers in the same condition. Therefore, the
    Respondents are wrong in treating every kind of refuse as
    'trade refuse' and on the said incorrect premise imposing      G
    TRC upon the appellants. 'Trade refuse' should mean and
    imply some solid waste generated by an industry involved
    in manufacturing process and in this regard reliance is
    placed upon sub-clauses (a) and (b) of Section 367 and
    sub-sections (1) and (5) of Section 368 of the MMC Act
                                                                   H
    and as the terms "refuse" and "trade refuse" have been
    998       SUPREME COURT REPORTS                [2015) 1 S.C.R.


A         dealt with separately this is indicative that every kind of
          refuse cannot be qualified as "trade refuse".

          (ii). It was pointed out that Respondents' own inspection
          reports of warehouses show that those warehousers only
          generated dust, tree leaves, etc. and in a quantity of only
B
          one and a half to two baskets. This cannot, by any stretch
          of imagination, be treated as trade refuse since the dust
          and tree leaves are blown into the warehouses by the wind
          and not on account of any activity being carried out by the
          warehousers/appellants. Further, under Section 370 of the
c         MMC Act it will be incumbent on the occupier of any
          premises situate in any portion of the city for which the
          Commissioner has not given a public notice under Section
          142 (a) and in which there is no water closet or privy
          connected to municipal drains, to cause all excrementitious ·
D         and polluted to be collected and to be conveyed to the
          nearest receptacle /depot provided for this purpose under
          Section 367 (b) and not (a). Pertinently, 367 (a) deals with
          dust, ashes, refuse and rubbish and 367 (b) deals with
          trade refuse. Thus "trade refuse" is obnoxious refuse and
E         cannot and ought not be equated with refuse generated in
          any trade /business establishment. It is submitted that this
          vital difference has been ignored and TRC is being
          unlawfully sought to be levied upon the appellants who
          generate no "trade refuse at all".                         ·
F
          (iii). It was the contention of the learned counsel that the
          appellants, who are engaged in the warehousing business,
          do not generate any trade refuse and in the event TRC
          constitutes a 'tax' there is no taxable event for imposition
          of tax in the form of TRC. Alternatively, if TRC is to be
G
          regarded a 'fee', then, on account of the circumstance that
          the appellants generate no trade refuse at all, there is no
          element of 'quid pro quo' and hence levy of fee in the form
          of TRC is illegal and invalid.

H         (iv). It was submitted that the linking of payment of TRC
KANDIVALI COOPERATIVE INDUS. ESTATE v. MUNICIPAL 999
   CORPN. OF GREATER MUMBAI [M.Y. EQBAL, J.]

  with renewal of trade licences under section 394 of the          A
  MMC Act, is illegal, invalid and, therefore, renewal of trade
  licences under section 394 of the MMC Act ought to be
  granted, irrespective of whether the appellants pay TRC
  or not. The TRC being levied in addition to the normal
  licence fees for issue of trade licences under Section 394       B
  of the MMC Act, there is double charging, which is wholly
  arbitrary and unreasonable and without authority of law,
  particularly, qua the Appellants, who do not generate any
  'trade refuse'. It was, therefore sought to be submitted, that
  the levy and collection of TRC cannot be linked to the           c
  renewal of an annual trade licence granted to the
  Appellants for conducting warehousing activity when there
  is no statutory provision enabling such linkage; and in the
  facts and circumstances and absence of any specific
  authority to levy a retrospective charge or fee, Respondent      D
  No.1 could not levy TRC with effect from 1.1.2008 when a
  solemn assurance was made by Respondent No.1 to the
  Bombay High Court that there would be no linkage
  between TRC and licence fees collected at the stage of
  renewal. Under Section 471 of the MMC Act, Respondent
  No.1 is entitled to impose penalty for contravention of          E
  Section 368 (1) to (4) and under Section 472 of the Act,
  the Respondent No.1 is entitled to impose penalty for
  continuing offence in contravention· of any provision of
  Section 368 (1) to (5). When penalty provisions are
  provided under the Act, payment of TRC has been without          F
  any basis or justification whatsoever sought to be linked
  with renewal of the Trade Licence, which is impermissible
  and bad in law. Furthermore, only valid trade licence
  holders are being charged TRC. It becomes pertinent to
  note that after 1976, Respondent No.1 has stopped                G
  issuing warehousing licences in the Greater Mumbai Area.
  Therefore, the burden on TRC is only being applied to valid
   licence holders and not to others who are carrying on the
  trade without any licence.
                                                                   H
    1000   SUPREME COURT REPORTS                [2015) 1 S.C.R.


