1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No(s). 2511/2011
THE MUNICIPAL COUNCIL, RAGHOGARH & ANR. …Appellant(s)
VERSUS
NATIONAL FERTILIZER LTD. & ORS. …Respondent(s)
WITH
Civil Appeal No. 2512/2011
THE MUNICIPAL COUNCIL, RAGHOGARH & ANR. …Appellant(s)
VERSUS
GAS AUTHORITY OF INDIA LIMITED & ORS. …Respondent(s)
JUDGMENT
N.V. RAMANA, J.
1. These two Appeals arise out of a common Judgment
2
passed on 3rd August, 2007 in First Appeal Nos.1 of 1996 and 175
of 1995, respectively, by the High Court of Madhya Pradesh, Bench
at Gwalior.
2. The short question that arises for our consideration in
these appeals is whether the contesting respondents herein, i.e.
National Fertilizers Limited and Gas Authority of India Limited, are
liable to pay external development charges to the appellant—
Municipal Council as per its demand?
3. Both the contesting respondents in these appeals were
allotted forest lands within the municipal limits of the appellant
Council. Subsequently, the respondents were served with a notice
calling upon them to deposit external development charges @
Rs.5/- per sq. meter in consonance with Government of Madhya
Pradesh, Housing and Environment Department, Notification No.
F.3-39/32/85, dated 28-11-1985. Raising objections, respondents
challenged the notices by filing Civil Suits before the District Judge,
Guna, Madhya Pradesh contending that they are Central
Government entities and would not come under the purview of the
said Notification and hence sought declaration and permanent
injunction restraining the appellant from demanding external
3
development fee from them.
4. The District Judge, Guna by separate judgments dated
11th October, 1995 decreed the Suits in favour of respondents and
declared that the defendants (appellant and proforma respondents
herein) jointly or severally have no right to recover amount by name
of external development fee and no amount shall be recovered from
the plaintiffs (respondents herein) in the form of external
development fee.
5. Against the said judgment of the District Judge, the
appellant moved the High Court by way of First Appeals challenging
the decree that the Suit has been filed before expiry of period of
notice under Section 80, CPC and no Suit is maintainable against
the Municipal Council without notice under Section 319 of the
Municipalities Act. The other stand taken by the appellant was that
since the plaintiffs are avoiding recovery of external development
fee, therefore, without payment of ad valorem court fee suit ought to
have been dismissed or the trial Court should have rejected the
plaint for insufficient payment of court fee.
6. The Division Bench of the High Court by judgment dated
4
12th May, 2005 allowed the First Appeals and set aside the decree
passed by the trial Court. The High Court, however, without giving
its opinion on the merits, held that both the Suits have not been
properly valued and notice issued was not one under Section 80,
CPC and Suits as filed were not maintainable. In the absence of
notice under Section 319 of the Madhya Pradesh Municipalities Act,
Suit against Municipal Council is not maintainable.
7. The contesting respondents herein challenged aforesaid
judgment of the High Court in Civil Appeal Nos. 3502 and 3503 of
2006 before this Court. By order dated 21st November, 2006 this
Court opined that having regard to the fact that the State of M.P.
did not prefer any appeal against the judgment and decree passed
by the learned trial Judge, the Division Bench of the High Court
went wrong in holding that the suit was barred under Section 80,
CPC. So far as the non-maintainability of the suit for want of notice
under Section 319 of the M.P. Municipalities Act is concerned,
neither any such plea was taken in the written statement nor any
issue was raised before the trial Court by the Municipal Council.
Therefore, it was held that the Division Bench of the High Court
was wrong in holding that the Suit was not maintainable. This
Court, accordingly, set aside the judgment passed by the High
5
Court and remitted the matter back to the High Court for
consideration of the first appeals on merit.
8. The High Court, after considering the matter on merits,
by the judgment impugned herein, formed the opinion that the trial
Court did not commit any error in declaring that the appellant
Municipal Council had no authority under law to charge external
development cost and thereby affirmed the judgment of the trial
Court and dismissed the appeals of the Municipal Council.
Aggrieved thereby, the said Municipal Council is in appeal before
us.
