Bombay High Court
Along With vs N. T. Ramarao on 24 August, 2010
Author: P. B. Majmudar
Bench: P. B. Majmudar, Anoop V. Mohta
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dgm
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
PUBLIC INTEREST LITIGATION (LODGING) NO. 44 OF 2010
ALONG WITH
CHAMBER SUMMONS NO.140/2010
AND
CHAMBER SUMMONS NO.143/2010
AND
CHAMBER SUMMONS NO.151/2010
Mr. Subhash Desai
vs
ig .... Petitioner
1 Board of Control for Cricket in India
2 Shri Lalit Modi
Ex. Chairman and Commissioner of
Indian Premier League
3 The Maharashtra State
4 Shri Chirau Amin
Chairman and Commissioner of
Indian Premier League
5 Shri Sharad Pawar,
Union Agricultural Minister
6 Union of India, through
The Additional Solicitor General of India .... Respondents
Mr. Balkrishna D. Joshi for the petitioner.
Mr. T. N. Subramanian, Senior Advocate with Smt. Neha Palshikar-Bhide for
respondents 1 and 4.
None for respondent no.2.
Mr. Ravi Kadam, Advocate General, with Mr. D. A. Nalawade, Government
Pleader with Mr. R.A. Lokhande, AGP for respondent no.3-State.
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Mr. V. A. Thorat, Senior Advocate, with Smt. C. Salgaonkar i/by Mr. I. M. Khairdi
for respondent no.5.
Mr. D. J. Khambatta, Additional Solicitor General, with Mr. D.H. Shah with
Mr.Rohan Cama and Mr. Rohit Pandey for respondent no.6.
CORAM: P. B. MAJMUDAR, &
ANOOP V. MOHTA, JJ.
DATE : 24th August, 2010
ORAL JUDGMENT (Per P. B. Majmudar,J.):
Rule.
2The respective Advocates waive service of rule on behalf of the concerned respondents.
3 With the consent of the learned counsel appearing for the parties, the matter is taken up for final hearing forthwith.
4 This PIL is filed by the petitioner who is a sitting Member of Maharashtra Legislative Assembly. By way of this petition, the petitioner has challenged the propriety of the decision taken by the State Government, by which the State Government has granted exemption in the matter of levying entertainment tax in connection with the IPL matches which were organised by the Board of Control for Cricket in India (for short, "BCCI") during the period between January and March/April 2010.
5 It is the say of the petitioner that large amount of income has been received ::: Downloaded on - 09/06/2013 16:19:41 ::: 3 pill-44-10gr-avm.sxw by the organisers, through such IPL matches. Some entertainment activities conducted before, during and after the match hours, which were part and parcel of such IPL games. According to the petitioner, since such IPL matches can never be said to be a sporting activity, the Government should have levied entertainment tax and collected stamp duty in connection with various agreements executed between BCCI and the Franchisees as well as, in connection with giving Television rights. It is the say of the petitioner that the Government should be directed to collect entertainment tax from BCCI in connection with the organisation of such matches in the State of Maharashtra. It is submitted that by collecting appropriate entertainment tax, the Government can utilise this amount for the betterment of the people of Maharashtra. The principal grievance of the petitioner is that by granting exemption to BCCI in the mater of entertainment tax, the State has acted against the interest of the citizens and the State is deprived of its legitimate revenue. There is also an intervention application filed by Mr.Prakash Mahadik, Advocate, taking the point that by organising such IPL matches, the electricity was diverted towards the cricket stadium/grounds where such matches were held, with the result that some areas in Dombivli suburbs remained without electricity during the period when these matches were conducted. This PIL is accordingly filed for appropriate direction to the State Government to levy entertainment tax in connection with the IPL matches. In the petition, an allegation is also made against respondent no.5 Mr.Sharad Pawar, Union Minister for Agriculture, on the ground that because of his influence that the State Government, though initially passed a resolution to charge entertainment tax, subsequently decided not to implement the same. During the ::: Downloaded on - 09/06/2013 16:19:41 ::: 4 pill-44-10gr-avm.sxw course of hearing, the learned counsel for the petitioner has also raised the point about Code of Conduct as well as the issue regarding conflict of interest on the point whether a Minister should be part of a club/body organising sports, such as cricket etc. According to the learned counsel for the petitioner, in a given case, if a Minister holds a post in a Sports Association or body, it may result into conflict of interest. It is submitted that for example, if a Minister is holding a portfolio of Finance Ministry in the Cabinet or if he is holding any post in any sports organization/association and if he is required to take a decision of exemption of tax regarding any sports event, of which he is a President or Office bearer, then he may not be in a position to take an objective decision in this behalf and if any such decision is taken in favour of such sporting activity, it may in a given case, prejudice the interest of State Government. It is also submitted by the learned counsel for the petitioner that even though the State Government by passing a resolution decided to levy entertainment tax on the IPL matches, but at the instance of some one such decision was subsequently given go-bye.
