Supreme Court of India

UNION OF INDIA AND ANR.versusRANCHI MUNICIPAL CORPN. RANCHI AND ORS.

Citation: 1996 INSC 273
Decided: 16 February 1996
Disposal: Appeal(s) allowed
Bench: K RAMASWAMYG B PATTANAIK

Holding

The municipality’s demand for service charges from the Railways is ultra vires, as Section 135 of the Railways Act is subject to Article 285 of the Constitution, and the earlier summary dismissal does not create res judicata.

Summary

The Ranchi Municipal Corporation demanded Rs 1,01,501 as service charges from the Railways for the years 1993‑94 and 1994‑95. The Union of India challenged the demand, and the Patna High Court upheld it. On appeal, the Supreme Court examined whether the municipality could levy such charges under Section 135 of the Railways Act, which is subject to Article 285 of the Constitution. The Court held that the municipality had no authority to demand service charges from the Union, making the demand ultra vires, and that no valid contract under clause (4) of Section 135 existed. It also ruled that the earlier summary dismissal of a related suit did not amount to res judicata. Consequently, the appeal was allowed, a writ was issued directing that any amount already paid could not be recovered, and no costs were awarded.

Issues considered

Whether the municipality can demand service charges from the Railways under Section 135 of the Railways Act.
Whether Section 135 is subject to the limitations of Article 285 of the Constitution.
Whether a contract under clause (4) of Section 135 exists between the Union and the municipality.
Whether a prior summary dismissal constitutes res judicata for the present controversy.

Legislation cited

Code of Civil Procedure, 1908s. Section 11
Constitution of Indias. Article 285
Railways Acts. Section 135

Subjects

service chargesultra viresRailways ActArticle 285res judicatamunicipal authoritycontractSupreme Courtappeal

Judgment

                UNION OF INDIA AND ANR.                                        A
                           v.
        RANCHI MUNICIPAL CORPN. RANCHI AND ORS.

                          FEBRUARY 16, 1996

           [K. RAMASWAMY AND G.B. PATTANAIK, JJ.]                              B

      Constitution of India, 1950/Railways Act:

      A1t. 285/ 135-Municipalit:y demanding payment of se1vice charges from
Railway-Held : It is ultra vires the power of the Municipality to demand       C
se1vice charges from Railways-S. 135 of Railways Act subject to the
provisions of Alt, 285.

      Code of Civil Procedure, 1908.

       S.11-Res-judicata-Summmy dismissal does not constitute res              D
judicata for deciding the controversy-More so when the recuning liability is
ultra vires the power.

      Union of India v. Puma Municipal Counsel & Ors., [1992] 1SCC100,
relied on.
                                                                               E
      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3646 of
1996.                                                       .

     From the Judgment and Order dated 15.5.95 of the Patna High Court
in C.W.J.C. No. 3223 of 1994 (R).
                                                                               F
     V.R. Reddy, Additional Solicitor General, A.K. Srivastava and B.K.
Prasad for the Appellants.

      M.P. Jha for the Respondents.

      The following Order of the Court was delivered :                         G
      Leave granted.

      We have heard learned counsel on both sides.

      The respondent-Municipality has made a consolidated outstanding          H
                                 761
    762                   SUPREME COURT REPORTS                    [1996] 2 S.C.R.

A demand for a sum of Rs. 1,01,501 for years 1993-94, 1994-95 on December
    16, 1993 towards the service charges. The appellants challenged the validity
    of the dema~d. On reference, the Division Bench in the impugned order
    dated May 15, 1995 in CWJC No. 3223/94 upheld the demand of the
    Municipality. Thus this appeal by special leave.

B          The controversy is no .longer res integra. This Court in Union of India
    v. Puma Municipal Council & ors., [1992] 1SCC100 had held that Section
    135 of the Railways Act is subject to the provisions of Article 285 of the
    Constitution. Therefore, the respondent-Municipality was restrained from
    demanding any payment by way of service charges from the Railways. Shri
C   M.P. Jha, learned counsel appearing for the Municipality sought to rely on
    clause (4) of Section 135 of the Railway Act which contemplates a contract
    between the Central Government and the Municipality and payment there-
    of on the basis of the said contract. In this case the contract now sought
    to be relied upon is only to relieve distress warrant pending disposal of the
    dispute in the High Court. Therefore, it cannot be construed that there is
D   any contract between the Union of India and the Municipality. In view of
    the fact that the Municipality has no right to demand service charges from
    the Union of India, the demand made by the Municipality is clearly ultra
    vires its power. It is true that earlier W.P. No. 2844/92 was filed and was
    dismissed by the High Court and the special leave was refused by this Court
E   on the ground of gross delay.

            It is now settled law that the sufilmary dismissal does not constitute
    res judicata for deciding the controversy. Moreover, this being recurring
    liability which is ultra vires the power, earlier summary dismissal of the case
    does not operate as a res judicata.
F
         The appeal is accordingly allowed. Writ is issued as prayed for.
    Whatever amount has been· paid by now cannot be recovered from the
    Municipality. No costs.

    G.N.                                                         Appeal allowed.

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