NAGAR NIGAM, ALLAHABAD THROUGH ITS MUNICIPAL COMMISSIONERversusLIFE INSURANCE CORPORATION OF INDIA & ORS.

                              [2017] 7 S.C.R. 518



A             NAGAR NIGAM, ALLAHABAD THROUGH ITS
                    MUNICIPAL COMMISSIONER

                                       v.

        LIFE INSURANCE CORPORATION OF INDIA & ORS.
B
                        (Civil Appeal No. 7460 of2009)
                               AUGUST 03, 2017
        [R.F. NARIMAN AND SANJAY K.ISHAN KAUL, JJ.I
C          Uttar Pradesh Municipal Corporation Act, 1959 - ss.438,
  452, 541 - Licence Fee - Levy of - On business of insurance -
  Propriety - Held: s.438 deals with licence fee which is chargeable
  for activities related.to functions of Municipal Corporations, which
  activities refer to premises in which goods or animals are kept for
  sale or any other purpose, and to premises in which manufacture of
D goods takes place - Licence fee can be levied uls.438(d) only if
  any trade or operations connected with any trade are specified in
   bye-laws and expression 'trade' would not include business of
   insurance.
              CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7460
E   of2009.
            From the Judgment and Order dated 19.01.2005 of the High
    Court of Judicature at Allahabad in Civil Misc. Writ Petition Nos. 386,
    16861, 16948, 13287, 14251, 14253and14255 of2004
              T. N. Singh, Adv. for the Appellant.
F
            B. B. Sawhney, Sr. Adv. Ms. Indra Sawhney, Aditya Shandilya,
    Advs. for the Respondents.
              The Judgment of the Court was delivered by
            R.F. NARIMAN, J. I. Mr. T.N. Singh, learned counsel
G   appearing on behalf of the appellant-Nagar Nigam has assailed the
    judgment of the Allahabad High Court in which the respondent-Life
    Insurance Corporation of India was held not to be covered by the
    expression "insurance company" under a notification dated 30.01.1999
    issued by the appellant.
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                                       518
NAGAR NIGAM, ALLAHABADTHR.ITS MUNICIPAL COMMR v.                             519
LIFE INSURANCE CORPORATION OF INDIA [ R. F. NARIMAN, l].

        2. The judgment under appeal has held:                               A
      "We also notice that in Item No. 25 of the Schedule annexed with
      the Nagar Nigam, Allahabad Notification dated 13.01.99/
      Annexure-2 to the writ petition without an exception various
      establishments, undertakings etc. are all in essence pure and simple
      business or commercial units. In category Ga, Serial No.l of the       B
      list refers to Finance Company/Chit Fund. It is followed by Item
      No.2 referring to Insurance Company '(each Branch)'. It goes
      to show that respondents provided license fee with respect to
      business of a Company in the nature of 'Financial Companies'
      'Chit Fund Companies' and the like Insurance Companies dealing
      in general insurance (i.e. other than Life Insurance-exclusively
                                                                             c
      carried on by LIC of India).
        Aforesaid conclusion is further discernible from the fact that
      the list does not embarrass in itself any charitable hospital or
      government hospital or other likewise establishments.
                                                                             D
        In that view of the matter we do find a clear distinction between
      Insurance Company (carrying on business under Insurance Act
      1958) vis-a-vis the Life Insurance Corporation carrying business
      of life insurance under Life Insurance Corporation of India Act,
      1956. Otherwise also Principle of Interpretation. It is an accepted
                                                                             E
      principle of Statutory Interpretation that in a case where two
      interpretations of a provision imposing tax/fee is possible, Court
      should accept the interpretation which leans in favour of the
      assessee i.e. the person who is sought to be burdened."
        3. Mr. B.B. Sawhney, learned Senior Counsel appearing on
                                                                             F
behalf of the respondents has sought to support the judgment under appeal
by advancing slightly different arguments, which we have permitted him
to advance. He has referred to the statutory authority to levy licence
fee and read to us Section 438 of the Uttar Pradesh Municipal
Corporations Act, 1959, which reads as follows:-
                                                                             G
      "438. Certain things not to be kept, and certain trades and
      operations not to be carried on without licence.- ( 1) Except under
      and in confonnity with the terms and conditions of a licence
      granted by the Municipal Commissioner, no person shall-

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520            SUPREME COURT REPORTS                          [2017) 7 S.C.R.


