AKOLA MUNICIPAL CORPORATION AND ANR.versusZISHAN HUSSAIN AZHAR HUSSAIN AND ANR.

                [2025] 12 S.C.R. 391 : 2025 INSC 1398

               Akola Municipal Corporation and Anr.
                                v.
              Zishan Hussain Azhar Hussain and Anr.
                 (Civil Appeal No(s). 12488-12489 of 2024)
                               08 December 2025
               [Vikram Nath and Sandeep Mehta,* JJ.]


                            Issue for Consideration
       Issue arose whether the High Court was justified in entertaining
       the Public Interest Litigation filed by the respondent, assailing the
       resolution passed by the appellant-Corporation to increase the
       property tax for the year 2017-18 to 2021-22.

                                   Headnotes†
       Maharashtra Municipal Corporations Act, 1949 – Economic
       Policy decision – Challenge to – Public interest litigation filed
       by the respondent no.1 challenging the revision of property tax
       by the appellant-Corporation for a period of five years- 2017-
       18 to 2021-22, thereby increasing the tax rates in respect of
       properties situated within the jurisdictional limits of appellant-
       Corporation, which was irrational and arbitrary by passing
       a resolution and allegedly without following the procedure
       established by law – High Court quashed and set aside the
       resolution passed by the appellant-Corporation determining
       the mode and manner in which the property taxes are to be
       imposed for a period of five years – Sustainability:
       Held: Not sustainable – Locus of the respondent-writ petitioner
       in filing the writ petition before the High Court questionable –
       Respondent-writ petitioner, did not claim that he was representing
       the entire populace of the Akola city – There exists a mechanism of
       statutory remedy provided under the 1949 Act for challenging the
       decision of the Corporations – Thus, the writ petition purportedly
       in public interest was nothing but an action taken as a subterfuge
       to avoid filing of the appeals against the proposal to increase the
       property tax – High Court exceeded the well-settled tenets of scope
       of judicial review in effectively substituting its own opinion for that
       of the appellant-Corporation – Matters of tax revision fell squarely
       within the domain of the appellant-Corporation, and the High Court

* Author
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       ought not to have reassessed the merits of the policy decision as
       if it was sitting in appeal over the said decision – Trivial errors in
       the process of revision would not vitiate the entire regime of tax
       revision and collection – High Court not justified in invoking powers
       of judicial review in a public interest litigation so as to interfere in
       the economic policy decision taken by the appellant-Corporation to
       increase the rates of the property taxes and particularly when such
       revision was made after a considerable gap of about 16 years –
       Said exercise not permissible to be undertaken in the extraordinary
       writ jurisdiction of the Court – No finding by the High Court that the
       decision to increase the tax rates perverse or unconstitutional –
       Further, in the absence of any challenge to the substantive authority
       of the appellant-Corporation to revise municipal taxes, the scope of
       scrutiny before the High Court stood confined solely to examining
       whether the statutory procedure had been complied with – High
       Court ought not to have embarked upon a roving inquiry into the
       merits or wisdom of the decision to revise the tax rates unless it
       was demonstrated that the procedure adopted by the appellant was
       ex-facie arbitrary, perverse, unreasonable or in blatant derogation
       of the governing statutory provisions – No such material placed
       before the Court, nor does the record disclose any such infirmity –
       Thus, the High Court transgressed the permissible limits of judicial
       review in interfering with the decision of the appellant to revise
       the rate of property taxes – Judgment passed by the High Court
       set aside. [Paras 12, 16, 19, 20, 23, 24, 26, 28]

       Constitution of India – Art.226 – Writ Jurisdiction – Public
       interest litigation challenging economic policy decision –
       Judicial Interference – Scope:
       Held: Judicial interference by way of public interest litigation is
       available only if there is injury to public because of dereliction of
       constitutional obligations on the part of the Government – Writ
       jurisdiction of the High Court cannot be exercised in public interest
       for questioning the economic/fiscal policy or reforms sought to be
       undertaken by the Government or its functionaries. [Paras 21, 12]
       Municipal Bodies – Scheme of municipal governance –
       Financial Autonomy – Necessity – Discussed [Paras 6-8]

                                 Case Law Cited
       Shri Sitaram Sugar Co. Ltd. v. Union of India [1990] 1 SCR 909 :
       (1990) 3 SCC 223; BALCO Employees’ Union v. Union of India
[2025] 12 S.C.R.                                                          393

                 Akola Municipal Corporation and Anr. v.
                 Zishan Hussain Azhar Hussain and Anr.

