Alladi Kuppuswami, J.
1. I have gone through the Judgment of my learned brother Venkatarama Sastry, J., which is about to be delivered and I agree with him that the Writ Appeal has to be dismissed. I would like however, to add a few words of my own.
2. Bye-law 20 of the Agricultural Market Committee, Guntur which prescribes the fees for the licence to be obtained by persons dealing in notified agricultural produce, live-stock or products of live-stock. Persons whose turn-over does not exceed Rs. 300/- on any single day are exempt from taking out a licence. In regard to other cases the licence fee varies according to the scale fixed with reference to the turnover.
3. Under Section 7(1) of the Andhra Pradesh (Agricultural Produce and Live-stock) Markets Act, 1966 (referred to in this Judgment as the Act) no person shall within a notified area set up, establish or use etc. any place for the purchase, sale etc. of any notified agricultural produce or products of live-stock except under and in accordance with the conditions of a licence granted to him by the market Committee. Section 7(3) of the Act provides that a licence granted under Sub-section (1) shall be in such form and subject to the payment of such fees, as may be prescribed. The Expression 'prescribed' is defined by Section 2(14) as meaning prescribed by rules made under the Act. Section 33 confers power on Government to make rules for carrying out the purposes of the Act and in particular in regard to the issue by a market Committee of licences under Section 7, the forms in which and the conditions under which such licences are issued or renewed, the annual fees that may be levied for such licences and the recovery of such fees. Accordingly, rules were made under the Act and Rule. 48(1) provides that an application for a licence shall be accompanied with such fees which shall not exceed Rs. 100/- as may be fixed in the bye-laws of the Market Committee.
4. The contention of the petitioners a stated in the writ petition was that under Section 7(3) the licence fees has to be prescribed, which means prescribed by the Government under the rules made by it. Hence it is the duty of the Government to fix the fees but instead of doing so, the Government has under Rule. 48 authorised the market Committee to fix the licence fees indicating only the maximum that may be fixed by the Committee. It is not competent to the Government to delegate to the market Committee the power to fix the rates of licence fees. It was therefore contended that the Bye-law 20 of respondents bye-laws is ultra vires.
5. At the time of the arguments it was pointed out to Sri Y. Satyanarayana, learned counsel for the appellants that as the rule prescribes a maximum licence fee of Rs. 100/- and leaves it to the market Committee to fix the licence fees, any bye-law cannot be said to be ultra vires the rules so long as the fees fixed do not exceed the maximum. Realising that the bye-law cannot be questioned as ultra vires, as long as Rule. 48 remains, the learned counsel for the appellants submitted that Rule. 48 itself is ultra vires the provisions of the Act. He modified his submission by arguing that Rule. 48 which delegates the power vested in the Government to fix the fees, to the Committee is ultra vires. He submitted that the Government who is constituted delegate of the legislature in the matter of fixing the fees has to power to further delegate the said power to the market Committee as such as power to delegate is not conferred by statute.
6. It is unnecessary in my view to consider the various decisions relating to the validity of delegation of legislative functions to the Government or any other authority, for it is not the case of the appellants that Section 7(3) of the Act which vests the power to levy the licence fee on the Government is ultra vires on the ground that there is a delegation of legislative function. The only argument is that the Government to whom the power to levy fees is delegated cannot in its turn delegate that power to the market Committee. Such delegation is bad, whether the power delegated is a legislative power or not. The only question therefore is whether this sub-delegation of the power to levy fees by the Government is valid.
7. As has been pointed out by the Supreme Court the doctrine of delegatus non potest delegare is not a rule of law, but a rule of construction. (Vide Barium Chemicals Ltd. v. Company Law Board, : 1SCR898 ). The same view was expressed in the Union of India v. P. K. Roy, ( : (1970)ILLJ633SC ). Sub-delegation may be sustained if permitted by an express provision or by necessary implication from the provisions of the Act. (Vide : : AIR1967AP265 ). Even in the case of a principal and agent it is well settled that no agent has power to delegate his authority except with the express or implied authority of the principal and such authority is implied in the following among other cases. Where it may be reasonably presumed to have been the intention that the agent should have the power to delegate his authority and where the authority conferred is of such a nature as to necessitate its execution wholly or in part by a deputy or sub-agent. This applies with greater force when the principal is the legislature and the agent is an institution like the Government. As rightly pointed out in the order of reference, there is no express provision in the statute authorising the Government to delegate its power to prescribe fees under the rules to the market Committee. The question is whether such a power can be spelt out by necessary implication from the provisions of the statute. Venkatarama Sastry, J., has in the course of his Judgment set out all the relevant provisions of the Act including the preamble and has stated that when the market Committee enacts bye-laws, it does so to regulate the conditions of trading in the notified area under its jurisdiction. It is the market Committee that is entrusted with the duty to enforce the provisions of the Act. The Committees are manned by representatives of traders, growers and nominees of Government. All the nominees received by the market Committee have to be credited to a market Committee fund and have to be expended only for the purposes mentioned in the Act. Thus, it is clear that it is primarily the duty of the market Committee to see that the provisions of the Act are carried out. The market Committee would be the authority which would know intimately the conditions prevailing in several markets. The levy of licence fee would depend upon the volume of trade, quality of business done and various other factors depending upon the local conditions. The levy of licence fee would also have to be commensurate with the services rendered by the market Committee. From these circumstances it is not difficult to imply that it was intended by the legislature that the power vested in the Government to levy licence fee could be delegated to the market Committee. It is also to be noticed that while delegating the power to fix the fees, the Government has taken care to say that the fee shall not exceed maximum of Rs. 100/- referred to in the rule. Further, there is also the additional safeguard that the bye-laws of a market Committee are approved by the Director of Marketing who is incharge of market Committees and thereby preventing any arbitrary exercise of power by the market Committee.
8. In this connection it is sufficient to refer to a few decisions of the Supreme Court by way of illustration which deal with sub-delegation and are almost directly in point. In H. Bagla v. State of M. P., ( : 1954CriLJ1322 ) one of the contentions raised was that Section 4 of the Essential Supplies (Temporary Powers) Act (Act 24 of 1946) which empowered the Central Government to exercise its power to make an order under Section 3 for regulating the production, supply and distribution of any essential commodity to any other officer or authority subordinate to the Central Government or the State Transport Authority is ultra vires on the ground of sub-delegation. It was contended that the legislature itself should have mentioned the particular authority or officers who can exercise the powers under Section 3 and it should not have left it to the discretion of the Central Government to decide the Officers or authorities to whom the power could be delegated. This contention was negatived and the power to sub-delegate the power under Section 4 of the Act was upheld. Similarly in Union of India v. Bhanamal Ghulzarimal Ltd., ( : 2SCR627 ), Cl. 11(B) of the Iron and Steel (Control of Production and Distribution) Order under which the controller was given the power to fix the maximum price was upheld. It was observed that in conferring power upon the Controller to fix the maximum price for Iron and Steel, the Legislature must inevitably have taken into account the special features of the objects, which it intends to achieve by the statute. It is true that in this case the Act itself conferred powers upon the Central Government to delegate its functions to a subordinate authority, but such power can also be inferred though not expressly granted, from the various provisions of the Act.
9. Similarly in Union of India v. P. K. Roy, ( : (1970)ILLJ633SC ) it was held that there was no improper delegation of its statutory power and duties under Section 195 (5) of the States Reorganisation Act by the Central Government by asking the State Government to prepare the preliminary and final gradation lists on the principles laid down by the Central Government.
10. It is unnecessary to refer to various other decisions which have been elaborately considered and discussed by Venkatarama Sastry, J.
11. The learned counsel for the appellants relied upon the decision in Mohd. Hussain v. State of Bombay, ( : 2SCR659 ). In that case Section 11 of the Bombay Agricultural Produce Markets Act, 1939 gave power to the market Committee to fix the fees subject to such maximum as may be prescribed by the rules. Rule. 53 of the rules framed under the Act however, authorised the levy of fees at rates specified in the bye-laws without fixing the maximum. In those circumstances it was held that the bye-laws were ultra vires. This decision has no application to the facts of the present case where Rule. 48 has prescribed the maximum and the fees fixed under the bye-law is subject to that maximum. It may be noticed that after the decisions of the Supreme Court, Rule. 53 of the rules made under the Bombay Act was amended and the maximum rate was fixed. When the matter again came up before the Supreme Court in Muhammad Bhai v. State of Gujarat, ( : AIR1962SC1517 ), the Supreme Court upheld the notification and the levy of fees. As has been pointed out by Venkatarama Sastry, in a later decision G. B. Modi v. Ahmedabad Municipality, ( : 3SCR942 ) the Supreme Court held that even if a maximum is not prescribed by the Act or the rules, the validity of such levy cannot be questioned so long as policy is clearly laid down and the levy is made by a representative body subject to the control of the Government.
