HC junks advertisers’ challenge to civic licence fee; says licensing no longer only on paper

The Bombay High Court upheld the municipal licence fees for sky signs, dismissing claims by advertisers as "luxury litigation" and emphasizing modern regulatory needs.

MUMBAI: The Bombay High Court on Wednesday dismissed a group of petitions challenging the licence fee levied by municipal corporations for granting and renewing licences for sky signs and hoardings. Calling the outdoor advertising agencies’ pleas, a “luxury litigation”, justices G S Kulkarni and Advait Sethna said, “The modern licensing requirements are monumentally different from what was prevalent in the yesteryears.”

HC junks advertisers’ challenge to civic licence fee; says licensing no longer only on paper

The court also said that licensing was no longer “routine paper work”. The judges said when sky-signs and hoardings determine the skyline of modern cities, their regulation and control needs continuous research on adversities, high-dimension lights and issues of the environment, and public safety, among others.

The advertisers had alleged that the licence fee levied by the municipal corporations was “exorbitant, unreasonable and unguided.” Most petitions questioned the Pune Municipal Corporation’s (PMC) challans issued in 2013 at the annual rate of ₹222 per sq ft and its retrospective collection effected in 2018. The advertisers said that except for the permission on paper and a few inspections, the civic body provides no other service to them.

Of the 29 petitions, 26 were against the PMC and one each against the Thane, Nashik and Kolhapur municipal corporations. The advertising agencies argued that with the Goods and Service Tax in place, the licence fee was impermissible.

Arguing for the PMC, senior counsel Ashutosh Kumbhakoni told the court that GST and the licence fee are “separate, unconnected and independent of each other”.

The judges concluded that the licence fee levied by the corporation was legal and laws under which the corporation collected the licence fee were not obliterated by GST.

The judges said that the advertisers had not disclosed their contractual amounts but assailed the licence fee, with a clear intention of “unjust enrichment/profiteering”.

Why HC said advertisement licensing is more than routine paperwork

Advertisement is now characterised by dynamic high-resolution electronic screens that display multiple advertisements on a single hoarding throughout the day.

This has changed regulatory control requiring structural stability reports from engineers, a meticulous licensing regime, visual and traffic safety with varying ‘luminance and size ratio’, drivers’ safety,energy consumption, carbon footprint, and light pollution.

Civic bodies have to ensure that the sky-signs integrate safely and harmoniously into the urban landscape and don’t turn into an eyesore.