( 1 ) K. L. MANJUNATH, J. This batch of writ appeals has been filed by R-3 in WP Nos. 1995-2000 / 1999 etc. . The appellant is State Co-operative Federation haying on its membership rolls of the Primary Co-operative Societies and Banks and other co-operative institutions. In the bye-laws of the appellant-federation under the caption 'objects', it is stated that the Federation is the accredited representative of the co-operative movement in karnataka State. To propagate the co-operative principles and practices, to impart education and training to the employees, members and office bearers of the co-operative societies, to act as co-ordinating agency on all matters pertaining to co-operative education, to promote different types of co-operative activities in accordance with the plan for co-operative development and to strengthen the existing societies in the State by providing assistance and guidance technically or otherwise are some of the objectives of the society. Respondents (other than the official respondents) are mostly primary co-operative societies. They filed the writ petitions questioning certain provisions of the karnataka Co-operative Societies act (hereinafter refer as to as The Act') as unconstitutional. The provisions challenged inter- alia are Section 57 (2-A) and (2-B) of The Act. The appellant, insofar as it is aggrieved by the judgment of the learned single Judge striking down sub-sections (2-A) and (2-B) of section 57 as ultra-vires of the Constitutional guarantees enshrined in Arts. 14 and 19 (1) (g) has filed these appeals. Appellant is aggrieved by. that part of the judgment by which Section 57 (2-A) of the Act has been held to be invalid insofar as it provides for two percent contribution to Co-operative education Fund. Sub-section (2-A) of Section 57 which was introduced, by karnataka Act 25 / 1998 reads as follows :"a Co-operative society shall, from out of the balance of the, net profits, contribute two percent to the Co-operative Education Fund and five percent to the Sahakari Kalayan Nidhi constituted by the government. "sub-section (2-B) lays down that. "no co-operative society which has failed to contribute to the Co-operative Education Fund and Sahakara kalyana Nidhi shall pay a divident to its members. " ,. Rule-20 of the Karnataka Co-operative Societies Rules lays down the rate of contribution payable to the Co-operative Education Fund. Though in sub-section (2-A) of Section 57, the amount to contribution is fixed at 2%. "no co-operative society which has failed to contribute to the Co-operative Education Fund and Sahakara kalyana Nidhi shall pay a divident to its members. " ,. Rule-20 of the Karnataka Co-operative Societies Rules lays down the rate of contribution payable to the Co-operative Education Fund. Though in sub-section (2-A) of Section 57, the amount to contribution is fixed at 2%. according to Rule, the rate of contribution varies between three-fourth percent of the annual net profit and 2% thereof, depending on the rate of dividend. This rule was in statute book even before Section 57 (2-A) was introduced in the year 1998. There is an apparent conflict between the Section and the Rule. We need not go into the question as to what is the rate of contribution payable, as such a question is not raised before us. As seen from Circular No. 141 dated 15. 7. 1999 issued by the Government (Co-operation Department), the co-operative societies are required to remit the amount payable towards Co-operative Education Fund directly to the Karnataka State Co-operative Federation. ( 2 ) WE will briefly refer to the reasoning and conclusions of the learned single Judge. The learned Judge held that imposition of levy being confined only to profit making co-operative societies and non-profit making societies being exonerated from the burden of this levy, there was clear violation of article 14 of the Constitution. Learned Judge then proceeded to observe "a levy should be uniform and should apply to all the co-operative societies without reference to whether they make profit or not. Only then it can be considered as a fee in the real sense. " Learned Judge having upheld the legislative competence to impose such a levy under Section 57 (2-A) of the Act and having held that It is in the nature of fee, proceeded to consider the question whether it has an element of quid pro quo. It was observed that no special service was rendered to the co-operative societies and no data has been placed as to how it was related to the functions of the co-operative society. Learned Judge then observed at paragraph-111 :"the creation of the Nidhi and the Fund functions is totally outside the provisions of the Act. The purpose of the Nidhi and the fund has nothing to do with the services rendered by the State for the regulation of the co-operative society. Learned Judge then observed at paragraph-111 :"the creation of the Nidhi and the Fund functions is totally outside the provisions of the Act. The purpose of the Nidhi and the fund has