     [2001] Supp. 5 SCR 511 : (2002) 2 SCC 333; Kirloskar Ferrous
     Industries Ltd. v. Union of India [2024] 12 SCR 68 : (2025) 1 SCC
     695 – referred to.

                                List of Acts
     Maharashtra Municipal Corporations Act, 1949.

                             List of Keywords
     Writ Jurisdiction; Public Interest Litigation; Financial Autonomy;
     Judicial Interference; Economic policies; Power of judicial review;
     Increase in property tax by Municipal Corporation; Locus.

                            Case Arising From
     CIVIL APPELLATE JURISDICTION: Civil Appeal No(s).
     12488-12489 of 2024
     From the Judgment and Order dated 09.10.2019 and 24.01.2020
     of the High Court of Judicature at Bombay at Nagpur in PIL No.
     42 of 2018 and MCAR No. 42 of 2020, respectively

                         Appearances for Parties
     Advs. for the Appellant(s):
     Vinay Navare, Sr. Adv., Suhaskumar Kadam, M/s Black & White
     Solicitors.
     Advs. for the Respondent(s):
     A.I.S. Cheema, Sr. Adv., Kunal Cheema, Ms. Kritika Gakhar,
     Rushabh Tripathi, Shubham Chandankhede, Ms. Aarti Gupta,
     Aaditya Aniruddha Pande, Ms. Anagha S. Desai, Aaditya Aniruddha
     Pande, Siddharth Dharmadhikari, Shrirang B. Varma, Bharat Bagla,
     Sourav Singh, Aditya Krishna, Adarsh Dubey, Ms. Chitransha Singh
     Sikarwar, Satyajit A Desai, Sachin Singh, Pratik Kumar Singh,
     Ms. Anagha S. Desai, Sanchit Agrahari.

                 Judgment / Order of the Supreme Court

                                Judgment

     Mehta, J.

1.   Heard learned counsel for the parties and perused the material
     available on record.
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2.     The judgment dated 9th October, 2019 in Public Interest Litigation
       No. 42 of 2018 and order dated 24th January, 2020 in MCA (Review)
       No. 42 of 2020 passed by the Division Bench of the High Court of
       Judicature at Bombay, Nagpur Bench1 are subject matter of challenge
       in these appeals filed by the Akola Municipal Corporation2.
3.     The aforesaid writ petition in public interest came to be filed by
       respondent No.1-Dr. Zishan Hussain3 with the following prayers.
               “i) Issue any appropriate writ, order or direction in the nature
               of mandamus and thereby declare that the revision of
               property tax by the respondent no.2 Municipal Corporation
               for the year 2017-18 to 2021-22 is illegal, contrary to law
               and the revision of property tax is made without following
               due process of law;
               ii) Issue any appropriate writ, order or direction and thereby
               quash and set aside revision of property tax by respondent
               no.2 Municipal Corporation for the year 2017-18 to 2021-
               22 in the interest of justice;
               iii) Stay the effect and operation of the revision of property
               tax by respondent no.2 Municipal Corporation for the year
               2017-18 to 2021·22 in the interest of justice”
4.     The appellant-Corporation took a specific objection in its written
       submissions filed before the High Court regarding the grievances
       sought to be agitated by way of the public interest litigation, viz.,
       the challenge to the jurisdiction of the Corporation to levy/revise the
       rates of property tax. Specific averments made in paragraph Nos. 9
       and 11 of the written submissions filed by the appellant-Corporation
       explaining the detailed procedure for increasing the rate of property
       tax are germane to the controversy. For the sake of ready reference,
       the aforesaid paragraphs are reproduced hereinbelow: -
               “9. The Petitioner has rightly stated in Para 5 of his petition
               that the assessment, revaluation of taxable values was not
               done from the year 2002 by Akola Municipal Corporation.



