Calcutta High Court
The Kolkata Municipal Corporation & Ors vs Calcutta Ladies Golf Club & Ors on 27 September, 2019
Equivalent citations: AIRONLINE 2019 CAL 817
Author: I. P. Mukerji
Bench: Md. Nizamuddin, I. P. Mukerji
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
Original Side
Present :- Hon'ble Mr. Justice I. P. Mukerji
Hon'ble Justice Md. Nizamuddin
GA 2506 of 2015
APO 55 of 2016
WP 284 of 2009
The Kolkata Municipal Corporation & Ors.
Vs.
Calcutta Ladies Golf Club & Ors.
For the Appellant :- Mr. Ashok Kumar Banerjee, Sr. Adv
Mr. Alok Kumar Ghosh,
Mr. Dilip Kumar Chatterjee,
Mr. Dipankar Ghosh, Advocates.
For the respondent :- Mr. A. C. Kar, Sr. Adv
Mr. S. S. Bhuteria.
Judgment On :- 27.09.2019
I.P. MUKERJI, J.:-
Facts:-
Calcutta Ladies Golf Club filed the instant writ application in this court (WP No.284 of 2009). The club was the first petitioner. Its President, Secretary and Captain were the second, third and fourth petitioners. In the cause title the petitioners stated that they had their office at 12, Lord Sinha Road, Kolkata - 700071 and the club activities were carried out from the "club house, maidan, Casurina Avenue, Kolkata - 700071." In the body of the petition it was averred that the club functioned from its club house in the maidan. The petitioners stated that the maidan area was under the control of the army and that it had duly granted permission to the club to function from there. That area was not under the Kolkata Municipal Corporation Act, 1980.
2The other arguments in the petition were like this. By a mistake in December, 2005 the club applied for trade licence (certificate of enlistment) from the Corporation.
On 24th November, 2008 it made a demand of Rs.96,200/- from the first petitioner.
In this notice certain other demands were also raised by the Corporation - enlistment fee for Rs.2,500/- under Section 199 of the said Act, fee for Rs.4,000/- for supply of water under Section 238(2), drainage fee of Rs.1,000/- under Section 307, fee for Rs.4,000/- for removal of solid waste under Section 333, fee of Rs.2,500/- under Section 435 of the said Act for using the premises for non-residential purposes, fee of Rs.5,000/- for using the premises as eating house under Section 421 together with a fee of Rs.72,150/- as arrear dues for 2005-2006 to 2007-2008 aggregating to Rs.96,200/-. This was followed by another notice dated 2nd January, 2009. On 24th March, 2009, the Corporation issued a distress warrant under Section 220 of the said Act. They sought to realize the said demand of Rs.96,200/-.
Only after issuance of this distress warrant, the instant writ was filed on or about 30th March, 2009 asking for quashing of this process dated 24th March, 2009.
I will now narrate the grounds on which the writ was sought to be maintained.
Apart from the ground that the area which the club occupied in the maidan was under the army and outside the purview of the Kolkata Municipal Corporation Act, 1980, other grounds were also taken. In short the argument of the club was as follows:
3
It was said that the club was not required to obtain a trade licence. The club was private in its composition and activities. Although the members and their guests indulged in entertainment the club could never be called a place of public entertainment, Mr. Kar argued. It was also said, though not specifically in the writ petition but at the bar that since the club at the maidan was not within the jurisdiction of the said Act, the supply of water, drainage facilities and removal of solid waste were provided and managed by the club privately. The Corporation had no role to play in the matter. Hence, they could not demand any fee. The club was also not required to obtain any licence for use of the club for non-residential purposes as it was not carrying on any trade or business or calling. Neither was the club running any eating house. Therefore, it was not liable to pay any fee for maintaining an eating house.
