Holding

Rule III(d)(i) is ultra vires the corporation’s statutory authority and cannot be used to charge for water not actually supplied.

Summary

The Municipal Corporation of Greater Bombay fixed a water quota for Nagpal Printing Mills and, under Rule III(d)(i) of the 1976 Water Charges and Sewerage & Waste Removal Rules, billed the mill for a charge equal to one‑tenth of the quota when actual consumption fell short. The mill contested the charge, arguing that the rule allowed billing for water not actually supplied. The Bombay High Court struck down the rule as ultra vires, holding that Section 169 of the Bombay Municipal Corporation Act, 1888 permits charges only on water actually supplied and measured or estimated on sound guidelines. The Corporation appealed, contending the rule was within its rule‑making power. The Supreme Court upheld the High Court, finding that Rule III(d)(i) lacked any methodology for measuring water supplied and therefore exceeded the corporation’s authority. Consequently, the rule was declared invalid and the petition dismissed.

Issues considered

Whether Rule III(d)(i) of the Water Charges and Sewerage & Waste Removal Rules, 1976 is within the rule‑making power conferred by Section 169 of the Bombay Municipal Corporation Act, 1888.
Whether the corporation can levy water charges on the basis of a fixed quota without a prescribed method to measure actual water supplied.
Whether the bye‑laws fixing water quotas without guidelines are valid under the Act.

Legislation cited

Bombay Municipal Corporation Act, 1888s. 169, s. 276, s. 277, s. 461
Water Charges and Sewerage & Waste Removal Rules, 1976s. Rule III(d)(i)

Subjects

water supplymunicipal corporationrule‑making powerultra viresquotawater chargesmeasurementstatutory interpretation

Judgment

"' I

J
'1'
MUNICIPAL CORPORATION OF GREATER BOMBAY
A
v.
NAGPAL PRINTING MILLS & ANR.

MAR~H 17, 1988
•
B [SABYASACHI MUKHARJI ANDS. RANGANATHAN, JJ.]
A,
Bombay Municipal Corporation Act, 1888: ss. 169, 276, 277 and ;.
./61/Water Charges and Sewerage & Waste Removal Rules, 1976: Rule
lll(d)(i)-Water-Supply of-Determination of water char!(es-Cor- A.
'
poration empowered to levy charge only in respect of water actually
c
~
supplied and consumed-Rule III(d)(i) containing no methodology for
measuring water supplied-Held beyond rule making power of Cor-
poration.

Section 169 of the Bombay Municipal Corporation Act, 1888
D empowers the Standing Committee to make rules to charge for the
supply of water and by such rules to determine the water charges in lieu
of water tax based on a measurement or estimated measurement of the
quantity of water supplied. Section 276 provides for fixing of meters for
measurement of water supplied and maintaining the instruments in
proper order. Bye-laws framed under s. 461 in 1968 empowered the ~
Commissioner to fix a quota. Rule III(d)(i) of the Water Charges and
A
'l
E
Sewerage and Waste Removal Rules framed in exercise of the powers
given by ss. 169 and 276 of the Act which became effective in 1976
provided for charging for the shortfall between the quota and the -I
'., recorded consumption in respect of industries for which a quota has
' been fixed. '
.,.A\-
' F
The respondents were being charged for water upto June, 1977 on
the basis of their actual consumption. In July, 1977 they were sought lo
be billed for the difference between the charges on the quota basis
under the said rule and the actual consumption basis, which was J
objected to by the respondents. The writ petition filed by them in the
G High Court was rejected by a single Judge.

In appeal before the Division Bench it was contended that the >--...
Rule III(d)(i) of the Rules was ultra vires the rule-making power of the
Standing Committee of the Corporation being inconsistent with s. 169
of the Act. The High Court held that s. 169 empowers the Corporation
H to levy charge only in respect of the water that has in fact been supplied
274

t
MUNICIPAL CORPN. v. NAGPAL PRINTING MILLS [MUKHARJI, J.[ 275

to and consumed by the consumer and it is to be levied on the basis of A
measurement or estimated measurement, and struck down the rule.

