2001(4) ALL MR 407
IN THE HIGH COURT OF JUDICATURE AT BOMBAY

R.M. LODHA AND D.B. BHOSALE, JJ.

Piem Hotels Limited Vs. Municipal Corporation Of Greater Bombay & Ors.

Writ Petition No.88 of 1998,Writ Petition No.3565 of 1987,Writ Petition No.2228 of 1987

28th March, 2001

Petitioner Counsel: Shri.S.C.DHARMADHIKARI, M.K.AMBALAL & Co.,Shri.A.J.RANA , Mr.V.R.CHHATRAPATI, K.D.MEHTA , Ms.P.G.BHATIA,PAYNE & Co.,Shri.S.G.ANEY , NITIN JAMDAR , VIVEK GORE,A.SAMANT
Respondent Counsel: Shri. E. P. BHARUCHA , Ms. N. V. SANGLIKAR,Shri.E. P. BHARUCHA , Ms. N. V. SANGLIKAR,Shri. E. P. BHARUCHA , Ms. N. V. SANGLIKAR

Mumbai Municipal Corporation Act (1888) Ss.140,169 and 276 - Brihan Mumbai Maha Nagar Palika Water Charges Rules (1987), Paras 1.5 and 1.7 - Rules made by Standing Committee's Resolution No.2202 dt.4-3-1987 - Fixation of water rates - Water supplied to commercial premises - Classification of consumers - Fixation of rates on basis of paying capacity of consumer - Not invalid nor beyond power of Standing Committee.

The fixation of water charges by the Standing Committee of the Mahanagar Palika is based on the relevant factors and therefore, cannot be faulted or held to be arbitrary. Consequently, the rules cannot be held to be violative of Art 14 of the Constitution. [Para 11A]

There is no dispute that of the position that classification based on residential and commercial premises could be made. Therefore, there is no reason why classification based on residential and commercial premises could not be made. The classification of the premises and consumers with regard to commercial premises or commercial use cannot be faulted particularly keeping in view the social welfare approach. The classification of commercial consumers having capacity to pay more is proper and cannot be termed to be hostile. The Corporation has to supply water to all types of consumers including large number of population living in the slums, the people belonging to the category of have nots and the people belonging to the lower class or middle class. The standpost water connections given to the hutment dwellers is gratituous and Corporation is not in a position to recover large expenses incurred for such water supply. So obviously, to off-set the losses by providing gratuitous water supply to the hutment dwellers or to meet large expenses incurred for such water supply, some category of consumers are required to bear more burden who have capacity of paying water charges at higher rate and those consumers who utilise water for luxurious purpose and not merely for necessity. It is true that there has to be co-relationship between the rate charged and the cost of providing water supply whether it is levy of water tax or fixation of water charges supplied according to measurement. In the tax matters the law makers have to be given full latitude and leeway, of course within the permissible power, so also in fixation of the water charges, etc. Standing Committee has to be given due freedom of classification subject of course to the limitation of relationship between the rate charged and cost of water supply according to measurement. [Para 10,11]

Further, it could not be said that the Rules were bad for not following procedure under Ss.125 to 127 were not followed. There is also no question of excessive delegation given to the Standing Committee under section 169. Section 4 provides for the Municipal Authorities who have been given statutory power and duty to carry out the provisions of the Act of 1888. The Standing Committee is one of such Municipal Authorities who has to carry out the functions provided to it under Section 169 for determination of Water Charges Rules. Thus there is no question of excessive delegation to the Standing Committee nor section 169 can be said to be violative of Article 14 of the Constitution of India on that count. [Para 14]

Cases Cited:
Hirabai Ashabai Patel vs. The State of Bombay, 56 BLR 1035 [Para 10]
Mississippi Valley Bayeline Company vs. United States of America, 292 US 282 [Para 11]
Ganga Sugar Corporation Ltd. vs. State of Uttar Pradesh, (1980) 1 SCC page 223 [Para 11]
M/s.Polychem Ltd. vs.The Municipal Corporation of Greater Bombay, Writ Petition No.3928 of 1987 decided on 7th February 1997 [Para 11A]
Vijay Kumar S.Rajput vs.The Municipal Corporation of Greater Bombay, Writ Petition No.1113 of 1989 decided on 9th December 1999 [Para 12]
Ashok Soap Factory vs. Municipal Corporation of Delhi, (1993) 2 SCC 37 [Para 12]
Nagpal Printing Mills vs. The Municipal Corporation of Greater Mumbai, A.I.R.1988 Bombay 91 [Para 16]
AIR 1988 SC 1009 [Para 16]


JUDGMENT

R.M.LODHA, J. :- We are concerned in this group of three Writ Petitions with the legitimacy of Rules 1.7 and 1.5 of the Water Charges Rules effective from 5th April, 1987, enacted by Brihan Mumbai Maha Nagar Palika vide Standing Committee's Resolution No.2202 of 4.3.1987.

