1996 JTR(SC) 403
1996 27 AllLR 699 ; 1996 1 CTC 435 ; 1996 3 JT 171 ; 1996 2 MLJ 48 ; 1996 1 OLR 422 ; 1996 2 Scale 412 ; 1996 7 SCC 542 ; 1996 2 SCR 761 ; 1996 2 Supreme 518
1996(2) SUPREME 518
SUPREME COURT OF INDIA
Ramaswamy and G.B. Pattanaik, JJ.
Union of India & Anr. -Appellants
versus
Ranchi Municipal Corporation, Ranchi & Ors. -Respondents
Civil Appeal No. 3646 of 1996
(Arising out of SLP (C) No. 18788/95)
Decided on 16-2-1996
Counsel for the Parties :
For the Municipality : M.P. Jha, Advocate.
IMPORTANT POINT
A Municipality has no right to demand service charges from Union of India, if such a demand is made it is clearly ultra vires its power. Early summary dismissal in WP/SLP does not constitute res judicata in deciding the controversy.
Act
Referred
:CIVIL PROCEDURE CODE : S.11
CONSTITUTION OF INDIA : Art.285, Art.226, Art.136
RAILWAYS ACT : S.135, S.135(4)
A) Relevant laws and sections are not explicitly cited in the judgment.
B) A demand for service charges from a municipality is ultra vires its power if there is no contract between the Union of India and the municipality; earlier summary dismissal does not operate as res judicata for recurring liability.
Facts of the case:
The respondent municipality made a consolidated outstanding demand for service charges for 1993-94 and 1994-95. The appellants challenged the validity of the demand, and the Division Bench upheld it.
Findings of Court:
The court held that the municipality had no right to demand service charges from the Union of India, making the demand ultra vires. Earlier dismissal was not res judicata.
Issues:
Whether the municipality could validly demand service charges and whether the appeal was barred by res judicata.
Ratio Decidendi:
The absence of a contract between the Union of India and the municipality rendered the demand ultra vires, and prior summary dismissal did not preclude reconsideration of a recurring liability.
Result:
Appeal allowed; demand quashed; no recovery from the municipality.
A) Relevant laws and sections are not explicitly cited in the judgment.
B) A demand for service charges from a municipality is ultra vires its power if there is no contract between the Union of India and the municipality; earlier summary dismissal does not operate as res judicata for recurring liability.
Facts of the case:
The respondent municipality made a consolidated outstanding demand for service charges for 1993-94 and 1994-95. The appellants challenged the validity of the demand, and the Division Bench upheld it.
Findings of Court:
The court held that the municipality had no right to demand service charges from the Union of India, making the demand ultra vires. Earlier dismissal was not res judicata.
Issues:
Whether the municipality could validly demand service charges and whether the appeal was barred by res judicata.
Ratio Decidendi:
The absence of a contract between the Union of India and the municipality rendered the demand ultra vires, and prior summary dismissal did not preclude reconsideration of a recurring liability.
Result:
Appeal allowed; demand quashed; no recovery from the municipality.
ORDER
Leave granted.
2. We have heard learned counsel on both sides.
3. The respondent-Municipality had made a consolidated outstanding 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 demand. 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.
4. The controversy is no longer res integra. This Court in Union of India v. Purna Municipal Council & Ors.1, 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 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 thereof 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 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 ealier W.P. No. 2844/92 was filed and was dismissed by the High Court and the special leave was refused by this Court on ground of gross delay.
5. It is now settled law that the summary 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.
6. 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.
Appeal allowed.
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Parallel Citations of other Journals : .
Union of India & Anr. v. Ranchi Municipal Corporation, Ranchi & Ors., 1996(2) Supreme 518
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