TMI Blog1959 (8) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... en served on the petitioner. It was further urged that Section 237 of the Calcutta Municipal Act of 1951 was ultra vires the Constitution of India being violative of Article 14 of the Constitution. After a Rule Nisi was issued, the allegation that the distress warrant had been issued without previous issue and service of notice under Section 236 of the Act was denied by the respondents. The allegation that Section 237 is ultra vires the Constitution of India was also denied. D. N. Sinha, J. before whom the Rule came up for hearing made this reference under Chapter V of the Original Side Rules as in his view the question raised whether Section 237 of the Calcutta Municipal Act is ultra vires the Constitution because of the inconsistency of Article 14 of the Constitution was a point of substance which required an authoritative determination. It has to be mentioned at the outset that the question whether a notice under Section 236 was sent or not being a disputed question of fact, that question cannot be properly taken up by the Court before which relief under Article 226 of the Constitution is sought. Mr. S. Roy, who appeared before us for the petitioner, agreed that this was the pos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he movable property of any person liable for the payment of any sum, for the recovery of which a warrant has been issued under Sub-section (1), may be distrained wherever the same may be found in Calcutta. (3) For every warrant issued under this section, a fee shall be charged at the rate mentioned in that behalf in Schedule XI, and the amount of the said fee shall be included in the costs of recovery. '' Section 244 contains provisions for a fresh war rant if the first of the proceeds of a sale of property seized under the first warrant are not sufficient. The relevant portion of this Section is in these words: If the proceeds of any sale under Section 240, proviso, or Section 243 are not sufficient to cover the sum due, together with the costs of recovery, the Commissioner may issue a fresh warrant of distress . in the form in Schedule IX, or in a form to the like effect, for the recovery of the balance due and for all additional costs thereof.'' Section 245 provides that: After a defaulter has been proceeded against under the foregoing provisions of this Chapter unsuccessfully or with only partial success, the Commissioner may recover from him b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w well established that while Article 14 forbids onerous legislation, it does not forbid reasonable classification for the purposes of legislation. In order, however, to pass the test of permissible classification two conditions must be fulfilled, namely, (i) that the classification must be! founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and (ii) that the differentia must have a rational relation to the object sought to be achieved by the statute in question. The classification may 'be founded on different bases, namely. geographical, or according to objects or occupation or the like. What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration. It is also well established by the decisions of this Court that Article 14 condemns discrimination not only by a substantive law but also by a law of procedure. More recently in R.K. Dabma v. S.R. Tendolkar, [1959]1SCR279 the Supreme Court considered the different classes in which a statute which might come up for consideration on the question of its validity under Article 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applying this principle to the present case it is first necessary to see whether the statute itself has made any classification and if it has not whether it has left the classification to the discretion of the Government to select or classify persons or things to whom its provisions are to apply and if so to examine and ascertain if it has laid down any principle or policy for the guidance of the exercise of the discretion by the Government in the matter of selection or classification. 7. On the first question namely whether the statute itself has made any classification as between the persons against whom distraint may issue for the recovery of dues and the persons against whom a suit may be filed for such recovery, it is necessary to arrive first at a correct interpretation of the provisions of Section 251. Mr. S. Roy, who appeared before us on behalf of the petitioner, contended that on a proper and indeed the only possible interpretation this section means that in every case where the law permits a distraint to be issued it also permits a suit to be filed for recovery of dues on account of consolidated rate. This, according to him, is the inevitable result of the use by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... put on these words in their natural meaning according to the rules of English language. I have no hesitation in accepting as correct the interpretation suggested on behalf of the petitioner that the legislature wanted to provide that all defaulters may be proceeded against by way of suit and to achieve that result, they first thought of defaulters who were not at all being proceeded against under the foregoing provisions -- whether because of impracticability or any other reason--then of the defaulters who have been proceeded against under the foregoing provisions but without any success. As these would leave defaulters who have been proceeded against with partial success out of the reach of the Section, the further words were used or with only partial success . In my opinion the words used by the legislature gave full effect to this intention of providing that every class of defaulters could be proceeded against by the Corporation by way of suit, in addition to the mode already provided for the same purpose, namely, recovery by way of distraint or by certificate procedure. The words or after a defaulter has been so proceeded against unsuccessfully or with only partial success d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds. In my judgment there is no scope for reading such a policy also in Section 251 in view of the very clear words used by the legislature in the phrase instead of the Commissioner proceeding against a defaulter under the foregoing provisions of this Chapter, or after a defaulter has been so proceeded against unsuccessfully or with only partial success . It is settled law that if any interpretation is possible which will save an Act from the attack of unconstitutionality that interpretation should always be accepted in preference to an alternative interpretation that might also be possible, under which the statute would be void. But it is not for us, the Court, to put an unnatural and forced meaning on the words that have been used by the Legislature in our search for interpretation to save the statutory provisions, or to read a policy which is not there, merely because we think a policy could have been given. It is in my judgment impossible by any known canon of interpretation to read any policy in Section 251 as suggested by Dr. Gupta. My conclusion is that the statute has not laid down any principle or policy for the guidance of the exercise of discretion by the municipal autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investigation Commission) Act, 1947, was substantially more prejudicial or more drastic to the assessee than the procedure of the Income Tax Act, the Supreme Court held that Subsection (4) of Section 5 of the Taxation on Income (Investigation Commission) Act, 1947, and the procedure prescribed thereby by this Act in so far as it affects the persons proceeded against under that Sub-section was a piece of discriminatory legislation and offended Article 14 of the Constitution and was therefore void and unenforceable. When by an amendment of Section 34 of the Indian Income Tax Act the cases of the persons who originally fell within the ambit of Section 5(1) of Taxation on Income (Investigation