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7. They must comply with the provisions of the Act, the Rules and the bye-laws framed thereunder, and effect all sales of notified agricultural produce, livestock and products of livestock under the supervision and control of the market committee established under the Act.

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Arguments in these proceedings have revolved around certain observations of Untwalia, J. in Kewal Krishan Puri and Anr v. State of Punjab and Ors (1) where he, speaking for the Court, after referring to the judgment of Mukherjea, J. (as he then was) in the leading case of the Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt(2) known as the Shirur Mutt case, and the dictum of Latham, C. J. in Matthews v. Chicory Marketing Board(3) upon which it was based, and the subsequent decisions on the subject, drew a distinction between a tax and a fee. Stress was particularly laid on these observations which, torn out of context, tend to suggest that there must be actual quid pro quo between the prayer and the market committee i.e. there must be actual correlation between the service rendered by a market committee and the prayer of the market fee, and that such service must be In relation to each transaction. Emphasis was placed on the following observations of Untwalia, J. in Kewal Krishan Puri's case, supra:

There was quite some discussion at the Bar as to the binding effect of the aforesaid observations made by this Court in Kewal Krishan Puri's case, supra. With greatest respect, the decision in Kewal Krishan Puri's case does not lay down any legal principle of general applicability. The decision in Kewal Krishan Puri's case is clearly distinguishable on facts. In that case, there was sufficient material showing that the income from the market fee in the State of Punjab had become a source of revenue, and therefore the increase the rate of market fee from Rs. 2 per hundred rupees to Rs. 3 was quashed. It appears that the income of almost all the market committees was to the tune of several lakes of rupees per year and every market committee was required under sub-s. (2) (a) of s. 27 to pay 30 per centum of its income to the Punjab State agricultural Marketing Board as its contribution to the Marketing Development Fund maintained under s. 25 of that Act. Due to the progressive increase in the rate of market fee from 0.50 p. to Rs. 2 per hundred rupees during the course of few years both the State Agricultural Marketing Board as well as the market committees throughout the State were left with huge surplus funds. The State Government in exercise of the powers vested under s. 26 (xvii) and s. 28 (xvii) directed the State Agricultural Marketing Board and the market committees throughout the State to contribute rupees one crore to Guru Gobind Singh Medical College at Faridkot. In the year 1974 under the directions of the State Government, all the market committees were required to deposit the surplus amounts lying with them with the State Agricultural Marketing Board and the Board advanced an interest-free loan of rupees five crores to the Punjab State Co-operative Supplies and Marketing Federation, known as 'Markfed'. Apart from these unauthorized expenditure, the judgment reveals that there were surplus funds to the tune of rupees nine crores with market committees and each of them was required to make huge donations of Rs. 50,000 and above to many educational institutions. Besides, the statement of income and expenditure of the Board for the year 1975-76 showed that a sum of Rs. 1,28,000 was spent on general improvement of the municipal areas and a sum of Rs. 95 lakhs and odd was spent on setting up a gober gas plant. It would appear that the increase in the rate of market fee from Rs. 2 to Rs. 3 in the year 1978 was largely brought about to compensate the market committees for having contributed Rs. One crore to the medical college at Faridkot. The decision really turned on the provisions of cl. (xvii) of ss. 26 and 28 of the Punjab Agricultural Produce Markets Act, 1961 which permits diversion of the monies lying in the Market Committee Fund and the Marketing Development Fund by the market committees and the State Agricultural Marketing Board with the sanction of the Board or the State Government, as the case may be, for any purpose calculated to promote the general interests of the Board or the committees, or the national or public interest. The decision of the Court was rendered by Untwalia, J. in these words:

In the ultimate analysis, the Court held in Kewal Krishan Puri's case, supra, that so long as the concept of fee remains distinct and limited in contrast to tax, such expenditure of the amounts recovered by the levy of a market fee cannot be countenanced in law. A case is an authority only for what it actually decides and not for what may logically follow from it. Every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found that there are not intended to be expositions of the whole law but governed or qualified by the particular facts of the case in which such expressions are to be found. It would appear that there are certain observations to be found in the judgment in Kewal Krishan Puri's case, supra, which were really not necessary for purposes of the decision and go beyond the occasion and therefore they have no binding authority though they may have merely persuasive value. The observation made therein seeking to quantify the extent of correlation between the amount of fee collected and the cost of rendition of service, namely: "At least a good and substantial portion of the amount collected on account of fees, may be in the neighborhood of two-thirds or three- fourths, must ba shown with reasonable certainty as being spent for rendering services in the market to the payer of fee", appears to be an obiter.

Viewed from this perspective, the conclusion is inevitable that the observation made in Kewal Krishan Puri's case that "At least a good and substantial portion of the amount collected on account of fees, may be in the neighborhood of two-thirds or three-fourths, must be shown with reasonable certainty as being spent for rendering services in the market to the payer of fee" was not intended to lay down a rule of universal application but it was a decision which must be confined to the special facts of that case. Otherwise it may affect the validity of many similar marketing legislations undertaken during the past 50 years relating to the regulation of purchase and sale of agricultural produce, livestock and products of livestock and the establishment of markets in connection there with and the levying of a market fee in lieu thereof towards the cost of rendering such service by different States on the recommendations made in the Report of the Royal Commission on Agriculture in India, 1928 and of those of many high-powered bodies of experts constituted from time to time by the Centre and the different States. In the subsequent decision in Ramesh Chandra etc. v. State of U.P. etc.,(1) Untwalia, J speaking for the Court has considerably narrowed down his observations in Kewal Krishan Puri's case at p. 116 of the Report saying that 'the free realized from the payer of the fee has, by and large, to be spent for his special benefit and for the benefit of other persons connected with the transactions of purchase and sale in the various Mandis.' If the quantum of quid pro quo was to be quantified to the extent as indicated in Kewal Krishan Puri's case for the levy of a fee or cess, it may affect many other beneficent legislations brought in by the Centre and the States for rendering service to a specified area or a specified class or persons or trade or business in any local area. There are many other observations in Kewal Krishan Puri's case which were really not necessary for purposes of the decision in that case and need to be, clarified. The word 'fee' cannot be said to have acquired a rigid technical meaning during the past three decades and should not be given such a narrow construction.