1986 PLP 480 (CLC)

ABDUR REHMAN, J.‑‑All the above Constitutional Petitions involve common questions of law and facts and, therefore, we have decided to dispose of all of them by this common judgment. These petitions are under Article 9 of the Provisional Constitution Order, 1981 and are directed against the levy and increase from time to time of the water rates by the respondent, Karachi, Water and Sewerage Board, and its predecessors. The petitioners are public limited companies situated at the Landhi Industrial Estate. Each of them consumed large quantity of water and is connected with the pipe line which is fitted with meters. Upto 30th June, 1961 the water rate was charged by the K.M.C. from the petitioners at Re. 1 per thousand gallons. From 1‑7‑1961 the aforesaid rate was increased to Rs.1.50 per thousand gallons and from October, 1971 the said rate was further increased to Rs.2 per thousand gallons. On 28‑3‑1981, the Government of Sind i.e. respondent No.l in exercise of powers vested under section 62 of the Sind Local Government Ordinance, 1979 directed K.M.C. the respondent No.2 to carry out rationalisation of the rates of retail water supply. Accordingly the Municipal Commissioner, Karachi by Notification, dated 30‑3‑1981 enhanced the water rates. According to item No.5(ii) of the said Notification the water rate in respect of industrial consumers as the petitioners are, which were connected with water line was to be calculated at 9% per annum of the net annual rental value. Again on 21‑5‑1981, Karachi Water Management Board Ordinance (Sind Ordinance X of 1981) was promulgated. This Ordinance established a Board to be called as the Karachi Water Management Board. According to clause (V) of section 9 of the Said Ordinance, Board was given powers to levy, enhance, reduce or revise water charges in the prescribed manner so that the supply is made on no loss no profit basis. The Karachi Water Management Board on 27‑3‑1982 held a meeting and approved new water rates alleging that the same were in respect of those consumers who were not specified in the Municipal Commissioner's Notification, dated 30‑3‑1981. It fixed water rates in respect of such industrial consumers which had meters at Rs.6 per thousand gallons. It is alleged by the petitioners that it was wrongly stated in the minutes of the meeting that the industrial consumers with meters were not included in the Notification of the Municipal Commissioner, although they had been so included and no exception was made for those industrial units whose connections were fitted with meters. After the last mentioned decision the Water Management Board started billing the petitioners at the rate of Rs.6 per thousand gallons. According to the Karachi Water Management Board Ordinance, 1981 the Board was given the power to prepare and submit to the K.M.C. schedule of water rates, charges or fees to be levied by it, which had to sanction with or without modification, the schedule of water rates, charges or fees so submitted within 90 days thereof. The petitioners have alleged that no such recommendations were made by the Board nor any sanction was given by the K.M.C. Hence the petitioner refused to pay water rates in excess of those which fixed by the Municipal Commissioner in his notification dated 30‑3‑1981. It has been alleged that the respondent are threatening to recover water rates from the petitioners at the enhanced rate of Rs.6 per thousand gallons and that also from a previous date. Hence it has been prayed that the decision of the meeting dated 27‑3‑1982, and the claim of the respondent Karachi Water and Sewerage Board the successor of Karachi, Water Management Board on the basis of the decision be declared as without lawful authority and of no legal effect and it should be declared that the petitioners are liable to be charged for water at 9$ per annum of their Mills annual letting value as provided in the Municipal Commissioner's letter dated 30‑3‑1981. A prayer for consequent direction for‑bearing them from enforcing the recovery thereof has also been made. ' Respondent No.3 Karachi Water and Sewerage Management Board filed a counter‑affidavit and admitted that the petitioners were their consumers of the water and were taking water from pipe‑lines which were fitted with meters. It was also admitted that the rates of water supply previous to 1981 were the same with respect of the petitioners as have been claimed by them. It was however, alleged that the Notification of the Municipal Commissioner, dated 30‑3‑1981 related only to those industrial consumers who were not having water meters. The petitioners who were having water meters were left out in advertently and, therefore, the water rates in respect of those industrial consumers who were having water meters were revised subsequently by the Water Management Board in their decision dated 27‑3‑1982. It is claimed that the petitioners were billed properly, but they had without any lawful excuse withheld the payment and had made short payments. It was alleged that the rates charged from the petitioners were neither exhorbitant nor arbitrary but were less than the actual cost which comes on the water supply. It was claimed that the petition was hit by latches. It was further stated that the action of the respondent Karachi Water and Sewerage Board was subject to appeal and the Court had no jurisdiction to entertain these proceedings under section 17 of the Ordinance X of 1981 as no such appeal was filed. It was also claimed that the petitioner would not suffer any irreparable loss even if the relief was not granted to them. We have heard Messrs Muhammad Ali Sayeed and Khursheed A. Shaikh. We have also heard Mr. Sattar A.Shaikh A.A.