JUDGMENT : By way of present writ petition, under Articles 226/227 of the Constitution of India, the petitioners, few shop keepers of the shops situated at O.F.B Market Complex, Itarsi calls in question the imposition of trading right fee along with the licence fee, electricity charges and the conservancy dues. 2. It is urged that compulsory exaction by way of trading right fee is without any basis or sanction of law and the imposition is beyond the powers of the respondents as there is no quid pro quo. 3. Admittedly, the petitioners are lessee of shops situated at Market Complex Area, Ordnance Factory, Itarsi, leased out in accordance with the policy guidelines for lease of defence lands for Ordnance Factory Estates, circulated vide Ministry of Defence letter No. 4 (3)/87/I/D (Fy.II) dated 10-8-1990, on the lease rent and other charges such as electricity and conservancy and the "trading right fee". 4. This trading right fee, pertinent to note, has been in vogue and was imposed right from initial induction of the petitioners as the lessee. However, with the increase in rate thereof with the renewal of lease, the grievance as now being put-forth by the petitioners is against its imposition. 5. It is urged on behalf of the petitioners that trading right fee has been imposed at the instance of the General Manager, Ordnance Factory, Itarsi, who is merely a delegatee of Ordnance Factory Board and is not vested with the powers to impose trading right fee. It is contended that licence fee is determined as per the policy guideline dated 10-8-1990 and the said guideline, it is urged, nowhere provides for trading right fee. It is accordingly contended that the imposition of the fee being beyond the powers of the General Manager, Ordnance Factory, Itarsi, deserves to be quashed. It is further submitted that the respondents be directed to extend/execute, the lease without imposing the condition of trading right fee. 6. The respondents on their turn while denying the contentions that the trading right fee is compulsory exaction of money, has to submit inter alia, that the trading right fee is in the nature of the occupational charge because the petitioners though lessees have been granted the permission to carry out trade and business within the periphery of the ordnance factory, Itarsi, which otherwise is prohibited. It is further contended that there being delegation of full powers to the General Manager by the Ordnance Factory Board, it is within the power of the authorities concerned, i.e., the General Manager, to impose a fee in the nature of trading right fee from the traders/shopkeepers who are allowed to carry on trade within the Estate. It is further contended that being a matter pertaining to lease, the petitioners who are lessees having entered with the agreement cannot question the same, merely because the rates are getting onerous. It is contended that the petitioners cannot as a matter of right dictate terms and if they are not agreeable to the terms and conditions of lease, are at liberty to opt out. It is accordingly urged that the petition being devoid of substance deserves to be dismissed. Be it noted that few of the grounds have been urged at the time of hearing. 7. Before dwelling upon the rival contentions worth it would be to note some relevant decisions touching the aspect of 'fee', which generally is defined to be a charge for special service rendered to individuals by some governmental agency. 8. In the Commissioner, Hindu Religious Endowments, Madras vs. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, AIR 1954 SC 282 , it was observed by their Lordships "44. Coming now to fees, a fee is generally defined to be a charge for a special service rendered to individuals by some governmental agency. The amount of fee levied is supposed to be based on the expenses incurred by the Government in rendering the service, though in many cases the costs are arbitrarily assessed. Ordinarily, the fees are uniform and no account is taken of the varying abilities of different recipients to pay. vide Luts on "Public Finance" p. 215 these are undoubtedly some of the general characteristics but as there may be various kinds of fees, it is not possible to formulate a definition that would be applicable to all cases. 45. Ordinarily, the fees are uniform and no account is taken of the varying abilities of different recipients to pay. vide Luts on "Public Finance" p. 215 these are undoubtedly some of the general characteristics but as there may be various kinds of fees, it is not possible to formulate a definition that would be applicable to all cases. 