MUNICIPAL CORPORATION OF GREATER BOMBAYversusMAFATLAL INDUSTRIES AND ORS., ETC.

l
           MUNICIPAL CORPORATION OF GREATER BOMBAY                                     A
                               v.
               MAFATLAL INDUSTRIES AND ORS., ETC.

                                FEBRUARY 23, 1996

                  [KULDIP SINGH AND G.B. PATTANAIK, JJ.)                               B

            Bombay Electricity Duty Act, 1958: Schedule-Part A and Part B-1981
     Tariff: Guest house in city maintained by Company-Whether meant for .ex-
     clusive use as private residential premises-Whether tariff Category 'R' ap-
     plicable. Held, no.                                                               c
            Statutory constrnction: Expression "exclusively used as private residen-
     tial premises"-Meaning of-Category 'R' 1981 Tariff-Schedule Part A, Bom-
     bay Electricity Duty Act, 1958.

             Section 3(1) of the Bombay Electricity Duty Act, 1958 provided for D
      levy of electricity duty on the units of energy consumed at the rates
      specified in the Schedule to the Act. In the Schedule, Part A provided the
      tariff for premises used for residential purposes and Part B provided the
      tariff for premises used for business, trade, commercial undertaking or
    · professional purposes. Category 'R' of the 1981 tariff applied to premises E
      exclusively used as a private residential premises, and Category 'C' ap·
      plied, as a residuary category, to premises which did not come within
      categories R, S, RC(LV) and SL.

           The respondent company had been maintaining guest houses in
     Bombay City for occupation of its employees. The said premises having             F
     been treated as Category 'C' in the bill raised under the 1981 tariff, the
     company filed writ petition in the High Court seeking a direction to treat
     the said guest houses as falling under Category 'R'.

            The Single Judge took the view that Category 'R' was restricted to
      premises used as private residence by a family for permanent or longer           G
      occupation and would not apply to flats provided for transitory periods to
     ·outstation officers. The Division Bench, however, in the appeals, construed
      that the word 'private' in the expression "exclusively lised as a private
      residential premises' must be read as opposed to 'public', and came to the
      conclusion that since the company was using the premi~s ·as guest house          H
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     1016                  SUPREME COURT REPORTS                   [1996) 2 S.C.R.

A without any intention to make profit and it was not the business of the
     company to run a guest house, it must be held that the premises was
     exclusively used for its own purpose and accordingly tariff rate meant for
     Category 'R' should apply.

            Allowing the appeals, the Court
B
           HELD: 1. The Division Bench of the High Court committed serious
     error in applying the test of profit making as well as the test of use of the
     word 'private' in contradistinction to 'public' for interpreting the expres-
     sion "exclusively used as a private residential premises". [1020-C]
c         2. It is a cardinal principle of construction of a statute that the words
     must be given their natural meaning and must be understood in their
     ordinary or popular sense and each word must have its play. Natural and
     ordinary meaning of the words should not be departed from unless it is
     shown that the context in which the words are used requires a different
I>   meaning. [1019-D-E]

           3. In the instant case, on a plain literal meaning being given to each
     of the words in the· expression "exclusively used as a private residential
     promises", it cannot be said that the guest house maintained by a company
     or commercial undertaking would come within that expression. The said
E    expression connotes that the premises in question must be exclusively used
     as a residential premises, which, in other words, would mean the premises
     which is used by any person privately for his own residence for a sufficiently
     continued period and not a premise where a person can come and spend a
     day or a night and then go back. The guest houses maintained by company
F    or commercial undertaking, on the other hand, are part of its commercial
     venture, and, as such, cannot be held to be meant for exclusive use as
     private residential premises. The word 'exclusively', occurring in the
     aforesaid expression, also must be given a rational meaning. [1020-C-DJ

            Viewed from that angle, the. context in which the expression "ex-
G elusively used as a private residential premises" has been used for deter-
     mining the 1981 tariff under the Bombay Electricity Duty Act, 1958, it can·
     only apply when any premises is U'"ed as a private residential premises.
                                                                    (1020-A·CJ .
            4. Since th~ guest ho.use maintained by a company o~ comfuerciai
H undertaking in the cities cannot be held a premise which is exclusively used,
I
            MUNICIPALCORPN.OFGREATERBOMBAYv.MAFATLALINDS.(G.B.PATIANAIK,J.]   1017

    as private residential premise, Category 'R' of the 1981 tariff, in the instant A
    case, cannot he held to be applicable. [1020-E]

            CIVIL APPELLATE JURISDICTION: Civil Appeal No. 11142 of
    1995.

