# THE WESTERN INDIA THEATRES LTD v. MUNICIPAL CORPORATION OF THE CITY OF

- **Citation:** [1959] Supp. 2 S.C.R. 71
- **Court:** Supreme Court of India
- **Decided:** 1959
- **Case number:** Civil Appeal No. 146 of 1955
- **Bench:** S. R. Das, s. K. DAS, P. B. Gajendragadkar. K. N. Wanchoo, M. Hidayatullah
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-western-india-theatres-ltd-v-municipal-corporation-of-the-city-of-1738
- **Pages:** 8

## Headnote

Municipality, Power of-Imposition of tax on cinema showConstitutional validity of enactment-Enhancement of such taxValidity-Bombay District Municipal Act, I90I (Bom. III of
IgoI), s. 59(I) (XI)-Bombay Municipal Boroughs Act, I925
(Bom. XVIII of Ig25), s. 60.
The appellant, a public limited company, was a lessee of
four cinema houses situated within the municipal limits of
Poona City where it used to exhibit cinematograph films.
The
respondent, the Municipal Corporation of Poona, in exercise of
its power under s. 59(1) (XI) of the Bombay District Municipal Act,
1901, levied with effect from October l, 1920, a tax of Rs. 2 per
day as license fee on the-owners and lessees of cinema houses.
That Act governed the Municipality till 1926 and thereafter it
was governed bythe Bombay Municipal Boroughs Act, 1925. The
tax was enhanced to Re. l per show on June 3, 1941, and to
Rs. 5 per show on June 9, 1948. By the suit, out of which the
present appeal arose, the appellant sought for a declaration that
the levy of the said tax, the rules framed in connection therewith and the enhancement of the tax as aforesaid were iIIegal
and ultra vires.
The trial court decreed the suit in part but the
High Court in appeal reversed the decision of the trial court
I959
January z6.
72
SUPREME COURT REPORTS [1959] Supp.
I958
and dismissed the suit. It was contended on behalf of the
appellant that (r) the tax was not. one covered by Entry 50
The Western India in List 11 of Seventh Schedule to the Government of India
Theatres Ltd.
Act, 1935, but was one on trade or calling covered by Entry 46
v.
thereof, and, was as such governed by s. l42A of the said Act and
Municipal
that (2) s. 59(1)(XI) of the Bombay District Municipal Act, 1901,
Corporation of !he was unconstitutional in that the legislature had thereby delegatCity of Poona
ed essential legislative power to the Municipality to determine
the nature of the tax to be imposed on the rate-payers and
completely abdicated its function, leaving such power wholly
unguided.
Held, that both the contentions must fail.
The first point was covered by the decision given in the
appellant's other appeal, Civil Appeal No. 145 of 1955, which
must also govern this case.
It was not correct to contend that the power delegated to
the Municipality under s. 59(1)(XI) of the Bombay District
Municipal Act, 1901, was unguided. That section authorised
the imposition of such taxes alone as were necessary for the purposes of the Act.
The obligations and functions cast upon the
Municipalities by ch. VII of the Act showed that taxes could be
levied only for implementing those purposes and none others.
Nor could it be said that the provincial Legislature had
abdicated its function in favour of the Municipality. The taxing
power of the Municipality was made subject to the approval of
the Governor-in-Council by the section itself.
The marginal note to a section could not affect the construction of the section if its language was otherwise clear and unambiguous and the word 'modify' connoted not merely reduction hut also other kinds of alteration including enlargement.
The substitution of the word 'reduce' by the word 'modify' in
the body of s. bo of the Bombay Municipal Boroughs Act, 1925,
notwithstanding the omission to do so in the marginal note,
therefore, clearly indicated the intention of the Legislature to
widen the scope of that section and, consequently, it could not
be said that the enhancement of the tax was not sustainable
thereunder.
Commissioner of Income Tax, Bombay v. Ahmedbhai Umarbhai & Co., Bombay,
[1950] S.C.R. 335 and Stevens v. The
General Steam Navigation Company, Ltd., L.R. (1903) l K.B. 890,
referred to.