45. As regards the distinction between a tax and a fee, it is argued in the first place on behalf of the respondent that a fee is something voluntary which a person has got to pay if he wants certain services from the Government; but there is no obligation on his part to seek such services and if he does not want the services, he can avoid the obligation. I The example given is of a licence fee. If a man wants a licence that is [ entirely his own choice and then only he has to pay the fees but not I otherwise. We think that a careful examination will reveal that the element of compulsion or coerciveness is present in all kinds of imposition, though in different degrees and that it is not totally absent in I fees. This therefore, cannot be made the sole or even a material criterion for distinguishing a tax from fees. It is difficult, we think to conceive of a tax except, it be something like a poll tax, the incidence of which falls on all persons within a State. The house tax has to be paid only by those who own houses, the land tax, by those who possess lands, municipal taxes or rates will fall on those who have properties within a municipality. Persons, who do not haw houses, lands or properties within municipalities, would not have to pay these taxes, but nevertheless these impositions come within the category of taxes and nobody can say that it is a choice of these people to own lands or houses or specified kinds or properties, so that there is not compulsion on them to pay taxes at all. Compulsion lies in the fact that payment is enforceable by law against a man in spite of his unwillingness or want of consent; and that element is present in taxes as well as in fees. Compulsion lies in the fact that payment is enforceable by law against a man in spite of his unwillingness or want of consent; and that element is present in taxes as well as in fees. Of course, in some cases whether a man would come within the category of a service receiver may be a matter of his choice but that by itself would not constitute a major test which can be taken as the criterion of this species of imposition. The distinction between a tax and a fee lies primarily in the fact that a tax is levied as a part of a common burden, while a fee is a payment for a special benefit or privilege. Fees confer a special capacity although the special advantage, as for example in the case of registration fees for documents or marriage licences, is secondary to the primary motive of regulation in the public interest, vide. Finally Shirras on 'Science of Public finance'. Vol. I. Page 202. Public interest seems to be at the basis of all impositions, but in a fee it is some special benefit which the individual receives. As Seligman says, it is thel special benefit accounting to the individual which is the reason for payment in the case of fees; in the case of a tax, the particular advantage if it exists at all is an incidental result of State action, vide Seligman's Essays on Taxation, p. 408. 46. If as we hold, a fee is regarded as a sort of return of consideration for services rendered it is absolutely necessary that the levy of fees should, on the face of the legislative provision, be correlated to the expenses incurred by Government in rendering the services. As indicated in Art. 110 of the Constitution ordinarily there are two classes of case where Government imposes 'fees' upon persons. In the first class of cases, Government simply grants a permission or privilege to a person to do something, which otherwise that person would not be competent to do and extracts fees either heavy or moderate from that person in return for the privilege that is conferred. A most common illustration of this type of cases is furnished by the licence fees for motor vehicles. A most common illustration of this type of cases is furnished by the licence fees for motor vehicles. Here the costs incurred by the Government in maintaining an office or bureau for the granting of licences may be very small and the amount of imposition that is levied is based really not upon the costs incurred by the Government but upon the benefit that the individual receives. In such cases, according to all the writers on public finance, the tax element is predominant, vide Seligman's Essays on Taxation page 409 and if the money paid by licence holders goes for the upkeep of roads and other matters of general public utility, the licence fee cannot but be regarded as a tax." 9. In Dhenkanal Municipal Council and another vs. A. Raja Rao and others, AIR 1994 SC 1648 their Lordships were pleased observe: "6. It is not necessary for us to go into the question as to whether the levy under section 295(2) of the Act is a "fee" or "tax". Assuming the levy to be 'fee' we are of the view that the High Court fell into patent error in reaching the finding that no services were being rendered for the benefit of the traders in the market area of "Darbar Hat". We are at a loss to understand how the laying of roads, levelling of ground, constructing boundary wall and providing electricity etc, are not services rendered for the benefit of the traders. 