JUDGMENT Honble Mrs. Jayashree Tiwari, J.—The present writ petition has been filed by the petitioner Oriental Insurance Company Ltd, Jhinghara Road, Shambi through its Assistant Manager, Legal Cell, 16-A Mahatma Gandhi Marg, Civil Lines, Allahabad for the issuance of writ of certiorari quashing the Government Order dated 9.6.1997 and notice dated 31.1.2001 and also for directing by way of mandamus not to impose the licence fee. 2. The brief facts of the case are that the petitioner is a Government of India undertaking and nationalised insurance company created under an Act of the Parliament. Under the (General Insurance business Nationalisation) Act, 1992, the apex body General Insurance Corporation has been established under section 9 and it formed it’s four subsidiary companies one of which is the petitioner. Having its branch in the limit of Nagar Palika Parishad, Shamli, District Muzaffarnagar, the aforesaid business of insurance is exclusively in the Union List at entry No. 47 and can be governed and controlled by the Central Government and the Parliament is only competent to make laws for the same. The insurance companies does not carry on any trade or business for any personal gain but are Government of India establishments and their funds are Government of India funds. 3. The respondent No. 1 Nagar Palika Parishad, Shamli, in the exercise of its power under Section 298 of U.P. Nagar Palika Act, 1916 framed certain bye-laws which were published in the light of the direction of State of U.P. contained in its G.O. dated 9.6.1997, which is annexed as annexure 1 to the writ petition. In accordance with law those bye-laws respondents has imposed for first time licence fee of Rs. 12,000/- for the year 1999-2000 and Rs. 12,000/- for the year 2000-2001 on insurance company under cause 26 of the Government Order. In pursuance of aforesaid G.O. the respondent No. 1 has send notice dated 31.1.2001 to the petitioner’s company. The true copy of said notice dated 31.1.2001 has been annexed herewith as annexure 2 to the writ petition. The petitioner submits that nowhere in the Act nor in Section 298 any power is given to the respondents to impose any licence fee on the insurance business. The Act does not provide for any power to impose license fee on the insurance company. The petitioner submits that nowhere in the Act nor in Section 298 any power is given to the respondents to impose any licence fee on the insurance business. The Act does not provide for any power to impose license fee on the insurance company. The respondents do not provide any kind of service to the branches of the petitioner company and hence no regulation is required for it’s branches by the Nagar Palika Parishad and as such no licence fee can be imposed under any circumstances apart from the fact that the Insurance companies are created under the Central Act in exercise of the power by the Parliament and the Central Government in Entry 47 of List 1 of Schedule 7 can alone impose any such tax of license fee. The banking business and Life insurance business is also under the Union List and they tender similar nature of service to the public like that of the insurance companies but no fee has been imposed on the banking companies operating in public sector or private sector. Under Section 541 of the Nagar Palika Act, provides for the purposes for which bye-laws can be framed. But the insurance business does not find place in that nor particularly in sub-sections (26), (36), (41) and (43) of Section 541. The license fee of Rs. 12,000/- yearly for two years Rs. 24,000/- is highly arbitrary, exorbitant for no services being rendered by the respondent and there is no element of quid pro quo in the same. 4. No counter affidavit has been filed on behalf of the respondents. 5. We have heard the learned counsels for the petitioner and the respondents. 6. During the course of the arguments, the learned counsel for the petitioner contended that it is only the Parliament which alone can enact or may be bye-laws in the matter as it relates to Union List. 7. In this connection, it will be appropriate to go though the decision of Division Bench of this Court in C.M.W.P. No. 14037 of 1999 reported in 2003 (52) ALR 281 wherein he was held that licence fee imposed in the matter is a regulatory fee and hence no interference is called for. The writ petition is dismissed. 8. 7. In this connection, it will be appropriate to go though the decision of Division Bench of this Court in C.M.W.P. No. 14037 of 1999 reported in 2003 (52) ALR 281 wherein he was held that licence fee imposed in the matter is a regulatory fee and hence no interference is called for. The writ petition is dismissed. 