A      (v). It was again pointed out that the Respondents have
       completely ignored their own Circular No. ChE/280/SWM
       dated 06.04.2010 which categorically states that for the
       year 2010, TRC will be levied on the basis of licence fees
       of the licence issued by the Shops & Establishment
B      Department of the MMC and that the Respondents will
       delink TRC from licence fees in future and new TRC levy
       pattern will be introduced. The TRC is now wrongfully
       charged on the basis of sq. mtr. footage of area of
       premises and is in fact more than the licence fees which
c      is wholly illogical, irrational, arbitrary and without any
       authority of law. The policy adopted by the Respondents
       and the manner of collection of TRC (whether charged
       based on number of employees or square meter area) is
       absurd, unreasonable and disproportionately oppressive,
       without Application of mind and incompetent and without
D
       the authority of law.

       (vi). Lastly, it was contended that any compulsory
       execration of money by the Government for a tax or a cess
       has to be strictly in accordance with law and there should
E      be a specific provision for the same and there is no room
       for intendment and nothing is to be read or nothing is to
       be implied and one should look fairly to the language used.
       Our attention was drawn to the decision of this Court in
       Consumer Online Foundation vs. Union of India (2011)
F      5 sec 360. In this behalf it was sought to be pointed out,
       that Imposition of levy/charges by Respondent No.1 is in
       the nature of a tax and not a fee and hence such imposition
       without backing of statutes is unreasonable and unfair.
       Learned counsel also drew our attention to the decisions
G      of this Court in the cases of Gupta Modern Breweries vs.
       State of J&K & Ors. - (2007) 6 SCC 317 and B.C.
       Banerjee & Ors. vs. State of M.P. & Ors. (1970) 2 SCC
       467.

       13. Mr. L. Nageswar Rao, learned Additional Solicitor
H
KANDIVALI COOPERATIVE INDUS. ESTATE v. MUNICIPAL 1001
   CORPN. OF GREATER MUMBAI [M.Y. EQBAL, J.]

General appearing for the respondents, firstly contended that A
the constitutional validity of Section 368(5) of the Act was never
challenged by any of the appellants as being ultra vires to the
Constitution. The appellants have only prayed in the writ
petitions for issuance of appropriate writ directing the
respondents to cancel and/or withdraw the Circulars dated B
14.1.2008 and 11.10.2011 and also to withdraw the notice
dated 9th June, 2014. Learned counsel submitted that the
appellants challenged the circular by arguing that the manner
of collection of trade refuse charges was contrary to law. The
competence of the authority to demand and levy TRC has not c
been challenged at any point of time. Distinguishing the
imposition of fee/TRC and tax, learned counsel put heavy
reliance on the ratio decided by this Court in the case of The
Commissioner, Hindu Religious Endowment, Madras vs. Sri
Lakshmindra Tirtha Swamiar of Shirur Mutt, (1954) 1 SCR 0
 1005. Mr. Rao referred to the Core Committee Report and
submitted that the validity of guidelines provided therein cannot
be tested on any ground. Learned counsel put reliance on a
decision in the case of Corporation of Calcutta & Anr. vs.
 Liberty Cinema, Assam, (1965) 2 SCR 477. Learned counsel
                                                                   E
 also made submission on the object and purpose of collection
 and submitted that absolute equality is impossible for the
 purpose of levy of fee or charges. Leamed counsel referred·the
 decision of this Court in the case of Gulabchand Bapalal Modi
 vs. Municipal Corpn. of Ahmedabad City, (1971) 1 SCC 82,
 Union of India vs. Nitdip Textile Processors (P) Ltd., (2012) 1 F
 sec 226.
     14. Before appreciating the rival contentions made by the
parties, we would like to refer the relevant provisions of Bombay
Municipal Corporation Act, 1988. Section 3 (yy) defines the         G
word 'trade refuse' as under:-

     "3(yy) "Trade refuse" means and includes the refuse of any
     trade, manufacture or business."

