' MUHAMMAD MUJEEBULLAH SIDDIQUI, J.---The above acquittal appeals are directed against the judgments. Dated 17th of October, 1995 passed by the Special Magistrate K.M.C. In Case Nos. 748, 945 and 948 of 1991, whereby the respondents have been acquitted.
2. Briefly stated the relevant facts are that in all the three cases, thethen Deputy Director Health, KMC, challaned the respondents for the commission of offences under clauses 2, 29 and 31 read with Item No,59 of Part-II of Schedule VI of Sindh Local Government Ordinance, 1979 punishable under section 100(2) of the said Ordinance.
3. The prosecution case was that from the year 1976-77 to the year, 1991 the respondents have been running their respective industries without license. All the respondents pleaded not guilty to the charge.
4. According to the facts stated in the impugned judgment the respondent in Case No, 945 of 1991 was running textile factory on 1900KW Electric Motors with 4048 HP capacity, the respondent in Case No, 943 of 1991 was running textile factory on 3020 KW Motors with 4048 HP capacity, while respondent in Case No, 748 of 1991 was running the textile factory on 3020 KW Electric Motors with 4048 HP capacity. None of them had obtained license for running factory as required by Bye-law No,40 of KMC. It was alleged that each one of them was liable to pay, maximum of Rs,10,000 per annum as license fee prescribed by Government Notification No, ,N.C.1/15(16)/74, dated 30-1-1980 issued by the Government of Sindh.
5. The respondents in their written statements filed on 11-1-1991 pleaded that they have never refused to obtain license nor they have avoided payment of license fee. Each one of them contended that they requested KMC to issue the license in favor of accused persons on receipt of license fee prescribed by the Notification, dated 30-11-1980. The impugned judgment further contains that the claim of KMC was that the respondents were liable to pay license fee as prescribed by specified rates mentioned after Item No, 9 of the notification, dated 30-1-1980 (hereinafter referred to as the said notification), while the claim of the respondents was that they were manufacturers of cloth or yarn and therefore, were liable to pay the fee prescribed by Item No,1 of the said notification and were not governed by specified rates.
6. In support of its claim the prosecution examined Mukhtar Hussain Mughal, Deputy Director Estate KMC and Asad Muhammad Siddiqui. They gave the location of the factories run by the respondents, electricity power capacity of each factory and deposed to the effect that none of the respondents obtained license and thereby did not pay any license fee as per record of the KMC.
7. The respondents in their statements under section 342, Cr.P.C. Denied the allegations and placed reliance on the Gazette Notification, dated 2-7-1976 and the letter from Federal Government to the Industries Division, dated 4-3-1978. They further placed reliance on the said notification and the judgment of the trial Court, dated 2-9-1990 in Case No, 310 of 1990, KMC v. Aftab Ahmed (Messrs Firdous SW Mill Ltd.) They also placed reliance on the judgment of High Court, dated 21-2-1989 in C.P. No,D-49 of 1982.'
8. The learned trial Court framed the following points for determination:--
(1) Whether the accused was liable to pay license fee according to Item No, 9 of Government of Sindh Notification No,M.C.-1/15(16)/74, dated 30-1-1980 or according to specified rates mentioned in the same notification.
(2) Whether accused wilfully defaulted in obtaining license and paying the prescribed license'fee?
And
(3) What should be the penalty?
9. The learned trial Court observed that after consideration of evidence brought on record, as well as the material placed on record it was of the opinion that the KMC authorities have wrongly placed upon C the accused liability to pay license fee at the rate of Rs 10,000 per annum and on that pretext have wrongly refused to issue license to the accused for running the factory.
10. For this purpose the learned trial Court recorded reasons to the effect that the respondents were manufacturers of cloth or yarn as indicated by Item No,9 of the said notification. According to trial Court there was no sense in taking the matter further to the extent that the factory of accused was running or was located in Landhi Industrial Site Area. It was held that Item No,9 of the notification was generally applicable to all the factories manufacturing cloth or yarn irrespective of location or nature of power of energy consumed in manufacture of cloth or yarn. It was observed that if the factor of the respondent was pushed in the item of specified rates it would lead to discrimination between the factories manufacturing cloth located in Industrial SITE area at Karachi, and factories manufacturing cloth even of bigger capacity but not located in SITE area. It was further observed that the factories manufacturing cloth even though located in Industrial SITE area but beyond the jurisdiction of KMC for instance at Kotri, Hyderabad, Sukkur etc., shall not be charged with license fee as per specified rates. It was held that it was discrimination strictly prohibited under Article 25 of the Constitution of Islamic Republic of Pakistan.
