Skip to content


Wamanrao Motiramji Masodkar Vs. Amrutlal Gulabchand and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtMumbai High Court
Decided On
Case NumberCriminal Appeal No. 46 of 1967
Judge
Reported inAIR1968Bom336; (1968)70BOMLR274; 1968CriLJ1227; 1968MhLJ217
ActsC.P. and Berar Agricultural Produce Market Act, 1935 - Sections 19; C.P. and Berar Agricultural Produce Market Rules, 1935 - Rule 33(1) and 33(2)
AppellantWamanrao Motiramji Masodkar
RespondentAmrutlal Gulabchand and anr.
Appellant AdvocateJ.N. Chandurkar, Adv.
Respondent AdvocateR.N. Deshpande, Adv. and ;P.G. Palsikar, Honorary Asst. Govt. Pleader
Excerpt:
.....person as a trader from the obligation to take a licence and to be registered as a trader with the market committee. - - (1) this appeal raises an interesting question regarding interpretation of rule 33 of the rules framed under the c. the preamble of the act shows that the legislation is put on the statute book to provide for the establishment and better regulating of recognised open markets for the sale and purchase of agricultural produce other than cotton in this region. we fail to see what turns upon some of the transactions being of this nature. but we fail to see how the fact that same person can have two kinds of licences can possibly lead to the conclusion that the employment of such a broker will relieve a trader from obtaining a licence in his own name merely because he..........act. 1935 (act no. xxix of 1935).(2) the appellant is an inspector in the employment of the grain market committee, amravati, which has been duly constituted under the provisions of the c. p. and berar agricultural produce market act, 1935, section 3 of this act enables the provincial government to declare by a notification any place or market as a market for sale or purchase of agricultural produce. every such notification has to define the limits of the market. accordingly, a notification was issued on 27th october 1956 for defining the limits of the market under agricultural produce market act at amravati. the market yard is the area included within the defined limits stated in this notification and the second paragraph of the notification says that the market proper shall include.....
Judgment:

Abhyankar, J.

(1) This appeal raises an interesting question regarding interpretation of Rule 33 of the rules framed under the C. P. and Berar Agricultural Produce Market Act. 1935 (Act No. XXIX of 1935).

(2) The appellant is an Inspector in the employment of the Grain Market Committee, Amravati, which has been duly constituted under the provisions of the C. P. and Berar Agricultural Produce Market Act, 1935, Section 3 of this Act enables the provincial Government to declare by a notification any place or market as a market for sale or purchase of agricultural produce. Every such notification has to define the limits of the market. Accordingly, a notification was issued on 27th October 1956 for defining the limits of the market under Agricultural Produce Market Act at Amravati. The market yard is the area included within the defined limits stated in this notification and the second paragraph of the notification says that the market proper shall include market yard and land and buildings within a radius of one mile from the market yard.

(3) The appellant was authorised by the market Committee under Section 19 of the Act to institute the present proceedings by way of a complaint against respondent No. 1. The complaint is that respondent no. 1 is a dealer or trader in agricultural produce in Amravati, that every trader or dealer in agricultural produce in Amravati is required to obtain a licence for such trade from the Committee and that respondent No. 1 has not obtained such a licence. It was further alleged that the accused purchased through the Adat of one Harinarayan Bhagirath, a grain broker, 120 bags of groundnut on 14-11-1964. A copy of the bill relating to this transaction is on record as Ex. 14. It shows that the respondent is a purchaser of this quantity of groundnut, that one Harikisan Mundada of Udkhed was the seller and the transaction was brought about through the brokerage or agency of Messrs. Harinarayan Bhagirath, grain and pulse broker. Inasmuch as respondent No. 1 has not obtained licence as a licensed trader entitled to make purchase or sale in the market area, he was prosecuted under a complaint dated 3-1-1966. The respondent on appearing in obedience to the notice admitted that Harinarayan Kalantri firm had purchased groundnuts on 14-11-1964 and sold the same to him at Amravati under bill no. 16, and that the firm of brokers had collected Adat, i. e. commission in respect of the transaction from him. In a further answer respondent no. 1 stated that he had purchased the above bags from the commission agent and that he was not required to hold a licence for making such purchase. The reason given was that his commission agent was holding the necessary licence and therefore he was not required on a proper construction of the rules, to hold the licence. This contention has found favour with the learned Magistrate who has acquitted the first respondent. Against this acquittal the complainant asked for leave to appeal and leave having been granted the matter is now before us in appeal against the acquittal.

