# Court in Bharat Singh and another v. Smt. Bhudevi and another, 1987 RD 23

- **Citation:** (2013) 2 ILRA 925
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2013-05-29
- **Case number:** W.P. No. 657(MB) of 2002
- **Bench:** Rajiv Sharma, Vishnu Chandra Gupta
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/court-in-bharat-singh-and-another-v-smt-bhudevi-and-another-1987-rd-23-42649
- **Pages:** 10

## Headnote

Rules 1910-Rule 5(8) read with U.P. Excise
Act-Section 40(2)(e)and (f)-with General
Clause Act, 1904- Power of Nagar Nigam to
issue license to run foreign liquor shopcontention that the petitioners are license
holder from excise department-demand of
license fee by Nagar Nigam-unwarrantedheld
misconceived-objection
raised
by
Nagar Nigam-rightly decided by Collectorbye laws providing Rs. 6000/- per annum
for country made liquor and Rs. 12000/-for
foreign made liquor-not excessive-petitions
dismissed.
Held: Para-28
As stated in foregoing paragraphs, Nagar
Nigam is a body that has to perform
certain obligatory duties. These duties
are provided under Section 114 of the
Nagar Nigam Adhiniyam. A cursory look
at the section will make it abundantly
clear that these duties are directly
related to public welfare, health, peace
and well being. Further, in order to carry
out these duties there is a huge financial
burden that the Nagar Nigam has to
meet, this financial burden is reduced by
collecting taxes and fees in lieu of these
services. As averred above, Rule 5(8)
enshrines that in urban areas, no new
shop shall be opened without notice to
the Nagar Mahapalika, Town area or
notified area, as the case may be.
Sending of notice is not a mere formality.
Requiring of notice denotes that if any
objection is made by the Nagar Nigam it
will be decided by the collector. Thus the
objections raised by the Nagar Nigam
cannot be ignored or taken lightly.

Case Law discussed:
(1975) 1 SCC 737; [(1995) 1 SCC 574]; J.T.
1996(7) SC 16; (JT 1997 (1) SC 625; (1999) 2
SCC 274; AIR 2001 Alld. 343; AIR 1996 SC
2560; AIR 1997 SC 1168;

## Text

2 All] Jhurai Vs. Ram Bali
925

4. On behalf of appellant reliance is
placed on a Single Judge judgment of this
Court in Bharat Singh and another Vs.
Smt. Bhudevi and another, 1987 RD 23
wherein it was held that after deposit of
twenty times of land revenue if the
incumbent Sirdar died, no Bhumadhari
Sanad could have been issued in favour of
that person as it would be a nullity and no
benefit or right would accrue on this basis.
Relying on Raghunandan Singh Vs.
Yashwant Singh, 1978 RD 183, it has been
held that the change of status of Sirdar into
Bhumidhar occurs when the Assistant
Collector makes judicial grant. The Court
said that it would mean that when judicial
order for grant of a certificate is passed, that
would be relevant.

5. However, this view has not been
approved by Apex Court in Deo Nandan
and another Vs. Ram Saran and others,
AIR 2000 SC 1192 wherein it has been
held that Bhumadhari rights will accrue to
a Sirdar on the date of deposit of twenty
times land revenue and rest of the act is
only ministerial. In view of aforesaid
decision of Apex Court in Deo Nandan
(supra) it cannot be said that the law laid
down by this Court in Bharat Singh
(supra) is a good law and, therefore, the
reliance placed on aforesaid decision is
totally misconceived. In Deo Nandan
(supra) the Apex Court has construed
Section 134 of Act, 1951 and said:

"Section
134,
from
its
plain
language, indicates and shows that on the
application being made and 10 times the
land revenue being paid, the sirdar
becomes entitled 'with effect from the
date on which the amount had been
deposited' to a declaration that he has
acquired the rights mentioned in Section
137 of the Act."

6. Thereafter it has also considered
the Full Bench judgment in Banshidhar
Vs. Smt. Dhirajadhari and others, 1971
RC 371 and Single Judge decisions
Mobin Khan Vs. Chunnu Khan and
others,
1981
A.L.J.
402
and
Raghunandan Singh (supra) and then
the Court said:

"In our opinion, the said decisions
run counter to the plain language and
meaning of Sections 134 and 137 as they
stood at the relevant point of time."