‑G. for respondent No.l, Mr. Muslim Naqvi for respondent No.2 and Mr. Maqbool Ahmed Khan of respondent No.3 at length. Although in the beginning it was argued by Mr. Muhammad Ali Sayeed that the enhancement of water charges from Re.l to Rs.1.50 per thousand gallons which was fixed before 30th June, 1961 was illegal. Similarly the enhancement in October, 1971 from Rs.1.50 to Rs.2 per thousand gallons was also illegal and void. The enhancement of the same by Municipal Commissioner vide his Notification dated 30‑3‑1981 to 9% per annum of the rental value was also illegal. But subsequently he submitted that for the purposes of this case the petitioners have decided not to question these enhancements and increases and to accept the enhancement and revision of rates made on 30‑3‑1981 by the Municipal Commissioner as the latest and the correct fixation of water rates. He submitted that at present he was only challenging the decision taken by the Karachi Water Management Board, in its minutes dated 27‑3‑1982 wherein the water rate for the industrial consumers connected with water pipe‑line and fixed with meters was raised to Rs.6 per thousand gallons. This decision was challenged on various grounds. First of all he submitted that there was no application of mind in this decision and that it proceeded on an absolutely wrong assumption and wrong basis. He referred us to the Notification issued by the Municipal Commissioner which is published in Sind Government Gazette, dated 30th March, 1981 wherein it was clearly mentioned that with effect from 1st April, 1981 the Commercial and Industrial units which were connected with water lines were liable to pay water rate per month at 9$ after net annual rental value. This Notification clearly covered the petitioners and they were accordingly billed at Rs.4.50 per thousand gallons from 1‑1‑1981. Thereafter, he referred us to the decision of the Karachi Water Management Board dated 27‑3‑1982 in which it was wrongly stated that Karachi Water Management Board in its meeting held on 27‑3‑1982 has unanimously approved, on ad hoc basis, fixation of water rates in respect of the following categories which have not been specified in the Municipal Commissioner's Notification dated 30‑3‑1981, although the same as shown above was clearly specified therein. The decision further clearly shows that it is for the categories of consumers not specifically covered under Notification dated 30‑3‑1981 and where metered connections have been provided except the categories mentioned there under the charge will be at Rs.4.50 per thousand gallons. It further shows that the industrial and commercial consumers including agriculturists will be charged Rs.6 per thousand gallons. Mr. Muhammad Ali Sayeed went on the argue that the very fact that this decision of Water Management Board shows that it applies to the categories which have not been specified in the Municipal Commissioner's Notification whereas the petitioners were specified in that Notification leads to the conclusion that this decision was made without proper application of mind and is, therefore, absolutely unlawful and illegal. Mr. Khurshid Anwar Shaikh, who appeared for the other petitioners also repeated this contention. Mr. Maqbool Ahmed Khan, who appeared for Karachi Water and Sewerage Board 'vehemently opposed this contention. It may be pointed out here that subsequently Karachi, Water Management Board had been replaced by another Board known as Water and Sewerage Management Board which is now responsible for distribution of water supply and recovery of water charges hence the said board was added as a party to this petition and is now contesting the same. Mr. Maqbool Ahmed Khan, pointed out that the order of Municipal Commissioner dated 30‑3‑1981 does not cover those industrial consumers whose units were connected with not only pipe‑line, but were also fitted with the meters. This Notification covered only those industrial units which were not fitted with meters though connected with pipe‑line. This was also evidence from the fact that the rates charged for supply of water to such units were not shown in terms of per thousand gallons. He referred us to a common practice in case of certain suppliers such as of electricity of sui‑gas which have been charging a fixed amount from those consumers whose electricity or gas connections were not fitted with meters while they were charging at the rate per unit from those consumers, whose connections were fitted with meters. He relied upon trap counter‑affidavit filed in that behalf and went on the argue that it is a matter of common sense that a fixed amount cannot be charged or levied on a consumer who is getting the water supply through a meter. He concluded that to think otherwise was absolutely absured. The Karachi Management Board intended to increase the water charges of those industrial consumers also whose connections were fitted with meters, but had inadvertantly omitted the same. Hence the Karachi, Water Management Board, in its meeting on 27‑3‑1982 unanimously approved on ad hoc basis, fixation, of water rates in respect of inter alia, industrial consumers to whom meter fitted connections were provided at the rate of Rs.6 per thousand gallons. Similar arguments were advanced by Mr. Muslim Naqvi, Advocate for K.M.C. and Mr. Sattar A. Shaikh, A.A‑‑G. for the Government of Sind. We have carefully considered the arguments of the advocates of both sides and we are of the clear view that the Notification of the Municipal Commissioner dated 30‑3‑1981, had not made mention of those industrial consumers whose units