     15. Section 367 empowers the Commissioner to make              H
    1002       SUPREME COURT REPORTS                [2015) 1 S.C.R.


A   provision for providing receptacles, depots and places for
    temporary deposit or final disposal of waste articles including
    trade refuse. Section 367 is quoted hereinbelow:-

        "367. Provision and appointment of receptacles, depots
        and places for refuse, etc.,
B
        The Commissioner shall provide or appoint in proper and
        convenient situations public receptacles, depots and
        places for the temporary deposit or disposal of-

C       (a) dust, ashes, refuse and rubbish;

        (b) trade refuse;"

       16. Section 368 lays down the provisions with regard to
  the duty of owners and occupiers for the purpose of collecting
D and depositing dust etc. Sections 368, 394 and 479, which are
  under consideration in these appeals, read as under:-

        "368. Duty of owners and occupiers to collect and deposit
        dust, etc. ,
E       (1) It shall be incumbent on the owners and occupiers of
        all premises to cause all dust, ashes, refuse, rubbish and
        trade refuse to be collected from their respective premises
        and to be deposited at such times as the Commissioner,
        by public notice, from time to time prescribes in the public
F       receptacle, depot or place provided or appointed under
        the last preceding section or the temporary deposit or final
        disposal thereof

         (2) .... ..
G
         (3) ........ .

         (4)-....... ..

         (5) Notwithstanding anything contained in this section, if the
H        owner or occupier 'of any trade premises desires
KANDIVALI COOPERATIVE INDUS. ESTATE v. MUNICIPAL 1003
   CORPN. OF GREATER MUMBAI [M.Y. EQBAL, J.]

    permission to deposit trade refuse, collected daily or           A
    periodically from the premises, temporarily upon any place
   ·app.ointed by the Commissioner in this behalf, the
    Commissioner may, on the application, and on payment
    of such charges as the Commissioner may from time to
  , time, fix, allow the applicant to deposit the trade refuse       s
    accordingly."

   "394. Certain articles (or animals) not to be kept, and
   certain trades, processes and operations not to be carried
   on without a licence; and things liable to be seized              C
   destroyed, etc., to prevent danger or nuisance.-

   (1) Except under and in accordance with the terms and
   conditions of the licence granted by the Commissioner, no
   person shall-
                                                                     D
   (a) keep, or suffer or allow to be kept, in or upon any
   premises,

   (I) any article specified in Part I of Schedule M; or,

   (II) ariy article specified in Part II of Schedule M, in excess   E
   of the quantity therein specified as the maximum quantity
   (or where such article is kept along with any other article
   or articles specified in that Schedule, such other maximum
   quantity as may be notified by the Commissioner) of such
   article which may at any one time be kept in or upon· the         F
   same premises without a licence;

   (b) keep, or suffer or allow to be kept, in or upon any
   premises, for sale or for other than domestic use, any
   article specified in Part Ill of Schedule M;
                                                                     G
   (c) ............ ·····

   (d) ................ .

   (e) carry on or allow or suffer to be carried on, in or upon
   any premises.-                                                    H
    1004     SUPREME COURT REPORTS                 [2015) 1 S.C.R.


A      (I) any of the trades specified in Part IV of Schedule M, or
       any process or operation connected with any such trade;

       (II) any trade, process or operation, which in the opinion
       of, the Commissioner, is dangerous to life, health or
       property, or likely to create a nuisance either from its
B
       nature or by reason of the manner in which, or the
       conditions under which, the, same is, or is proposed to be
       carried on;

       (f) carry on within [Brihan Mumbai] or use or allow to be
c      used any premises for, the trade or operation of a carrier.

       (2) .................... .

       (3) ................... .

D      (4) .................. .

