Chandulal Jorawarmal Mehta v. Mumbai Building Repair And Reconstruction Board

4. We heard submissions of Mr Pravin Samdani, learned senior counsel appearing for the Petitioner and Ms Sharmila Deshmukh, learned counsel appearing for the Respondent- MHADA.

5. Mr Samdani pointed out various provisions of the said Act including Sections 2(7), 2(9), 2(15), 2(23), 28(1)(d), 28(3), 30, 34, 76 and 53. He submitted that under the said Act, Respondent is empowered to recover cess and the same is paid by the tenants and erstwhile owners of the building. He submitted that the reimbursement of the same is not at all permissible as there is no source of power to recover the said amount. He submitted that unless there is an express provision which authorises levy or collection of tax, no such tax can be levied or collected. He submitted that the actions of the Respondent are violative of Article 265 of the Constitution of India. He submitted that in absence of three mandatory requirements namely, existence of provision of law, such provision of law authorises recovery of tax and such tax must be levied and collected according to that law, the Respondents can not direct reimbursement of those charges and the same amounts to levy or collection of tax without any authority of law. He submitted that reimbursement as sought to be done under the impugned Clause No. 5 in the respective NOCs is without any authority of law. He relied on certain judgments of the Supreme Court and High Courts. We will refer to the relevant judgments as and when necessary.

6. On the other hand, Ms. Sharmila Deshmukh, learned counsel of the Respondent, relied on the Affidavits filed on behalf of the Respondent and pointed out the contentions raised in the said Affidavits. She submitted that the developer, i.e. Petitioner in this case has availed incentive FSI and not normal FSI. She submitted that Section 28(1)(d) of the said Act is the source of power of MHADA to call upon the Petitioner to reimburse the said charges. She submitted that therefore, it cannot be said that the term mentioned in NOCs by which the expenses incurred by the Respondent-Board are asked to be reimbursed cannot be said to be without any authority of law. She pointed out undertakings submitted by the Petitioner before grant of NOC and therefore submitted that the Petitioner is estopped from challenging Clause No. 5 of the said NOCs.

7. Initially, we will consider two points raised by the Respondent. The first point is delay in filing the Writ Petition and the second is whether the Petitioner is estopped from challenging condition No.5 of NOCs in view of Affidavits cum undertaking executed by the Petitioner.

8. As far as the delay in filing the Writ Petition is concerned, it is to be noted that the Writ Petition has been filed on 8th March 2016. The challenge in the Writ Petition is to condition No.5 in NOCs dated 4th December 2012, 2nd July 2013, 3rd May 2014, 15th January 2011, 19th December 2009 and 22nd September 2009. Thus, NOCs issued from the year 2009 to 2014 are challenged by filing Writ Petition in March 2016. Therefore, there is considerable delay in filing Writ Petition. It is significant to note that there is no explanation whatsoever given in the Writ Petition regarding said delay. In fact in the memo of the Writ Petition there is specific averments that there is no delay or laches in filing the Writ Petition. Thus, there is substance in the contention raised by the Respondent regarding delay.

9. Another contention raised by the Respondent is that the Petitioner has submitted Affidavit cum undertaking, inter alia, agreeing to pay to the Board any expenditure incurred by it in the past towards the structural repairs, propping, framing reconstruction scheme, land acquisition, etc. of the said property as and when called upon by the Board but in any case before demolition of existing buildings. It is submitted that the Petitioner has accepted the conditions incorporated in NOCs and the said NOCs have been acted upon. The Petitioner has in fact reimbursed the said expenditure and complied with clause No.5 of the said NOCs. The Petitioner has constructed new buildings and thereafter, after completion of the work of the new buildings, has now challenged the said condition. It is apparent that the Petitioner has given undertaking as above, complied with the same and thereafter, on the basis of NOCs, carried out the reconstruction by availing incentive F.S.I. Thus, there is also substance in the said contention raised by the Respondents that the Petitioner is estopped from challenging Clause No.5 of the NOCs.

10. However, as the issue raised in the present Petition is important and is likely to be raised concerning many similar NOCs, we have also examined the challenge to the condition No.5 of said NOCs on merits.

11. Before going into the rival contentions regarding challenge to condition No.5 of NOCs, it is useful to refer to the historical background set out in the Affidavit dated 12th December 2016 of Mr Arvind Joshi, Executive Engineer, Mumbai Building Repairs and Reconstruction Board. The relevant paragraphs 5 to 9 are reproduced hereinbelow: “5. I say that with the advent of the Second World War in 1939, rents in Bombay were frozen at 1939 levels initially, under the Bombay Rent Act, 1939 and subsequently at 1940 levels under the Bombay Rent Act, 1947. As result of the freezing of the rents on the one hand and increase in prices of building materials, wages of workers etc. on the other, it was impossible for landlords to carry out repairs to the buildings. This led to collapse of some buildings. To meet this situation, the Bombay Building Repairs and Reconstruction Board Act, 1969 was enacted on 1.10.1969. It was applicable only to the island city of Mumbai and not to the suburbs. The buildings in Mumbai were categorised into three groups depending on their year of construction viz. Category ‘A’ Buildings Constructed prior to 1.9.1940 (16502 Bldgs). Category ‘B’ Buildings constructed between 1.9.1940 and 31.12.1950. (1489 Bldgs) Category ‘C’ Buildings constructed between 1.1.1951 and 30.12.1969. (1651 Bldgs) Total 19,642 cessed Buildings A cess was levied on these buildings and the Repair Board established under the said Act, had taken up the responsibility of repairing the said buildings. In case the repairs were beyond economic levels, such buildings were to be acquired by the Board and reconstructed/ redeveloped.

6. The said 1969 Repairs Act was replaced by the Maharashtra Housing and Area Development Act, 1976 (Development Act) which consolidated various Acts, including the said 1969 Repairs Act, which was inserted into the Development Act as Chapter VIII with modifications. Collection of cess continued under the Development Act. The basic objective of Chapter VIII of the said Act was to carry out structural repairs to the cessed buildings and if they were beyond economic repairs to acquire and reconstruct. This scheme of reconstruction/development failed. Thereafter, in 1986, the Development Act was amended by incorporating Chapter VIII-A by which 70% of the occupiers of ‘A’ category cessed buildings could come together and acquire property through the Development Act for “reconstruction” on paying only 100 months’ net rent to the owner (the rents were frozen at 1940 levels). The owner had no role to play in this scheme. The occupiers could acquire the building, demolish the building and reconstruct it. This scheme of reconstruction/redevelopment also failed. The government policy for reconstruction/redevelopment from12.11.1984 to 23.11.1991 granting FSI 2 or consumed FSI, whichever is more, to the cooperative societies of the owners and occupiers also failed. Therefore, on 23.3.1991, Regulation 33(7) was brought into force as a part of the Town Planning Act in 1991. During all this period, the large number of cess buildings were repaired and or reconstructed by the Authority, from the funds made available to it. The cess amount collected is nominal and insufficient as compared to the expenses that are incurred in the task of maintenance and repairs/ reconstruction of the cessed buildings.