12. Reliance was also placed upon the decision in Madan Gopal v. The Agricultural Market Committee, ( : AIR1975AP1 ) where it was held that a bye-law fixing the licence fee was not ultra vires Section 7 read with Section 33(2)(vii) and Rs. 45 and 48. It was observed that Rule. 48 itself empowers the market Committee to fix the fee and it is by virtue of this power the bye-law was framed. Hence, the bye-law was valid. There cannot be any quarrel with this proposition and as I pointed out at the outset Sri Y., Satyanarayana did not submit that the bye-law was inconsistent with the rule, but submitted that it was not open to the Government to delegate the power to fix the fees to the Committee when the statute did not empower it to do so. Apparently, the matter was not argued before the learned Judges who decided cases in Madan Gopal v. The Agricultural Market Committee (supra) in this form. No doubt there is an observation in the Judgment 'it cannot be complained that there is any further delegation of the power by the Government without the authority of the legislature', It cannot be complained that there is any further delegation of the power by the Government without the authority of the legislature'. It cannot be said there is no delegation of the power at all to fix the fees as there is such a delegation under Rule. 48. But as I have stated above, such delegation is justified even though not expressly authorised by the legislature, as the power to delegate can be implied in the circumstances of the case. In the judgment under appeal before us also, the main basis of the decision is that the bye-law is not in excess of the authority conferred on the market Committee as apparently the matter was not argued on the lines argued before us.
13. For the reasons above stated I am, of the view that though Section 7(3) provides that the licence fee should be prescribed by rules made by the Government, by necessary implication from the various provisions of the Act it cannot be said that the State Transport Authority is not empowered to delegate that power to the market Committee. Rule 48 which prescribes the maximum and authorises the market Committee to levy the fees under its bye-laws cannot be said to be ultra vires. The bye-law which prescribed the fee within the maximum prescribed by the rules is not in any way inconsistent with the rules.
14. The Writ Appeal is therefore dismissed.
Katarama Sastry, J.
15. This appeal has been referred to this Full Bench as our learned brothers Ramachandra Rao and Punnaya, JJ., felt that the decision in Madan Gopal v. The Agricultural Market Committee, Guntur represented by its Chairman. The said Committee was constituted under the Andhra Pradesh (Agricultural Produce and Live-stock) Markets Act 1966 (hereinafter referred to as the Act). According to the appellants there was a Market Committee at Guntur even prior to 1966, which was constituted under the Andhra Pradesh (Andhra Area) Commercial Crops Market Act 1933. The Market Committee under the new Act was formed in 1969. The said Committee framed bye-laws on 30-1-1970, in exercise of the powers conferred upon it by Section 34 of the Act. Bye-law 20 deals with licences to be issued under Section 7 Rule. 48 of the Act. It provides that licences under Section 7 of the Act should be in the form prescribed under Rule. 48 on payment of fees as prescribed under the bye-law for dealing in any or all of the notified agricultural produce, livestock or products of livestock. According to that bye-law persons whose turn-over does not exceed Rs. 300/- on any single day are exempt from taking out such a licence, whereas persons purchasing or selling any or all of the notified agricultural produce livestock or products of livestock of the value above Rs. 300/- and upto Rs. 25,000/- per annum should pay Rs. 25/- per annum; and similarly persons carrying on such business of the value above Rs. 25,000/- upto Rs. 50,000/- had to pay Rs. 50/- those having a turnover of above Rs. 50,000/- upto Rs. 1,00,000/- per annum Rs. 75/- and those having a turnover of more than one lakh per annum had to pay Rs. 100/-. The appellants challenged the levy of the said licence fees on the ground that the expenses of the market Committee have not changed in any manner and that the increase in the licence fee is out of all proportion to the expenses, which would have to be incurred by the market Committee for the regulation of their trade. As a matter of fact there were surplus funds to the tune of one lakh and thirty thousand rupees by the time of the formation of the new Committee which represents the balance of the collections in the previous years. The bye-laws were also not approved by the Director of Marketing and they were not published in the Gazette as required by Section 34 of the Act. Writ Petition No. 1879 of 1972 etc, were filed in the High Court questioning the said levy.
17. In the meanwhile the Act was amended by deleting from the Sub-section the necessity of awaiting for three months after publication of the bye-laws for their enforcement. Therefore, the bye-laws were immediately published in the official Gazette in June, 1971.
18. One of the main grounds raised by the appellants was that the Market Committee was incompetent to fix the rate of licence fee. The licence fee had to be fixed only by the Government as per the rules made by them under the Act. Section 7(3) of the Act provides that the licence shall be in such form and subject to the payment of such fees as may be prescribed. 'Prescribed' means prescribed by rules made under the Act as per Section 2(14) of the Act. Section 33 of the Act enables the Government alone to make the rules. Thus the combined effect of all these provisions is that the rates of licence fees should be fixed by the Government alone and it is not open to the market Committee to fix those rates. Rule. 48 framed by the Government under Section 33 of the Act provides that every application for a licence shall be accompanied with such fees, which shall not exceed Rs. 100/- as may be fixed under the bye-laws of the market Committee. the proviso to Rule. 48, therefore, authorises the market Committee to fix the rates of licence fee by its bye-laws. The Government is not competent to delegate to the market Committee the power to fix the rates of licence fees. Bye-law 20(1) of the respondent's bye-laws is ultra vires, and hence it cannot be enforced. The petitioners therefore filed the writ petition for the issue of a writ of mandamus or other appropriate writ, order or direction prohibiting the respondent from enforcing the enhanced rates of licence fees, introduced by bye-law 23(1) and declaring the bye-law as void and to pass necessary or incidental orders.
19. The Secretary of the Agricultural Market Committee filed his counter opposing the writ petition. According to the counter the petitioners, who were all traders, are bound to obtain licences under Section 7 of the Act. The bye-laws of the market Committee were made after following the procedure prescribed in the Act and after publication in the Gazette on 24-6-1971 and after obtaining the previous sanction of the Director of Marketing. The amount of licence fees fixed by the bye-law is reasonable and is not arbitrary or unreasonable. It is not true that the market Committee's expenses have remained the same. The budget for 1972-73 discloses that the Committee had to spend large amounts for maintenance of supervisory staff and also for providing amenities and facilities etc. Under Rule. 48, the Government fixed the maximum licence fee at Rs. 100/- and directed the market Committee to fix the licence fees in its bye-laws. Where the maximum is fixed and the Committee is given power to fix licence fees subject to the maximum fixed by the Government, there is no delegation to the market Committee of any power, and the Government retained its power as they had control over the Committee. The Committee has to fix the licence fees depending upon the facts and circumstances existing in the area of the Committee and also depending upon the local conditions. There is no abdication of power of complete annihilation of the power of the Government to prescribe the licence fees under Section 7(3) of the Act. The said bye-law 20(1) is perfectly valid and is not opposed to Section 7(3) or Rule. 48 of the rules. Moreover the Government has got powers of revision under Section 27 of the Act to examine the legality, regularity or propriety of the bye-laws made by the market Committee. Hence, the writ petition may be dismissed.
20. The writ petition came up for disposal before our learned brother Obul Reddy, J. (as he then was) on 15-1-74. The learned Judge dismissed the said writ petition holding that the bye-law cannot be said to be in any way in conflict with Rule. 48 as it is subject to what is provided in Rule. 48. It is also not in excess of authority conferred upon the market Committee to make bye-laws. There is no delegation of power by the Government without the authority of the legislature. The learned Judge followed the view expressed in L. P. A. 204/72 by one of us Venkatarama Sastry, J. to the following effect :
'Admittedly, the rates of fee levied by the market Committee under its bye-laws are within the maximum prescribed by the rule-making authority. Where the statutory rule itself fixes the maximum rate or rates of fees that can be levied in respect of commercial crops bought and sold in the notified area and the market Committee has to fix the rates of levy within or not exceeding the maximum rates prescribed by the statutory rule, it cannot be said that the statutory provision empowering the market Committee to levy fees is invalid. It is perfectly valid and it is neither unconstitutional nor void, as it does not suffer from the vice of excessive delegation.'