2. The 1st petitioner in Writ Petition No.3565 of 1987 is a company incorporated under the provisions of Companies Act, 1956 and carries on the business inter alia of running and managing hotels in India. The hotel of the 1st petitioner is "Hotel President" in Bombay. The 2nd petitioner is a director and a shareholder of the 1st petitioner Company and they are challenging revised Water Charges particularly paragraph 1.7 of the Water Charges Rules on various grounds which we shall refer at the appropriate stage. The petitioners in Writ Petition No.2228 of 1987 are also challenging the validity of paragraph 1.7 of the Water Charges Rules, 1987. The 1st petitioner in this Writ Petition is a company incorporated under the provisions of the Companies Act,1956, and the 2nd petitioner is a club member. The 1st petitioner i.e. Royal Western India Turf Club Ltd. runs the race course in the city of Bombay. The 3rd petition namely Writ Petition No.88 of 1988 has been filed by the Bombay Mill Owners Association, which is an Association of Textile Mills, having its membership, among others, the textile mills of Bombay and various textile mills.

3. Mr.Rana, the learned senior counsel who made leading arguments on behalf of the petitioners in Writ Petition No.3565 of 1987 was heard at length by us. Mr.Aney, the learned senior counsel appearing for the petitioners in Writ Petition No.2228 of 1987 and Mr.Dharmadhikari, the learned counsel appearing for the petitioners in Writ Petition No.88 of 1988, adopted Mr.Rana's arguments and also made other submissions. Broadly stated the challenge to the paragraphs 1.7 and 1.5 of Water Charges Rules is made on the following grounds :- i)The Standing Committee has no power to make classification of the consumers. Even if such power is assumed, the classification can only be of domestic or non-domestic consumers inter se. Classification of different consumers in the non-domestic category is impermissible, much less the adoption of paying capacity as basis for the said classification. In other words, the contention is that section 169 of Mumbai Municipal Corporation Act, 1888 (for short 'Act of 1888') does not confer a power on the Standing Committee to prescribe different charges for different consumers for the same quantity of water, much less the said section confers the power on the Standing Committee to prescribe rates or charges on the basis of paying capacity of the consumers concerned;

ii) The categorisation made by the Standing Committee is arbitrary and there is total arbitrariness in the matter of premises as well as in the matter of rates and thus violative of Article 14 of the Constitution of India. What is submitted is that the said Rules 1.7 and 1.5 are ultra vires Rule making power of the Standing Committee of the Corporation being inconsistent with section 169 of the Act of 1888;

iii) The Water Charges Rules are illegal and contrary to the provisions of Act of 1888, in as much as the procedure prescribed under sections 125 to 127 of the Act have not at all been followed; and

iv) The provisions of section 169 itself suffer from the vice of excessive delegation of powers and are violative of Article 14 of the Constitution of India.

4. It would be advantageous at this stage to refer to the relevant provisions of the Act of 1888 for better appreciation of the submissions advanced before us. Section 4 defines the Municipal Authorities charged with carrying out provisions of the Act of 1888, and said section reads thus :

"4. The Municipal Authorities charged with carrying out the provisions of this Act are:-

(a) a Corporation;

(b) a Standing Committee;

(c) an Improvements Committee;

(d) a Brihan Mumbai Electric Supply and Transport Committee;

(e) and Education Committee;

(f) a Wards Committee;

(g) a Mayor;

(h) a Municipal Commissioner;

(i) a General Manager of the Brihan Mumbai."

Section 139 is a part of Chapter IV of the Act of 1888, which deals with the Municipal Taxation. It provides for taxes to be imposed under the Act which includes the property taxes. Section 140 which makes provisions for levy of the property taxes reads thus :

"140. (1) The following taxes shall be levied on buildings and lands in (Greater Bombay) and shall be called "property taxes", namely :-

(a) (i) the water tax of so many per centum of their rateable value, as the Standing Committee may consider necessary for providing water supply;

(ii) and additional water tax which shall be called "the water benefit tax" of so many per centum of their rateable value, as the Standing Committee may consider necessary for meeting the whole or part of the expenditure incurred or to be incurred on capital works for making and improving the facilities of water-supply and for maintaining and operating such works;

(b) (i) the sewerage tax of so many per centum of their rateable value, as the Standing Committee may consider necessary for collection, removal and disposal of human waste and other wastes;

(ii) an additional sewerage tax which shall be called the "sewerage benefit tax" of so many per centum of their rateable value, as the Standing Committee may consider necessary for meeting the whole or part of the expenditure incurred or to be incurred on capital work for making and improving facilities for the collection, removal and disposal of human waste and other wastes and for maintaining and operating such works;