Commission) Act, 1947, and who before this amendment could be said to have formed a distinct class, became liable to be dealt with under the amended section 34, both categories of persons, namely, those who came within the scope of Section 5(1) as well as those within the ambit of Section 34 row formed one class. This position was considered by the Supreme Court in the Menakshi Mills case, [1954]26ITR713(SC) . The Supreme Court being of opinion that the procedure under Section 5(1) being prejudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it and the final disposal, there will be several months, very often more than 12 months. If a decree is made against the defaulter, he will have right of appeal and that will in the usual course of things take several months, -- may be more than a year -- for disposal. It is reasonable to think that in most cases, where the Corporation proceeds by way of suit, a rate-payer would get in place of the 30 days or thereabouts which he would have got if the distraint procedure is applied against him for paying the rate, ten or twelve times that period for doing so. It very often will be that he will have to pay much more than the rate but the time he will get for paying the arrears of rate plus the expenses of the suit will, in many cases, be sufficient to enable him to pay up the entire amount without action having to be taken for execution of the decree against him. No less important is the consideration that the very fact that a distress warrant has issued and the bailiff has come to the house with a distress warrant is extremely harmful to the prestige and dignity of a person and to his reputation in the locality. I have no hesitation, there fore, in coming to the conclusion that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. It is true that a statute may not make a classification of the persons or things to whom or to which its provisions are intended to apply but may at the same time lay down a principle for the guidance of the exercise of discretion by the officers responsible for administration of the statute and in sum cases the statute cannot be regarded as offending against the provisions of Article 14 of the Constitution. In the present case, however, the statute neither makes a classification nor does it lay down any principle for the guidance of the exercise of the discretion by the Commissioner. In the case of [1959]1SCR279 the Supreme Court has classified the different decisions or the Supreme Court under Article 14 of the Constitution. In my opinion, the present case comes under the third category, at page 772 (of SCA): (at, p. 548 of AIR), where Das C.J. makes the following observations: In determining the question of the validity or otherwise of such a statute the Court will not strike down the law out of hand only because no classification appears on its face or because a discretion is given to the Government to make the selection or classification but will go on to examine and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a summary character under which the rate payer has no right of appeal against the order of the Commissioner and he is given only 15 days' time within which to pay the amount claimed under the notice of demand or to show sufficient cause to the satisfaction of the Commissioner for non-payment of the same. If the Commissioner is not satisfied with the cause shown he 19 authorised to realise the amount due together with all costs of recovery by distress and sale of any movable property belonging to such person or if such persons be the occupier of any premises in Respect of which the sum is due by distress and sale of any movable property found on the premises. In the case of a suit under Section 251, however, the rate payer will have time to file a written statement, also some more time for discovery and inspection of documents and at the trial the rate payer will have the right to corss-examine any witness examined by the rating authority. Above all the rate payer will also have a right of appeal against any decree that maybe passed against him. For these reasons I have no hesitation in holding that the procedure: for recovery of arrears of consolidated rates under Section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial position can be maintained is to arm the body with necessary powers to collect its dues as expeditiously as possible. The scheme of the provisions of Chapter XVII of the Act which deal with the procedure for recovery of the consolidated rate and other taxes is broadly this that as soon as the consolidated rate or any instalment thereof falls due, the Commissioner has to cause to be presented to the person liable, with the least practicable delay a bill for the sum due and if the amount of the bill is paid within fifteen days from the date of presentation, a rebate of three and one-eighth per cent of such amount shall be allowed to the payer. (Section 235). If the amount is not paid within fifteen days from the date of presentation the commissioner has to serve upon the person liable a notice of demand in the form in Schedule VIII or in a form to the like effect. (Section 236). If the person liable does not within fifteen days from the service of a notice of demand under Section 236, pay the sum due or show sufficient cause to the satisfaction of the Commissioner for non-payment of the same, it is only then that the Commissioner can issue a distress warrant (Section 237). So ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces. The framers of the Act felt or thought that there may be cases where enforcement of the procedure by way of distraint is not practicable or convenient. The defaulter may not have any moveable property at all (although such cases will be very rare) or the moveable properties are all mortgaged to the hilt or they consist of only some hired furniture, and there is no chance of the Corporation realising anything by distress and sale of such properties. In order to provide against such contingencies and contingencies of a like nature, the framers of the Act enacted that instead of the Commissioner proceeding against defaulter by the distress procedure it will be OPEN to the Corporation to proceed against the defaulter by way of a suit. It is true that the expression Instead of occurring in the Section leaves a very wide discretion to the authorities concerned and TO gives scope to the Commissioner not to enforce the provisions for distress in the case of some social or political favourites or in the case of some of his friends and relatives, but such cases will be cases of abuse of the power vested in the Commissioner. Such individual acts will be regarded as discriminatory unc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ails in any particular case or it is not practicable to pursue the coercive process in any particular case, ordinary process of recovery of the by way of suit has to be resorted to. I fail to we why the impugned provisions should be struck down, as being unreasonable and discriminatory. The Sections 237 and 251 are general Sections intended' to be applicable to all defaulters alike. In some cases it may be necessary and expedient to have recourse to suit and in other cases the distress procedure will serve the purpose. As I have pointed out already it is possible to conceive of a state of facts where recourse to a suit is the only affective remedy. So following the principles laid down by the Supreme Court it must be held that the classification has a reasonable basis. The policy of the Act in the matter of realisation of taxes is contained in the various sections set out in Chapter XVII of the Act and the authorities responsible for recovery of the taxes are guided by this policy. 28. Then again the argument of the learned counsel for the petitioner that the remedy by way of suit is a less onerous procedure is also open to question. If the only remedy that the Corporation c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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