Judgment :- In this petition it is necessary to consider and decide as to whether the Benzigar Hospital, Kollam requires a licence under S.284 of the Kerala Municipalities Act, 1960. In Chapter XII dealing with "Licences and Fees", this section 284 has been substituted by Act 26 of 1972 with the heading "Industries, Factories and other Trades". Perusal of Ext. P-1- Demand Notice - Form "C", from Municipal Office, Kollam also refers "unauthorised trade conducted in building No. 14/405 as the subject-matter of the demand made to the petitioner - Director, Benzigar Hospital, by communication dated November 16,1990. Even subsequent communication Ext. P-3 dated January 11,1991 makes a demand for application for licence on the basis of resolution No. 16 passed in the meeting dated 25-7-1986 of the Municipal Council, Kollam (respondents Nos.1 and 2), on the footing that canteens conducted in buildings fetching annual rental of more than Rs.2500/-, licence fee of Rs. 290/- has been so fixed for Benzigar Hospital Canteen and it has been so included in the demand as Charitable Institutions are not excluded from the said licence schedule. The monetary demand, as specified, is a consequence. Further communication - Ext. P5 dated November 4, 1993, of the Municipal Commissioner, Kollam (respondent No. 1) administers a veiled threat of all steps to shut down "the eating house". The material on record also places enough sensitiveness in the context. 2. It would, therefore, be necessary to put the factual spectrum as a Priorii and men to proceed to settle legal position to determine as to whether there is Viability or not. 3. The petitioner is a private hospital run within Kollam Municipal limits registered under the Travancore-Cochin Literary, Scientific and Charitable Societies Registration Act, 1955 and is functioning as such for the last over 45 years, with no profit motive for the betterment of humanity by its service orientation of a team of doctors and nursing staff. It is averred and not disputed that the hospital has a kitchen to provide prescribed diet to the in-patients and other inmates of the hospital and by-standers of the patients. It is averred that it is neither a hotel nor a restaurant and general public has no access. The petitioner is exempted from the purview of the Kerala Shops and Commercial Establishments Act, 1960. It is averred that it is neither a hotel nor a restaurant and general public has no access. The petitioner is exempted from the purview of the Kerala Shops and Commercial Establishments Act, 1960. It is needless to state that under S.101(1)(cc) and (d) of the Kerala Municipalities Act there is exemption from the property-tax, the petitioner being a charitable institution as a consequence. 4. The respondent No.1 issued demand notice (Ext. P1) dated 16-11-1990 on the footing that the subject-matter is "unauthorised trade without licence", informing the petitioner to apply for licence in the prescribed form and remit fees demanded within 7 days, failing which the trade will be got closed. 5. By reply dated January 3,1991 (Ext. P2), the petitioner contended that being a service oriented institution with no profit motive, income being utilised for promotion of objectives and not for payment of any dividend or share of profit to any person, it would not be a trade i n any context of the meaning. It is stated that several patients are being treated in the hospital and medical diet prescribed by doctors attached to the hospital is provided. Service is not extended to the members of the public at large and as such would neither be a shop or a commercial establishment. It is urged that levy of licence-fee could extend only to those establishments mentioned in Schedule III of the Act, and, as such, the demand for application and consequential payment would be unsustainable in law. 6. Thereafter, placing reliance on the revised schedule as per resolution No. 16 of the meeting of the Municipal Council, Kollam (Respondent) published in the Kerala Government Gazette, dated 31-5-1988, as per 6(2)(b) of the schedule, demand was repeated by Ext. P3 - dated January 11, 1991 contending that canteens conducted in buildings fetching annual rental of more than Rs. 2500/-, licence fee of Rs. 290/-has been so fixed for Benzigar Hospital Canteen, Charitable institutions not being excluded from the said Licence Schedule, reiterating threat of resorting to other legal steps. 7. The petitioner preferred appeal to the Municipal Council, Kollam (respondent No. 2) - Ext. P4 dated 2-2-1991. It is contended that absence of motive for profit-making, absence of any aspect of activity being a trade are ignored. It is also contended that assumption of annual rental value being of Rs. 7. The petitioner preferred appeal to the Municipal Council, Kollam (respondent No. 2) - Ext. P4 dated 2-2-1991. It is contended that absence of motive for profit-making, absence of any aspect of activity being a trade are ignored. It is also contended that assumption of annual rental value being of Rs. 2500/- or above has no basis and as such even otherwise, the levy could legally be levied only as regards items specified in Schedule III specified in the provisions of S.284 of the Kerala Municipalities Act, 1960. It is also contended that the legal principles settled in the context (Illustratively -1969 KLJ 188) have been ignored. 