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Fulabhai Govindbhai Bhadran and ors. Vs. the Kaira District Tobacco Market Committee and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial;Constitution
CourtGujarat High Court
Decided On
Case NumberSpl. Civil Appln. Nos. 460 and 1242 of 1969
Judge
Reported inAIR1972Guj78; (1971)GLR71
ActsGujarat Agricultural Produce Markets Act, 1964 - Sections 6 and 60; Gujarat Agricultural Produce Markets Rules 1965 - Rules 48, 57 and 58; Constitution of India - Articles 19(1), 59 and 245
AppellantFulabhai Govindbhai Bhadran and ors.
RespondentThe Kaira District Tobacco Market Committee and ors.
Appellant Advocate V.B. Patel and; J.B. Patel, Advs.
Respondent Advocate J.R. Nanavati, Asstt. Government pleader,; R.M. Gandhi, Addl. Govt. Pleader,;
Cases ReferredMohammed Faruk v. State of Madhya Pradesh
Excerpt:
commercial - licence - sections 6, 30 and 60 of gujarat agricultural produce markets act, 1964, rules 48, 57 and 58 of gujarat agricultural produce markets rules, 1965 and articles 19 (1), 59 and 245 of constitution of india - act enacted to provide better regulation of selling and buying agricultural produce - petitioners (tobacco's dealers) challenged some provisions of act and rules - contention given by petitioners in support of challenges - section 30 provides that dealers or traders who have no licence could be evicted from market - provisions of act and rules prescribed as part of overall machinery for essentially regulating buying and selling of agricultural produce - not with view to affect transactions between parties - petitioner's challenge rejected. - - on november 2,.....divan, j.1. in both these petitions though the petitioners are different, the provisions of the rules and the bye-laws framed under the gujarat agricultural produce markets act, 1963 (hereinafter referred to as 'the act') have been challenged by the respective petitioners. the rules in both the petitions are in connection with the bye-laws of the kaira district tobacco market committee. anand and in connection with the market area, the principal market year and the market proper set up for the purpose of controlling trade in tobacco in kaira district these challenges have been made. 2. the petitioners in special civil application no. 460 of 1969 state that petitioners nos. 1, 2 and 3 are dealers in tobacco. petitioner no. 1 purchases its tobacco from agriculturists and / or other dealers.....
Judgment:

Divan, J.

1. In both these petitions though the petitioners are different, the provisions of the Rules and the bye-laws framed under the Gujarat Agricultural Produce Markets Act, 1963 (hereinafter referred to as 'the Act') have been challenged by the respective petitioners. The rules in both the petitions are in connection with the bye-laws of the Kaira District Tobacco Market Committee. Anand and in connection with the market area, the principal market year and the market proper set up for the purpose of controlling trade in tobacco in Kaira District these challenges have been made.

2. The petitioners in Special Civil Application No. 460 of 1969 state that petitioners Nos. 1, 2 and 3 are dealers in tobacco. Petitioner No. 1 purchases its tobacco from agriculturists and / or other dealers in tobacco and / or from through brokers or commission agents and petitioners Nos. 2 and 3 are commission agents and brokers. Petitioner Nos. 4 and 5 claim to be agriculturists and tobacco growers. On November 2, 1939 the Legislature of the Province of Bombay enacted an Act called the Bombay enacted an Act called the Bombay Agricultural Produce Markets Act, 1939 (hereinafter referred to as 'the Bombay Act') to provide for better regulation of buying and selling of agricultural produce and the establishment of markets for agricultural produce in the province of Bombay. Subsequent to the enactment of the Bombay Act. Section 4-A, 5-A, 5-AA and 5-BB and Section 18-A TO 18-C, 21-A, 21-B and 29-A were added in the Bombay Act. Pursuant to the powers vested in the Provincial Government in that behalf under the Bombay Act. Rules were framed by the Provincial Government in 1941 and thereafter in 1960 the Commissioner, Ahmedabad Division, declared that with effect from 15th February 1960 the area of Kaira District was to be the market area for the purposes of the Bombay Act in respect of purchase and sale of tobacco. That notification was issued on 9th February 1960. Thereafter a further notification was issued on October 18, 1960 mentioning that the localities mentioned in the notification were to be the market yard for the market area of Kaira District and by another notification dated October 18, 1960 the Commissioner Concerned further notified that the area within the limits of Anand Municipality was to be the market proper in the market area of Kaira District. It is by virtue of these three notifications that in 1960 first the market area of the entire Kaira District was set up as the market area for purchase and sale of tobacco and the market yard was set up at Anand and the market proper was set up conterminous with the limits of Anand Municipality.

3. The Bombay Act of 1939 was repealed by the Gujarat Agricultural Produce Markets Act, 1963 (hereinafter referred to as 'the Gujarat Act') and in exercise of the powers conferred upon it by Section 59 of the Gujarat Act the Government of Gujarat framed Rules called the Gujarat Agricultural Produce Market Rules, 1965 (hereinafter referred to as 'the Gujarat Rules'). Thereafter the first respondent - Market Committee has framed appropriate bye-laws as well. In Special Civil Application No. 460 of 1969 the petitioners have challenged some of the provisions of the Act as well as the Rules and we will later on set out seriatim the different contentions urged on behalf of the petitioners regarding those challenges.

4. In Special Civil Application No. 1242 of 1969 the petitioners are three different partnership firms and all these partnership firms have their offices at Chikhodra village in Anand Taluka of Kaira District. The averments set out in this Special Civil Application are on the same lines as the averments in Special Civil Application No. 460 of 1969 and the Challenges are also on the same grounds. The three petitioners-firms in this Special Civil Application are dealers in tobacco and all the male partners of the different petitioner-firms claim to be agriculturists and tobacco growers. Since the challenges to the section and the rules and the bye-laws in the two petitions are on the same lines, we will dispose of both these Special Civil Applications by this common judgment.

5. Mr. V. B. Patel appearing on behalf of the petitioners in both the Special Civil Applications contended as follows:-

(1) That the area declared as market area, market proper and market yard is so wide that the sale and purchase or tobacco cannot be controlled and, therefore, the notifications declaring such areas are invalid. It is also contended under this head that the market committee has not located the market and, therefore, the Act i.e. the Gujarat Act does not operate in this market area.

(2) Bye-laws dealing with the market fee and licence fee are void as the levy thereof is beyond the power of the Market committee inasmuch as there is no quit pro quo of sufficient quid pro quo for the service rendered by the Market Committee and the funds are permitted to be used by for aiding other bodies under the provisions of Section 34 of the Gujarat Act.

