J.M. Shelat J.
1. These three Revision Applications involve a common question of law arising under the Bombay Agricultural Produce Markets Act of 1939.
2. The accused in Rev. Application No. 5/ of 1960 is a trader, who carried on business at Broach in wheat and jowar during the years 1957-58 and 1958-59. In Rev. Applications Nos. 79 and 80 of 1960 the two accused are brothers and were at the material time dealing in the market area at Balasinor in wheat, rice and bajri. The question that has been raised in these three applications is whether the Bombay Agricultural Produce Markets Act, 1939, applies to a trader, who imports agricultural produce from outside the market area and sells it within that market area, or the market constituted therein. The learned Judicial Magistrate, First Class, II Court, Broach, convicted the accused in Criminal Rev. Application No. 57 of 1960 under Rules 65(1) and 65(7) framed under the Act, and sentenced him to pay a fine of Rs. 15/-. Similarly in the other two Applications, the learned First Class Magistrate, Balasinor, convicted the two accused therein and sentenced each of them to a fine of Rs. 30/- in default to suffer S.I. for 6 days. All the three accused thereafter filed their appeals before the learned Sessions Judges at Broach and Nadiad respectively, and their appeals were dismissed.
3. Mr. Patwa and Mr. V.J. Desai have raised four contentions against these orders of convictions, (1) that the Bombay Agricultural Produce Markets Act, 1939, and the Rules framed thereunder apply to agricultural produce grown within the market area notified under the Act; (2) that they apply to transactions, either of purchase or of sale, of such agricultural produce between an agriculturist and a trader, and not to transactions between a trader and a trader; (3) that once such agricultural produce has passed from the hands of an agriculturist, it loses its character of agricultural produce and becomes a commercial commodity to which the Act cannot apply; and lastly, (4) that the word 'trader 'as defined in the Act means a person who buys from or sells to an agriculturist agricultural produce grown within the local area.
4. In order 10 appreciate these contentions it is necessary to refer to certain sections of the Act. The object of passing this enactment which undoubtedly is a piece of social legislation is seen from the preamble of the Act. The preamble states that the object of enacting this legislation was to provide for the better regulation of buying and selling of agricultural produce and the establishment of markets for agriocultural produce in the Province of Bombay. The object thus clearly was to regulate transactions of purchase and sale of agricultural produce and the establishment of markets for such agricultural produce.
5. Section 2(1)(i) defines agricultural produce as including all produce of agriculture etc, specified in the schedule. The schedule includes the types of grain with which we are in these applications concerned viz. wheat Jowar and Bajri. Section 2(1)(ii) then defines an agriculturist as meaning a person who ordinarily by himself or who by his tenants or hired labour or otherwise is engaged in the production or growth of agricultural produce but does not include a dealer or broker in agricultural produce although such a dealer or broker may also be engaged in the production or growth of agricultural produce. Section 2(1)(v) defines a market meaning thereby a market established for the purpose of this Act and Sub-clause (vi) defines a market area as meaning any area declared to be a market area under Section 4.
6. Chapter II of the Act provides for the construction of markets and market committees. Section 3(1) in that Chapter provides that the State Government may by notification in the official gazette declare its intention of regulating the purchase and sale of such agricultural produce and in such area as may be specified in the notification. Section 4 then deals with the declaration of market areas by the State Government by means of a notification in the official gazette. Sub-section (2) of Section 4 provides that on and after the date on which any area is declared to be a market area under Sub-section (1) no place in the said area shall subject to the provisions of Section 5-A be used for the purchase or sale of any agricultural produce specified in the notification issued thereunder. Sub-section 2-B of Section 4 then provides that on and after the date on which any area is declared to be a market area under Sub-section (1) no Municipality or any other local authority... shall be competent to establish authorise or allow to be established any place in the said area for the purchase or sale of any agricultural produce specified in the notification issued under Sub-section (1). Section 4-A provides that for each market area there shall be one principal market yard and one or more sub-market yards as may be necessary and for that purpose the State Government may by notification in the Official Gazette declare any enclosure building or locality in any market area to be a principal market yard for the area and other enclosure buildings or localities to be one or more sub-market yards for the area. Section 5 then deals with the establishment of market committees and provides that the State Government shall establish a market committee for every market area in respect of agricultural produce for which the said area is declared to be a market area under Section 4. It also lays down that it shall be the duty of the market committee to enforce the provisions of this Act the conditions of a licence granted under Sub-section (2) of Section 4 and the rules and bye-laws made under this Act in such market area and when so required by the State Government to establish a market therein providing for such facilities as the State Government may from time to time direct. Section 5-A contains provisions with regard to the issue of licences. It provides that where a market is established under Section 5 the market committee may issue licences in accordance whit the rules to traders commission agents brokers weigh men measurers surveyors warehousemen and other persons to operate in the market. Section 26 empowers the State Government to make rules either generally or specially for any market area or market areas for the purposes of carrying-out the provisions of the Act. Sub-section (2) of Section 26 in particular empowers the State Government to make rules with regard to the issue of licences to traders commission agents brokers etc. operating in the market the form in which and the conditions subject to which such licences shall be issued or renewed and the fees to be charged therefore. Finally Section 27 empowers the market committee to frame bye-laws in respect of the market area under its management for the regulation of the business and the conditions of trading therein.