         From the Judgment and Order dated 5/8.2.93 of the Bombay High               B
    Court in A.No.1159/90 Arising from W.P. No. 539 of 1981.

                                         With

            Civil Appeal No. 11143 of 1995.
                                                                                     c
         From the Judgment and Order dated 5/8.2.93 of the Bombay High
    Court in A.No.1234/90 arising from W.P. No. 1606 of 1983.

         V.R. Reddy, Additional Solicitor General, P.H. Parekh, Amit
    Dhingra and S.A. Gadkar for the Appellants.
                                                                                     D
         Bhimrao N. Naik and Amit Damle and Bharat Sangal for the
    Respondents.

            The Judgment of the Court was delivered by

          G.B. PATIANAIK, J. These appeals by special leave are directed E
    against the judgment of the division bench of Bombay High Court dated
    8.2.1993 arising out of writ petition nos. 539 of 1981 and 1606 of 1983
    respectively.

          The facts are not in dispute namely the respondents' industries had p
    got their guest houses in Bombay and the Municipal Corporation of
    Bombay treating the premises falling under Category 'C' under the Bombay
    Electricity Duty Act raised a bill for payment of electricity duty. The
    respondents being aggrieved by the said bill.ing filed writ petition in the .
    Bombay High Court contending inter alia that premises having been used
    as guest houses for the occupation of the employees of the company, the G
    same could not have been categorised as Category 'C' and. the order of'.i!ie
    Municipal Corporation is invalid and. inoperative. The appellant -
    Municipal Corporation in its return filed before the learned Single Judge
    took the stand that the tariff under Category 'R' is exclusively meant for
    premises used as 'private residential premises' and tariff under Category H
    1018                  SUPREME COURT REPORTS                   (1996] 2 S.C.R.

A 'C' is meant for all non industrial premises and a guest house maintained
    by a commercial undertaking even for occupation of its employees cannot
     come within Category 'R' and therefore rightly they have been charged in
    accordance with the tariff meant for Category 'C'. The learned Single
    Judge on consideration of ~he relevant provisions of the tariff came to the
    conclusion that Category 'R' is restricted to premises used as private
B
    residence and by a fixed category for example a family whose occupation
    is permanent or at least of a duration dependent on factors such as length
  · of service or posting at a place etc. and it will not apply to cases where
    flats are· provided for transitory periods for out-station officers and direc-
     tors. The learned Single Judge accordingly held that the placing of the
C premises under Category 'C' is fully justified and the writ petitions were
     dismissed. The respondents being aggrieved by the aforesaid judgment of
     the learned Single Judge preferred appeals to the Division Bench. The
   . Division Bench by the impugned Judgment came to the conclusion that
    since the company is using the premises as guest house without any
D intention to make profit and it is not the business of the company to run a
    guest house, it must be held that the premises is exclusively used for its
     own purpose and accordingly tariff rate meant for Category 'R' should
     apply. The Division Bench construed that the word "private" in the expres-
    sion "exclusively used as a private residential premise" must be. read as
    opposed to "public". It further came to hold that since guest house main-
E tained by the company is not a business proposition it cannot be held to
    be for commercial purpose and unless the premises is used for any com-
     mercial purposes then the same cannot be categorised as Category 'C'.
    With this conclusion the judgment of the learned Single Judge has been
     reversed and the appeals having been allowed, the present appeals by
F special leave have been filed in this Court.
         Mr. Reddy, learned Additional Solicitor General appearing for the
  appellant contended that the Division Bench of the Bombay High court
  totally misconstrued the expression "exclusively used as a private residential
  premise" and the said expression has no co-relation with either the object         ..•
G of profit making or it is to be rea~ in contradistinction to the word 'public'.
  Aq;ording to Mr. Reddy, the expression "exclusively used as a private
  re~idential premise" must be given its natural grammatical c.onstruction and
  if such a construction being given it would apply to those premises which
  are used for residential purpose and Will cert~ly not apply to guest house
H maintained by a company or a commercial undertaking where its
    '