(3) This contention was divided into two major sub-heads, viz. (a) Rules 58 and 59 of the Gujarat Rules are ultra vires the rule making power and they over-reach Section 28. In this connection it was contended that the word 'agent' must be given the ordinary meaning and that if the acceptance of a particular contract is under compulsion, no contract at all can be said to be created and if agency for the purpose of collection of market fee is constituted by compulsion, then there cannot be said to be any agency and hence Rules 58 and 59 are ultra vires. It was further contended under this sub-head that the mere expediency of saving money or a more convenient mode of collection of market fee was not a relevant factor while considering the rule making power in this connection.

(b) Relevant bye-laws of the respondent - Market committee are also challenged on the same grounds as the provisions of Rules 58 and 59 of the Gujarat Rules.

(4) Bye-laws 21, 24, 57 and 32. Forms 5, 6, 8 and 9 and conditions Nos. 3, 5, 10 and 18 of the licence are all ultra vires the powers of the Market Committee and are not binding on the petitioners. It was contended in this connection that these bye-laws, forms and conditions to carry as unreasonable restrictions to carry on trade and are, obnoxious to Art. 19(1)(g) and are also violative of Art. 31 of the Constitution.

(5) Section 34 is a colourable exercise of legislative power. It was contended that the Legislature cannot provide for use of the money for purposes of a body other than the respondent -Market Committee or any Market Committee other than the one which collects the market fees. It was also contended in this connection that Sections 34 and 35 are both beyond the legislative subject-matter and are ultra vires the State Legislature because the entry relating to contracts occupied the field so far as the Central Legislature is concerned and these provisions were not regulatory but were prohibitory in nature and amounted to unreasonable restrictions.

(6) Explanation to sub-rule (1) of R. 48 and bye-law 2 (9) were ultra vires the rule making authority and void and it was contended in this connection that the vice lies in the fact that the levy is charged before the leviable event occurs and, therefore, it was repugnant to the scheme of the Act.

(7) Section 27, 28, 6 and 8 are void on the ground of excessive delegation inasmuch as these sections confer arbitrary power on the delegate without providing guidance and restraints subject to which the delegate has to prescribe fee.

(8) It may be stated at the commencement of considerations of these different contentions that each of these contentions is supported by appropriate averments in the petition or in the affidavits filed on behalf of the petitioners in these proceedings.

7. Before we go on to consider the contentions it is necessary to set out certain prominent provisions of the Gujarat Act and the Gujarat Rules. As the title of the Act shows, the Gujarat Act is an Act to consolidate and amend the law relating to the regulation of buying and selling of agricultural produce and the establishment of markets for agricultural produce in the State of Gujarat. At this stage we may also point out that entry No. 28 in List II i.e. State List in the Seventh Schedule of the Constitution is 'Markets and fairs' and under Article 246 (3), subject to Cls. (1) and (2) of Art. 246, the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule and thus the State Legislature had the exclusive power to make laws for the State of Gujarat in connection with markets and fairs. Deriving power from Article 246 (3) read with Entry 28 in the Seventh Schedule the State of Gujarat has enacted this legislation and the legislation is for regulating buying and selling of agricultural produce and the establishment of markets for agricultural produce. Under Section 2(I) of the Gujarat Act, 'agricultural Produce' means all produce. Whether processed or not, of agriculture, horticulture and animal husbandry, specified in the schedule. The terms 'market Proper' and 'market area' mean respectively market, market proper and market area declared or deemed to be declared so under the provisions of the Act. Section 6 empowers the Director of Agricultural Marketing and Rural Finance. Gujarat State to declare any areas specified in the notification to be a market area for the purposes of the Act in respect of all or any of the kinds of agricultural produce specified in the notification and under Section 7(1) for each market area, there shall be a market which shall consist of one principal market yard, sub-market yards, if any and all markets proper as notified under sub-sections (2) and (3) of that section. The Director has been empowered under Section 7(2) to declare by notification in the Official Gazette any enclosure, building or locality in any market area to be a principal market yard and any other enclosure, building or locality to be a sub-market yard. Under Section 7(3) whenever the Director declares for any market area, the principal market yard or a sub-market yard, he shall simultaneously declare, by notification in the Official Gazette, an area within such distance of the principal market yard or sub-market yard, as the case may be, as he thinks fit, to be a market proper. Under Section 8 of the Gujarat Act, no person shall operate in the market area or any part thereof except under and in accordance with the conditions of a licence granted under the Act. One of the results of the declaration of the market area as under Section 6(2) is that notwithstanding anything contained in any law for the time being in force, from the date on which any area is declared to be a market area under sub-section (1), no place in the said area shall be used for the purchase or sale of any agricultural produce specified in the notification except in accordance with the provisions of the Act and under sub-section (3), nothing in sub-section (2) shall apply to the purchase or slaw of any such agricultural produce, if its producer is himself its seller and the purchaser purchases it for his own private consumption. Under Section 9, for every market area the Director has to establish a market committee and the exceptions set out in sub-sections (2) and (3) of Section 9 have no bearing on the controversy arising in the present case and, therefore we do not refer to the same, Section 27(1) lays down that on the establishment of a market, the market Committee may, subject to rules made in that behalf, grant or renew a general licence or a special licence for the purpose of any specific transaction or transactions to a trader general commission agent, broker, weighman, surveyor, warehouseman or any person to operate in the market area or part thereof, or after recording its reasons therefore, refuse to grant or renew any such licence. Power has also been given to the Market Committee to suspend or cancel a licence after following proper procedure and for reasons to be recorded in writing. Section 28 empowers the Market Committee, subject to the provisions of the rules and the maxima and minima from time to time prescribed, to levy and collect fees on the agricultural produce bought or sold in the market area and the proviso to Section 28 states that the fees so levied may be collected by the Market Committee through such agents as it may appoint. Under Section 30 power has been conferred upon the Chairman. Vice-Chairman or Secretary of the Market Committee or any other member, officer or servant authorised by the committee in this behalf to evict summarily from the market any person found to be operating in the market area without holding a valid licence and such eviction is to be without prejudice evicted may be liable under the Act. Under Section 32, all moneys received by a Market Committee shall be paid into a fund to be called 'the Market Committee Fund' and all expenditure incurred by the Market Committee under or for the purposes of the Act has to be defrayed out of the said fund. Any surplus remaining with the Market Committee after such expenditure has been met has to be invested in such manner as may be prescribed in this behalf. Section 33 lays down the purposes for which the fund is to be expended and what has been attacked is clause (9) laying down payment of contribution to the State Agricultural Produce Markets Fund. Section 34 lays down that there shall be established a fund called the State Agricultural Produce Markets Fund which is to consist of the payments made into it under sub-section (2) of that Section and such other sums which may under this act be credited thereof, and which shall unless otherwise provided in the Act, be utilised provided in the Act, be utilised for subsidising a market committee for the development of a market or for subsidising market committees whose financial position makes it impossible for them to employ a sufficient number of officers and servants for the discharge of their functions under the Act or for discharging any liability vesting in the State Government under Section 53. Section 34(2) provides that all market committees shall pay to the State Agricultural Produce Markets Fund every year such contribution on such date and in such manner as may be prescribed and the State Government has to contribute to the said Fund every year a sum which shall be equal to the total amount of contributions under clause (a) from all market committees.