1    Hereinafter, being referred to as “High Court”.
2    Hereinafter, being referred to as “appellant-Corporation”.
3    Hereinafter, being referred to as “respondent-writ petitioner”.
[2025] 12 S.C.R.                                                          395

                Akola Municipal Corporation and Anr. v.
                Zishan Hussain Azhar Hussain and Anr.

          It is submitted that the property tax is the main source of
          income of Akola Municipal Corporation. To strengthen the
          tax recovery system there was necessity to re-assess the
          taxable values for the year 2015-2016 till 2020-2021 and
          therefore by the Written Communication dated 01/12/2015
          the Respondent No.3 made a request to Assistant Director
          of Town Planning, Akola to propose the rate of expected
          Annual Letting Value and ratable value of properties for
          various categories of buildings depending upon their age,
          location, type of constructions, use etc. within the limits
          of Akola Municipal Corporation Accordingly by the Written
          Communication dated 01/01/2016 (Annexure 7) the rates
          wore proposed by the in-charge Assistant Director Town
          Planning, Akola. On the basis of these details and other
          documents, official note (Annexure B) was prepared by
          then Municipal Commissioner regarding taking decision of
          revised rates of calculation and valuation of expected letting
          values for entire properties (Buildings and Lands) situated
          within Municipal Limits for the calculation and assessment
          of their ratable value for the period from 2017-18 till 2021-
          22 and forwarded it to the Municipal Secretary. This official
          note doesn’t show any intention of Respondent Municipal
          Corporation to make changes or fixation of tax rates, i.e.,
          property tax, road tax, fire tax, etc. Since, there was no
          question of fixing the rates of taxes as envisaged in Section
          99 of the Act, the prior proposal or suggestion from the
          Standing Committee was not required and therefore, the
          Municipal Secretary prepared agenda for the General Body
          Meeting held on 03/04/2017. If the subject No.5 of General
          Body Meeting dated 03/04/2017 (Annexure A) is perused,
          then it will show that it only says about taking decision,
          about the revised rates of entire properties (Building and
          Lands) situated within Municipal Limits for calculation of
          their expected taxable value for various, categories and
          the various policies for assessment of taxable. values for
          the period from 2017 till 2021-22. Therefore, the objection
          of the petitioner that the criteria mentioned in Sections 127
          and 129 is not followed, is incorrect and baseless. At the
          cost of repetition, the respondent Municipal Commissioner
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       says that the rates of taxes already fixed in the year 2002
       are not disturbed of changed or revised by the resolution
       dated 03/04/2017.
       [……….]
       11. The earlier verification of the properties and assessment
       of tax was done during the period of the then Akola
       Municipal Council. After the formation of Akola Municipal
       Corporation on 01/10/2001, verification of properties was
       not done and neither the procedure for assessment of
       tax was carried out. In last more than 20 years there
       was increase in the built-up area, changes in use of
       property, additional and new construction on large scale.
       The revenue generated by the old assessment was not
       sufficient to meet the demands of public and development
       of city. Therefore, there was pressing and extreme need
       for setting up an efficient, qualitative and stronger tax
       recovery system. Therefore, in the larger interest of Akola
       City a decision was taken to engage some expert agency.
       who will assist and help the officers, of Akola Municipal
       Corporation it this work. Hence, e-tender notice dated
       18/02/2016 bearing No.1059 was published on official
       website of Government of Maharashtra inviting tenders for
       appointment of technical consultant for assisting Municipal
       Corporation for conventional comprehensive door to door
       survey of land and buildings in the Municipal jurisdiction
       capturing all the details and parameters of those properties
       which are relevant for levy and collection of property
       tax and other Municipal taxes. It was also made clear
       that the selected agency shall have to provide property
       numbers on the satellite imaginary and linking the property
       tax and basic information on the satellite image of the
       properties for quick reference by providing the Integrated
       Property information on GIS module in the software to
       be a provided for the property tax assessment by the
       agony. The agency selected will use own registered for the
       purpose of preparation of database for assessment and
       taxation. The software should be capable to calculate and
       adopt the taxation on capital value method/ratable value
[2025] 12 S.C.R.                                                          397