7. Development Control Regulations for Greater Mumbai, 1991 have been made by the State Government in exercise of powers conferred by section 154 of the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act). These DCRs regulate the construction of buildings within the local limits of the planning authority i.e. the Municipal Corporation of Greater Mumbai. Regulation 32 thereof lays down restrictions regarding floor space index (FSI). The FSI in south Mumbai is 1.0 and the FSI in suburbs in the north is 1.33. However, various clauses of Regulation 33, such as the clause (7) and (10), provide for additional FSI.

8. The provision regarding permissible FSI under Regulation 33(7) and the minimum and maximum carpet area in clause-2 of Appendix III has undergone changes from time to time as under:- Period Floor Space Index (FSI) Minimum Carpet Area Maximum Carpet Area (a) (b) (c) (d) 1991 to 1999 2.0 180 sq.ft. 1999 to 2011 2.[5] 225 sq.ft. 753 sq.ft. 2011 onwards 3.0 300 sq.ft. No limit The Petitioner is thus deriving benefit of FSI, which he will be able to convert into constructed areas and sell at market price to make substantial profits.

9. I say that if the Petitioners had not taken advantage of DCR 33(7), the petitioners would have got an FSI of

1.33 only, but it is only by taking advantage of the said Regulation that the Petitioners are going for redevelopment of their property by availing higher FSI of 2.0 between 1991 to 1999 or FSI of 2.[5] between 1999 and 2011 or FSI of 3.0 from 2011 onwards. It is submitted that having taken advantage of such high FSI of 2.[5] or 3.0 and having voluntarily agreed to undertake redevelopment subject to the condition of paying the expenses incurred by this Authority (Condition no.5 of the NOC), now it is not open to the Petitioners to challenge the said condition and that too after a gross delay of a number of years and after having constructed buildings on the plots. The Petitioner cannot be allowed to wriggle out of the condition of NOC which was accepted and acted upon by them without reservation, including giving an undertaking to pay the expenses incurred by MHADA.” (Emphasis added)

12. In the above background it is necessary to see the relevant provisions of the said Act. The said Act was enacted to unify, consolidate and amend the laws relating to housing, repairing and reconstructing dangerous buildings and carrying out improvement works in slum areas. The relevant portion of the preamble of the said Act is set out hereinbelow: “An Act to unify, consolidate and amend the laws relating to housing, repairing and reconstructing dangerous buildings and carrying out improvement works in slum areas. [WHEREAS, on account of the rapid growth of industries in the urban areas and the fast growth of population and commercial activities in such areas, the need of housing accommodation could not be met by the limited house construction activities in the private sector; AND WHEREAS, in the urban areas and particularly in the [Brihan Mumbai] area the old buildings which have outlived their lives and rendered themselves in a bad state of repairs and presented a dangerous possibility of collapse, necessity was increasingly felt to take up the programme of repairs and reconstructions of such buildings; AND WHEREAS, due to acute shortage of accommodation in the urban areas slums have come up which necessitated taking up improvement works in slum areas; AND WHEREAS, the magnitude of the housing programme for construction of new houses throughout the State and the task of repairs and reconstruction of old and dilapidated buildings and improvement of slums in the urban areas is so, great that it is necessary for the State Government to intervene and take effective steps including acquisition of lands and buildings for carrying out housing, repairs, construction and reconstruction programmes over or in such lands and buildings and transferring ownership and control thereof to needy persons so as to bring about an equitable distribution of ownership and control in houses in such lands and buildings to subserve the common good;]”

13. Section 2(9) defines “Cess” which means a tax on lands and buildings levied or leviable under Chapter VIII of the said Act. Section 2(30 ) defines “rateable value” in relation to a building in any area has the meaning assigned to it in the relevant municipal law in force in such area. Section 28 is regarding functions, duties and powers of authority, i.e. Maharashtra Housing and Area Development Authority (“MHADA”) established under Section 3. As per section 28(1)(a)(ix), the demolition of obstructive or dangerous and dilapidated buildings or portions of such buildings and as per Section 28(1)(a)(x), repairs to or construction and reconstruction of buildings are inter alia functions and duties of the MHADA. Section 28(1)(d) specifies that one of the power of the MHADA is to raise resources for the purpose of carrying out the objects of this Act and subject to directions, if any, made by the State Government to make suitable allocation of the resources to the Board. Section 2(6) defines “board” which means a board established under Section 18.

14. The Mumbai Repairs and Reconstruction Board for the City of Mumbai is constituted under Section 18(1)(a) of the said Act. The said Board is inter alia constituted for carrying out the activities of repairs and reconstruction of dilapidated buildings. As per Section 16 of the said Act inter alia Board is one of the authorities charged with carrying out the provisions of the said Act.

15. The provisions contained in Chapter VIII of the said Act regarding repairs and reconstruction of dilapidated buildings are also significant for deciding the present Writ Petition. Chapter VIII consists of Section 74 to Section 103. Section 74 provides that the Mumbai Repairs and Reconstruction Board established under Section 18 shall be the Board for the purpose of carrying out the purposes of said Chapter. Section 75 provides that Board to exercise power and perform duties subject to the superintendence, direction and control of Authority, i.e. MHADA. Section 76 is regarding duties relating to repairs and reconstruction of dilapidated buildings and the same is reproduced hereinbelow for ready reference: “76. Duties relating to repairs and reconstruction of dilapidated buildings. Subject to the provisions of this Chapter, it shall be the duty of the Board:a. to undertake and carry out structural repairs to buildings, in such order of priority as the Board, having regard to the exigencies of the case and availability of resources, considers necessary, without recovering any expenses thereof from the owners or occupiers of such buildings; b. to provide temporary or alternative accommodation to the occupiers of any such building, when repairs thereto are undertaken or a building collapses; c. to undertake, from time to time, the work of ordinary and tenantable repairs in respect of all premises placed at the disposal of the Board; d. to move the State Government to acquire old and dilapidated buildings and which are, in the opinion of the Board, beyond repairs; and to reconstruct or to get reconstructed new buildings thereon for the purpose of housing as many occupiers of those properties as possible, and for providing alternative accommodation to other affected occupiers; e. to move the State Government to acquire old and dilapidated buildings and which were once structurally repaired by the Board, but in respect of which further structural repairs are not, in the opinion of the Board possible or economical, and to reconstruct or to get reconstructed (on demolishing existing buildings) new buildings thereon for the purpose of housing as many occupiers of those properties as possible, and for providing alternative accommodation to other affected occupiers; f. having regard to the exigences of the case and availability of resources, to construct or to get constructed through an approved agency, transit camps with a view to providing temporary accommodation to persons affected by house collapse, fire torrential rain or tempest in its area of operation; g. to take action for demotion of dangerous and dilapidated buildings or portions thereof, which are not capable of being repaired at reasonable expense, and thereby save human lives; h. with the prior approval of the Authority, to do all other things to facilitate the carrying out its powers, duties and functions provided by or under this Act.”

16. Section 79 is concerning power of Board as to undertake building repairs, building reconstruction and occupiers housing and rehabilitation schemes. The same is reproduced hereinbelow for ready reference: “79. Power of Board to undertake building repairs, building reconstruction and occupiers housing and rehabilitation schemes.

1. The Authority may, on such terms and conditions as it may think it to impose, entrust to the board the framing and execution of schemes for building repairs or for reconstruction of buildings or for housing and rehabilitation of, dishoused occupiers, whether provided by this Act or not, and the Board shall thereupon undertake the framing and execution of such schemes as if it had been provided for by this Act.