7. The judgment in Bharat Singh
(supra)
has
heavily
relief
on
Raghunandan Singh (supra) which has
been held to be not a correct decision and,
therefore, it follows that the decision in
Bharat Singh (supra) is also no longer a
good law, in view of recent decision of
Apex Court in Deo Nandan (supra). It
may be worthy to mention that the
decision in Deo Nandan (supra) has also
been followed by this Court in Chandan
Singh Vs. First Additional District
Judge and others, 2012(5) ADJ 678.

8. In view of above, no substantial
question of law has arisen in this matter.
The appeal is accordingly dismissed.
---------

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 29.05.2013

BEFORE
THE HON'BLE RAJIV SHARMA, J.
THE HON'BLE VISHNU CHANDRA GUPTA, J.

W.P. No. 657(MB) of 2002
with
W.P. No. 367(MB) of 2002, W.P. No.
388(MB) of 2002, W.P. No. 658(MB) of
2002,
926 INDIAN LAW REPORTS ALLAHABAD SERIES [2013
W.P. No. 659(MB) of 2002,W.P. No.
660(MB) of 2002,W.P. No. 661(MB) of
2002,
W.P. No. 662(MB) of 2002,W.P. No.
663(MB) of 2002,W.P. No. 664(MB) of
2002,
W.P. No. 665(MB) of 2002,W.P. No.
666(MB) of 2002,W.P. No. 667(MB) of
2002,
W.P. No. 668(MB) of 2002,W.P. No.
669(MB) of 2002,W.P. No. 670MB) of
2002,
W.P. No. 671(MB) of 2002,W.P. No.
672(MB) of 2002,W.P. No. 673(MB) of
2002,
W.P. No. 674(MB) of 2002,W.P. No.
695(MB) of 2002,W.P. No. 2354(MB) of
2004,
W.P. No.2493(MB) of 2004, W.P.
No.2510(MB) of 2004,W.P. No.2511(MB)
of 2004
and 693(MB) of 2002,

Anoop Kumar Jaiswal & Anr ...Petitioners
Versus
The State of U.P. and Ors... Opp. Parties

Counsel for the Petitioners:
Sri Appoli Srivastava

Counsel for the Opposite Parties:
C.S.C., Sri Namit Sharma, Sri R.K. Singh,
Sri Shailendra Singh Chauhan and Sri
Shashi Prakash

U.P. Number of Location of Excise shop
Rules 1910-Rule 5(8) read with U.P. Excise
Act-Section 40(2)(e)and (f)-with General
Clause Act, 1904- Power of Nagar Nigam to
issue license to run foreign liquor shopcontention that the petitioners are license
holder from excise department-demand of
license fee by Nagar Nigam-unwarrantedheld
misconceived-objection
raised
by
Nagar Nigam-rightly decided by Collectorbye laws providing Rs. 6000/- per annum
for country made liquor and Rs. 12000/-for
foreign made liquor-not excessive-petitions
dismissed.
Held: Para-28
As stated in foregoing paragraphs, Nagar
Nigam is a body that has to perform
certain obligatory duties. These duties
are provided under Section 114 of the
Nagar Nigam Adhiniyam. A cursory look
at the section will make it abundantly
clear that these duties are directly
related to public welfare, health, peace
and well being. Further, in order to carry
out these duties there is a huge financial
burden that the Nagar Nigam has to
meet, this financial burden is reduced by
collecting taxes and fees in lieu of these
services. As averred above, Rule 5(8)
enshrines that in urban areas, no new
shop shall be opened without notice to
the Nagar Mahapalika, Town area or
notified area, as the case may be.
Sending of notice is not a mere formality.
Requiring of notice denotes that if any
objection is made by the Nagar Nigam it
will be decided by the collector. Thus the
objections raised by the Nagar Nigam
cannot be ignored or taken lightly.

Case Law discussed:
(1975) 1 SCC 737; [(1995) 1 SCC 574]; J.T.
1996(7) SC 16; (JT 1997 (1) SC 625; (1999) 2
SCC 274; AIR 2001 Alld. 343; AIR 1996 SC
2560; AIR 1997 SC 1168;

(Delivered by Hon'ble Rajiv Sharma, J.)

