KERALA MONEY LENDERS ASSOCIATION Vs. STATE OF KERALA

JUDGEMENT

(1.) The challenge in the writ petition pertains to the amendment brought to the Kerala Money-Lenders Act, 1958 by the Finance Act, 2013. Originally, when the writ petition was filed, the petitioner had challenged the Kerala Finance Bill, 2013 proposing to amend Sec. 4(2)(i) of the said Act for revision of rates of the licence fee by the Government from Rs.3,000.00 to Rs.10,000.00. The challenge was mainly directed against the amendment based on the judgment of the Division Bench of this Court in Kerala Small Financiers' Association vs. State of Kerala, reported in 1998 (2) KLT 813. Pending the challenge, the State of Kerala promulgated the Kerala Finance Act, 2013 on 23/7/2013, by which Sec. 4(2)(i) of the Kerala Money-Lenders Act, 1958 has been amended reducing the licence fee from Rs.10,000.00 as proposed under the Finance Bill, 2013 to Rs.6,000.00. It is pertinent to note that though the writ petition stood admitted on 26/4/2013, in view of the changed circumstances when the Finance Act, 2013 was promulgated, this Court refused to extend the interim order, vide order dtd. 28/10/2013.

(2.) The main ground of challenge to the Finance Act, 2013 is based on the principles laid down by the Division Bench in Kerala Small Financiers' Association (supra). It is contended that there is no reasonable nexus in causing increase of licence fee of Rs.3000.00 to Rs.6,000.00 to the object sought to be achieved. The petitioner further placed reliance on Article 276(2) of the Constitution of India to buttress their argument that such levy is unconstitutional and that the maximum levy can only be Rs.2,500.00 per annum.

(3.) The respondents in their counter affidavit have specifically pointed out that the proposal to enhance the licence fee from Rs.3,000.00 to Rs.10,000.00 was to cope up with the increase in the administrative expenses and services rendered to the money lenders from the Department. From 1/4/2012 onwards filing of return was made electronically. So filing of annual return, quarterly return and remittance of renewal fee etc. are made electronically. The proposal to enhance the licence fee was to meet the administrative expenses as stated in the Budget Speech. It is also stated that subsequently the fee was reduced to Rs.6,000.00.