(4) In this appeal the appellant challenged the interpretation of the rules and especially the effect of sub-rule (4) of R. 33 of the rules on the finding of the Magistrate recorded as follows:-

'It is an admitted fact that M/s Harinarayan Bhagirath made alleged purchases as commission agent acting for and on behalf of the accused did not directly make alleged purchases on the Market yard, but such purchases were made for and on his behalf by this commission agent who was already a registered trader and holding necessary licence........'

The appellant challenges the correctness of this view.

(5) In order to understand the nature of the controversy certain provision of the C. P. and Berar Agricultural Produce Market Act and the rules framed thereunder are required to be examined. The preamble of the Act shows that the legislation is put on the statute book to provide for the establishment and better regulating of recognised open markets for the sale and purchase of agricultural produce other than cotton in this region. Section 3 provides for Market Committee Under Section 5 power is given to the Government to make rules and, among other matters, rules can be made under sub-clause (vii) of sub-section (2) of Section 5 for grant of licence by a market committee to traders, brokers, weighmen measures surveyors, warehousemen and other persons using the market, and fixing the fees leviable by them, the form in which and the conditions under which such licences should be granted and the fees to be charged for such licences. Under Section 19 of the Act provision is made for institution of prosecutions and under that section prosecutions under the Act may be instituted by any person duly authorised in writing by the Market Committee in this behalf. Under sub-section (3) of Section 5 which gives the rule-making power to the Government it is further provided that any such rule may, when necessary provide that contravention thereof or of any of the conditions of the licence issued thereunder shall be punishable on conviction by a competent Magistrate, with fine which may extend to five hundred rupees.

(6) Rules have been framed by the Government under Section 5 of the Agricultural Produce Market Act, Rule 5(1) provides that all persons engaged in purchasing or selling agricultural produce in the market, including adatyas, who have been registered as traders under Rule 33, shall form the traders electorate and shall be qualified to be elected as representatives of the traders on the committee. The rule does not apparently define as to who can be called 'a trader'. Provision for taking licence is made in Rules 33, 38 and 46 for licence to traders brokers weighmen etc. Rule 33 is as follows:-

'33(1). (i) Any trader in agricultural produce shall on application at the office of the committee be entitled to have his name registered as a trader on his executing an agreement in such form as the Committee may prescribe agreeing to conform to the Market rules, and on his paying such fee as the Committee subject to the provision of clause (ii), with sanction of the Collector may fix in that behalf, according to the class of the Market as determined under Rule 61.

(ii) The fee to be levied by Committee under Clause (1) shall.

(a) in the case of retail traders, be not less than Rs. 15/- and not more than Rupees 45/- per annum.

(b) in the case of wholesale traders, be not less than Rs. 50/- and not more than Rs. 200/- per annum.

(iii) Any Aditya as defined in the Explanation to Rule 5(1) shall on application at the office of the Committee be entitled to have his name registered as a trade on his executing an agreement in such form as the Committee may prescribe agreeing to conform to the market rules, and on his paying such fee, not less than Rs. 15/- and not more that Rs. 45/- per annum, if he is a retail trader and not less than Rs. 50/- and not more than Rs. 200/- per annum, if he is a whole sale trader, as the Committee with previous sanction of the Collector, may from time to time possession prescribe:

Provided that the Committee may refuse to register an Aditya as a trader for any reasonable cause to be recorded by it in writing. (iv) For the purposes of Clauses (ii) and (iii);

(a) a retail trader means a trader who sells or purchases agricultural produce in quantities not exceeding 15 Bengali Maunds per day.

(b) a wholesale trader means a trader sells or purchases agricultural produces in quantities not exceeding may prescribe without possession payment of an additional fee.

(3) Every registration shall remain in force from the date on which it takes place until the 30th of September following and may be renewed for each succeeding year on possession payment of the prescribed fee.

(4) No person shall buy or sell agricultural produce within the market proper unless he is registered as a trader provided that an agriculturist may sell his own agricultural produce without such registration.

(5) An appeal shall lie to the Collector against the committee's orders under this rule, if it is presented within fifteen days from the date of such order.'