It was also observed that the above Division Bench followed the decisions of the Supreme Court in Mohd. Hussain v. State of Bombay, ( : 2SCR659 ) and in Muhamadbahi v. State of Gujarat, ( : AIR1962SC1517 ). In that view the writ petition was dismissed.
21. The appellants herein carried the matter in writ appeal 106 of 1974. It was heard in the first instance by our learned brothers Ramachandra Rao and Punnaiah, JJ. After quoting the relevant provisions and the decisions, including the decision in Madan Gopal v. The Agricultural Market Committee, ( : AIR1975AP1 ) rendered by Obul Reddi, C. J., and Sriramulu, J., our learned brothers felt a doubt about the view expressed in the last mentioned decision. According to them, as per the provisions in the Act, the rates of licence fees have to be fixed by the rule-making authority, viz., the Government. It is not enough if a maximum rate is prescribed. There is nothing in the statute empowering the market Committee to fix the annual licence fees. They therefore wanted the matter to be referred to a Full Bench. Accordingly the matter has been placed before us.
22. Mr. Yellapragada Satyanarayana, learned counsel appearing for the appellants submitted that the bye-law is void in so far as it fixed the rates of licence fees, as it amounts to an abdication of the legislative power by the legislature to an authority sub-ordinate to the Government and therefore void. To a question put by us, the learned counsel modified his arguments be saying that Rule. 48 of the rules, in so far as it directs the market Committee to fix the rates of licence fees by its bye-laws, is itself ultra vires as it amounts to excessive delegation of legislative power.
23. On the other hand Mr. Ramachandra Reddy, learned Advocate-General, who appeared on behalf of the market Committee submitted that there is no excessive delegation in this case and the bye-law has been validly made. The special delegation, if any, by the Government to the Market Committee is within the permissible limits and is not void or ultra vires. The learned Counsel for the appellants cited one or two decisions of the Supreme Court, beside those referred to in the order of reference, while the learned Advocate General referred to other decisions, which will be referred to shortly in our discussion.
24. Before we consider the point that arises in this case, it is convenient to extract the relevant provisions of law. Section 7 of the Act, which requires licences to be taken by the traders etc. is in the following terms :
7(1) No person shall, within a notified area, set up, establish or use, or continue or allow to be continued, any place for the purchase, sale, storage, weighment, curing, pressing or processing of any notified agricultural produce or products of livestock or for the purchase or sale of livestock except under and in accordance with the conditions of a licence granted to him by the market Committee :
Provided that the market Committee may exempt from the provisions of this Sub-section any person who carries on the business of purchasing or selling any notified agricultural produce, livestock or products of livestock not exceeding such value as may be prescribed :
Provided further that a person selling notified agricultural produce, livestock or products or livestock grown, reared or produced by him, shall be exempt from the provisions of this Sub-section, but the Government may, for special reasons to be recorded in writing, withdraw such exemption in respect of any such person.
Explanation: Nothing in the second proviso to this Sub-section shall be construed as exempting a Co-operative Marketing Society registered or deemed to be registered under the Andhra Pradesh Co-operative Societies Act, 1964 selling notified agricultural produce, livestock products of livestock grown, reared or produced by any of its members.
(2) xx xx xx xx xx xx xx xx xx xx
(3) A licence granted under Sub-section (1) shall be in such form and subject to the payment of such fees, as may be prescribed :
Provided that no fees shall be charged for the grant of a licence;
(i) to the Khadi and Village Industries Commission;
'(ii) to a Co-operative marketing society referred to in the explanation to Sub-section (i);
(iii) to a person merely for curing, pressing or processing any notified agricultural produce or products of live stock.'
The word 'prescribed' has been defined in the Act by Section 2(14) as follows :-
'(xiv) 1. 'Prescribed' means prescribed by rules made under this Act.' 25. Clause (8) , Section 33(2) is in the following terms :-
33. (1) The Government may, either generally or specially for any notified area or areas, make rules for carrying out the purposes of this Act.
(2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for :
(i) to (vii) xx xx xx xx xx xx xx xx xx
(viii) the issue by a market Committee of licences under Section 7 the forms in which, and the conditions under which such licences shall be issued or renewed, the annual fees that may be levied for such licences and the recovery of such fees :'
Rule. 48, which is made under this Section is in the following terms :
48 (1) Any person desiring to obtain or renew a licence under Section 7(1) shall make an application in Form 5 :
Provided that every such application shall be accompanied with such fees which shall not exceed Rs. 100/- (Rupees one hundred only) as may be fixed in the bye-laws of the market Committee:
Provided further that a person residing outside the notified area and desiring to operate in a notified area of a Market Committee for specific transactions which may not exceed ten in a year may be granted special licence on payment of such fees which shall not exceed Rs. 20/- (Rupees twenty only) as may be fixed in the bye-laws of Market Committee.' Section 34 deals with the Bye-laws and it is to the following effect :-
'34. (1) Subject to any rules made by the Government under Section 33 and with the previous sanction of the Director of Marketing, a market Committee may, in respect of the notified area for which it was constituted, make bye-laws for the regulation of the business and the conditions of trading therein :
Provided that where a market Committee fails to make bye-laws under this Sub-section within two months from the date of its Constitution, the Director of Marketing may make such bye-laws, as he thinks fit, and the bye-laws so made shall remain in operation until the market Committee has made bye-laws under this Sub-section.
(2) Every bye-law made under this Section shall be published in English and Telugu in the Andhra Pradesh Gazette and in the District Gazette and it shall come into operation on the expiration of three months from the date of its publication in the Andhra Pradesh Gazette.
(3) Any bye-law made under this Section may provide that any contravention thereof shall be punishable with fine which may extend to five hundred rupees.'
Bye-law 20(1) framed by the various market Committees as per the notification in the supplement to Rules supplement to part 2 of A. P. Gazette, D/- 24-6-1971 is to the following effect :-
20. Licences under Section 7 (Rule. 48) (1) licences under Section 7 of the Act shall be in the form prescribed and shall be issued in the following manner;
(a) Persons intending to obtain licence under Section 7, Rule. 48 shall make applications in form 5.
(b) Copies of application forms mentioned above can be obtained from any of the offices of the market Committee on payment of Rs. 0.50 paise per form.
(c) Applicants shall make applications for the renewal of licence at least 30 days before the date of expiry of the licence previously granted.
(d) All applications for fresh or renewal of licence shall accompany with a licence fee; the rate of fee shall be as shown in Annexure-V.'
26. Annexure-V, attached to this supplement mentions different rates of licence fee for different Agricultural Market Committees. They are published at Page. 66 to 70. We are extracting below the bye-law 20(d) in so far as it related to the Agricultural Market Committees of Guntur, Narasaraopet, Tenali and Ongole.
(For bye-law see below)
Annexure V. (See Bye-law 20 (d).)
A. Agricultural Market Committee, Guntur, Narasaraopet, Tenali and Ongole.
Category (1) Rate of Fee (2)
A. Class Trader and/or Commission Agent.
Trader whose purchases or sales exceed a value of Rs. 8.00 lakhs per annum.
B. Class Trader and/or Commission Agent.
Trader whose purchases or sales exceed a value of Rs. 1.00 lakhs and not exceeding Rs. 8.00 lakhs per annum.
C. Class Trader and/or Commission Agent.
Trader whose purchases or sales exceed a value of Rs. 50,000 and not exceeding Rs. 1.00 lakhs per annum.
D. Class Trader and/or Commission Agent.
Trader whose purchases or sales exceed a value of Rs. 15,000 and not exceeding Rs. 50,000 per annum.
E. Class Trader and/or Commission Agent.
Trader whose purchases or sales exceed a value of Rs. 15,000/-. per annum.
27. We may state in this connection that in regard to Markapur Agricultural Market Committees, the maximum rate is only Rs. 60/- while the other corresponding rates are Rs. 40/-, Rs. 25/-, Rs. 10/- and Rs. 5/- respectively. In the cases of Agricultural Market Committees Jaggayyapet, Amudalavalasa and Kothavalsa the maximum is Rs. 100/- and the Minimum is Rs. 10/-. In the cases of Agricultural Market Committees of Rajahmundry and Ambajipet the maximum is Rs. 100/- while the minimum is Rs. 5/-. Thus it is seen varying rates of licence fees have been fixed for the various agricultural market Committees. They were all approved by the Director of Marketing and notified in the A. P. Gazette as required by the Act.