6 The petition has been resisted by the respondents by filing respective replies and rejoinder.
7 The learned Advocate General for the State has pointed out that now the State Government has already taken a decision which is followed by a Notification to levy entertainment tax regarding T-20 matches, One Day International Matches excluding Test Matches. The said stand has been made clear in the affidavit filed by Mr. C.B. Mhatre, Deputy Secretary, Revenue and Forest Department, ::: Downloaded on - 09/06/2013 16:19:41 ::: 5 pill-44-10gr-avm.sxw Mantralaya, Bombay. In para 3 of the said reply, it is stated that the State Government is making constant efforts for the enhancement of the State revenue.
Considering the commercialization and popularization of cricket in the country, the proposal for withdrawing the exemption from levying entertainment duty on various One Day Cricket events, matches organised by Indian Premier League, Twenty-Twenty One Day Cricket matches was considered by the Cabinet in its meeting held on January, 20, 2010. The said issue was discussed in the meeting and a final decision on the same has been taken on May 6, 2010. Accordingly, as per the provisions of Section 3(1)(b) of Bombay Entertainment Duty Act, 1923, the State Government has decided to levy entertainment tax on International One Day Cricket events, matches organised by IPL, Twenty-Twenty and similar One Day Cricket matches, excluding Five-days Test Matches. A resolution bearing No.ENT-1007/PK29/Part I/T-1 dated 14th June, 2010 has also been published in this behalf. The said resolution is taken on record and marked "X" for identification purposes.
8 Since the State Government has decided to levy entertainment tax, as pointed out above, which includes IPL matches also, now it is not necessary to give any further directions in this behalf. The State may act accordingly on the basis of the resolution passed in the Cabinet. In view of this, it is clear that the exemption which is granted regarding T-20 matches has now already been withdrawn and in future cricket matches or T-20 matches shall be subject to entertainment tax, as per the decision of the Government insofar as the Maharashtra State is concerned. No further directions are required to be issued ::: Downloaded on - 09/06/2013 16:19:41 ::: 6 pill-44-10gr-avm.sxw by this Court in this behalf. In para No.3 of the affidavit-in-reply, the State Government has made its stand clear to the effect that that since the cricket activity is no longer a sporting activity and has become commercialized and popularized in our country, that ultimately a decision is taken to levy entertainment tax on the IPL Matches. The State Government may now act accordingly in the matter of collecting entertainment tax in future on one day IPL events.
9 At this stage, the learned counsel for the petitioner Mr. Joshi submits that the entertainment tax should be collected with retrospective effect and from back date. He submits that when last four matches were held during the pendency of this petition, the Government at least should have taken appropriate care in informing the BCCI or various Franchisees to keep account and to pay entertainment taxes. He submits that the State has failed to take appropriate measures in this behalf. So far as the aforesaid aspect is concerned, it is required to be noted that entertainment tax is leviable only from the day on which exemption is withdrawn. This Court cannot direct the State to levy any tax retrospectively regarding the matches which are already over and especially the Franchisees, who have organised the matches are not before this Court in this Petition. Though the object of the petitioner may be laudable in this behalf to protect the revenue of the State, in our view, this Court cannot give such a direction to the State Government to recover the taxes retrospectively regarding the matches which were already conducted. It is also required to be noted that entertainment tax is normally recovered from the person who purchases the ticket ::: Downloaded on - 09/06/2013 16:19:41 ::: 7 pill-44-10gr-avm.sxw and this being indirect tax, such a direction to recover the tax cannot be given now. Even otherwise, the tax is payable only from the date on which the exemption is withdrawn. Under the circumstances, no direction in this behalf as prayed for, can be granted.