The State Fund has to be kept in the custody of, and has to be administered by the Director of agricultural Marketing and Rural Finance in such manner as may be prescribed. Under Section 35 no person shall make or recover any trade allowance, other than an allowance prescribed by rules or bye-laws made under the Act, in any market area in any transaction in respect of agricultural produce specified in respect of the market area under the provisions of the Act and no civil court shall, in any suit or proceeding arising out of any such transaction, take into consideration or recognise any trade allowance not so prescribed. The explanation to Section 35 mentions that every deduction other than a deduction on account of deviation from sample when the purchase is made by sample, or on account of a deviation from standard when the purchase is made by reference to a known standard, or on account of a difference between the actual weight of the container and the standard weight, shall be regarded as a trade allowance for the purposes of this section. Section 59 confers the power to made rules on the State Government and such rules may be either general or special for any market area or market areas and they are to be made for the purposes of carrying out the provisions of the Act. Section 60 confers power on the market committee in respect of the market area and agricultural produce for which it is established to make by-laws, not inconsistent with the Act and the rules made thereunder, for the regulation of business and the conditions of trading in the market area for any other matters as may be prescribed and the proviso lays down that no such bye-law shall be valid until it is registered under the Act. Such registration under the provisions of Section 60 is to be made with the Director of Agricultural Marketing and Rural Finance. The other provisions of the Act are not material for the purpose of this judgment.

8. Acting in exercise of the powers conferred by Section 59 of the Gujarat Act, the Gujarat Government made the Gujarat Agricultural Produce Markets Rules, 1965. Rules which are relevant for the purpose of this judgment are as follows.

Rule 48 provides for markets fees and lays down that the market committee shall levy and collect fees on agricultural produce bought or sold in the market area at such rate as may be specified in the bye-laws subject to the minima and maxima laid down in the rule. So far as the rates levied ad valorem are concerned, they are not to be less than 5 paise and not to be more than 40 paise per hundred rupees. The explanation to clause (1) of Rule 48 lays down that for the purposes of this rule a sale of agricultural produce shall be deemed to have taken place in market area if it has been weighed or measured or surveyed or delivered in case of cattle in the market area for the purpose of sale, notwithstanding the fact that the property in the agricultural produce has by reason of such sale passed to a person in a place outside the market area. Under the second proviso to sub-rule (2) of Rule 48 no fee shall be payable on a sale or purchase to which sub-section (3) of Section 6 applies, meaning thereby to a sale by an agricultural producer to a purchaser purchasing the produce for his own private consumption. Rule 49 provides for recovery of fees and lays down that the fees on agricultural produce shall be payable as soon as it is brought into the principal market yard or sub-market yard or market proper or market area as may be specified in the bye-laws, provided that the fees so paid shall be refunded on production of sufficient proof that such produce was not sold within the limits of the market area. The remaining provisions of Rule 49 are not material for this judgment. Under R. 50 a receipt duly signed by the person authorised by the market committee has to be granted to every person in respect of fees collected from him under these rules or the bye-laws. Rule 54 lays down that all agricultural produce arriving into the market shall be brought into the principal market yard or submarket-yard in the 1st instance and shall side such yards, provided that ginned cotton, husked paddy, groundnut seeds and split pulses may be sold anywhere in the market area in accordance with the provisions of bye-laws and details wholesale in the market area have to be reported to the market committee under clause (2) of Rule 54. Rule 57 prescribes the maximum fees for licences to be issued by the market committee to a broker, weighman, measurer. Hamal, Surveyor, warehouseman, carting agent and clearing agent. Provisions have also been made in Rule 56 for issuing licences to traders and general commission agents carrying on their respective business in the agricultural produce in question in the market area or any part therefor. The maximum licence fee which can be charged to a licenced trader or a general commission agent is Rs.200/-. Under Rule 58 every trader, general commission agent, broker, weighman, measurer and surveyor licensed under these rules has to keep such books in such form and render such periodical form as the market committee may from time to time direct and has to collect fees and render such assistance in the prevention of the evasion of fees due under the Act, these rules and bye-laws and in the prevention of the breach of the rules and bye-laws as may be re-quired by the market committee. There is also a provision in the rules for requiring the traders, general commission agents and brokers to sumbit for examination in the office of the market committee, and to allow the inspection of their account books, ledger etc, on demand by the chairman, vic-chairman or Secretary of the market committee or any other officer or servant of the market committee when so authorised by the chairman or secretary. The rules also provide for appropriate weights and measures and standard weights and measures and inspection of weights and measures. The remaining rules do not require consideration for the purpose of this judgment.

9. The first respondent - market committee has made the bye-laws for the purposes of the Act under Section 60. Bye-law 20 lays down that market fee at the rate of 25 p. per hundred rupees on tobacco bought and sold or brought within the market area in question has to be paid. Bye-law 21 lays down the procedure for recovery of market fee and clause (1) of bye-law 21 states that as soon as tobacco is bought or sold owners of the tobacco become liable to pay the market fee at the rates mentioned in bye-law 20. Clause (3) of bye-law 21 lays down that if in a particular transaction a commission agent or broker has been engaged, then the market fee is to be recovered from such commission agent or broker and/or from the purchaser of the tobacco and the responsibility of paying the market fee to the market committee is on such commission agent or broke or purchaser of the tobacco. Clause (4) lays down that at the time of paying the price of the tobacco to the seller of the owner of the tobacco the market agent or the broker or the purchaser.

10. Bye-law 24 lays down the provisions for different types of licence holders and the seller has also to observe certain rules at the time of effecting sale. One of the requirements is that if he does not wish to sell the goods then he has to get a note to that effect made by the market committee. Bye-law 39 provides for inspection of tobacco when such tobacco has been brought into the principal market yard or market proper or market area. Bye-law 42 provides for the control and regulation of traffic, vehicles etc, and for the regulation of movements of tobacco in the principal market yard or submarket yard and powers have been given under that bye-law to the Chairman. Vice-Chairman, Secretary or to the authorised member or official of the market committee to regulate the traffic in goods as well as in vehicles. The forms prescribed by the bye-laws lay down for the supply of different types of information by the licence-holders being either the general commission agents or licensed traders and form No. 8 prescribes the form in which the information has to be given regarding the account of weight and quantity sold and the price. Conditions of licence have been laid down and condition No.5 prescribes that whenever the market committee requires any information the licence-holder is bound to furnish that information and has to submit his books of account at such place as the committee may demand. That has to be done for the information of the market committee. The conditions also require the licence-holder not to carry on any trade with a non-licence holder in connection with products of tobacco, and require him to help the market committee in enforcing the provisions of the Act, the rules and the bye-laws in connection with the market committee and to be helpful to the market committee in preventing breaches of the sections the rules and the bye-laws.

