Binod Kumar Roy, Lakshmi Bihari, JJ. - (1.) By filing this writ petition on 3rd July. 1989, the petitioners, who are organised contractors taking contracts of various bodies including the Nagar Palika. Etah, for performing works entrusted to them in regard to construction of buildings, roads, drainage, etc. including repairs thereof have come up with following prayers (i) to quash the bye-laws of Etah Municipality framed under Section 298 (2) List I J-Miscellaneous (d) of the Provincial Municipalities Act, 1916. (hereinafter referred to as the Act) published on 3rd September. 1988 (as contained in Annexure-1) and (ii) to command Etah Municipality (Respondent No. 2) to refund the amount taken or deducted from their Bills prepared under bye-law 10 of the impugned bye-laws.
(2.) On 4th July, 1989, the following interim order was passed by the Division Bench : "Till further orders of Court opposite parties are directed not to refuse to entertain tender of petitioner only because they have not got themselves registered in accordance with the bye-laws, copy of which has been filed as Annexure-1 to writ petition." The Facts Pleaded :
(3.) The petitioners have come with following pleadings- Tenders were invited by the authority for performance of specified works within scheduled period. After scrutinising the tenders the authority accepts them in accordance with the quality of work performed by a particular contractor generally accepting the lowest one. On acceptance of the tender the contractor is entrusted the work. Presently the person filing the tender is required to purchase National Saving Certificate to the extent of 2% of the amount tendered for the purpose of earnest money and after acceptance of his tender submit N.S.C. worth further 3%. Thereby the total money which is taken as earnest money costs 5%. These certificates are, however, returned after six months, if the authority is satisfied with the work of the contractor. A list of the approved contractors is maintained by various authorities including the Etah Municipality. Black listed contractors by any department are not permitted to submit their tenders. The Etah Municipality framed bye-laws (which is being impugned) for regulating and controlling the contractors purported to have been framed under Section 298 (2) J (a) of the Act. The impugned bye-laws provides as follows : (i) For taking work of the Municipality no person will be eligible to put tenders unless he/it is registered as a contractor in the categories provided in Rule 6 (ii) vide Rule 10 the licence fee in the said categories will be as mentioned in the bye-laws (iii) under Rule 10 it has been provided that in the first week of April, it will be obligatory for the registered contractor to seek renewal of his registration on payment of requisite amount and for default thereto his registration will be deemed to have been cancelled and in the event of its renewal he shall have to deposit again the said amount as contemplated under Rule 10, which will be deemed to be either licenced money or tax and (iv) Rule 12 provides that the contractor will have to deposit earnest money in shape of National Saving Certificate apart from the licenced money of tax money. The Act nowhere provides for imposition of such tax or fee. It is not clear under what provision of law such taxes or levy in the nature of licence fee has been imposed. Section 293 (1) of the Act provides levy of licence fee on using immovable property vested in or entrusted to the Management of the Municipality. The contractors are neither occupying any property of the Municipality, nor are they using the property of the Municipality for any purpose. Section 294 empowers the power to charge fee to be fixed by the bye-laws for any licence, sanction or permission which it is entitled or required to be granted by or under the Act. The Act nowhere provided for grant of any licence, sanction or permission to the contractors, who are engaged in their activity of filing tenders whenever invited by a particular authority or by the Municipality for a particular work. Since the fee or tax imposed under the impugned bye-laws clearly imposes a restriction on the right of a person to carry on any occupation, trade or business thus it is an unreasonable restriction on their rights guaranteed under Article 19 (1) (g,) of the Constitution. This licence fee or tax cannot be Justified on the basis of any valid law which the Etah Municipality has powers to frame under the Act and thus ultra vires. These two bye-laws are being challenged specifically on these two grounds : (i) if it is a tax, in that event the procedure provided under the Act have not been followed. The Municipal authorities have not been empowered to impose such a tax on the persons who are engaged in the activities of taking contracts under the tenders invited by the Etah Municipality ; (ii) if it is a licence fee, then it has no sanction or authority under the Act as the Municipal Boards are not rendering any service to them thereby hit by the doctrine of quid-pro-quo. The impugned bye-laws do not mention that they were previously also published and objections were invited from the aggrieved persons about which they learnt in January, 1989. The petitioners apprised the authorities about the aforementioned aspect. The authorities realised that the bye-laws, apart from being illegal, have imposed an amount in the shape of licence fee or tax, which is unreasonable, and hence they passed a resolution in its meeting dated 16th January, 1989 resolving that the registration amount mentioned in Rule 10 be reduced to the amount of Rs. 500. Rs. 300 and Rs. 200 in regard to Class Ka-Kha and G a contractors respectively (copy of which appended as Annexure-2). The Executive Engineer of the Municipality, Etah, persuaded the petitioner to deposit the amount with an undertaking that it will be refunded. In the case of the petitioner No. 1 the amount was deducted from its Bill on 7th March, 1989 for a work which was undertaken by it and for which the Bill was to be paid (A copy of the receipt issued to the petitioner No. 1 has been filed as Annexure-3). Similarly, petitioner No. 2 was also called upon to deposit the amount in case it wants to participate in the tenders. The petitioners were waiting for refund of their said amount as assured by the appropriate authorities but instead of refunding they have been called upon to deposit the same amount under Rule 10 as they have failed to seek renewal of their registration in the first week of April, 1989. As they have been refused to fill in tenders and hence this writ petition.;