The Impugned Judgment & Order:-
By this judgment and order dated 19th March, 2015 a learned single judge of this court set aside the letter of demand dated 24th November, 2008 and the distress warrant dated 24th March, 2009. The reasons on which this judgment and order was founded were as follows:-
The defence of the respondents under Section 627 of the said Act that since the General Officer (Commanding) of the army had control over the land and building where the club was situated it was outside the field of operation of the said Act, was rejected. It was held that the club was liable to pay property tax in respect of the building, structure and swimming pool constructed over government land.4
Section 333 of the said Act was inapplicable as no notice in this behalf had been issued by the Corporation. The learned judge also held that the respondents would not be said to be running an eating house under Sl. No. 8 of Schedule V of the said Act as the club could not be said to be carrying on any business or trade. Neither did the respondents require any permission from the Corporation to operate as it could not be said that the club was carrying on any activity where the public was admitted. The demand dated 24th November, 2008 was set aside. ANALYSIS:-
One has to consider the nature, extent and the field of operation of the Kolkata Municipal Corporation Act, 1980. In the recital part of the said Act it is declared that it was to amend and consolidate the law relating to the municipal affairs of Kolkata. It was enacted by the state legislature in exercise of its powers under Article 246 of the Constitution of India read with list (II) of the 7th Schedule to the constitution. Under Entry 5 of this list the state government has the power to make laws with regard to the constitution and powers inter alia of municipal corporation, local authorities etc. The constitutional amendment in Part IXA relating to municipalities came much later, after the enactment of the said Act. Section 1(2) lays down that the Act would apply only to Kolkata.
I make an observation, although no argument was advanced in this regard, that atleast the first paragraph of Section 627 of the said Act is redundant. This is so because entries 2 and 3 of list (I) to the said 7th Schedule provide that the law relating to military, naval and air- forces or any other armed forces of the union including delimitation of cantonment areas and local self government within the exclusive 5 prerogative of parliament. A substantial portion of the land in and around the Hastings area is owned by the Central Government and is in the custody of the army. Therefore, parliament has the exclusive power to legislate with regard to the subject matter of the first paragraph of Section 627. Hence that paragraph declaring that all land and buildings belonging to the government in Hastings would be subject to the control of the General Officer (Commanding) is a redundant piece of legislation. One has to look at the central legislation or any executive order to show to what extent the land in the Hastings part is owned by the army and to what extent it is controlled by it.
Entry 32 of List I says that with regard to the property of the union in a state, unless parliament enacts otherwise, the state can legislate. Under Entry 5 of List II the state has exclusive power to legislate to create municipal corporations.
In my opinion, since no such limiting law has been shown to us, the state government has the power to enact a law to regulate local government through, inter alia, the Kolkata Municipal Corporation, also extending to army land.
Section 199 of the said Act provides that every person engaged in any profession, trade or calling as described in Schedule IV to the said Act would have to obtain a permanent certificate of enlistment. That the respondent club was engaged in the profession, trade or calling referred to in Schedule IV had to be established by the Corporation. The activities relied on by them are as follows in the schedule:
"14. Owner, lessee, licensee of a cinema house, theatre hall, planetarium, place of public entertainment where such place of entertainment is -6
i) Air-conditioned,
ii) Non-airconditioned,
20. Keeper of a restaurant with floor shows or orchestra,
26. i) Licensed foreign liquor vendors,
ii) Licensed country liquor vendors,
iii) Licensed Ganja, opium, Pachwai, toddy or bhang vendors."
The question is: Whether the respondent club is a public place or a place for public entertainment?
If a membership of an organization is confined to a particular group of persons on the basis of social standing, professional attainments or interests and its membership is relatively small, exclusive and defined, in that case it could be called a "private" body. Its place of functioning cannot be called a "public place". The respondent club, like other clubs, has a constitution with defined purposes and a body of members. However, its membership is open to the public at large, on fulfillment of the basic eligibility criteria. By no means membership of the club is restricted to a defined body of individuals with a particular social standing, or specific qualifications, or professional attainments, or interest or purposes. When membership is thrown open to the public at large at a fee then the club does not remain a private body but operates from a restricted public place. An identical point as to whether Willingdon Sports Club in Mumbai was a public place or not came up for consideration before the Supreme Court in Brihanmumbai Mahanagarpalika and Anr. Vs. Willingdon Sports Club and Ors. reported in (2013) 16 SCC 260, cited by Mr. Banerjee.
7Mr. Justice G.S. Singhvi opined:
"It cannot be denied that members of the Club also fall within the ambit of the term "public"."
This club is a typical recreational club. Its constitution, mode of taking members and activities are of a similar nature to those relating to the respondent club.