       (5) It shall be in the discretion of the Commissioner.-

       (a) to grant any licence referred to in sub-section (1 },
       subject to such restrictions or conditions (if any,) as he shall
E      think fit to specify, or (b} for the purposes of ensuring public
       safety, to withhold any such licence:

       Provided that, the Commissioner when withholding any
       such licence shall record his reasons in writing for such
F      withholding and furnish the person concerned a copy of his
       order containing the reasons for such withholding:

       Provided further that, any person aggrieved by an order
       of the Commissioner under this sub-section may, within
       sixty days of the date of such order, appeal to the Chief
G
       Judge of the Small Cause Court, whose decision shall be
       final."

       "479. Licences and written permission to specify condition
       etc, on which they are granted:-
H
KANDIVALI COOPERATIVE INDUS. ESTATE v. MUNICIPAL 1005
   CORPN. OF GREATER MUMBAI (M.Y. EQBAL, J.]
    (1) Whether it is provided in this Act that a licence or a        A
    written permission Licences and may be given for any
    purpose, such licence or written permission shall specify
    the wntten. period for which, and the restrictions and
    conditions subject to which, the same is granted, and shall
    be given under the signature of the Commissioner or of a          B
    munici pal officer empowered under section 68 to grant
    the same.

    (2) ................. .

    (3);-.. ·................. .                                      c
    (4) .................. ."

     17. From a conjoint reading of the provisions quoted
hereinbefore, it is manifestly clear that the Commissioner may        D
from time to time inter alia specify conditions and restrictions
while granting trade licence. The Commissioner may notify the
charges including trade refuse charges i.e. to be collected from
the trade licencees.

     18. In exercise of power conferred upon the Commissioner         E
under the MMC Act, a Circular was issued on 14.1.2008 raising
the TRC by almost 300 percent of the trade licence fees with
the stipulation that the TRC would be collected at the time of
renewal of the licence under Section 394 of the Act which were
due to expire in December, 2009. As noticed above the said            F
Circular dated 14.1.2008 was challenged before the Bombay
High Court by way of writ petitions. When the writ petitions were
taken up for hearing, learned counsel appearing for the
respondent-Corporation informed the Court that the rate of
trade refuse charges is under reconsideration by the Authority.       G
On the basis of submissions made by the counsel for the
Corporation, the writ petitions were disposed of as the
grievances of the traders were satisfied.

    19. In December, 2011, the respondents after re-
consideration of the tariff fixed in the earlier circular came with   H
    1006    SUPREME COURT REPORTS                 [2015] 1 S.C.R.


A another Circular dated 11.10.2011 whereby the TRC rate was
  revised effective from 1st January, 2008. Perusal of the revised
  rates appended thereto would show that the rates have been .
  significantly reduced in respect of different types of business.
  Instead of quoting the revised rates we would like to quote
B hereinbelow the modified circular dated 11.10.2011. The
  English translation of the Circular reads as under:-

        "MUNCIPAL CORPORATION OF GREATER MUMBAI

       . (Solid Waste Management Department)
c
        No. Pra.A/11384/SWM

        Dated 11.10.2011

        CIRCULAR
D
        Subject:-: Revision/Modification in the trade refuse charge.

        For the purpose of recovering Trade refuse charge by
        Solid Waste Management Department in Municipal
        Corporation of Greater Mumbai, the Mayor's Council gave
E       approval vide Resolution No.14 dated 15.4.99 to recover
        the said charge in certain multiplication of licence/
        registration charge without making any category of the
        business. According to that procedure, the orders were
        issued vide Circular Pra. A/17785/SWM dated 14.1.2008,
F       regarding entrusting the responsibility on (1) Licencing
        Department (2) Shops & Establishment Department (3)
        health department and (4) Market Department, by co-
        relating the expenses incurred then for disposal of the
        waste and the multiplication of licencing/registration
G       charges and also to recover 'Trade refuse charges' at the
        time of renewal of licence and deposit the same under the
        head 'Miscellaneous Charges' of Income under Financial
        Budget Head of Solid Waste Management Department.

