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? = the contesting respondents are not liable to pay any amount in the form of external development fee as demanded by the appellants.

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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

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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

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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

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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

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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,

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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

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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.

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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

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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.