## Text

(2) S.C.R. SUPREME COURT REPORTS
71
may be that the appellant may in some future procex959
eding adduce evidence to establish that there are other Th w t
1 a·
cinema houses similarly situate and that the .imposieThe;;,;;~t;, '"
tion of a higher tax on the appellant is discriminatory
v.
as to which we say nothing; but all we need say is The Cantonment
that in this suit the appellant bas not discharged the
Board, Poona,
onus that was on him and, on the material on record,
Cantonment
it is impossible for us to hold in this case that there
1
Das C .•
has been any discrimination in fact.
For reasons stated abve this appeal must be dismissed with costs.
Appeal dismissed
THE WESTERN INDIA THEATRES LTD.
v.
MUNICIPAL CORPORATION OF THE CITY OF
POONA
{S. R. DAS, c. J., s. K. DAS, P. B. GAJENDRAGADKAR.
K. N. WANCHOO and M. HIDAYATULLAH, JJ.)
Municipality, Power of-Imposition of tax on cinema showConstitutional validity of enactment-Enhancement of such taxValidity-Bombay District Municipal Act, I90I (Bom. III of
IgoI), s. 59(I) (XI)-Bombay Municipal Boroughs Act, I925
(Bom. XVIII of Ig25), s. 60.
The appellant, a public limited company, was a lessee of
four cinema houses situated within the municipal limits of
Poona City where it used to exhibit cinematograph films.
The
respondent, the Municipal Corporation of Poona, in exercise of
its power under s. 59(1) (XI) of the Bombay District Municipal Act,
1901, levied with effect from October l, 1920, a tax of Rs. 2 per
day as license fee on the-owners and lessees of cinema houses.
That Act governed the Municipality till 1926 and thereafter it
was governed bythe Bombay Municipal Boroughs Act, 1925. The
tax was enhanced to Re. l per show on June 3, 1941, and to
Rs. 5 per show on June 9, 1948. By the suit, out of which the
present appeal arose, the appellant sought for a declaration that
the levy of the said tax, the rules framed in connection therewith and the enhancement of the tax as aforesaid were iIIegal
and ultra vires.
The trial court decreed the suit in part but the
High Court in appeal reversed the decision of the trial court
I959
January z6.
72
SUPREME COURT REPORTS [1959] Supp.
I958
and dismissed the suit. It was contended on behalf of the
appellant that (r) the tax was not. one covered by Entry 50
The Western India in List 11 of Seventh Schedule to the Government of India
Theatres Ltd.
Act, 1935, but was one on trade or calling covered by Entry 46
v.
thereof, and, was as such governed by s. l42A of the said Act and
Municipal
that (2) s. 59(1)(XI) of the Bombay District Municipal Act, 1901,
Corporation of !he was unconstitutional in that the legislature had thereby delegatCity of Poona
ed essential legislative power to the Municipality to determine
the nature of the tax to be imposed on the rate-payers and
completely abdicated its function, leaving such power wholly
unguided.
Held, that both the contentions must fail.
The first point was covered by the decision given in the
appellant's other appeal, Civil Appeal No. 145 of 1955, which
must also govern this case.
It was not correct to contend that the power delegated to
the Municipality under s. 59(1)(XI) of the Bombay District
Municipal Act, 1901, was unguided. That section authorised
the imposition of such taxes alone as were necessary for the purposes of the Act.
The obligations and functions cast upon the
Municipalities by ch. VII of the Act showed that taxes could be
levied only for implementing those purposes and none others.
Nor could it be said that the provincial Legislature had
abdicated its function in favour of the Municipality. The taxing
power of the Municipality was made subject to the approval of
the Governor-in-Council by the section itself.
The marginal note to a section could not affect the construction of the section if its language was otherwise clear and unambiguous and the word 'modify' connoted not merely reduction hut also other kinds of alteration including enlargement.
The substitution of the word 'reduce' by the word 'modify' in
the body of s. bo of the Bombay Municipal Boroughs Act, 1925,
notwithstanding the omission to do so in the marginal note,
therefore, clearly indicated the intention of the Legislature to
widen the scope of that section and, consequently, it could not
be said that the enhancement of the tax was not sustainable
thereunder.
Commissioner of Income Tax, Bombay v. Ahmedbhai Umarbhai & Co., Bombay,
[1950] S.C.R. 335 and Stevens v. The
General Steam Navigation Company, Ltd., L.R. (1903) l K.B. 890,
referred to.
CIVIL APPELLATE JURISDICTION:
Civil Appeal No.
146 of 1955.