~,:{ Dismissing the special leave petition ided by the Municipal
\ Corporation,

HELD: There being no methodology in Rule III(d)(i) of the B
) Water Charges Rules for measuring the actual water supplied, that rule
is beyond the powers of the Corporation. The High Court, was, there-

-
=,,

I
fore, right in striking it down. [278H; 279AJ

The Corporation cannot estimate and charge on the basis of water
A it makes available for use by a consumer. The supply referred to in s. C
169 of the Act, is a supply which is, in fact, supplied to the consumer
and consumed by it. It is only that supply which can be measured.
Where the measuring device has failed to record the correct consump-
tion it might be estimated. But that must be on sound guidelines
otherwise it would be arbitrary and mere. ipse dixit of the authorities
concerned. [278D-E] D

The bye-laws made in 1968 empowering the Commissioner to
fix a quota do not indicate any guidelines. That is bad and unwar-
ranted. \l278E]---i

CIVIL APPELLATE JURISDICTION: Special Leave Petition E
(C) No. 13154 of 1987,

From the Judgment and Order dated 16.9.1987 of the Bombay
High Court in Appeal No. 425of1981.

R.P. Bhatt and D.N. Mishra for the Petitioner. F

Shri Narain and Mrs. M. Karanjawala for the Respondents.
_,
The following Judgment of the Court was delivered by

••· j
SABYASACHI MUKHARJI, J. This petition for leave to appeal
under Article 136 of the Constitution is directed against the Judgment
and Order of the Division Bench of the High Court of Bombay, dated
G

September 16, 1987. The respondents were in the business of dyeing
and printing at Industrial Estate, Kandivali, Bombay. They had origi-

I' nally an 1/2 inch water connection in their premises. In 1971 they had
applied to the Municipal Cm;poration of Greater Bombay, for a lar_ger H
276 SUPREME COURT REPORTS 11988] ~ S.C.It

water connection. In 1975 they were given an l'h inch connection. It
A appears that on 24th September, 1975, according to the Corporation,
it fixed a water quota for the respondents in the figure of 27, 18,000
litres per month. This was, however, disputed by the respondents. But
the High Court proceeded upon the basis that this was the water quota
fixed for them.
B
Water Charges and Sewerage and Waste Removal Rules of the A_
Greater Bombay became effective from 1st April, 1976. These Rules
were framed in exercise of the powers given by sections 169 and 276 of
the Bombay Municipal Corporation Act, 1888 (hereinafter called 'the
Act'). Rule III(d)(i) provides as follows: --\
c "(d)(i) In case of industries for which a quota of water has
been fixed, if the recorded or computed consumption falls
short of 9/lOth of the quota of water for any month, a
consumption equal to 9/lOth of the quota of water shall be
charged."
D
It appears, upto June, 1977 water charge bills were sent to the
respondents on the basis of their actual consumption. In July, 1977 the
respondents received supplementary bills for the difference between
the charge on the quota basis under the said rule and the actual con-
sumption basis. This was objected to by the respondents. The respon-
E dents contended that though they had kept their taps open for the full
24 hours of the day, water was not avrulable to make up anywhere near
the quantity of the quota. The respondents asserted that the Corpora-
tion had agreed to verify this. The Corporation threatened to cut off
the respondents' water supply. The respondents filed a writ petition in
the High Court of Bombay to restrain the Corporation from doing so.
F
The learned Single Judge of the High Court found no substance
in the case of the respondents. Rule nisi was, therefore, discharged.
Th·e respondents went up in appeal before the Division Bench.

It was contended that the said rule was ultra Vires the rule-mak-
G ing power of the Standing Committee of the Corporation being incon-
sistent with section 169 of the Act. It was further urged that the Corpo-
ration was, in the meanwhile, not justified in charging on the basis of ).,.
the quota because it was in no position to supply the quantity of water
fixed. It was also urged that the said rule did not provide any guideline
in respect of the industries to which it was to be applied and as to how
H the quota was to be fixed. Section 169 of the Act provides as follows:
MUNICIPAL CORPN. v. NAGPAL PRINTING MILLS IMUKHARJI, J.J 277

"169.(1) Notwithstanding anything contained in section A
128, the Standing Committee shall, from time to time,
make such rules as shall be necessary for supply of water
and for charging for the supply of water and for any fit-
tings, fixtures or services rendered by the Corporation
under Chapter X and shall by such rules determine-
B
) (i) x x x