1. In the afore-captioned batch of
writ petitions, the cause of action for
filing writ petitions and the relief sought
are identical in nature and as such all the
writ petitions are being decided by a
common judgment.

2. Heard Sri S.K. Srivastava, Ms.
Appoli Srivastava, Sri Amitabh Rai, Ms.
Sujata Srivastava, Mr. Manish Kumar,
Mr.Ahilesh Kalra and Mr.Shailendra
Kumar Singh, learned Counsel for the
petitioners and Sri Namit Sharma, Sri R.
K.Singh, Sri Shailendra Singh Chauhan,
Sri Shashi Prakash Singh and Sri Shafiq
Mirza, learned Counsel for the respective
2 All] Anoop Kumar Jaiswal & Anr. Vs.The State of U.P. and Ors.
927
opposite parties and Sri H. P. Srivastava,
learned
Additional
Chief
Standing
Counsel.

3. All the petitioners, except the
petitioners of Writ Petition No. 2493 (MB)
of 2004, Writ Petition No. 2511 (MB) of
2004, writ petition no. 2510 (MB) of 2004
and writ petition no. 2354(MB) of 2004, are
holders of excise licenses for selling Indian
Made Foreign Liquor in sealed bottles for
which licences were granted to them as per
provisions of The U.P. Excise Act, on
payment of license fee for financial year
2001-2002 by the Collector, Lucknow. They
have questioned the bye-laws framed by
Nagar Nigam,Lucknow, which enjoins upon
the petitioners to take licence, in view of
clause 5 and 7 of the Bye-laws, from Nagar
Nigam for selling Indian Made Foreign
Liquor (IMFL) and pay Rs. 12,000/- per
annum as licence fee.

4. According to petitioners, Nagar
Nigam does not have any power to
impose a license on the petitioners when
they have already obtained a license from
the Excise Department under the U.P.
Excise Act. It has been contended on
behalf of the petitioners that U.P. Excise
Act and the Rules framed thereunder fully
cover all aspects incidental to the excise
business. Also, the license granted to
them lays down very strict conditions for
a liquor shop to operate. The conditions
include the location of the shops, its
opening and closing time, the premises at
which the shop is located can be searched
any time not only by the excise inspector
but even by the police officers. Therefore,
petitioners argue that there is nothing left
for the Nagar Nigam to regulate upon.

5. According to petitioners, the U.P.
Excise Act has been enacted by the State
Government under Entries 8 and 51 of
List II, Schedule VII of the Constitution
and therefore, the bye-laws cannot have
an
overriding
effect
upon
a
constitutionally valid Act. Further, a local
body cannot superimpose its authority
over that of the State body as the excise
business is already controlled by the State
through the Excise Commissioner. The
license to the petitioners have been
granted by the Excise Department but if
the Nagar Nigam also starts granting
license this will lead to conflict as denial
of license by the Nagar Nigam will render
the license granted by the Excise
department ineffective or useless.

6. The principle of taking license fee
requires providing of certain services in
lieu of it but bye-laws formulated by the
Nagar Nigam does not prescribe or lay
down the type of services, which they will
render to an Excise licensee. Lucknow
Nagar Nigam has sought to justify the
said bye-laws on the basis of Section 541
(20) read with Section 438 of U.P. Nagar
Nigam Adhiniyam. Section 541 and 438
of U. P. Nagar Nigam Adhiniyam speaks
about the premises where any trade is to
be done and details of premises can be
prescribed. The bye-law is silent on this
point. Similarly, Section 438 (1) (d)
provides for taking licence for doing
trade. In fact, if entire section is perused,
it would reflect that it intends to control
the dangerous trade. The word 'trade' used
in this section would not be so called
trade of liquor. The reason that there are
certain trades on account of their
pernicious nature cannot be called trade as
is commonly understood. In such alleged
trades, like Excise, gambling, lottery etc,
it is only the privilege of the State to
exploit the earnings of money. It may do
itself or through it's agency under it's
928 INDIAN LAW REPORTS ALLAHABAD SERIES [2013
strict control. The State only sells its
privilege to an Excise licencee as held in
Hari Shanker and others vs. The
Deputy
Excise
and
Taxation
Commissioner and others; (1975) 1
SCC 737. In ordinary trade, there is a
fundamental right under Article 19 (1) (g)
of the Constitution, but in Excise Trade
there is no fundamental right as held by
the Apex Court in number of cases. The
Apex Court in the case of Khodey
Distillery
Ltd.
versus
State
of
Karnataka [(1995) 1 SCC 574] has held
that the Excise Trade is "Res Extra
Commercian" that is non-commercial i.e.
trade of no commerce. Therefore, selling
of liquor is not covered by Section 541
and 438 of the Nagar Nigam Adhiniyam.