The respondent club, in my opinion, is a restricted public place. Whether at all the activities carried on by the club is a profession, trade or calling?
The word calling is described by the Concise Oxford English Dictionary (Eleventh Edition) as:
"a strong urge towards a particular way of life or career, a vacation. > A profession or occupation."
The word "trade" is described in the same dictionary as:
"1 the buying and selling of goods and services. > n. Amer. (in sport) a transfer. 2. A job requiring manual skills and special training. 3 (the trade) [treated as sign. Or pl.] a particular area of business. > dated, chiefly derogatory the practice of making one's living in business, as opposed to in a profession or from unearned income. 4 a trade wind. * v. 1 buy or from unearned income."
The word "profession" is described in the following way:
"1. Paid occupation, especially one involving training and a formal qualification. > [treated as sing. Or pl.] a body of people engaged in a profession. 2. An open but typically false claim: a profession or allegiance. 3. A declaration of belief 8 in a religion. > the vows made on entering a religious order. > the fact of being professed in a religious order."
Mr. Banerjee, learned senior advocate for the corporation submitted that if the club could obtain a liquor licence under the Bengal Excise Act and the rules and vend liquor to its members and their guests why should they be shy of obtaining a certificate of enlistment, under Serial No.26?
Unless the activity of the respondent club falls within one of the three categories Schedule IV of the said Act would not apply. One has to make a very purposive interpretation of profession, trade or calling as mentioned in Section 199(1) of the said Act. It is quite possible that while enacting this piece of legislation the legislature was not consciously aware of the various clubs in this city and that a point was likely to be taken by them to resist obtaining a trade licence or certificate of enlistment, that they were not carrying on any profession, trade or calling. In my opinion, if one considers the wide meaning of the word 'trade' given in the Oxford Dictionary, the definition would include buying and selling goods and services. In Brihanmumbai Mahanagarpalika and Anr. Vs. Willingdon Sports Club and Ors. reported in (2013) 16 SCC 260 the Supreme Court relying on State of Bombay Vs. Hospital Mazdoor Sabha reported in AIR 1960 SC 610 endorsed the definition of trade as "any business carried on with a view to provide whether manual or mercantile, as distinguished from the liberal arts or learned profession and from agriculture." The Supreme Court also endorsed the view of the Bombay High Court in Narayan Gopal Karadkar Vs. Hanumant Ramrao Palkar reported in 1969 Mah LJ 728 that:
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"...........earning profits is not a necessary appurtenant of the expression 'business' and looked at from this point of view, a place used for the business of sale of any article of food or drink does not cease to be so merely because it is not being conducted with a view to earn profits."
A member pays a monthly subscription to avail of the services of the club. He also pays for the food and drink that he buys. He has to make an extra payment to accommodate his guests or to avail of some special facilities. It would be inconceivable and against reason that other places of public entertainment like licensed foreign liquor vendors, a restaurant with orchestra or facilities for floor show would be required to obtain an enlistment certificate whereas a club carrying out the same nature of activity from a restricted public place would be exempt from it. This certainly could not have been the intention of the legislature.
In my interpretation of its intention I give the word 'trade' a purposive meaning so as to include the activities of the respondent club relating to buying and selling of food, liquor and beverages and specific services like use of hair cutting saloon, provision of store, swimming pool, gymnasiums, tennis court for a fee and services for use of club by guests on payment of a charge and so on.
The above Supreme Court decision in Brihanmumbai Mahanagarpalika and Anr. Vs. Willingdon Sports Club and Ors. reported in (2013) 16 SCC 260 makes it abundantly clear that the dining facilities in the club where food and drink are served is to be treated as an "eating house". It said as follows:-
"In our view, both the aforesaid reasons are incorrect. A cursory reading of the definition of the expression 10 "eating house" may support the conclusion of the High Court because general public is not allowed entry in the premises of the Club and, in the first blush, it appears that food is not supplied for consumption on the premises for profit or gain. However, if we apply purposive interpretation, then it becomes clear that the Catering Department of the Club which prepares and serves/supplies food to members of the Club is covered by the definition of the expression "eating house".