2. The Board may, on such terms and conditions as may be agreed upon and with the previous approval of the Authority— a. hand over the execution under its own supervision of any, building repairs scheme, building reconstruction scheme, or dishoused occupier’s housing scheme to a Municipal Corporation or to a co-operative society or to any other agency recognized for the purpose by the Board, as it may deem necessary, and b. transfer by sale, exchange or otherwise in any manners whatsoever any new building constructed on any land acquired under this Chapter to any co-operative society, if it is formed by all the occupiers, or to apartment owners for the purposes of the Maharashtra Apartment Ownership Act, 1970 (the apartment owners being all such occupiers).”

17. Section 82 is concerning Levy and Collection of Mumbai Building Repairs and Reconstruction Cess. The said Section is “82. (1) For the purpose of this Chapter but subject to the provisions of section 83, there shall be levied and paid to the State Government, from such date as may be appointed by the State Government by notification in the Official Gazette, a tax on lands and buildings called 2[the Mumbai Building Repairs and Reconstruction Cess] (in this Chapter referred to as “the cess”,) at the rate of so many percentum of the rateable value of the concerned building or land or part thereof as is provided therefor under the Second Schedule to this Act. (2) Subject to the provisions of this Chapter, the cess shall be collected by the Mumbai Corporation in the same manner in which the property tax is collected under [the Mumbai Municipal Corporation Act] (hereinafter in this Chapter referred to as “ the Corporation Act”). (3) The Municipal Commissioner shall recover the amount of the cess levied under sub-section (1) by an addition to the general tax levied and collected under the Corporation Act. Every addition to the general tax made under this section shall be recovered by the Municipal Commissioner from each person liable therefore in the same manner as the general tax due from him. The Municipal Commissioner may, in respect of the cess due, prepare separate bill for such period or periods and in such form or forms and serve them in such manner as he may determine. Where the cess is primarily leviable from the owner, the instalment of the cess due for any half year shall be recoverable from him in arrears with the instalment of the general tax due for the next half year, and where such owner is not able to recover any amount of increase in the rent from any occupier as permitted under sub-section (4) of this section, he shall, subject to the provisions of subsections (5) and (6), be entitled to withhold payment of that amount till it is recovered from the occupier. The provisions of section 147 and 148 of the Corporation Act, shall apply to the cess, as if it were part of the general tax levied under that Act. (4) Where an owner is required to pay to 1[the Mumbai Corporation] in respect of any land or building the cess levied under this section, the share of the owner shall be 10 per cent. of the rateable value of the land or building, and he shall be entitled to recover the remaining amount of the cess levied by making a proportionate increase in the rent of the various premises in the building, in the same manner as if there was an increase in the general tax; and such increase in rent shall not be deemed to be an increase for the purposes of section 7 of the Rent Act, or for the purposes of the Corporation Act. Where the rent of any premises in a building is payable by the month, if such rent or increases are in arrears for a period of six months or more, the owner shall be entitled to the recovery of possession of the premises under section 12 of the Rent Act. (5) If the owner— (a) fails to pay to the Mumbai Corporation his share of the cess; or (b) fails to pay to the Mumbai Corporation any portion of the cess as is due from any occupier as provided in sub-section (4), after having recovered the same from the occupier; or

(c) does not within a reasonable time institute a suit, for recovery of possession of the premises; or report to the Municipal Commissioner the name of the occupier, the premises in his possession and the amount of the cess due from him, as and when any occupier is in arrears for payment of the portion of the cess due from him for a period of six months or more, the Municipal Commissioner shall be entitled to recover from the owner the owner’’s or occupier’’s share of the cess, or both, as the case may be, in the same manner in which the arrears of property tax are recovered under the provisions of the Corporation Act, [and shall also be entitled to impose a penalty as provided in section 207A of the Corporation Act, not exceeding fifteen percentum of the amount of cess due from the owner or occupier.] (6) On receipt of a report from the owner under the last preceding sub-section or otherwise, when any occupier is in arrear in payment of the portion of the cess due from him, the Municipal Commissioner may recover from the occupier the due amount (whether it has remained due for less than one year or more) as if it were an arrear of tax due under the Corporation Act. (7) Where the Municipal Commissioner has under section 175 of the Corporation Act refunded two-thirds of the amount of general tax paid in respect of any property or part thereof for any period, the Municipal Commissioner shall, under intimation to the Board, also refund two-thirds of the amount of cess if paid in respect of that property or part thereof for the same period and if the cess is not paid, reduce the demand for cess to one-third of the amount of cess payable for that period. (8) Notwithstanding anything contained in any law and notwithstanding any rights arising out of any contract or otherwise howsoever, any sum due as cess in respect of any land or building shall, subject to prior payment of the land revenue and the education cess and penalty levied under the Maharashtra Education and Employment Guarantee (Cess) Act, 1962 (if any) thereon, due to the State Government, be a first charge,— (a) in the case of any land or building held immediately from the Government upon the interest in such land or building of the person liable to pay the cess, and upon the goods and other moveable property, if any, found within or upon such land or building and belonging to such person; and (b) in the case of any other land or building, upon such land or building, and upon the goods and other moveable property, if any found within or upon such land or building and belonging to the person liable to pay the cess.”

18. Section 83 is regarding exemption of certain buildings and lands from payment of cess. Section 84 is regarding assessment book maintained under Corporation Act to contain entries showing categories to which buildings liable to cess belong and other particulars. The relevant portion of Section 84 is reproduced hereinbelow: “(1) For the purpose of assessing the amount of cess leviable under this Chapter, the Municipal Commissioner shall, in a Schedule appended to the assessment book maintained by him under section 156 of the Corporation Act (which shall be deemed to be a part of such assessment book) cause additional entries to be made showing the Category to which every property on which the cess is leviable belongs and such other particulars as he deems necessary. Where a building is erected before the 1st day of September 1940, the building shall be classified as belonging to Category A. Where a building is erected between the period from the 1st day of September 1940 to 31st day of December 1950 (both inclusive), the building shall be classified as belonging to Category B. Where a building comprised in any property is erected between the period from the 1st day of January, 1951, to the day immediately preceding the date on which the provisions of the Bombay Building Repairs and Reconstruction Board Act, 1969 are brought into force in the area in which the building is situated the building shall be classified as belonging to Category C.”

19. Section 85 mandates that Mumbai Corporation to credit cess amount to the Government. Section 86 is regarding creation of Mumbai Building Repairs and Reconstruction Fund and the same is “86. (1) The proceeds of the cess collected and paid to the State Government by the [Mumbai Corporation] in pursuance of the provisions of the last preceding section shall first be credited to the Consolidated Fund of the State; and, after deducting the rebate payable to the [Mumbai Corporation] for the cost of collection, the remaining amount shall, under appropriation duly made by law in this behalf, be transferred to the fund of the Authority. There shall, however, be created a separate fund called [the Mumbai Building Repairs and Reconstruction Fund] (in this Chapter referred to as ““ the Repairs Fund ““) and the amount so transferred to the fund of the Authority shall be withdrawn therefrom and transferred to such Repairs Fund. (2) The amount transferred to the Repairs Fund under sub-section (1) shall be charged on the Consolidated Fund of the State. (3) The amount in the Repairs Fund shall be placed by the Authority at the disposal of the Board for being expended for the purposes of this Chapter. The State Government may make rules regulating all matters connected with the Repairs Fund, including the manner in which that Fund shall be maintained, operated and expended.”