7. It has also been vehemently
contended that prior to formulating bye
laws by the Nagar Nigam, its proposal has
to be published in the Government
Gazette under Section 543 of the said
Adhiniyam, inviting objections from
public, which is lacking in the instant case
and as such bye-laws enacted by the
Nagar Nigam suffers from procedural
defect. Moreover, there is no notification
of the State Government for imposing
licence fee contained in the bye-laws. It
was through Government order dated
27.10.1994 that licence fee was imposed
on IMFL which was a new item and
imposing licence fee on new item was in
breach of Section 543 of the Act.

8. Lastly, it has been argued on
behalf of petitioners that there is vast
distinction between 'fee' and 'tax'. The
Tax is revenue for the State as well as for
the Corporation to meet its obligations.
Fee is usually charged for rendering some
service, which cannot be source of
income. Lucknow Nagar Nigam in its
counter affidavit has admitted that it is
regulatory as well as compensatory and it
has filed it's budget but no expenditure
has been shown in it for regulating Excise
Trade. Under the garb of taking 'Anugya
Patra' as provided in the Bye-laws, the
Nagar Nigam is granting licences, which
is to be taken by the licencees of IMFL
shop and imposing licence fee upon it, as
would be clear from clause 5 & 7 of the
Bye Laws which provides for obtaining
licence from Nagar Nigam. The end result
would be that there will be dual control on
excise business of both Nagar Nigam &
Excise Department, and if no permission
or licence is granted by Nagar Nigam,
then the same would nullify the Excise
licence
granted
by
the
Collector,
Lucknow.

9. Petitioners of Writ Petition No.
2354 (MB) of 2004, Writ Petition No.
2510 (MB) of 2004 and writ petition No.
2511 (MB) of 2004 were granted licence
by the Excise Collector for running Indian
Made Foreign Liquor or country liquor
shop in district Unnao and petitioners of
Writ Petition No.2493 (MB) of 2004 were
granted Excise License to run English
Wine Shop and country liquor shop in
District Rae Bareli.

10. In Writ Petition No. 2493(MB)
of 2004, petitioner no.1 was granted
licence to run an English Wine Shop at
Rae Bareli for the Excise Year 20032004, whereas petitioner no. 2 was
granted licence to run a country liquor
shop by the Collector, Rae Bareli for the
Excise Year 2003-04.

11. Petitioners of Writ Petition No.
2493 (MB) of 2004, Writ Petition No.
2354 (MB) of 2004, Writ Petition no.
2510 (MB) of 2004 and Writ Petition no.
2 All] Anoop Kumar Jaiswal & Anr. Vs.The State of U.P. and Ors.
929
2511 (MB) of 2004 have questioned the
bye-laws framed by the respective Nagar
Palikas in purported exercise of powers
under Section 298 of the Uttar Pradesh
Municipalities Act, 1916 whereby licence
fee is recoverable by the Nagar Palika
from the persons running the excise
shops. According to petitioners, under
Section 298 (1) of the U.P. Municipalities
Act, the Nagar Palika Parishad has got
powers to make bye-laws for the purpose
of promoting or maintaining the health,
safety and convenience of inhabitants of
the municipal area of the district and for
the
furtherance
of
the
Municipal
Administration under the Act, in the
district. However, this Section does not
empower the Nagar Palika to charge any
licence fee on excise shops which are
exclusively covered by the provisions of
the Uttar Pradesh Excise Act. It has been
contended that licence fee is being
charged from the petitioners for the
alleged purpose of regulating the excise
business of the petitioners. When the
licence of the petitioners is already being
regulated under the provisions of the
Excise Act and Rules framed thereunder
for which the State Government has
already provided separate mechanism
under the Excise Act. Therefore, no
restrictions or conditions can be imposed
by the Nagar Palika Parishad, on the
business of the petitioners or for that
matter any regulatory fee can be charged
by the Nagar Palika Parishad.