(c) a general tax of not less than eight and not more than fifty per centum of their rateable value, together with not less than one eighth and (not more than five per centum) of their rateable value added thereto in order to provide for the expense necessary for fulfilling the duties of the corporation arising under clause (k) of section 61 and Chapter XIV;

[(ca) the education cess leviable under section 195E;]

[(cb) the street tax leviable under section 195G;]

[(d) betterment charges leviable under Chapter XII-A]

[(2) Any reference in this Act or in any instrument to a water tax or a hallakhor tax shall after the commencement of the Bombay Municipal Corporation (Amendment) Ordinance, 1973, be construed as a reference to the water tax or the water benefit tax or both, or the sewerage tax or the sewerage benefit tax, or both as the context may require.]

[Provided that all or any of the property taxes may be imposed on a graduated scale.]

Section 141 which is also relevant for the present purposes reads thus :-

"141. (1) Subject to the provisions of section 169, the water tax shall be levied only in respect of premises :-

(a) to which a private water supply is furnished from or which are connected by means of communication-pipes with, any municipal water works; or

(b) which are situated in a portion of (Greater Bombay) in which the Commissioner has given public notice that sufficient water is available from municipal water works for furnishing a reasonable supply to all the premises in the said portion.

(2) Subject to the provisions of section 169 the water benefit tax shall be levied in respect of all premises situated in Greater Bombay."

Section 169 empowers the Standing Committee to make such rules necessary for supply of water and relevant portion of section 169 reads thus :-

"169.(1) Notwithstanding anything contained in section 128, the Standing Committee shall, from time to time, make such rules as shall be necessary for supply of water and for charging for the supply of water and for any fittings, fixtures or services rendered by the Corporation under Chapter X and shall by such rules determine -

(i) the charges for the supply of water by a water tax and a water benefit tax levied under section 140 of a percentage of the rateable value or any property provided with a supply of water; or

(ii) a water charge in lieu of a water tax, based on a measurement or estimated measurement of the quantity of water supplied; or

(iii) combined charged under clauses (i) and (ii); or

(iv) a compounded charge in lieu of charges under clauses (i) and (ii).

(2) A person who is charged for supply of water under clause (ii) or (iv) of sub-section (1) shall not be liable for payment of the water tax, but any such payable by him and not paid when it becomes due shall be recoverable by the Commissioner as if it were an arrear of property tax due.

(3) Notwithstanding anything contained in section 146, the water taxes and charges shall be primarily recoverable from person or persons actually occupying the premises."

5. Section 276 makes provision of meters when water is supplied by measurement and it provides that where water is supplied by measurement, the Commissioner may either provide a meter and charge the consumer for the same such rent as shall from time to time be prescribed in this behalf by the Standing Committee, or may permit the consumer to provide a meter of his own such size, material and description as the Commissioner shall approve for this purpose.

6. It would be, thus, seen that under section 140 of the Act of 1888, the water tax may be levied by the Bombay Municipal Corporation as per decision taken by the Standing Committee necessary for providing water supply. The Standing Committee may fix water tax on the percentage of the rateable value of the property as may be determined by it, yet another mode has been provided for imposition of the water tax on graduated scale by way of amendment introduced in the year 1994. Section 169 enables the Standing Committee to make such rules as shall be necessary for charging for supply of water from time to time notwithstanding the provisions contained in section 128. Clause (i) of sub section (1) of section 169 provides for determination of the charges for supply of water by a water tax and a water benefit tax leviable under section 140. However clause (ii) of sub section (1) of section 169 confers power on the Standing Committee for fixation of water charges in lieu of a Water tax, based on a measurement or estimated measurement of the quantity of water supplied. The Water charges, thus, are alternative charge to the water tax and for the determination of such water charges, power has been conferred on the Standing Committee to make rules. Levy of water charges in lieu of water tax is tatutorily recognised. It is in exercise of the power conferred under section 169 read with section 276 of the Standing Committee and based on the resolution dated 4.3.1987 Water Charges Rules were framed which became effective from 5th April, 1987 and subsequent Water Charges Rules were also framed accordingly.

7. Paragraph 1.7 of Water Charges Rules, 1987 provides that rate of Rs.150/- per 10,000 litres supply of water shall apply to the consumers/users for the premises used as Race Course and building appurtenant thereto, Five Star Hotels and Chemical Industries. Paragraph 1.7 of the Water Charges Rules reads thus :-

1.7 Rate of Rs.150/- per 10,000 litres shall apply to the types of consumers/users, premises used as :-

(1) Race Course and buildings appurtenant thereto,

(2) Five Star Hotels, and

(3) Chemical Industries.