20. Section 88 is regarding undertaking structural repairs by the Board of buildings which are in dangerous condition and likely to deteriorate and fall. The relevant portion is reproduced hereinbelow: “88. (1) Subject to the other provisions of this Chapter, where the Board on consideration of the information given by the Municipal Commissioner, or a report or its officer authorised for the purpose, or other information in its possession, is satisfied that any building, which is occupied by persons, is in such a ruinous or dangerous condition, that it is imminently likely to fall unless structural repairs which will render it fit and safe for habitation, are urgently done, then in such cases, the Board shall, subject to the provisions of sub-section (3), undertake such repairs to that building. (2) The Board may prepare a list of such buildings setting out the order of priority or urgency in respect of which structural repairs are necessary, and may undertake simultaneously or in such order of priority the structural repairs according to the exigencies of the case and its resources. (3) If the Board is of opinion that— (a) the cost of structural repairs to [a building per square metre, will exceed such amount, as may be specified by the State Government, by notification in the Official Gazette, to be the structural repairs cost per square metre] or (b) the cost of structural repairs to a building, per square metre, will exceed the amount specified under clause (a) but the size of the land on which such building is standing is such that for some reason or the other it would not be possible or economical to erect any new building thereon and there is an adjoining building but the cost of structural repairs to [such building, per square metre, does not exceed the amount specified under clause (a) then in cases falling under clause (a) or clause

(i) the Board, notwithstanding anything contained in this Chapter, may not consider such building or buildings for repairs and may issue a certificate to the effect to the owner or owners thereof, as the case may be, affix a copy of the relevant certificate in some conspicuous part of the building or buildings for the information of the occupiers and proceed to take action as provided in this Chapter: Provided that, in cases of special hardship, the Board may, on such terms and conditions as it may deem fit to impose, consider a building for structural repairs even if the cost of such repairs is likely to exceed the limit aforesaid: Provided further that, where in any case the occupiers of a building undertake that they shall bear the cost of such repairs which are in excess of the amount specified under clause (a) and abide by such terms and conditions for payment of the excess cost to the Board as it may think fit to impose, the Board may carry out structural repairs to such building. (4) The Municipal Commissioner shall, from time to time, send to the Board, full particulars of the buildings which are in a ruinous or dangerous condition and the condition of which is such that they are likely to fall if structural repairs are not urgently undertaken or in respect of which he has served notice under section 354 of the Corporation Act, but the same have not been complied with.”

21. Section 89 is regarding procedure before undertaking structural repairs. Section 90 is concerning temporary accommodation pending structural repairs. Section 91 makes provision for repairs or reconstruction of buildings which suddenly collapse or become uninhabitable. Section 97 is a very important provision and the same is reproduced hereinbelow for ready reference: “97. (1) The State Government shall, under appropriation duly made by law in this behalf, pay an annual contribution to the Authority equal to the amount of cess recovered during that year, and the Mumbai Corporation shall pay the annual contribution of rupees ten crores to the Authority. (2) The Authority from its own funds shall pay an annual contribution of rupees ten crores to the Board for the purpose of reconstruction of the buildings.”

22. Section 98 is regarding disposal of moneys received by the Board and is reproduced hereinbelow: “98. The moneys placed at the disposal of the Board by the Authority under this Chapter shall be applied for the purposes of this Chapter.”

23. The historical background set out in the Affidavit filed on behalf of Respondent-Board and scheme of the said Act as reflected in the abovementioned relevant provisions of the said Act points out the following significant aspects: I We are concerned with clause No.5 of NOCs granted by the Board for redeveloping the said properties issued under Regulation 33(7) of D.C.R., 1991. Provisions of Chapter VIII of the said Act are concerning the cess buildings which are in Mumbai. Therefore, in the present petition, we are concerned with the redevelopment of cess properties in Mumbai. II As noted hereinabove with the advent of the Second World War in 1939, rents in Mumbai were frozen at 1939 levels initially and at 1940 levels under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. As a result of the freezing of the rents, it was impossible for landlords to carry out repairs to the buildings which led to collapse of some buildings. Earlier “1969 Act” was enacted and the same was replaced by the MHADA Act. The MHADA Act was enacted for making provision regarding housing, repairing and reconstruction of dangerous buildings. III The Board has been constituted under Section 18(1)(a) of the said Act. The said Board is constituted for carrying out inter alia the activities of repairs and reconstruction of dilapidated buildings. Section 75 provides that Board to exercise power and perform duties subject to the superintendence, direction and control of Authority, i.e. MHADA. As per Section 76 of the said Act following are inter alia duties of the Board: (a) to undertake and carry out structural repairs to buildings; (b) to provide temporary or alternate accommodation to the occupiers of such buildings;

(c) to undertake work of ordinary and tenantable repairs,

(d) to move the State Government to acquire old and dilapidated buildings which are beyond repairs for reconstructing the same for providing alternate accommodation to occupiers of said buildings and for providing alternate accommodation to other affected occupiers; (e) to take action for demolition of dangerous and dilapidated buildings or portion thereof. Thus, it is significant to note that the scope of work of Board is not only confined to repairs of the old dilapidated buildings but covers wide range of activities. IV For the purpose of said Chapter VIII, Municipal Corporation of Greater Mumbai is empowered to collect the cess in the same manner in which the property tax is collected. Such cess is to be collected from owners as well as occupiers of cess buildings. 10% of such cess is to be collected from the owners and the balance is to be collected from occupiers (Section 82). For the purpose of assessing the amount of cess, the buildings are classified as category A, category B and category C. Buildings erected before 1st day of September 1940 are classified as category A, buildings erected from 1st September 1940 to 31st December 1950 are classified as belonging to category B and buildings erected between 1st January 1951 till 1st October 1969 are classified as category C buildings. (Section 83). Thus, buildings falling in said categories and liable to pay cess are referred as “cess buildings”. V Under Section 86(1) of the said Act, Mumbai Buildings Repairs and Reconstruction Fund (“said Fund”) is created. The cess collected by MCGM by deducting the expenses required for collecting such cess is required to be transferred to the said fund, through MHADA. Under Section 97, the State Government shall pay an annual contribution to MHADA equal to the amount of cess recovered during that year and MCGM shall pay annual contribution of Rs.10 crores to MHADA. Under Section 97 (2), MHADA from its own funds shall pay annual contribution of Rs.10 crores to the Board for the purpose of reconstruction of the buildings. Section 98 provides that moneys placed at the disposal by the MHADA are to be applied for the purposes of said Chapter VIII.

24. The scheme of the said Act clearly provides that Board is established for the purpose of undertaking and carrying out structural repairs to buildings, to carry out ordinary and tenantable repairs, to demolish dangerous and dilapidated buildings, to reconstruct new buildings for the purpose of providing houses to affected occupiers of that particular building and also to affected occupiers of other buildings. Thus, the contention of the Petitioner that occupants of said buildings have paid cess and therefore, expenditure made with respect to repair of such building is not required to be reimbursed is to be examined in view of wide range of functions/duties assigned to the Board and not merely confining the same to repairs. It is significant to note that as per the scheme of Chapter VIII of the said Act, cess is recovered for the purpose of performing the functions as contemplated in Chapter VIII. To carry out repairs is not the only function of the Board. The Board has to perform a wide range of functions including repairs to the dilapidated buildings, demolition of dilapidated buildings, reconstruction of new buildings, providing transit accommodation to the affected occupiers during repairs or reconstruction, providing houses to affected occupiers of concerned building and other buildings. Thus, cess is collected to carry out large number of activities. Therefore, the contention that the occupiers of old buildings with which Petitioner is concerned, paid the “cess” and therefore, the Board cannot impose condition of reimbursement of the expenses required for carrying out the repairs of said particular building and the same amounts to double taxation is without any basis.