11. In order to deal with the challenge to these provisions it is important to bear in mind the distinction between 'market area' 'market proper' 'principal or sub-market yard' and 'market'. The market area is out of all these geographical areas the largest entity and the market committee under the Act and the rules made thereunder has the power to regulate transaction of purchase and sale of tobacco throughout the market area and no person can operate in the market area in connection with this particular commodity of tobacco except in accordance with the licence granted to him. At the same time, it must be borne in mind that the operation means action as a trader, commission agent, broker, weighman, surveyor etc, as contemplated by the rules and the bye-laws. In the market area the principal market yard or sub-market yards as the case may be have to be notified by appropriate notification and appurtenant to each principal or sub-market yard an area called 'market proper' which is a slightly larger area has also to be notified. The principal or the sub-market yards as the case may be together with the appurtenant market proper constitute a market. Thus there is a clear distinction between 'market area' and 'market'. This distinction between 'market' and 'market area' has to be constantly borne in mind in order to understand properly the provisions of the Act, the rules and the bye-laws and what the Legislature has sought to do, in the instant case.

12. Subba Rao. J. (as he then was) in Arunachala Nadar v. State of Madras. AIR 1959 SC 300, has in paragraph 6 pointed out the historical background of such legislation for regulating marketing of agricultural produce and he has stated that marketing legislation is now a well-settled feature of all commercial countries. The object of such legislation is to protect the producers of commercial crops from being exploited by the middlemen and profiteers and to enable them to secure a fair return for their produce. He has also pointed out how the Royal Commission on Agriculture in India, the Central Banking Enquiry Committee, the All India Rural Credit and Survey Committee etc, and also the Expert Committee appointed by the Government of Madras had made recommendations for legislation on these lines and so far as tobacco on these lines and so far as tobacco trade is concerned, it may be pointed out that the notifications issued in 1960 were in pursuance of the Report of the Expert Committee on the review of the Bombay Agricultural Produce Markets Act. 1939. That Committee was set up by the Government of Bombay by its resolution of June 22, 1955. It was in pursuance of the report of that Expert Committee that regulation of marketing of tobacco which was one of the major cash crops under the Act was taken in hand and the market yard and market proper at Anand were notified in 1960 under the Bombay Act of 1939.

13. In paragraph 14 of the petition, the petitioners have stated that the authority issuing the Notifications declaring the areas to be the market area, market proper and market-yard has acted without applying its mind properly, arbitrarily and so unreasonably that the sale and purchase of the regulated produce cannot be controlled by the market committee. The petitioners contended that this is apparent from the Notifications annexed to the petition and collectively market annexure 'a' According to the petitioners, the declarations made by the said notifications are manifestly unreasonable and more so in case of produce like tobacco. According to the petitioners, such declarations are totally misconceived and wholly inappropriate. The petitioners, therefore, contend that the said notifications were illegal, ineffective and unenforceable. The petitioners contended that Kaira District consists of 10 Talukas, each consisting of a number of villages; and the total area of the District is 6788 Sq. Kilometers. Mr. V.B. Patel, on behalf of the petitioners, also drew our attention to various rules laid down by the Central Government under the Central Excises and Salt Act, 1944; and these Rules are called the Central Excise Rules, 1944. Under the rules laid down in Chapter IV of the Central Excise Rules, 1944, special obligations have been laid down on growers of tobacco and those who store tobacco; and certain registers and books have to be maintained as laid down in those Rules; and it was contended that if the Central Excise Rules have to be complied with, then the Scheme of the market-area, market-yard market proper, and the market committee under the Bombay Act, 1939 and Gujarat Act of 1963 becomes unworkable.

14. As regards this contention, it is true that under the Central Excise Act, certain obligations are laid down on the growers of tobacco and also on those who process tobacco for being taken to the market or process it in any other manner. Those obligations are from the point of view of seeing that the excise duty payable on tobacco is not evaded; where as the provisions of the Bombay Act of 1939 and the Gujarat Act of 1963 and the Rules and buy-laws framed thereunder, are for seeing that the agriculturists who produce tobacco in his field gets the maximum price for his agricultural produce and is not cheated in any manner; and it is from the point of view of thus benefiting the agriculturist, producer of tobacco, that the regulation of the market is sought to be enforced. The scheme of the two Acts being different, there cannot be any question of the Scheme of the Gujarat Act becoming unworkable because of the provisions of the Central Excise and Salt Act, 1944, or the Central Excise Rules, 1944.

15. As regards the contention that the area notified as market area, viz., 6788 Sq. meters. is a very wide area, we must bear in mind that under the Scheme of the Act and the Rules, it is only when goods arrive in the market-proper either because they are grown there or because they are brought there from outside that the obligation arises to take them either to the principal market yard or to the sub-market yard, as the case may be. Each and every purchaser of tobacco in the market area is not bound to take his goods to the principal market yard or the sub-Market yard, if an. But so far as the regulation of the traders is concerned, no trader can operate in the entire market area unless he has licence and by licencing and keeping control over his transactions, the Market Committee sees to it that proper prices are paid and that the traders carry out the terms and conditions of their licences and do not in any manner act contrary to the interests of the producers.

16. We may also point out that in Bapubhai v. State of Bombay. AIR 1956 21, a Division Bench of the Bombay High Court considered the constitutional validity of the Bombay Act of 1939 and held it to be a valid piece of legislation. Chagla C.J., delivering the judgment of the Division Bench, pointed out the distinction between a power vested in the Government and exercise of discretion. In paragraph 24 at p.29, Chagla C.J., observed:--

'There is one further point that Sir Nusserwanji wanted to urge which we have no permitted him to do, and therefore in fairness to him we must point out what his contention was to be. With regard to the notification of 13-10-1954, to which reference has been made. Sir Nusserwaji wanted to argue that that notification was in fraud of the provision to Section 4-A (2). The argument was that the first notification which purported to give effect to the proviso was merely a camouflage, the intention all along was no to carry out the mandatory provisions of the proviso and to declare a principal market yard different from the principal market yard which had to be declared under the proviso.

Now, it is a serious allegation to make that a Government has acted in fraud of a legislation and we cannot countenance an argument based on such an allegation unless there is a clear plea in the petition. Now, there is no plea to the effect that the State Government has acted in fraud of the legislation or that the notification issued by it is in fraud of the legislation. The only contention put forward is that the State government has arbitrarily and capriciously issued the second notification within a short time of the first notification.

In our opinion, a contention that a Government acts arbitrarily and capriciously is very different from the contention that the Government acts in fraud of a law on the statute book. It is also difficult to understand the plea of the State Government's action being arbitrary or capricious when we are not dealing with the question of exercise of discretion but the exercise of a power.