12. In contrast, Counsel for the
respondents
have
argued
that
the
contesting respondents were much within
their power in formulating the impugned
bye laws. Clarifying the position, it has
been submitted that under Section 541 of
the Nagar Nigam Act, the Nagar Nigam
and under Section 298 (1) of the U.P.
Municipalities Act, the Nagar Palika
Parishad is vested with the power to
frame bye-laws from time to time in
respect of the matters envisaged in
different sub-section of Section 541, so
long as the bye-laws are not inconsistent
with the Nagar Nigam Adhiniyam.
Further, a reading of Section 541(2), (36),
(41) together with Section 438(1)(a) and
(d), trade in country liquor as well as
IMFL liquor has been regulated by the
Nagar Nigam in its bye-laws, hence it
cannot be said that the Nagar Nigam is
incompetent to frame the bye-laws in
exercise of the power vested in it under
the Act.

13. Inviting our attention towards
Uttar Pradesh Number and Location of
Excise Shop Rules, 1968 framed in
exercise of the powers vested under
Clause (e) and (f) of sub-section(2) of
Section 40 of the Uttar Pradesh Excise
Act, 1910 read with Section 21 of the
U.P. General Clauses Act, 1904, and in
supersession of all rules and orders on the
subject, made by the Governor, learned
Counsel for the Nagar Nigam submitted
that Rule 5(8) enshrines that in urban
areas, no new shop shall be opened
without notice to the Nagar Mahapalika,
Town area or notified area, as the case
may be.

14. Section 114 of the Nagar Nigam
Adhiniyam provides for obligatory duties
of the Corporation. Sub section (46) of
Section 2 of the Nagar Nigam Adhiniyam
defines "nuisance" to include any act,
omission, place or thing which causes or
is
likely
to
cause
injury,
danger,
annoyance or offence to the sense of
sight, smell or hearing or which is or
more may be dangerous to life or
injurious to health or property. Thus, it is
930 INDIAN LAW REPORTS ALLAHABAD SERIES [2013
evident
that
for
carrying
out
the
obligatory duties, huge amount of money
is required, which is recovered by way of
municipal taxes/fees.

15. Moreover, as far as notification
pertaining to bye-law is concerned, it has
been pointed out that the impugned bye-law
was duly notified in the U.P. Gazette dated
29.03.1997 and public notice was also given
through leading newspaper in the year 2000.
Therefore, there is no procedural defect as
asserted
by
petitioners.
According
to
him,under section 541, the Nagar Nigam is
fully competent to pass such laws in matters
envisaged in different sub-sections of
section-541, so long as bye-laws are not
inconsistent
with
the
Nagar
Nigam
Adhiniyam.

16. Before dealing with the rival
contentions, it would be relevant to
mention that though it is said that there is
no generic difference between the tax and
a fee and the taxing power of a State may
manifest itself in different forms known
respectively as special assessments, fees
and tax. Our Constitution has for
legislative purposes, made a distinction
between the tax and fee. Hence while
drafting the Bill or making the legislation,
one has to keep in mind the relevant
entries of the Constitution of India. The
distribution of the power to levy a tax in
not identical, with that of the power to
levy a fee. Taxes are specifically
distributed as between the Union and the
State Legislation by various entries in List
I and List II and residuary power to levy a
tax which is not enumerated in any of the
entries lies under Entry 97 of List I
exclusively for the Parliament. On the
other hand, entry relating to fee has been
specifically mentioned in the end of the
three List I, II and III.

17. Every legislature has the power
to levy fee which is co-extensive with
power to legislate with respect to
substantive matters and legislature may
while making law relating to a subject
matter within its competence, levy a fee
with reference to the services that would
be rendered by the State under such Law.
Taxes are specifically divided between
List I Entries 82 to 92A and in List II
Entries 46 to 63. The fees are however,
not mentioned specifically. There is a
general entry towards the end of each list
which empowers the legislature to levy a
fee in respect of any matter over which it
has legislative power according to the
relevant List. The power to levy fee is
thus distributed in Entry 96 of List I, 66 of
List II and 46 of List III. The result is that
power of legislature to levy a fee or tax is
to be determined by complying different
test. If a fee is levied on the capacity of
the payer, then it shall not be treated as
fee and will be held to be a tax.

