[Case Brief] The Municipal Council, Raghogarh & Another v/s National Fertilizer Limited & Others – Supreme Court of India

Case NameTHE MUNICIPAL COUNCIL, RAGHOGARH & ANR v/s NATIONAL FERTILIZER LTD. & ORS AND THE MUNICIPAL COUNCIL, RAGHOGARH & ANR v/s GAS AUTHORITY OF INDIA LIMITED & ORS
Case NumberCivil Appeal Number: 2511/2011 with 2512/2011
CourtSupreme Court of India
BenchJustice N.V Ramana, Justice S. Abdul Nazeer
Author of the judgmentJustice N.V. Ramana
Decided OnJanuary 30, 2018
Relevant Act/Sections1) Civil Procedure Code, 1908- Section 80

2) Municipalities Act - Section 319
Author of the Case briefTitiksha Sinha

Brief Facts and Procedural History-

According to the facts of the present case, the present two appeals filed before the Supreme Court arise out of a common judgment passed by the Gwalior Bench of Madhya Pradesh High Court on August 03, 2007.

The respondents, namely ‘National Fertilizer Limited & Ors’ and ‘Gas Authority of India Limited & Ors’, were allotted forests land within the municipal limits of the appellant, Raghogarh Municipal Council. Later, these respondents were served with a notice calling upon them to deposit external development charges (EDC) @Rs 5/- per sq. meter in consonance with Government of Madhya Pradesh, Housing & Environment Department, Notification dated 28-11-1985.

The said notice received by the respondents was challenged by them before the District Judge, Guna, Madhya Pradesh by contending that they are Central Government entities and thus would not come under the purview of the Notification. Accordingly, the District Judge of Guna decreed the suit in favour of the respondents and thereby exempted the respondents from the EDC charges. Against this judgment of the District Judge, an appeal was made before the High Court by the appellant- Municipal Council. The appeal was made on the following terms-

  • That the Suit has been filed before expiry of the notice period mentioned under Section 80, Civil Procedure Code.
  • That no Suit is maintainable against the Municipal Council without notice under Section 319 of the Municipalities Act.
  • That the trial court should have rejected the plaint for insufficient payment of court fee.

The Division Bench of Madhya Pradesh High Court by judgment dated May 12, 2005, allowed the First appeals and set aside the decree passed by the trial court. This decision of the Division Bench was challenged by the two respondents before the Supreme Court. The Supreme Court had opined as follows-

  • The fact that the State of M.P. did not prefer any appeal against the judgment 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.

After this opinion of the Supreme Court, the suit was remitted back to the High Court for consideration. A subsequent opinion was thus framed by the High Court wherein it was held that the decision given by the trial court was justified and correct in law. Against this, an appeal has been again made by the appellant before the Supreme Court.

The Issue to be decided-

Whether the contesting respondents i.e. National Fertilizers Limited and Gas Authority of India Limited, are liable to pay external development charges to the appellant i.e Municipal Council as per its demand or not?

Arguments made by the appellant-

  • The appellant is a statutory body providing various amenities and necessities to the general public residing in its area limits.
  • In accordance with the rules, the fee of Rs.5/- per. Sq.m. has been legally charged on the respondents and they are liable to make payment.
  • The trial court committed a legal error in declaring that the appellant has no right to recover amount and the same view has affirmed by the High Court is also incorrect.

Arguments made by the respondent-

  • Respondents are neither private entities nor colonizers and thus cannot be asked to pay the development charges.
  • The ownership of the respondents lies with the Government of India in whose control the day to day activities of the institutions are carried out.
  • The maintenance, cleanliness, etc., in the entire area, is being done by the respondents and therefore they are not bound to pay the charges.

The ratio of the Judge and the decision rendered-

The respondents are not required to pay external development charges as demanded by the appellant Municipal Council because in the present case, the 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. There is no error in the decision given by the trial court and the high court. This appeal before the Supreme Court thus failed devoid of merit without any order as to costs.