Section 199 of the said Act refers to a person being liable for enlistment and for payment of enlistment fee. The liability is not attached to any premises but to the person carrying on the specified profession, trade or calling. I have held that the club carries on the activities specified in Section 199 read with Schedule IV. The definition of "person" covers the respondent club. Hence, I hold that the club is liable to obtain enlistment and to pay fee therefor as demanded by the respondent corporation in their notice dated 24th November, 2008.
The next question is whether the respondent club would be considered as a premises?
Mr. Kar, learned senior advocate appearing for the respondents submitted that the above activities of the club were being carried out from a "tent" in the maidan. It could not be termed as premises. I am unable to accept this argument for two reasons. This argument that the place from which the club is carrying on its operation is a tent and not a premises was not taken in the writ petition. Neither was it taken as an argument before the court below. Hence, this contention finds no place in the impugned judgment. Mr. Kar argued that it was a law point which he was entitled to take. I do not accept this. 11 Whether the place where the club carries on activity is a premises or a tent is a question of fact. Both have distinct meanings in the English language and in legal parlance. So this fact had to be established before an argument was maintainable that operating from a tent the club was outside the operation of Section 421 or 435. Equally important is the fact that in his letter dated 25th March, 2006 the advocate for the respondent club wrote to the commissioner, Kolkata Municipal Corporation and to the Deputy Licencing Officer (HQ), Kolkata Municipal Corporation, describing the maidan unit of the club as a premises in several paragraphs. In my opinion, learned counsel for the club is estopped from contending at this point of time that the place of operation of the club in the maidan was a tent and not premises.
Mr. Banerjee submitted that according to the cause title framed by the club in the writ petition, it had its "office" at 12 Lord Sinha Road, Kolkata -71 and was also functioning from "the club house maidan, Casurina Avenue, Kolkata - 71." He argued that two structures situated at a distance from each other can constitute one premises for the purpose of assessment under the said Act. Even if it is assumed that the club was operating from a tent in the maidan, its premises at Lord Sinha Road and the tent in the maidan are to be taken as a single premises. For example if eating house facilities are available in one part of the said premises, although that part may be a non permanent structure the person running "the eating house" would be required to obtain written permission from the municipal corporation, learned counsel contended.
It is very important to analyze the scheme of the said Act. Section 199 imposes liability on every person engaged in the specified profession, 12 trade or calling. Section 234(1) of the said Act provides for "supply of wholesome water to houses" for domestic purposes. Section 239 refers to water supply for non-domestic purposes but does not specify that the supply is to be made to any "house", "building", "land", "premises" etc. Section 283 provides for drains across streets or under "any land whatsoever" within Kolkata "for the purpose of outfall or distribution of sewerage". Section 289 gives a right to an owner or occupier of "premises" to have his private house drain connected with the municipal drains to discharge foul water. Section 307 is about drainage and sewerage fee for "house" or "land". Under Section 333 the Municipal Commissioner can charge fees for removal of solid wastes from inter alia any premises. In Section 435 we find the use of the word "premises". Every person using premises for any of the non- residential purposes in Schedule V to the Act would have to obtain municipal licence. Again Section 421 refers to "premises" set up, continued or altered for use as an eating house, without the permission of the Municipal Commissioner.
Now, the word "premises" has not been defined in the said Act. An Act of the same legislature, the West Bengal Municipal Act, 1993 has defined "premises" in Section 2(46) of the West Bengal Municipal Act, 1993 as follows:-
"2.(46) "premises" means any land or building or part of a building or any hut or part of a hut, and includes -
(a) the garden, ground and out-houses, if any, appertaining thereto; and
(b) any fittings or fixtures affixed to a building or part of a building or hut or part of a hut for the more beneficial enjoyment thereof;"13
A nice point which is to be decided now is this. The respondent club has its office at 12, Lord Sinha Road, Kolkata. The structure on the maidan is part of the club, although several kilometres apart from its Lord Sinha Road office. Is the structure on the maidan to be treated as a separate unit or part of the club as a whole taking 12, Lord Sinha Road and the maidan structure together?