8. Paragraph 1.5 of the Water Charges Rules of 1987 provides various categories of the premises to which rates of Rs.80/- per 10,000 litres of water supply is applicable. There are 28 categories therein, but we are concerned with category No.22, which relates to Cotton and Textiles Mills including Spinning, Weaving & Dyeing & Bleaching.

9. At this stage we may also refer to stand taken by the respondents in justifying the Water Charges Rules in relation to three categories of users/consumers with which we are concerned with. According to the respondents the petitioners are consumers of water for non-essential uses and luxury purposes and not merely for necessity. The petitioners are large concerns and taxes and charges imposed are transferred by them to the occupiers of the room in the case of five star hotel premises and to the members by race course club and to the consumers by the textile industries. They have a capacity to pay of water charges than the other categories using the water. It is averred that in view of existence of different level of consumption with difference in living conditions particularly in respect of excess water supplies, several categories, of users have been made. The respondents have to do social justice by charging domestic consumers of water at the minimum price and higher prices for water supplies in non-essential and luxurious use. The large part of the population of Greater Mumbai lives in hutments and as per the policy of the Corporation standpost water connections are given to the hutments gratuituously. The Corporation is not in a position to recover large expenses of water supply given through standpost water connections. The Corporation has averred that domestic and community welfare factors have been kept in mind for charging minimum rates while consumption and capacity to pay are also factors for fixation of higher tariff rates in case of the petitioners. It is also averred in reply that the Municipal Commissioner addressed a letter dated 18th September, 1986 to the Standing Committee of the 1st respondent Corporation for increase of water supply rates for several categories and in the said letter several reasons were set out for increased cost of supply amongst other multifold increase in operating expenses. It was felt that the burden of tariff increase should not be unreasonably heavy on the middle class and lower middle class in Bombay City. Thus it is the stand of the Corporation that the Standing Committee which is competent body has made proper classification and the said classification does not suffer from vice of arbitrariness nor does it offend Article 14 of the Constitution of India.