Appeal from the judgment and
decree
dated
February 10, 1953, of the Bombay High Court in
Appeal No. 953 of 1951, arising out of the judgment
and decree dated November 30, 1951, of the Court of
(2) S.C.R. SUPREME COURT REPORTS
73
Joint Civil Judge, Senior Division, Poona, in Specia.l
x959
Suit No. 76 of 1950.
Th
• •
e Western India
H. D. BanaJi, R. A. Gagrat and G. Gopalakrishnan,
Theatr~s Ltd.
for the appellant.
v.
M. 0. Setalvad, Attorney-General for India, S. N.
Municipa1
1 h.
A dz
d J B
d h
" c
h
d
Corporation o t e
n ey an
.
. Da ac anJi, 1or t e·respon ent.
City of Poona
1959. January 16.
The Judgment of the Court
was delivered by
Das c. J.
DAS, C. J.-The appellant is a public limited company registered under the Indian Companies Act, 1913.
It is a lessee of four cinema houses situate within the
municipal limits of Poona City known respectively as
"Minerva'', "The Globe ", "Sri Krishna " and "The
Nishat ". It exhibits cinematograph films, both foreign
and Indian, in the said four houses. The respondent,
a body corporate, was governed by the Bombay District Municipal Act, 1901 (Born. III of 1901) up to June
8, 1926, and from then by the Bombay Municipal
Boroughs Act, 1925 (Born. XVIII of 1925) up to
December 29, 1949, and, thereafter, by the Bombay
Provincial Municipal Corporation Act, 1949 (Born.
LTX of 1949). With effect from October 1, 1920, the
respondent, with the sanction of the Government of
Bombay levied on the owners and lessees of cinema
houses within the limits of the erstwhile province of
Bombay a tax of Rs. 2 per day as license fee.
Rules
for the levy and collection of the said tax were framed
by the respondent. Those rules were amended on or
about June 3, 1941, enhancing the tax from Rs. 2 per
day to Re. l per show. The rules were again revised on
or about June 9, 1948, under which the tax was enhanced from Re. 1 per show to Rs. 5 per show. At all material times the tax wa,s being collected at the last mentioned rate.
Section 59 of the Bombay District Municipal Act
1901 provided that subject to any general or special
orders which the State Government might make in
that behalf any municipality (a) after observing the
preliminary procedure required bys. 60, and (b) with
the sanction of the authority therein mentioned, might
IO
74
SUPREME COURT REPORTS [1959] Supp.
'959
impose for the purposes of that Act any of the taxes
The we:;;n India men~ioned in that section.. After en1;1~era:ting ten
Theatres Ltd.
specific heads of taxes, which a mumc1pahty could
v.
• levy, a residuary category was set forth in cl. (xi) in
.
Mnnicipal
the words following:-
Corporation of the
"Any other tax to the nature and object of which
City of Poona
the approval of the Governor in Council shall have
Das c. J.
been obtained prior to the selection contemplated in
sub-clause (il of clause (a) of section 60 ".
Ever since the appellant became a lessee of the said
cinema houses, the appellant has be!ln making payments of the said tax under protest.
After giving the necessary statutory notice to the
respondent, the appellant, on or about March 31, 1950,
filed a suit in the Court of the Civil Judge, Senior
Division, Poona, being Suit No. 76 of 1950, against
the respondent for a declaration that the levy and
imposition of the said tax with effect from October 1,
1920, were invalid and illegal; that the enhancement
,.
in the rates of the tax with effect first from June 3,
1941, and then June 9, 1948, was invalid and illegal
and that the resolutions passed and rules framed in
connection with the levy, imposition, enhancement
and collection of the said impugned tax were invalid,
illegal and ultra vires, for a permanent injunction restraining the defendants from levying or recovering and
or increasing and enhancing the said tax and for refund to the appellant of the amounts of the tax collected from it and for costs of the suit and interest. By
its judgment dated November 30, 1951, the ~rial court
held that the said tax was validly levied and imposed,
but that the increase and enhancement thereof in
1941 and 1948 were illegal and ultra vires and that
the suit was not barred under the Acts governing the
respondent. The trial court decreed the suit in part
by issuing an injunction restraining the respondent
from levying, recovering or collecting the tax at the
enhanced rate and passing a decree against the respondent for refund of a sum of Rs. 27,072 with interest and costs. The respondent preferred an appeal and
the appellant filed cross objections. But the HighCourt
by its judgment and decree dated February 10, 1953,
(2) ~.C.R. SUPREME COURT REPORTS
75
reversed the judgment of the trial court and dismissed
I959
the suit of the appellant with costs throughout. The Th w -
.