The said Act used different words to describe immovable properties in different parts of the statute. In some parts it refers to land and buildings. If you consider Section 170 and 171 of the said Act, property tax is leviable on land and buildings. Now, considering Section 385 of the said Act relating to naming and numbering of streets, the legislature in sub -section (d) has said that the Municipal Commissioner "with the approval of the Mayor-in-Council determine the number or sub-number by which any premises or part thereof shall be known." We have seen how the same legislature has defined premises in Section 2(46) of the West Bengal Municipal Act, 1993.
"Building" has been defined in Section 2(5) of the Kolkata Municipal Corporation Act, 1980 in the following manner:-
"2. (5) "building" means a structure constructed for whatsoever purpose and of whatsoever materials and includes the foundation, plinth, walls, floors, roofs, chimneys, fixed platforms, verandas, balcony, cornice or projection or part of a building or anything affixed thereto or any wall (other than a boundary wall less than three metres in height) enclosing or intended to enclose any land, signs and outdoor display structures but does not include a tent, samiana or tarpaulin shelter;"
Mark the word "structure" used in Section 2(5) of the 1980 Act. 14 In my opinion, the word "building" has to be given a liberal and wide interpretation so as to include any kind of structure except tent, samiana or tarpaulin shelter. The word "premises" has a wider connotation under the Act to include all buildings and huts. It also includes any garden, ground or eating house appertaining to the building and all fittings and fixtures. In my opinion, there is nothing in the Act to suggest that any premises should consist of contiguous land, buildings, huts etc. The club premises were marked as 12, Lord Sinha Road, Kolkata. The demand notices were raised at 12, Lord Sinha Road, Kolkata. Therefore, the building or part of the building where the office or club was situated and the unit of the club in the maidan are to be treated as one premises.
In view of this ratio of the Supreme Court the club needed licence under Sections 421 and 435 of the said Act to carry on its functions from its maidan unit.
If one goes by the letter of demand dated 24th November, 2008 one will notice that it is addressed to the respondent club at 12A, Lord Sinha Road. Section 238(2) refers to supply of water. There is no dispute that the part of the building at 12A, Lord Sinha Road used by the club is not for residential purpose.
That establishment of the club obtains supply of water and drainage facilities from the appellant corporation.
The given word is "supply".
The corporation does not supply any water to the unit of the club in the maidan. It is an accepted position that the club draws its requirement of water supply from the sub-soil water reserve and deals with drainage thereof by an indigenous system within the club territory in the maidan. The appellant corporation neither has any 15 pipeline for supply of water to the maidan nor has any drainage system. So far as the unit of the respondent club in the maidan is concerned, the appellant can neither claim any fee for water supply or drainage under Section 307 or removal of solid waste under Section 333 of the said Act. These activities are undertaken by the maidan unit of the club on their own without any service having been provided or requested from the appellant corporation. However, they are entitled to claim water fee for supply to 12, Lord Sinha Road, Kolkata - 700071. Furthermore, they are entitled to charge fee for providing the drainage system in that address. Also for rendering service for solid waste disposal threat. That part of the judgment and order setting aside the demand of the appellants under Section 238(2), 307 and 333 of the said Act is upheld. The corporation is free to raise a fresh demand restricted to Premises No. 12, Lord Sinha Road, Kolkata- 700071.
SUMMARY OF FINDINGS:
I) The part of the demand notice dated 24th November, 2008 under Section 199 of the Kolkata Municipal Corporation Act, 1980 is upheld, II) The parts of the said demand notice under Sections 238(2), Section 307, Section 333 of the said Act are set aside with a direction upon the appellant corporation to raise fresh demands confined to the unit of the respondent club at 12, Lord Sinha Road, Kolkata - 700 071 only. No demand notice under the aforesaid sections can be raised in respect of its unit in the maidan.
III) The part of the said demand notice under Section 435 and 421 of the said Act is upheld.16
IV) The other miscellaneous demands in the said notice are also upheld.
V) The distraint warrant dated 24th March, 2009 under Section 220 of the said Act is set aside with liberty to issue a fresh one after the demands referred to above are recomputed and notices in this behalf issued to the respondent club, giving reasonable time to them to make payment.
In those circumstances, this appeal partly succeeds. The impugned judgment and order of the learned single judge dated 19th March, 2015 is partly set aside. All the subject demand notices of the appellants subject to the observations and modifications indicated above are upheld. All interim orders are vacated. The appeal (APO 55 of 2016) is partly allowed. The application (GA 2506 of 2015) is disposed of accordingly.