A           (a) keep in or upon any premises any article specified in the bye-
            laws in any quantity or in excess of the quantity specified in the
            bye-laws as the maximum quantity of such article which may at
            one time be kept in or upon the same premises without a licence;
            and
 B          (b) keep in or upon any building intended for or used as a dwelling
            or within fifteen feet of such building cotton, in pressed bales or
            boras or loose, in quantity exceeding four hundred-weight;
            (c) keep, or allow to be kept, in or upon any premises horses,
            cattle or other four-footed animals-
 c          (i) for sale,
            (ii) for letting out on hire,
            (iii) for any purposes for which any charge is made or any
            remuneration is received, or
 D
            (iv) for sale of any produce thereof;
            ( d) carry on or allow to be carried on, in or upon any premises-
            (i) any trade or operations connected with any trade specified in
            the bye-laws,
 E
            (ii) any trade or operation which is dangerous to life or health or
            property, or likely to create a nuisance either from its nature or by
            reason of the manner in which or the conditions under which, the
            same, is or is proposed to be carried on;
            (e) carry on within the City, or use any premises, for the trade or
 F
            operation of a farrier."
              He has referred to and relied upon sub-clause (d) of Section
      43 8 which states that a licence fee can be levied only if any trade or
      operations connected with any trade specified in the bye-laws is there.
 G    According to him, the expression "trade" would not, by any stretch of
      imagination, include the business of insurance since what is referred to
      in Section 438 is keeping for sale or otherwise goods or animals or the
      manufacture of goods in premises. To buttress his submission, he has
      referred to Section 2 sub-sections (78), (79) and ( 80) which reads as
      follows:-
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NAGAR NIGAM, ALLAHABADTHR.ITS MUNICIPAL COMMR v.                               521
LIFE INSURANCE CORPORATION OF INDIA [ R. F. NARIMAN, J.].

      "(78) "trade effluent" means any liquid either with or without           A
      particles of matter in suspension therein, which is so wholly or in
      part produced in the course of any trade or industry carried on at
      trade premises and in relation to any trade premises, means any
      such liquid as aforesaid which is so produced in the course of any
      trade or industry carried on at those premises, but does not include
                                                                               B
      domestic sewage;
      (79) "trade premises" means any premises used or intended to be
      used for carrying on any trade or industry;
      (80) "trade refuse" means and includes the refuse of any trade,
      manufacture or business;"                                                c
        4. When the Court questioned learned counsel for the appellant
as to this interpretation, the answer it got was that bye-laws can be
framed, in any event, under Section 541 and, in particular, sub-clause
(41) which reads as follows:-
      "(41) fixing offees for any licence, sanction or permission to be        D
      granted by or under this Act;"
        5. We were also refen-ed to Section 452 which reads as follows:-
      "452. Licence fees, etc.- The Municipal Commissioner may charge
      a fee to be fixed by bye-law for any licence, sanction or permission
                                                                               E
      which he is entitled or required to grant by or under this Act."
         6. It will be noticed that both the aforesaid provisions, namely,
Section 541 as well as Section 452 only refer back to a provision in the
Act which specifies that a levy may be made for licence fees. We were
not 1:eferred to any provision other than Section 438 for the purpose of
                                                                               F
locating such levy.
         7. In our opinion, learned counsel for the respondents appears
to be correct in his submission, inasmuch as Section 4 38 deals with licence
fee which is chargeable for activities related to functions of Municipal
Corporations, which activities refer to premises in which goods or animals
                                                                               G
are kept for sale or for any other purpose, and to premises in which
manufacture of goods takes place. This becomes further clear when
we refer to Section 438(8) of the Act which reads as under:-
      "(8) Nothing in sub-sections ( 6) ad (7) shall be deemed to apply to
      mills for spinning or weaving cotton, jute, wool or silk to any other
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522            SUPREME COURT REPORTS                        [2017] 7 S.C.R.


A           large mill or factory which the Municipal Commissioner may from
            time to time with the approval of the Executive Committee,
            specially exempt from the operation thereof."
              8. Mr. B.B. Sawhney, learned Senior Counsel, also referred to
      Section 541(20) which reads as under:-
B           "20. the control and supervision of all premises used for any of
            the purposes mentioned in Section 438 and of all trades and
            manufactures carried thereon and the prescribing and regulating
            of the construction, dimensions, ventilation, lighting, cleansing,
            drainage and water-supply of any such premises;"
 c            This provision also has direct reference to Section 438 and
      supports the interpretation that he has suggested.
              9. In the premises, we dismiss the appeal, but for the reasons
      stated by us.

D
      Ankit Gyan                                               Appeal dismissed.