JUDGMENT 1. - In these two writ petitions validity of the fee imposed by the Municipal Council, Udaipur under the Nagar Palika Parishad Udaipur (Hotel, Restaurant, Bakery. Mithai, Pan, Khadyan and Shops Selling other Things Regulation and Control Rules) Bye-Laws, 1971 (hereinafter referred to as the Bye-laws) has been challenged. 2. The petitioners in both the writ petitions are owners of Hotels or Guest houses. The Bye-Laws framed by the Municipal Council Udaipur under clauses (iv) and (vii) of Sub-section (1) (b) of Section 90 of the Rajasthan Municipalities Act, 1959 were published in the Rajasthan Gazette dated December 9, 1971 and came into force with effect from the date of their publication in the Rajasthan Gazette. Clause 3 of the Bye-Laws makes provision for registration of establishments which are Hotel, Restaurants, Rest Houses, Lodging houses or sweetshops for the purpose of ensuring security of the people and for maintenance of public health. The owners or proprietors of such establishments are required to get the hotel or lodging house or rest house or restaurant or sweet shops registered with the Municipal Council on payment of the prescribed fee. Hotels and other similar establishments have been divided into three classes for the purposes of payment of registration or license fees. Hotels or lodging houses having more than 20 rooms for providing accommodation to passengers are required to pay Rs. 200/- as registration fee, while hotels or lodging houses having 11 to 20 rooms, for accommodating passengers have to pay Rs. 125/- and those hotels, rest houses or lodging houses having 10 or less than 10 rooms providing accommodation for the passengers arc required to pay Rs. -75/-, in accordance with the provisions contained in clause (11) of the Bye-laws. 3. The petitioners failed to get their hotels or lodging houses registered in accordance with the Bye-laws and as such notices were issued by the Municipal Council to the proprietors or owners of such establishments directing them to close their hotels or lodging houses forthwith and to show cause within 3 days as to why prosecution should not be launched against them for violation of the provisions of the Bye-laws relating to registration. Learned counsel for the petitioners submitted that levy of fee by the Municipal Council is not justified because of the absence of quid pro quo and it is submitted that charging of license fee by the Municipal Council is ultra vices of the provisions of the Constitution of India and the Rajasthan Municipalities Act. 4. Learned Additional Government Advocate and the learned counsel appearing for the Municipal Council, Udaipur defended the charging of license fees and submitted that the Municipal Council has to render some service to the petitioners inasmuch as a licence is issued and a register is maintained. It was further submitted that whatever amount is received by the Municipal Council by way of license fees, was spent by the Municipal Council for the development of the municipal area and for rendering services to the people residing within the municipal limits. It was also submitted that merely because the amount paid by way of license fees is deposited in the municipal funds cannot be a reason for invalidating the charging of such fee. 5. Learned counsel for the petitioners drew my attention to the decision of a learned Single Judge of this Court dated October 4, 1977 in the case of M/s Ajanta Hotel v. The State of Rajasthan and others (S B. Civil Writ Petition No. 1079 of 1972) dismissing the writ petition, relying upon the decision of their Lordships of the Supreme Court in (1) The Corporation of Calcutta and another v. Liberty Cinema (AIR 1965 SG 1107) . It was held in that case that the levy of license tee on cinema houses by the Municipal Corporation of Calcutta was valid, although in that case it was held that license fee was a tax and not a fee in return for services rendered by the Corporation. However, in view of the discussion which follows it is not possible to agree with the view taken in Ajanta Hotel case and the fee charged by the Municipal Council Udaipur must be held to be a fee and not a tax. 6. The question whether a particular exaction or levy by the State or by local bodes is a fee or a tax has been considered in numerous cases by their Lordships of the Supreme Court. In such cases, it has been held that levy may be a fee if the element of quid pro quo is present. 6. The question whether a particular exaction or levy by the State or by local bodes is a fee or a tax has been considered in numerous cases by their Lordships of the Supreme Court. In such cases, it has been held that levy may be a fee if the element of quid pro quo is present. Learned counsel for the petitioners relied upon the decision of their Lordships of the Supreme Court in Kewal Krishna Puri and another v. State of Punjab and others ( AIR 1980 SC 1008 ), in support of his contention. In Kewal Krishan Puri's case (Supra) the following observations were made by their Lordships of the Supreme Court : "The element of quid pro quo must be established between the payer of the fee and the authority charging it. It may not be the exact equivalent of the fee by a mathematical precision, yet, by and large, or predominantly, the authority collecting the fee must show that the service which they are rendering in lieu of fee is for some special benefit of