If absolute power is conferred upon Government, then that power can be exercised and the Government is not bound to give reasons and explain motives why the power was exercised. If the power is not absolute and is conditional, then the power can only be exercised provided the conditions are satisfied.

But in their case a plea that the power was exercised arbitrarily or capriciously seems to be a little out of place. It is true that the Court will hold that there was no exercise of power conferred by a statute if that exercise was a fraud upon the law, and therefore short of plea of fraud the exercise of the power conferred by statute cannot be objected to on vague grounds like the one put forward in the petition by the petitioners.'

Applying the same reasoning here in the present case, the petitioners do not contend that the Notifications declaring Kaira District Market Area and Market-Yard, Market-Proper were in fraud of the statute, namely, the Bombay Act of 1939. It may be that the power having been conferred upon the State Government or the appropriate authority and fixing the market area in case of any particular area in the exercise of that power, the State Government has issued this Notification, which according to the petitioners is an arbitrary or capricious exercise of that power; but there is no plea of fraud in the present case and hence of exercise of the power conferred by this particular statute cannot be objected on grounds like ground of wide area, which has been urged by the petitioner in the petition. Under these circumstances, in our opinion, the contention, urged by Mr. V.B. Patel that the area notified as market-area is very wide must fail.

17. So far as the question of location of the market area is concerned, under the Gujarat Act and also under the Gujarat Rules Market Committee's function is to regulate the trade in tobacco in the market area viz., Kaira District, by its bye-laws. Under the Scheme of Section 7(1) of the Gujarat Act, for each market area, there shall be a market which shall consist of (i) one principal market yard (ii) sub-market yards, if any; and (iii) all markets proper; notified under sub-sections (2) & (3). Under sub-section (3) of Section 7 when the Director declares for any market area, the principal market yard or a sub-market yard, he shall simultaneously declare, by notification in the official gazette, an area within such distance of the principal market yard to sub-market yard, as the case may be, as he thinks fit, to be a market proper. Under sub-section (4) of Section 7, a market shall be deemed to have been established for any market area with effect from the date on which the principal market yard and a market proper are declared for that area. The principal market-yard and market-proper for this particular market area were declared as far back as November 1960; and hence from that date onwards, the market shall be deemed to have been established for this market area of Kaira District as regards agricultural produce of tobacco. We may point out that under Section 4-A (4) of the Bombay Act, a market was deemed to have been established for any market area with effect from the date on which the principal market yard and a market proper were declared for that area. In view of this legal position regarding the establishment of the market, which is the geographical entity for the purposes of regulating the actual transactions in the market area, the second part of the first contention of Mr. Patel must also fail. There is no question of the market committee locating to any market. The committee locating to any market. The market is deemed to have come into existence under Section 7(4) of the Gujarat Act and under Section 4-A (4) of the Bombay Act when the principal market yard and its market proper in the market area were notified. It is, therefore, not correct to say that the Act does not operate at all in the absence of the location of a market by the market committee.

18. We find from the trend of the arguments before us that lot of confusion was prevailing in the contentions urged on behalf of the petitioners between market, market-proper and market area and that is why at all stages we have tried to emphasize that the jurisdiction of the market committee is with reference to the entire market area and market committee regulates the trade in tobacco in the entire market area but the obligation to take the goods to the principal market yard is only is the goods are brought within the market i.e. within the area of market proper; and nonce this scheme laid down under the Act and the Rules thereunder is properly understood, a large number of problems which are imagined to exist by the petitioners stand clearly explained and pose no difficulty.

19. Coming now to the second contention of Mr. V.B. Patel, on behalf of the petitioners, it was contended that under the scheme of the Gujarat Rules of 1965 and the buye-laws framed by the Committee, the market committee charges two types of fees; viz:--

(1) Licence fees from different types of persons operating in the market, namely, traders, commission agents, brokers, warehousemen etc., who take out, licences for operating in the market area for tobacco and who pay fees for obtaining such licences, and

(2) market fee, which is levied and collected at the time when tobacco is brought into the market area or the market proper or the principal market yard, or the sub-market yard, as the case may be.

The contention was that the buy-laws dealing with the levying these fees are void as there was no sufficient quid pro quo between the collection by way of fees and the services which are rendered by the market committee as against the collection of these fees. It was contended in this connection that no services worth the name were being rendered to the agriculturists or the different licensees and it was contended that in the affidavit-in-reply, no such services had been pointed out in the shape of any tangible material on the record. It may be pointed out in this connection that in the affidavit-in-reply filed by Vithlbai Somabhai Patel, Secretary of the first respondent Market Committee, in paragraph 13 it has been pointed out as follows:--

'It is stated that negotiations are going on for acquiring lands for the purposes of the committee at various strategic places such as Sunay, in Detlad Taluka, Saresa, Bhalej, Lambhvel, Redva, Vaghasi in Andand Taluka at Dumral and Nadiad in Nadiad Taluka and at Thasra in Tasra and for the purchase of such lands, the funds will be insufficient and it will be necessary to go in for loans as the lands are costly and it will be required to purchase. The following table will give an idea of the fees charged and the expenses incurred by the first respondent in last three years.

Years. Licence Market Expenses.Fees. Fees.Rs. Rs. Rs.1966-67 58,984 1,95,084 81,0131967-68 75,325 3,24,821 96,1431968-69 87,621 2,81,770 1,22,546 It is stated that the surplus would not be sufficient for the purpose of acquiring lands as set out herein and more funds would be required for setting up warehouses and sub-market yards, in strategic areas. The lands in the areas are costly and present funds of rupees nineteen lacs will not be sufficient. It is true that the market area of this respondent committee is predominantly tobacco growing but looking to the task before the committee the levies effected by way of licence fees and market fees are reasonable.'

Thus, the market committee has been utilizing a surplus from its income a licence fees and market fees for the purpose of providing facilities and it is only over a number of years that the funds can be collected and the moneys can be properly utilized for giving proper facilities to agricultural producers. It has not been contended, as in fact it is not open to contend, that the money collected from the agriculturists during a particular year must be spent for the benefit of the agriculturists in that very year and that the fees cannot be collected at all in the manner in which the market committee has been doing at present. We may point out that under Section 32 of the Gujarat Act, all moneys received by a market committee shall be paid into a fund to be called 'the Market Committee Fund' and all expenditure incurred by the market committee under or for the purposes of the Act shall be defrayed out of the said Fund. Any surplus remaining with the market committee after such expenditure has been met shall be invested in such manner as may be prescribed in this behalf. Section 33 of the Gujarat Act lays down the purposes for which the Market Committee Fund shall be expended. It is, therefore, clear as pointed out by Bachawat J. in Lakhan Lal v. State of Bihar, AIR 1968 SC 1408.