28. From the above provisions it is clear that the Legislature delegated the power of fixing the rate of licence fees to the Government under Section 7(3) of the Act, and under Rule. 48 of the Rules framed under the Act. Rule. 48 fixed the maximum licence fee as Rs. 100 and provides that the licence fees may be fixed by the market Committees subject to that maximum in accordance with this provision the various Market Committees have framed their bye-laws fixing various rates of licence fees not exceeding the said maximum, taking into consideration the special features and conditions prevailing in those markets and the corresponding services to be rendered by them for such licence fees collected from the traders etc. Section 23 of the Act provides a penalty for not possessing the licence, which is punishable with a fine of Rs. 500/- and in the case of continuous contravention with a further fine, which may extend to Rs. 100/- for every day. The Market Committee has also got power to collect market fees as per Section 12 of the Act.
29. All the moneys collected by the Market Committee are paid into a fund and expended for the purpose of this Act. Section 15 enumerates the purposes for which the market Committee fund may be expended. They included the acquisition of site for the market, establishment, maintenance and improvement of the market, construction and maintenance of buildings necessary for the market and for the health, convenience and safety of the persons using the same, providing standard weights and measures, the collection and dissemination of information regarding all matters relating to crops, statistics and marketing in respect of notified agricultural produce, livestock and products of livestock, embarking upon schemes for the expansion of agricultural products and improvement to the notified agricultural produce etc. and also doing propaganda for the improvement of agricultural produce, livestock and products of livestock and encouragement thrift to promote grading services and to advice measures for the preservation of the food grains etc. The market Committee constituted under Section 4 of the Act is a corporate body having perpetual succession and a common seal, with power to acquire hold and dispose of property and sue or be sued. It is the duty of the market Committee to enforce the provisions of this Act and the rules and the bye-laws. It has also to establish number of markets within the notified marketing areas.
30. The composition of market Committee consists of varied interests on the recommendations of the Director of Marketing from amongst growers of Agricultural products and the owners of livestock and products of livestock, and not less than half of the members would be appointed by the Government. One member representing the Co-operative Marketing Societies, one representative of the Agricultural Department or Animal Husbandry Department to be appointed by the Government, two representatives of the Municipality and the other members elected in the prescribed manner also constitute the members of the Marketing Committee. The market Committee is liable to be superseded under Section 23 for failure to carry out their functions. The Director of Marketing in exercise of his powers of revision under Section 27 of the Act can call for and examine the record of any market Committee and the Government also have got similar powers of revision over the Director of Marketing. This Act has got overriding effect over any other law providing for the establishment, maintenance or regulation of markets or the levy of fees thereon. This Act as is clear from the preamble to the same is regulatory in nature intended to consolidate and also to amend the law relating to the regulation of production and sale of agricultural produce, livestock and products of livestock and the establishment of markets in connection therewith. The above is a brief sketch of the scope and ambit of the Act, market Committee and its powers.
31. The principal question that we have to answer in this reference is whether Rule. 48 in so far as it enables the market Committee to fix the licence fees as per its bye-laws subject to a maximum of Rs. 100/- is valid or not, or whether it is a delegation of legislative function to the market Committee, which is void.
32. In deciding this question we have to see whether and if so, to what extent, it amounts to delegation of an essential legislative function to the extent of the rule-making power. Courts have agreed that the legislature by laying down the essential legislative policy can authorise the Government to enact further details by means of subordinate legislation viz., by framing rules etc. But all the decisions are agreed that the essential legislative policy itself cannot be delegated to any subordinate authority. When once ample guidance has been given and principles have been laid down, it is open to the subordinate authority to proceed with the determination of the other details, which are required to carry out the effect, purpose and objects of the legislation, so long as they do not entrench upon the legislative powers. The question whether guidance has been given or not, in each case has to be determined on an overall appraisal of the facts and circumstances of each case. When once such guidance has been given it is open to the subordinate authority to fill the necessary details. In this connection we may also observe that it is also open to the subordinate authority to sub-delegate the said functions to persons or institutions recognised by the Statute itself, so long as it is intended to work out the result of the legislation and carry it into effect.
33. We shall now mention the leading decisions of the Supreme Court, wherein the above general principles have been laid down and where it has been held that even sub-delegation is permissible within limits.
34. Before we proceed to elaborately deal with the above aspects we would clarify one aspect of the case viz., that the Act itself has been upheld as a valid one not offending any of the provisions of the Constitution. We have got decisions relating not only the Act in question, but also its predecessor Act viz., The Madras Commercial Crops Act 1933 as well as the other similar enactments prevalent in other States. As the matter is no longer in dispute we would merely give a list of those previous enactment of this nature which have been uniformly upheld in those States. For instance the Madras Commercial Crops Markets Act 1933 was upheld in P. P. Kutti Keya v. The State of Madras, ( : AIR1954Mad621 ), and in Arunachala Nadar v. State of Madras ( : AIR1959SC300 ). The succeeding Madras Act of 1959 was upheld in Kannappa Mudaliar v. State of Madras (1969-1 Mad LJ 212). The Bombay Act was upheld in Mohd. Hussain v. State of Bombay ( : 2SCR659 ), while the Gujarat Act has been upheld as valid in Jan Mohd. v. State of Gujarat ( : 1SCR505 ). The Hyderabad Act also was similarly upheld in Narayana Reddi v. State of Andh. Pra., : AIR1964AP373 , while the validity of the Bihar Act has been approved by the Supreme Court in Lakhan Lal v. State of Bihar : 3SCR534 . The present Act in question in Andhra Pradesh State has been upheld in a batch of writ petitions, W. P. 1214/70 D/- 19-7-1971 decided by one of us (Kuppuswami, J.) sitting with the then Chief Justice K. V. Narasimham, J. We may in this connection also usefully extract the scope and object of the Act of this nature as extracted by the Supreme Court in Arunachala Nadar v. State of Madras (AIR 1959 SC at Page. 305), as follows :-
'shortly stated, the Act, Rules and the Bye-laws framed thereunder have a long-term target of providing a net work of markets wherein facilities for correct weighment are ensured, storage accommodation is provided, and equal powers of bargaining ensured, so that the growers may bring their commercial crops to the market and sell them at reasonable prices. Till such markets are established, the said provisions, by imposing licensing restrictions, enable the buyers and sellers to meet in licensed premises, ensure correct weighment, make available to them reliable market information and provide for them a simple machinery for settlement of disputes. After the markets are built or opened by the marketing committees, within a reasonable radius from the market, as prescribed by the Rule. no licence is issued; thereafter all growers will have to resort to the market for vending their goods. The result of the implementation of the Act would be to eliminate, as far as possible, the middlemen and to give reasonable facilities for the growers of commercial crops to secure best prices for their commodities.'
35. In respondent Article. 143 Constitution of India etc., AIR 1951 SC 332 at Page. 355 Fazl Ali J. summed up his conclusions in regard to the delegation of legislative functions as follows :
'The legislature must normally discharge its primary legislative function itself and not through others. (2) Once it is established that it has sovereign powers within a certain sphere, it must follow as a corollary that it is free to legislate within that sphere in any way which appears to it to be the best way to give effect to its intention and policy in making a particular law, and that it may utilise any outside agency to any extent it finds necessary for doing things which it is unable to do itself or finds it inconvenient to do. In other words, it can do everything which is ancillary to and necessary for the full and effective exercise of its power of legislation. (3) It cannot abdicate its legislative functions, and therefore while entrusting power to an outside agency, it must see that such agency acts as a subordinate authority and does not become a parallel Legislature. (4) The doctrine of separation of powers and the judicial interpretation it has received in America ever since the American Constitution was framed, enables the American Courts to check undue and excessive delegation but the Courts of this country are not committed to that doctrine and cannot apply it in the same way as it has been applied in America. Therefore, there are only two main checks in this country on the power of the legislature to delegate; these being its good sense and the principle that it should not cross the line beyond which delegation amounts to 'abdication and self-effacement'.'
At Page. 358 the same learned Judge observed as follows :-
'It is now well settled in England and in America that a legislature can pass an Act to allow a Government or a local body or some other agency to make Regulations consistently with the provisions of the Act.'
