A.K. Yog and K.N. Ojha, JJ.
1. Heard Sri Prakash Padia, Advocate representing Life Insurance Corporation of India/Petitioner, Sri Q.H. Siddiqui, Advocate for respondent Nos. 1, 2, and 3 and Sri Ran Vijay Singh learned Standing Counsel for respondent Nos. 4 and 5 in the leading case and all other Counsels appearing in connected cases. Life Insurance Corporation of India (LIC) as petitioner has filed all the above petitions under Article 226 of the Constitution of India, challenging orders/actions of the respondent Nagar Nigams, Nagar Palika Parishad impleaded as respondents called Local Bodies seeking to recover Licence Fee from LIC on the basis of entry "Insurance Company" in the Schedule attached to G.O. dated 16.12.97 and consequential Notifications on that basis.
2. It is admitted at the bar that all the petitions under somewhat similar facts raises common question of law and on that basis, learned Counsels for the parties in the above cases agreed that all the petitions be decided together by referring to the facts and record of Writ Petition No. 386 of 2004 wherein, LIC has claimed following reliefs :--
(a) To, issue a writ, order or direction including a writ in the nature of certiorari for quashing the Government Order dated 16.12.1997 (Annexure-1 to the writ petition).
(b) To, issue a writ, order or direction including a writ in the nature of certiorari for quashing the bye-laws framed by the Nagar Nigam, Allahabad dated 13.1.1999 published in the U.P. Gazette on 30.1.1999 (Annexure-2 to the writ petition).
(c) To, issue a writ, order or direction including a writ in the nature of certiorari for quashing the notices dated 30.5.2003, 18.6.2003, 18.6.2003, 18.6.2003, 30.5.2003, 19.7.2003, 18.6.2003 and 18.6.2003 (Annexure-3 to 11 to the writ petition) all issued by the Sahayak Nagar Aykt, Nagar Nigam, Allahabad, respondent No. 3 against the petitioners.
(d) To, issue a writ, order or direction including a writ in the nature of mandamus commanding the respondents not to take any coercive steps against the petitioners in respect of the impugned notices issued by the Executive Officer, Nagar Palika Parishad, Allahabad.
(c) To, issue such other and further writ, order or direction which this Hon'ble Court may deem fit and proper under the circumstances of the case; so that justice be done between the parties.
(f) To, award cost of the writ petition throughout to the petitioner as against the respondents.
3. Petitioner plead inter-alia amongst others, that Nagar Palika Parishad, Allahabad issued Notification and containing Rule/Bye-laws imposing licence fee on several establishments including "Insurance Corporation (each (Branch) @ Rs. 12,000/-" whereas Life Insurance Corporation of India is not covered under said entry. In this context reference is made to Government Order dated 16.12.1997/ Annexure-1 to the writ petition, whereby Government of U.P. directed all Nagar Pramukhs of Nagar Nigam, U.P., Mukhya Nagar Adhikari, Nagar Nigam, U.P. Regional Commissioner, U.P., Adhyaksh Nagar Palika Parishad, U.P., Adhyaksh, Nagar Panchayat, U.P. for information that in order to raise revenue, local bodies shall revise licence fee at the fix rates given in the Schedule annexed thereto. Entries at Serial Nos. 25 and 26 above said G.O. are relevant which are reproduced below :--
"25-Finance Company, Chit Fund -6000/-
26-Insurance Company, Prati Sakha -12000/-"
4. Mukhya Nagar Adhikari, Nagar Nigam, Allahabad presumably on the strength of above Government Order issued notification dated January 13, 1999 containing Bye-Law regarding Licence Fee as per Resolution of Parishad dated 11.7.1998 and Finalisation of objection vide Resolution No. 126, dated 28.10.1998. In category Ga in the Schedule of the said Notification afore quoted entries have been repeated at Serial Nos. 1 and 2. It also contains certain other conditions for those in category '...................' to conduct their business or to run their establishments and one of them being to display for public information 'Rate Board'.
