Union Of India & Anr vs Ranchi Municipal Corpn. Ranchi & Ors
- SCC(1996) 7 SCC 542
- Neutral1996 INSC 273
- SCR[1996] 2 SCR 761
Ratio decidendi
The rule this decision rests on
Where a municipal corporation seeks to demand service charges from the Railways, such demand is subject to Article 285 of the Constitution, which provides immunity to the Union of India from local taxation and levies, notwithstanding Section 135(4) of the Railways Act which contemplates contractual arrangements between the Central Government and a municipality. A contract entered into merely to relieve a distress warrant pending disposal of a dispute does not constitute a valid contract contemplated by Section 135(4) of the Railways Act, and therefore cannot furnish the basis for a municipality's demand for service charges against the Union of India. Where a demand made by a municipality is ultra vires its powers, the summary dismissal of an earlier petition on grounds of delay does not operate as res judicata for deciding a subsequent controversy relating to a recurring liability of the same character.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
We have heard learned counsel on both sides. 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.
The controversy is no longer res integra. This Court in Union of India v. Purna, Municipal Council & Ors. [(1992) 1 SCC 100] 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 earlier W.P. No.2844/92 was filed and was dismissed by the High Court and the special leave was refused by this Court on the ground of gross delay.
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.
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.
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