Holding

The Supreme Court held that the newspaper notice informing the public that the rules could be inspected and purchased at the municipal office fulfilled the publication requirement of section 77 of the Bombay Municipal Boroughs Act, 1925.

Summary

The Rajkot Municipality framed draft rules for levying rates on buildings and lands, obtained State Government sanction, and published a newspaper notice under section 77 of the Bombay Municipal Boroughs Act, 1925 stating that the rules could be inspected and purchased at the municipal office. Sonik Industries challenged the validity of the rules, arguing that the rules were not properly published because they were not printed in the newspaper. The trial court declared the rules invalid; the High Court reversed that decision, holding that the publication requirement was satisfied. On appeal, the Supreme Court examined whether the notice, coupled with the availability of the rules for inspection, fulfilled the statutory publication mandate. It concluded that the notice satisfied the requirement of section 77, as the mode of publication need only allow reasonable persons to obtain the rules with due diligence, and therefore dismissed the appeal.

Issues considered

Whether a newspaper notice stating that the sanctioned rules are available for inspection and purchase at the municipal office satisfies the publication requirement of section 77 of the Bombay Municipal Boroughs Act, 1925.
Whether the mode of publication prescribed by section 77 is mandatory or can be complied with by substantial compliance.
Whether the period prescribed in section 77 for imposing the tax is complied with when the rules are not printed in the newspaper.

Legislation cited

Bombay General Clauses Acts. 24
Bombay Municipal Boroughs Act, 1925s. 102, s. 192, s. 75, s. 76, s. 77

Subjects

municipal taxationpublication requirementsection 77Bombay Municipal Boroughs Actsubstantial compliancetax levynoticeinspection

Judgment

59

A
SONIK INDUSTRIES, RAJKOT
v.
MIJNICIPAL IDRPORATION OF THE CITY OF RAJKOT

APRIL 2, 1986
B
[R.S. PATHAK, O. CHINNAPPA REDDY AND R.B. MISRA, JJ.]

Bombay Municipal Boroughs Act, 1925, section 77, scope
of - Whether the rules for the levy of a rate on buildings and
_., lands can be said to be published under section 77 of the Act,
if the notice published in a newspaper reciting the sanction
·,.l of the State Government to the rules mentions that the rules c
themselves are open to inspection in the Municipal office and
J- that copies of the rules can also be purchased there.

The Rajkot llllnicipality framed Draft rules for the levy
of rates on buildings and lands in Rajkot. The Draft Rules
were published and objections were invited and, thereafter the D
State Government accorded its sanction to the rules. The issue
dated November 28, 1964 of "Jai Hind", a Gujarati newspaper
published from Rajkot carried a Notice purporting to be under
section 77 of the Bombay Municipal Boroughs Act, 1925 as
adopted and applied for the information of persons holding
buildings and i111DOvable property within the Municipal limits E
.... of Rajkot that the Municipality had resolved to enforce the
"Rules to the Rajkot Borough Municipality for the levy of Rate
(Tax) · on buildings and lands" sanctioned by the State
Government of Gujarat, with effect from January 1, 1965.
Thereafter an assessment list was prepared and steps were
taken to demand the tax. F

The appellants, a registered partnership firm instituted
a suit in the Court of the Civil Judge, Senior Division Rajkot
for a declaration that the aforesaid Rules were invalid. The
Trial Court decreed the suit. An Appeal against the decree of
the Trial Court was dismissed by the Extra Assistant Judge, G
Rajkot. A Second Appeal preferred by the Municipality was
referred to a larger Bench of the High Court consisting of
learned Judges who held that the conditions of section 77 had
been complied with. In accordance with the said opinion, the
learned Single Judge allowed the Second Appeal. Hence the
appeal by Special Leave.
H
60 SUPRE.'1E COURT REPORTS [19861 2 s.c.R.