10 The learned Advocate General has pointed out that the exemption to sports activity was given as far back as in 1964 and that Notification and decision continued from time to time. But since with the change in the form of cricket matches and considering the fact that since commercialisation has also taken place in the sports activity, it is now decided by the State Government to levy entertainment tax. It is submitted by the learned Advocate General that in view of the 1964 resolution which was in force, the entertainment tax was not collected from such cricket matches, but in view of the withdrawal of the exemption and in view of the fresh decision of the State Government, such matches will be subjected to entertainment tax in future.
11 Considering the aforesaid aspect, it is not possible for us to say that with any ulterior motive the tax was not collected as at the relevant time the exemption notification was also in force. Be that as it may, now since the Government has taken decision to levy entertainment tax regarding future matches, in our view, no further directions as such are required to be given in this behalf.
12 Mr. Subramaniam, the learned senior counsel for respondents 1 and 4 as ::: Downloaded on - 09/06/2013 16:19:41 ::: 8 pill-44-10gr-avm.sxw well as Mr.Thorat, the learned senior counsel for respondent no.5-Mr. Sharad Pawar, pointed out that allegations made against BCCI and against respondent no.
5 are baseless. It is submitted by both of them that Mr. Pawar was not holding any post in the BCCI during the period when last IPL matches were held and conducted. It is submitted by both of them that Mr. Pawar is also not holding a Minister's post so far as the State Cabinet is concerned. Considering the aforesaid aspects and considering the fact that there is nothing on record, by which it can be said that respondent no.5 had influenced the State Government to take a particular decision regarding giving exemption of entertainment tax. In our view, no weightage can be given to such allegations made by the petitioner against respondent no.5. It is also requited to be noted that decision regarding granting of exemption has been taken by the State Government regarding sports activity as far back as in 1964 and it is not even the case of the petitioner that in 1964, respondent no.5 had played any role when exemption was granted. When a collective decision is taken by the State Cabinet, there is no scope of alleging any malafides against any one.
13 Mr. Subramanian has also submitted that income of such matches has been recovered by the Franchisees and such Franchises are not made parties before us and, therefore, this Court cannot give any direction for collecting entertainment tax retrospectively. He also pointed out that IPL is part and parcel of BCCI and it functions as per the Constitution of the BCCI and it is an autonomous body, which is not a State within the meaning of Article 12 of the Constitution of India and, therefore, the petition against BCCI is not maintainable. It is, however, required ::: Downloaded on - 09/06/2013 16:19:41 ::: 9 pill-44-10gr-avm.sxw to be noted that this petition is also directed against the State Government asking the State Government to collect the entertainment tax and therefore, it cannot be said that the petition is not maintainable, as this Court can always give necessary directions to the State Government in this behalf. We are therefore, unable to accept the argument of Mr. Subramanian that the petition is not maintainable. It is also submitted by Mr. Subramanian that this is not a genuine PIL and since IPL matches are being organised since last three years, there is no reason as to why the petitioner waited upto this period and approached this Court after considerable time. In our view, looking to the prayer made in the petition, it cannot be said that this is not a genuine PIL filed by the petitioner. It is required to be noted that the petitioner has not filed the above petition for his personal benefits or gain. As a sitting Member of the Maharashtra Legislative Assembly, he is trying to ventilate his grievance about the State exchequer and the State revenue, by pointing out his grievance in detail. It therefore, cannot be said that the petitioner has filed this petition with an oblique motive. Even the State Government has also not taken any objection that this is not a genuine PIL. We therefore, do not accede to the submission of Mr.Subramanian that this petition may not be treated as a genuine PIL.