'The market committee has taken steps for the establishment of a market where buyers and sellers meet and sales and purchases of agricultural produce take place at fair prices. Unhealthy market practices are eliminated, market charges are defined and improper ones are prohibited. Correct weighmen in ensured by employment of licensed weighment and by inspection of scales, weights and measures and weighing and measuring instruments. The market committee has appointed a Dispute sub-committee for quick settlement of disputes. It has set up a market intelligence unit for collecting and publishing the daily prices and information regarding the stock, arrivals and despatches of agricultural produce. It has provided a grading unit where the technique of grading unit where the technique of grading agricultural produce is taught. The contract form for purchase and sale is standardised. The provisions of the Act and the rules are enforced through inspectors and other staff appointed by the market committee. The fees charged by the market committee are correlated to the expenses incurred by it for rendering these services. The market fee of 25 naye paise per Rupees 100/- worth of agricultural produce and the licence fees prescribed by Rules 71 and 73 are not excessive. The fees collected by the market committee form part of the market committee fund which is set apart and ear-marked for the purposes of the Act. There is sufficient quid pro quo for the levies and they satisfy the test of 'fee' as laid down in commr., Hindu Religious Endowments Madras v. Shri Lakshimindra Thirtha Swaminar of Shri Lakshmindra Thirtha Swamiar of Shri Shirur Mutt, AIR 1954 Sc 282.'

20. In the instant case as shown by the affidavit-in-reply the market committee has clearly pointed out that there are sufficient services rendered by the market committee to the agricultural producers of tobacco as a whole and it is for their benefit that this Act for regulating the trade in tobacco has been applied in Kaira District. In Lakhan Lal's case. AIR 1968 SC 1408 (supra), the Supreme Court was considering the provisions of Bihar Agricultural Produce Market Act, 1960, which are in parimateria with the provisions of the Gujarat Act of 1963; and hence the observations of Bachwat, J. in that case apply to the facts of the present case and also the contentions urged in that behalf.

21. We may also point out that the case of the licence fee stands on a slightly different footing from the case of the market fees. In AIR 1954 SC 282, the distinction between licence fees and other fees was pointed out, and in the Corpn., of Calcutta v. Liberty Cinema. AIR 1965 SC 1107, the Supreme Court has pointed out how this distinction between licence fees and other fees has to be approached. In Calcutta Corporation's case (supra), in paragraph 8 at pages 1111 and 1113 Sarkar, J. delivering the judgment on behalf of himself. Raghubardayal, J. and Mudholkar, J., has pointed out that no doubt Section 548 of the Act before the Court uses the word fees but the Act uses the word fee indiscriminately and did not intend to use it as referring only to a levy in return for services. In fact in our Constitution fee for licence and fee for services rendered are contemplated as different kinds of levy. The former is not intended to be a fee for services rendered. This is apparent from a consideration of arts, 110 (2) and 199 (2) where both the expressions are used indicating thereby that they are not the same and the following passage from Shannon v. Lower Mainland Dairy Products Board, 1938 AC 708, was relied upon by the Supreme Court:

'If licences are granted, it appears to be no objection that fees should be charged in order either to defray the costs of administering the local regulation or to increase the general funds of the province or for both purposes ........... It cannot, as their Lordships think, be an objection to a licence plus a fee that it is directed both to the regulation of trade and to the provision of revenue.'

The Supreme Court, therefore, held that the imposition of a licence fee does not necessarily lead to the conclusion that the fee must be only for the services rendered. The Supreme Court, therefore, came to the conclusion that the word 'fee' in Section 548 of the Calcutta Municipal Act, 1951, which was the statute before it, should be read as meaning a tax because it made no provision for services to be rendered and any other reading of that section would make the section invalid.

22. These different decisions of the Supreme Court and the observations of the Privy Council in Shannon's case, 1938 AC 708 (supra) were considered by a Division Bench of our High Court in Spl. Civil Application No.457 of 1965, D/-23-10-1969 (Guj). The question before the Division Bench was regarding the licence fees under the Prevention of Food Adulteration Act, 1954. In paragraph 33 of that judgment it was observed:--

'In our opinion, all the fees do not fall under one class. Arts, 110 (2) and 199 (2) of our Constitution draw not only a distinction between a tax and a fee but they further distinguish between 'fees for licences' and 'fees for services rendered'. In view of this constitutional distinction as explained by the Supreme Court in the case of AIR 1965 SC 1107 (supra). We cannot lump together all levies which are called 'fees', apply to them the tests of (a) quid pro quo and (b) the existence of the reasonable relationship between the levy collected and the expenses incurred for services rendered to the persons from whom the levy is demanded. The levy may be known by any name but if in reality it is a 'fee for services rendered' within the meaning of the Constitution, it must undoubtedly satisfy the two tests before it can be upheld as a fee. By whatever, name called if it is a 'fee for licences' within the meaning of the Constitution with an avowed object of regulating a trade or a business in public interest, it cannot be tested on the anvil of the two tests applicable to 'fee for services rendered'. Such a levy is a licence fee which is distinct from the tax as well as 'fees for services rendered'.

23. It was contended by Mr. Patel, on behalf of the petitioners, that the Supreme Court decision did not contemplate a third category apart from a fee for services rendered and that the third category which was referred to as fee of licence as shown in the judgment just now quoted, was not justified by the decision of the Supreme Court. So far as the present case is concerned, it is clearly a fee for licences of different categories issued by the market committee and those fees are collected as part of the terms and conditions on which the licences are granted. The tests of quid pro quo is not required to be met so far as these licence fees are concerned and it is for regulating the trade in this particular agricultural commodity, viz., tobacco, that these licence fees are levied from the traders, general commission agents and others who are permitted to operate in the market area for tobacco.

24. As against these decisions that we have so far discussed, Mr. V.B. Patel, on behalf of the petitioners, very strongly relied upon the decision of the Supreme Court in Nagar Mahapalika. Varanasi v. Durga Das, AIR 1968 SC 1119 and certain observations made therein. There the Supreme Court has pointed out that there is no generic difference between a tax and a fee; both are compulsory exactions of money by public authorities; but whereas a tax is imposed for public purposes and is not supported by any consideration of service rendered in return, a fee is levied essentially for services rendered and as such there is an element of quid pro quo between the person who pays the fee and the public authority which imposes it. It was urged before the Supreme Court that the fee in question was a licence fee. The Supreme Court pointed out that in the light of the observations of the Supreme Court in AIR 1954 SC 282 (supra), the fee in question fell within the category of a tax and in para 7 of the judgment. Ramaswami, J., delivering the judgment of the Supreme Court, pointed out:--

'We shall assume in favour of the appellant that the tax element is predominant in the imposition of the fee upon the respondents under the impugned bye-laws and the license fee is therefore in the nature of tax. Even upon that assumption the imposition of the fee under the machinery contemplated by S. 294 of the Act is ultra vires the powers of the municipal Board. The reasons that if the imposition is in the nature of a tax the procedure contemplated by Ss.131 to 135 of the Act should be followed by the Municipal Board and in the absence of such procedure being followed the imposition of this kind of fee would be ultra vires.'