7. Rule 65 under which the three accused persons were prosecuted and convicted lays down that no person shall do business as a trader or a general commission agent in agricultural produce in any market area except under a licence granted by the market committee under this rule. And Sub-clause (7) of that rule which is a penal provision provides that whoever does business as a trader or a general commission agent in agriculture produce in any market area without a licence granted under this rule or otherwise contravene any of the provisions of this rule shall on conviction be punishable with fine which may extend to Rs. 200 etc....
8. It is not in dispute that so far as the city of Broach is concerned not only the market area but a market have been constituted while in Balasinor though a market area has been notified no market as such has been set up by the market committee. The fact however that no market has been constituted at Balasinor does not make any difference as under Rule 65 framed by the State Government the power to issue a license to a trader who carries on his business in the market area has been conferred upon the market committee. Where a market is constituted as in the case of the city of Broach under Section 5-A of the Act the power to issue such a licence to traders has been conferred upon the market committee by the Act itself. In such a case no rule such as Rule 65(1) would be necessary. It is clear from Section 26(1) of the Act that the State Government has the power to make rules such as Rule 65 prohibiting trading without a licence or laying down conditions for doing business in a market area and generally for the purposes of carrying out the provisions of the Act. As we have said Section 27 enables the market committee to make bye-laws for the regulation of business and the conditions of trading in the market. To enable the market committee to discharge its functions under the Act more effectively the State Government seems to have made Rule 65 prohibiting a trader from doing business in a market area without a licence obtained from the market committee and prescribing fees payable in respect of such a licence. Under Section 27(1) bye-laws can be made by the market committee for the regulation of business in the market area or subject to the rules made by the State Government undo Section 26. This indicates that under Section 26 of the Act the State Government has also the power to make rules for the regulation of business and conditions of trading in the market area and that power can be spelt out from the provisions of Section 26(1) of the Act. Therefore Section 26(1) confers ample power on the State Government to make Rule 65 and under that rule the State Government has empowered in us turn the market committees to frame rules and regulations with regard to the issue of licences for traders carrying on business in the market area. It is clear therefore that by virtue of Rule 65 no person would be entitled to do business as a trader or a general commission agent etc. in agricultural produce in any market area such as in the City of Broach or Balasinor except under a licence granted by the market committee constituted for that local area under the Act. If a trader or a general commission agent were to do such business without a licence granted under this rule or if he otherwise were to contravene any of the provisions of Rule 65 such a person becomes liable to punishment under Sub-clause (7) of Rule 65.
9. This position has not been challenged either by Mr. Desai or by Mr. Patwa. Their contention however is that neither the Act nor the rules framed thereunder are applicable to the accused persons in these three applications inasmuch as all the three accused persons imported the goods in question from outside the respective market areas notified under the Act by the State Government and consequently they were not required to possess a licence under Rule 65. The contention of Mr. Desai and of Mr. Patwa is also that the accused persons having imported these goods after purchasing them from traders outside the respective market areas these goods do not fall within the purview of the Act as they caused to be agricultural produce within the meaning of Section 2 of the Act and therefore again the Act would not apply. In our view neither of these two contentions has any substance.
10. The definition of the words agricultural produce contained in Section 2 is in wide and ample terms and includes all produce of agriculture specified in the Schedule attached to the Act. That definition does not make any distinction as between agricultural produce grown or produced within the market area or the local area within which a market is situated and the agricultural produce bought or sold by a trader from an agriculturist and agricultural produce bought or sold by a trader from a trader. It was submitted on behalf of the accused that agricultural produce ceases to be such and becomes a commercial commodity when it changes hands from one trader to another trader. It was therefore contended that when such agricultural produce becomes an agricultural commodity that is when it passes from the hands of one trader to another trader either by means of purchase or sale; the Act would not apply to such a commodity inasmuch as it ceases to be agricultural produce. Though the contention is an interesting one it does not find support either in the definition of the words agricultural produce in Section 2(1) or from any other provision of the Act. An agricultural produce whether it is wheat jowar or bajri remains an agricultural produce even if it passes from the hands of one trader into the bands of another trader. There is nothing in the definition of agricultural produce or in any other provision of the Act to justify the distinction sought to be made by the learned advocates for the accused.