nothing to do with the services rendered by the State for the regulation of the co-operative society. It does not in any way advance the aims for the objects of the Act however commendable it may be. No service is rendered to the co-operative society by such levy per se. "the learned Judge further observed that no restriction can be placed on co-operative society on payment of dividend to the members until and unless the contribution is made. The learned Judge tersely put it as an instance of robbing Peter to pay Paul. ( 3 ) WE find it difficult to endorse the reasoning and affirm the conclusions of the learned single Judge insofar as contribution for the purpose of Co-operative education Fund is concerned. First, we will address ourselves to the question whether levy could be justified as fee. The contribution under Section 57 (2-A)is nothing but compulsory exaction from profit making societies for a specific purpose. Indubitably, it partakes the character of fee. This legal position has not been disputed by any of the counsel. The controversial issue however is whether the test of quid pro quo is satisfied. ( 4 ) THE concept of fee and the concomitant of quid pro quo which is ingrained in the concept of fee has undergone a vast change in the recent times. Series of decisions rendered from 1980 onwards till date have emphasized the idea that the services or the benefits need not directly reach each and every payer of fee. In other words, a direct and immediate benefit in the form of service to each member of the class which is called upon to pay the fee need not necessarily be present. A general and broad co- relation between the fee and the services rendered is what the law requires. It is also well settled that there need not be exact co-relation between the income by way of fee and the expenditure incurred. A general and broad co- relation between the fee and the services rendered is what the law requires. It is also well settled that there need not be exact co-relation between the income by way of fee and the expenditure incurred. The true test is what is laid down by the Supreme Court in Krishi Upaj Mandi Samiti v. Orient Paper Industries Ltd. , 1995 (1) SCC 655 : (1994 AIR SCW 5156), Sawant J. Speaking for the Supreme Court after referring to the various cases, laid down certain propositions amongst which proposition No. 7 is important. " (7) It is not a postulate of fee that it must have relation to the actual service rendered. However, the rendering of service has to be established. The service, further, cannot be remote. The test of quid pro quo is not to be satisfied with close or proximate relationship in all kinds of fees. A good and substantial portion of the fee must, however, be shown to be expended for the purpose for which the fee is levied. It is not necessary to'confer the whole of the benefit on the payers of the fee but some special benefit must be conferred on them which has a direct and reasonable correlation to the fee. While conferring some special benefits on the payers of the fees, it is permissible to render service in the general interest of all concerned. The element of quid pro quo is not possible or even necessary to be established with arithmetical exactitude. But it must be established broadly and reasonably that the amount is being spent for rendering services to those on whom the burden of the fee falls. There is no postulate of a fee that it must have a direct relation to the actual services rendered by the authorities to each individual to obtain the benefit of the service. The element of quid pro quo in the strict sense is not always a sine qua non for a fee. The element of quid pro quo is not necessarily absent in every tax. It is enough if there is a broad, reasonable and general corelationship between the levy and the resultant benefit to the class of people on which the fee is levied though no single payer of the fee receives direct or personal benefit from those services. The element of quid pro quo is not necessarily absent in every tax. It is enough if there is a broad, reasonable and general corelationship between the levy and the resultant benefit to the class of people on which the fee is levied though no single payer of the fee receives direct or personal benefit from those services. It is immaterial that the general public may also be benefited from some of the services if the primary service intended is for the payers of the fees. " ( 5 ) IN The Sirstik Ltd, v. The Textiles Committee, AIR 1989 SC 317 the supreme Court was concerned with the question whether the fee credited to the textile fund under Section 7 (2) of the Textile Committee Act read with rule 21 of Textiles Committee Rules for the purpose of defraying the expenditure of the committee for its manifold duties such as undertaking and encouraging scientific, technological and economic research in textile industry and textile machinery, promoting export of textiles and textile machinery and carrying on propaganda for that purpose, specifying