7. This Court in Municipal Corporation of Delhi vs. Mohd. Yasin, (1983)2 SCR 999 ( AIR 1983 SC 617 ) referred to the earlier judgments of this Court in Commr. for H.R. and C. E. Madras vs. Shri Lakshmindra Thirtha Swamiyar, 1954 SCR 1005 : ( AIR 1954 SC 282 ); H. H. Sudhindra vs. Commr. for Hindu Religious and Charitable Endowments, (1963) Supp 2 SCR 302: ( AIR 1963 SC 966 ); Hingir-Rampur Coal Co. Ltd. vs. State of Orissa, (1961) 2 SCR 537 : ( AIR 1961 SC 459 ); H. H. Swamiji vs. Commr. Hindu Religious and, Charitable Endowments Dept., (1980)1 SCR 368 : { AIR 1980 SC 1 ); Southern Pharmaceuticals and Chemicals, Trichur vs. State of Kerala, (1982)1 SCR 519 ; ( AIR 1981 SC 1863 ) and held as under (at Pp. 620-21 of AIR); "What do we learn from these precedents? Hindu Religious and, Charitable Endowments Dept., (1980)1 SCR 368 : { AIR 1980 SC 1 ); Southern Pharmaceuticals and Chemicals, Trichur vs. State of Kerala, (1982)1 SCR 519 ; ( AIR 1981 SC 1863 ) and held as under (at Pp. 620-21 of AIR); "What do we learn from these precedents? We learn that there is no generic difference between a tax and a fee, though broadly a tax is a 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. 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 advantages conferred, such relation need not be direct: a mere causal 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 fees 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." 10. In State of Tripura and others vs. Sudhir Ranjan Nath, AIR 1997 SC 1168 , their Lordships while observing that every fee must not satisfy the test of quid pro quo for a licence fee may be regulatory in nature; were pleased to hold: "14. We next take up the validity of the levy of application fee and licence fee of Rupees one thousand and Rupees two thousand respectively. We next take up the validity of the levy of application fee and licence fee of Rupees one thousand and Rupees two thousand respectively. In our opinion, the High Court was not right in holding that the said fee amounts to tax on the ground that it has not been proved to be compensatory in nature. In our opinion, the fee imposed by sub-rules (3) and (4) is a fee within the meaning of clause (c) of sub-section (2)of section 41. It is regulatory fee and not compensatory fee. The distinction between compensatory fee and regulatory fee is well established by several decisions of this Court. Reference may be made to the decision of the Constitution Bench in Corporation of Calcutta vs. Liberty Cinema, (1965) 2 SCR 477 : ( AIR 1965 SC 1107 ). It has been held in the said decision that the expression "licence fee" does not necessarily mean a tee in lieu of service and that in the case of regulatory fees, no quid pro quo need be established. The following observations may usefully be quoted (at p. 1113 of AIR): "This contention is not really open to the respondent for section 548 does not use the word 'fee'; it uses the words 'licence fee' and those words do not necessarily mean a fee in return for services. In fact in our Constitution fee for licence and fee for services rendered are contemplated as different kinds of levy. The former is not intended to be a fee for services rendered. This is apparent from a consideration of Art. 110(2) and Art. 119(2) where both the expressions are used indicating thereby that they are not the same. In Shannon vs. Lower Mainland Dairy Products Board, 1938 AC 708: AIR 1939 PC 36 , it was observed at Pp. 721 -722 of (AC): (at pp. This is apparent from a consideration of Art. 110(2) and Art. 119(2) where both the expressions are used indicating thereby that they are not the same. In Shannon vs. Lower Mainland Dairy Products Board, 1938 AC 708: AIR 1939 PC 36 , it was observed at Pp. 721 -722 of (AC): (at pp. 38-39 of AIR): "If licences are granted, it appears to be no objection that fees should be charged in order either to defray the costs of administering the local regulation or to increase the general funds of the Province or for both purposes......It cannot, as their Lordships think, be an objection to a licence plus a fee that it is directed both to the regulation of trade and to the provision of revenue.' It would, therefore, appear that a provision for the imposition of a licence fee does not necessarily lead to the conclusion that the fee must be only for services rendered. 