A
Dismissing the appeal, the Court,

HELD : 1,1 The general principle is that if the llklde of r
publication adopted is sufficient for persons affected by the
rules with reasonable diligence to be acquainted with them,
publication of the Rules has taken place in contemplation of
the law. (65 D-E]
B
1.2 In the case of Municipal taxation, the conventional
procedure enacted in most statutes requires publication of the
proposed rules providing for the levy and inviting objections
thereto from the inhabitants of the Municipality. Thereafter
when the tules are finalised and sanctioned by the State ~
c Government, it is mandatory that they be published so that the
inhabitants of the Municipality should know how the levy A
affects them in its final form. The rules, and consequently
the levy, take effect only upon publication in accordance with
the statute. The object of the requirement is that a person
affected by the levy 111.1st know precisely the provisions of the
levy and its consequences for him. [64 D-F]

1.3 The requirement of section 77 was complied with
inas1111ch as information was thereby given to all persons
holding buildings and immovable property within the Municipal
E
limits of Rajkot that the rules mentioned therein had been
sanctioned by the State Government and that the rules could be
inspected in the Municipal office. The mandatory requirement
of section 77 was that the rules should be published, which
requirement the notice satisfies. The mode of publishing the
rules is a matter for directory or substantial compliance. It
is sufficient if it is reasonably possible for persons _r·
..
F
affected by the rules to obtain, with fair diligence,
knowledge of those rules through the mode specified in the '
notice. Had the Act itself specified the mode in which the
rules were to be published, that mode would have to be adopted
for publishing the rules. In the opinion of the Legislature,
that would have been the mode through which the inhabitants of
the Municipality could best be informed of the rules. (64 H;
65 A-D]
1.4 Section 77 provides the final stage of the procedure
enacted in sections 75 to 77 for imposing a levy •. The period
referred to in section 77, after which alone the tax can be
imposed, is intended to enable persons affected by the levy to
acquaint themselves with the contents of the rules, and to
\
SONIK INDUSTRIES v. MUNICIPAL CORPN. [PATHAK, J.] 61

A
take preparatory measures for compliance with the rules. The
period has not been particularly prescribed in order to enable
a person to. take advantage of the benefit of section 102
before the tax.is imposed. [66 B-D]

Chunni Lal v. The Municipal Board, Shri Madhopur, [1956) B
I.L.R. Rajasthan 568; Gokaldas Amarshi v. Porbandar City
!imicipality; [1971] 12 G.L.R. 603; Comnissioner of
Sales-tax, Uttar Pradesh v. The Modi Sugar Mills Ltd. , [ 1961 ]
2 s.c.R. 189; The . Municipal Corporation Bhopal, H.P. v.
Mis babul Hasan and Ors. , [ 1972) 1 S. C. c. 696; Govindlal
Chhaggan Lal Patel . v. The . Agricultural Produce Market
c:c-ittee, Godhra and Others, [1976) 1 S.C.R. 451; and c
1'tlnicipal Conndl, Rajalumndry v. Nidamarti Jaladurga
Prasadarayudu and Anr., 1926 A.I.R. Madras 800 referred to.

OBSERVATION

(It would have been more desirable for the Municipality D
to have published the rules in the Newspaper along with the
notice reciting the sanction, though the omission to do so and
notifying instead that inspection of the rules was available
in the V.unicipal office still constitute sufficient compliance
with the law.) ·
~ E
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1242 of
1980.

From the Judgment and Order dated 2nd May, 1980 of the
Gujarat High Court in Second Appeal No. 110 of 1978.
y T.U. Mehta, D.H. Kothari, S.K. Dholakia and R.C. Bhatia
F

for the Appellant.
/
Dr. Y.s. Chitale, Vimal nave and H. Mehta for the
Respondent.
G
The Judgment of the Court was delivered by

PAnIAK, J. This appeal by special leave raises the
question whether the rules for the levy of a rate on buildings
and lands can be said to be published under s.77 of the Bombay
Municipal Boroughs Act, 1925 i f the notice published in a H
62 SUPREME COURT REPORTS [1986] 2 S.C.R.