25. The Constitutional Bench of Supreme Court in the judgment reported in Vivian Joseph Ferreira & Anr v The Municipal Corporation of Greater Bombay & Ors,[1] was dealing with challenge to the constitutional validity of levying of cess under the said 1969 Act. In that case, owners of two residential buildings challenged the validity of the 1969 Act. It was their contention that their buildings are not in dilapidated or in dangerous conditions and still they were required to pay the cess as levied under the provisions of the said 1969 Act. The same was unreasonable and hit by Article 14 of the Constitution of India. It was contended on their behalf that by 1(1972) ()SCCS70. subjecting residential buildings in sound condition to the cess, the 1969 Act in substance and effect provides bounties for those owners who have been neglectful of their buildings. It was contended that the cess amounted to unreasonable restrictions and could not be said to be for public purposes as the same benefits neglectful and defaulting owners at the cost of owners who have been looking after their properties and consistently carrying out tenantable repairs. While dealing with these contentions, the Supreme Court inter alia held that: “17. A perusal of the provisions of the Act makes it clear that its objects were: ( 1 ) to preserve the residential and tenanted buildings existing at the date of its enactment, (2) for that purpose, to set up a special agency, the Bombay Buildings Repairs and Reconstruction Board, whose duties and functions would be, (a) to undertake and carry out structural repairs to buildings in respect of which the impugned tax is levied, (b) to provide temporary or alternative accommodation to occupiers of any such buildings where any such building collapses, (c) to undertake and carry out tenantable repairs to buildings placed at its disposal, (d) to move the Government to acquire old and dilapidated buildings in respect of which the cess is levied and which are beyond repairs or buildings in which structural repairs have once been carried out but further repairs are not possible, (e) to reconstruct new buildings, (f) to set up transit camps for those dishoused on account of collapses, fire, rain or tempest, and (g) to undertake demolition of dangerous buildings or portions thereof. These objects obviously were, fixed upon as a result of the earlier studies undertaken by the Government and the Corporation and the recommendations made by members of the public in answer to the proposals published by Government in connection with collapses of residential buildings and the tragic consequences following them.

20. Such being the scheme and the objects of the, Act, can it be said that the cess imposed thereunder is not for a public purpose? It may be that some of the existing buildings, by reason of their having been recently constructed or their having been properly cared for or structural repairs having been recently made therein, might not require repairs contemplated by the Act. Yet, their owners are required to pay the cess from out of which the Board would carry out structural repairs to buildings whose owners have been neglectful or even defaulters in carrying out the Municipal requisitions. Does it, however, follow from such a result that the purpose of the Act is to confer bounty on such owners, and that therefore, the purpose of the tax is to serve a private and not a public purpose, and therefore, violative of Article 19(1) (f)?

21. The rule, no doubt, is that taxes can be levied for public purposes and indirect and incidental benefits which may result to the public do not make a public purpose, where the object is directly private. But the purpose of a tax would not be regarded as private merely because some persons might receive more benefits from the use of its proceeds than others or is imposed for a purpose other than revenue, such as tariff duties for encouragement of manufactures or licence fees with a view to regulate a particular trade or industry. A law, not only exempting from taxation the limited means of poor and afflicted persons but providing public funds to ameliorate their conditions, is undoubtedly one for public purpose. A clear example of such a tax is the provision for hospitals and asylums where medical and other aid is given to the poor and the dependent free of any charge. A tax in aid of private enterprises would undoubtedly be regarded as loading ““the table of the few with bounty that the many may partake of the crumbs that fall therefrom””, unless such an enterprise is one of such magnitude or promise that its prosperity constitutes a substantial element of public welfare or which renders it important to national defence or other such national interest(1). But the principle that funds raised by taxation cannot be expended for private use does not prevent the Legislature from looking at the ultimate rather than the immediate result of the expenditure, and incurring an expense or creating a liability on the part of the public which it was under no constitutional obligation to incur or create if the ultimate effect will be beneficial to the public. Upon this theory laws establishing minimum wage or limiting the hours of labour have been sustained. The fact that a statute authorising an expenditure of public funds for a public purpose may foster another enterprise which is not a public one does not invalidate the statute if the purpose of the expenditure is legitimate because it is public. It will not be defeated merely because the execution of it involves payments to individuals. The test is not as to who receives the money but the character of the purpose for which it is to be expended(2). What is to be borne in mind is the distinction between the purpose and the method of its implementation. If in the course of the latter some benefit incidentally reaches to a particular person or persons, the former neither changes its character nor is it invalidated for that reason. For instance, when a sudden or an overwhelming disaster strikes, such as flood or a destructive fire, a Legislature may legitimately authorise expenditure of public money to provide succour to the victims. Persons living in the area may become helpless or destitute, irrespective of whether rich or poor, but it is a public purpose to supply the sufferers with food, clothing and shelter in order to relieve their immediate needs. Expenditure of public funds in such cases have been treated as necessary for the proper exercise of the police powers of the State(3).

23. Both the purpose of the cess and its use are without doubt for public purpose. The purpose is to prevent collapses and the suffering they must cause including rendering several persons homeless, a condition accentuated by the demand for accommodation outrunning the supply. The use is for preservation and prolonging the life of the buildings existing at the date of the enactment of the Act by carrying out structural repairs where owners due to diverse reasons refuse or are reluctant to spend their capital on such preservation, jeopardising the life of their properties and due to the peculiar conditions in the property market find it profitable to render buildings into vacant plots. If in implementing the purpose, which, as aforesaid, is demonstratably public, some benefit reaches particular individuals, the statute, which does not directly purport so to do, cannot be invalidated.”

26. The above observations of the Supreme Court in Vivian Joseph Ferreira & Anr (supra) considering cess under the 1969 Act are applicable with equal force to the cess under the MHADA Act of 1976. Thus, it is clear that the said cess under the MHADA Act is a tax and said cess is required to be paid by the owners of the buildings covered by Chapter VIII of the MHADA Act to the extent of 10% and balance is to be paid by the occupiers of the said building. It is also significant to note that Board is required to make expenses for the purpose of carrying out functions contemplated by Chapter VIII of said Act through the Mumbai Building Repairs and Reconstruction fund. The said fund inter alia consist of the said cess (excluding expenditure required by MCGM for collection of said cess) and contribution to be paid by State Government, MCGM and MHADA. Thus, it is clear that cess collected under Section 82 of the said Act does not exclusively form part of the said Mumbai Building Repairs and Reconstruction Fund and additional amounts are contributed by the State Government, MCGM as well as by MHADA. This is important to appreciate the contentions raised by the Petitioner.