- (ii) a water charge in lieu of a water tax, based on a mea-
surement of estimated measurement of the quantity of
water supplied; ... "
.(
Sections 276 and 277 provide as follows:
c
i
"276.(1) Where water is supplied by measurement, the
Commissioner may either provide a meter and charge the
consumer for the same such rent as shall from time to time
be prescribed in this behalf by the standing committee, or D'
may permit the consumer to provide a meter of his own of
such size, material and description as the Commissioner
shall approve for this purpose:

_j (Provided that if such consumer is an occupier of any pre-
' mises, he shall not be provided with a meter or permitted to E
provide himself with a meter of his own, unless he complies
with such conditions as may be prescribed by the Commis-
' sioner).

(2) The Commissioner shall at all times keep all meters
and other instruments for measuring water, let by him for F
hire to any person, in proper order for correctly registering
the supply of water, and in default of his so doing such
person shall not be liable to pay rent for the same during
such time as such default continues.

277. Where water is supplied by measurement, the register G
of the meter or other instrument for measuring water shall
be prima facie evidence of the quantity consumed."

It may be mentioned that section 461 of the Act empowers the
Corporation to make bye--laws, not inconsistent with the Act, for reg-
ulating all matters _and things connected with the supply and use of H
l'I
fl'
~
'fit'

278 SUPREME COURT REPORTS [1988] 3 S.C.R. • ••

~
A water. It further appears that .by an amendment in 1968, bye-laws
framed under section 461(a) and (b) empower regulating all matters ~;

and things connected with.the supply and use of water, and is defined
to mean maximum quaptity of water any consumer or class of consum- 1
ers is entitled to receive. It is to be fixed by the Municipal Corporation
;,
by Order on the basis of an assessment of the requirement. It further
B ;
stipulates that 110 consumer in respect of whom an Order has been
made, may consume water in excess of such quantity. ~

The High Court held that the rule was framed, in terms, in exer-
cise of the powers given by sections 169 and 276. Section 169 specifi'
cally empowers the Standing Committee to make rules to charge for ---\
-•
c the supply of water and by such rules to determine the water charges
'
"based on a measurement or estimated measurement of the quantity
of water supplied." The High Court has emphasised the past tense of ~
the word "supply", which is important and refers to something already
done. We are in agreement with the High Court's view that it empow-
ers the Corporation to levy charge only in respect of water that has in i'.
D r
fact been supplied to and consumed by the consumer and it is to be
levied on the basis of measurement or estimated measurement. This has
been conferred by the terms of Section 277 of the Act. It is only that
supply which can be measured. Where the measuring device has failed
to record the correct consumption, it may be estimated. But that must
E
be on sound guidelines otherwise ii would be arbitrary and mere ipse
dix(t of the authorities concerned. The bye-laws made in 1968 here
>--
empower the Commissioner to fix a quota. But no guideline is indi'
cated. That is bad and unwarranted.

It appears that the supply referred to in Section 169 of the Act, is ~

a supply which is, in fact, supplied to the consumer and consumed by it. c
F ~ ~
It is only that supply which can be measured. We are in agreement '
with the High Court that where the measuring device has failed to
record the correct consumption, it may be estimated. The circumst-
ances in which the measuring device could be said to have failed, the
modes of estimation in such circumstances- are provided for by rule
III(a), (b) and (c) of the Water Charges Rules. The Corporation can
G ~.
not estimate and charge on the basis of water it makes available for use
by a consumer. There is no warrant for such a construction.
,f--
Therefore, there being no methodology in Rule III (d)(i) of the
Water Charges Rules for measuring the actual water supply, that rule
is beyond the powers of the Corporation. The High Court was, there- :'~
H
MUNICIPAL CORPN. v. NAGPAL PRINTING MILLS IMUKHARJI, J.I 279

fore, right in striking down the Rule III(d)(i) of the said Rules as A
effective from 1st April, 1976. If there is no supply, the question of
measurement cannot arise by estimate or otherwise.

There is no ground to interfere. The petition, therefore, fails and
is dismissed.
B
J P.S.S. Petition dismissed.