11. Mr. Patwa next contended that in order that the Act may apply to a trader such a person must mean a person who buys from or sells to an agriculturist agricultural produce grown in the market area concerned and therefore again the Act would not apply in the case of a trader who has imported agricultural goods from outside the local area through a commission agent or a trader and has sold them to another trader though such a transaction takes place in the market area. The learned advocates for the accused have taken us through the various sections and the rules framed under the Act but no provision has been pointed out to substantiate the distinction sought to be made. There is therefore nothing either in the Act or the rules to justify a restricted meaning to be given to the word trader or a restricted meaning to be attached to the words agricultural produce.
12. Reliance was placed by Mr. Desai on the decision in Bapubhai Ratanchand Shah v. The State of Bombay 57 Bombay L.R. 892. There the question was with regard to the validity of the Act and whether the Act in any way violated the provisions of Articles 19(1)(f) 19 or Articles 31 or 304(b) of the Constitution of India. Such a question does not arise in these applications. On the other hand viz. the question now raised before us whether the Act has application to a trader who has imported goods from outside the local area did not arise in that case. Consequently that decision would have no application. A similar question did however arise in the State of Bombay v. Bapulal Fakirchand Gandhi 61 Bombay L.R. 1978 but as is clear from that decision the learned Judges there found that in view of their findings on other questions arising in that appeal it did not become necessary for them to deal with the question whether the Act and the rules made thereunder and the bye-laws made by the market committee of Kolhapur had application to the sale of agricultural produce by one trader to another. That decision also does not therefore assist us However there is an unreported judgment in Isakhan Jahangirkhan Naster v. The State of Bombay Appeal No. 1014 of 1952 decided on January 7th 1959 where a similar question arose. There the appellant was dealing in vegetables in Ahmedabad. He and some other persons imported vegetables from outside Ahmedabad and sold them in Ahmedabad. Some vegetables were also imported from places even outside the State of Bombay. The question was whether on these facts those dealers in vegetables the plaintiffs in that case were affected by this Act in view of the fact that they had imported vegetables from places outside the market that is from places beyond 12 miles from the City of Ahmedabad. Two of these dealers filed a suit for a declaration that the merchants who were importing vegetables from beyond the limits of the market area were not required to take out licences under Section 4 of the Act and also for an injunction restraining the State of Bombay and the Agricultural Produce Market Committee Ahmedabad constituted under the Act from taking any action against them for not complying with the provisions of the Act. The defendants contended that the Act applied to all produce coming from both within and without the market area and arriving in the market area for sale and therefore the plaintiffs and other dealers like them were required to obtain licences under Section 4 of the Act for carrying on business in vegetables. A Division Bench of the High Court of Bombay consisting of Chainam C.J. and Tarkunde J. held that there was nothing in the Act showing that the legislature intended to refer only to agricultural produce produced in the State Reiving upon the preamble of the Act they also held that the object of the Act was to regulate the buying and selling of agricultural produce in the entire Province of Bombay and that the Act would apply to agricultural produce produced and brought from outside the State. The question thus in Isakhan Jahangirkhan Naster v. the State of Bombay was practically the same as the one before us.
13. Considering Sections 4(2) 5 and 54 of the Act the scheme of the Act as it emerges from them is that once a market area is established there is prohibition against purchase or sale of agricultural produce in any area other than such an area. Permission from the State Government to purchase or sell in this area is necessary but this permission is to continue only so long as a market is not established and licences are not issued by the market committee under Section 5A. Once a market is established it is for the market committee to issue licences which would operate in such a market. It would be noticed that whereas under the licences granted by the State Government permission would be granted to operate in any place in the market area under Section 5A once the market is established all transactions must be done in the market. As we have said so far as Balasinor is concerned no market seems to have been established under the Act and therefore ordinarily if a trader wishes to deal in agricultural produce in the market area notified by the State Government he can do so by obtaining a licence from the State Government under Section 4(2) of the Act. But the State Government has under Rule 65 conferred the power of issuing licences to the market committee even in respect of the market area and therefore the fact that a market has not been set up in Balasinor would not seem to make any difference. The result therefore is that both in respect of the places where a market is set up under the Act and where a market is not set up a trader has by reason of Rule 65 to obtain a licence from the market committee without which he would not be entitled to carry on his business in agricultural produce.
14. It is quite clear from the scheme of the Act that the object of this legislation is two-fold first to concentrate all transactions in agricultural produce in one compact area or place; and secondly to concentrate all transactions to persons who have obtained licences. Both these restrictions seem to have been made under the Act to make it convenient to control transactions of purchase or sale in agricultural produce either by the State Government or by the market committee. In this view it was necessary for all the three accused persons to have obtained licences from the market committee and not having obtained such licences and having carried on their business in agricultural produce without them they were rightly convicted under Rules 65(1) and 65(7) of the rules framed under the Act.
In the result all the three applications fail and are dismissed.