9. The case put forward on behalf of the appellant Municipal
Council is that it is a statutory body providing various amenities
and necessities to the general public residing in its area limits.
Relying on Order No.F./3-39/32/85 dated 28-11-1983 of Housing
and Environment Department, Government of Madhya Pradesh, it
is stated that the areas where there is a Municipal Committee or
Municipal Corporation, the internal development work of colonies
by House Construction Societies and individual persons will be
done in supervision of respective Municipal Committee or Municipal
Corporation. For that all the activities pertaining to maintenance,
6
civil amenities, development work and construction require heavy
expenditure. About Rs.5 lakhs per month is the electricity bill to
maintain the streetlights and to run pump houses. Nearly Rs.25
lakhs per annum are the vehicle maintenance charges, Rs.50 lakhs
for supply of water and pipeline maintenance and about Rs.25
lakhs for sanitation and Rs.2 crores per year is required for
maintenance, construction and development of roads. In view
thereof, in accordance with the prevailing rules, the externational
development fee @ Rs.5/- per. Sq.m. has been legally charged on
the contesting respondents and they are liable to make payment.
But, unfortunately the trial Court committed legal error and
declared that the defendants (appellant and proforma respondents
herein) jointly or severally have no right to recover amount by name
of external development fee from the plaintiffs (respondents herein)
and the same view has been affirmed by the High Court. The entire
development activity in the Municipality, Rahograh has come to
standstill and it is therefore necessary for this Court to set aside the
impugned judgment.
10. On behalf of contesting respondents, it is contended that
the contesting respondents are not private entities, nor colonizers.
The ownership of the institutions lies with the Government of India
7
in whose control the day to day activities of the institutions are run.
The institutions being totally secured, no outsider can enter the
Company premises without prior permission. As regards the
maintenance, cleanliness, electricity, roads and safeguarding
environment in the entire area is being done by the institutions and
therefore they are not binding on the demands of Municipal Council
for making payment of external development charges. The Courts
below have thoroughly examined the issue in clear legal view and
only thereafter rendered the judgment in their favour and therefore
there is no occasion for this Court to exercise the power under
Article 136 of the Constitution to interfere in these appeals.
11. Having heard learned counsel on either side, we have also
given our thoughtful consideration to various Government of
Madhya Pradesh Orders including the first and foremost Order on
the issue in question viz., No. 2681/1677/32, dated 6th July, 1978
for levying internal development charges. The subsequent Order No.
2997/C.R.129/32/Bhopal, dated 27th July, 1978 provides certain
relaxations regarding the mode of payment of the amount required
to be deposited under original order dated 6th July, 1978. The next
one is the Order No. F.3-39/32/85 dated 28th November, 1983 on
levying external development fee @ Rs.5/- per sq. mtr.
8
12. It is clearly noticeable from the aforementioned
Government Orders that they are meant for housing construction
societies, colonizers and individual persons where the internal
developmental works of the colonies are done by the respective
house construction society, colonizers or individual persons. In the
same way, if any colonizer, house construction society or individual
person constructs a colony under the supervision of Municipal
Committee or Municipal Corporation, as the case may be, Rs.5/-
per sq. mtr. towards external development charges are applicable.
While so, in the case on hand, the contesting respondents are
neither colonizers nor house construction societies or individuals.
The dwelling units developed by them are for their employees only
and not meant for sale or for letting out on rent. Apparently, the
construction of dwelling units and the residential areas developed
by the contesting respondents are done by the contesting
respondents i.e. Government entities being Public Sector
Undertakings with the investment of Central Government.
13. For all the aforementioned reasons we do not see any
error in the impugned judgment. In our opinion, the trial Court as
well as the High Court considered all the relevant issues in their
9
true spirit and came to the right conclusion that the contesting
respondents are not liable to pay any amount in the form of
external development fee as demanded by the appellants. The
appeals fail and therefore stand dismissed devoid of merit without
any order as to costs.
...................................J.
(N.V. RAMANA)
...................................J.