15. This decision has been followed in several decisions, including the recent decision of this Court in Vam Organic Chemical Industries vs. Collector of Central Excise, Bombay (1997) 1 JT (SC) 625 (641) and Bihar Distillery vs. Union of India, (1997) 2 JT (SC) 20. The High Court was, therefore, not right in proceeding on the assumption that every fee must necessarily satisfy the test of quid pro quo and in declaring the fees levied by sub-rules (3) and (4) of Rule 3 as bad on that basis. Since we hold that the fees levied by the said sub-rules is regulatory in nature, the said levy must be held to be valid and competent, being fully warranted by section 41. 11. In Mumbai Agricultural Produce Market Committee and another vs. Hindustan Lever Limited and others, (2008) 5 SCC 575 , "18. Cost of supervision, if borne by the State has to be recovered by it. The burden was, therefore, on the State to justify the levy. Even the general or special order, if any, purported to have been issued by the State has not been brought on record. On what basis, the supervision charges were being calculated is not known. The premise for levy or recovery of the amount of supervisory charges is not founded on any factual matrix. Only the source of the power has been stated but the basis for exercise of the power has not been disclosed." 12. On what basis, the supervision charges were being calculated is not known. The premise for levy or recovery of the amount of supervisory charges is not founded on any factual matrix. Only the source of the power has been stated but the basis for exercise of the power has not been disclosed." 12. It is pertinent to note that in the present case no material is brought on record to show as to what facilities are being provided by the respondents or any special service rendered to the individuals in lieu of their occupation of respective shops taken by them on lease as for which the expenses are required to be meted out by levying trading right fee. It is not disputed that after leasing out the shops the respondents besides lease rent are recovering the electricity charges and the conservancy charges; whereas, no trades of activities as would justify the charge of trading right fee has been shown to be undertaken by the respondents. 13. For a justification for imposition of the trading right fee, it is essential to have some correlation qua the services rendered. In the case at hand no material is brought on record to establish such correlation. In Keval Krishna Puri vs. State of Punjab, AIR 1980 SC 1 008 it was observed their Lordships were pleased to observe:- "21. Observations of one of us (Chandrachud J., as he then was), speaking for the Court in the case of Government of Andhra Pradesh vs. Hindustan Machine Tools Ltd., (1975) Supp SCR 394, at page 401, are quite apposite and may be user fully quoted here:- "One cannot take into account the sum total of the activities of a public body like a Gram Panchayat to seek justification for the fees imposed by it. The expenses incurred by a Gram Panchayat or a Municipality in discharging its obligatory functions are usually met by the imposition of a variety of taxes. For justifying the imposition of fees the public authority has to show what services are rendered to intended to be rendered individually to the particular person on whom the fee is imposed. The Gram Panchayat here has not even prepared an estimate of what the intended services would cost it." The levy of house-tax was held to be lawful but the levy of Permission Fee had to be struck down as being illegal. The Gram Panchayat here has not even prepared an estimate of what the intended services would cost it." The levy of house-tax was held to be lawful but the levy of Permission Fee had to be struck down as being illegal. In the instant case also it would be noticed that the Market Committees and the Market Boards assumed to themselves the liberty of utilizing and spending the realizations from market fees to a considerable extent, as if it was a tax, although in reality it was not so. In Municipal Council Madurai vs. R. Narayanan, (1976) 1 SCR 333 , endeavour was made as in the case of Nagar Mahapalika, Varanasi (supra) to justify the impost by the Municipal Council as a tax. Krishna Iyer, J., speaking for the Court repelled that argument and since the impost could not be justified as fee the resolution of the Municipal Council was held to be invalid. In The Chief Commr., Delhi vs. Delhi Cloth and General Mills Co. Ltd., AIR 1978 SC 1181 , the question for consideration was whether the registration fee charged on the document satisfied the two conditions of fee which were enumerated in the following language:- "(i) there must be an element of quid pro quo that is to say, the authority levying the fee must render some service for the fee levied however remote the service may be; (ii) that the fee realized must be spent for the purposes of the imposition and should not form part of the general revenues of the State." The second condition was found not to be