11
,
b'
.
l
d'
.
d
O
e
estern India
appe ants cross o Ject10ns were a so 1smisse .
n
Theatres Ltd
December 10, 1953, theHigh Court granted leave to the
v.
·
appellant to appeal to this Court from the said judgMunicipal
ment.
Hence this final appeal questioning the vali- Corporation of the
dity of the impugned tax.
City 0f. Poona
The first point urged in this appeal is that the law
imposing this tax is not covered by entry 50 in List II
of the Seventh Schedule to the Government of India
Act, 1935, but is really a tax on the appellant's trade
or calling referred to in entry 46 and that, therefore, the
amount of tax cannot under s. 142-A of the Government of India Act, 1935 exceed Rs. 100 per annum.
This point need not detain us long, for it is covered
by us in the appellant's other appeal No. 145 of 1955.
The second point urged before us in support of this
appeal is thats. 59(1) (xi) is unconstitutional in that the
legislature had completely abdicated its functions and
had delegated essential legislative power to the Municipality to determine the nature of the tax to be imposed on the rate payers. Learned counsel for the appellant urges that the power thus delegated to the
municipality is unguided, uncanalised and vagrant,
for there is nothing in the Act to prevent the municipality from imposing any tax it likes, even, say, income tax. Such omnibus delegation, be contends,
cannot on the authorities be supported as constitutional. We find ourselves in agreement with the High
Court in rejecting this contention.
In the first place, the power of the municipality
cannot exceed the power of the provincial legislature
itself and the municipality cannot impose any tax, e.g.,
income tax which the provincial legislature could not
itself impose. In the next place, s. 59 authorises the
municipality to impose the taxes therein mentioned
"for the purposes of this Act". The obligations and
functions cast upon the municipalities are set forth
in ch. VII of the Act. Taxes, therefore, can be
levied by the municipality only for implementing
those purposes and for no other purpose. In other
words it will be open to the municipality to levy a tax
for giving any of the amenities therein mentioned.
Das C. ].
-,
••
76
SUPREME COURT REPORTS [1959] Supp.
I959
The matter may be
illustrated by reference to
-
. s. 54 which enumerates the duties of municipaTh•T:estern L~;dia lities.
The first duty mentioned in that section is
eat~s
·
that the Municipality should make provision for
Munfripal
lighting public streets and nobody can object if it
Co,po,otion of the imposes a lighting tax, which, indeed, is item (ix) in
City of Poona s. 59(1).
Take another example: It is the duty of the
Municipality to arrange for supply of drinking water
Dos c. J.
and it may legitimately charge a water rate which,
again, is item (viii) in s. 59(1).
We do not for a
moment suggest that the municipalities may only
impose a tax directly in connection with the heads
of duties cast upon it. ·what we say is that the tax to
be imposed must have some reasonable relation to the
duties cast on it by the Act. In the third place, although the rule of construction based on the principle
of ejusdem generis cannot be invoked in this case, for
items (i) to (x) do not, strictly speaking, belong to the
same genus, but they do indicate, to our mind the
kind and nature of tax which the municipalities are
authorised to impose. Finally, the provincial legislature had certainly not abdicated in favour of the
municipality, for the taxing power of the municipality was quite definitely made subject to the approval
of the Governor-in-Council. Under the Indian Council
Act, 1861 (24 & 25 Vic. c. 67) the Governor-in-Council
might mean· the Governor in Executive Council or
the Governor in Legislative Council. If the reference
in s. 59(l)(xi) is to the Governor's Legislative Council,
then there was no improper delegation at all, for it
was subject to the legislative control of the Governor
in Legislative Council.
Tho Governor's Legislative
Council was composed of all the members of the
•
Governor's Executive Council besides a few other
persons.
Therefore if the reference was to the
Governor in his Executive Council even then, from a
practical point of view, the ultimate control was
left with the Governor's Legislative Council. We need
not labour this point any further, for on the first
three grounds the delegation of legislative authority,
if any, is not excessive so as to make the exercise of
it unconstitutional. In our opinion the impugned
section did lay down a principle and fix a standard
•
(2) S.C.R.
