ORDER
K. Bhaskaran, J.
1. The petitioners are stated to be dealers in textile goods within the limits of the Sherthallai Municipality, the respondent in the writ petition.
2. In terms of the bye-laws of the respondent Municipality published on 22-2-1966 traders are required to take out
licence for “storing of textiles”, the licence fee prescribed being Rs. 100/- for storing goods beyond the value of Rupees 1,00,000/-.
3. The question whether the collection of licence fee from dealers in textile goods was supported by quid pro quo in the shape of conferment of a special benefit on the class of licensees to which they belonged had come up for consideration before this Court in O. P. No. 2823 of 1972 filed by two dealers carrying on their business within the respondent Municipality. The Division Bench, before which it came up for bearing, in its judgment dated 6-3-1975 (reported in 1976 Ker LT 199 : (1976 Tax LR 1698)) held as follows (at p. 1701 of Tax LR) :–
“We are unable to hold that the municipality has made out a case for the levy of licence fee. We, therefore, hold that the licence fee is not supported by quid pro quo. There should be no difficulty to issue a direction prohibiting the Municipality from collecting the licence fee as prayed for by the petitioner. We direct that such an order will issue.”
4. According to the petitioners, subsequent to the decision referred to above, without bringing about any change of the bye-laws and without rendering any special service, the respondent Municipality had been demanding licence fee from all dealers in textile goods within its jurisdiction, except from the two who had filed the writ petition referred to above, Ext. P-1 is the copy of the objections to the demand of licence fee submitted by one Sri Damodara Pai, Piece Goods Merchant, on 26-8-1978; Ext. P-2 is the copy of the reply sent by the respondent Municipality to the Secretary, Merchants Association, Sherthallai, with a copy marked to the said Sri Damodara Pai who had submitted Ext. P-1 objections; in Ext. P-2 the stand taken by the respondent Municipality was that the decision of the Division Bench referred to above was not a bar to the levy of licence fee inasmuch as the Municipal Council had provided special service in relation to the activities of the licenced traders including the dealers in textile goods; the petitioner, not being satisfied with Ext. P-2 reply, prays for a declaration that the the bye-laws of the respondent Municipality empowering it to collect licence fee for storing textile goods is ultra vires and void; and for the issue of a Writ of prohibition restraining the respondent Municipality from collecting the licence fee from them.
5. The respondent Municipality in its counter affidavit contended inter alia that it had by its resolution dt. 8-9-1978 introduced a special service within the Municipal area for the removal of rubbish and waste connected with the trades from each licenced premises including those of the textile dealers; provision had also been made for checking the hygienic condition of the premises and the health condtion of the workers employed in the premises periodically for which purposes the general services rendered by the Municipality were not found effective; in pursuance of this resolution three field staff were newly appointed for the above works in addition to another worker for disinfection work in every licenced premises; under this service rubbish, sweepings and waste which were usually accumulated by the licenced traders, were required to be deposited in baskets placed inside their shops for being removed daily in hand-carts by the special workers allotted for that purpose; provision had also been made to depute one Health Assistant exclusively for the purpose of supervising their work and also for checking the health conditions of the workers employed by the traders; one clerk and one peon are exclusively posted for attending to the above matters; and the expenditure for the special service rendered exclusively for the licenced traders came to Rs. 33,792/- per annum, besides the incidental expenses, as against an estimated income of Rs. 25,000/- by way of licence fee. Ext. R-1 is stated to be the extract from muster roll showing the workers employed for the special service to the D & O licencees. Ext. R-1 (a) is the extract of payment to the workers employed on special service to the licensees; Ext R-2 is the copy of resolution No. 13 passed by the Municipal Council on 8-9-1978 for doing special service to the licensees; Ext. R-3 is the copy of the proceedings of the Commissioner implementing Ext. R-2 resolution; and Ext. R-4 is the copy of the public notice issued by the Municipality calling upon the licensees to keep the waste and rubbish, including paper bits, collected in their premises without throwing them on the road or in the drains, as arrangements had been made for their removal by the Municipal workers specially employed for that purpose.
6. Sri P. C. Chacko, the counsel for the petitioners, submitted that the levy of licence fee has no basis whatsoever
either in law or on facts. He also contended that the levy could not be justified in the light of the decisions of this Court in Vijayamohini Mills v. Trivandrum Corporation (AIR 1971 Ker 7 (FB)); Jeevaraj v. Commr., Badagara Municipality (1973 Ker LT 845); and P. Kesavan v. Commr., Cochin Corporation (1974 Ker LJ 190). Elaborating his arguments, he stated that the levy of a fee could be justified only if it was for the special benefits of the payer of the licence fee, and that it was the duty of the Municipality to establish that what were purported to be special services were really those other than what it was bound to perform statutorily.
