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Petitioner: The Bank Of Khyber through Authorized Attorneys VS Respondent: Municipal Corporation JUDGMENT
Court Name: Lahore High Court Judge(s): Ayesha A. Malik Title:The Bank Of Khyber through Authorized Attorneys vs Municipal Corporation
JUDGMENT
Reported As: 2020 LHC 3135, 2021 CLD 340, PLD 2021 Lahore 108 Result: Order accordingly Judgment
JUDGMENT AYESHA A. MALIK, J.---This common judgment decides upon the issues raised in the instant Petition along with connected Petitions, as detailed in Schedule "A" appended with the judgment, as all Petitions question the levy of advertisement fee by the Respondents. 2. The Petitioners before the Court are primarily banking companies who have challenged the levy of advertisement fee as imposed by the various different Respondent authorities. The Petitioners have been asked to pay advertisement fee for the signboards affixed at' their branches. In some cases the fee is being charged for neon signs, stickers and other forms of signage, on the windows of the branch, ATM cabins and elsewhere. Also before the Court are different companies such as Bata Pakistan Limited, Punjab Beverages, Agha Khan Hospital, TCS, Singer Pakistan, Coca Cola Beverages and Raiz Bottlers who have also been levied advertisement fee for the affixation of signboard at their office premises, shops and hospitals along with neon signs and other materials, similar to the Banks. One set of Petitioners before this Court are contractors who specialize in the business of outdoor advertisement and install bill boards and sky signs in various different cities of Punjab. They have been charged advertisement fee for outdoor billboards and sky boards and other forms of advertisement. Most of the Petitioners have also impugned the demand notices issued by the Respondents for payment of advertisement fee. The Respondent authorities before the Court are: (i) Local Government(s); (ii) Cantonment Boards;
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(iii) Parks and Horticulture Authority ("PHA"); (iv) Defence Housing Authority ("DHA") and (v) National Highway Authority ("NHA"). 3. So far as the Petitioners are concerned, the common argument in all cases is that they are banking companies or corporate entities who display their corporate information through signboards in compliance with section 22 of the Companies Act, 2017 ("Companies Act") which requires the display of the name of the company in a conspicuous position outside the registered office and every office or place of business as well as the branch under the Licensing Policy of the State Bank of Pakistan in terms of the BPRD Circular 15 of 2007 dated 12.10.2007 ("SBP Policy") which requires the same for the Banks. These requirements are federal in nature and are mandatory, meaning thereby that the Petitioners are obligated to place signboards at their place of business, hence cannot be charged a fee for compliance with the federal law. Learned counsel for the Petitioners argued that since the matter of placing signboards or affixing the company name falls within the domain of the federation, therefore provincial authorities cannot compel the Petitioners to remove their boards nor can they levy a fee on the same. Reliance has been placed on Bank Alfalah Limited v. Messrs Callmate Telips Telecom Ltd. and 5 others (2016 CLD 1202) to urge the point that State Bank of Pakistan Guidelines and Circulars are binding. Learned counsel for the Petitioners also argued that the levy of advertisement fee by its very definition is illegal because there is no advertisement involved in so far as display of signboards is concerned and further that there is no quid pro quo, hence the levy of advertisement fee is illegal. In the context of the different authorities before the Court, the case of the Petitioners is that they are not authorized under their respective law to levy advertisement fee. The Petitioners have placed reliance on Soneri Bank Limited v. Province of Punjab and others (PLJ 2020 Lahore 239) ("Soneri Bank Case") where the same matter was raised and decided. 4. The issue before the Court is with respect to the levy of fee/ charges for the affixation of signboards displaying the name of the Petitioner Banks or companies and in some cases with respect to promotional or advertisement material pasted on the windows of the relevant branch or corporate office. So far as the Petitioners who are contractors engaged in the business of contracting for outdoor display, the issue raised by them is whether the relevant Respondent authority can levy advertisement fee for the purposes of billboards, sky boards and other -forms of display used by such contractors. The case of each of the Respondent authority is taken up separately with specific reference to their relevant law. Local Governments 5. Report and parawise comments have been filed by the respective Municipal Corporations. Some of the Petitions are with reference to the Punjab Local Government Act; 2013 ("2013 Act") while others are with