fulfilled and hence the impost was held to be bad. We would like to point out that the first condition is rather couched in too broad and general a language. Rendering some service, however remote the service may be cannot strictly speaking satisfy the element of quid pro quo required to be established in cases of the impost of fee. But then, as pointed out, in some of the cases noticed earlier the registration fee has been taken to stand on a different footing altogether. In the case of such a fee the test of quid pro quo is not to be satisfied with such direct, close or proximate correlationship as in the case of many other kinds of fees. But then, as pointed out, in some of the cases noticed earlier the registration fee has been taken to stand on a different footing altogether. In the case of such a fee the test of quid pro quo is not to be satisfied with such direct, close or proximate correlationship as in the case of many other kinds of fees. By and large registration fee is charged as a regulatory measure." In view whereof the levy of trading right fee by the respondent qua the shopkeepers having lease-hold right to carry on their trade and business is not sustainable and deserves to be and is hereby quashed. 14. The levy of trading right fee is not sustainable for another reason also. As evident from the policy in vogue, the General Manager has been delegated with full powers which are vested in O.F.B for sanctioning the regularization, licensing and subsequent averments of the licence/leases in conformity with the guidelines. And that the General Manager shall exercise his delegated power with the concurrence of the Finance/Accounts Officer nominated by three member (Finance). 15. Thus, the authority delegated with full powers has to act within the four corners of the powers delegated. And unless it is shown that the Ordnance Factory Board under the policy guidelines has the power to impose the fee such as "trading right fee," the General Manager who is merely a repository of Ordnance Factory Board has no power to impose the trading right fee. No material is also on record to justify that the policy guidelines empowers the OFB and its delegates to levy the fee, i.e., trade right fee on the lessees. In this context following observation can be noted with profit: "7. After giving our anxious consideration to the contentions raised by Mr. Goswami, it appears to us that in a fiscal matter it will not be proper to hold that even in the absence of express provision, a delegated authority can impose tax or fee. In our view, such power of imposition of tax and/or fee by delegated authority must be very specific and there is no scope of implied authority for imposition of such tax or fee. In our view, such power of imposition of tax and/or fee by delegated authority must be very specific and there is no scope of implied authority for imposition of such tax or fee. It appears to us that the delegated authority must act strictly within the parameters of the authority delegated to it under the Act and it will not be proper to bring the theory of implied intent or the concept of incidental and ancillary power in the matter of exercise of fiscal power. The facts and circumstances in the case of District Council of Jowai, AIR 1986 SC 1930 are entirely different. The exercise of powers by the Autonomous Jantia Hills Districts are controlled by the constitutional provisions and in the special facts of the case, this Court has indicated that the realization of just fee for a specific purpose by the autonomous District was justified and such power was implied. The said decision cannot be made applicable to the facts of this case or the same should not be held to have laid down any legal proposition that in matters of imposition of tax or fees, the' question of necessary intendment may be looked into when there is no express provision for imposition of fee or tax. The other decision in Khargram Panchayat Samiti's case. 1987 (3) SCC 82 also deals with the exercise of incidental and consequential power in the field of administrative law and the same does not deal with the power of imposing tax and fee." (Ahmedabud Urban Development Authority vs. Sharadkumar Jayantikumar Pasawalla and others, (1992) 3 SCC 285 ) 16. In view of above analysis, the levy of trading right fee by the respondent is hereby quashed. The respondents shall now without insisting upon the trading right fee may renew/execute a fresh lease in accordance with law. 17. Though the levy of trading right fee has been quashed, but the same will not entitle the petitioner for refund/adjustment of the amount deposited towards trading right fee during currency of previous lease period. 18. In result, the petition is allowed to the extent above. No costs. Petition allowed.