8. By an order dated November 4,1993 (Ext. P5), appeal is rejected holding that it is not liable to be considered under S.364 of the Kerala Municipalities Act, 1960 reiterating that all steps would be taken to shut down "the eating house", as it comes within the provisions of S.284 of the said Act, without further notice. 9. The petitioner then preferred revision petition dated February 22, 1994 (Ext. P6) to the State Government. It is urged therein that the appellate order not only being a "non-speaking order" but is also passed without hearing the petitioner. It is reiterated that the hospital kitchen could not be "an Eating House" which is also not contemplated in any of me items of schedule III of the Act. The food is available only to the patients and by-standers; the entry and facilities are restricted, not being available to the general public or any cross-section thereof. It is urged that it is meant for the welfare and service of the Hospital. Reliance is placed on AIR 1965 SC 1107 to contend that the levy must be for the special benefit of the payer of fees. 10. The State Government by Order dated October 31,1994 (Ext. P7) rejected the petition observing that the disputed building appears to be part of a nursing school for which mere is no separate mess and therefore, it is basically a kitchen _and mess attached to the school which for other purposes for the convenience of management is being used for other purposes also. It is observed that running a nursing school in the present context is not a charitable purpose. 11. It is observed that running a nursing school in the present context is not a charitable purpose. 11. To appreciate the contentions in the present petition, it would be necessary to place on record the material of two C.M.P. Nos. 6912/95 (filed along with O.P. dated March 9,1995) and No.7233/95 dated March 13,1995 wherein orders dated March 10, 1955, and dated March 17,1995 are passed earlier by this court, together with the material placed on record by the petitioner by filing additional affidavit dated August 11,1995. It is in view of this material and earlier orders that the main petition was taken up-for hearing and alter hearing the counsel for parties is being decided by this judgment, after hearing counsel on September 19 and 20,1995. 12. On March 10, 1995, this court passed the following order on C.M.P.Nos. 6912 of 1995 presented along with O.P. "Admit. Urgent notice. There will be an interim direction as prayed for on condition petitioner shall apply to the Municipality and obtain a licence for conducting the canteen attached to the hospital, but obtaining of the licence will be subject to the final decision in the O.P. and further orders from this court. I also make it clear that taking the licence by the petitioner shall not be considered as a conduct agreeing to the orders passed by the Municipality which are under challenge in this O.P." 13. Thereafter, in C.M.P.No. 7233/1995, the petitioner sought clarification and moulding of interim relief. In paragraph 3 of the C.M.P. it is averred as follows: - "The petitioner has been conducting without any licence the canteen, (more rather, a kitchen) for more than 15 years. The challenge in the O.P. is against illegal issue of Ext. P1 demand notice directing petitioner to pay licence fees for 1988-89,1989-90 and 1990-91, though petitioner never applied for any licence for said years or years prior. Even respondent Municipality has no case that petitioner is serving dishes to members of the public. But licence is insisted only because, Municipal Council passed a resolution mat all canteens, having an assumed rental value of Rs. 2500/- is to have a licence, a classification unsustainable in law. Even respondent Municipality has no case that petitioner is serving dishes to members of the public. But licence is insisted only because, Municipal Council passed a resolution mat all canteens, having an assumed rental value of Rs. 2500/- is to have a licence, a classification unsustainable in law. Then on March 17,1995 the court passed the following order: - "As per the interim order passed in C.M.P.No. 6912/95, this court has issued a direction to the respondent not to interfere with the reopening and continuous operation of the hospital canteen which is a part of Benzigar Hospital, Kollam, on condition that the petitioner will apply and obtain a licence from the Municipality. In the present petition, it is apprehended by the petitioner that coercive steps will be taken by the respondent if amount covered by Ext. P1 demand notice is not paid. At present there is no necessity of passing any order in this petition. If the petitioner has got any complaint in future, he may move the C.M.P. for appropriate orders." 14. Material placed on record by the Additional Affidavit dated August 11,1995 also needs mention to appreciate the aspect of sensitiveness of the question. Quoting relevant aspects from the said affidavit, it would be as follows: (a) In continuation the petitioner filed C.M.P.7233/95 for staying the operation of Ext. P1 demand notice and issued other direction modifying the conditions imposed in the order dated 10-3-1995 in C.M.P.6912/95.On the said C.M.P. 7233/95 this Honourable Court ordered: - "At present there is no necessity of passing any order in this petition. If the petitioner has got any complaint in future, he may move the Civil Miscellaneous Petition for appropriate orders." (b) As matters stand at present Ext. P1 demand notice for arrears of licence fee is not yet stayed and there is every likelihood of respondent-Municipality initiating speedy steps