reference to the Punjab Local Government Act, 2019 ("Local Government Act"). The Respondents before the. Court represent various different Municipal Corporations in whose vicinity the signboard has been affixed. The case of the Respondents is that in terms of the powers under section 115 of the 2013 Act and section 156 of the Local Government Act, they are entitled to levy taxes and fees. They argue that it is part of the authorized functions of the Municipal Corporations to regulate the affixation of signboards and advertisement boards except where it falls within the jurisdiction of the PHA. Reliance is placed on section 87(2)(i) and (g) of the 2013 Act. In this regard the Respondents have also relied upon letter dated 3.7.2020 issued by the Local Government and Community Development Department, Government of Punjab, Lahore wherein it is stated that the Local Government can regulate signboards and street advertisement, however the respective PHAs continue to perform this function in areas which do not fall within their domain. While relying upon the Soneri Bank Case, the letter of 3.7.2020 requires the Director General, PHA to settle the question of advertisement fee in any area where there is an issue with respect to who can levy the fee, PHA
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or the Local Government. Learned counsel argued that this letter shows that the Respondent Municipal Corporations can levy advertisement fee. 6. In terms of section 156 of the Local Government Act, fee or tax can be levied through a notification published in the official gazette, meaning thereby that the Local Government can levy fees, rates, tolls and rents provided the same has been approved and is notified in the official gazette. Similar was the position under the 2013 Act where section 115 also required that the fee be notified in the official gazette. In the cases before the Court; it is admitted by the Respondent Local Government that no notification has been issued to date by any of the Municipal Corporations. In the absence of a notification as per the requirement of section 156 of the Local Government Act and section 115 of the 2013 Act, the Local Government cannot levy or charge any fee for the purposes of signboards or advertisement fee from the Petitioners. In this regard, it is noted that this issue has already been decided in the Soneri Bank Case that the. Local Governments can only charge fee for the affixation of signboards or advertisement fee provided it is duly notified. However there has been no progress in the matter as no notifications have been issued. I am informed by the learned Law Officer that some effort is being made to regulate this issue, however he could not explain as to whether there will be one -single notification for all Municipal Corporations or whether separate rates will be issued. furthermore there is nothing on the record which justifies non- issuance of notifications given the substantive requirement of the law. It is further noted that so far as the Banks and corporate entities are concerned, they are required under federal law to affix their signboard on their premises, be it in their ownership or rented premises, hence they should be exempt from any fee to this extent as the provincial law cannot override the provisions of a federal law. In this regard, the PHA has exempt banks and corporate entities from any fee on signboards provided they comply with the requirements of size and shape. Therefore any fee that is charged by the Local Government pursuant to section 156 of the Local Government Act will be cognizant of the provisions of the federate statute regarding banks and corporate entities to install their signboards outside their premises as per the Companies Act and the SBP Policy. Hence these Petitions against the Local Government are allowed as the Local Government has not issued, any notification for levy of advertisement fee. Cantonment Boards 7. Report and parawise comments have been filed by the Respondent Cantonment Board. The stated Respondent essentially rely on section 282 of the Cantonments Act, 1924 ("Cantonment Act") which gives the power to make byelaws. Pursuant to this section byelaws have been issued regarding the pasting of billboards and advertisements with respect to size, shape or style of name-boards, sign boards and signposts, hence they argue that fee can be levied. The Petitioners' contention is that there is no power under the Cantonment Act on the basis of which the Respondents seek to levy advertisement fee. They have placed reliance on the judgment dated 20.5.2015 passed by the august Supreme Court of Pakistan titled Hyderabad Cantonment Board v. Raj Kumar and others 2015 SCMR 1385 wherein the matter in issue has been decided, consequent to which it is argued that the Respondent Cantonment Board is not authorized under the Cantonment Act to levy advertisement fee. They have also relied upon the Soneri Bank Case wherein it is specifically held that with reference to section 200 of the Cantonment Act, the Cantonment Board has no authority to levy any fee which is not contemplated by the said provision. 8. Section 282(3) of the Cantonment Act is reproduced hereunder: 282. Power to make bye-laws.---Subject to the provisions of this Act and of the rules made thereunder, a [Board] may, in addition to any bye-laws which it is empowered to make by any other provision of this Act, make bye-laws to provide for all or any of the following matters in the cantonment, namely:--