(S. ABDUL NAZEER)
NEW DELHI,
JANUARY 30, 2018.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No(s). 2511/2011
THE MUNICIPAL COUNCIL, RAGHOGARH & ANR. …Appellant(s)
VERSUS
NATIONAL FERTILIZER LTD. & ORS. …Respondent(s)
WITH
Civil Appeal No. 2512/2011
THE MUNICIPAL COUNCIL, RAGHOGARH & ANR. …Appellant(s)
VERSUS
GAS AUTHORITY OF INDIA LIMITED & ORS. …Respondent(s)
JUDGMENT
N.V. RAMANA, J.
1. These two Appeals arise out of a common Judgment
2
passed on 3rd August, 2007 in First Appeal Nos.1 of 1996 and 175
of 1995, respectively, by the High Court of Madhya Pradesh, Bench
at Gwalior.
2. The short question that arises for our consideration in
these appeals is whether the contesting respondents herein, i.e.
National Fertilizers Limited and Gas Authority of India Limited, are
liable to pay external development charges to the appellant—
Municipal Council as per its demand?
3. Both the contesting respondents in these appeals were
allotted forest lands within the municipal limits of the appellant
Council. Subsequently, the respondents were served with a notice
calling upon them to deposit external development charges @
Rs.5/- per sq. meter in consonance with Government of Madhya
Pradesh, Housing and Environment Department, Notification No.
F.3-39/32/85, dated 28-11-1985. Raising objections, respondents
challenged the notices by filing Civil Suits before the District Judge,
Guna, Madhya Pradesh contending that they are Central
Government entities and would not come under the purview of the
said Notification and hence sought declaration and permanent
injunction restraining the appellant from demanding external
3
development fee from them.
4. The District Judge, Guna by separate judgments dated
11th October, 1995 decreed the Suits in favour of respondents and
declared that the defendants (appellant and proforma respondents
herein) jointly or severally have no right to recover amount by name
of external development fee and no amount shall be recovered from
the plaintiffs (respondents herein) in the form of external
development fee.
5. Against the said judgment of the District Judge, the
appellant moved the High Court by way of First Appeals challenging
the decree that the Suit has been filed before expiry of period of
notice under Section 80, CPC and no Suit is maintainable against
the Municipal Council without notice under Section 319 of the
Municipalities Act. The other stand taken by the appellant was that
since the plaintiffs are avoiding recovery of external development
fee, therefore, without payment of ad valorem court fee suit ought to
have been dismissed or the trial Court should have rejected the
plaint for insufficient payment of court fee.
6. The Division Bench of the High Court by judgment dated
4
12th May, 2005 allowed the First Appeals and set aside the decree
passed by the trial Court. The High Court, however, without giving
its opinion on the merits, held that both the Suits have not been
properly valued and notice issued was not one under Section 80,
CPC and Suits as filed were not maintainable. In the absence of
notice under Section 319 of the Madhya Pradesh Municipalities Act,
Suit against Municipal Council is not maintainable.
7. The contesting respondents herein challenged aforesaid
judgment of the High Court in Civil Appeal Nos. 3502 and 3503 of
2006 before this Court. By order dated 21st November, 2006 this
Court opined that having regard to the fact that the State of M.P.
did not prefer any appeal against the judgment and decree passed
by the learned trial Judge, the Division Bench of the High Court
went wrong in holding that the suit was barred under Section 80,
CPC. So far as the non-maintainability of the suit for want of notice
under Section 319 of the M.P. Municipalities Act is concerned,
neither any such plea was taken in the written statement nor any
issue was raised before the trial Court by the Municipal Council.
Therefore, it was held that the Division Bench of the High Court
was wrong in holding that the Suit was not maintainable. This
Court, accordingly, set aside the judgment passed by the High
5
Court and remitted the matter back to the High Court for
consideration of the first appeals on merit.
8. The High Court, after considering the matter on merits,
by the judgment impugned herein, formed the opinion that the trial
Court did not commit any error in declaring that the appellant
Municipal Council had no authority under law to charge external
development cost and thereby affirmed the judgment of the trial
Court and dismissed the appeals of the Municipal Council.
Aggrieved thereby, the said Municipal Council is in appeal before
us.