It is clear that in the case before the Supreme Court, this particular procedure for imposition of the tax had not been followed by the Municipality of Varanasi; and hence the amount could not be collected as a tax. We must draw a distinction between a licence fee collected by a local authority like a Municipality or by the State and a licence fee collected by a body like the Market Committee set up under the provisions of the statute. When a licence fee is collected by a Market Committee like the first respondent Committee before us, the amount goes into a fund set up for the purposes of that Committee and does not form part of the general revenues of the State or of a local authority like a municipal body. Therefore, under no circumstances can it be said that the Market Committee is collecting a tax in the sense of a levy for the purposes of general revenues of the State of the State or the Municipal Body, as the case may be. The essential element of tax, namely, the income by way of levy or impost being utilized as a part of the general revenues of that particular body is necessarily absent, when a market committee collects fees for licences. In our opinion, the present case must be distinguished from the line of cases where the licence fees are collecting by the State or by a municipal body. Further, the present case before us is on all fours with the case which was before the Supreme Court in Lakhan Lal's case, AIR 1968 SC 1408 (supra); and hence in the light of the observations of Bachawat, J, in that particular case, the impost of the present licence fee can also be justified. Hence the second contention of Mr. Patel must also fail.

25. It was further contended by Mr. Patel that Section 34 of the Gujarat Act of 1963 sets up a special fund called the State Agricultural Produce Markets Fund, which consists of the payments made into it under sub-section (2) and such other sums which may under the Act be credited thereto and which shall, unless otherwise provided in the Act, be utilised for subsidising a market committee, for the development of a market or for subsidising market committees whose financial position makes it impossible for them to employ a sufficient number of officers and servants for the discharge of their functions under the Act or for discharging any liability vesting in the State Government under Section 53. Under sub-section (2) of S. 34, all market committees shall pay to the State Agricultural Produce Markets Fund every year such contribution on such date and in such manner as may be prescribed; provided that the amount of contribution shall be fixed at rates in proportion to the gross annual income of a committee. Mr. patel contended that under sub-section (1) of Section 34, the funds collected from the different market committees would be utilised for subsidising market committees whose financial position makes it impossible for them to employ a sufficient number of officers and servants for the discharge of their functions under the Act; and it was, therefore, contended that under the scheme of the Act itself particularly under section 34, a portion of the funds of any particular committee and the first respondent committee in particular could possibly be utilized for purposes which were in no way beneficial for marketing of tobacco crop. However, it has to be borne in mind that the provisions of Section 34 of the Act have been introduced as a part of an overall scheme of regulating the marketing of agricultural produce. The Act has not been enacted with a view to regulate the trade in any one market but to regulate the trade of agricultural produce of all kinds and it is but natural that if a market committee in any particular market area is not functioning properly because of want of funds for the employment of sufficient number of officers and servants, the regulation of market in agricultural produce in that particular market area would suffer and as a result the neighboring areas are bound to be affected. Where the regulation is not set up properly, malpractices are likely occur and it is quite likely that such malpractices in one market area would affect the marketing of agricultural produce in neighbouring are as well. It is for this purpose that Section 34(1) provides not only for the spending of the money from the State Agricultural Produce Markets Fund for the benefit of the specify market committee contributing to it but for all market committees throughout the State. Under these circumstances, in our opinion, the contention based on the provisions of Section 34 must also fail.

26. It was next contended that under Section 28 of the Gujarat Act, power has been conferred on the market committee to collect the fees through such agents as it may appoint. This Section refers to the market fee; and it was contended that the very notion of agency contemplated a contract between in principal, viz., the market committee, and the agent, i.e., the body of persons, who were entrusted with the task of collection of market fee. It was further contended in this connection that such element of contract necessarily implies an element of volition of body can be compelled to act as an agent; hence the contractual nexus between the principal and agent was necessary. It was also contended in this connection that if there was an element of compulsion, there could not be any agreement between the market committee and the person entrusted with the collection of the market fee. Under the rules, every licenced trader, general commission agent or broker has to collect the market fee, which is payable by the agricultural producer or by the person selling the agricultural producer by or by the person selling the agricultural produce in question and has to account to the market committee for such market fee collected by him from time to time. The buy-laws provide that once every quarter the market fee has to be paid into the office of the market committee by the licensees concerned and the statements of account have to be furnished in the prescribed form as laid down in the bye-law. It was urged by Mr. V.B. Patel on behalf of the petitioners that the rules and the bye-laws made the licensees the agents for collection. Now under Section 27 of the Gujarat Act, it has been provided in sub-section (2) as under:--

'(2) Licences may be granted under sub-section (1) in such forms, for such periods, on such terms and conditions and restrictions (including ........................) as may be prescribed or determined by the bye-laws and on payment of fees determined by the market committee within such maxima as may be prescribed.'

Therefore, it is open to the market committee to provide for the bye-laws under the power vested in it under Section 60 of the Gujarat Act to prescribe the terms and conditions of licences and while laying down such terms and conditions it is open to the market committee to lay down that the different licensees operating in the marketing area shall be liable to the market committee for collecting the market fee from different sellers, who bring their agricultural produce to the market for the purpose of sale and incidence of levying of market fee shall be on goods bought and sold. Thus, so far as the bye-laws, the rules and the provisions of the sections are concerned, they are all parts of a correlated scheme for the purpose of collecting the market fee on the buying and selling of agricultural produce and for the utilization of that fee ultimately for the benefit of the agricultural producers. We may also point out in this connection that it is not obligatory on the market committee to appoint agents but under the proviso to Section 28, power has been conferred on the market committee to appoint agents for the purpose of collecting the market fee as the market committee may appoint. It is, therefore, not obligatory on the market committee to appoint agents and the fact that the market fees are collected under the scheme of the bye-laws through the licences, namely, licenced traders, licenced commission agents and licenced brokers, it does not mean that such licensees become the agents of the market committee as contemplated by the proviso to Section 28. Contentions Nos.3 and 4 of Mr. V.B. Patel based on this provision must, therefore, also fail.

27. We have already dealt with the contention regarding Section 34 of the Act and that is the form in which point No.5 was urged before us, namely, regarding the constitution of the State Agricultural Produce Markets Fund. It is. Therefore, not necessary for us to deal with this point at this stage.