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(3) the regulation of the collection and recovery of taxes, tolls and fees under this Act and the refund of taxes; At the very outset, it is noted that this power is essentially the power to make byelaws which is subject to the provisions of the Act. Hence the power to make rules is dependent on specific power given to the Board under the Cantonment Act. The section which authorizes the Cantonment Board to levy any fee is section 200 of the Cantonment Act which reads as follows: 200. Levy of stallages, rents and fees. A [Board] may (a) charge for the occupation or use of any stall, shop, standing, shed or pen in a public market, or public slaughter-house, or for the right to expose goods for sale in a public market, or for weighing or measuring goods sold therein, or for the right to slaughter animals in any public slaughter- house, such stallages, rents and fees as it thinks fit; or (b) with the sanction of the [Competent Authority], farm the stallages, rents and fees leviable as aforesaid or any portion thereof for any period not exceeding one year at a time; or (c) put up to public auction, or with the sanction of the [Competent Authority], dispose of by private sale, the privilege of occupying or using any stall, shop, standing, shed or pen in a public market or public slaughter-house for such term ad on such conditions as it thinks fit. Section 200 of the Cantonment Act was interpreted by the august Supreme Court of Pakistan in the judgment dated 20.5.2015 passed by the august Supreme Court of Pakistan in 2015 SCM R 1385 (supra) concluded that a bare perusal of section 200 of the Cantonment Act is limited for levying of stallages rent and fee for providing stall, shop, standing shed, pen and for other defined commercial activities on the vendors dealing in goods and for the slaughter of animals in public market or public slaughter houses respectively and that too subject to sanction by the competent authority. In the case before the august Supreme Court of Pakistan the issue was of parking fee and the Court concluded that parking fee is not envisioned under the referred provision. Therefore the Cantonment Board has no authority to enlarge the scope of the charging section and include the subject of parking fee for the purposes of levying fee. The same section was interpreted by this Court in the Soneri Bank Case wherein it was held that the Cantonment Board has no authority to levy fee in relation to the boards installed by the petitioners at their offices/branches. The Respondents rely upon the order of this Court dated 14.3.2018 passed by a learned Division Bench of this Court in I.C.A. No.62/2015 titled Allied Bank Limited v. Province of Punjab and others wherein the Court remanded the matter with the consent of the parties to the Board for due consideration. In the order dated 7.10.2015 passed by the august Supreme Court of Pakistan in Civil Appeal No.796/2015 titled Habib Bank Limited Islamabad v. Federation of Pakistan through Secretary Ministry of Defence, Islamabad and others the Court referred the matter to the learned Division Bench of Lahore High Court, Rawalpindi Bench for the purposes of deciding the same along with other matters pending there. The cases were decided by the Division Bench in I.C.A. No.62/2015 wherein the Court on the basis of a consent order decided that they would not charge any advertisement fee on the board affixed on a branch and further that if the respondents intend to charge advertisement fee from the banks for reasons that its board contains advertisement material in violation of the specified shape, it can do so after passing an assessment order in writing. This case did not consider the authority of the Cantonment Board to levy advertisement fee and was decided on the basis of the statement made in the Habib Bank Case (supra) before the august Supreme Court of Pakistan. The Respondents also rely on order dated 16.3.2018 passed by this Court in I.C.A. No.50/2015 titled Messrs Haidri Beverages (Pvt.) Ltd. v. City District Government, Rawalpindi through D.C.O. and others and order dated 10.11.2020 passed by this Court in I.C.A. No.217/2016 titled Lahore Cantonment Board v. Allied Bank Limited and others along with several other cases decided on the same terms. However, in this regard, it is noted that these orders are of no help to the Respondent Cantonment Board as the matter in issue essentially is