18. The traditional view, as asserted
by the Counsel for the petitioners, that
there must be actual quid pro quo for a fee
has undergone a sea change. In this
connection, we may refer to and rely upon
the decision of Hon'ble The Apex Court
in M/s.Kishan Lal Lakhmi Chand & Ors.
vs. State of Haryana & ors. (Judgments
Today) 1993 (4) SC page 426 (para 5):
where it was held by Hon'ble The
Supreme Court :-

"The traditional view that there must
be actual quid pro quo for a fee has
undergone a sea change. The distinction
between a tax and fee lies primarily in the
fact that a tax is levied as part of a
common burden, while a fee is for
payment of a specific benefit or privilege
although
the
special
advantage
is
2 All] Anoop Kumar Jaiswal & Anr. Vs.The State of U.P. and Ors.
931
secondary to the primary purposes of
regulation in public interest, if the element of
revenue for general purposes of the State
predominates, the levy becomes a tax. In
regard to fee, there is, and must always be,
co-relation between the fee collected and the
service intended to
be rendered.
In
determining whether a levy is a fee, the true
test must be whether its primary and essential
purposes it to render specific services to a
specified area or class; it may be of no
consequence that the State may ultimately
and indirectly be benefited by it. The power
of any legislature to levy a fee is conditioned
by the fact that is must be "by and large" a
quid pro quo for the services rendered.
However, co- relationship between the levy
and the services rendered/expected is one of
general character and not of mathematical
exactitude. All that is necessary is that there
should be a "reasonable relationship"
between the levy of the fee and the services
rendered. There is no genetic difference
between a tax and a fee. Both are
compulsory extractions of money by public
authorities. Compulsion lies in the fact that
payment is enforceable bylaw against a
person in spite of his unwillingness or want
of consent. A levy in the nature of a fee does
not cease to be of that character merely
because there is an element of compulsion or
coerciveness present in it, not is it a postulate
of a fee that it must have direct relation to the
actual service rendered by the authority to
each individual nor that each should obtain
the benefit of the service."

19. In view of the aforesaid law laid
down by Hon'ble Apex Court in M/s
Kishan Lal Lakhmi Chand vs. State of
Haryana, there may be a regulatory fee
and a compensatory fee. In the cases of
licence fee, which is a regulatory fee, the
condition of quid pro quo is not
necessary. It would, therefore, appear that
a provision for the imposition of licence
fee does not necessarily lead to the
conclusion that the fee must be only for
services rendered."

Same view was taken:-

P. Kannadsan etc. vs. State of
Tamil Nadu & other etc. J.T. 1996 (7)
SC 16. It has been observed that :

"Even in the matter of fees, it is not
necessary that element of quid pro quo
should be established in each and every
case, for it is well settled that fees can be
both regulatory and compensatory and
that in the case of regulatory fee, the
element of quid pro quo is totally
irrelevant."

20. In Vam Organic Chemicals
Limited and Anr. vs. State of U.P. &
Ors. (JT 1997 (1) SC 625)-

".......... has approved that there is a
distinction between the fees charged for
licence. i.e. regulatory fees and the fees
for
the
services
rendered
as
compensatory. It approved the view that
in case of regulatory fees like the licence
fees, existence of quid pro quo is not
necessary."

21. In this connection, we may also
refer to a recent decision of Hon'ble the
Apex Court in (1999) 2 Supreme Court
Cases 274 Secunderabad Hyderabad
Hotel Owners Association & Ors. vs.
Hyderabad
Municipal
Corporation,
Hyderabad
&
another.
Relevant
paragraph 9 reads as under:-

"9. It is, by now, well settled that a
licence fee may be either regulatory or
compensatory. When a fee is charged for
932 INDIAN LAW REPORTS ALLAHABAD SERIES [2013
rendering specific services, a certain
element of quit pro quo must be there
between the services rendered and the fee
charged so that the licence fee is
commensurate with the cost of rendering
the service although exact arithmetical
equivalence is not expected. However,
this is not the only kind of fee which can
be charged. Licence fee can also be
regulatory when the activities for which a
licence is given required to be regulated
or controlled The fee which is charged for
regulation for such activity would be
validly classifiable as a fee and not a tax
although no service is rendered. An
element of quid pro quo for the levy of
such fees is not required although such
fees cannot be excessive."