14 During the course of hearing, the learned Additional Solicitor General (ASG) Mr. Khambatta has addressed the Court at length in connection with the question about the Code of Conduct for the Ministers as well as on the question about conflict of interest, which may arise in a given case. The learned counsel for the petitioner vehemently urged that in a given case, if a Minister is holding ::: Downloaded on - 09/06/2013 16:19:41 ::: 10 pill-44-10gr-avm.sxw any post in a sports body or council and if he is required to take a decision in the Cabinet for giving certain benefits to such a body of the sports, it may result into conflict of interest. In this connection, Mr. Khambatta, the learned Additional Solicitor General has pointed out that there is a Code of Conduct for the Ministers.
The same is placed on record. The Code of Conduct deals with the Code of Conduct for Ministers for both Union and State. The said Code of conduct was formulated in the year 1964, following the recommendation of the Committee on Prevention of Corruption Act. The said Code of Conduct is revised from time to time.
15 Relying on the said Code of Conduct, the learned Additional Solicitor General submits that there is no Code of Conduct prescribed by which a Minister is prohibited from holding any post in any sports organisation, provided a Minister is not taking any remuneration or fees in this behalf. The State Government in its affidavit states that there is no express provision in the Code of Conduct, prohibiting a Minister from participating in the sports activity.
16 The learned Additional Solicitor General further submits that in a given case, even violation of Code of Conduct is not justiciable issue. In order to substantiate his say, the learned Additional Solicitor General has relied upon the decision of the Supreme Court in the case of in Satrucharla Chandrasekhar Raju v. Vyricherla Pradeep Kumar Dev & anr., AIR 1992 SC 1959. In para 22 thereof, it has been observed as under :
"22 It is also necessary to bear in mind that the Government is undertaking several projects and activities including commercial ::: Downloaded on - 09/06/2013 16:19:41 ::: 11 pill-44-10gr-avm.sxw activities through the corporations and local bodies exercising some control over such corporations or bodies. In that view of the matter they may come within the meaning of the "State" as envisaged in Art. 12 but that may not be a decisive factor in deciding the issue. As a matter of fact S. 10 of the Representation of the People Act as well as Art. 58(2) of the Constitution of India do indicate that all persons employed in such undertakings, corporations or local bodies cannot be deemed to suffer disqualification for contesting the elections except to the extent indicated therein. This aspect also has been considered in some of the above mentioned decisions. If a strict and narrow construction is to be applied that amounts to shutting off many prominent and other eligible persons to contest the elections which forms the fundamental basis for the democratic set-up. Therefore several factors as indicated above depending upon the facts of each case have to be taken into consideration in deciding whether a particular person is disqualified by virtue of his holding an office of profit before concluding that such an office is under the Government. In Mudhuker G.E. Pankakar's case (AIR 196 SC 2283) as to what should be the approach, it was observed thus (Para 22):
"After all, all law is a means to an end. What is the legislative end here in disqualifying holders of `offices of profit under Government'? Obviously, to avoid a conflict between duty and interest, to cut out the misuse of official position to advance private benefit and to avert the likelihood of influencing Government to promote personal advantage. So this is the mischief to be suppressed. At the same time we have to bear in mind that our Constitution mandates the State to undertake multiform public welfare and socio-economic activities involving technical persons, welfare workers, and lay people on a massive scale so that participatory Government may prove a progressive reality. In such an expanding situation, can we keep out from elective posts at various levels many doctors, lawyers, engineers and scientists, not to speak of an army of other non-officials who are wanted in various fields, not as full-time Government servants but as part-time participants in people's projects sponsored by Government? For instance, if a National Legal Services Authority funded largely by the State comes into being, a large segment of the legal profession may be employed part time in the ennobling occupation of legal aid to the poor. Doctors, lawyers, engineers, scientists and other experts may have to be invited into local bodies, legislatures and like political and administrative organs based on election if these vital limbs of representative Government are not to be the monopoly of populist politicians or lay members but sprinkled with technicians in an age which belongs to technology. So, an interpretation of `office of profit' to cast the net so wide that all our citizens with specialities and know-how are inhibiting from entering elected organs of public administration and offering semi voluntary services in para-official, ::: Downloaded on - 09/06/2013 16:19:41 ::: 12 pill-44-10gr-avm.sxw statutory or like projects run or directed by Government or Corporation controlled by the State may be detrimental to democracy itself. Even athletes may hesitate to come into Sports Councils if some fee for services is paid and that proves their funeral if elected to a panchayat. A balanced view even if it involves `judicious irreverence' to vintage precedents is the wiser desideratum."
