Fee validity and reorganised-area continuity upheld where broad service-cost correlation and no proven discrimination were shown.

The Commissioner's authority under the States Reorganisation Act was sustained because the notification empowering him to perform functions under the Madras Hindu Religious and Charitable Endowments Act, 1951 remained effective, and the statutory power to issue directions did not make that authority dependent on prior directions. The contribution under section 76(1) was upheld because a fee requires only a fair and reasonable correlation between the levy and the cost of services rendered to the class of payers, not exact arithmetic equivalence, and the record showed broad correspondence. The article 14 challenge to continued application of the Act in South Kanara also failed, as mere continuance of pre-existing law in a reorganised area did not by itself establish discrimination.

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Issues: (i) whether the Commissioner had authority under the States Reorganisation Act to exercise the functions of the Commissioner under the Madras Hindu Religious and Charitable Endowments Act, 1951; (ii) whether the contribution levied under section 76(1) of the Madras Hindu Religious and Charitable Endowments Act, 1951 lacked quid pro quo and was therefore invalid as an excessive fee; and (iii) whether the continued application of the Madras Hindu Religious and Charitable Endowments Act, 1951 to South Kanara District offended article 14 of the Constitution of India.

Issue (i): whether the Commissioner had authority under the States Reorganisation Act to exercise the functions of the Commissioner under the Madras Hindu Religious and Charitable Endowments Act, 1951.

Analysis: The relevant body corporate created under the Madras Act continued to function in the transferred area after reorganisation. The power of the Central Government under section 109 of the States Reorganisation Act, 1956 was to issue directions and modifications, but the existence of that power did not make the exercise of the statutory functions dependent on the prior issue of directions. The notification empowering the Commissioner to act therefore remained effective.

Conclusion: The challenge to the Commissioner's authority failed.

Issue (ii): whether the contribution levied under section 76(1) of the Madras Hindu Religious and Charitable Endowments Act, 1951 lacked quid pro quo and was therefore invalid as an excessive fee.

Analysis: A fee must bear a fair and reasonable correlation to the cost of services rendered to the class of payers, though not exact arithmetical equivalence. The material showed that the Department rendered services to a large class of religious institutions, and the collections broadly matched the allocable expenditure for the relevant period. The absence of mathematical precision in allocation did not establish absence of quid pro quo.

Conclusion: The levy was upheld and the plea of absence of quid pro quo was rejected.

Issue (iii): whether the continued application of the Madras Hindu Religious and Charitable Endowments Act, 1951 to South Kanara District offended article 14 of the Constitution of India.

Analysis: The continued operation of pre-existing law in a reorganised area is sustained by the historical and geographical basis underlying section 119 of the States Reorganisation Act, 1956. Differential treatment arising from such continuance is not per se discriminatory, and the initial validity of the classification does not automatically cease merely with lapse of time. The materials then on record did not justify holding that the application of the Act to South Kanara had become unconstitutional.

Conclusion: The article 14 challenge failed.

Concurring Opinion: Shinghal J. agreed that the appeals should be dismissed and concurred on the Commissioner's authority and quid pro quo. On article 14, the concurrence rested on the absence of sufficient pleadings and material to establish discriminatory treatment, and therefore did not accept that unconstitutionality had been shown on the record.

Final Conclusion: The statutory levy and the administrative arrangement for its collection were sustained, and the appeals did not succeed.

Ratio Decidendi: A levy imposed for regulatory services is valid as a fee if there is a broad and reasonable correlation between the charge and the cost of the services rendered to the class, and continued application of a pre-existing law to a reorganised area is not unconstitutional merely because the law operates only in part of the new State unless a real case of discrimination is established.

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