the type of quality control or inspection to be applied to textiles or textile machinery, providing training in the techniques of quality control, providing for inspection and examination of textiles, textile machinery, packing materials etc. and to establish laboratories and test houses for testing of textiles etc. Following observations made by the Supreme Court are quite apposite in page-334. "the provision for the levy of fees for inspection and examination of textiles under Section 12 (1) (a) of the Act or the levy of the fee under rule 21 of the Rules cannot be challenged on the ground that there is no reasonable relationship between the levy of the fee and the services rendered by the Committee to the entire textile industry to which the appellants and the petitioners before us owning large textile mills belong. When the levy of the fee is for the benefit of the entire textile industry, there is sufficient quid pro quo between the levy recovered from the appellants and the petitioners and the services rendered to the industry as a whole. In the premises, the principles laid down by this Court in sreeniwasa General traders ( AIR 1983 SC 1246 are clearly attracted. In the premises, the principles laid down by this Court in sreeniwasa General traders ( AIR 1983 SC 1246 are clearly attracted. "accordingly, levy of fee under Rule 21 of Textile Committee Rules for the purpose of defraying the expenditure for various activities of textile committee which go to benefit the textile industry as a whole was upheld by the Supreme court. The ratio of this decision squarely applies to the instant case wherein the contribution in the nature of fee provided for by Section 57 (2- A) goes to the benefit of all the Co-operative Societies in general. The decision in Sirsilk case especially the observations extracted above, were approved by a three judge Bench of the Supreme Court in a recent decision in B. S. E. Brokers forum, Bombay v. Securities and Exchange Board of India, 2001 (3) SCC 482 : air 2001 SC 1010 . At paragraph 37 Santosh Hegde J. Speaking for the supreme Court, observed :"as noticed in the City Cororation of Calicut ( AIR 1985 SC 756 ) (supra), the traditional concept of quid pro quo in a fee has undergone considerable transformation. From the conspectus of the ratio of the above judgments, we find that so far as the regulatory fee is concerned, the service to be rendered is not a condition precedent and the same does not lose the character of fee provided the fee so charged is not excessive. It is also not necessary that the services to be rendered by the collecting authority should be confined to the contributories alone. As held in Sirsilk Ltd. , (supra), if the levy is for the benefit of the entire industry, there is sufficient quid pro quo between the levy recovered and services rendered to the industry as a whole. If we apply the test as laid down by this Court in the above said judgments to the facts of the case in hand, it can be seen that the statute under Section 11 of the Act requires the Board to undertake various activities to regulate the business of the securities market which requires constant and continuing supervision including investigation and instituting legal proceedings against the offending traders, wherever necessary. Such activities are clearly regulatory Activities and the Board is empowered Under Section 11 (2) (k) to charge the required fee for the said purpose, and once it is held that the fee levied is also regulatory in nature then the requirement of quid pro quo recedes to the background and the same need not be confined to the contributories alone. "as regards the utilisation of funds for the purpose of various activities of the Federation aimed at spreading and imparting education and training in co-operative field, in the statement of objections and in the Memorandum of writ appeal, a number of activities and projects undertaken by the Federation are enumerated. It is not the case of the appellants that the amount collected by way of contribution to co-operative Education Fund under Section 57 (2-B)of the Act is far in excess of requirements of the Federation and therefore the fee collected is excessive. Objection of the appellant is directed towards the very nature and basis of levy. Therefore, we need not go into the reasonableness of quantum of fee and to go into the details to judge whether the co-relation between the income and expenditure has been fulfilled. We should also make note of the fact that even the members of the Managing Committee and the employees of many of the respondents-co-operative societies have been participating from time to time in the educational and training programmes organised by the appellant-federation. Therefore, there can be no gain saying that the Co-operative Education Fund will go a long way in promoting the objectives of the co-operative movement and in particular, benefits the various co-operative societies in the State by the spread of co-operative literacy