17 Mr. Khambatta, the learned Additional Solicitor General has also relied upon the decision of the Supreme Court in the case of R. Sai Bharathi v. J.
Jayalalitha & ors., (2004) 2 SCC 9. In the aforesaid judgment, it has been held by the Supreme Court that persons holding high public offices should scrupulously follow the Code of conduct as their moral obligation. Whenever their acts are questioned, they should not take shelter under criminal law like ordinary criminals and when there is a conflict between the office they hold and the acts to be done by them, they should desist themselves from such acts. Relying upon the aforesaid observation, the learned Additional Solicitor General submitted that in a given case, the Minister may not participate in the matter wherein any such decision is likely to be taken and there is any likelihood of any conflict of interest.
18 The learned Additional Solicitor General has also relied upon the decision of the Andhra Pradesh High Court in the case of Vidadala Harinadhababu and etc. vs. N. T. Ramarao, Chief Minister, State of Andhra Pradesh & ors., AIR 1990 AP 20. The three Judges of the Andhra Pradesh High Court, while considering the aspect about Code of Conduct regarding Ministers has summarised as under :
"50 We may now summarise our findings:
(i) There is no provision in the Constitution, nor is there any provision of law ::: Downloaded on - 09/06/2013 16:19:41 ::: 13 pill-44-10gr-avm.sxw which regulates the conduct of a Minister - which expression includes Chief Minister and Prime Minister., There is also no constitutional or statutory provision prohibiting a Minister from engaging himself in any profession, occupation, or business, whether actively for gain, or otherwise.
(ii) The Code of Conduct issued by the Union Government - and by the State Government - is of great significance and sanctity, though it is not statutory. It fills a great void. The Code is evolved with an eye upon good Government and clean administration, not only in action but also in appearance. It is binding upon all Ministers. It prescribes the authority who shall ensure observance thereof. The procedure to be followed by him and the action to be taken thereon is also left to him. Similar rules have also been evolved in United Kingdom. However, for the reasons given hereinbefore, the petitioners cannot seek to enforce the Code through the Court.
(iii)A person is not deprived of his fundamental rights guaranteed by Part III of the Constitution on account of his accepting the office of Minister., At the same time, the nature and character of the office, the duties and functions attached to it, and the power and position which it carries, necessarily involve and imply certain restrictions on those fundamental rights to the extent they are called for to ensure a proper and effective discharge of the powers and functions of the office. For instance, no Minister may carry on any profession, or business, actively, for gain, while in office. Such activity would be inconsistent with the high office he holds. It may provide occasion for open abuse. The Code of Conduct evolved by the Union Government and the State Government does contain salutary restrictions;
but, since the Code cannot be treated as law within the meaning of Cls. (2) to (6) of Art. 19, the restrictions contained therein cannot be enforced by Court.
(iv)It is not possible to infer or deduce Limitations - whether of the nature contained in the Code of Conduct or otherwise - from the scheme or text of the Constitution applying the theory of implied limitations/implied restrictions. Indeed, the theory of implied restrictions has been rejected by a majority of Judges in Kesavananda Bharati, MANU/SC/0445/1973 : air 1973 SC 1461. In any event, the said theory is not available for evolving a whole set of rules governing the conduct of Ministers. Adopting such a course amounts to amending the Constitution or, at any rate, to an act of substantive law making - which cannot be done by this Court.
(v) Constitutional Convention relate to the working of the Government. They determine relations between the three wings of the State. They are distinct from the rules of conduct of Ministers, or other high constitutional functionaries. Even otherwise, it is not shown that any particular conventions governing the conduct of Ministers have grown in England, or in India, which have been enforced by Courts.