27. It is the main contention of the Petitioner that as the occupiers of the said buildings have paid the cess there cannot be any recovery of the expenditure made for the purpose of repairs of the said buildings from the Owner/Developer and the same will amount to double taxation. In this behalf it is significant to note that the Petitioner has redeveloped the said properties under the Regulation 33(7) of D.C.R., 1991. No Objection Certificate from Board is required for redevelopment of said properties/buildings, as in view of collection of said cess and applicability of the provisions contained in Chapter VIII of said Act, it is statutory duty of MHADA/Board to undertake repairs/reconstruction, etc. As the Owners/Occupiers wanted to redevelop the said properties on their own, the NOCs of Board were required. These NOCs are issued under Regulation 33(7) of D.C.R., 1991 and therefore, it necessary to set out the said Regulation: “(7) Reconstruction or redevelopment of cessed buildings in the Island City by Co-operative Housing Societies or of old buildings belonging to the Corporation or of old buildings belonging to the Police Department. — For reconstruction/redevelopment to be under taken by Co-operative Housing Societies of existing tenants or by Co-op. Housing Societies of landlords and/or occupiers of a cessed buildings of ‘A’ category in Island City, which attracts the provisions of MHADA Act, 1976 and for reconstruction/redevelopment of the buildings of Corporation and Department of Police, Police Housing Corporation, Jail and Home Guard of Government of Maharashtra, constructed prior to 1940, the Floor Space Indiex shall be 3.0 on the gross plot area or the FSI required for rehabilitation of existing tenants plus incentive FSI as specified in Appendix-III whichever is more. Provided, however that with the previous approval of the Government, MHADA/Corporation shall be eligible to get additional incentive FSI over otherwise permissible FSI as specified in Annexure III of these Regulations: Provided further that in cases of composite redevelopment scheme for plot having ‘A’ category as also ‘B’ category cessed building the above FSI shall be available: Provided further that in cases of reconstruction/development of buildings which have been declared as unsafe by the BHAD Board prior to monsoon of 1997, the above FSI will be available irrespective of category of cessed building: Provided further, that reconstruction/redevelopment undertaken by proposed Co-operative Housing Societies of Landlords and/or Occupiers of cessed building of ‘B’ category, and where composite development is undertaken by different owners of 5 or more plots the FSI required for Rehabilitation of existing tenants plus incentive FSI as specified in Appendix III will be available.] Provided further that reconstruction/ redevelopment undertaken by proposed Co-operative Housing Society of Occupiers of buildings, which were earlier “A” category / cessed buildings but thereafter due to purchase acquisition of the same by Co-operative Housing Society Occupiers such buildings are exempted from payment of cess and which have been declared unsafe by BHAD Board BMC, the FSI required for rehabilitation of existing occupier plus incentive FSI as specified in Appendix-III will be available.”

28. A bare perusal of the said Regulation clearly shows that the owners/developers are entitled for incentive FSI over and above the normal FSI. The normal FSI is 1.33 for the Island City Mumbai and for suburban Mumbai, it is 1. As per Regulation 33(7), the owners/developers are entitled for FSI of 3 or FSI required for rehabilitation of existing occupiers/tenants and 50% of such FSI. Thus, in view of said incentive FSI, Owners/Developers are in a position to avail substantial monetary benefits. It is also significant to note that the Tenants/Occupants of the old buildings will be rehabilitated in new rehab premises by allotting additional carpet areas in addition to the carpet area earlier occupied by them as more particularly, provided by the Regulation 33(7). Thus, in the redevelopment scheme all parties, i.e. Owners/Developers and Occupiers/Tenants will be getting substantial benefits.

29. It is further significant to note that after demolition and reconstruction of said cessed building, the new constructed building will be no longer a cessed building. Owners/Occupiers of such new buildings are not required to pay the cess as new building cannot be classified as belonging to category A, B or C as envisaged under Chapter VIII. As discussed earlier, the said classification is required to be done on the basis of year of construction of the old buildings erected prior to 1st October 1969. As the said new constructed building cannot be termed as “Cessed Building”, there is no question of collection of cess from the owners/occupiers of new building and therefore, there is no corresponding statutory duty on the Board regarding repairs, reconstruction, providing transit accommodation etc. Thus, what is sought to be done by the Board by the impugned condition No.5 of the NOC is reimbursement of expenses already incurred on the said old building. As already set out hereinabove and as held by the Supreme Court in Vivian Joseph Ferreira & Anr (supra) cess is not collected only from the dilapidated buildings but from the buildings which are categorized as category A, B and C irrespectively whether the same are dilapidated or requiring repairs. As set out hereinabove, the said categorization is done only on the basis of year of construction and the same has nothing to do with the condition of the building. It is further significant to note that not only the cess which is recovered under Section 82 of the said Act is utilized for the purposes of Chapter VIII, but contributions by the State Government, MHADA as well as by the MCGM are utilized for the said purposes. The contention raised that there is no statutory provision for collection of such expenses is required to be rejected as Section 28(1)(d) of the said Act specifies that authority, i.e. MHADA is empowered to raise resources for the purpose of carrying out the object of the said Act. It is significant to note that, as said old buildings are covered by category A, B and C as contemplated under Section 83 of the said Act, it is the statutory responsibility of Board to carry out the repairs, reconstruction etc. to such buildings and in that case, expenses are not required to be recovered from the owners or occupiers of such buildings. However, in the present case, old dilapidated buildings were proposed to be demolished and to be reconstructed under Regulation 33 (7) by the Owners/Occupiers or their societies and for that purpose FSI of 3 or the FSI required for rehabilitation of the existing occupiers plus 50% incentive FSI, whichever is higher was allotted and accordingly new buildings were constructed. The old Tenants/Occupiers are also allotted rehab premises of more carpet area than the carpet area of old tenanted premises occupied by them. The said new constructed buildings will not be “Cess Buildings” as they will not be belonging to category A, B, C as contemplated under Chapter VIII and therefore, no cess is required to be paid by them. Consequently, provisions contained in Chapter VIII of the said Act will not apply to such newly constructed buildings. Thus, the impediment as provided under Section 76(a) of the said Act will not apply to the same, assuming that the repairs carried out to said buildings are structural repairs. Thus, there is no illegality in imposing the condition that expenditure required by Board is required to be reimbursed as condition for granting NOC.Recovery of amounts expended by the Board, on old buildings on their repairs, reconstruction and other aspects when they were “Cess Buildings” at the time of granting permission for redevelopment to the NOC holder as a result of which new building will be constructed which will not be “Cess Building”, is a legitimate and lawful means of keeping Board available with the funds for undertaking the purposes of Chapter VIII of the said Act.

30. According to the Petitioner, the demand for reimbursement of said moneys required for repairs of said building amounts to a tax. It is the contention of the Petitioner that neither a tax, nor a fee can be levied without an express provision authorising the same. It is submitted that power to tax must be expressly conferred and strictly construed. Ambiguities in taxing power must be resolved in favour of the citizen. It is submitted that levy of both fees and taxes must be backed by primary legislation. Thus, it is submitted that condition No.5 of said NOCs requiring reimbursement is without any authority of law.

