Supreme Court Upholds User Charges for Wastewater Discharge: Municipal Corporation of Faridabad vs. Modern School (8 February 2019)

Introduction

Date of the Judgment: 8 February 2019
Citation: 2019 INSC 123
Judges: Dr. Dhananjaya Y. Chandrachud, J., Hemant Gupta, J. (authored the judgment)
Can a municipal corporation charge private entities for using its sewer lines to discharge wastewater from their own tubewells? The Supreme Court of India recently addressed this question in a case concerning the Municipal Corporation of Faridabad and several schools. The core issue was whether the charges levied by the Municipal Corporation were valid under the Haryana Municipal Corporation Act, 1994. The Supreme Court, in this case, held that the Municipal Corporation was within its rights to levy user charges for the use of its sewer lines.

Case Background

The case involves a dispute between the Municipal Corporation of Faridabad and several schools that had installed tubewells on their premises. These schools were initially allotted land by the Haryana Urban Development Authority for educational purposes. Over time, they installed tubewells to meet their water needs, primarily due to inadequate water supply from the Municipal Corporation. The Municipal Corporation, on 14 June 1999, issued an order to regulate tubewells and prevent the unauthorized discharge of wastewater into the municipal sewer system. Consequently, notices were served to the schools, demanding user charges for discharging wastewater into the municipal drains. The schools contested these charges, arguing that they were essentially a fee that required prior approval from the State Government, which had not been obtained.

Timeline

Course of Proceedings

The schools filed writ petitions in the High Court challenging the Municipal Corporation’s order dated 14 June 1999, arguing that the user charges were illegal. The schools contended that they had installed tubewells after obtaining registration from the Central Ground Water Authority under Section 3(3) of the Environment (Protection) Act, 1986, and that the water was used for essential purposes. The High Court ruled in favor of the schools, setting aside the charges on the ground that they were a fee under Section 88 of the Haryana Municipal Corporation Act, 1994, which required prior approval from the State Government. The Municipal Corporation then appealed to the Supreme Court after the Division Bench of the High Court dismissed the intra-court appeals.

Legal Framework

The Supreme Court examined the following provisions of the Haryana Municipal Corporation Act, 1994:

• Section 43: This section outlines the obligatory functions of the Municipal Corporation, including the construction, maintenance, and cleaning of drains and drainage works, as well as the provision of water supply for public and private purposes.
• Section 177: This section deals with the supply of water to connected premises, allowing the Commissioner to arrange for water supply and to charge additional fees for specific uses, such as for animals, trade, or gardens.
• Section 193: This section states that all public drains and sewage disposal works within the municipal area vest in the Corporation.
• Section 194: This section gives the Commissioner control over all municipal drains and sewage disposal works, mandating their maintenance and repair.
• Section 195: This section prohibits the discharge of harmful substances into municipal drains.
• Section 196: This section regulates how private drains can connect to municipal drains, requiring owners to seek permission for such connections.
• Section 205: This section prohibits any unauthorized connection to municipal drains or waterworks without the Commissioner’s written permission. “Without the written permission of Commissioner, no person shall for any purpose whatsoever, at any time make or cause to be made any connection or communication with any drain referred to in section 194 or any water-works, constructed or maintained by, or vested in the Corporation.”

Arguments

Appellant (Municipal Corporation) Arguments:

• The Municipal Corporation argued that the user charges were not a tax or fee under Sections 87 or 88 of the Haryana Municipal Corporation Act, 1994.
• The charges were for the discharge of wastewater into the municipal sewer lines, which is a service provided by the corporation as per Section 205 of the Act.
• The Corporation has the responsibility to maintain the drains and sewage disposal works as per Sections 43, 193 and 194 of the Act.
• The user charges were levied because the schools were using the municipal drains to dispose of wastewater from their tubewells.

Respondent (Schools) Arguments:

• The schools argued that the charges were a fee based on the diameter of the tubewell, and thus, fell under Section 88 of the Act.
• Since the charges were a fee, they required prior approval from the State Government, which had not been obtained.
• The schools contended that they had installed tubewells after obtaining registration from the Central Ground Water Authority under Section 3(3) of the Environment (Protection) Act, 1986.
• The water from the tubewells was used for essential purposes, including drinking, toilets, and maintaining lawns.

Issues Framed by the Supreme Court

The Supreme Court considered the following issue:

1. Whether the user charges levied by the Municipal Corporation for the discharge of wastewater into its sewer lines by the schools are valid under the Haryana Municipal Corporation Act, 1994.

Treatment of the Issue by the Court

Authorities

The Court did not explicitly rely on any previous judgments or books. However, the Court did analyze the following provisions of the Haryana Municipal Corporation Act, 1994:

• Section 43: Obligatory functions of the Corporation, including maintenance of drains and water supply.
• Section 87: Levy of taxes by the Corporation.
• Section 88: Levy of fees by the Corporation with prior approval of the State Government.
• Section 177: Supply of water to connected premises and additional charges for specific uses.
• Section 193: Vesting of public drains and sewage disposal works in the Corporation.
• Section 194: Control of drains and sewage disposal works by the Commissioner.
• Section 195: Prohibition on discharging harmful substances into municipal drains.
• Section 196: Application by owners to drain into municipal drains.
• Section 205: Prohibition of unauthorized connections to municipal drains or waterworks.

Judgment

How each authority was viewed by the Court:

• The Court interpreted Section 43* of the Haryana Municipal Corporation Act, 1994 as outlining the Corporation’s duty to maintain drains and provide water supply.
• The Court clarified that the user charges were not a tax under Section 87* of the Haryana Municipal Corporation Act, 1994.
• The Court distinguished the user charges from a fee under Section 88* of the Haryana Municipal Corporation Act, 1994, which requires prior State Government approval.
• The Court used Section 177* of the Haryana Municipal Corporation Act, 1994 to explain the water supply provisions and the additional charges for specific uses.
• The Court referred to Section 193* of the Haryana Municipal Corporation Act, 1994 to explain that public drains and sewage disposal works vest in the Corporation.
• The Court referred to Section 194* of the Haryana Municipal Corporation Act, 1994 to explain the Commissioner’s control over drains and sewage disposal works.
• The Court referred to Section 195* of the Haryana Municipal Corporation Act, 1994 to explain the prohibition on discharging harmful substances into municipal drains.
• The Court referred to Section 196* of the Haryana Municipal Corporation Act, 1994 to explain the application process for owners to drain into municipal drains.
• The Court relied on Section 205* of the Haryana Municipal Corporation Act, 1994 to justify the user charges, stating that it prohibits unauthorized connections to municipal drains and waterworks.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the fact that the schools were using the Municipal Corporation’s sewer lines to discharge wastewater from their tubewells. The Court emphasized that the charges were not for the extraction of groundwater but for the use of the municipal infrastructure for waste disposal. The Court also highlighted the Corporation’s responsibility to maintain and manage the sewer system under Sections 43, 193 and 194 of the Haryana Municipal Corporation Act, 1994, and the prohibition of unauthorized connections under Section 205 of the Act.

The Court’s reasoning was as follows:

The Court considered the arguments made by the schools, but ultimately rejected them, stating:

“The water extracted by tubewells installed by the Schools is discharged into the Municipal drains, therefore, the Corporation is justified to levy user charges whereby, the waste water of the Schools is carried by the Municipal drains.”

The Court further clarified:

“The Corporation has claimed the user charges for permitting the Schools to discharge waste water into the Municipal drains which are related to the capacity to extract ground water.”

The Court emphasized that the charges were for the use of the municipal infrastructure, not for the extraction of groundwater:

“We do not find that such demand contravenes any of the provisions of the Act. Therefore, the Corporation was well within its right to claim user charges for the use of Municipal drains for discharge of waste water from the tubewells installed by the Schools.”

Key Takeaways

• Municipal corporations can levy user charges for the discharge of wastewater into their sewer lines by private entities.
• These charges are not considered a tax or fee under Sections 87 or 88 of the Haryana Municipal Corporation Act, 1994, but are user charges for using municipal services.
• Private entities must obtain permission before connecting to municipal drains, as per Section 205 of the Act.
• The charges are valid even if the water source is a private tubewell, as long as the wastewater is discharged into municipal drains.

Directions

The Supreme Court allowed the appeals of the Municipal Corporation, set aside the orders of the High Court, and dismissed the writ petitions filed by the schools.

Development of Law

The ratio decidendi of this case is that a municipal corporation can levy user charges for the discharge of wastewater into its sewer lines by private entities that extract groundwater through their own tubewells. This clarifies that such charges are not a tax or fee under Sections 87 or 88 of the Haryana Municipal Corporation Act, 1994, but are user charges for using municipal services under Section 205 of the Act. This decision reinforces the authority of municipal corporations to manage their infrastructure and levy charges for the use of their services.

Conclusion

The Supreme Court’s decision in Municipal Corporation, Faridabad v. Modern School, Faridabad clarifies the legal position on user charges for wastewater discharge into municipal sewer lines. The Court held that the Municipal Corporation of Faridabad was within its rights to levy user charges on schools that were discharging wastewater from their private tubewells into the municipal sewer system. This ruling underscores the authority of municipal corporations to manage their infrastructure and charge for the services they provide, ensuring the proper maintenance of public utilities.