5. The petitioner endeavours to challenge competence of framing of bye-laws by Nagar Nigam, Allahabad as well as the authority of the State Government to issue directions on the ground that 'Insurance', is a subject mentioned at Serial No. 47 in the List-Union of VII Schedule, Constitution of India; prescribing licence fee, relating to business of insurance also (carried by the petitioner) infringes upon right to carry said business, and hence imposition of said licence fee by Nagar Nigam and State Government is illegal and without sanctity of law.
6. The petitioner, however, failed to show successfully that State Government is not competent to legislate and promulgate U.P. Municipal Corporation Adhiniyam, 1959 in as much as the subject 'Municipality' in List 2-State under VII Schedule at Serial No. 5 read with Serial No. 66 of the Constitution.
7. The other limb of arguments of the petitioner is that no licence fee could be imposed by Nagar Nigam, Allahabad in exercise of its power conferred under the aforesaid Adhiniyam, 1959.
8. Section 114, under Chapter V of the said Adhiniyam prescribed obligatory duties of the Corporation, makes it incumbent on the Corporation to make reasonable and adequate provision, for certain matters including the matter at Serial No. (xxi) which reads 'the construction and maintenance of public markets and slaughter-houses, [tenneries] and the regulation of all markets and slaughterhouses, (italics to lay emphasis). The Provision confers ample power upon a Corporation to regulate market within its territory area and no exception can be taken to the same.
9. Section 438(1)(d)(i) of the said Adhiniyam lays down that except under and in conformity with the terms and conditions of a licence granted by the Mukhya Nagar Adhikari, no person shall carry on or allowed to be carried on, in or upon any premises any trade or operations connected with any trade specified in the bye-laws and that 'it would be lawful for the Mukhya Nagar Adhikari to grant any licence referred to in Sub-section but subject to such further restriction or condition, if any, as he shall deem fit in circumstances of the case'.
10. Again Sections 452 and 453 of the Adhiniyam lays that the Mukhya Nagar Adhikari may charge a fee to be fixed by bye-law for any licence which he is entitled or required to grant by or under the Act.
11. Chapter XXIII of the said Adhiniyam which contains Sections 540 to 545 is relevant for the purpose of ascertaining the procedure for framing bye-laws and envisages opportunity to be given before finalizing Bye-Laws. Petitioner admittedly did not avail the same. Any objection on the part of the petitioner regarding licence fee its enforcement or being excessive cannot be entertained at this stage.
12. Power to provide licence fee is referable to Section 541, Serial No. (41) which lays down that the Corporation may from time to time make bye-laws with respect to the matters, apart from others, fixing of fee for any licence, sanction or permission to be granted under the said Adhiniyam. The submissions, made on behalf of the petitioner with respect to the validity of the bye-laws on the competence of Nagar Nigam, therefore, falls.
13. Learned Counsel for the petitioner submitted an argument in the alternative, and argued that even if Nagar Nigam, Allahabad is competent to frame bye-laws and charge fee the petitioner (LIC) (which is a Corporation dealing with Life Insurance) does not fall within the afore quoted item in the above referred Bye-Law which refers to 'Insurance Company'.
14. The submission is that 'LIC' is a Statutory Corporation under Section 3. Life Insurance Corporation Act, 1956 which has exclusive authority to carry on business of 'Life Insurance' only and which is clearly distinguishable and in contrast to the general 'insurance' under Insurance Act, 1938 carried on by private entities 'natural' or 'judicial' like registered Partnership Firms or Private Companies.
15. Establishments-under Schedule of the said Notification, are without exception, purely business or commercial undertakings/which establishments have no element of control by Government or element of Social Services/Welfare of the people as such.