                Akola Municipal Corporation and Anr. v.
                Zishan Hussain Azhar Hussain and Anr.

          method as per the law. After survey, the data should be
          entered in software for calculation of assessment on any
          one method as per corporation viz. capital or ratable value
          based, along with the automated property tax assessment
          software module as per the requirements of the Municipal
          Corporation. Total GIS work should be completed from
          contractor. The total number of properties in the Municipal
          Area were approximately shown 1,50,000 in the tender.”
5.   A bare perusal of the aforesaid assertions made by the appellant-
     Corporation would clearly indicate that the property tax, which is the
     main source of revenue for the appellant-Corporation to undertake
     its welfare, and developmental activities had not been revised since
     the year 2001.
6.   It cannot be disputed that the tasks assigned to every municipal
     body includes urban planning, public health and sanitation, waste
     management, provision of essential services, upkeep of infrastructure
     of the cities/towns. These activities are vital for public welfare and
     for maintaining the standard of life of citizens in every city or town,
     which are fundamental to ensuring health and dignified living, 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.
7.   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 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., that would make the
     municipal bodies defunct and non-functional.
8.   Municipal bodies, being autonomous institutions constituted under
     statutes, are entrusted with extensive and multifaceted 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
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       and independent sources of revenue to sustain and strengthen their
       operational capacities. 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.
9.     It is in these facts and circumstances, the respective Municipal
       Legislations and the Rules framed thereunder give powers/authorize
       the municipal bodies to take steps for revision in the rates of property
       taxes so that adequate revenue may be generated and the functioning
       of the municipal bodies may not be adversely affected for lack of funds.
       The fact that the tax structure in respect of properties falling within
       the jurisdiction of the appellant-Corporation had not been revised
       and the verification of the properties situated within its jurisdiction,
       had not been done from the year 2001-2017, by itself, depicts gross
       laxity on part of the authorities concerned.
10. It must be noted here that while entertaining the present appeals at
    the instance of appellant-Corporation, this Court vide order dated
    13th October, 2020, stayed the operation of the impugned judgment
    and order dated 9th October, 2019 passed by the High Court.
11. We have heard and considered the submissions advanced by
    learned counsel for the appellant-Corporation and learned counsel
    representing the respondent-writ petitioner.
12. At the outset, we feel that the very locus of the respondent-writ
    petitioner in filing the writ petition before the High Court was
    questionable. The respondent-writ petitioner, in his writ petition, did
    not claim that he was representing the entire populace of the Akola
    city. For ready reference, the opening paragraphs of the writ petition
    wherein the respondent-writ petitioner adverted to his locus and
    grievances needs to be reproduced hereunder: -
            “Being aggrieved by the apparent and manifest irrationality
            in the arbitrary increase of property tax by the respondents
            no.2 and 3 without following due procedure of law and the
[2025] 12 S.C.R.                                                           399

                 Akola Municipal Corporation and Anr. v.
                 Zishan Hussain Azhar Hussain and Anr.