Patanjali Sastri, J. observed in the same case at Page. 361 as follows :-
'The legislature has now to make so many laws that it has no time to devote to all the legislative details, and sometimes the subject on which it has to legislate is of such a technical nature that all it can do is to state the broad principles and leave the details to be worked out by those who are more familiar with the subject. Again, when complex schemes of reform are to be subject of legislation, it is difficult to bring out a self contained and complete Act straightway, since it is not possible to foresee all the contingencies and envisage all the local requirements for which provision is to be made. Thus, some degree of flexibility becomes necessary so as to permit constant adaptation to unknown future conditions without the necessity of having to amend the law again the again. The advantage of such a course is that it enables the delegated authority to consult interests likely to be affected by a particular law, make actual experiments when necessary, and utilise the results of its investigations and experiments in the best way possible.'
Mukherjee, J. expressed his opinion in the same case at Page. 400 as follows :-
'The decisions referred to above clearly lay down that the legislature cannot part with its essential legislative function which consists in declaring its policy and making it a binding rule of conduct. A surrender of this essential function would amount to abdication of legislative powers in the eye of law. The policy may be particularised in as few or as many words as the legislature thinks proper and it is enough if an intelligent guidance is given to the subordinate authority. The Court can interfere if no policy is discernible at all or the delegation is of such an indefinite character as to amount to abdication, but as the discretion vests with the legislature in determining whether there is necessity for delegation or not, the exercise of such discretion is not to be disturbed by the Court except in clear cases of abuse. These I consider to be the fundamental principles and in respect to the powers of the legislature the constitutional position in India approximates more to the American than to the English pattern. There is a basic difference between the Indian and the British Parliament in this respect. There is no constitutional limitation to restrain the British Parliament from assigning its powers where it will, but the Indian Parliament quo legislative body is fettered by a written Constitution and it does not possess the sovereign powers of the British Parliament. The limits of the powers of delegation in India would therefore have to be ascertained as a matter of Constitution from the provisions of the Constitution itself and as I have said the right of delegation may be implied in the exercise of legislative power only to the extent that it is necessary to make the exercise of the power effective and complete.'
Das J. also gave his own separate Judgment in that case in Shannon v. Lower Mainland Dairy Products Board, (1938 AC 708) holding that the Privy Council not only upheld the validity of a single delegation, but also upheld the validity of sub-delegation of power.
36. In Kathi Raning v. State of Saurashtra, ( : 1952CriLJ805 ), Mukherjea, J. again re-stated his opinion in the following terms ( at page 132):
'In my opinion if the legislative policy is clear and definite and as an effective method of carrying out that policy a discretion is vested by the statute upon a body of administrators or officers to make selective application of the law to certain classes or groups of persons, the statute itself cannot be condemned as a piece of discriminatory legislation. xx xx xx xx The discretion that is conferred on official agencies in such circumstances is not an unguided discretion; it has to be exercised in conformity with the policy, to effectuate which the direction is given and it is in relation to that objective that the propriety of the classification would have to be tested. If the Administrative body proceeds to classify persons or things on a basis which has no rational relation to the objective of the legislature, its action can certainly be annulled as offending against the equal protection clause. On the other hand, if the statute itself does not disclose a definite policy or objective and it confers authority on another to make selection as its pleasure, the statute would be held on the face of it to be discriminatory irrespective of the way in which it is applied.'
In Rajnarain Singh v. Chairman , P.A. Committee, Patna ( : 1SCR290 . Bose. J., explained the decision in In re The Delhi Laws Act 1912, (AIR 1951 SC 332), and analysed the conclusions drawn by various Judges in that cases, summing up as follows at page 574 of AIR:
'In my opinion, the majority view was that an executive authority, can be authorised to modify either existing or future laws but not in any essential feature. Exactly what constitutes an essential feature cannot be enunciated in general terms, and there was some divergence of view about this in the former case, but this much is clear from the opinions set out above; it cannot include a change of policy.'
In the facts of that case the notification Dated 23-4-1951 was not upheld as it changed the policy of the Act.
37. In H. Bagla v. State of M. P. , ( : 1954CriLJ1322 ), Mahajan , C.J. again laid down the law in the following terms (at page 468 of AIR):-
'It was settled by the majority judgment in the Delhi Laws Act case (1951 SCR 747) :(AIR 1951 SC 332), that essential powers of legislation cannot be delegated. In other words, the legislature cannot delegate its function of laying down legislative policy in respect of a measure and its formulation as a rule of conduct. The legislature must declare the policy of the law and the legal principles which are to control any given cases and must provide a standard to guide the officials or the body in power to execute the law. The essential legislative functions consists in the determination or choice of the legislative policy and of formally enacting that policy into a binding rule of conduct. In the present case the legislature has laid down such a principle and that principle is the maintenance or increase in supply of essential commodities and of securing equitable distribution and availability at fair prices. The principle is clear and offers sufficient guidance to the Central Government in exercising its powers under S. 3'. The learned Judges therefore upheld S. 3 of the Essential Supplies (Temporary Powers) Act 24 of 1946.
38. In Delhi Municipality v. B. G. S. and W. Mills ( : 3SCR251 ) Wanchoo , C.J. also laid down similar principles relating to delegated legislation to the same effect.
39. We shall now deal with cases where even sub-delegation has been held to be valid. In H. Bagla v. State of M. P. , : 1954CriLJ1322 , their Lordships of the Supreme Court were dealing with the validity of Ss. 3 and 4 of the Essential Supplies (Temporary Powers Act 24 of 1946. Under S. 3, the Central Government may by order provide for regulating or prohibiting the production, supply and distribution of any essential commodity in so far as is necessary or expedient for maintenance or increasing their supply or for securing their equitable distribution and availability at fair prices. This Section was attacked as amounting to delegation of legislative power outside the permissible limits, but that argument was negatived, following the decisions of the Privy Council, including the one reported in law reports 1938 AC 708 (Shannon v. Lower Mainland Diary Products Board). Under S. 4 of the said Act, the Central Government may be a notified order, direct that the power to make orders under S. 3, shall in relation to such matters and subject to such conditions, if any, as may be specified in the direction to be exercised also by such officer or authority subordinate to Central Government or such State Government or such officer or authority subordinate to State Government as may be specified in the direction. This Section was attacked in that case as amounting to sub-delegation of its power under S. 3.
40. The contention was that the legislature itself should have mentioned the particular authorities or Officers, who can exercise powers under S. 3 and it should not have been left to the discretion of the Central Government to decide, who those officers or authorities should be. This contention also was negatived by their Lordships relying upon the decision in Shannon v. Lower Mainland Dairy Products Marketing (British Columbia) Act, 1936, enabled the Lt. Governor in Council to set up a Central Marketing Board to establish or approve schemes for the control and regulation of transportation, packing storage and marketing of any natural products and to constitute marketing boards to administer the schemes to vest in those boards, to fix and collect licence fees. Lord Atkin upheld the validity of the Act by observing as follows:-
'The third objection is that it is not within the powers of the Provincial Legislature to delegate so-called legislative powers to the Lt. Governor in Council or to give him powers of further delegation. This objection appears to their Lordships subversive of the rights which the provincial legislature enjoys while dealing with matters following within the classes of subjects in relation to which the Constitution has granted legislative powers. Within its appointed sphere the Provincial Legislature is supreme as any other Parliament; and it is unnecessary to try to enumerate the innumerable occasions on which legislature, provincial dominion and Imperial, have entrusted various persons and bodies with similar powers to those contained in this Act.'
Following this passage, Mahajan, C.J. upheld the validity of S. 4 of the Essential Supplies (Temporary Powers) Act 25 of 1946, which also sub-delegated the power to an officer subordinate to the Central or State Government to make any of the orders specified under S. 7 of the said Act. These decisions, therefore, set at rest any controversy , in our opinion, about the authority of any sub-delegation of such powers on any subordinate authority. The Privy Council decision dealt with the powers of the Marketing Board is similar to the one in this case, which was vested with the power to establish or approve schemes contemplated by the Act. If such schemes are valid, we see no reason why the power to fix licence fee subject to a maximum laid down in R. 48 now conferred upon the market Committee in this case should not be upheld as the valid one.