31. To substantiate the aforesaid contentions, the Petitioner has relied on the case of Ahmedabad Urban Development Authority v In the said judgment, it has been held that power of imposition of tax and/or fee by delegated authority must be very specific and there is no scope of implied authority for imposition of such tax or fee. The Petitioner has relied on the case Commissioner of Customs (Import), Mumbai v Dilip Kumar[3] and particularly on paragraphs 54 and 55 of the same: “““54.In Govind Saran Ganga Saran v. CST, this Court pointed out three components of a taxing statute, namely, subject of the tax; person liable to pay tax; and the rate at which the tax is to be levied. If there is any ambiguity in understanding any of the components, no tax can be levied till the ambiguity or defect is removed by the legislature. [See Mathuram Agrawal v. State of M.P.; Indian Banks’’’ Assn. v. Devkala Consultancy Service and Consumer Online Foundation v. Union of India.]

55. There is abundant jurisprudential justification for this. In the governance of rule of law by a written Constitution,

3(2018) 9 SCC 1 there is no implied power of taxation. The tax power must be specifically conferred and it should be strictly in accordance with the power so endowed by the Constitution itself. It is for this reason that the courts insist upon strict compliance before a State demands and extracts money from its citizens towards various taxes. Any ambiguity in a taxation provision, therefore, is interpreted in favour of the subject/assessee. The statement of law that ambiguity in a taxation statute should be interpreted strictly and in the event of ambiguity the benefit should go to the subject/assessee may warrant visualising different situations. For instance, if there is ambiguity in the subject of tax, that is to say, who are the persons or things liable to pay tax, and whether the Revenue has established conditions before raising and justifying a demand. Similar is the case in roping all persons within the tax net, in which event the State is to prove the liability of the persons, as may arise within the strict language of the law. There cannot be any implied concept either in identifying the subject of the tax or person liable to pay tax. That is why it is often said that subject is not to be taxed, unless the words of the statute unambiguously impose a tax on him, that one has to look merely at the words clearly stated and that there is no room for any intendment nor presumption as to tax. It is only the letter of the law and not the spirit of the law to guide the interpreter to decide the liability to tax ignoring any amount of hardship and eschewing equity in taxation. Thus, we may emphatically reiterate that if in the event of ambiguity in a taxation liability statute, the benefit should go to the subject/assessee. But, in a situation where the tax exemption has to be interpreted, the benefit of doubt should go in favour of the Revenue, the aforesaid conclusions are expounded only as a prelude to better understand jurisprudential basis for our conclusion. We may now consider the decisions which support our view.”””

32. In view of the contention raised by the Petitioner that the said reimbursement towards repairs of said buildings amounts to tax, levy of same without any authority of law and therefore, violative of Article 265 of the Constitution of India, it is necessary to examine whether reimbursement of amount incurred on repairs of old building is tax while granting NOC for carrying on redevelopment under Regulation 33(7) and as a consequence of the same new building is proposed to be constructed.

33. Article 265 of the Constitution of India provides that no tax shall be levied or collected except by authority of law. The Supreme Court in Municipal Corporation of Delhi & Ors v Mohd Yasin[4] held as under: “4. Commissioner, Hindu Religious Endowments, Madras v. Lukshmindra Thirtha Swamiar is considered the locus classicus on the subject of the contradistinction between ‘‘tax’’ and fee?. The definition of ‘‘tax’’ given by Latham, C.J. as ““a compulsory exaction of money by public authority for public purposes enforceable by law and not payment for services rendered”” was accepted, by the Court as stating the essential characteristics of a tax. Turning to fees, it was said ““a fee is generally defined to be a charge for a special service rendered to individuals by some governmental agency””, but it was confessed, ““as there may be various kinds of fee, it is not possible to formulate a definition that would be applicable to all cases””. As regards the distinction between a tax and a fee, it was noticed that compulsion could not be made the sole or even a material criterion for distinguishing a tax from fee.

It was observed that the distinction between a tax and fee lay primarily in the fact that tax was levied as a part of a common burden, while a fee was a payment for a special benefit or privilege. But it was noticed that the special benefit or advantage might be secondary to the primary motive of regulation in the public interest, as for instance in the case of registration fees for documents or marriage licences. It was further noticed that Article 110 of the Constitution appeared to indicate two classes of cases where ‘‘fees’’ could be imposed: (1) where the government simply granted a permission on privilege to a person to do something-which otherwise that person would not be competent to do and extracted from him, in return, heavy or moderate fees (ii) where the government did some positive work for the benefit of the person and money was taken as a return for the work done or services rendered, such money not being merged in the public revenues for the benefit of the general public. It was however made clear that the circumstance that all the collections went to the Consolidated Fund of the State and not to a separate fund may not be conclusive. The Court finally observed that there was really no generic difference between the tax fees though the Constitution had, for legislative purposes, made a distinction between a tax and a fee. While there were entries in the legislative lists with regard to various forms of taxes, there was an entry at the end of each one of the three lists as regards fees which could be levied in respect of any of matters that was included in it. The implication seemed to be that fee had special reference to governmental action undertaken in respect to any of those matters.

9. What do we learn from these precedents? We learn that there is no generic difference between a tax and a fee, though broadly a tax is a compulsory exaction as part of a common burden, without promise of any special advantages to classes of taxpayers whereas a fee is a payment for services rendered, benefit provided or privilege conferred’’. Compulsion is not the hall-mark of the distinction between a tax and a fee. That the money collected does not go into a separate fund but goes into the consolidated fund does not also necessarily make a levy a tax. Though a fee must have relation to the services rendered, or the advantages conferred, such relation need not be direct. a mere causal relation may be enough. Further, neither the incidence of the fee nor the service rendered need be uniform. That others besides those paying the fees are also benefited does not detract from the character of the fee. In fact the special benefit or advantage to the payers of the fees may even be secondary as compared with the primary motive of regulation in the public interest. Nor is the Court to assume the role of a cost accountant. It is neither necessary nor expedient to weigh too meticulously the cost of the services rendered etc. against the amount of fees collected so as to evenly balance the two. A broad correlationship is all that is necessary. Quid pro quo in the strict sense is not the one and only true index of a fee; nor is it necessarily absent in a tax.”

34. The Supreme Court in State of HP & Ors v Shivalik Agro Poly Products & Ors[5] in paragraph 15 held as follows: “15. It will be thus seen that the statement of law made in Shirur Mutt case (supra) regarding the attributes of fee has 5(2004) 8 SCC 556 undergone a sea change. The consistent view now is that there is no generic difference between a tax and a fee which are both compulsory exaction of money by public authorities. The correlationship between the levy and the services rendered should be one of general character and not of mathematical exactitude. Further, the broad and general correlationship between the totality of the fee on the one hand and the totality of the expenses of the services on the other, will be sufficient to justify the levy. The levy will not fail only on the ground that the measure of its distribution on the persons or incidence is disproportionate to the actual services rendered by them. The true test being the comprehensive level of the value of the totality of the services set off against the totality of the receipts. The character of the fee is thus established. The vagaries in its distribution amongst the class do not detract from the concept of a fee as such.”