A
newspaper reciting the sanction of the State Government to the \-
rules mentions that the rules themselves are open to
inspection in the Municipal office and that copies of the r
rules can also be purchased there.

The Rajkot Borough Municipality framed Draft rules for
the levy of rates on buildings and lands in Rajkot. The Draft
B
rules were published and objections were invited, and there- ;.
after the State Government accorded its sanction to the rules.

c
In the issue dated November 28, 1964 of "Jai Hind", a Gujarati
newspaper published from Rajkot, a notice was published
purporting to be under s.77 of the Bombay Municipal Boroughs
Act, 1925 as adopted and applied to the Saurshtra area of the~·
-
State Gujarat (hereinafter referred to as "The Act"), for the
information of persons holding buildings and illDllOvable -'.
property within the Municipal limits of Rajkot that the
Municipality had resolved to enforce the "Rules of the Rajkot
Borough Municipality for the levy of Rate (Tax) on Buildings
and Lands" sanctioned by the State Government of Gujarat with
D
effect from January 1, 1965. Notice recited the date and
serial number of the sanction. It also stated :

"These rules can be inspected at the office of the ~
Municipality on all days other than Holidays during
office hours; moreover copies of the rules can be
E
purchased at the Municipal Office".

It appears that thereafter an assessment list was prepared and
steps were taken to demand the tax. 't'
r
The appellant, a registered partnership firm, instituted~
F
a suit in the Court of the learned Civil Judge, Senior ·
Division, Rajkot, praying for a declaration that the aforesaid
rules were invalid, and that the consequent assessment list
and the related notices of demand were without authority of
law. A permanent injunction was also sought to restrain the
Municipality from giving effect to the rules. The trial court
G
decreed the suit and granted the declaration and injunction ._
prayed for. An appeal against the decree of the trial court y
was dismissed by the learned Extra Assistant Judge, Rajkot. A
second appeal was filed by the Municipal Corporation of Rajkot
(the Municipal Borough of Rajkot having been so renamed) in
the High Court, and at the time of admission a learned Single
H
SONIK INDUSTRIES v. MUNICIPAL CORPN. [PATHAK, J.) 63

A
'""<'Judge of the High ·Court fornulated three questions of law
arising in the appeal. The appeal was ref erred subsequently to
a larger Bench. A Bench of three learned Judges of the High
Court took up the case and observed at the outset that the
only question which required consideration at that stage was
whether the courts below had erred in striking down the rules B
on the ground that they had not been published as required by
-1-s.77 of the Act. The learned Judges held that the courts below
had taken an err0neous view of·the statute and that, in their
opinion, the conditions of cs.77· of the ·Act had been satisfied
in the case. The case was sent back to. the learned Single
Judge with that opinion for disposal in accordance with law.
c
Chapter VII of the Act provides for Municipal taxation.
\While .the different taxes .which can be levied by a Munici-
pality are enumerated in s. 73, sections 75 to 77 detail the
procedure to be observed when the Municipality proposes to
levy a tax. Before imposing.a tax the Municipality is required
by s. 75 to pass a resolution deciding which one or other of D
the taxes specified in s. n would be imposed and to approve
rules specifying the classes ·of persons or property. or both
which are proposed· to be . made liable, the amunt or rate
proposed for assessment, the basis of valuation on which such
rate on buildings and lands' is to be imposed and other related
·::>---matters. The rules so approved . by the Municipality are E
required to be published with a notice in a prescribed form.
Objections are invited from the inhabitants of the.Municipal
borough, and . the Municipality is required to take the
objections into consideration, and if it decides to pursue the
levy it submits the objections with its opinion thereon and
."-'any 1DOdifications proposed by it, together with the notice and F
J rules to the State Government. Section 76 empowers the State
Government to sanction the rules with or without mdif ication,
or to return them to the Municipality for further consider-
ation. Section 77 provides : /

"77. · Rules sanctioned under section 76 with the G
lllOdifications and· conditions, if any, subject to
which the sanction is given shall be published by
the Municipality in the Municipal borough, together
with a notice reciting the sanction and the date
and serial number thereof; and the tax as
prescribed by the rules ~o published shall, from a H
64 SUPREME COURT REPORTS [1986) 2 s.c.R.