and by disseminating knowledge in the co-operative field. We therefore regret our inability to lend our concurrence to the views of the learned Judge that the levy does not bear the essential characteristics of fee. ( 6 ) WE turn to the next question whether the classification between profit making societies and the non-profit making societies would violate Article 14 of the Constitution. Learned Judge proceeded on the basis that if it is a fee, it should be uniform and should be come by all the societies irrespective of the fact whether they make profit or not. The element of uniformity need not invariably be present in the concept of fee. Learned Judge proceeded on the basis that if it is a fee, it should be uniform and should be come by all the societies irrespective of the fact whether they make profit or not. The element of uniformity need not invariably be present in the concept of fee. As observed in 1995 (1) SCC 655 : 1994 AIR SCW 5156, refering to Shirur Math's case (at page 5163 of AIR SCW) :"the Court then referred to the contention with regard to the distinction between a tax and a fee in the compulsory nature of the former and the voluntary nature of the latter and observed that a careful examination will reveal that the element of compulsion or coerciveness is present in all kinds of impositions though in different degrees and that it is not totally absent in fees. Hence, it cannot be the sole or even a material criterion for distinguishing a tax from fee. Compulsion lies in the fact that payment is enforceable by law against a man inspite of his unwillingness or want of consent and this element is present in taxes as well as in fees. "in fastening the liability on the profit making societies while excluding the societies in the red, we do not think that the guarantee of equality under article 14 has been breached. Such a classification, in our view, rests on an intelligible differential and it is a reasonable classification. In fact such classi-efication is commendable for the reason that it would not be just and proper to require the non-profit making societies to bear this burden, there by adding to their financial problems. It may be that the benefit of service rendered by the Federation by organising the educational and training programmes would reach all societies in the State. But, it does not necessarily follow that all such societies irrespective of their financial capacity should be required to bear the burden. The classification on the basis of the financial capacity of the payer of tax or fee has been unifomally upheld by the supreme Court. If an authority is needed for this purpose, we may refer to the decision in Kerala Hotel and Restaurant Association v. State of Kerala, 1990 (2) SCC 502 : AIR 1990 SC 913 . The classification on the basis of the financial capacity of the payer of tax or fee has been unifomally upheld by the supreme Court. If an authority is needed for this purpose, we may refer to the decision in Kerala Hotel and Restaurant Association v. State of Kerala, 1990 (2) SCC 502 : AIR 1990 SC 913 . ( 7 ) CLOSE to the case on hand is the decision of the Division Bench of bombay High Court in Bassein Catholic Co-operative Bank Ltd. v. State of maharashtra, AIR 1988 Bombay 72. The decision countenances the principle that the classification of co-operative societies based on its financial position and share capital cannot be considered to be arbitrary or discriminatory. ( 8 ) FOR the above reasons, we see no infirmity in Section 57 (2- A) of the act insofar as it provides for contribution towards the Co-operative Education fund. As regards the Sahakara Kalyana Nidhi, we need not express any view in these appeals. ( 9 ) SECTION 57 (2-B) is only a mode of ensuring payment of contribution which the co-operative society is statutorily bound to pay. When once the legality of the levy is upheld, that could possibly be no objection for the operation of the embargo contained in sub-section (2-B) of Section 57 of the act. The payment of dividend can only be made after providing for payment of contribution towards the Co-operative Education Fund. The profit of the co-operative society PRO TANTO gets reduced and that is the reason why before disbursing the dividend, profit making co-operative society is enjoined to discharge the liability under sub-section (2-A) of Section 57 of the Act in the first instance. We therefore, uphold the validity of this provision also insofar as it relates to Co-operative Education Fund. ( 10 ) BEFORE closing the judgment, we would like to take note of the fact that in the Multi State Co-operative Societies Act which is a Central Act, as well as in almost all the Co-operative Societies Act similar provision is to be found. Co-operative Education Fund has now become an integral part of co-operative movement. ( 11 ) ACCORDINGLY, these Writ Appeals are allowed and the order of the learned single Judge Is set aside to the extent indicated above. We make no order as to costs. Appeals allowed.