41. In Union of India v. Bhanamal Gulzarilal ltd. ( : 2SCR627 ) their Lordships of the Supreme Court were considering the validity of Cl. 11-B of the Iron and Steel (Control of Production and Distribution) Order, 1941, under which the Controller was given power to fix the maximum prices. Their Lordships followed the decision in H. Bagla v. State of M. P. : 1954CriLJ1322 , and held that the power conferred on the Central Government by S. 3 of the Essential Supplies (Temporary Powers) Act, lays down the legislative policy and that the delegation under S. 4 of the said Act also is valid. In conferring power upon the Controller, to fix the maximum price for Iron and Steel, the legislature must inevitably have taken into account the Special features of the objects, which it intends to achieve by the Statute. In fixing the said price, the delegate has to take the rational evaluation from time to time of all varied factors. Thus it was held to be not an uncanalised and unbridled power that was vested in the sub-delegate viz., the Commissioner. The sub-delegation was therefore upheld as valid.
42. In state of Bombay v. Shivabalak : 1SCR211 it was held by their Lordships of the Supreme Court that the Deputy Collector, to whom the powers of the state Government under S. 65 (1) Lands Act (67 of 1948) were delegated under S. 83 of the said Act, was within his powers when he directed his subordinates to collect the material relevant to the enquiry about the lands being kept fallow etc., and on receipt of reports he could make an declaration that the management of the said land shall be assumed. There was no question of excessive sub-delegation in that case. Their Lordships have distinguished the case in Allingham v. Minister of Agriculture and Fisheries, (1948) 1 All ER 780 on the ground that there was no delegation of the authority to the Deputy Collector to hold an enquiry, but it was only an effort to get the material necessary for the enquiry collected by the Subordinate Officers and the final conclusion was arrived at by the delegate himself.
43. In Arnold Rodricks v. State of Maharashtra : 3SCR885 their Lordships of the Supreme Court were considering the validity of Ss. 3(3) and 4 of the Bombay Commissioners of Divisions Act (8 of 1958) whereby the system of Commissioners was re-introduced and they were conferred powers and duties. Their Lordships held that the legislature left it to the State Government to decide whether any duties and obligations imposed on it or some of the authorities should be conferred on the new administrative set up viz., the Commissioners. It was observed by their Lordships (at page 1795) as follows:-
'We see no difference in principle between the State legislature inserting a section in an Act enabling the State Government to delegate power to another authority and the legislature in view of the change in the administrative set up conferring powers on the State Government to confer not only its own duties on Commissioners but also of other Officers performing executive and revenue duties.'
In coming to this conclusion their Lordships followed the decision in H. Bagla v. State of M. P. : 1954CriLJ1322 wherein a similar question viz., S. 4 of Essential Supplies (Temporary Powers) Act (24 of 1948) was upheld by the Supreme Court . It was observed 'after all , the law which the Commissioners or the State Government or other authorities have to administer remains the same; it is only the authority that is changed.' This decision is, therefore an authority for the proposition that sub-delegation is permissible where the law to be administered is the same and provided sufficient guidelines are in the statute.
44. In Hapur Municipality v. Raghuvendra, : 1SCR650 their Lordships of the Supreme Court were considering the validity of the levy of water tax under S. 135 (3) of the U.P. Muncipal Act (2 of 1916). Hidayatullah, J. speaking for the Bench observed (at pages 697-98) as follows:
'We have already pointed out that the power to tax is conferred on the State Legislature but is exercised by the local authority under the control of the State Government. The taxes with which we are concerned are local taxes for local needs and for which local inquiries have to be made. They are rightly left to the representatives of the local population which would bear the tax. Such taxes must vary from town to town, from one Board to another and from one commodity to another. It is impossible for the Legislature to pass statutes for the impossible of such taxes in local areas. The power must be delegated. Regard being had to the democratic set up of the Municipalities which need the proceeds of these taxes for their own administration, it is proper to leave to these Municipalities the power to impose and collect these taxes. The taxes are, however, predetermined and a procedure for consulting the wishes of the people is devised. But the matter is not left entirely in the hands of the Municipal Boards. As the State Legislature cannot supervise the due observance of its laws by the Muncipal Boards, power is given t the State Government to check their actions. The imposition of the tax is left to the Muncipal Boards but the duty to see that the provisions for publicity, and obtaining the views of the persons to be taxed are fully complied with is laid upon the State Government. The proceedings for the imposition of the tax, however, must come to a conclusion at some stage after which it can be said that the tax has been imposed. That stage is reached, not when the special resolution of the Muncipal Board is passed, but when the notification by Government is issued. xx xx xx xx The provision making the notification conclusive evidence of the proper imposition of the tax is conceived in the best interest of compliance of the provisions by the Boards and not to facilitate their breach. It cannot, therefore be said that there is excessive delegation.'
This decision lays down the principle that where taxes are to be levied by a local body, according to the local needs, after making local enquiries, sub-delegation is valid, where there is control retained in the Government over its actions.
45. In Barium Chemicals Ltd. v. Company Law Board : 1SCR898 it was held that the powers conferred under S. 237 of the Companies Act 1956, delegated by the Central Government to Company Law Board can be exercised by the Chairman on behalf of the Board. It was also further held the that the doctrine of Delegatus Non Potest Delegare is not a rule of law, but a rule of construction. Hence sub-delegation can be sustained, if permitted by an express provision or by necessary implication from the provisions of the Statute.
46. In Union of India v. P.K. Roy, : (1970)ILLJ633SC the same view was expressed viz., that the maxim Delegatus Non Potest Delegare is only a rule of construction.
47. In Delhi Municipality v. B. G. S. and W. Mills : 3SCR251 the right of the Delhi Muncipal Corporation, under Act (66 of 1957) to levy any of the optional taxes by prescribing a maximum rate of tax, was held to be valid. Their Lordships have fully discussed the principle of delegated Legislation and laid down the law in very clear terms, and all the earlier case law has been reviewed, and the cases dealing with the fixation of rates of taxes by the legislature also have been considered. After a review of those authorities, it was observed at p. 1244 as follows:-
' A review of these authorities therefore leads to the conclusion that so far as this Court is concerned the principle is well established that essential legislative function consists of the determination of the legislative policy and its formulation as a binding rule of conduct and cannot be delegated by the legislature. Nor is there any unlimited right of delegation inherent in the legislative power itself. This is not warranted by the provisions of the Constitution. The legislature must retain in its own hands the essential legislative functions and what can be delegated is the task of subordinate legislation necessary for implementing the purposes and objects of the Act. Where the legislative policy is enunciated with sufficient clearness or a standard is laid down, the Courts should not interfere. What guidance should be given and to what extent and whether guidance has been given in a particular case at all depends on a consideration of the provisions of the particular Act with which the Court has to deal including its preamble. Further it appears to us that the nature of the body to which delegation is made is also a factor to be taken into consideration in determining whether there is sufficient guidance in the matter of delegation. What form the guidance should take is again a matter which cannot be stated in general terms. It will depend upon the circumstances of each statute under consideration; in some cases guidance in broad general terms may be enough in other cases more detailed guidance may be necessary. As we are concerned in the present case with the field of taxation, let us look at the nature of guidance necessary in this field. The guidance may take the form of providing maximum rates of tax up to which a local body may be given the discretion to make its choice, or it may take the form of providing for consideration with the people of the local area and then fixing the rates after such consultation. It may also take the form of subjecting the rate to be fixed by the local body to the approval of Government which acts as a watch dog on the actions of the local body in this matter on behalf of the legislature. There may be other ways in which guidance may be provided. But the purpose of guidance, whatsoever may be the matter thereof, is to see that the local body fixes a reasonable rate of taxation for the local area concerned. So long as the legislature has made provision to achieve that reasonable rates of taxation are fixed by the local bodies, whatever may be the method employed for this purpose provided it is effective - it may be said that there is guidance for the purpose of fixation of rates of taxation. The reasonableness of rates may be ensured by fixing a maximum beyond which the local bodies may not go. , It may be ensured by providing safeguards laying down the procedure for consulting the wishes of the local inhabitants. It may consist in the supervision by Government of the rate of taxation by local bodies. So long as the law has provided a method by which the local body can be controlled and there is provision to see that reasonable rates are fixed it can be said that there is guidance in the matter of fixing rates for local taxation. As we have already said there is pre-eminently a case for delegating the fixation of rates of tax to the local body and so long as the legislature has provided a method for seeing that rates fixed are reasonable, be it in one form or another, it may be said that there is guidance for fixing rates of taxation and the power assigned to the local body for fixing the rates is not uncontrolled and uncanalised. It is on the basis of these principles that we have to consider the Act with which we are concerned.' (underlining is ours). This extract gives the gist of the various decisions and lays down the law very succinctly on the subject.