22. In Dr. Chakresh Kumar Jain
and Ors. v. State of U.P. and Ors., AIR
2001 Alld. 343, a Division Bench of this
Court pointed out the distinction between
a compensatory fee and a regulatory fee.
Quid pro quo is required in the case of a
compensatory fee but not for a regulatory
fee. In P. Kannadasan v. State of Tamil
Nadu and Ors., AIR 1996 SC 2560, the
Supreme Court observed that there is no
need for any element of quid pro quo in a
regulatory fee. The Supreme Court took
the same view in the State of Tripura
and Ors. v. Sudhir Ranjan Nath, AIR
1997 SC 1168. Regulatory fees are
charged because staff has to be engaged
for enforcing the regulations, and their
salaries have to be paid and other
expenses incurred in this connection. In
view of the above clear legal position, the
case laws relied upon by the petitioners
are of no avail to them.

23. It is wrong to say that the liquor
has no correlation with increasing health
disease, the health hazards of liquor
intake are well known and time and again
liquor has proved a threat to peace and
law and order. There is no denying that
the effects of liquor intake cause nuisance
to public. The state government by a
Government Order dated 27.10.94 had
issued
directions
to
all
Nagar
Nigam/Nagar
Palika
Parishad/Nagar
Panchayat throughout the State of U.P. in
respect of imposition of license fee in
respect of the commodity along with the
rate of fee to be charged. A list of
commodities and the fee to be charged
was annexed with the said Government
Order. One of the objects of this
government order was to empower the
Nagar Nigam to create its sources of
income in order to meet its huge financial
burden for providing different services
and
carrying
out
the
obligations
prescribed under the Act for the public
purposes. By another Government Order
the State Government directed the Nagar
Nigam/Nagar
Palika
Parishad/Nagar
Panchayat
to
amend
the
bye-laws.
Therefore, this imposition of fee was done
not only with respect to liquor trade but in
respect of other commodities as well.
Hence in this case there is no violation of
Article 14 of the constitution. Further the
imposition of license fee is different from
the levy of excise duty or fee under the
Excise Act. The Nagar Nigam in this case
is not charging for any other tax in respect
of liquor and it is only the license fee that
is being charged for the aforestated
purposes, so there is no question of dual
taxation. Also, the subject matter in case
of fee by the Nagar Nigam and that of the
Excise
license
is
very
different.
Therefore, both should not be confused to
be one and the same.

24. Moreover, as far as notification
of the bye-law is concerned, it has been
2 All] Anoop Kumar Jaiswal & Anr. Vs.The State of U.P. and Ors.
933
pointed out that the impugned bye-law
was duly notified in the U.P. Gazette
dated 29.03.1997 and public notice was
also given through leading newspaper in
the year 2000, as well as in the year 2001
on 06.02.2001 and 21.03.2001 requiring
the persons carrying trade in liquor to
obtain license from Nagar Nigam before
opening of new shops which was also in
consonance with rule 5(8) of Uttar
Pradesh Number and Location of Excise
Shops Rules, 1968.

25. Under section 541, the Nagar
Nigam is fully competent to enact laws in
matters envisaged in different subsections of section-541, so long as the
bye-laws are not inconsistent with the
Nagar Nigam Adhiniyam. The section
541 (20), (36) and (41) state as under :-

"(20) the control and supervision of
all premises used for any of the purposes
mentioned Section 438 and of all trades
and manufactured carried thereon and the
prescribing
and
regulating
of
the
construction,
dimensions,
ventilation,
lighting, cleansing, drainage and water
supply of any such premises.

(36) securing the protection of public
markets, gardens, public parking places
and open spaces vested in or under the
control of the Corporation from injury, or
misuse, regulating there management and
the manner in which they may be used by
the public and providing for proper
behavior of persons in them.

(41)fixing of fees for any license,
sanction or permission to be granted by or
under this act; from the perusal of Sub
Section -20 of Section 541, it has been
provided that the control and supervision
of all premises used for any of the said
purposes mentioned in section 438and for
all trade and manufactures carried thereon
and the prescribing and regulating of the
construction,
dimensions,
ventilation,
lighting, cleansing drainage wand water
supply of any such premises;

The section 438 of the Act, provides:

`
1)Except under and in conformity
with the terms and conditions of a license
granted by the Mukhya Nagar Adhikari,
no person shall-

a) Keep in or upon any premises any
article specified in the bye-laws as the
maximum quantity of such article which
may at one time be kept in or upon the
same premises without a license.