10. The close reading of section 140 and section 169 of the Act of 1888, leaves no manner of doubt that the Standing Committee while making rules for water charges is empowered to make classification of consumers based on relevant consideration. As the matter of fact, during the course of arguments, the learned senior counsel Mr.Rana did agree that it may be "lawful" for the Standing Committee to classify the consumers and users of domestic or non-domestic premises. In other words according to Mr.Rana, the classification in respect of the residential and commercial premises could be made. When there is no serious dispute of the position that classification based on residential and commercial premises could be made, we find no reason why classification inter-se between commercial premises cannot be made. From the Division Bench judgment of this Court in Hirabai Ashabai Patel vs. The State of Bombay (56 BLR Page 1035) we find that right from 1907 the classification has been made in respect of class of premises for recovery of water tax or alternatively the water charges. From 1907 to 1915, the recovery of water tax by means of measurement by meters was applied to the following class of premises: (a) Milch cattle, livery and bullock stables; (b) premises used for trade purposes; (c) Properties which are at a greater distance than 500 feet from the Municipal mains; (d) Railways; (e) Bungalows with gardens; (f) Premises in respect of which owners agree to pay by meter measurement for larger connections or for greater number of taps than permissible under the Rules. In 1917 gymkhanas, lawns and playgrounds were added as properties chargeable by meter measurement. In 1924 premises used for laundries were also included in the list of premises chargeable by meter measurement. In 1927, separate rates were prescribed by the Standing Committee for the following additional classes of premises: viz (a) Cotton, Woollen, Silk, Dyeing and Bleaching Mills; (b) Hotels, Flour Mills, Oil Mills and Factories. In the year 1930, recovery of water charges by meter measurement was applied to the race course and buildings appurtenant thereto. In 1940 metering was introduced in respect of private markets and the structures appurtenant thereto, licensed under section 463 of the Bombay Municipal Corporation Act. In 1943, meters were introduced in respect of boarding and lodging houses, bakeries, Hamamkhanas and swimming pools. In 1945 hand-printing works were metered. In 1947 the more classes of premises were included under the water charges rules for being charged by meter measurement: (a)Residential quarters and labour chawls belonging or attached to trade concerns which were charged on meter measurement; (b) Printing Press; (c) Photo and Cine Studios, (d) Metal manufacturing concerns; (e) Refineries; (f) Motor Workshops (g) Nurseries. In the year 1948 land under cultivation also came to be metered. In 1950 the further additional classes of premises were charged for by meter measurement : (a) Dhobiwadas; (b) Restaurants, Bathing Houses, Soda Fountains, Cold Drinks Shops and Bars, (c) Saw Mills; (d) BEST undertaking including residential quarters and labour chawls. In April 1950 the suburbs were merged into Greater Bombay and all premises in the suburbs including those used for residential purposes were metered. In the year 1951, some additional classes of premises were included in the water charges rules for being charged under meter measurement. Thus, it is apparent that the classification of the premises, has been made for the last eight/nine decades in exercise of the power under section 169 read with 276 for the recovery of Water tax by means of measurement by meters. In the very exercise of the power which has been conferred on the Standing Committee for determination of water tax for the supply of water and for water charges in lieu of water tax such power of classification is implied. It is not necessary that the classification, in order to be valid must be fully carried out by the Statute itself. The legislature instead of making the classification itself, may with the inbuilt safeguard provided in Statute leave to the discretion of the Government or the authority to select such persons or things having regard to the limitation imposed upon by the statute. It cannot be overlooked that the law making authority in respect of taxing Statute has major discretion to select basis of classification. The classification made for taxing economically affluent class cannot be said to suffer from vice of discrimination and arbitrariness nor can such classification be said to be in violation of the Article 14 of the Constitution of India once it is found that the Standing Committee is competent to make classification in respect of the premises or in respect of consumers and users of water. The classification of the premises and consumers with regard to commercial premises or commercial use cannot be faulted particularly keeping in view the social welfare approach. The classification of commercial consumers having capacity to pay more is proper and cannot be termed to be hostile. The Corporation has to supply water to all types of consumers including large number of population living in the slums, the people belonging to the category of have nots and the people belonging to the lower class or middle class. The standpost water connections given to the hutment dwellers is gratuituous and Corporation is not in a position to recover large expenses incurred for such water supply. So obviously, to off-set the losses by providing gratuituous water supply to the hutment dwellers or to meet large expenses incurred for such water supply, some category of consumers are required to bear more burden who have capacity of paying water charges at higher rate and those consumers who utilise water for luxurious purpose and not merely for necessity. It is true and there is no denying a fact that there has to be co-relationship between the rate charged and the cost of providing water supply whether it is levy of water tax or fixation of water charges supplied according to measurement. As already observed above by us the recovery of the water charges under section 169 is alternative to water tax as provided in section 140 sub clause (a) and the Standing Committee while determining water charges has also to keep in mind the relationship between rate charged and costs of providing water supply. Once this limitation of the relationship between rate charged and costs of water supply according to measurement is kept in mind the Standing Committee's competence to classify the category or class or the premises of consumers and users while determining the water charges cannot be doubted. In the tax matters the law makers have to be given full latitude and leeway, of course within the permissible power, so also in fixation of the water charges,etc. Standing Committee has to be given due freedom of classification subject of course to the limitation of relationship between the rate charged and cost of water supply according to measurement.