Certified photocopy of this judgment and order, if applied for, be supplied to the parties upon compliance with all requisite formalities.
(I. P. MUKERJI, J.) MD. NIZAMUDDIN, J:-
I have had the privilege of going through the detailed and erudite judgment of my brother I. P. Mukerji, J. and I am in complete agreement with the view and conclusions taken by him. However, I would like to add a few observations of my own. I have considered the provisions of Section 627 of the Kolkata Municipal Corporation Act, 1980 under which the writ petitioner Club claims exemption from its statutory liability of obtaining licences and 17 payment of various fees under Section 199, 421 and 435 of the Kolkata Municipal Corporation Act, 1980 for the nature of activities carrying on by it on the aforesaid premises by contending that the said land belongs to the Government of India and controlled over by the Army and since the club is located on the said land, provisions of the Kolkata Municipal Corporation Act are not applicable to it. According to me in the aforesaid context the writ petitioner Club has misinterpreted Section 627 of the said Act. From the plain language of Section 627 of the said Act it appears to me that those lands and buildings which belong to the Government in the Hastings area will be subject to the control of the Commanding General Officer. This Section does not say that said part of Hastings area is not included in Kolkata. According to me the expression "Subject to control of the General Officer Commanding" cannot be read in a manner and its scope cannot be enlarged to the extent that he can grant exemption to any person he allows to use or occupy the said premises of that part of Hastings and carrying any activity for which that person is required to obtain licences and to pay fees under the relevant provisions of the said Act. According to me the Commanding General Officer under the expression "control" in Section 627 of the said Act cannot have the power and authority to grant exemption to any such person like the petitioner club from the statutory obligation cast upon that person under Section 199, 421 and 435 of the Kolkata Municipal Corporation Act, 1980 to obtain licences and to pay fees under the provisions of those Sections.
In my view user or occupier of a premises cannot be equated with the status of the owner. Here the Government may be the owner of the said premises in question but unless the law permits it cannot exempt any person who is an occupier or user of its premises from the 18 purview of the Kolkata Municipal Corporation and similarly user or occupier of the said premises here it is the petitioner club cannot claim exemption from the purview of Section 199, 421 and 435 of the said Act only on the ground of the Government being the owner of the said premises by virtue of Section 627 of the said Act. In my view such interpretation of Section 627 will frustrate the very object and purpose of the aforesaid Sections 199, 421 and 435 of the said Act.
Had it been the intention of the legislature to exempt an occupier or user like the Writ Petitioner Club from the application of the aforesaid provisions of the Kolkata Municipal Corporation Act, 1980 it could have made specific exemption provision like Section 172 which exempts the class or categories of lands and buildings including the Government's land from payment of property tax. Section 172 of the said Act is as follows:
"172. Exemption of lands and buildings from [property tax].- (1) Notwithstanding anything contained in the foregoing sections in this Chapter,-
(a) (i) lands and buildings or portions thereof exclusively used for the purpose of public worship, or
(ii) lands or buildings exclusively used for the purpose of public burial or as burning ground, or any other place used for the disposal of the daad duly registered under this Act, or 19
(iii) parade grounds which are the properties of Government, or
(iv). Social Welfare Homes run by the State Government, shall be exempt from the [property tax]...................."
If we look into Sections 199, 421 and 435 of the said Act it has used the expression "person" upon whom such statutory obligation has been cast. From plain reading of Section 627 of the said Act nowhere it appears that it grants exemption under Section 199, 421 and 435 of the said Act to the person like the petitioner club which is an occupier or user of the aforesaid Government premises and carries out the nature of activities in question upon it.
In my considered view by no stretch of imagination ambit and scope of Section 627 of the aforesaid Act can be enlarged to the extent that it grants exemption to any user or occupier of the aforesaid premises of the part of Hastings area which belongs to the Government from application of Section 199, 421 and 435 of the Kolkata Municipal Corporation Act, 1980 if it carries the aforesaid activities over the said premises. The impugned demand raised by the appellant corporation against the Writ Petitioner/Club to the aforesaid extent is quite legal and justified.
(MD. NIZAMUDDIN, J.)