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with respect to the authority of the Cantonment Board to levy advertisement fee which matter has been decided by the august Supreme Court of Pakistan. Therefore the Cantonment Board has no authority to levy fee in relation to the boards installed by the Petitioners at their offices/branches and reliance on section 282 of the Cantonment Act is misconceived. 9. Under the circumstances, all the Petitions challenging the levy of advertisement fee by the Cantonment Board are allowed. Parks and Horticulture Authority 10. There are 33 Petitions against the PHA filed by different banks with reference to signboards, glass flex, neon signs, window advertisement, LED etc. as well as corporate entities such as Punjab Beverages Company Private Limited, Borjan (Private) Limited, Sign-O- Plus Namoos Advertisement Company, Coca Cola Beverages, Faisalabad Outdoor Advertising Association for payment of advertisement fee against display of their signboards as well as for advertisement on billboards, signboards, sky signs and other forms of advertisement. Some Petitioners have challenged the registration for being beyond the scope of the PHA Act. 11. Report and parawise comments have been filed by the Respondent PHA. The Respondents argue that PHA has been created under section 3(2) of the Parks and Horticulture Authority Act, 2012 ("PHA Act") and it regulates the installation of billboards, sky signs and outdoor advertisements under section 4(c) of the PHA Act. Also argued that the Petitioners are bound to seek permission of PHA before installation of billboards, sky signs and to bring already existing boards in conformity with provisions of the PHA Act. Therefore the counsel argued the Petitioners are bound to fulfil the legal formalities and deposit the fee as approved by the Government under section 12(8) of the PHA Act. 12. PHA is established under section 3 of. the PHA Act. The preamble of the PHA Act provides for the establishment of Parks and Horticulture Authority in the Punjab for the regulation, development and maintenance of public parks., green belts and green areas in the Punjab; regulation of billboards, sky signs and outdoor advertisements; to promote open and unrestricted views of the Punjab and to provide for the connected matters. Section 4 of the PHA Act provides for the powers and functions of the Authority to regulate the installation of billboards, sky signs, outdoor advertisements on private or public property. Section 12 of the PHA Act deals with installation of billboards, sky signs and outdoor advertisements and section 12(8) allows the PHA to levy charges and fees for installation of billboards, sky signs or outdoor advertisement as per the government approval. The prohibitions are contained in section 21 of the PHA Act whereby section 21(4) provides that the permission of the Authority is mandatory for any installation or exhibit of advertisement material on any property or contain advertisement material or fall under the category of outdoor advertisement. The definition of advertisement is provided in section 2(b) of the PHA Act, which means commercially displayed or installed signage, board, screen, streamer, poster, banner or any other thing placed, painted, pasted or installed on public or private property that is visible from a public place and is intended to inform the reader of the availability of a service, product or promoters of a business. Section 30 of the PHA Act also provides the power to make rules. In terms of the Parks and Horticulture Authority Outdoor Advertisement Regulations, 2017 ("Regulations"), the Respondents have exempted banks and other companies from displaying their signage in compliance with Companies Act and the SBP Policy, however with respect to other outdoor advertisement, they are liable to pay fee. Accordingly advertisement fee is only levied on any signboards installed by the banks which exceed the permissible measurement prescribed by the Regulations. 13. In view of the aforesaid to the extent of Banks and corporate entities who display their name as per the requirements of the Companies Act and the SBP Policy, in terms of the Regulations no fee should be charged. However if the display contains any advertisement or is contrary to the Regulations or is with reference to the outdoor advertisement, fee can be levied. So far as the
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contractors are concerned, since they are involved in the business of outdoor advertisement, they are liable to pay fee as per the PHA Act read with the Regulations. Consequently the Petitions of the Banks and corporate entities are disposed of to the extent of signboard which are in compliance with the Companies Act and the SBP Policy. However if they are involved in any advertisement, they are liable to pay as per the PHA Act and Regulations whereas the Petitions of the contractors are dismissed. National Highway Authority 14. There are three Petitions against the NHA being W.Ps. Nos.201485/18, 256585/18 filed by Banks and W.P. No.22283/18 filed by Lotte Akhtar Beverages (Private) Limited (formerly Riaz Bottlers Private Limited), which is engaged in the business of manufacturing of carbonated beverages under various different brand names that is Pepsi Cola, Rave, Seven Up, Miranda, Mountain Dew, Sting and purified water under the brand name Aquafina. So far as the Banks are concerned, they have impugned the demand raised by the Respondent NHA for payment of advertisement fee against display of their signboards whereas the Petitioner Lotte Akhtar Beverages (Private) Limited has impugned the demand raised for rental charges against the advertisement displayed by the Petitioner. 