35. Applying these guidelines to the impugned reimbursement demand shows that the same is neither a tax nor a fee. The cess collected under Section 82 of the said Act is a tax. However, the Board utilizes the said fund for carrying out several statutory functions including repairs to the old buildings, providing temporary or transit accommodation to the affected occupiers, acquisition of dilapidated buildings, demolition of dilapidated buildings, reconstruction of such buildings etc. We have already noted that the said fund consists of cess levied under Section 82, contribution by State Government, contribution by MCGM and contribution by MHADA. The expenses incurred on the repairs of the old buildings of the Petitioner are sought to be reimbursed as the said old buildings were proposed to be demolished and were proposed to be reconstructed by utilizing incentive FSI under Regulation 33(7) of D.C.R., 1991 and accordingly new buildings are constructed. The said reconstruction is to be done by NOC holder, i.e. Owners/Developers of the buildings in question. For that purpose, Owners/Developers have been granted incentive FSI, i.e. more than the ordinary FSI and old Tenants/Occupiers will also be provided extra carpet area.

36. In the above background, it is significant to note that MHADA is empowered under Section 28(1)(d) of the said Act to raise resources for the purpose of carrying out the objects of the said Act. Thus, MHADA/Board are empowered to raise resources for the purpose of carrying out the objects of the said Act. By impugned condition No.5 of said NOCs, all that is sought to be done is to simply recover the expenses made on the repairs of said old building which is to be demolished and new building is to be constructed. The same cannot be termed as a “Tax” or a “Fee” as sought to be contended. It will be merely reimbursement of expenditure incurred by the Board towards repair of said old buildings. As we have already discussed such new building will not come under the purview of Chapter VIII of MHADA Act and therefore, impediment under Section 76 will not apply to such reimbursement.

37. The Petitioner in support of the submissions that reimbursement for recovery of expenditure incurred towards repairs of said old buildings is impermissible relied on the judgment of Supreme Court in Gupta Modern Breweries v State of Jammu & Kashmir.[6] In that case, by the impugned order dated 10th September 1981, the Excise Commissioner made a demand for payment of salaries of excise personnel posted at the appellant’s distillery. Section 25 of the Jammu and Kashmir Excise Act, 1901 empowered the Government to frame rules with respect to various matters including for the inspection and supervision of stills, distilleries, private warehouses and breweries. The Jammu and Kashmir Distillery Rules, 1946 were framed in exercise of this power. Rule 17 of the said rules, which was assailed as ultra vires of the Jammu and Kashmir Excise Act, 1901, reads as under: “17. The licensee shall, if required by the Excise and Taxation Commissioner, make into the Government treasury such payment as may be demanded on account of the salaries of the Government excise establishment posted to the distillery, but he shall not make any direct payment to any member of such establishment.”

38. The relevant discussion by the Supreme Court is to be found in paragraphs 26 to 28, which reads as under: “26. The question as to whether the tax payers or license holders would have to pay for the official staff of the State for supervising collection of the revenue, has been set at rest by the Constitution Bench of this Court in the case of Indian Mica Micanite Industries vs. The State of Bihar[7]. It is held in SCC at para 17 as under: “The only services rendered by the Government to the appellant and to other similar licensees is that the Excise Department have to maintain an elaborate 6(2007) 6 SCC 317 7(1971) 2 SCC 236 staff not only for the purposes of ensuring that denaturing is done properly by the manufacturer but also for the purpose of seeing that the subsequent possession of denatured spirit in the hands either of a wholesale dealer or retail seller or any other licensee or permit-holder is not misused by converting the denatured spirit into alcohol fit for human consumption and thereby evade payment of heavy duty. So far as the manufacturing process is concerned, the appellant or other similar licensees have nothing to do with it. They are only the purchasers of manufactured denatured spirit. Hence the cost of supervising the manufacturing process or any assistance rendered to the manufacturers cannot be recovered from the consumers like the appellant. Further under Rule 9 of the Board’s rules, the actual cost of supervision of the manufacturing process by the Excise Department is required to be borne by the manufacturer. There cannot be a double levy in that regard. In the opinion of the High Court the subsequent transfer of denatured spirit and possession of the same in the hands of various persons such as whole-sale dealer, retail dealer or other manufacturers also requires close and effective supervision because of the risk of the denatured spirit being converted into palatable liquor and thus evading heavy duty. Assuming this conclusion to be correct, by doing so, the State is rendering no service to the consumer. It is merely protecting its own rights. Further in this case, the State which was in a position to place material before the Court to show what services had been rendered by it to the appellant and other similar licensees, the costs or at any rate the probable costs that can be said to have been incurred for rendering those services and the amount realised as fees has failed to do so. On the side of the appellant, it is alleged that the State is collecting huge amount as fees and that it is rendering little or no service in return. The co-relationship between the services rendered and the fee levied is essentially a question of fact. Prima facie, the levy appears to be excessive even if the State can be said to be rendering some service to the licensees. The State ought to be in possession of the material from which the co-relationship between the levy and the services rendered can be established at least in a general way. But the State has not chosen to place those materials before the Court. Therefore the levy under the impugned Rule cannot be justified.” (emphasis supplied)

27. In CCE v. Chhata Sugar Co. Ltd.8, one of the issues was whether the State Government’s administrative charges to collect a levy could be passed on to the person from whom the tax, fee or levy was collected. This Court categorically held that such an imposition would be a tax and not a fee and must be duly authorised since it is a tax (at para 14), it is held:(SCC p.483) “Hence, administrative charge under the U.P. Act is a tax and not a fee.”

28. It is, thus, clear from the aforesaid decisions that 8(2004) 3 SCC 466 imposition of administrative services (sic charges) is a tax and not a fee. Such imposition without backing of statutes is unreasonable and unfair.”

39. The above observations of the Supreme Court were in a totally different context. In that case, the question was whether the tax payers or license holders would have to pay for the official staff of the State for supervising collection of the revenue. The Supreme Court after considering the relevant decisions held that imposition of administrative services (sic charges) is a tax and not a fee. Such imposition without backing of statutes is unreasonable and unfair. In the present case, in contrast, expenditure incurred for the purpose of repairs of the old buildings of persons like the Petitioner is sought to be reimbursed as the said old buildings were proposed to be demolished and reconstructed under Regulation 33(7) and the same is to be done by Owners/Developers availing incentive FSI, i.e. more than normal FSI.

(d) of the said Act to raise resources for the purpose of carrying out the objects of the said Act.

40. The respective NOCs issued to the Petitioner under Regulation No.33(7) of D.C.R., 1991 are comprehensive. By said NOCs incentive FSI was granted subject to certain obligations namely rehabilitation of tenants/occupants by providing new rehab tenements, creation of corpus for payment of maintenance of new rehab building, reimbursement of expenses required for repairs of old buildings etc. Therefore, it cannot lie in the mouth of the Petitioner that although Petitioner is entitled for the benefits under NOCs, the Petitioner has no obligations under law corresponding to those benefits or privileges.

41. The fallacy in the Petitioner’s argument is the unwarranted and baseless assumption that the cess collected by MHADA represents the entirety of the fund at MHADA’s disposal, and that MHADA does not ever spend more than the cess collected in performing its statutory obligations to repair cessed buildings. Once this assumption is found to be baseless — simply because the fund on which MHADA draws has sources of inflow other than cess — then the entire argument of the Petitioner on all counts must necessarily fail.

42. Apart from this, Section 28(1)(d) of said Act empowers MHADA/Board to recover the expenses incurred towards repairs of old buildings.

43. In the light of above reasoning, there is no substance in contentions raised by the Petitioner.

44. The Writ Petition is dismissed. However, there will be no order as to costs. (Madhav J. Jamdar, J) (G. S. Patel, J)