CHIEF COMMISSIONER, DELHI & ANR. versus DELHI CLOTH AND GENERAL MILLS CO. LTD. & ORS.

Citation: [1978] 3 S.C.R. 657 · Decided: 07-04-1978 · Supreme Court of India · Bench: S. MURTAZA FAZAL ALI · Disposal: Dismissed

Cited by 1 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

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657 
CHIEF COMMISSIONER, DELHI & ANR. 
v 
DELHI CLOTH AND GENERAL MILLS CO. LTD. & ORS. 
April 7, 1978 
[S. MURTAZA FAZAL ALI AND JASWANT SINGH, JJ] 
Fee-Conditions to be satisfied to be a legal fee, within the meaning of the 
Constitution. 
The Respondent Company floated debenture loan of Rs. 2.50 crores and to 
'Secure the repayment of the said loan executed debenture trust deed dated 10th 
April, 1962, mortgaging certain properties of the Company for a considerat~on 
of Rs. 2.50 crores in favour of the trustees \Vho were petitioners before the High 
Court. 
Stan1ps to the extent of Rs. 2,50,00 /- were paid under the Indian 
Stamp Act and apart from that when the document was presented for registra-
tion, a registration fee of Rs. 1,25, 157.50 np. \Vere demanded as registration fee 
by the Sub-Registrar under a notification issued by the appe1lant, 
the 
Chief 
·Com~ssioner of Delhi on 15th December, 1952. 
The registration fee 
was 
paid by the Respondents under compulsion, but the trustees filed a petition in 
the High Court challenging the validity of the notification and the exorbitant 
amount realised as registration fee as illegal levy not fulfi.11ing 
the 
essential 
conditions of a fee within the meaning of the Constitution. The plea of the 
trustees found favour with the High Court v,rhich held that the fee charged by 
the Registration Department under the notification was an illegal impost and 
·could not be levied. The High Court accordingly quashed the notification. 
Dismissing the appeal by certificate, the Court 
HEID : A fee in order to be a legal fee n1ust satisfy two conditions : (a) 
There must be an element of quid pro quo, i.e. the authority levying the fee 
·must render some service for the fee levied however remote the service may 
be; and (b) That the fee realised n1ust be spent for the purpose of the imposi-
tion and should not form part of the general revenues of the State. [658 F-01 
In the instant case, in view of the fact that it was ·not disputed that the fee 
Tealised by the Registration Department under the impugned notification dated 
15-2-1952 was to form part of the general revenues of the State, the second 
<element of a fee was wholly wanting and the High Court was, therefore, right 
in striking down this notification. [658 G-H] 
Mahant Sri Jaga11nath Ran1anuj Das and Anr. v. The State of Orissa and 
Anr. [19541 SCR 1046, Ratilal Panac1wnd Gandhi v. The State of Bombay and 
-Ors. [1954) SCR at p. 1055 and State of Malfarashtra & Ors. v. The Salvation 
Army, Western India Territory [1975] 3 SCR 475 applied. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1959 of 1968. 
From the Judgment and Order dated the 7th May, 1964 of the 
Puniah High Court, Circuit Bench at Delhi, in Civil Writ No. 227-D 
Qf 1962. 
R.P. Bhatt and Girish Chandra for the Appellant. 
Hardayal Hardy, D.R. Thadani and A .N. Goyal for Respondents • 
Sobhagmal Jain for the Intervener (The Slate of Rajasthan). 
0. P. Rana Inc the Intervener (State ,,f U.P.). 
A 
B 
c 
D 
E. 
F 
G 
H 
A 
B 
c 
D 
. E 
F 
G 
H 
658 
SUPREME COURT REPORTS 
(1978] 3 S.C.R. 
The Judgment of the Court was delivered by 
FAZAL ALI, J. 
This appeal by certificate is directed against the 
judgment and order of the Circuit Bench of the Punjab High Court at 
Delhi dated the 7th May, 1964 and arises in the following 
circum-
stances : 
The respondent Company floated debenture loan of Rs. 2.50 crores 
and to secure the repayment of the said loan, executed debenture trust 
deed dated 10th April, 1962 mortgaging certain properties of the Com-
pany for a considera,tion of Rs. 2.50 crores iu favour of the trustees who 
were petitioners before the High Court. 
Further details have been 
given in the judgment of the High Court and it is not necessary to 
repeat them here. It appears that stamps to the extent of Rs. 2,50,300/-
were paid uuder the Indian Stamp Act and apart from that when the 
document was presented for registration, a registration fee of Rs. 1,25, 
157.50 np were demanded as registration fee by the Sub-Registrar under 
a notification issued by the Chief Commissioner of Delhi, which is the 
impugned notification in this case. 
The registration fee was paid by 
the respondents under compulsion but the trustees filed a petition in 
the High Court challenging the, validity of the notification and the exor-
bitant amount realised as registration fee. 
The short point taken before the High Court by the Respondents 
was that the registrat

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