(7) It will be seen that the literal interpretation of sub-rule (4) of Rule 33 would mean that no person can but or sell agricultural produce within the market proper unless he is registered as a trader, though under the proviso to this sub-rule itself an agriculturist may sell his own agricultural produce without registration. The first question therefore that falls for determination is which kind of sale or purchase transactions within the market proper are intended to be regulated by requiring licence to be taken for such purchase or sale. It is difficult to hold that the rules intend every person or any person who wants to purchase any quantity of agricultural produce or sell is required to take a licence simply because the transaction of sale or purchase takes place within the market proper. What is intended to be regulated under the licence and the rules is trading activity in agricultural produce in the market area. It is therefore difficult to hold that the sale or purchase by individuals for their own consumption and which is not part of a trading activity of such person, is required to be protected by a trading licence. The licence that is required for purchase and sale is to act as a trader. It is thus clear that even in respect of sale or purchase, only that person who trades in the agricultural produce concerned whether by way of purchase or sale is alone required to obtain a licence and such a licence is called trader's licence. It is also clear that a broker or an Aditya is also entitled to have his name registered as a trader, and on payment of requisite fee to obtain a trader's licence required to be taken by a trader. Such a licence obtained by an Aditya is not to be confused with the licence required to be taken by a person who wants to practise as a broker in the market. Under Rule 38 no person shall practise as a broker without obtaining a licence from the committee. Even though, therefore, a broker may be entitled to have himself registered as a trader, if he intends to make purchase in his own name the necessity of traders to be armed with licences is not obviated because their transactions are carried through brokers. The argument that has found favour with the Magistrate is that because a broker is entitled to make purchases for his constituent, the rules apparently do not require such constituents themselves to take licences as traders. In out opinion, rules do not yield such a construction. What is intended to be regulated by Rule 33(1) is the trading activity of a person with respect to agricultural produce within the market. Whether or not the trading activity is carried on by a person by making purchases and sales through the agency of adatya, that cannot possibly relieve such a person as a trader from the obligation to take licence and to be registered as a trader with the Market Committee. Thus, the crucial question that falls for decision, whenever it is alleged that a person has made a purchase or sale without a licence in the market area, is whether such person is a 'trader'. In the instant case on the material on record we do not find a clear finding recorded by the Magistrate whether or not respondent no. 1 was a trader trading in agricultural produce within the market area concerned.

(8) The learned counsel appearing for the respondent no. 1 has suggested that so to construe Rule 33(1) and (2) would create difficulties in respect of large class of up-country sellers who may place orders for purchases or sales of agricultural produce with their agents operating in the market area. The fact that such brokers effect sales or purchases on behalf of their principals within the market area will entail an obligation on such principals to take licences as traders from the Market Committee having jurisdiction over the market area. We do not see any difficulty in implementation of such rules and the scheme of the Act. The scheme of the Act and the rules is to regulate the trading activity of every transaction in respect of sale or purchase of agricultural produce taking place within the market area proper. In respect of each such transaction different persons may play different roles. If the transaction is brought about through the agency of a broker or an adatya, such persons must be armed with a broker's licence. If the transaction is brought on behalf of a trader, whether as purchaser or seller, then such person again must obtain a licence under which he can trade in that commodity in the market area. Similarly, weighmen who may be employed with actual measurement of produce are also required to take licences under the rules. It is difficult to accept the contention that the transaction having been put through a licenced broker, other persons concerned in the transaction such as purchasers and sellers should not be required to obtain licence. The function of a broker is different from that of a trader. Though the rules permit the same person to be a trader and to take a trader's licence and also to be a broker if he takes a broker's licence, it does not mean and cannot possibly be intended to mean that whenever transactions are effected through the agency of broker, the trader who puts such transaction through the agency of the broker need not take licence what is intended to be regulated is a trading activity and that must mean regulating the activities both of purchasers and sellers provided they are traders within the market area. The reason for this regulation is obvious. The learned counsel for the appellant has produced before us forms of agreement required to be executed by a trader and also by a broker. The obligations of a trader are different from those of a broker. Though the object of regulating the activities of each of these classes operating in the market is to secure a fair deal and clean transactions and to see that proper rates are obtained and proper prices are paid as agreed to ensure that weighmen are faithful, and no kind of unlawful deductions are made, the obligations of each person playing his part in respect of a transaction taking place in the market or in respect of agricultural produce are different from each other. A trader is required to keep his own record and show the names of persons entering into transactions, their addresses, the name of the weighman, the name of the broker the name of the person to whom payment was made, the date of the payment, details of deduction, if any, to be properly made, and he is bound to conform to the regulations of the market under the supervision of the Market Committee. The obligations of brokers are different. We are therefore unable to understand how it can be said that merely because a transaction is put through on behalf of a trader, if he is trading in the market, is not required to take a licence. It was also argued that the brokers themselves being entitled to be registered as traders, and obtain licence as traders, are not bound to disclose the name of principal if they are pakka adatyas. We fail to see what turns upon some of the transactions being of this nature. Even if the names of purchasers and sellers as the case may be, may not be required to be disclosed by a pakka adatya, the moment the name is disclosed as a purchaser or seller, ordinarily that person will have to answer whether he is trader within the market or not. The necessity of disclosing the name of the purchaser is that all purchases and sales have to conform to the regulation of the market. If the broker enters into a transaction of sale or purchase in his own name, then he does not act as a broker but acts as a trader, and for this activity he has to be properly armed with a trader's licence. But we fail to see how the fact that same person can have two kinds of licences can possibly lead to the conclusion that the employment of such a broker will relieve a trader from obtaining a licence in his own name merely because he prefers to trade through a broker.