11. It was further held that even if it is considered that the factory of accused comes within the purview of Item No,9 (which fact cannot be denied) and also within purview of specified rates it would lead to two interpretations of law. The choice as to which interpretation should be applicable to the factory of respondent is to be decided on the basis of time honored principle of law known as Benevolent construction of law Interpretation favorable to the subject is to be extended to the citizens. The learned trial Magistrate observed that on this count as well, he was inclined to accept the plea raised by respondents that they were liable to pay license fee as prescribed by Item No,9 and reject the plea of KMC that they were liable to pay license fee as prescribed by specified rates.
12. The learned trial Court referred to the decision of High Court in C.P. No,D-49 of 1982, challenging the validity and vires of the said notification which was dismissed. It was held that notwithstanding the dismissal of petition a question regarding validity of relevant item to therespondents was yet to be resolved and in its opinion the factories of respondent were governed by Item No,9 and not by specified rates. Ultimately it was held that the respondents have all along shown their willingness to obtain license on payment of prescribed license fee but the KMC authorities have erroneously insisted on payment of heavy license fee. It was held that in the circumstances there was no mens rea on the part of respondents in not holding the license fee and they have not violated any rules or Bye-laws of KMC. All the respondents were acquitted accordingly. In the end it was observed that the respondents were absolved of the liability of obtaining license on payment of license fee at Rs,50 per month i,e,Rs,600 per year. If this license fee was paid the respondents shall stand exonerated.
13. The appellant feeling aggrieved has preferred these appeals on the ground that the impugned judgments are based on misappreciation of material placed on record and that the trial Court failed to consider the Government notification. It is averred that the trial Court committed error in deciding the cases on the basis of statements of accused/ respondents only. It is averred that the notification fixing license fee was challenged before the High Court in C.P. No, D-49 of 1982 and the petition was dismissed. According to the appellants the trial Court instead of following the law laid down by the High Court has given the finding contrary to the judgment of High Court and, therefore, the impugned judgments are liable to be set aside.
14. I have heard Mr. Manzoor Ahmed, learned counsel for the appellant and Mr. Abdul Hafeez Lakho, learned counsel for the respondent in Criminal Acquittal Appeal No, 8 of 1996.
15. The moot point for consideration is as follows:-- "What is the license fee required to be paid by the respondents?"
16. The learned counsels for the appellant has submitted that initially the license fee was fixed vide Notification No, ML-1/15(16)/74, dated 29-6-1974. He has produced the copy of said Schedule of the license fee. According to this Schedule the relevant items are 9, 48 and under heading "Licence Fee Fixed for Each Electric Motor" which read as under:--
(9) Cleaning, dyeing, preparing or manufacturing by any process whatever, clothes or yarn in indigo and other colours:-
(I) By manual labour (per unit) Rs, 100.00 per month.
(II) By mechanical power. According to H. P.
(48) Manufacturing of cloth by mechanical power looms, hand-looms, textile factories;
(i) Floor area up to 1,000 sq.Ft. Rs,10.00 per month.
(ii) Floor area above 1,000 sq.Ft. Rs,20.00 per month
(III) By mechanical power. H.P. According to LICENCE FEE FIXED FOR EACH ELECTRIC MOTOR S. No.Description Rates
1. Upto 5 horse power (H. P.)Rs.10.00 per month
2. Above 5 H.P. upto 10 H.P. Rs.20.00 per month
3. Above 10 H.P. upto 20 P.H.Rs.40.00 per month
4. Above 20 H.P. upto SO H.P.Rs.75.00 per month
5. Above 50 H.P. upto 100 H.PFcs.150.00 per month
6. Above 100 H.P. (Additional fee of Rs.2 per H.P. P. M.)
17. It would be appropriate to observe here that in large number of items in the schedule of license fee, the license fee have been specified under two categories. One by manual labour and the other by mechanical power. Under the headings manual labour specific amounts are shown, while under the headings Mechanical Power, the fee is to be charged according to HP and the schedule of license fee on the basis of HP of each electric motor, is given in general terms which is applicable to every item dealing with the manufacture with the mechanical power.
