1. The petitioner is a firm of Merchants and Commission Agents trading within the jurisdiction of the Agricultural Produce Market Committee, Shimoga. The Market Committee, by its order dated 13-8-1973, suspended the petitioner's licence, for a period of one month, under, Section 73 of the Karnataka Agricultural Produce Marketing (Regulation) Act, 1966, (shortly called 'the Act'). The petitioner's appeal against the said order was dismissed by the Chief Marketing Officer, Bangalore. Hence, this writ petition under Art. 227 of the Constitution.
2. The facts leading up to the order of suspending the licence, as revealed from the records, are these:
Respondent 3, Subbiah Gowda is a younger brother of Laxman Gowda. They are agriculturists, having regular transactions with the petitioner on agricultural commodities. In January, 1973, the petitioner paid Rs. 7,401/- to Laxman Gowda as advance towards supply of areca. In the same month the petitioner, received 8 bags of areca, which was credited to the account of Subbiah Gowda. The petitioner sold the said areca for Rs. 1,684,24 P., which was also credited to the account of Subbiah Gowda. The amount, however, was not paid to Subbiah Gowda when demanded. The petitioner contended that they were instructed by Laxman Gowda not to make payment to Subbiah Gowda, since there was a dispute between the brothers as to the division of their family properties. The petitioner also contended that they had opened account in the name of Subbiah Gowda at the instructions from Laxman Gowda.
3. Subbiah Gowda, complaining nonpayment of the sale proceeds of areca, approached the Market Committee for an investigation and relief. The Secretary of the Market Committee called upon the petitioner to make payment to Subbiah Gowda. The petitioner, in their reply, explained the circumstances under which they have withheld the payment; but finally offered to pass on the said amount to the Secretary of the Market Committee to make the payment to Subbiah Gowda with the risks attendant thereto. The Secretary, without accepting the offer, brought the matter before the Market Committee and the Committee, by its Resolution dated 13-8-1973, suspended the trading licence of the petitioner for one month.
4. The above action was taken under Section 73 of the Act. The section, so far as it is relevant, provides:
'Power to cancel or suspend licences. (1) Subject to the provisions of sub-section (4), a market committee may, for reasons to be recorded in writing, suspend or cancel a licence-
0(a) xx xx xx xx(b) If the holder thereof or any servant or any one acting on his behalf with his express or implied permission, commits a breach of any of the terms or conditions of the licence.'
5. The licence was issued in Form No. 36 under Rule 76 (4) of the Karnataka Agricultural Produce Marketing (Regulation) Rules, 1968. It was issued subject to the conditions laid down in the Act, Rules, Bye-laws and such other conditions as may be laid down by the Committee.
6. The complaint against the petitioners was that they had contravened the provisions of Section 78(2)(b) of the Act. The said sub-section provides:
'(2) Every commission agent shall be liable-
(a) xx xx xx xx(b) To pay the principal, as soon as the goods are sold, the price thereof, irrespective of whether he has or has not received the price from the buyer of such goods.'
7. From the above provisions, it is seen that it is obligatory for the Commission Agent to pay the principal, the sale proceeds, as soon as the goods are sold, irrespective of whether the Commission Agent has received the sale amount or not. The breach of this condition may be a good ground for suspending the licence under Section 73(1)(b) of the Act.
8. It seems to me that Section 73 of the Act was intended to 'protect' the interests of the growers or agriculturists. The principle behind the Section appears to be that they should get their dues without delay, and should not be unnecessarily driven to litigations to recover the sale proceeds of their agricultural commodities. The Market Committee is charged with a duty to look into these matters whenever a complaint is brought before it. But, while so examining the complaint, it cannot constitute itself into a Civil Court to decide difficult questions of civil liabilities. The Market Committee may examine any dispute, advise the parties to settle their differences and if there is unimpeachable evidence on the delaying tactics of the Commission Agent, it may take appropriate action under Section 73. But if there is a serious dispute between the Commission Agent and the principal, or other claimant, on the question of payment, the Market Committee should not wake it a ground to suspend or cancel the trading licence. In such cases, it is better that the parties are left to work out their rights by other means known to law.
9. In the instant case, the fact remains that the petitioner did not pay the sale price of areca when demanded by Subbiah Gowda. But, the petitioner gave reasons why they were compelled to delay the payment. The Market Committee appears to have not considered and rejected that explanation as frivolous or vexatious. It has not observed that the contention raised by the petitioner was ex facie untenable. At any rate, its order is silent over the matter and so also the order of the appellate authority. In the absence of such a finding, the Committee, in my view, was in error in suspending the licence of the petitioner.
10. In the result, the rule is made absolute. A writ of certiorari shall go to quash the impugned orders. The matter stands remitted to the Market Committee for reconsideration of the entire matter, in the light of this order, with liberty to the parties to produce all the materials.
11. In the circumstances of the case, I make no order as to costs.
12. Petition allowed.