SUPREME COURT REPORTS
77
which the municipalities had to follow in imposing a
r959
tax and the legislature cannot, in the circumstances, Tl w1 a·
•
•
ie
estetn
n 1a
be said to have had abdicated itself and, therefore,
Theatres Ltd.
the delegation of power to impose any other tax canv.
not be struck down as being in excess of the permisMunicipal
sible limits of delegation of legislative functions.
Corporation of the
The last point urged by learned counsel for the City of Poona
appellant is that, under cl. (xi) of s. 59(1), the enhanceDas c. J.
ments of the rates of the tax in 1941 and again in
1948 were illegal in that the municipality had· no
power to do so under the Bombay Municipal Boroughs
Act, 1925.
According to learned counsel for the appellant the judgment under appeal upholding the validity of such enhancements cannot be supported under
s. 60 of that Act. That section runs as follows :-
"Power to
60(1) Subject to the requirements
suspend, reof clause (a) of the proviso to secduce or abotion 58 a municipality may, except as
~
lish any exotherwise provided in clause (b) of the
isting tax
proviso to section 103 at any time for
any sufficient reason, suspend, modify
or abolish any existing tax by suspending, altering or
rescinding any rule prescribing such tax.
(2) The provisions of Chapter VII relating to the
imposition of taxes shall apply so far as may be to
the suspension, modification or abolition of any tax
and to the suspension, alteration or rescission of any
rule prescribing a tax."
Reference is made to the marginal note where the
words used are "power to suspend, reduce or abolish
any existing tax". It is suggested that the word
" modify " in the body of the section in between the
words " suspend" and "abolish " should be construed
in the sense of reduction.
The marginal note, according to him, shows that the several words were used
in the section to indicate a progressive diminution in
the quantum of tax until it was completely gone ..
Reference is made to the root meaning of the word
"modify " w hie h is to reduce or make less but does
not cover the .idea of enhancement. In the first place,
the marginal note cannot affect the construction of
the language used in the body of the section if it is
otherwise clear and unambiguous (see Commissioner of
78
SUPREME COURT REPORTS [1959] Supp.
I9S9
Income Tax, Bombay v. Ahmedbhai Umarbhai & Co.,
The Western India Bombay) (1).
In the next place, it should be borne in
Theatres Ltd.
mind that s. 67 of the Bombay District Municipal
v.
Act (Born. III of 1901) which was formerly applicable
Munfripal
to municipalities used the word "reduce" in between
Corporation of the the words " suspend " and " abolish " and that that
City of Poo1ta
·
"h d b
d
d ·
f h
·B
b
section
a
een re pro uce
1s s. 60 o t e
om a y
Das c. J.
Municipal Boroughs Act, 1925, but that in the process
of such reproduction the word "reduce" was dropped
and the word " modify " was introduced. In the
marginal note, however, the word "reduce" was
not substituted by the word "modify", apparently
through inadvertence. If the word "modify" is to be
read as "reduce'', then there could be no point in the
provincial legislature substituting the word "reduce "
by the word "modify". This change must have been
made with some purpose and the purpose could only
have been to use an expression of wider connotation
so as to include not only reduction but also other
kinds of alteration. Section 76 of this very Act also
refers to "modification not involving an increase in
the amount to be imposed" which makes the sense in
which the word "modify" has been used in this Act
perfectly clear, namely, that there may be a modification involving an increase. Reference may also be made
to the decision of the Court of Appeal in England
in the case of Stevens v. The General Steam Naviga.
tion Company, Ltd. (2).
" Modification ", acc,ording
to Collins M. R. in his judgment at p. 893, implied an
alteration and the word was equally applicable
whether the effect of the alteration was to narrow or
to enlarge the provisions. In our opinion the dropping of the word ".reduce" and the introduction of the
word "modify" in the body of s. 60 of the Act under
consideration clearly indicate an intention on the part
of legislature to widen the scope of this section and
the High Court was right in so construing the same.
No other point was urged in this appeal and for
reas'ons stated above this appeal must be dismissed
with costs.
Appeal dismissed.
(1) [1950] S.C.R. 335 at p. 353·
(2) L.R. (1903) I K.B. 890.