were connected with pipe‑line, but were not fitted with meters. If this Notification was intended to cover the cases of those industrial units which had their connections fitted with water meters, the rates in respect of them would have been mentioned on the basis of per thousand gallons. It is absurd to think that even in the case of a consumer who had got a meter fixed to his pipe‑line a fixed sum of amount would be charged irrespective of the quantity of water actually consumed by him and the earlier practice oil charging at the rate of per thousand gallons would be given up. Mr. Muhammad Ali Sayeed and like him, Mr. Khurshid Anwar Shaikh attacked section 9 clause (V) of Karachi Water Management Board Ordinance, 1981 and branded it as a case of excessive delegation of legislative power. Both of them contended that by this provision naked powers of taxation have been delegated to the Board by the Provincial Government which has effected itself its own powers. Hence this provision was ultra vires and illegal. In this connection they have relied upon P L D 1971 Kar. 333/460 (Well‑known case of Zebtan Textile Mills Ltd.) where it was held as follows:‑-- "The conclusion from this discussion is that the amendments made in section 3 of the Central Excise and Salt Act, 1944 by the Finance Act of 1966, cannot be said to suffer from the vice of impermissible or excessive delegation of legislative power, nor can the Legislature be said to have effaced itself or abdicated from its essential legislative functions. Considering the nature of the subject with which the Legislature had to deal, sufficient legislative guidance, by way of declaring the legislative policy and primary legislative standards and also secondary legislative principles according to which the Central Board of Revenue was required to act, has been fully set out in the impugned amendments, which also contain both substantive as well as procedural ‑safeguards." This ruling does not apply to the facts of the present case. Moreover, it goes against the petitioners themselves as is clear from the above extract itself. It is next contended by the advocates for petitioners that the water rate could not be enhanced or varied by the respondent without following rules 4 and 5 of Sind Councils Imposition of Taxes Rules, 1979 which required the respondent Water Management Board to submit their tax proposals to K.M.C. and get the same confirmed. In this connection it may be pointed out that no doubt the Ordinance X of 1981 had provided that levy or increase of water rate was to be made in the prescribed manner and it had in its view the making of certain rules for the said purposes, but by that time no rules were made, nor any procedure was prescribed for levying or increasing the water rate. The Sind Council Imposition of Taxes Rules, 1979 were not applicable in the present case because the Karachi Water Management Board was an independent statutory body created under a separate enactment and was not bound to follow the same. The Board which had imposed and revised the taxes under Ordinance X of 1981 was, therefore, not bound to place its proposals for confirmation before the K . M . C . after the promulgation of Ordinance II of 1983. No doubt in clause (V) of section 9 of Ordinance X of 1981, the guideline which was provided for levy of water rate was no profit no loss basis, but there is nothing to show that the amount of Rs.6 per thousand gallons which the respondents proposed to recover is in violation of that principle. Respondent No.3 has filed an affidavit in which it has been stated that it is supplying water to the petitioners at a rate which is less than the actual costs incurred by it in the management and distribution of water supply. We are not in a position to disagree with this statement on oath of respondent No.3 which looking to the high costs prevalent now‑a‑days appears to be convincing and reasonable. After taking into consideration the contentions of advocates of both the sides and after carefully perusing the entire material on the record, we are of the opinion that the decision of the Karachi Water Management Board dated 27‑3‑1982, is valid, legal and binding on the petitioners. We have no hesitation in holding that this decision can take effect from the date on which it has been made. Neither there is any mention in this decision that it has to take effect from a retrospective date nor Ordinance X of 1981 gave powers to the Karachi Water Management Board to increase or enhance the water rates from a retrospective date. The respondents themselves have made it clear that the Municipal Commissioner's Notification dated 30‑3‑1981, did not include within its scope the units of the petitioners as they were connected with water meters. Hence it may be made clear that prior to the date of the resolution the respondents were entitled and the petitioners were liable to pay water charges at the rates at which they were liable to pay before 27‑3‑1982, and not according to M.P.L. Commissioner's: Notification. We, therefor, partly allow the writ petitions and declare that the Karachi, Water and Sewerage Board cannot claim from the petitioners water charges at the enhanced rate retrospectively and the SITE is also not entitled to charge retrospectively prior to decision dated 27‑3‑1982. The petitions cannot be allowed except to the extent mentioned above and are, therefore, otherwise dismissed and the decision of Karachi Water Management Board dated 27‑3‑1982, is upheld. Looking to the special circumstances of the case we do not propose to make any order as to costs in any one of these petitions. M. Y . H Petitions partly allowed.