TaxTMI 
TaxTMI 
1995 (10) TMI 229
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....ed to, or entrusted by the Government of a municipal or local fund." Incidentally, "Local authority" has also been defined in Section 2(J) of the Haryana Housing Board Act, 1971 as under: "(J) 'Local authority' means a municipality constituted under the Punjab Municipal Act, 1911 (Punjab Act 3 of 1911), or a Gram Panchayat constituted under the Punjab Gram Panchayat Act, 1952 (Punjab Act 4 of 1953), or a Panchayat Samity or a Zilla Parishad constituted under the Punjab Panchayat Samities and Zilla Parishad Act, 1961 (Punjab Act 3 of 1961), or an Improvement Trust Improvement under the Punjab Act 4 of 1922)." Both the definitions are conclusive in nature and only those bodies including the Municipal Board or a Gram Panchayat etc. Will be treated as "Local authority" as are mentioned therein. But there is a significant difference in as much as the words "Authority legally entitled to or entrusted by the Government with, the control or management of a Municipal or Local Fund" which are found in the definition contained in the General Clauses Act are not found in the definition of "Local Authority" in the Haryana Housin....
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....ng been placed in the company of "Municipal Council" and "District Boards" etc. in the definition of "Local Authority" in the General Clauses Act can be interpreted to mean a "Body" having and possessing, practically all the attributes of a Municipal Board or the District Board so far as their independent existence is concerened. Similarly, in the definition of "Local Authority" in the Haryana Housing Board Act, 1971, it has been provided that it shall mean the Municipality, Gram Panchayats, Panchayat Samitis, Zila Parishads and Improvement Trusts. It hardly requires to be mentioned that the Municipal Board, the Gram Panchayat or a Panchayat Samiti or a Zilla Parishad, or for that matter, Improvement Trust, referred to in this definition are, at least, partially, if not wholly, elected bodies. In Municipal Corporation of Delhi v. Birla Cotton Spinning and Weaving Mills, Delhi and Anr. (1968 (3) S.C.R.251), Hidayatullah,J. (as he then was ) observed as under: "Local bodies are subordinate branches of governmental activity. They are democratic institutions managed by the representatives of the people. They function for public....
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....be governmental duties and functions. Finally, they must have the power to raise funds for the furtherance of their activites and the fulfilment of their projects by levying taxes, rates, charges, or fees. This may be in addition to monies provided by government or obtained by borrowing or otherwise. What is essential is that control or management of the fund must vest in the authority." Since this decision will equally apply to the definition of "Local Authority" set out in the Haryana Housing Board Act, 1971 as that definition is substantially similar to the definition of "Local Authority" in the General Clauses Act, it is in the light of the above principals that it has to be seen whether the Haryana Housing Board answers the attributes specified above so as to be treated a "local authority" within the meaning of Section 32(iv) of the Payment of Bonus Act. The Haryana Housing Board Act, 1971 in its preamble states that it is "an Act to provide for measures to be taken to deal with and satisfy the need of housing accommodation." The Statement of "Objects and Reasons" set out at the time of introduction of the Bill in the....
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.... Section 14 provides for the appointment of one or more committees for any particular local area for purpose of discharging such duties or performing such functions of the Board as may be delegated to them with due regard to the circumstances and requirements of that area. Chapter III of the Act deals with the Housing Schemes. Section 20 provides as under: "20. Duty of Board to undertake housing schemes.-- Subject to the provisions of this Act and subject to the control of the State Government, the Board may incur expenditure and undertake works in any area for the framing and execution of such housing schemes as it may consider necessary from time to time or as may be entrusted to it by the State Government." The exercise of power by the Board in framing and executing Housing Schemes is not only subject to the provisions of the Act but also subject to the control of the State Government. The matters which may be provided for in a Housing Scheme are indicated in Section 21 which include laying or re-laying of the land, construction and re-construction of buildings, construction and alteration of streets and back lanes, drainage, water supply and lighting of the area....
