LexSONA CHANDI OAL COMMITTEE AND ORS. versus STATE OF MAHARASHTRA
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SONA CHANbI OAL COMMITTEE AND ORS. v. STATE OF MAHARASHTRA DECEMBER 16, 2004 [ASHOK BHAN AND A.K. MATHUR, JJ.] Bombay Money-Lenders Act, 1946-Section 9-A-Bombay Money- lenders Rules, 1959-Renewal of money lender's licence-Levy of inspec- tion fee-Nature of, fee or tax in the guise of fee-Held : Levy of inspection A B fee for renewal of licence depends upon inspection of books of accounts C of money lenders-Inspection of records, by itself, is direct service rendered . by the State to money lenders-Furthermore, fee charged is regulatory in nature to control and supervise the functioning of money lending business to protect debtors-Thus, fee imposed in nature of fees-Also, inspection fee and licence fee obtained under the Act is not sufficient to meet the D expenses incurred on staff performing duties under the Act, thus, fee imposed is neither arbitrary nor excessive so as to lose the character of fee- Constitution of India, 1950-Article 14. The question which arose for consideration in these appeals was whether the imposition of inspection fee for the renewal of money E lenders licence under the amended provisions of Section 9-A of the Bombay Money Lenders Act, 1946 is a tax in the guise of fee and whether it is so excessive or unreasonable as to lose the character of fee. Appellant-licensed money lenders contended that quid pro quo is F a must in the case of fee and in the absence of the same, the levy would be deemed to be a tax; that in the instant case there is no quid pro quo and no benefit is being rendered to the person paying the fee and as such the levy imposed is in the nature of tax though described as fee; that the fees have to be unif'orm; and that the fee could not be imposed on the basis of the annual turnover of the money lenders as it would amount G to a tax on turnover. Dismissing the appeal, the Court HELD: 1.1. Under section 9-A of the Bombay Money-Lenders Act, H 971 972 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R. A 1946 inspection fee is levied for renewal of licence. Section 2(5-A) of the Act defines 'inspection fee' as fee leviable under Section 9A in respect of inspection of books of accounts of a money-lender. For grart,ting renewal of licence it is necessary and must th~t the records maintained by the money lenders should be thoroughly examined in B order to satisfy whether all the registers are maintained property in accordance with the provisions of the Act and Ru:les and:it is only after satisfying that no irregularities are committed, the money lender be- comes entitled to get the renewal of his licence. Renewal of licence is not automatic and can be refused on the grounds specified in Section 8. Rule 11 of the Bombay Money-Lenders Rules, 1959 provides that on receipt of C any application for renewal of a licence, Assistant Registrar would call upon the applicant to produce his accounts for inspection and then assess the inspection fee payable under Section 9A in respect of inspection of books ofaccounts and call upon the applicant to pay the inspection fee in the manner prescribed in Rule 10. Under Section 18 of the Act read with D Rules 16 and 17 of the Rules, every money lender is required to keep and maintain a cash book and a ledger in such form and in such manner as may be prescribed. Thus, the inspection of records, by itself, provides for service rendered by the State to the money lenders which is done in connection with their request to renew the licence. This is the direct service rendered to the money lenders as the renewal of licence depends E upon the inspection of their accounts which is required to be carried out under the Act. [983-G-H; 985-A; 984-A-B] B.S.E. Brokers' Forum, Bombay and Other v. Securities and Exchange Board of India and Others, (2001) 3 SCC 482; Corporation of Calcutta and F Anr. v. Liberty Cinema, [1965) 2 SCR 477; The Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, [1954] SCR 1005; Chief Commissioner, Delhi v. Delhi Cloth ~ G & General Mills Co. Ltd., [1978) 2 SCC 367; Om Parkash Agarwal v. Giri Raj Kishori, [1986) 1 SCC 722 and Commissioner of Central Excise, Lucknow, U.P. v. Chhata Sugar Co. Ltd., [2004) 3 SCC 466, referred to. 1.2. The object of the 1946 Act is to serve a larger public interest. It is to control the money lending business and protect the debtors from . the malpractices in the business by detecting illegal mone
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