H       However, considering the complaints/ representations as
KANDIVALI COOPERATIVE INDUS. ESTATE v. MUNICIPAL 1007
   CORPN. OF GREATER MUMBAI (M.Y. EQBAL, J.]

       well as certain other aspects regarding Trade refuse          A
       charge, meetings were held with the officials of 1)
       Licencing Department, Shops & Establishment
       Department (3) health department and (4) Market
       Department and after detailed deliberations it was
       proposed to carry out suitable modifications in Trade         B
       refuse charges for which the business people were
       examined regarding the Trade refuse charge. The
       examination reports received from all the department levels
       were carefully studied and the aspects such as the Trade
       refuse charge being levied on the business, the               c
       expenditure incurred for disposal of the waste generated
       by them were examined, and accordingly Hon'ble
       Municipal Commissioner has given approval vide No.
       MGC/F/5874 dated 2.9.2011 to charge Trade refuse
       charge accordingly and following decision was taken.
                                                                     D
       (1) As the Trade refuse charge being levied by the Shops
       & Establishment Department in proportion with the waste
       generation, hence it will be continued as per the circular
       No. Pra.A/6123 dated 05.06.1999.
                                                                     E
       (2) The businesses for which the complaints about the
       Trade refuse charge being more and in respect of whom
       changes in the Trade refuse charge have been made in
       accordance with their waste generation from the year
       2008, have been indicated in 'schedule B-1".                  F

     (3) Trade refuse charge for the halls used for marriages
and parties is being introduced now. The solid waste generated
in halls of schools, colleges and the functions in layout R.G.
Plots of the housing societies, is not included in commercial
tax.                                                                 G
     (4) In respect of the business who do not agree with the
revised Trade refuse charge, applications may be accepted
from them in enclosed format and after examining the same, a
                                                                     H
    1008     SUPREME COURT REPORTS                [2015] 1 S.C.R.


A   report be sent to the concerned Asst. Engineer (S.W.M.) for
    submitting to Chief Engineer (S.W.M.).

         (5) In respect of the business whete there are more than
    one licences, the Trade refuse charge will be levied on the
    licence of which the fees are more than other licences.
8
        (6) Trade refuse charge will be increased by 10 percent
    every year from the year 2009.

         (7) In respect of the businesses who have paid the Trade
c   refuse charge at less/more rate than the rate mentioned in the
    circular, it should be adjusted at the time of recovering, Trade
    refuse tax from the next year with effect from 2008. In respect
    of the business whose rates of Trade refuse charge have not
    been increased/decreased or those business who have so far
0   not paid the Trade refuse charge, the same should be
    recovered from them immediately at the rate indicated in the
    Circular of 2008.

         All the concerned department heads will take note of this
    circular and take further action.
E
                                                             Sd/-
                                          Chief Engineer (S.W.M.)
                                                        11.10.11.
                                        Licencing Superintendent."
F      20. The Bombay High Court, while passing the impugned
  order dismissing the writ petitions came to the conclusion that
  the MMC Act confers power upon the authorities of the
  respondents to impose conditions at the time of grant of trade
  licence and also to recover trade refuse charges. The High
G Court observed:-

        "21. The provisions of sections 368(5) and 394(5) read
        with Section 479 of the MMC Act, in our view, entitle the
        respondents to impose restrictions and conditions at the
        time of grant of licence. The same principle will be
H
KANDIVALI COOPERATIVE INDUS. ESTATE v. MUNICIPAL 1009
   CORPN. OF GREATER MUMBAI [M.Y. EQBAL, J.]

