HC upholds 2009 BMC decision to hike outdoor advt licence fees by 10% annually

The division bench of chief justice Shree Chandrashekhar and justice Gautam Akhand dismissed a petition filed by an advertising firm, Rushabh Outdoors, which had challenged the 2009 decision, claiming it violated their fundamental rights guaranteed under Articles 14 (right to equality) and 19 (right to a profession) of the Constitution of India

MUMBAI: The Bombay High Court on Monday upheld the 2009 decision of the Brihanmumbai Municipal Corporation (BMC) to increase the licence fees for outdoor advertisements such as hoardings and sky-signs by 10% every year.

HC upholds 2009 BMC decision to hike outdoor advt licence fees by 10% annually

The division bench of chief justice Shree Chandrashekhar and justice Gautam Akhand dismissed a petition filed by an advertising firm, Rushabh Outdoors, which had challenged the 2009 decision, claiming it violated their fundamental rights guaranteed under Articles 14 (right to equality) and 19 (right to a profession) of the Constitution of India.

The BMC had, in December 2009, increased the outdoor advertisement licence fees by 80%, with provision for 10% increase every subsequent year.

Rushabh Outdoors argued that while the fee was apparently hiked on account of rising expenditure and decreasing revenue from licence fees, information obtained by them under the Right to Information Act showed that the BMC had (at the relevant time) reserves and surplus of ₹47,244.56 crore and its consolidated income far exceeded its expenditure.

The petitioner firm further argued that advertising licence fees constituted about 69% of the total collections of BMC’s licence department and the effect of a 10% annual hike in licence fees in perpetuity was excessive, arbitrary and unreasonable, in violation of Articles 14 and 19 of the Constitution.

The BMC opposed the petition, pointing out that its administrative expenditure had almost doubled in the four years preceding the 2009 fee hike decision, from ₹5,366.26 crore in 2003-04 to ₹10,585 crore in 2007-08. The proposal to increase the licence fee was considered at various levels and approved by the general body, the BMC said.

The high court accepted the BMC’s argument, noticing that foundation was laid for an increase in licence fees by 80% in 2009, and 10% every subsequent year.

“The municipal corporation has to perform multiple tasks and provide a variety of services. But the fees in every service provided by the municipal corporation cannot be determined with mathematical exactitude,” the court said while dismissing the advertising firm’s petition.

The court also rejected the firm’s prayer to declare unconstitutional section 479(2) of the Mumbai Municipal Corporation Act, 1888. The provision conferred unguided, arbitrary powers on the municipal commissioner to levy licence fees on outdoor advertisements, the firm claimed. But the court clarified that the power conferred on the commissioner under sub-section (2) was not at all unguided and there were sufficient guidelines and safeguards for fixing of licence fees.