A date which shall be specified in such notice and'-
which shall not be less than one ioonth from the
date of publication on such notice, be imposed
accordingly, ••••••••••••"

.It is contended by learned counsel for the appellant that
the rules sanctioned by the State Government should have been
B published along with the notice reciting the sanction in th;1-
same newspaper and there was no publication for the purposes
of s. 77 i f the notice merely mentions that the rules can be
inspected in the Municipal Off ice and that copies of the
rules can be purchased. Our attention· is invited to s.192
which provides for the mode of service of notice under the
c Act, and it is urged that the publication of the rules in this
case is not in conformity with any of the modes prescribedT°"
there~n. It is contended that the provisions of s.77 call for
strict construction inasll1lch as the rules are intended _to levy
a tax on the inhabitants of the Municipality.

D In the c·ase of Municipal taxation, the conventional
procedure enacted in ioost statutes requires publication of the
proposed rules providing for the levy and inviting objections
thereto from the inhabitants of the Municipality. Thereafter
when the rules are finalised and sanctioned by t.he State
Government, it is mandatory that they be published so that the~ .
E . inhabitants of the . Municipality should know how · the levy
effects them in its final form. The rules, and consequently
the levy, take effect only upon publication in accordance.with
the statute. The object of the requirement is that a person
affected by the levy !l11St know precisely the provisions of the
'·levy and its consequences for him. Section 77 requires that.,.
F the sanctioned rules should be published by the Municipality(
in the Municipal borough together with the notice reciting the
sanction. The notice published in /
the newspaper mentioned . that
the "Rules of Rajkot Borough Municipality for the levy of Rate
(Tax) levied on Buildings and Lands" had been sanctioned by
the State Government and the notice recited·also the date and
~
.v serial number of the sanction. It was open to the Municipality
to publish the sanctioned rules also in the newspaper, but
what it did was to state in the notice that the rules could'be
inspected in the Municipal office, and also that copies of the
rules could be purchased at the Municipal Office. In our
opinion, the requirement of s.77 was complied with inasll1lch as
•
H
SONIK umusnnES v. MUNICIPAL CORPN •. [PATHAK, J. I 65

~ A
-: I information was thereby given to all persons holding buildings
and im::iovable property within the Municipal limits of Rajkot
that the rules mentioned therein had been sanctioned by the
State Government and that the rules could be inspected in the
Municipal Office. The mandatory requirement of s.77 was that
the rules : should be· published and it seems to us that the .
B.
notice .. satisfies that requirement. The mode of publishing the·
rules is a matter for directory or substantial compliance. It
is sufficient ·u it· is' reasonably poss-ible for persons affect-
ed by the rules to obtain, with fair diligence, knowledge of
those rules through the mode specified in the.notice~ Had the
Act itself specified the mode. in which the rules were to be
published, that. mode would have to be'. adopted· for publishing
. the . rules. In the opinion of the Legislature, that was the
mode through which the inhabitants of . the Mu~iClpality ·could
best.be informed· of the,rules. But the Act· is· silent as· to
· this•. Section 102 .specifies the Jll)des . iri . which' service of a
notice contemplated by · the Act should: be . served.· There· is
nothing in the section prescribing the mode for publishing the D
rules in question here.· Nor does s.24~of _the .. Bombay General
Clauses Act help us~ We rust,. therefore, fall ··back upon the
general ·principle that if the Jll)de of publication adopted is
sufficient for persons, affected by the rules, with reasonable
diligence to be acquainted with them, publication of the rules ·
has .taken place in contemplation:of law. It is nec~ssary to E
e"l'hasise that we are dealing with··, a ·stage defining the ·final
:shape of the rules,· after obj~c:tiotis ·to the draft rules have·
been considered and the ·State Government · has accorded its
sanction.