   applicable even at the stage of renewal of licences. The          A
   linkage which is challenged by the appellants in the present
   petition is more concerned with the manner of recovery of
   TRC and not competence of the respondents to recover
   TRC. In deciding the manner, we are once again of the
   opinion that this is a policy matter and sufficient free hand     B
   is required to be conceded to the respondents in
   formulation of such policy. The respondents are right in
   submitting that it is not possible to monitor each and every
   establishment for purposes of determining the precise
   quantity and quality of 'trade refuse' generated. So also         c
   the respondents are right in contending that there is nothing
   illegal, arbitrary or unconstitutional in respondents
   recovering TRC at the stage of renewal of licences. From
   the averments made by the appellants themselves, it
   appears that this has always been the manner in which the         0
   respondents have been collecting TRC. In matters of
   policy, merely because some other system of collection
   may be better, is no ground to exercise power of judicial
    review. As long as it is not demonstrated that the manner
   of collection is ex-facie, absurd, unreasonable or                E
   disproportionately oppressive, we are unable to uphold the
   seventh challenge as to the linking. We find nothing
   absurd, unreasonable or disproportionately oppressive in
   the policy adopted by the respondents or the manner of
   collection of TRC.
                                                                     F
   22. We have already held that there is nothing illegal,
   arbitrary, unreasonable or unconstitutional in the levy of
   TRC by the respondents. In these circumstances, we are
   not inclined to exercise the jurisdiction under Article 226
   of the Constitution of India in order to assist the appellants,   G
   who desire to either postpone or avoid payment of TRC
   and at the same time enjoy the benefits of a renewed
   licence. Upon grant of renewal, the MMC shall have to
   initiate fresh proceedings in order to recover TRC, thereby
   giving the appellants opportunity to resist or delay in the       H
    1010     SUPREME COURT REPORTS                [2015] 1 S.C.R.


A       payment of the same. The extra-ordinary jurisdiction under
        Article 226 of the Constitution of India cannot be exercised
        for such purposes.•

        21. As stated above, the constitutional validity of Section
  368(5) of the Act has not been challenged in the writ petitions.
8
  The power of the Commissioner in fixing and demanding trade
  refuse charges by the impugned Circular have been questioned
  in all those writ petitions which are the subject matter of these
  appeals. The only challenge is the Circular dated 11.10.2011
C and th'e respective entries in the schedule appended thereto
  issued by the respondents on the ground that the rate fixed in
  the schedule appended to the Circular is wholly irrational and
  rull of arbitrariness. The main contention made by the
  appellants are that they do not generate any trade refuse and,
  therefore, the rate fixed for levy of TRC is arbitrary,
D unreasonable and violative of Articles 14 and 19(1)(g) of the
  Constitution of India.

       22. Since the constitutional validity of different provisions
  including Section 368 of the Act was not challenged, we do not
E think it necessary to go into the vires of the said provisions. The
  only issue that needs to be considered is as to whether the fees
  or charge imposed by the impugned Circular dated 11.10.2011
  is just and proper or suffers from arbitrariness.
                                                                            /
                                                                        /
    · 23. There is no dispute with regard to the settled legal
F proposition that in almost all the statute dealing with legal
  administratioh, Municipal Authorities have inevitablyto be
  delegat~d the power of taxation. The aim and object of the
  scheme have to be taken into consideration while deciding the
  question as to the excessive exercise of power in the matter
G of collection of fees and charges.

       24. How~ver, it would be appropriate to refer the principles
  laid down by this Court in the case of The Commissioner,
  Hindu Religious Endowment, Madras vs. Sri Lakshmindra
H Tirtha Swamiar of Shirur Mutt, (1954) 1 SCR 1005: AIR 1954
  KANDIVALI COOPERATIVE INDUS. ESTATE v. MUNICIPAL 1011
     CORPN. OF GREATER MUMBAI [M.Y. EQBAL, J.]

SC 282, which according to us will be the complete answer to A
the points raised by Mr. Divan and Mr. Singh, learned senior
counsel appearing for the appellants. In para 44, this Court
observed:

      "44. Coming now to fees, a 'fee' is generally defined to
                                                                   8
      be a charge for a special service rendered to individuals
      by some governmental agency. The amount of fee levied
      is supposed to be based on the expenses incurred by the
      Government in rendering the service, though in many cases
      the costs are arbitrarily assessed. Ordinarily, the fees are C
      uniform and no account is taken of the varying abilities of
      different recipients to pay (Vide Lutz on "Public Finance"
      p. 215.). These are undoubtedly some of the general
      characteristics, but as there may be various kinds of fees,
      it is not possible to formulate a definition that would be
      applicable to all cases."                                    D

        25. A fee undoubtedly, is a payment primarily in public
  interest, but for some special services, rendered or some
· special work done for the benefit of those from whom payments
  are demanded. In other words, fees must be levied in                   E
  consideration of certain services which the individual accept
  willingly or unwillingly. It is also necessary that fees or charges
  so demanded must be appropriated for that purpose and must
  not be used for other general public purposes. Further,
  indisputably, the legislature can delegate its power to statutory      F
  authority, to levy taxes or fees and fix the rate in regard thereto.