48. In Veena Theatre v. State of Bihar, : AIR1970SC1522 it was held that sub delegation was valid, where the mode and the manner in which liability for taxation under the Bihar Entertainment Act (35 of 1948) was to be determined by the taxing authority.
49. In J. R. G. Mfg. Asscn. v. Union of India, : 2SCR68 it was again held that the guidance may take the form of subjecting the rate to be fixed by the local body to the approval of the Government and the reasonableness of the rates may be ensured by providing safeguards, laying down the procedure for consultation with the wishes of the local inhabitants.
50. In G.B. Modi v. Ahmedabad Municipality, : 3SCR942 their Lordships of the Supreme Court have again discussed the case law on the subject and held that while fixing rates at which property tax is to be levied by corporation, under Bombay Provincial Muncipal Corporation Act (59 of 1949), which did not fix any maximum rate it was not invalid on that ground, because the ultimate control for raising them is with the councillors responsible to the people and the Act contains a policy or principles furnishing guidance to delegate in exercising such power. Their Lordships have considered various provisions of the Act at page 2105 viz., the purpose for which the taxes could be levied the purpose for which they can be expended the provisions for keeping the fund in trust and spent as per the Budget Estimate after sanction etc., and held that the above provisions amply establish that the ultimate control both for raising taxes and incurring expenditure is with the councillors, chosen by and responsible to the people and the taxes have to be levied in accordance with the rules made under the Act. It cannot, therefore be said that the power to levy property tax in that case was so unbridled as to make it possible for the corporation to levy it in an arbitrary manner. Their Lordships further observed (at page 2105) as follows:-
'In all statutes dealing with local administration, Muncipal authorities have inevitably to be delegated the power of taxation, such power is a necessary adjunct to a system of local self-Government. Whether such delegation is excessive and amounts to abdication of an essential legislative function has to be considered from the schedule, the objects, and the provisions of the statute in question'.
Their Lordships have reviewed all the previous case law on the subject in this case.
51. We may mention in this connection that in dealing with the levy of market fees under S. 11 of the Bombay Agricultural Produce Markets Act, 1939 (Bombay Act 22 of 1939), the Supreme Court held in Mohd. Hussain v. State of Bombay, : 2SCR659 that R. 53 framed under the Act authorising levy of fees at rates specified under the Bye laws as ultra vires, because S. 11 of the Act gave power to the market Committee subject to the provisions of the rules and subject to such maximum as may be prescribed to levy such fees. In the absence of the maximum being prescribed by R. 53, it was held that the bye-laws, which fixed them are ultra vires of the Section. After this decision was rendered, the rules were amended and the maximum rate was fixed. The matter again came up before the Supreme Court in Muhammadbhai v. State of Gujarat, : AIR1962SC1517 . Their Lordships then upheld the notification and the levy of such fees, which were fixed under the bye-laws. This decision in our opinion, is not in any way opposed to the principle laid down in G.R. Modi v. Ahmedabad Municipality, : 3SCR942 already referred to S. 11 of the Bombay Act provided that the maximum should be fixed by the rules and hence there was a necessity for the rule prescribing the maximum. But in view of the latter decision i.e., G.B. Modi v. Ahmedabad Municipality, : 3SCR942 , even if the maximum is not prescribed by the Act or the rules, the validity of such levy cannot be questioned so long as the policy is clearly laid down and the levy is made by representative body subject to the control of the Government.
52. In deciding the question, what is the sufficient guidance, the following cases have held that the preamble itself is sufficient. H. Bagla v. State of M.P. , : 1954CriLJ1322 ; Vasantlal Maganbhai v. State of Bombay, : 1978CriLJ1281 and State of M.P. v. Champalal, : 6SCR35 .
53. We now summarise our conclusions from the principles laid down in the above decisions as follows:-
1. The power of delegation is a constituent element of Legislative power. The Legislature, in making the laws has to perform the essential function viz., of laying down the essential legislative intent by declaring its policy and formulating it as a binding rule of conduct. Such a function cannot be abdicated to any other person or body of administrators or officers.
2. Such a policy can be deduced either from the preamble of the Act itself or from the other guidance given by the Act intended to achieve the objects of the Act.
3. When once the policy is laid down in definite and discernible terms, the delegation of subsidiary or ancillary powers to delegates of their choice by the legislature for carrying out the policy laid down by it cannot be said to be excessive delegation.
4. On the same principle sub-delegation is also valid, if permitted by the Act, provided sufficient guidance is given, and it is intended to achieve the objects of the Act. For instances where such sub-delegation has been held to be valid, refer to H. Bagla v. State of M.P. , : 1954CriLJ1322 where the legislature authorised the Central Government to delegate its powers to make order under S. 3 of Essential Supplies (Temporary Powers) Act (24 of 1946) not only to the State Government but also to any officer subordinate to the Central or State Government; George Walkem v. L.M.D.P. Board, (AIR 1939 PC 36), where the Lt. Governor delegated the power of making schemes to the Marketing Board; Union of India v. Bhanamal Gulzarimal Ltd., : 2SCR627 where the Controller was delegated the power by the Government to fix the maximum prices for Iron and Steel; W.I. Theaters v. Municipal Corporation, Poona, : AIR1959SC586 where the Municipality was held entitled to levy any other tax for the purposes of the Act, though the nature for the purposes of the Act, though the nature of that tax has not been enumerated by the Act; State of Bombay v. Shivabalak , (AIR 1965 SC 6610 where it was held that the delegate can authorise his subordinate to gather information to enable him to pass the necessary orders required by the statute; Arnold Rodricks v. State of Maharashtra, : 3SCR885 , where it was held that there is no difference between a case where the legislature authorising sub-delegation by statute or by conferring power on the State Government to confer duties on Commissioners (Newly introduced) or other officers performing executive and revenue duties; Hapur Municipality v. Raghuvendra, : 1SCR650 where it was held that the power to levy local taxes is vested in a local body for their local needs which depends upon local enquiries can be left to the representative bodies in which event there can be no excessive delegation; Barium Chemicals Ltd., v. Company Law Board if it is warranted by the express provisions or by necessary implication from the statute, such as the control retained by a nominee of the legislature; Khambhalia Municipality v. Gujarat State, : 2SCR631 where the delegation by the Government to the Development Commissioner to declare an area to be a gram or nagar was held to be valid; Delhi Municipality v. B.G.S. & W. Mills , (AIR 19689 SC 1232) and J.R.G. Mfg. Asscn. v. Union of India, : 2SCR68 , where it was held that in the field of taxation the guidance may take the form of providing maximum rates of tax upto which a local body may make a choice after consulting local opinion or the opinion of the representative body subject to control being retained in the delegate of the Legislature; Veena Theatre v. State of Bihar, : AIR1970SC1522 which held that the mode and manner in which the liability is determined can be provided in the rules leaving it to the taxing authorities, G.B. Modi v. Ahmedabad Municipality, : 3SCR942 where it was held that the Corporation can levy taxes where maximum rates are prescribed by the statute.
5. The doctrine of 'Delegatus non potest delegare' is not a rule of law but a rule of construction. Sub-delegation therefore can be sustained if permitted by an express provision or by necessary implication from the provisions of the Statute, Barium Chemicals Ltd. v. Company law Board, : 1SCR898 ; Union of India v. P.K. Roy, : (1970)ILLJ633SC .
6. The nature of the body to which delegation is made is a factor in deciding whether there is proper guidance or not. If the levy is by way of taxes like Income-tax or sales Tax or the like by the Government, the Government cannot delegate the rates of tax to the delegate. On the other hand in case where the power to levy fees is conferred on a representative local body with maximum rates being fixed by the Statute or rules, it is valid so long as there are provisions in the Statute retaining the control in the delegates of the legislature. The fixation of maximum rates is itself guidance for the levy of reasonable fees.
54. Though in the case, Corporation of Calcutta v. Liberty Cinema, : 2SCR477 it was held that the rates of tax are not essential features of Legislation, these observations were held to have been widely stated in the Delhi Municipality v. B.G.S. & W. Mills, : 3SCR251 case. Even if they are essential features the Legislature can validly lay down the maximum rates and leave it to the local body or the representative body to determine the rates subject to that maximum.