18. Likewise, in the list of dangerous and offensive articles and trades, two categories are shown in respect of manufacturing of clothes. Serial No,9, reads as follows:-- "Cleaning, dyeing, preparing or manufacturing by any processwhatever, clothes for yarn in indigo and other colours."
19. Under Serial No,49, it is stated as under:- "Manufacturing of cloth by mechanical power looms, hand-looms, textile factories."
20. This categorization also shows that there are two broad categories in respect of the manufacture of cloth, one is by manual labour/hand-loom and the other is mechanical power looms/textile factories. By Notification MC-K/15(16)/74, dated 30-1-1980 the notification, dated 29- 6-1974, (wrongly written as 1976) was partially amended in exercise of the powers conferred by section 62(1) of the SindLocal Government Ordinance, 1979, for the purpose of Karachi Metropolitan Corporation. In respect of some items the license fee was revised downward. Item No,9 of the notification, dated 30-1-1980 reads as follows:-- Items No. Particulars Existing rates Revised rates
9. Cleaning, dyeing, preparing or manufacturing by any process whatever, cloth or yarn in indigo and other colours.Rs.100.00 p.m. Floor Rs.10.00 per month area upto 200 sq.ft.
Floor Rs. 20.00 per month area between 200-500 sq. ft.
Floor Rs.50.00 per month .area above 500 sq.ft.
21. Under the head specified rates, it reads as under:-- Specified rates:
(1) Trades run on electrical powerEach motor with its horse powerOn gross horse power being used on all motors subject to maximum of Rs.10,000 in case of SITE: and other approved industrial areas.
22. The position is further clarified in the memo. Of petition in C.P. No,D-49 of 1982 filed by Gul Ahmed Textile Mills. For the sake of convenience, paras. 1 to 9 of the said petition are reproduced below:--- S. No.Description Rates 1 Upto 5 horse power (H.
P.)Rs.10.00 per month 2 Above 5 H.P. upto 10 H.P.Rs.20.00 per month 3 Above 10 H.P. upto 20 H.P.Rs.40.00 per month 4 Above 20 H.P. upto 50 H.P.Rs.75.00 per month 5 Above 50 H.P. upto 100 H.P.Rs.150.00 per month 6 Above 100 H.P. (Additional fee copy of this notification is annexed marked as P-'2 and Rs.2per H.P. per month.)(1) That the petitioner is a Public Limited Company having its Textile Mills in Landhi Korangi Industrial Area, Karachi.
(2) That in order to operate the looms and spindles fixed in the Textile Unit the petitioner has also installed approximately 1900 electric motors of various horse power ranging from 5 horse power to 100 horse power.
(3) That the respondents No,2 vide Communication/Letter No, MC-1/15(16)/74, dated 20-8-1976, sanctioned Karachi MunicipalCorporation (Dangerous and Offensive Articles and Trades) Bye- laws, 1975 which were adopted by the respondent No,1, vide Resolution No, 18855, dated 8-7-1976, copy annexed and marked as P-1.
(4) That the respondents No,2 vide Notification No, MC-1115(16)/74, dated 29-6-1976, sanctioned levy of license fee under the said bye-laws, whereby under S.I. No, 48(ii) license fee on the manufacture of cloth by mechanical power looms was fixed according to horse power at the following rates as described in the bottom of the said Notification and are reproduced below:--
(5) That according to this schedule the petitioner became liable to obtain a license for running the textile industry by paying a fee of Rs,3 lakhs, approximately, per annum. It may be noted that dealers of electric motors, however, large number of motors they may have in their possession, are not liable to take any license under the said bye-laws.
(6) That their imposition of such an exorbitant license fee for running an industry which is neither an article nor a trade and which license fee in its very nature is prohibitive, was objected to and the matter was taken up with the Federal Government by the All-Pakistan Textile Mills Association and the Federal Government, Industries, Division, vide its Communication No,(60)77-Dev-I, dated 4-3- 1978, was pleased to inform to Secretary, All Pakistan Textile Mills Association, that necessary instructions had been issued for the abolition of license fee on electric motors. Copy of this communication is annexed and marked as P-3 this was further allowed by D.O. No 1(1)-2(61)/ 77- Dev-I, March 7, 1979. To the same effect, addressed to respondent No,2, copy of which is annexed and marked as P-4.