           grave procedural impropriety in the arbitrary assessments
           of property tax done by the respondent no.2 and 3 through
           Private Contractors contrary to law, the petitioner is
           challenging the arbitrary. Increase of property tax by the
           present writ petition under Article 226 of the constitution of
           India in public interest, as the petition does not have any of
           the efficacious remedy available than the present one for
           the redressal of grievances raised in the present petition.
           The facts which lead to present petition are as follows:
           1. That, the petitioner is a citizen of India and permanent
           resident of Akola. The Petitioner is a practicing doctor
           having M.D. (medicine) degree and a social worker and
           corporator of the Akola Municipal Corporation.”
13. The respondent-writ petitioner, himself being a corporator in the
    appellant-Corporation, it can be presumed that he would be privy
    to the functioning of the autonomous institution including the tax-
    generation structure.
14. A perusal of the opening paragraph (supra) of the writ petition would
    clearly indicate that the grievance of the respondent-writ petitioner
    is prima facie directed at the purported irrational and arbitrary
    increase of property tax by the appellant-Corporation by passing a
    resolution and allegedly without following the procedure established
    by law. The contents of the writ petition would further indicate that
    the respondent-writ petitioner never claimed that he had been
    authorised or was acting on behalf of the citizens of the Akola city
    for challenging the action of the appellant-Corporation in revising
    the tax structure. Thus, apparently the respondent-writ petitioner has
    raised his individual grievance against the action of increase of tax
    by the appellant-Corporation by filing a writ petition under the garb
    of a public interest litigation.
15. Though it requires to be noted that as per the respondent-writ
    petitioner, the public at large, protested to and filed objections against
    the issuance of the public notice by the appellant-Corporation but,
    at the same time, the respondent-writ petitioner has admitted that
    these complaints were disposed of albeit mechanically.
16. There is no dispute that there exists a mechanism of statutory remedy
    provided under Section 406 of the Maharashtra Municipal Corporations
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       Act, 1949, for challenging the decision of the Corporations established
       under the aforesaid Act. Thus, the writ petition purportedly in public
       interest was in fact, nothing but an action taken as a subterfuge
       to avoid filing of the appeals against the proposal to increase the
       property tax.
17. We may further note that another Division Bench of the High Court
    examined a similar controversy in Writ Petition No. 1115 of 2018
    which came to be dismissed in the following terms: -
            “1. Heard.
            2. Admittedly, the Municipal Council, Akola- Municipal
            Corporation, Akola has not revised property tax after 2000-
            01. Hence, grievance that revision proposed on 3/4/2017
            exceeds by 60% and therefore violates statutory provision,
            is misconceived.
            3. Learned Government Pleader has pointed out that
            Municipal Corporation has specifically looked into this
            facet in Resolution dated 3/4/2017 and has noted that
            since 2001-02 there is no regular revision.
            4. The petitioner did not come to this Court to enforce
            obligation of Municipal Council-Municipal Corporation
            to revise property tax after every five years. He has
            chosen to approach Government or this Court only
            after the Municipal Corporation started efforts to revise
            the property tax.
            5. It is apparent that the Municipal Corporation has
            to revise property tax from 2001-02 and recover the
            same as per law from the residents.
            6. We, therefore, find present writ petition erroneous. It is
            dismissed. No costs.”
                                                 [Emphasis supplied]

18. Furthermore, the respondent-writ petitioner in the writ petition has
    challenged/questioned the tender floated and work order issued by
    the appellant-Corporation to the firm named Sthapatya Consultancy
    Pvt. Ltd., for the purpose of survey of properties situated within the
    jurisdictional limits of the appellant-Corporation and assessment of
[2025] 12 S.C.R.                                                         401

                    Akola Municipal Corporation and Anr. v.
                    Zishan Hussain Azhar Hussain and Anr.