the payer of the fee." 7. However, the aforesaid observations were explained in a subsequent case in (Supra) Southern Pharmaceuticals and Chemicals Trichur and others v. State of Kerala and others ( AIR 1981 SC 1863 ) and their Lordships of the Supreme Court held that the aforesaid observations were not intended and meant as laying down a rule of universal application. In Southern Pharmaceuticals and Chemicals's case (3) it was observed that the traditional concept of quid pro quo was undergoing a transformation and the following statement made by H M. Seervai in his treatise on Constitution of India (2nd Edn.) Vol. 2 at page 1252 was quoted with approval : "It is submitted that as recognised by Mukherjee, J. himself, the fact that the collections are not merged in the consolidated fund, is not conclusive, though that fact may enable a court to say that a very important feature of a fee was present. But the attention of the Supreme Court does not appear to have been called to Article 266 which required that all revenues of the Union of India and the States must go into their respective consolidated funds and all other public moneys must go into the respective public accounts of the Union and the States. But the attention of the Supreme Court does not appear to have been called to Article 266 which required that all revenues of the Union of India and the States must go into their respective consolidated funds and all other public moneys must go into the respective public accounts of the Union and the States. It is submitted that if the services rendered are not by a separate body like the charity Commissioner, but by a Government Department the character of the imposition would not change because under Article 266 the moneys collected for the services must be credited to the consolidated fund. It may be mentioned that the element of quid pro quo is not necessarily absent in every tax." (emphasis added) 8. In Southern Pharmaceticals and Chemicals case, their Lordships of the Supreme Court also observed as under in this context: "It is now increasingly realised that merely because the collections for the services rendered or grant of a privilege or licence, are taken to the consolidated fund of the State and are not separately appropriated towards the expenditure for rendering the service is not by itself decisive. That is because the Constitution did not contemplate it to be an essential element of a fee that it should be credited to a separate fun i and not to the consolidated fund. It is also increasingly realised that element of quid pro quo stricto senso is not always a sine qua non of a fee. It is needless to stress that the element of quid pro quo is not necessarily absent in every tax." 9. The aforesaid observations made in Southern Pharmaceuticlas and Chemical's case were quoted with approval by their Lordships of the Supreme Court in Municipal Corporation of Delhi and others v. Mohd. Kasin ( AIR 1983 SC 617 ) . In the last mentioned cast, Chinnappa Reddy, J., speaking for the Court observed as under : "there is no generic difference between a tax and a fee, though broadly a tax is compulsory exaction as part of a common burden, without promise of any special advantages to classes of tax payers whereas a fee is a payment for services rendered, benefit provided or privilege conferred. Compulsion is not the hall mark of the distinction between a tax and a fee. Compulsion is not the hall mark of the distinction between a tax and a fee. That the money collected does not go into a separate fund but goes into the consolidated fund does not also necessarily make a levy a tax. Though a fee must have relation to the services rendered or the advantage conferred, such relation need not be direct, a mere casual relation may be enough. Further, neither the incidence of the fee nor the service rendered need be uniform. That others besides those paying the fees are also benefited does not detract from the character of the fee. In fact the special benefit or advantage to the payers of the fees may even be secondary as compared with the primary motive of regulation in the public interest. Nor is the Court to assume the role of a Cost Accountant. It is neither necessary nor expedient to weigh too meticulously the cost of the services rendered etc. against the amount of fee collected so as to evenly balance the two. A broad co-relationship is all that is necessary. Quid pro quo in the strict sense is not the one and only true index of a fee; nor is it necessarily absent in a tax. (emphasis added) 10. The same view was again reiterated by their Lordships of the Supreme Court in Sreenivasa General Traders and others etc. v. State of Andhra Pradesh and others etc. ( AIR 1983 SC 1246 ) , wherein again the observations made in Kewal Krishan Puri's case were explained and their Lordships held that the observations made in Kewal Krishan Puri's case quoted above were not necessary for the decision of that case and went beyond the occasion and therefore have no birdirg authority, though they may have persuasive value. A. P. Sen, J., speaking for the Supreme Court in Sreenivasa General Traders case observed as under: "The traditional view that there must be actual quid pro quo for a fee has undergone a sea of change in the subsequent decisions. The distinction between a tax and a 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 secondary to the primary motive of regulation in public interest. The distinction between a tax and a 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 secondary to the primary motive of regulation in public interest. If the element of revenue for general purpose of the State predominates, the levy becomes tax. In regard to fees there is, and must always be, correlation 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 purpose is 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 it must be "by and large" a quid pro quo for the services rendered. However, co-relationship between the levy and the services expected to be rendered 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 generic difference between a tax and a fee. Both are compulsory exactions of money by public authorities. Compulsion lies in the fact that payment is enforceable by law 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 that of character merely because there is an element of compulsion or coersiveness present in it, nor is it a postulate of a fee that it must have direct relation to the actual service rendered by the authority to each individual who obtains the benefit of the service. It is now increasingly realised that merely because the collections for the services rendered or grant of a privilege or license are taken to the consolidated fund of the State and not separately appropriated towards the expenditure for rendering the service, is not by itself decisive." 11. It is now increasingly realised that merely because the collections for the services rendered or grant of a privilege or license are taken to the consolidated fund of the State and not separately appropriated towards the expenditure for rendering the service, is not by itself decisive." 11. Thus, it is now well settled that it is not an essential element of fee that it has to be credited to a separate fund and not to the consolidated fund of the State or mixed with the general revenue of the local body concerned. It is also now well established that the element of quid pro quo in the strict sense is not always a sine qua non for validity of charging a fee and that fee cannot be construed in a rigid narrow sense. The charging of fee may not lead to the conferment of a special advantage on the person from whom the fee is charged as the primary motive of charging a fee may be regulation in public interest or rendering service to a specified area or class of persons. 12. In the present case, the Bye-Laws have been made by the Municipal Council, Udaipur for registration of hotels, lodging houses, rest houses, restaurants, sweet shops etc. and for issuance of a licence to them on payment of the prescribed licence fee. The registration of establishments such as hotels, lodging houses and test houses etc. and issuing licences to them by the Municipal Council is not only necessary for regulation in public interest but an element of social security is also present therein, while the question of maintenance of public health is also involved. If the owners or proprietors of such establishments like hotels, lodging houses, rest houses or restaurants, sweet shops etc. keep such premises dirty or unclean or allow persons of dubious character, to stay in them, then the Municipal Council would be justified in cancelling the licence of such establishments. After all it is the Municipal Council who has to look after the well-being of the residents of the localities comprised in the municipal area and it is the duty of the Municipal Council to see that such establishments like hotels, rest houses, lodging houses, restaurants etc. do not become dens of immoral acts or unlawful activities or become hazards to public health. do not become dens of immoral acts or unlawful activities or become hazards to public health. The aforesaid duty cast upon the Municipal Council by the Act requires proper regulation of such establishments, registration thereof and issuing of licenses to them by the Municipal Council so as to ensure inspection and checking of such establishments from time to time by the Municipal authorities in public interest. Thus, there is a reasonable relationship between the levy of fee and the services rendered in the present case and in my view the charging of licence fee or registration fee by the Municipal Council, Udaipur for regulation and licensing of hotels, lodging houses, rest houses, restaurants etc. is perfectly justified and within the competence of the Municipal Council. 13. In view of the aforesaid discussion, the petitioners are not justified in challenging the levy of licence fee and registration and licensing of their hotels or guest houses by the Municipal Council, Udaipur. However, it would be for the Municipal Council to consider as to whether in view of the serious controversy raised by the petitioners about the validity of the Bye-laws and the charging of licence fee, it would at all he proper to take proceedings against the petitioners for prosecuting them for non-payment of licence fee, within the time permissible under the Bye-laws. It may be sufficient compliance with the provisions of the Bye-laws if the petitioners are now allowed to make payment of the licence fee payable by them under the Bye-laws and obtain the requisite licences from the Municipal Council, Udaipur. 14. In the result, the writ petitions are dismissed, subject to the observations made above.Petition dismissed. *******