Clause - (d) of sub section (i) of
section 438 further provides that no
person shall carry on or allow to be
carried on, in or upon any premises:

I)any trade or operation connected
with any trade specified in the bye-laws,

II) any trade or operation which is
dangerous to life or health or property, or
likely to create nuisance either from its
nature or by reason of the manner in
which or the conditions under which, the
same, is or is proposed to be carried on.

26. Thus, from the reading of the
above sections, it is imminently clear that
the IMFL and Country liquor is of such
nature that it can be regulated by the
Nagar Nigam.

27. Further, as far as the position of
the Nagar Nigam is concerned with
regards to the state acts and laws in the
matter of Excise Shops it is important to
our discussion to mention rule known as
'Uttar Pradesh Number and Location of
Excise Shop Rules, 1968' framed in
exercise of powers under clause (e) and
(f) of Sub-Section (2) of Section 40 of
934 INDIAN LAW REPORTS ALLAHABAD SERIES [2013
Uttar Pradesh Excise Act, 1910, read with
Section 21 of the U.P. General Clauses
Act, 1904. The Rule-5(8) of the said rules
provide that in urban areas, no new shop
shall be opened without notice to the
Nagar Mahapalika, Town area or notified
area, as the case may be.

28. As stated in foregoing paragraphs,
Nagar Nigam is a body that has to perform
certain obligatory duties. These duties are
provided under Section 114 of the Nagar
Nigam Adhiniyam. A cursory look at the
section will make it abundantly clear that
these duties are directly related to public
welfare, health, peace and well being.
Further, in order to carry out these duties
there is a huge financial burden that the
Nagar Nigam has to meet, this financial
burden is reduced by collecting taxes and
fees in lieu of these services. As averred
above, Rule 5(8) enshrines that in urban
areas, no new shop shall be opened without
notice to the Nagar Mahapalika, Town area
or notified area, as the case may be. Sending
of notice is not a mere formality. Requiring
of notice denotes that if any objection is
made by the Nagar Nigam it will be decided
by the collector. Thus the objections raised
by the Nagar Nigam cannot be ignored or
taken lightly.

29. Since we are concerned with a
regulatory fee there is no need for any quid
pro quo, though the fee cannot be excessive.
The assertion of the petitioners that charging
of Rs.12,000/- per annum is highly
excessive. The bye-laws have provided
Rs.6,000/- as licence fee for country-made
liquor and Rs.12,000/- for foreign liquor. In
our opinion, the fee of Rs.6,000/- for
country-made liquor and Rs. 12,000/per
annum is not excessive as it works out to
only about Rs.500/- and Rs.1,000/- per
month, which is a meagre amount.

30. In the result, we do not find any
merit in the writ petitions. Writ petitions
are accordingly dismissed. Costs easy.
---------

APPELLATE JURISDICTION
CIVIL- SIDE
DATED: ALLAHABAD 23.07.2013

BEFORE
THE HON'BLE PANKAJ MITHAL, J.

First Appeal No. 670 of 1992

State of U.P. & Ors.

...Appellants
Versus
Rahmulla

 ...Respondent

Counsel for the Petitioners:
S.C., Sri A.K. Mehrotra
Sri Sandeep Mukherjee

Counsel for the Respondent:
Sri P.C. Srivastava

C.P.C. Section-107 Order 41 Rule 23/23 A-
Power of Remand by Reference Court-Land
acquisition-SLO-given
award-reference
against
that-in
absence
of
sufficient
material-no
enhancement
can
be
considered-under this background matter
remanded for fresh consideration-heldorder without jurisdiction-reference being
original jurisdiction-in absence of statutory
provision-reference
Court
ceased
with
jurisdiction of remand-order quashed.

Held: Para-11
In the light of the above decision, the
reference court acts as court of original
jurisdiction
and
does
not
exercises
appellate
powers
while
deciding
references under Section 18 of the Land
Acquisition Act. Therefore, it is denuded
of any power to remand the matter.

Case Law discussed:
AIR 1988 SC 1692

(Delivered by Hon'ble Pankaj Mithal, J.)