Learned counsel forthe appella~t' and learned counsel for
'"", .. the F
1·
Interveners have referred us to s. ·102 of -the Act, .which
empciwers the State Government on complaint made·· or otherwise·
that any tax leviable by the Municipality is unfair in its
·, incidence, or that the levy thereof; of any· part thereof, is
obnoxious to the interest of the general public:, to require
the Municipality to take measures for removing any objection G
which appears to it to exist to. the said tax •. If, within the
~.: period so·. fixed, such .requirement is 'not ·carried into effect
to the satisfaction of the · State Govei::nment, it · may, by
notification in the Official Gazette, suspeild the levy of the
tax, or of sue:.~ part thereof, until such time as the objection
thereto is re100ved. It.' is urged that the rules published under. · H
66 SUPR&'IE COURT REPORTS [1986) 2 s.c.R.

A
s.77 of the Act are still open to challenge under s.102 of the
Act and it is _for that reason that s. 77 provides that the
notice published thereunder should prescribe a date, not less
th.in one month from the date of such publication, as the date
on which the tax as prescribed by the rules shall be imposed.
It is said that this period is intended to enable persons
B
. affected by the levy .to object again under s.102 of the Act,
· and therefore the rules must be : set forth in the newspaper
itself. We are unable to agree. To our mind, s.77 provides the
final stage_of .the procedure enacted in sections 75 to 77 for
imposing ·a levy. The period ref erred to in s. 77, after which
alone the tax can be imposed, is intended to enable persons
C· affected.by the levy to acquaint themselves with the contents
of the rules, and to take preparatory measures for compliance
with the. -rules. The period has not been particularly
prescribed · in order to enable ·a person to , take advantage of
the benefit of s.102 before the· tax is imposed. We are of
opinion /that it would have been more desirable. for the
D
Municipality to have published the rules in the newspaper
along with the notice reciting_the sanction, but while saying
so we are unable to hold that its omission to do so and
notifying instead· that inspection of the rules was available
in ·the Municipal Office does not constitute sufficient
compliance with law.
E
Reliance was placed by the appellant on Clmnni Lal v. The
Municipal Board, Shri Madhopur, [1956) I.L.R. Rajasthan 568
before us. In that. case, on a difference of opinion between
'· two. learned Judges of the Rajasthan High Court, a third.
'learned Judge of the High Court held that the provision for
inspection of the rules· in the Municipal ,Office did not
F
constitut~ · publication withiri the meaning of· s.62 of the Y
Rajasthan Town Municipalities Act, 1951. The High Court in
that - case was influenced by the particular . evidentiary
material before it, on the_ basis rQf which it reached the con-
clusion that it was not reasonably possible for a member of
G the ·public to acquaint himself with the contents of the rules.
-...__No such difficulty has been placed before us. Our attention
was also invited to Gokaldas Amarshi v. Porbandar City M.mici-
pality, [1971) 12 G.L.R. 603 but "in that case the. High Court
was concerned with the stage of publication of the draft
rules, that is to say the preliminary procedure enacted under
H
the Act before imposing a tax. Learned counsel for the
SONIK INDUSTRIES v. MUNICIPAL CORPN. [PATHAK, J.] 67

A
~,appellant has referred to Coon:lssioner of Sales-tax, Uttar
Pradesh v. Modi Sugar Mills Ltd., [1961] 2 s.c.R. 189, The
Municipal Corporation Bhopal, H.P. v. Misbahul Hasan and Ors.,
[1972] 1 s.c.c. 696, Govindlal Cbhaggan Lal Patel v. The Agri-
cultural Produce Market CoDlllittee, Godhra and Ors., [1976] 1
S.C.R. 451 and ~cipal Council, Rajahaundry v. Nidamarti B
Jaladurga Prasadarayudu and Anr. , [ 1926] A. I. R. Madras 800,
, but nothing said therein appears to us to be of any assistance
to the appellant in this case.

There is no force in this appeal and it is accordingly
dismissed with costs.
,A_ c

S.R. Appeal dismissed.

-
~