8. Yet another ruling in Chakresh Kumar Jain v. State of U.P., 2001(45) ALR 267, it was upheld the bye-laws in regulating and requiring licence fee from Nagar Palika Parishad from Nursing Home, private clinic etc was not beyond the power and was legal. They were legally authorised to impose such licence fees.. 9. In yet another Division Bench judgement in Doctors’ Jan Kalyan Society v. State of U.P., 1996 ACJ 1016, the validity of the bye-laws imposing of licence fee in regulating the business etc. was upheld. 10. In the above referred judgements it was urged by the learned counsel for the petitioner that since the business of insurance company is within the Union List Constitution of India vide Entry 43 of List I of Schedule 7, whereas power of licensing is given to the State under Entry 66 of the State List and it cannot be taxed or regulated by the State Government or under any State Act. The Division Bench held that we do not agree as in the case of M/s Naveen Gun House v. State of U.P., 2002(2) AWC 894,the question was whether stamp duty can e demanded for issuing arms licence. It was urged in that case that the Arms Act come under the Union List Entry V and hence no stamp duty can be levied by the State Legislature for issuing licence for arms. This submission was repealed by the Division Bench of this Court which relied upon the doctrine of ‘pith and substance’ and held that since stamp duty is leviable under Entry 44 of List III hence it was validly levied by the Sate. On the same reasoning we are of the opinion that the State Legislature can authorise levying of licence fee on insurance companies. 11. It is contended on behalf of the petitioner that no kind of service is rendered to the insurance companies. Hence there is no quid pro quo for imposing the fees. On the same reasoning we are of the opinion that the State Legislature can authorise levying of licence fee on insurance companies. 11. It is contended on behalf of the petitioner that no kind of service is rendered to the insurance companies. Hence there is no quid pro quo for imposing the fees. In this connection, the Division Bench has held in para 10, in our opinion, it is not necessary to go into the question because as held in Chakresh Kumar Jain’s case (supra). There is a difference between compensatory fee and regulatory fee. For regulatory fee quid pro quo is not necessary. It was observed that as held by Supreme Court in P. Kannadasan v. State of Tamil Nadu and others, reported in 1996 (5) SCC vide para 36 wherein it was held : “Even in the matter of fees, it is not necessary that the element of quid pro quo should be both regulatory and compensatory and that in the case of regulatory fees, the element of quid pro quo is totally irrelevant.” 12. Similarly, it was held by the Supreme Court in State of Tripura v. Sudhir Ranjan, 1997 (3) SCC 665 , that for regulatory fee quid pro quo is not necessary. The same view was also followed by the Supreme Court in Secunderabad Hyderabad Hotel Owners’ Association and other v. Hyderabad Municipal Corporation, Hyderabad and another, 1999 (2) SCC 274 , wherein it was held : “It is be now, well settled that a licence fee may be either regulatory or compensatory. When a fee is charged for rendering specific services, a certain element of quid pro quo must be there between the service 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 fees can also be regulatory when the activities for which a licence is given require regulating or controlling. 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 required although such fees cannot be excessive.” 13. In this light of these observations, a perusal of the notification shows that regulations have been made for insurance companies in category ‘Ga’. 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 required although such fees cannot be excessive.” 13. In this light of these observations, a perusal of the notification shows that regulations have been made for insurance companies in category ‘Ga’. Hence, the fee imposed is a regulatory fee. 14. Thus on the basis of the aforesaid observations and reported case laws, we are of the opinion that the bye-laws by the Nagar Palika Parishad Shamli for imposing of license fee on the insurance business is well within their power as discussed above and it is regulatory licence fee in its nature and thus the contention of learned counsel for the petitioner that the State is incompetent to impose the licence fee by such bye-laws and to issue notice in pursuance of thereof appears to have no force in itself. 15. The writ petition is, therefore, dismissed as such. ————