16. It is also to be noted, 'Finance Company Chit Fund', Insurance Companies generally belong to by Private Companies (under Companies Act) or Societies (registered under Societies Registration Act) or Partnership Firms (registered under Partnership Act). In other words they are not carried on by Statutory Corporation under regulatory control of Central Government. Insurance Companies deal in business of general insurance for damage, like- fire insurance, marine insurance, motor accident insurance, etc. governed by Insurance Act in contrast to the business of 'Life Insurance'- to be carried by LIC of India- is a Statutory Corporation, under LIC of India Act, 1956.
17. Insurance Act, 1938 initially- governed both 'Life Insurance' and General Insurance (Namely Fire Insurance, General Insurance, Motor Accident Insurance, Marine), Insurance etc. Section 2(8) of the Insurance Act, 1938 defines the expression 'Insurer' as any individual or unincorporated body of individuals or body corporate incorporated under the law of any country.
18. With the 'aim and object' of nationalizing Life Insurance business, as a social measure in our welfare state and for the benefit of society at large Life Insurance (Emergency Provisions) Act, 1956 (Act No. 9 of 1956) was promulgated with effect from March, 21, 1956. By means of the said Act No. 9 of 1956, Life Insurance Business (in contrast to other category of Insurance Business) was taken over by the Central Government and vested in a 'Custodian'. This Act No. 9 of 1956 is followed by (The) Life Insurance Corporation of India, 1956 (Act No. 31 of 1956) with effect from June 18, 1956.
19. As a consequence of the above legislation, Life Insurance business was taken away from the operation of Insurance Act. It is also evident from the perusal of various sections of the said Life Insurance Corporation Act, 1956 (particularly Sections 2, 3, 5 and 6 of the said Act) Chapter V, consisting of Sections 18 to 23, deals with Management of the said Corporation. Section 21 of the LIC Act categorically provides for, that the Corporation is to be guided by the directions of the Central Government in discharge of its function. It is understandable. The Government of India, in its wisdom, taken away business of Life Insurance out of the purview of Insurance Act and vesting it in a separate statutory Corporation created. Life Insurance is thus not purely a business or an exclusive commercial activity but also a social measure.
20. We also notice that in Item No. 25 of the Schedule annexed with the Nagar Nigam, Allahabad Notification dated 13.1.1999 (Annexure-2 to the writ petition) without an exception various establishments, undertakings etc. are all in essence pure and simple business or commercial units. In category Ga, Serial No. 1 of the list referes to Finance Company/Chit Fund. It is followed by Item No. 2-refereeing to Insurance Company '(each Branch)'. It goes to show that Respondents provided licence fee with respect to business of a Company in the nature of 'Financial Companies' 'Chit Fund Companies' and the like Insurance Companies dealing in general insurance (i.e. other than Life Insurance- exclusively carried on by LIC of India).
21. Aforesaid conclusion is further discernable from the fact that the list does not embarrass in itself any charitable hospital or Government hospital or other likewise establishments.
22. In that view of the matter we do find a clear distinction between Insurance Company (carrying on business under Insurance Act, 1958) vis-a-vis the Life Insurance Corporation carrying business of Life Insurance under Life Insurance Corporation of India Act, 1956. Otherwise also Principle of Interpretation. It is an accepted principle of Statutory Interpretation that in a case where two interpretations of a provision imposing tax/fee is possible, Court should accepted the interpretation which leans in favour of the assessee i.e. the person who is sought to be burdened.
23. Apex Court in AIR 1965 SC 1985 (pr. 7), LIC of India v. Crown Life Insurance Company, while noticing various provisions positively Life Insurance Fund of Insurance Company and LIC Act, observed :
"The working of Life Insurance Company is in some of respects different from that of ordinary Companies."
24. There is material difference not in phraseology but also in their setting. Only if one looks to the statutory provisions-viz LIC of India Act, 1956 and Insurance Act, 1938.
25. No violence is required to be done to the expression 'Insurance Company' and without anything added or detracted-it is to be read as such.
26. Sections 20 and 29 of the Code of Civil Procedure uses the expression "Corporation" and as held by Supreme Court in the case of Hakam Singh v. Gammon (India) Ltd., AIR 1971 SC 740, includes Company.