15. In terms of the report and parawise comments filed and the arguments made, NHA is empowered to levy advertisement fee under the. National Highway Authority Act, 1991 ("NHA Act"). Learned counsel for the Respondent NHA has relied upon section 10 of the NHA Act along with National Highways and Strategic Roads Control Rules, 1998 ("1998 Rules") which basically prescribes the procedure on the basis of which the Respondents can levy advertisement fee. Learned counsel stated that NHA has awarded concession for advertisement and promotional displays on Sahiwal to Lahore section for a period of two years with respect to advertisement and promotional displays, hence the Petitioners are bound to pay the same. Section 10(2)(vi) of the NHA Act empowers the authority to enter into contracts and thereby levy licence fee on the terms of the contract. Learned counsel stated that the Petitioners are therefore liable to pay advertisement fee in terms of the NHA Act as well as 1998 Rules. 16. NHA is established under section 3 of the NHA Act. The preamble of the NHA Act provides its mandate to establish a National Highway Authority for planning, development, operation and maintenance of National Highways and strategic roads and to provide for matters connected therewith or incidental thereto. Section 10 of the NHA Act provides for the powers and duties of the Authority, in terms of which the Authority may take such measures and exercise such powers as it considers necessary or expedient for carrying out the purposes of the Act. Section 10(2)(vii) of the NHA Act provides for the levy, collect or cause to be collected tolls on national highways, strategic roads and such other roads as may be entrusted to it and bridges thereon. This means that NHA can levy and collect tolls on the national highways and strategic roads. Section 10(2)(viii) is with reference to licence facilities on roads under its control and such terms as it deems fit. NHA has also relied upon the 1998 Rules and Regulations which are pursuant to sections 31 and 32 of the NHA Act. On the basis of the provisions of the NHA Act, it appears that the NHA is authorized to levy and collect toll on the national highways as well as strategic, bridges, roads and such other rates which are entrusted to it. Therefore there is no specific power to levy advertisement fee Or charges of any kind with respect to the signage or advertisement or promotional material. Section 10(2)(viii) of the NHA Act gives the Respondent NHA the authority to enter into a licence agreement with respect to roads under its control on the terms it deems fit. These licence agreements can contain terms for advertisement and promotional material, for which the Respondents have relied upon concession agreements entered in terms thereof. However there is no concession agreement placed on the file with respect to Soneri Bank Limited and Bank of Punjab or Lotte Akhtar Beverages (Private) Limited. In this regard, it is clarified that the Respondents cannot charge advertisement
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fee for any signage that has been affixed on the business premises of the Banks in terms of their requirement under the Companies Act and the SBP Policy. Although it is argued that it is with reference to ATM cabins and other material, there is nothing on the file which shows any concession agreement or licence agreement to charge advertisement fee. So far as Petitioner in W.P. No.22283/2018 is concerned, nothing has been appended with the Petition or the reply to show that there was any licence agreement between the parties for the purposes of displaying promotional material. 17. In view of the aforesaid, these Petitions are disposed of as there is no information provided by the Petitioners with reference to what they are being charged for and whether there is any licence agreement between the Petitioners and the NHA. The NHA cannot levy advertisement fee except if it has entered into a licence agreement with respect to advertisement and promotional material, hence it should consider the same before issuance of any demand. Defence Housing Authority 18. There are four Petitions against the DHA being W.Ps. Nos.12680/16, 173617/18, 77072/19, 73006/19 filed by the Banks wherein they have impugned notices issued by Respondent DHA for installation of vinyl/sticking papers by the Petitioners. 19. In terms of the report and parawise comments filed and the arguments made, DHA is authorized to levy…
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