     tax. We are, therefore, of the view that possibility of the writ petition
     having been filed to agitate a conflict of business interest cannot
     be ruled out.
19. Having gone through the impugned judgment and the material
    placed on record, we are of the view that in the instant case the High
    Court exceeded the well-settled tenets of scope of judicial review
    in effectively substituting its own opinion for that of the appellant-
    Corporation. The matters of tax revision fell squarely within the domain
    of the appellant-Corporation, and the High Court ought not to have
    reassessed the merits of the policy decision as if it was sitting in
    appeal over the said decision. Trivial errors in the process of revision
    would not vitiate the entire regime of tax revision and collection.
20. This Court in a catena of decisions has held that the Court cannot
    substitute its judgment for that of the legislature or its agents as to
    matters within the province of either. In this respect, we may gainfully
    refer to the observations of a Constitution Bench of this Court in the
    case of Shri Sitaram Sugar Co. Ltd. v. Union of India4: -
            “57. Judicial review is not concerned with matters of
            economic policy. The court does not substitute its
            judgment for that of the legislature or its agents as
            to matters within the province of either. The court
            does not supplant the “feel of the expert” by its own
            views. When the legislature acts within the sphere of
            its authority and delegates power to an agent, it may
            empower the agent to make findings of fact which
            are conclusive provided such findings satisfy the test
            of reasonableness. In all such cases, judicial inquiry is
            confined to the question whether the findings of fact are
            reasonably based on evidence and whether such findings
            are consistent with the laws of the land. As stated by
            Jagannatha Shetty, J. in Gupta Sugar Works [1987 Supp
            SCC 476, 481] : (SCC p. 479, para 4)
                   “... the court does not act like a chartered
                   accountant nor acts like an income tax officer.
                   The court is not concerned with any individual
                   case or any particular problem. The court only


4   (1990) 3 SCC 223.
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                           Supreme Court Reports


                   examines whether the price determined was
                   with due regard to considerations provided by
                   the statute. And whether extraneous matters
                   have been excluded from determination.”
            58. Price fixation is not within the province of the
            courts. Judicial function in respect of such matters
            is exhausted when there is found to be a rational
            basis for the conclusions reached by the concerned
            authority. ………”
21. This Court has also held that judicial interference by way of public
    interest litigation is available only if there is injury to public because of
    dereliction of constitutional obligations on the part of the Government.
    The writ jurisdiction of the High Court cannot be exercised in public
    interest for questioning the economic/fiscal policy or reforms sought
    to be undertaken by the Government or its functionaries. In this
    regard, we may gainfully refer to the following observations made by
    a three-Judge Bench of this Court in the case of BALCO Employees’
    Union v. Union of India5: -
            “93. Wisdom and advisability of economic policies
            are ordinarily not amenable to judicial review unless
            it can be demonstrated that the policy is contrary to
            any statutory provision or the Constitution. In other
            words, it is not for the courts to consider relative merits
            of different economic policies and consider whether
            a wiser or better one can be evolved. For testing the
            correctness of a policy, the appropriate forum is Parliament
            and not the courts. Here the policy was tested and the
            motion defeated in the Lok Sabha on 1-3-2001.
            [……….]
            97. Judicial interference by way of PIL is available
            if there is injury to public because of dereliction of
            constitutional or statutory obligations on the part of
            the Government. Here it is not so and in the sphere
            of economic policy or reform the court is not the
            appropriate forum. Every matter of public interest


5   (2002) 2 SCC 333.
[2025] 12 S.C.R.                                                               403

                    Akola Municipal Corporation and Anr. v.
                    Zishan Hussain Azhar Hussain and Anr.

            or curiosity cannot be the subject-matter of PIL.
            Courts are not intended to and nor should they conduct
            the administration of the country. Courts will interfere
            only if there is a clear violation of constitutional or
            statutory provisions or non-compliance by the State
            with its constitutional or statutory duties. None of these
            contingencies arise in this present case.
            98. In the case of a policy decision on economic
            matters, the courts should be very circumspect in
            conducting any enquiry or investigation and must be
            most reluctant to impugn the judgment of the experts
            who may have arrived at a conclusion unless the court
            is satisfied that there is illegality in the decision itself.”
                                                   [Emphasis supplied]

22. Recently, in the case of Kirloskar Ferrous Industries Ltd. v. Union
    of India6, this Court held as below: -
            “54. The doctrine of judicial restraint, which is central to this
            discussion, emphasizes that courts should exercise caution
            and avoid involvement in policy decisions, as these are
            complex judgments that require a balancing of diverse and
            often competing interests. Policies are crafted based on
            thorough analysis of social, economic, and political factors,
            considerations beyond the court’s purview. The court
            is tasked with ensuring that policies do not breach
            constitutional provisions or statutory limits; however,
            they should not replace policymakers’ judgments with
            their own unless absolutely necessary.
            55. Policy decisions often require the expertise of
            professionals and specialists in fields such as economics,
            public health, national security, and environmental science.
            These domains involve specialized knowledge that judges,
            as generalists in legal matters, may lack. For instance, in
            economic policy, the executive may decide on trade tariffs
            or subsidies based on extensive data and projections
            that aim to balance domestic industry support with global