(9) The crucial question therefore is whether a person is a trader in the market area. If he is found to be a trader in the market area, the there is no doubt that he is bound to take a licence as provided in sub-rule (1) of Rule 33 and cannot effect sales and purchases in contravention of sub-rule (4) of Rule 33. On the other hand, if the person is not shown to be a trader within the market area in respect of agricultural produce then we do not think that an act of purchase or sale of agricultural produce within the market area will involve an obligation to be armed with a trader's licence. What is required under the rule is 'traders licence' and not merely a licence for sale or purchase in the market area. The activity which is intended to be regulated is trading activity in respect of agricultural produce within the market area and not sales and purchases for individual consumption, which not of trading nature and for which there may be no necessity of taking licences for such person. On the other hand, if the activity is of a trading nature even though the transactions are effected through the agency of a broker or adatya, in our opinion, rules, require such a trader to take out a trader's licence if he operates within the market area.

(10) Applying these principles to the facts of this case, it will be found that there is no finding recorded whether the firs respondent is a trader in the market area. As this finding is essential for any enquiry whether licence is required to be taken out by him under Rule 33, we must hold that proper enquiry should be held and a finding recorded in this connection. Inasmuch as, however the learned Magistrate has acquitted the first respondent on his view that the transaction having been put through a broker the principal was not required to take out a licence, we are unable to sustain the finding of acquittal. It is accordingly set aside and the case is remanded to the trial Court for a fresh trial and a decision in the light of the observations made above.

(11) It was also contended on behalf of the first respondent that the complaint is not properly initiated. The learned counsel urged that the complainant in such a case must be the Market Committee itself and not the complainant Wamanrao who is an Inspector of the Market Committee. In support of this argument the learned counsel relied on Section 12 of the Act which provides for incorporation of the Market Committee. Under that section every Market Committee shall have a body corporate and shall have perpetual succession and a common seal and may sue and be sued in its corporate name and shall be competent to acquire and hold property. Basing the argument on this provision, it is urged that the right to sue and be sued having been vested in the Market Committee as an incorporate body or entity, a prosecution in the name of its Inspector was not proper. The short answer to this question is that Section 19 makes a special provision for initiation of prosecution by any person which may include the Chairman, Vice Chairman, or any officer or servant of the Market Committee, the only condition being that such person shall be duly authorised by the Market Committee in this behalf. It is this special provision which must govern the solution of the question whether the complaint in this case has been properly made. There is no doubt that Wamanrao, who was the Inspector, was duly authorised by the Market Committee. Once that condition is satisfied, there is no doubt that Wamanrao was fully competent to institute the proceedings for the Committee. The objection on this ground therefore must fail.

(12) The result is that the appeal is allowed, the acquittal of the first respondent is set aside and the case is remanded to the Court of the Magistrate for a fresh decision after giving opportunity to both sides to lead evidence they desire.

(13) Appeal allowed.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //