Civic bodies can't perform duties without revenue, would become defunct: SC

New Delhi, Dec 8 (PTI) The Supreme Court on Monday said that without revenue generation, the municipal bodies cannot be expected to sustain their functions and perform their statutory obligations, and any lapse in these duties may cause chaos, spread of diseases and adversely affect the quality of life of the citizens in general.

A bench of Justices Vikram Nath and Sandeep Mehta set aside the orders of the Nagpur bench of the Bombay High Court quashing a decision of the Akola Municipal Corporation to raise property tax after a gap of 16 years on properties under its jurisdiction.

"Without the generation of revenue, the municipal bodies cannot be expected to sustain all these functions and perform their statutory obligations. It cannot be denied that the cost of all these activities/functions rises with the passage of time and hence, revision in the tax structure on a regular basis to match the rising costs is unexceptionable.

"If the taxes are not revised in keeping with the rise in cost of infrastructure, human resources, etc., it would make the municipal bodies defunct and nonfunctional," the top court said.

It added that there is no dispute that the tasks assigned to every municipal body includes urban planning, public health and sanitation, waste management, provision of essential services, and upkeep of infrastructure of the cities/towns.

"These activities are vital for public welfare and for maintaining the standard of life of the citizens in every city or town, which are fundamental to ensuring health and dignified living, the core requirements of the constitutional obligations owed to the citizens.

"Any lapse in these duties/activities may cause chaos, spread of diseases and in general, adversely affect the quality of life of the citizens, for the welfare whereof the municipal bodies are formed to work," the bench said.

The top court also said that municipal bodies, being autonomous institutions constituted under statutes, are entrusted with extensive and multi-faceted responsibilities that bear a direct and immediate nexus to the daily lives, welfare and safety of the citizens residing within their territorial limits.

"Their functional efficacy, financial stability and administrative independence are integral to the discharge of these statutory obligations. It is, therefore, imperative that such municipal bodies possess adequate and independent sources of revenue to sustain and strengthen their operational capacities," it said.

The bench also said a municipal administration that is compelled to depend upon the state for grants, doles or other forms of financial largesse would be structurally weakened and rendered incapable of performing its statutory duties in a timely and efficient manner.

"The scheme of municipal governance envisages financial autonomy as a necessary concomitant of administrative autonomy; without such independent revenue-generation mechanisms, including periodic revision of taxes and charges as permissible in law, the very purpose for which these bodies are constituted would stand frustrated," the bench said.

It added that the respective municipal legislations and the rules framed thereunder give powers/authorise the municipal bodies to take steps for revision in the rates of property tax so that adequate revenue may be generated and the functioning of the municipal bodies may not be adversely affected for lack of funds. PTI MNL ARI