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(vi)The office of a Minister is a political office. It is an elective office. His oath of office obligates him to discharge the duties of Minister faithfully and conscientiously. The oath of office, however, does not say that he shall devote all his time to his office duties. It is a matter left to his good sense and his conscience. Holders of high constitutional offices like Ministers must act with a sense of self-discipline and with due regard to, and understanding of democratic norms and constitutional values - even in the mater of their personal conduct. The fact that Court may not regulate their personal conduct is beside the point.
(vii)The fact that a Minister has been held to be a public servant within the meaning of Section 51 of the Indian Penal Code, does not mean that he is a public servant for all purposes. A Minister cannot be equated to a public servant. The concept of Master and servant has no application or relevance to the office of a Minister. The Rules of Conduct applicable to civil servants, or the Fundamental Rules requiring civil servants to place all their time the disposal of the Government) are not applicable to Ministers.
(viii)This Court has no power to enquire into the desirability or otherwise of the respondent's conduct, nor has it power to restrain him from engaging himself in the said activity. Much less can it declare him to be disqualified form holding the office of Chief Minister on the said ground. In this case the petitioners are not questioning any particular executive action, or inaction of the respondent, but are questioning his personal conduct. There is no decision of any Court in this country, or for that matter, in England, where the Courts have undertaken to regulate the personal conduct of a Minister, or have sought to enforce moral or ethical rules of personal behaviour.
(ix)In the facts and circumstances, we do not wish to - we do not think it necessary - express opinion on the question whether the activity of the respondent complained of herein is relatable to the fundamental right guaranteed to him by sub-cl. (a) of Cl. (1) of Art. 19, or sub-cl (g) thereof.
(x) The allegation that acting in, and directing of the said film amounts to an appeal to voters on the grounds of religion cannot be enquired into by this Court, at this stage, in a writ petition. It is premature. The occasion for such complaint has not arisen yet. We refuse to look into the allegation.
19 In view of the above, it is clear that there is no provision in the Statute in any manner, which regulates the Code of Conduct for Ministers. There is no constitutional provision prohibiting a Minister, actively for gain or otherwise, from engaging himself in any such activities or taking active part in any of the ::: Downloaded on - 09/06/2013 16:19:41 ::: 15 pill-44-10gr-avm.sxw sports association/organization. However, such Code of conduct is evolved with an eye opener to the Ministers and public servants, which needs to be respected by the concerned Ministers.
20 Considering the Code of Conduct for Ministers, a copy of which is placed on record, as well as considering the case laws on the aforesaid subject, it is clear that such Code of Conduct as such are not enforceable in the Court of law.
However, it gives guidelines as to how a Minister in the State or at the Central should function. It is required to be noted that the Ministers are also Trustees for the people and in a democratic system, the Government is always by the people, for the people and of the people. The paramount consideration is the interest of the people of this country and rest of the things are absolutely immaterial.
Whether in a given case, there is likelihood of breach of conflict of interest, is a question which is required to be considered by the concerned authority, who is in-
charge of framing and regulating the Code of Conduct. It is for the concerned authority to consider whether the present Code of Conduct needs to be amended by adding any new Clauses and this aspect is entirely left to the wisdom of the such authority. We agree with the submission of Mr. Khambatta, the learned Additional Solicitor General, that the said Code of Conduct may not have a statutory binding effect or in a given case, the concerned Minister may recuse/preclude himself from taking part in the decision making process, as there is a likelihood of conflict of interest. It is clarified that we have not expressed any opinion on this aspect and it is left to the wisdom of the concerned authority.
::: Downloaded on - 09/06/2013 16:19:41 :::16 pill-44-10gr-avm.sxw 21 No other points are canvassed by the petitioner.
22 In our view, since now the State Government has decided to levy entertainment tax for future cricket matches, no further directions, in view of what is stated above, are required to be given in this petition. We have no doubt that the State Government will act accordingly as per the decision taken.
23 Subject to what is stated above, the petition is disposed of. Rule is discharged. No costs.
24 In view of disposal of PIL, Chamber Summon Nos.140/2010, 143/2010 and 151/2010 also stand disposed of accordingly. No costs.
(ANOOP V. MOHTA, J.) ( P. B. MAJMUDAR, J.)
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