11. Mr.Rana, the learned senior counsel appearing for PIEM Hotels Ltd. submitted that the categorisation or the classification by the Standing Committee was arbitrary and there is total arbitrariness in the matter of the premises as well as rates and thus the classification is violative of Article 14 of the Constitution of India. The learned senior counsel urged that the Legislature has provided only three guidelines namely; (i) that the water charges must be based on supply of water; (ii) that water charges are in lieu of water tax and therefore there has to be relationship between the rate charged and the water supply made, and (iii) that the classification can also be based on graduated basis. According to the learned senior counsel what is now expressly provided by way of proviso in the year 1994 in section 140 (1) was implied earlier. Mr.Aney, the learned senior counsel appearing for Royal Western India Turf Club Ltd. submitted that the Legislature has only permitted water tax to be levied under section 140 based on a particular percentage of the rateable value of the property or water charges under section 169 (1) (ii) based on measurement or estimated measurement of the quantity of the water supply and there could be no other mode for determination of water charges. According to Mr.Aney since the Water Charges Rules, 1987, and subsequent Water Charges Rules are not within the permissive limits of the Statute viz; the provisions contained in section 169 and section 140, the said Rules are violative of Article 14 of the Constitution of India. The contentions of both the learned senior counsel cannot be accepted. It is true that section 140 provides levy of water tax for water supply as shall be determined, by the Standing Committee based on such per centum of the rateable value of the property. Similarly section 169(1) (ii) enables the Standing Committee to make rules for determination of water charges in lieu of water tax based on measurement or estimated measurement of the quantity of water supply but the said provisions do provide guidelines in as much as with regard to water tax, the Standing Committee may determine the rate of the water tax on a particular per centum of the rateable value and the rate of water charges in lieu of a water tax has to be based on a measurement or estimated measurement of the quantity of water supplied. Besides that there is inbuilt check and limitation on the Standing Committee who is empowered to determine the water charges that there has to be relationship between rate charged and cost of water supply. It cannot be said that if the Standing Committee while maintaining the relationship between rate charged and cost of water supply has exercised its discretion by fixing higher rate of water charges in respect of particular class of premises or consumbers based on rationality, the power so exercised by the Standing Committee is arbitrary. As stated by Justice Cardozo in Mississippi Valley Bayeline Company vs. United States of America, 292 US 282. "The structure of a rate schedule calls in peculiar measure for the use of that enlightened judgment which the Commission by training and experience is qualified to form.... It is not the province of the Court to absorb this function to itself. The judicial function is exhausted when there is found to be rational basis for conclusions approved by the administrative body." Under section 4 of the Act of 1888, the Standing Committee has been given statutory power and duty to carry out certain functions. The Standing Committee is a committee comprising of elected members of Corporation. It is a body comprising of representatives of the public, though smaller in number than the general body. It is their domain to form opinion which they are qualified to form which class of consumers or premises are to be charged at high rate. In the case of Ganga Sugar Corporation Ltd and others versus State of Uttar Pradesh reported in (1980) 1 Supreme Court Cases page 223, the Apex Court approved the classification based on scale of operations, product manufactured and other substantial differences bearing on production capacity, profits of business and ability to pay tax as constitutionally valid. As a matter of fact, ability to pay the tax has always been considered to be valid criterion for levy of tax. For the determination of water charges also if the ability or capacity to pay has been kept in mind by the Standing Committee it cannot be said that the Standing Committee has acted arbitrarily in respect of determination of the premises as well as in respect of rates. It is well settled that while considering the question whether the rate of taxes and charges determined by the law maker is unreasonable or arbitrary, realities of life cannot be overlooked. What is required to be seen is substance and not the form and therefore, while considering the legitimacy of determination of the water charges in the city of Greater Bombay, it cannot be overlooked that the large population lives in Slums and it is obligation on the part of the Corporation to provide them water being necessity of life and from whom no recovery can be made for water supply. Thus certain class of people have to bear the burden and in that context, if higher rate is charged for water supply according to measurement from the consumers or users who have capacity to pay, such fixation of rate cannot be termed as arbitrary. Moreover, we find from the affidavit in reply filed by the respondents that while determining the water charges, the Standing Committee has inter alia taken into consideration the diverse factors viz., (1) Service rendered to and availed of by the consumers viz. water in the dwelling place, water through common stand-post and extent of sewerage service, (2) Demand for water-domestic and non-domestic, (3) Community Welfare -the optimum per capita supply for different classes of consumers (Standard the light of welfare of the people and economic development) (4) Water using capacity - type of dwelling, storage facilities, plumbing facilities, source of water supply,access to water supply and family size and (5) Consumers capacity to pay for water supply and sewerage services. The said factors amongst others cannot be termed as irrelevant factors for determination of water charges and thus the rate so fixed by the Standing Committee cannot be said to be arbitrary.

11A. Mr.Rana, the learned senior counsel appearing for Piem Hotels submitted that in so far as categorisation of five star hotels in paragraph 1.7.1 is concerned the same is arbitrary. The categorisation of five star given by the department of Tourism is non-voluntary and therefore, according to Mr.Rana, the same cannot form basis for determination of water charges for water supply made to such hotels. According to him, the hotel continues to be licensed as Boarding and lodging house and since para 1.5.1 of the Rules of 1987 covers Lodging and Boarding houses, on the basis of non statutory star facility given by the Tourism department, the higher water charges for the category of the five star hotel is arbitrary. He submitted that certain consumers whose consumption of water is for commercial purposes like aerated water factories etc. the rate of water charges is much less than the rate which is applicable to the five star hotels and that also renders the classification made by the Standing Committee arbitrary. Similarly, Mr.Dharmadhikari, the learned counsel appearing for the Association of Textile Mills submitted that most of the Textile Mills in the city of Bombay are incurring losses and many of them are even closed and therefore, the rate fixed under Rule 1.5.1 is arbitrary. Mr.Aney, the learned senior counsel appearing for the Royal Western India Turf Club Ltd. also submitted that fixation of rate at the rate of Rs.150/- per 10,000 litres for race course is highly arbitrary. We are not impressed by the submissions of the learned counsel for the parties. The factors as aforesaid which have been considered by the Standing Committee, we need not repeat, are valid factors. Whether the Textile Mills are incurring losses or not, is not a relevant factor to be considered by the Standing Committee for fixation of the water charges because there may be 100 reasons for such textile mills in running into losses. In any case this factor does not invalidate the water charges fixed for water supply to the textile mills. We find fixation of water charges by the Standing Committee rational, based on the relevant factors and therefore, cannot be said to be arbitrary. We, therefore, have no hesitation in holding that the water charges Rules framed by the Standing Committee are not violative of Article 14 of the Constitution of India. We may observe that constitutionality of section 169 of the Act of 1888 was challenged way back in Hirabai Ashabai Patel's case inter alia on the ground that the section offends Article 14 of the Constitution. The Division Bench of this court negatived the contention. In Writ Petition No.3928 of 1987 in M/s.Polychem Ltd. & others vs. The Municipal Corporation of Greater Bombay & others decided on February 7, 1997, the validity of water charges Rules, 1987 with which we are concerned was under challenge. The contention before the Division Bench in the said petition was that there was absolutely no basis in clubbing together the category of race course, the five star hotels and commercial factories under Rule 1.7.1 and therefore, the said Rule was discriminatory and violative of Article 14 of the Constitution of India. The Division Bench of this Court upheld Rule 1.7 of the said Water Charges Rules (with which we are concerned) and in paragraph 5 of the Judgment held thus:

"Though the argument of the learned counsel for the petitioner appears impressive, same does not bear the scrutiny. Under the provisions of the section 169 of the Bombay Corporation Act, the Standing Committee is empowered to make rules for charging supply of water and for any fitting, fixtures or services rendered by the Corporation under Chapter X. It also empowers the Standing Committee to frame rules to determine the water charges in lieu of water tax based on measurement or estimated measurement of the quantity of water supplied. The affidavit in reply clearly suggests that the rate of water charges in respect of chemical industries was determined by the Standing Committee on the basis that large quantity of water was supplied and on the basis of profitability and capacity to pay. In our opinion, that cannot be levelled as arbitrary exercise of powers. That chemical industries were consistently included in the group which was required to pay lesser rate of water charges is no ground to hold that the Standing Committee either had no power to treat it differently or that merely because Race Course, Five Star Hotels are also in the group which are required to pay highest rate of water charges, means that there are clubbed together. In our opinion, it was open to the Standing Committee to prescribe the particular rate for different industries separately and still rate could have been identical, for example they could have separately charged, at the rate of Rs.150/- the chemical industry under one item, then same for Race Course in second item and for the Five Star Hotel under the third. It is actually not grouping or clubbing together in the sense that they are held to be identical. Only similarly is that they are required to pay the same rate of water charges. We are of the opinion that the water charges are in lieu of water taxes, and as such, must partake the colour of the taxes. Looking from that angle, principles of judging the validity of the taxes are not all together irrelevant. In view of this, we do not find any merit in the challenge raised by the petitioners to the rate of water charges levied under the rules effective from July 1987 and the said challenge fails."

12. In Writ Petition No.1113 of 1989 Vijay Kumar S.Rajput & Anr. vs. The Municipal Corporation of Greater Bombay and Anr. decided on 9th December, 1999, the validity of Rule 1 of Water Charges Rules of 1987, was under challenge on the ground that it was violative of Article 14 of the Constitution of India. The Division Bench did not find any infirmity in the said Rule and in paragraph 4 of the Judgment observed thus :-

"It is clear from the above that different rates have seen prescribed for different types of premises based on their user. Evidently the classification of the premises for the purpose of rates of water charges is not arbitrary. The classification of different premises into different categories for the purpose of fixing rates of water charges is founded on rational principles. Prescribing lower rates of water charges for premises under exclusively for residential purposes cannot by itself be regarded as discriminatory or viloative of article 14 of the Constitution. There is no arbitrariness in fixing the rate of Rs.80 per 10,000 litres for premises used for commercial purposes. On a careful perusal of rule 1 of the Water Charges Rules and the classification of the premises for the purpose of charging different rates of water charges, the Standing Committee has applied its mind to make a reasonable classification. There is nothing to show that the classification is arbitrary. Situated thus, it is difficult to hold Rule 1 of the Water Charges Rules discriminatory. Law is well-settled that a legislation is not to be struck down as discriminatory if any state of facts may reasonably be conceived to justify it. In order to sustain the presumption of constitutionality, the court may also take into consideration matters of common knowledge. Moreover, the presumption is always in favour of the constitutionality of enactment since it must be assumed that the legislature understands and correctly appreciates the needs of its own people and that its discriminations are based on adequate grounds. The burden of showing that the classification is arbitrary and not founded on reasonable basis is upon the person, who impeaches the law on the ground of violation of the guarantee of equal protection. Moreover, as observed by the Supreme Court in Ashok Soap Factory v. Municipal Corporation of Delhi, (1993) 2 SCC 37, fixation of tariff is a legislative function and the only challenge to the fixation of such levy can be on the ground of unreasonableness and arbitrariness."