6   (2025) 1 SCC 695.
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       trade commitments. The courts, lacking the same level
       of economic expertise and without the authority to make
       trade-offs among competing policy objectives, is typically
       not equipped to second-guess these kinds of decisions.
       56. While courts have the power of judicial review
       to ensure that executive actions and legislative
       enactments comply with the Constitution, this power
       is not absolute. Judicial review is meant to act as
       a safeguard against actions that overstep legal
       boundaries or infringe on fundamental rights, but it
       does not entail a comprehensive re-evaluation of the
       policy’s wisdom. The judicial review of policy decisions
       is limited to assessing the legality of the decision
       making process rather than the substantive merits
       of the policy itself. For example, if a government policy
       infringes on fundamental rights or discriminates against a
       particular group, the courts have a duty to strike down such
       policies. However, in the absence of constitutional or
       legal violations, the courts should respect the policy
       choices made by the executive or legislature.
       57. The duty of the court in policy-related cases is primarily
       to determine whether the policy falls within the scope
       of the authority granted to the relevant body. If the
       policy decision is within the executive’s legal authority
       and has been made following proper procedures, the
       courts should defer to the expertise and discretion of
       the policy-makers, even if the policy appears unwise
       or imprudent. This restraint ensures that the courts do
       not impose its own perspective on policy matters that are
       rightly the responsibility of other branches.
       58. Economic and social policies often involve significant
       redistribution of resources, prioritization of interests,
       and balancing of public needs, which requires careful
       consideration by those with specialized knowledge and
       broad perspectives. In the realm of economic policy,
       for instance, questions regarding the allocation of
       subsidies, fiscal deficits, or budget allocations are
       best managed by the executive, which has access
[2025] 12 S.C.R.                                                         405

                Akola Municipal Corporation and Anr. v.
                Zishan Hussain Azhar Hussain and Anr.

          to economic data and is accountable to the public
          for its financial management. Judicial interference in
          such areas risks creating disruptions in the economic
          balance that policymakers are trying to achieve.
          59. Courts should assume that policy-makers act in good
          faith unless there is clear evidence to the contrary. As long
          as the policy does not contravene the Constitution or
          violate statutory provisions, it is not the role of the
          courts to question the wisdom or fairness of such
          policy.
          60. While judicial restraint is essential in respecting the
          boundaries of each branch of government, it does not
          mean that courts abdicate their responsibility to protect
          constitutional rights. The courts must still intervene if
          a policy infringes on fundamental rights, discriminates
          unfairly, or breaches statutory provisions. The role of the
          court in such instances is to protect individuals and groups
          from unlawful actions while maintaining the overall integrity
          of the policy-making process. This balance ensures that
          while courts do not interfere in matters of policy wisdom,
          they remain vigilant guardians of constitutional rights.”
                                               [Emphasis supplied]

23. Considered in light of the authoritative pronouncements of this Court
    in the precedents cited supra, we are of the firm opinion that the
    High Court was not justified in invoking powers of judicial review in
    a public interest litigation so as to interfere in the economic policy
    decision taken by the appellant-Corporation to increase the rates of
    the property taxes and particularly when such revision was made
    after a considerable gap of about 16 years.
24. We have also gone through the reasoning assigned by the High
    Court for quashing and setting aside the resolution dated 3rd April,
    2017 as modified by the subsequent resolution dated 19th August,
    2017 passed by the appellant-Corporation determining the mode and
    manner in which the property taxes are to be imposed for a period
    of five years, i.e., from 2017-18 to 2021-22, thereby increasing the
    tax rates in respect of properties situated within the jurisdictional
    limits of appellant-Corporation. Ex facie, we are of the opinion that
406                                                        [2025] 12 S.C.R.