7. Sri M. A. Manhu, the counsel for the respondent Municipality, on the other hand sought to sustain the levy, putting forward the plea that the facts of the decisions cited could be clearly distinguished, and the respondent Municipality was in a position to establish that the levy of the fee was for defraying the expenses incidental to the special services rendered to the licensees; distinct from the general services rendered to the people in the Municipality. He also submitted that the decision of the Supreme Court in Commr., Religious Endowments v. U. K. Rao ((1970) 2 SCR 917) : (AIR 1970 SC 1114) would support the case of the respondent Municipality that licence fee, though levied for rendering services of a particular type, need not be correlated to the services performed for each individual who is entitled to obtain the benefits of the services.
8. It is well settled by a catena of decisions that a licence fee could be levied only if it could be justified by quid pro quo and that the services rendered or expected to be rendered statutorily could not be treated as special services warranting the levy of licence fee. In this case the plea of the respondent Municipality is that three members of the staff were employed for outdoor work for the purpose of removing rubbish and waste collected in the licenced premises; one clerk and one peon were employed exclusively to attend to the work relating to the licenced traders and premises; one Health Assistant was assigned the task of checking the health conditions of the employees at the licenced premises and hygienic conditions of those premises. It is also the contention that separate accounts were being maintained with respect to the licence fee collected and the expenses Incurred exclusively for the licenced premises and the employees working therein, and that as a matter of fact the income from licence fee fell short of the actual expenses incidental to the special services rendered. The Supreme Court in Liberty Cinema’s case, (AIR 1965 SC 1107) has given the guideline to ascertain whether a particular levy of fee could be justified or not. The basic requirement to sustain the levy of fee is that it should be for the special benefit of the payer of the licence fee.
9. Section 183 Kerala Municipalities Act, 1960 (Act 14 of 1961) provides:
“183. Every municipal council shall make adequate arrangements for –
(a) & (b) ……..
(c) the daily removal of rubbish from dustbins and private premises; and with this object, it shall provide –
(i) depots for the deposit of filth, rubbish and the carcasses of animals;
(ii) covered vehicles or vessels for the removal of fifth;
(iii) vehicles or other suitable means for the removal of the carcasses of large animals and rubbish; and
(iv) dust-bins for the temporary deposit of rubbish.”
Section 189 of the said Act lays down:
“No person shall put or cause to be put any rubbish or filth into any public drain not intended for rubbish or filth or into any drain communicating with any such public drain.”
Sections 328 to 343 of the Municipalities Act provide for the steps to be taken by the Municipality for the prevention of diseases. In the light of the statutory obligations cast on the Municipality the steps taken by the Municipality for the rendition of what are called special services in the instant case, could not be characterised as services exclusively done for the benefit of those from whom the licence fee is sought to be recovered. It the statute enjoins the Municipality to render a particular service, merely for the reason that an individual or a particular class of individuals enjoyed the benefit of such service, denied or not extended to people in general in the Municipal area, licence fee could not be levied on those who enjoyed the benefit of such service, the reason being that, for performing the statutory duties the Municipality could not levy a fee in the guise of doing a special service. Judged in the light of the above broad principles, the fact that rubbish and waste are being removed from the licenced premises by the Municipal workers or that the Health Assistant used to visit the permises to check the hygienic conditions prevailing there or the health conditions of the employees attending to work, cannot be considered to be special service rendered by the Municipality to justify the levy of licence fee. The further facts that separate accounts are being maintained and that the fee collected is not sufficient to defray the expenses incurred for carrying out the service are not strictly relevant for deciding the basic issue whether the levy could be sustain-ed or not so long as the Municipality fails to establish that the service render-ed is not in fulfilment of its statutory duty, but is special service rendered to the licensee concerned, apart and distinct from the general service rendered to the people generally,
The irresistible conclusion, therefore, is that the levy of licence fee could not be sustained in this case as it is not supported by quid pro quo; accordingly, it is declared so; and the respondent Municipality is restrained from collecting licence fee from the petitioners. The writ petition is allowed as above. In the circumstances of the case there will, however, be no order as to costs.