    !         MUNICIPAL CORPN. OF GREATERBOMBAYv. M AFATI.ALINDS. (G.B. PATIANAIK, J.]   1019

        employees come and reside for some time when they are in Bombay. Mr. A
        Naik, learned senior counsel appearing for the respondents on the other
        hand contended that when under the Bombay Electricity Duty Act two
        different tariffs have been provided for, one for the premises used for
        residential purpose and the other for premises used for business, trade,
        commercial undertaking or professional purpos.e the guest house belonging B
        to the commercial undertaking must come within the first category and
        therefore the Division Bench was wholly justified in directing the payment
        of tariff for such guest houses bringing them under Category 'R'. According
        to learned counsel guest houses are maintained by commercial undertak-
        ings to be used by its employees when they come to the cities and therefore
        the purpose of maintenance of such guest houses is undoubtedly residential C
        and consequently the categorisation must be Category 'R'.

               In view of the rival submissions at the bar the question that arises for
        consideration is, what is the true meaning of the expression "exclusively
        used as a private residential premises"? A premise to come within Category D
        'R' Part A to the Schedule of Electricity Tariff must be a premise which is
        exclusively used as a private residential premise. It is a cardinal principle
        of Construction of a Statute that the words must be given their natural
        meaning and must be understood in their ordinary or popular sense and
        each word must have its play. Natural and ordinary meaning of the words
        should not be departed from unless it is shown that the context in which E
        the words are used requires a different meaning. Under the Bombay
        Electricity Duty Act, 1958 (hereinafter referred to as 'the Act'), under
        Section 3(1), Electricity Duty shall be.levied and paid on the units .of energy
        consumed at the rates specified in the Schedule to the Act. In the
        Schedule-Part A provided the tariff for premises used for residential F
        purposes and Part B provided the tariff for premises used for business,
         trade, commercial undertaking or professional purposes. The said


-       Schedule of electricity tariff has been changed from time to time and in
         the case in hand we are concerned with the tariff which was effective from
         20th March, 1981. Under the aforesaid 1981 tariff, Category 'R' would
         apply to premises exclusively used as a private residential premises and G
         Category 'C' would apply, as a residuary category to premises which does
         not come within categories R, S, RC (LV) and SL. This being the position
         the question for consideration is whether the guest house maintained by
         the company for the use of its employees when they come to the city can
         be held to be a premise "exclusively used as a private residential premise" H
    1020                  SUPREME COURT REPORTS                 [1996] 2 S.C.R.

A so as to come within the Category 'R'? On a plain literal meaning being
     given to each of the word in the expression "exclusively used as a private
     residential premises" it is difficult for us to hold that the guest house
     maintained by a comp~ny or commercial underta~ing would come within
     the aforesaid expression. The aforesaid .expression connotes that the
     premises in question must be exclusively used as a residential premises
B
     which in other words would mean where the premise which is used by any
     person privately for its own residence for a sufficiently continued period
     and not a premise where a person can come and spend a day or a night
     and then go back. The guest houses are maintained by company or com-
     mercial undertaking on the other hand is a part of its commercial venture
C   .and such premises by no stretch of imagination can be held to be meant
     for exclusive use as private residential premises. The Division Bench of
     Bombay High Court in our considered opinion committed serious error in
     applying the test of profit making as well as the test of use of the word
     'private' in contradistinction to 'public', which in our opinion have no
D    relevance for interpreting the expression "exclusively used as a private
     residential premises". The context in which the aforesaid expression has
     been used for determining tariff under the Act, it can only apply when any
     premises is used as a private residential premises. The word 'exclusively'
     also must be given a rational meaning and viewed from that angle, we are
     of the considered opinion that the guest house maintained by a company
E    or commercial undertaking in the cities can't be held a premise which is
     exclusively used as private residential premise. Therefore, Category 'R' of
     the tariff cannot be held to be applicable. The appeals are accordingly
     allowed. The judgment of the Division Bench of Bombay High Court is set
     aside, the writ petitions filed by the respondents stand dismissed. There
F    will be no order as to costs.

    P.S.S.                                                    Appeals allowed.




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