      26. Elaborating the distinction between the tax and a fee,
 this Court in number of decisions held that the element of
 compulsion or coercion is present in all impositions, though in
 different degrees and that it is not totally absent in fees. The G
 compulsion lies in the fact that payment is enforceable by law
 against a man in spite of his unwillingness or want of consent
 and this element is present in taxes as well as in fees.

      27. Since the provisions of Section 368(5) of the Act is           H
    1012         SUPREME COURT REPORTS            [2015] 1 S.C.R.


A   not under challenge the decisions relied upon by Mr. Divan and
    Mr. Singh, learned senior counsel appearing for the appellants,
    will have no application in the facts and circumstances of the
    present case. Be that as it may, it is well settled that an Act
    delegating power to the local body without providing a
B   maximum rate does not by itself render the delegation
    excessive or invalid.

         28. Coming back to the impugned Circular, it reveals that
    after considering the complaints and representations and
    certain other aspects regarding trade refuse charges, decisions
C   have been taken by the authority. Clause (4) and (6) of the said
    circular are re-quoted hereinbelow:-

           (4)    In respect of the business who do not agree with
                  the revised Trade refuse charge, applications may
D                 be accepted from them in enclosed format and after
                  examining the same, a report be sent to the
                  concerned Asst. Engineer (S.W.M.) for submitting
                  to Chief Engineer (S.W.M.).

           (6)    Trade refuse charge will be increased by 10
E
                  percent every year from the year 2009."

       29. So far clause (4) is concerned, provision has been
  made for making application by persons in respect of particular
  business who do not agree with the revised trade refuse charge
F may approach the authority by making necessary application
  and on such application or representation, appropriate
  response shall be given to those persons, who have any
  grievance to that effect. We, therefore, direct the respondent-
  authority to follow the procedure mentioned in clause (4) of the
G circular.

        30. As regard clause (6) of the Circular, prima facie we
    are of the definite opinion that increasing trade refuse charge
    by 10% every year from 2009 is highly arbitrary and without any
H   guidelines. In our considered opinion, the automatic increase
KANDIVALI COOPERATIVE INDUS. cSTATE v. MUNICIPAL 1013
   CORPN. OF GREATER MUMBAI [M.Y. EQBAL, J.]

of trade refuse charges by 10% every year irrespective of the          A
 nature of business carried on by the Licencee violates
 principles of natural justice. We, therefore, hold that respondent
.shall not recover any increased trade refuse charges with effect
 from 2009 without giving reasonable opportunity of hearing to
 the licencee or persons liable to pay such increased charges.         B

     31. After giving our anxious consideration in the matter, we
do not find any reason to differ with the view taken by the High
Court in passing impugned order. However, we modify the
impugned order only by holding that clause (6) of the Circular         C
increasing trade refuse charge by 1O' per cent every year from
2009 is highly arbitrary and without any guideline. We, therefore,
hold that the increase of trade refuse charge by 10 per cent
every year irrespective of the actual escalation or reduction in
costs involved or the nature of business carried on by the
licencee etc. violates principles of reasonableness as well as         D
natural justice. Accordingly, we direct that the respondent-
authority shall not recover increased trade refuse charge at the
rate of 10 per cent with effect from 2009. The actual increase
can be ascertained and realized in future but not without giving
reasonable opportunity of hearing to the licencee or the               E
persons liable to pay the said increased charges.

    32. With the aforesaid modification and directions, these
appeals stand disposed of with no order as to costs.

Kalpana K. Tripathy                              Appeal Disposed of.
                                                                       F