9. The case put forward on behalf of the appellant Municipal
Council is that it is a statutory body providing various amenities
and necessities to the general public residing in its area limits.
Relying on Order No.F./3-39/32/85 dated 28-11-1983 of Housing
and Environment Department, Government of Madhya Pradesh, it
is stated that the areas where there is a Municipal Committee or
Municipal Corporation, the internal development work of colonies
by House Construction Societies and individual persons will be
done in supervision of respective Municipal Committee or Municipal
Corporation. For that all the activities pertaining to maintenance,
6
civil amenities, development work and construction require heavy
expenditure. About Rs.5 lakhs per month is the electricity bill to
maintain the streetlights and to run pump houses. Nearly Rs.25
lakhs per annum are the vehicle maintenance charges, Rs.50 lakhs
for supply of water and pipeline maintenance and about Rs.25
lakhs for sanitation and Rs.2 crores per year is required for
maintenance, construction and development of roads. In view
thereof, in accordance with the prevailing rules, the externational
development fee @ Rs.5/- per. Sq.m. has been legally charged on
the contesting respondents and they are liable to make payment.
But, unfortunately the trial Court committed legal error and
declared that the defendants (appellant and proforma respondents
herein) jointly or severally have no right to recover amount by name
of external development fee from the plaintiffs (respondents herein)
and the same view has been affirmed by the High Court. The entire
development activity in the Municipality, Rahograh has come to
standstill and it is therefore necessary for this Court to set aside the
impugned judgment.
10. On behalf of contesting respondents, it is contended that
the contesting respondents are not private entities, nor colonizers.
The ownership of the institutions lies with the Government of India
7
in whose control the day to day activities of the institutions are run.
The institutions being totally secured, no outsider can enter the
Company premises without prior permission. As regards the
maintenance, cleanliness, electricity, roads and safeguarding
environment in the entire area is being done by the institutions and
therefore they are not binding on the demands of Municipal Council
for making payment of external development charges. The Courts
below have thoroughly examined the issue in clear legal view and
only thereafter rendered the judgment in their favour and therefore
there is no occasion for this Court to exercise the power under
Article 136 of the Constitution to interfere in these appeals.
11. Having heard learned counsel on either side, we have also
given our thoughtful consideration to various Government of
Madhya Pradesh Orders including the first and foremost Order on
the issue in question viz., No. 2681/1677/32, dated 6th July, 1978
for levying internal development charges. The subsequent Order No.
2997/C.R.129/32/Bhopal, dated 27th July, 1978 provides certain
relaxations regarding the mode of payment of the amount required
to be deposited under original order dated 6th July, 1978. The next
one is the Order No. F.3-39/32/85 dated 28th November, 1983 on
levying external development fee @ Rs.5/- per sq. mtr.
8
12. It is clearly noticeable from the aforementioned
Government Orders that they are meant for housing construction
societies, colonizers and individual persons where the internal
developmental works of the colonies are done by the respective
house construction society, colonizers or individual persons. In the
same way, if any colonizer, house construction society or individual
person constructs a colony under the supervision of Municipal
Committee or Municipal Corporation, as the case may be, Rs.5/-
per sq. mtr. towards external development charges are applicable.
While so, in the case on hand, the contesting respondents are
neither colonizers nor house construction societies or individuals.
The dwelling units developed by them are for their employees only
and not meant for sale or for letting out on rent. Apparently, the
construction of dwelling units and the residential areas developed
by the contesting respondents are done by the contesting
respondents i.e. Government entities being Public Sector
Undertakings with the investment of Central Government.
13. For all the aforementioned reasons we do not see any
error in the impugned judgment. In our opinion, the trial Court as
well as the High Court considered all the relevant issues in their
9
true spirit and came to the right conclusion that the contesting
respondents are not liable to pay any amount in the form of
external development fee as demanded by the appellants. The
appeals fail and therefore stand dismissed devoid of merit without
any order as to costs.
...................................J.
(N.V. RAMANA)
...................................J.
(S. ABDUL NAZEER)
NEW DELHI,
JANUARY 30, 2018.