                          Supreme Court Reports


       the aforesaid exercise was not permissible to be undertaken in the
       extraordinary writ jurisdiction of the Court and the decision of the
       appellant-Corporation regarding economic policies was beyond the
       scope of power of judicial review. There is no finding by the High
       Court that the decision to increase the tax rates was perverse or
       unconstitutional.
25. A perusal of the counter affidavit filed by the respondent-writ petitioner
    before this Court leaves no room for doubt that the respondent
    himself acknowledged the limited scope of the challenge before the
    High Court. It stands admitted that the Public Interest Litigation did
    not call into question the authority or competence of the appellant-
    Corporation to revise municipal taxes, and that the grievance was
    confined exclusively to the procedure and manner adopted in
    effectuating such revision. For sake of ready reference, relevant
    paragraphs from the counter affidavit filed by the respondent-writ
    petitioner before this Court are reproduced hereinbelow: -
            “b. It is most respectfully submitted that the question
            whether or not to revise or levy or otherwise Municipal
            Taxes is admittedly a pure question of Policy and is within
            the domain of the Corporation. It is submitted that however,
            since the aforesaid is not the issue raised in the Public
            Interest Litigation, the answering Respondent No. 1 is
            not commenting upon the power of the High Court under
            Article 226 & 227 of Judicial Review of such decision.
            [………]
            e. It is at the cost of repetition that the Respondent No. 1
            seeks to point out that the Public Interest Litigation and
            the lis did not pertain to the power or the decision of the
            Corporation to revise the rate of Municipal Taxes, but it
            pertained to the mode and manner of revision of the rates
            which is regulated by Statutory Provisions and hence the
            Public Interest Litigation is maintainable and has been
            rightly adjudicated by the High Court.”
26. In light of the above express admissions, it becomes evident that the
    power of the appellant-Corporation to revise the rate of municipal
    taxes was never the subject matter of challenge before the High
    Court. The only issue that was urged before the High Court pertained
[2025] 12 S.C.R.                                                          407

                    Akola Municipal Corporation and Anr. v.
                    Zishan Hussain Azhar Hussain and Anr.

     to the procedure and mode adopted by the appellant-Corporation
     while effecting such revision. In the absence of any challenge to
     the substantive authority of the appellant-Corporation to revise
     municipal taxes, the scope of scrutiny before the High Court stood
     confined solely to examining whether the statutory procedure had
     been complied with. We are of the considered view that the High
     Court ought not to have embarked upon a roving inquiry into the
     merits or wisdom of the decision to revise the tax rates unless it
     was demonstrated that the procedure adopted by the appellant-
     Corporation was ex-facie arbitrary, perverse, unreasonable or in
     blatant derogation of the governing statutory provisions. No such
     material was placed before the Court, nor does the record disclose any
     such infirmity. In these circumstances, the High Court transgressed
     the permissible limits of judicial review in interfering with the decision
     of the appellant-Corporation to revise the rate of property taxes.
27. As an upshot of the above discussion, we are of the firm view that
    the appellant-Corporation having kept the taxes at a stagnant rate
    for almost 16 years was indeed justified and rather under a statutory
    obligation to revise the tax rates. Had the exercise been taken on
    regular basis, perhaps the cumulative increase of tax rates by the
    appellant-Corporation in the year 2017 would have been much higher
    than 40% done under the subject exercise and the abrupt shock
    could have been avoided.
28. In this background, we are of the opinion that the impugned judgment
    dated 9th October, 2019 in Public Interest Litigation No. 42 of 2018
    and order dated 24th January, 2020 in MCA (Review) No. 42 of 2020
    passed by the High Court is unsustainable in the eyes of law. Hence,
    the same deserves to be and are hereby set aside.
29. The appeals are allowed in the aforesaid terms. No order as to costs.
30. Pending application(s), if any, shall stand disposed of.

     Result of the case: Appeals allowed.




     †
         Headnotes prepared by: Nidhi Jain