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....ernment after a perusal of the auditor's report. Special audit may also be made of the Board's accounts under the directions of the State Government. Other statutory provisions indicating control of the State Government over the Board are contained in Sections 71 and 72 of the Act relevant portions of which are re-produced below: "71. Power of government to give direction to Board.-- The State Government may give the Board such directions as in its opinion are necessary to expedient for carrying out the purposes of this Act, after giving an opportunity to the Board to state its objections, if any to such directions and after considering the said objections and it shall be the duty of the Board to comply with such directions. 72. Control of State Government over Board. (1) The State Government shall exercise superintendence and control over the Board and its officers and may cail for such information as it may deem necessary and, in the event of its being satisfied that they Board is not functioning properly and is abusing its powers and is guilty of corruption of mismanagement, it may, by notification, suspend the Board: Provided that the Board shall be recons....
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....uot;. What constitutes the fund of the Board has already been specified above. These functions as are indicated in a Housing Scheme are essentially performed by Municipal Boards or Municipal Council which, undoubtedly, are "Local Authorities" but on that analogy the Haryana Housing Board cannot be treated to be a "local authority" as the extent of control of the State Government under which the Board has to function is so prominently pervasive that it is almost destructive of its independence which will also be apparent from the fact that in the matter of settlement of its Annual Programmes, Budget and Establishment schedule, the Board has to obtain the sanction of the State Government under Section 24 of the Act. The supplementary budget and programme, if any, has also to be sanctioned by the State Government. We need not refer to other provisions as the provisions already referred to above are sufficient to bring home the point that Haryana Housing Board does not have even the semblance of independence which are normally possessed by local self Governments, like Municipal Boards or District Boards etc. The Board also does not even partially consist of electe....
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.... a "local authority" as it does not possess the attributes indicated by this court in the case of R.C. Jain (supra). Learned counsel for the appellant referred to the decision of this court in Surya Kant Roy v. Imamul Hak Khan (1975 (1) S.C.C. 531) wherein it was found that : "Mines Board of Health constituted under the Bihar and Orissa Mining Settlement Act, 1920 is a body corporate having perpetual succession and a common seal with power to hold and acquire property. It consists of not less than seven and not more than eleven members of whom not less than two and not more than four are elected by owners of mines within the Mining Settlement, three non-officials selected by the State Government and two or more members but not exceeding four nominated of the State Government. The Chairman of the Board is to be appointed by the State Government from among the members of the Board. A fund called 'The Mining Settlment Funds' is formed for every mining settlement and the fund vests in the Board. The fund consists of sums charged by the Board under the Act from land-owners, etc. as also sums allotted to the Board from the State Revenuse; sums borrowed by the Bo....
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....erage Act, 43 of 1975 was a "Local Authority", although, the Court had also found it to be an instrumentality of the State Government. The High Court noticed that Jal Sansthan as defined in Section 2(9) of the Act meant "a Local Authority constituted by the State Government under Section 18 to perform its functions under the Act in one or more local areas" and on account of this definition, the High Court, after referring to the definition of the "Local Authority" in Section 4(25) of the U.P. General Clauses Act, held that Jal Sansthan was a "Local Authority" which was to be treated at par with Municipal Corporation etc. for the purposes of Local Self- Government. It may be pointed out that under Section 18 of the Act, Jal Sansthan consists of, amongst others, three Sabhasads of the Nagar Mahapalika nominated by the State Government. Sabhasads, under the U.P. Nagar Mahapalika Abhihiyam, Municipal Corporation. Learned counsel for the appellant also relied upon the decision of Mahavir and others vs. State of u.p. and others AIR 1979 Allahabad 3 in which Mandi Samiti constituted under the U.P. Krishi Utpadan Mandi Adhiniyam was held to be a Loc....
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...."Local Authority" as it was found that the Market Committee was entrusted by the Government with the control and management of "Local Fund". This decision is also distinguishable on the ground that definition of Local Authority in the Haryana Housing Board Act, 1971 does not refer to entrustment, control or management of "Local Fund". In 12, I.C. Bose Road Tenants' Association vs. Collector of Howrah and Ors. (AIR 1977 Calcutta 437) which was next cited before us, it was not disputed that Calcutta Metropolitan Development Authority was a "Local Authority" within the meaning of Section 3(3) of the General Clauses Act. All the aforesaid decisions of Various High Court, therefore, do not help counsel for the appellant as all of them are clearly distinguishable. Moreover, the decision of this Court in Union of India and Ors. vs. R.C. Jain and Anr. (1981 (2) SCR 854) which has already been referred to above by us was not referred to in any of these decisions as those decisions were rendered prior to the decision of this Court except the Allahabad decision in Kandriya Nagrik Samiti, Kanpur (supra) in which also this decision was not noticed. ....