28. As regards, Section 35, Mr. Patel's contention was that Section 35 of the Gujarat Act, which deals with the trade allowances is a prohibitory provision and is not regulatory and amounts to an unreasonable restriction on the right to carry on trade on one's own terms; and it was further contended that no rule or bye-law prescribing trade allowances has been prescribed or made. Section 35 of the Gujarat Act is in these terms:--

'35. No person shall make or recover any trade allowances, other than an allowances prescribed by rules or bye-laws made under this Act, in any market area in any transmission in respect of agricultural produce specified in respect of the market area under the foregoing provisions of this Act, and no civil court, shall, in any suit or proceeding arising out of any such transaction, take into consideration or recognise any trade allowance not so prescribed.

Explanation. -- Every deduction other than a deduction on account of deviation from sample when the purchase is made by sample, or on account of a deviation from standard when the purchase is made by reference to a known standard, or on account of a difference between the actual weight of the container and the standard weight, shall be regarded as a trade allowance for the purposes of this section.'

29. In this connection Mr. Patel relied upon the decision of the Supreme Court in Mohammed Faruk v. State of Madhya Pradesh, (1969) 1 SCC 853 = (AIR 1970 SC 93). Now, though Sec. 35 prohibits any trade allowances other than those trade allowances which may be prescribed by the rules or the bye-laws, in fact it is a part of the overall scheme for regulating the agricultural markets. As has been pointed out by Subba Rao, J. in Arunachala's case, AIR 1959 SC 300 (supra), various commissions and enquiry bodies dealing with marketing of agricultural produce have pointed out that in the case of trade allowance very large deductions were being made from price of agricultural produce by the dealers in the market and to prevent the agricultural producers being cheated in this manner, this prohibition as part of the regulation of trade in agriculture has been laid down by the Legislature. In our opinion, it cannot be said that such prohibition, which forms part of the machinery for regulation of buying and selling of agricultural produce is unreasonable restriction on the right to carry on trade. This contention of Mr. Patel must also, therefore, fail.

30. It was next contended that Rule 48 and bye-law 2(9) are both ultra vires the appropriate relevant section of the Gujarat Act inasmuch as the levy is charge before the leviable even occur. Rule 48 lays down as follows:--

'48, Market fees.-- (1) The market committee shall levy and collect fees on agricultural produce bought or sold in the market area at such rate as may be specified in the bye-laws subject to the following minima and maxima, viz.,

(1) rates when levied ad valorem shall not be less than 5 paise and shall not exceed 50 paise per hundred rupees;

(2) rates when levied in respect of cattle, sheep, or goat shall not be less than 10 paise per animal and shall not exceed Rs.2 per animal.

Explanation.-- For the purposes of this rule, a sale of agricultural produce shall be deemed to have taken place in a market area if it has been weighed or measured or surveyed or delivered in case of cattle in the market area for the purpose of sale, notwithstanding the fact that the property in the agricultural produce has by reason of such sale passed to a person in a place outside the market area.'

The Explanation has brought in the notion of a fictional sale, though property in the goods might have passed to a person outside the market area, so long as some steps have been taken within the market area in the form of weighing, scaling or measuring the goods in question within the market area. This is surely with a view of prevent some persons evading the regulations contemplated by the Act by carrying on some steps within the market area and then allowing the property in the goods to pass outside the market area, or subsequently contending that the property in the goods has passed by reason of such sale to person outside the market area. The Explanation to Rule 48 is merely a safeguard against the possible evasion of the regulatory provisions regarding the marketing of agricultural produce and nothing else. Clause (9) or rule 2. (Bye-law 2 ?) which defines the place of business, has been prescribed in the light of what has been stated in the Explanation to Rule 48; and if the Explanation to Rule 48 does not suffer from any defect, C1, (9) of Rule 2 (bye-law 2 ?) cannot similarly be said to suffer from any illegality. The leviable event is buying or selling, which the deeming fiction has brought into play in this Explanation to Rule 48 and in bye-law evasion of the levy or evasion of the regulatory provisions.

31. The next contention of Mr. Patel was that Section 27, 28 as also Sections 6 and 8 are void on the ground of excessive delegation of power without any guidelines or restrictions subject to which such power is to be exercised. Section 27 of the Gujarat Act deals with the licences, their issues, renewal, suspension, or cancellation etc., and appeals against refusal, suspension etc., of licence; and it is under the power conferred by sub-section (2) of S. 27 that as a part of the terms and conditions the licence fees are collected from the different persons to whom licences are issued. Under Section 28 of the Gujarat Act, the market committee has been empowered to levy market fees on the agricultural produce bought or sold in the market area. Now, these fees are collected, as shown by the scheme of the Act, and particularly by Sections 32, 33 and 34 dealing with the market fund, the purposes for which the market fund is to be expended, for carrying out the purposes of the Act, namely, regulating buying and selling of agricultural produce and to establish agricultural market in the State of Gujarat. One of the purposes under Section 33 for which the money can be expanded is for acquisition of site or sites for the market committee; and thus it is clear that the fees which are collected in the shape of licence fees and market fees, are to be utilised for carrying out the purposes of the Act. Under these circumstances, it cannot be said that these sections suffer on the ground of excessive delegation. The guidelines are clearly laid down in the section itself so far as Sections 27 and 28 are concerned; and no further guidelines are necessary so far as the rules and bye-laws are to prescribe the maxima and minima and the actual rates of the market fees.

32. Sections 6 and 8 are also challenged on the ground of excessive delegation. Section 6 provides for the declaration of a market area and it is for the Director of Agricultural Produce Market to declare by a Notification in the Official Gazette a particular area as the market area for a particular agricultural produce. It is in the light of the particular information available to the Director, who is the Special Officer appointed for the purpose that these Notifications are issued fixing the market area for the particular agricultural produce; and so long as these Notifications are issued for the purpose of regulating the market and buying and selling particular agricultural produce, which is the main purpose of the Act, it cannot be said that there is no principal or guidelines for the exercise of the discretion of the Director.

33. Under these circumstances, all the different contentions urged by Mr. V.B. Patel, on behalf of petitioners, fail.

34. We may also point out that thought at one stage Mr. Patel contended that the transactions between two traders are beyond the scope of the Act, as contended in para 22 of the petition, no arguments were advanced by him before us in support of that contention and, therefore, we are not dealing with this contention in our judgment. In any event, we may point out that so far as licenced traders are concerned, they are governed by the terms and conditions of the licence and it is also the dealings and transactions of such licensed traders which the market committee can supervise. If they are not licenced traders or licenced commission agents, they could be removed or evicted from the market under Section 30 of the Gujarat Act; and, therefore, the provisions of the Act, Rules and the bye-laws in so far as they affect the transactions between the two traders, they have been prescribed as a part of the overall machinery for essentially regulating buying and selling of agricultural produce and not merely with a view to affect the transactions between the traders as such.

35. The result, therefore, is that all the contentions urged by Mr. Patel on behalf of the petitioners, fail, these two Special Civil Applications are, therefore, dismissed with costs. Costs in two sets one for the first respondent committee and the other for the State Government. Rule is discharged in each of the two matters.

36. Applications dismissed.


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