55. Bearing the above principles in mind, we now consider the validity of R. 48, which is now in question. The preamble to the Act is to the following effect:-
'An Act to consolidate an amend the law relating to the regulation of purchase and sale of agricultural produce, livestock and products of livestock and the establishment of markets in connection therewith'.
This is therefore an Act regulatory in nature. One of us had occasion to consider the similar question in L.P.A. No. 204/72. It was observed in that decision as follows:-
'The Madras Commercial Crops Markets Act. 1933 (Act XX of 1933) was passed by the Madras Legislature to provide for the better regulation of buying and selling of Commercial Crops and the establishment of markets for the commercial crops in the Presidency of Madras. It applies to commercial crops as defined in the said Act, which included originally Cotton, Groundnut and Tobacco and which list was later on expanded to include the other products also and it is now admitted that coconuts and copra with which we are not concerned in this case have also been notified by the State Government as Commercial Crops for the purposes of that Act. There are notified areas under that Act, which are constituted by virtue of notification made under Section 4 of the Act. Markets are established under Section 4-A for every notified area. The said Section says that it shall be the duty of the market Committee to enforce the provisions of the Act and the rules and the bye-laws made thereunder in such notified area. The market Committee shall establish in the notified area such number of markets providing for such facilities as the Government may from time to time decide for the purchase and sale of the commercial crop or crops concerned. Trading in commercial crops in the notified area is regulated by licences issued, under Section 5(1) of the Act. It provides that no person shall set up, establish or use or continue or allow to be continued any place for the purchase or sale of a notified commercial crops, except under and in accordance with the conditions of a licence, granted to him by the Collector, Every Market Committee consists of such number of members as may be fixed by the State Government. Every Market Committee is a body corporate and shall have a perpetual succession and a common seal. It may sue or be sued in its corporate name. It has got the powers to acquire and hold property both moveable and immoveable. It has powers to lease, sell or otherwise transfer any of its properties and to do all other things necessary for the purpose for which it is established. It can employ such staff as may be permitted by the rules to be made by the State Government for the management of the markets and pay them such emoluments as may be fixed by it. It can enter into contracts on behalf of the Market Committee. The Market Committee has also power to levy fees on the notified commercial crop or crops, bought and sold in the notified area at such rates as it may determine and such fees have to be paid by the purchaser of the commercial crop concerned. If the purchaser cannot be found, the fee has to be paid by the seller. Any notified commercial crop leaving the notified area, shall unless the contrary is proved, be presumed to be bought and sold within such area. The market Committee can levy subscription for collecting and disseminating among the subscribers information as to any matter relating to crop statistics or marketing in respect of commercial crop or crops. All moneys received by a market Committee have to be credited to the Market Committee fund and all expenditure incurred by the Market Committee as permitted by the Act or the Rules, shall be defrayed from out of the said fund. The balance has to be invested in the manner prescribed by the rules. The Act also enumerates the purposes for which the fund of a Market Committee may be expended. The Market Committee has got powers to borrow, the Market Committee may be superseded by the Government, if it is found incompetent to perform, or persistently makes default in performing duties imposed on it by or under this Act and abused its powers. Power is vested in the State Government to make rules consistent with the Act for carrying out all or any of the purposes of this Act. Power is also given under the Act for the Market Committee to make bye-laws for the regulation of the business and the conditions of the trading therein. Offences under this Act have to be tried by a Court, not inferior to that of a Presidency Magistrate, more a Magistrate of a First Class. The schedule to the Act gives the crop or crops or products as commercial crops for the purpose of the Act and the rate or rates at which the market fees have to be levied.' We have already extracted the observations of their Lordships of the Supreme Court in Arunachala Nadar v. State of Madras : AIR1959SC300 about the nature of this statute. The provisions of the present Act, Andhra Pradesh (Agricultural Produce and Livestock) Markets Act (16 of 1966) also contains similar provisions as the previous Act. We have already extracted in brief the provisions of the present statute in the beginning of our judgment. If the Market Committee makes bye-laws it would be doing so only to regulate its own procedure and the conditions of trading in the notified area covered under the jurisdiction of the Market Committee. The Act also contemplates that the duty of the Market Committee is to enforce the provisions of this Act. The Bye-laws made by it under Section 34 of the Act are always subject to the rules and have to be made with the previous sanction of the Director of Marketing who is an Officer appointed under this Act. They have therefore the power to regulate the business and the conditions of trading in the market under their jurisdiction. Every bye-law made under this Section has to be published in the A. P. Gazette and in the District Gazette and come into force only after three months from the date of publication. Sufficient power is therefore ratained with the Government to control the activities of the Market Committee. The Market Committee are manned by representatives of traders, growers etc. and also nominees of the Government, including officers. All the moneys received by the Market Committee have to be credited to a Market Committee fund and have to be expended only for the purposes mentioned in the Act. There is thus sufficient guidance given in the Act for the levy of the fees contemplated by the Act. Rule. 48 framed under this Act also provides that every application under Section 7 of the Act shall be accompanied with such fees which shall not exceed Rs. 100/-. The fees may be fixed by the Market Committees by its bye-laws subject to that maximum.
56. This itself is sufficient guidance to make it a valid levy. In very nature of things it cannot be expected that the legislature is aware of the varying conditions of the trading in the several markets. The levy of licence fees depends not only upon the nature of commodities bought and sold in such markets, but also on the quantum of business that is usually done and various other factors depending upon the local conditions. All these are matters which ought to be decided only by the local representatives body viz., the Market Committee taking into consideration the Guidance given in the Act and the various factors. The levy of licence fees would also be commensurate with the services to be rendered by the Market Committee. In fixing the guidance for levying licence fee under bye-law No. 20, it cannot be said that they adopted any arbitrary or capricious method. For traders having lower out-turn a lower licence fee has been prescribed. For traders having higher out-turn graded rates of licence fees, subject to the maximum of Rs. 100/- have been fixed. The differenciation thus made has got a reasonable nexus with the object sought to be achieved viz., the services that have to be rendered by the Market Committee to the various traders. The licence fee so collected would be credited to the Market Committee fund and would be spent only for the purposes mentioned therein viz., for improving the conditions of market, weighment and the storage facilities and dissemination of information relating to the various markets and price pattern. The Bye-laws have been approved by the Director of Marketing who is incharge of all such Market Committee by virtue of the Statute and it is a sufficient check over any arbitrary exercise of power by the Market Committee.
57. It has already been held by the Supreme Court in several decisions that the laying down of the maximum rates by the rules is itself sufficient to enable the Market Committee to levy licence fees upto that maximum. We have therefore to hold that Rule. 48, in so far as it fixed only the maximum and left it to the Market Committee to lay down rates by its bye-laws is not void and does not amount to excessive delegation of legislative powers nor is it otherwise ultra vires. The bye-law 20(1) which is now impugned in this writ petition cannot, therefore, be held to be bad.
58. The validity of a bye-law has to be decided by the power to make them (vide Afzal Ullah v. State of U. P., : 4SCR991 . It has also been held by the Supreme Court in Co-op. Cr. Bank v. Ind. Tri. Hyderabad. : (1969)IILLJ698SC that the bye-law of a Co-operative Society has no statutory force, though it is binding on the parties affected thereby. That decision was no doubt rendered in connection with the bye-law of a Co-operative Society under the Andhra Pradesh Co-operative Societies Act. Even assuming that it has got no statutory force it is binding between the parties affected thereby. All the appellants-traders herein are the members of the Market Committee, which have made the impugned bye-laws. They are therefore bound by them.
59. Our learned brothers Obul Reddy, C. J. and Sriramulu, J., have upheld he bue-law in Madan Gopal v. Agricultural M. Committee : AIR1975AP1 in fixing the licence fee on the basis of turnover of the trade. In our opinion that decision has been correctly rendered, as their Lordships have followed the decision in Muhammadbhai v. State of Gujarat : AIR1962SC1517 while deciding the above case, and also in view of the unreported decision in L. P. A. No. 204 of 1972 (Andh Pra).
60. In the above view we find no grounds for interference with the Judgment of the learned Judge. The Writ Appeal therefore fails and it is accordingly dismissed with costs.
Madhava Rao, J.
61. I have the pleasure of reading the judgments prepared by my learned brothers, Alladi Kupuswami and Venkatrama Sastry, JJ., I entirely agree with their view and dismiss the Writ Appeal.
62. In accordance with the unanimous conclusion of all of us the Writ Appeal is dismissed with costs. Advocate's fee Rs. 100/-.
63. Appeal dismissed.