for recovery of arrears though the petitioner has not applied for a licence or the respondent-Municipality issued a licence when alone, it becomes an arrear. (c) Fearing such iminent coercive steps, petitioner had closed the Hospital Canteen from 24-12-1993. If the Hospital takes licence, the Hospital is compelled to serve food to the demanding public. Being a canteen run by nuns, with no profit motive, the dishes are clean, hygienic and tasty and at the same time cheaper. (c) Fearing such iminent coercive steps, petitioner had closed the Hospital Canteen from 24-12-1993. If the Hospital takes licence, the Hospital is compelled to serve food to the demanding public. Being a canteen run by nuns, with no profit motive, the dishes are clean, hygienic and tasty and at the same time cheaper. Hence there is public demand to compel the Hospital to take out a license and serve the public. This is ever on the increase, after filing of the original petition. There is now constant friction on this issue between the management and local members of political parties. Hired unsocial elements came to the premises of the hospital, pelted stones at the hospital building and also used abusive filthy language, against the management for refusing to serve meals to public on the All Kerala Bandh day observed by the Merchants when all other hotels were remaining closed. This happened on 30-5-1995. (d) In the hospital there are 460 beds. The canteen is really a domestic kitchen exclusively intended for hospital service only. After the last order dated 17-3-1995 twice there was harassment by the health staff of the Municipality, who made forcible entry to the Hospital building at the peak hours when the nuns and other nursing staff were otherwise busy. There is every apprehension of constant harassment and victimisation of hospital nuns and managerial staff out of vicious political vendetta. (e) Petitioner hospital is not bound in law to take out licence, since the same is not an eating house or restaurant. The classification that canteens run in buildings or rooms with annual rental of Rs. 2500/- and above alone and exempting others is itself illegal and not permissible. So long as petitioner hospital is a charitable institution serving the cause of suffering patients with no 'profit motive. Also the food items served from the can teen are mainly the varied prescribed diet for the patients, food to few of the by-slanders and to nearly 290 strong medical staff." 15. From the factual material spread over as above, certain following aspects would get crystallised, especially when they are not controverted in this petition filed as far back as on March 9,1995: a. The petitioner is a charitable institution in existence for the last over 45 years with no profit-motive and is not at all engaged in any trading activity. From the factual material spread over as above, certain following aspects would get crystallised, especially when they are not controverted in this petition filed as far back as on March 9,1995: a. The petitioner is a charitable institution in existence for the last over 45 years with no profit-motive and is not at all engaged in any trading activity. b. The petitioner is already exempted from operation of the Kerala Shops and Commercial Establishments Act, 1960 and also from property-tax in view of S.101 (1)(cc) and (d) of the Kerala Municipalities Act, 1960. c. The dominant user of kitchen activity is service of prescribed diet-food to the in-patients and their bye¬standers. d. The petitioner has a staff of 290 personnel and the nursing school of the nuns is a feeders origin for the nursing staff of the hospital. The hospital has 460 beds. e. Upto the issuance of the Demand Notice, for all previous years, there has been no demand for licence and activity has continued uninterruptedly Without any licence. f. For reasons placed on record, justifiably, the petitioners have closed activity from December 23,1993 onwards. Even the incidents of pressure have been placed on record as regards what happened on May 30,1995. g. There is no basis to presume that annual rental of kitchen activity is Rs. 2500/- or over, so that demand could have any valid basis. 16. Apart from the above factual position, the position of law as available from the relevant statutory provisions and decisions in the context also needs discussion for the purpose of the ultimate decision in the light of the prayers of the petition. 17. By Act No. 26 of 1972, S.284 was substituted, introducing requirement of licence for "Industries, Factories and other Trades" as would appear from the caption as to be found in this regard from the text. Thus, the provision would have to be understood accordingly. Even the perusal of the items of schedule III would serve as aid to understand the legislative intent, and it is necessary to emphasise that all the items also specify that requirement of licence relates to industries, factories and trades alike. Eating houses, coffee houses, laundries or running barbers saloons, in the matter of licence, requires to contain a condition that admission or service therein shall be available to any member of the public. Eating houses, coffee houses, laundries or running barbers saloons, in the matter of licence, requires to contain a condition that admission or service therein shall be available to any member of the public. It is also necessary to mention that "eating houses" are not included in Schedule III at all. In addition, even the definition -Sec.3(10) - tells us "Lodging House" to mean "a hotel, a boarding house, a choultry dharmashala or rest house not maintained by the Government or local authority or any place where casual visitors are received and are provided with sleeping accommodation, with or without payment", with the exception of a students hostel under public or recognised control or retiring rooms and rest-houses of railways, specified. Taking these facets into consideration, it is clear that the kitchen activity in the present context cannot be said to be covered by the above provision at all. 18. If this is the provision, the Municipal Council, Kollam does not get power under S.347 of the Act to pass resolution inconsistent with the above provisions of S.284 thereof. Added to this, if S.347(13) of the Act, when examined in the context, speaks of regulation of hotels etc. (as specified therein) to which the public are admitted for repose or for the consumption of any food or drink. Apart there from, places such as hotels etc. stated in the said S.347(13) do not cover the present situation part-taking the characteristics of trading activity, as well as relevance of public at large. In these circumstances, it is clear that resolution No. 16 passed in the meeting dated July 25,1988, as published in the Kerala Government Gazette dated May 31,1988 would lack legal competence having been inconsistent with the provisions of S.284 of the Act. The resolution No. 16, as published in the Gazette/is therefore, quashed and set aside. 19. There is yet another legal aspect essential as a pre-requisite for a demand made that the petitioner should apply for a licence. The Municipality is set up to perform municipal duties and its powers are for enabling to perform its duties. The resolution No. 16, as published in the Gazette/is therefore, quashed and set aside. 19. There is yet another legal aspect essential as a pre-requisite for a demand made that the petitioner should apply for a licence. The Municipality is set up to perform municipal duties and its powers are for enabling to perform its duties. The relationship of quid pro quo in a wider sense includes cases where the function of the licence is to impose control upon an activity, the costs for effectuating the said control and on that basis the activity is placed under regulation and control not merely in public interest, but in the interest and for the benefit of the licensee as a whole. The Municipality subject to controls is an autonomous body and has to perform various statutory functions. The licence fee has necessary relation with the services rendered in respect of it as benefit or advantage on the person who pays the levy of fee. In the absence of such correlation of the amount of the levy to the costs of any services, the levy would be a tax and not a fee and as such would be beyond the rule or bye-law making power under S.347 of the Kerala Municipalities Act, 1960. In S.374 of the Act, it is clearly enacted that the Municipality has to frame rules or bye-laws in accordance with the provisions of the Act only, and it is already seen that S.284 and Schedule III of the Act rule out any necessity of a licence or levy of fee as discussed above. Apart from crystallisation of the above principles by the Supreme Court (AIR 1965,SC 1107 - The Corporation of Calcutta v. Liberty Cinema), on a resume of earlier decisions, and other subsequent decisions, S.284 and Schedule III of the Kerala Municipalities Act, 1960 also came up for consideration and similar treatment before this court (1973 KLT 845 (DB) -Jeevaraja v. Commr. Badagara Municipality), in regard to a place meant for storage and sale of copra, to lay down that the levy of a fee can be justified only if the same is for "special benefit" to the payer of the licence fee. It proceeds to observe further that the "special benefit" to the payer of the licence fee must be something in addition to what is being enjoyed by the general public. It proceeds to observe further that the "special benefit" to the payer of the licence fee must be something in addition to what is being enjoyed by the general public. The special benefit may well be services rendered to the payer of the licence-fee in greater measure and continuity than in the case of an ordinary tax-payer, payer of the licence-fee in question getting more than ordinary municipal service. I respectfully follow the line of these decisions. I must record that this aspect of special benefit is conspicuous by its total absence. 20. In para. 15 above, I have crystallised factual aspects. The discussion of legal aspects considered thereafter adds to the situation leading me to conclude that the very demands are not sustainable in law. 21. For the above reasons, the petition succeeds. Impugned resolution No. 16 passed in the meeting of the Kollam Municipal Council dated July 25,1986 and consequently published in Kerala Government Gazette dated May 31,1988 is quashed and set aside. As a consequence, Demands by Ext. P1 and Ext. P3 are also quashed and set aside. Needless to state that the orders dated 4-11-1993 of the Appellate Authority and dated October 31, 1994 of the State Government get quashed and set aside. Respondents Nos.1 and 2 are, therefore, directed not to prohibit the petitioner from running the hospital kitchen activity with any liability to pay any licence-fee as demanded and not to insist any access to the members of the general public. There shall be no order as to costs. Order accordingly.