27. Corporation is thus a wide term to include Company but converse need not be true fact that expression "Corporation" is not used and instead the Bye-law refers to the expression 'Company' shows that it is intended to cover 'Insurance Company' under Insurance Act- as it stands in application to insurance business-excluding 'Life Insurance' which is now subject matter of LIC of India Act, 1956.
28. By enacting of LIC of India Act-legislature has marked a clear distinction-between 'Insurance Company' and 'Life Insurance Corporation/Company.'
29. As a consequence of LIC of India Act, 1956, business of Life Insurance is carried on by a Statutory/Public Corporation (a legal entity created by a 'Statute' under Authority of Law).
30. Others carrying on business of insurance (other than life) are. Companies (like Partnership Firm, etc.) Incorporated/registered under Companies Act and therefore, not a creature of Statute as such.
31. In the result we find Life Insurance Corporation of India is not covered by the aforesaid expression "Insurance Company" in the bye-laws dated 13.1.1999 (Annexure-2 to the writ petition).
32. Respondents however, in defence referred to the decision of the Division Bench of this Court in the case of United India Insurance Company Ltd. v. Nagar Nigam, Allahabad, decided on 19th May, 2003, photocopy annexed as Annexure-12 to the writ petition reported in 2003 (2) Local Bodies Service and Education Reporter (Paper Book 115). In the said case argument was that there was no quid pro quo since there was no nexus between service rendered and imposition of fee as far as the United India Insurance Company Ltd. (Petitioner in that case) was concerned. The Division Bench held that direct connection need not to be established even in the matter of fee. The said case is clearly distinguishable on facts. The said writ petition was filled by the United India Insurance Company Ltd., which was admitted by a 'Insurance Company' which was not in dispute in the said case. It is, therefore, clear that United India Insurance Company Ltd. Which carried on the business of insurance under the Insurance Act, did not claim exemption as not covered by in the list contained in the Nagar Nigam Notification dated 13.1.1999/Annexure-2 to the writ petition. The Court in that case had no occasion to consider the question before us- namely LIC of India-is not a 'Insurance Company' but a Corporation in service dealing with 'Life Insurance' exclusively under LIC of India Act, 1956.
33. Irresistibly conclusion is that Life Insurance Corporation of India is not liable to pay licence fee under the Notification dated 13.1.1999/Annexure-2 to the writ petition. Consequently the impugned notices dated 30.5.2003/ Annexure-3; 18.6.2003/Annexure-4; 18.6.2003/Annexure-5; 18.6.2003/Annexure-6; 18.6.2003/Annexure-7; 30.5.2003/Annexure-8; 19.7.2003/Annexure-9; 18.6.2003/Annexure-10; and 18.6.2003/Annexure-11 to the writ petition are illegal being without sanction or authority in law and hence cannot be sustained and liable to be quashed.
34. In the result the impugned notice dated 30.5.2003/Annexure-3; 18.6.2003/ Annexure-4; 18.6.2003/Annexure-5; 18.6.2003/Annexure-6; 18.6.2003/Annexure-7; 30.5.2003/Annexure-8; 19.7.2003/Annexure-9; 18.6.2003/Annexure-10; and 18.6.2003/Annexure-11 to the writ petition are hereby set aside.
35. All the Petitions stand allowed.
36. Considering the facts of the case there shall be no orders as to costs.
37. The other connected writ petitions are also allowed on the same terms and conditions as given above. Notices against petitioners for recovery of licence fee on the basis of Notification/Government Order dated 16.12.1997 in question are quashed and consequential notices and recovery proceedings arising therefrom are also quashed. It is also provided that if Life Insurance Corporation of India will be entitled to refund of any money deposited in the post towards licence fee under aforesaid Government Notification dated 16.12.1997 alongwith interest @ 10% per annum from the date of deposit till the date of refund, this must be refunded within two months on receipt of a certified copy of this order.
38. Writ Petitions allowed.
39. No costs.