(7) That the respondent No,2 on 30th January, 1980 issued another Notification bearing No,MC- 1115(16)/74, by which license fee was revised on certain articles and trades and manufacturing cloth being one of them included therein fixing license fee on the basis of per month and Rs,10,000 levied on trades run on electric motors maximum per month, irrespective of number of motors installed. Copy of this Notification is annexed and marked as P-5.
(8) That the respondent No,1 in utter disregard of the instructions issued by the Federal Government, initiated criminal prosecution under Sindh Local Government Ordinance, 1972 (subsequently replaced by the Sindh Local Government Ordinance, 1979), on the basis of a notice issued on 15-1-1978 in the Court of respondent No,3 who, vide order, dated 29-10-1998, imposed a fine of Rs,900 or in default to suffer simple imprisonment for three months for not obtaining a license by paying.The required fee under the said KMC Bye-Laws. Copy of this order is annexed and marked as P-6.
(9) The petitioner respectfully submits that the KMC (Dangerous and Offensive Articles and Trades Bye-Laws, 1973 Annexure P-1, hereto, and the Schedule of license fee levied and sanctioned by the respondents Nos. 1 and 2 (Annexure P-2) subsequently revised vide Notification, dated 30-1-1980 (Annexure P-5)are ultra vires of the Sindh Peoples' Local Government Ordinance, 1972 (now 1979) the Imposition of Taxes Rules, 1960 and the Dangerous and Offensive Articles and Trades Rules, 1960, and further being uncertain, unreasonable, discriminatory, harsh and oppressive, merit to be declared as invalid, void and of no legal effect and the resultant order of the respondent No,3 merits to be quashed and set aside on the following amongst other."
23. In the grounds it was specifically pleaded that by the license fee imposed under Notification, dated 29-6-1974, the petitioner was required to pay license fee amounting to Rs,25, 000 per month, which came to Rs,300,000 per annum and under revised schedule by the Notification issued in January 1980, the license fee was Rs,10,000 per month, which came to Rs,1,20,000 per annum. It was unreasonable, discriminatory, harsh, and oppressive.
24. The petition was dismissed and the license fee as revised under Notification, dated 30-1-1980 was upheld.
25. 1 am of the opinion the notifications prescribing license fee have already been considered by a Division Bench of this Court whiledeciding C.P. No,D-49 of 1982. When the Memo. Of Appeal read with the judgment is perused, it becomes clear that the, license fee to be paid by the respondents is on the basis of rates prescribed in the Notification, dated 29-6-1974 under the heading 'Mechanical Power' read with the rates given under the head 'Licence Fee fixed for each Electric Motor' for the period from 29-6-1974 to the end of year, 1979, while after issuance of Notification, dated 30-1-1980 the maximum ceiling has been fixed which is Rs,10,000 per month and Rs,1,20,000 per annum. The license fee is to be computed in accordance with the rates specified in the Notification, dated 29-6-1974 under the heading license fee fixed for ' Reach Electric Motor read with under the heading specified rates, which provides a maximum ceiling of Rs,10,000 per month.
26. It is held that the learned trial Court has wrongly declared that the license fee is to be charged at the rate of Rs,50 per month. Such license fee is in respect of the cleaning, dyeing, preparing or manufacturing by any process whatever, by use of mechanical/electric power. It is not applicable in the cases of textile mills using mechanical power.
27. The impugned finding of the learned trial Court is therefore, hereby set aside.
28. However, even after setting aside the impugned finding of learned trial Court it is not appropriate to award conviction and sentence to the respondents for the reason that the officials of the appellant themselves are not clear about the position of law and have wrongly claimed that the license fee is at Rs,10,000 per annum. In fact, the license fee is to be, calculated on the basis of HP which is being used by the respondents. From the year, 1976-77 up to December, 1979 the license fee is to be calculated without any ceiling. However, from the year, 1980 onward the license fee is to be calculated keeping in view the ceiling fixed by the Notification, dated 30-1-1980. Before considering whether the maximum limit is attracted or not a calculation is to be made on the basis of HP being used by each respondent. If it is less than Rs,10,000 per month, such license fee is to be charged. However, if it exceeds the maximum ceiling of Rs,10,000 per month the license fee is to be charged 'at the rate of Rs,10,000 per month which comes' to Rs,1,20,000 per annum. It is held that the appellant is entitled to recover the license fee as discussed above.
29. In view of the confusion prevailing on both the sides the conviction and sentences cannot be awarded to the respondents and consequently, the acquittal of the respondents is not interfered