13. Though the arguments advanced before us were not specifically raised in the aforesaid Judgments when the legality of Water Charges Rules of 1987 was under attack but nevertheless the fact is that legality and validity of Rules of 1987 was under challenge being violative of Article 14 of the Constitution of India and said challenge was negatived for the reasons which we have quoted above. Once water Charges Rules of 1987 have been held to be valid by two Division Benches of this Court though attack was on different grounds, the different facets may not justify the challenge to the said Rules again and again.

14. In so far as the contention raised by Mr.Dharmadhikari, the learned counsel for the Association of Textile Mills that the said Rules are illegal and contrary to the provisions of Act of 1888 because the procedure under section 125 to 127 has not been followed, is concerned, we find no merit in the said contention. Section 125 deals with the estimates of expenditure and income to be prepared annually by the Commissioner. Section 125(a) provides for classification of budget heads. Section 126 makes provision that budget estimate shall be prepared by the Standing Committee. Section 127 provides for consideration of budget estimate by the Corporation. Section 128 provides for fixing rates of Municipal Taxes and of fares and Charges of Bombay Electric Supply and Transport Undertaking. Section 169 begins with non-obstante clause which clearly shows that procedure contemplated under section 125 to 127 is not required to be followed when the Standing Committee exercises its powers under section 169. Again section 170 empowers the Standing Committee to amend Rules from time to time made under section 169 to 171. Thus, by no stretch of imagination can it be said that Water Charges Rules made by the Standing Committee in the year 1987 were bad in law for not following the procedure contemplated under section 125 to 127 of the Act. Another contention raised by Mr.Dharmadhikari that even if it is held that the procedure under section 125 and 127 was not required to be followed then section 169 itself suffers from vice of excessive delegation of powers and are violative under Article 14 of the Constitution of India, also has no merit. There is no question of excessive delegation given to the Standing Committee under Section 169. As already pointed out above section 4 provides for the Municipal Authorities who have been given statutory power and duty to carry out the provisions of the Act of 1888. The Standing Committee is one of such Municipal Authorities who has to carry out the functions provided to it under section 169 for determination of Water Charges Rules. Thus there is no question of excessive delegation to the Standing Committee nor section 169 can be said to be violative of Article 14 of the Constitution of India on that count. The constitutionality of section 169 being violative of Article 14 of the Constitution of India was also under challenge in Hirabai Ashabai' case and the said provision has been held to be constitutionally valid.

15. During the course of arguments, Mr.Rana, the learned senior counsel appearing for petitioners in Writ Petition No.3565 of 1987 sought for leave to amend the Writ Petition by permitting the petitioners to challenge the Water Charges Rules, 1994 and Water Charges Rules, 2000 on the same grounds on which Water Charges Rules, 1987 have been challenged. Mr.Bharucha, the learned senior counsel did not object to this prayer but submitted that no separate order be passed in that regard and while disposing of the Writ Petition necessary order be passed in respect of proposed amendment. In this view of the matter we allow the proposed amendment in Writ Petition No.3565 of 1987, marked "X" for identification purpose, since the contentions advanced in respect of the amended Water Charges Rules in 1994 and 2000 are identical to the challenge to the Water Charges Rules, 1987. We also hold that there is no merit in challenge to the amended Water Charges Rules of 1994 and 2000 for the same reasons for which we have held Rules of 1987 valid. Necessary amendment may be carried out by the petitioners within three weeks from today.

16. Mr.Rana placed heavy reliance on the Judgment of the Division Bench of this Court in M/s.Nagpal Printing Mills vs. The Municipal Corporation of Greater Mumbai, A.I.R.1988 Bombay 91. So far as this case is concerned, the validity of section 3 (d)(i) of Water Charges Rules effective from 1st April, 1976 was under attack on diverse grounds inter alia (i) that the said Rules were ultra vires the rule making power of the Standing Committee being inconsistent with the provisions of Section 169 of the Bombay Municipal Corporation Act of 1888; (ii) that the Corporation was in no way justified in charging on the basis of quota because it was in no position to supply the quantity of water fixed thereby; and (iii) that the said Rule did not provide any guideline in respect of industries to which it was to be applied and as to how quota was to be fixed. The Division Bench found that the said Rule 3(d)(i) was ultra vires because the water charges were sought to be levied on the basis of quota of water for which no water was supplied. The Apex Court on the Appeal (reported in AIR 1988 Supreme Court, 1009) from that Judgment while upholding the Judgment of Division Bench of this Court agreed with the High Court's view that the Corporation could levy water charge only in respect of water that has in fact been supplied to and consumed by the consumer and it is to be levied on the basis of measurement or estimated measurement. The subject matter in Nagpal Printing Mills case was entirely different and the said Judgment have no application in the cases before us.

17. In the result, we find no merit in any of these Writ Petitions and dismiss them with no orders as to costs.

C.C.expedited.

Petition dismissed.