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Chhaganlal Mansukhlal and anr. Vs. the Agricultural Produce Market Committee and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtGujarat High Court
Decided On
Judge
Reported in(1975)16GLR916
AppellantChhaganlal Mansukhlal and anr.
RespondentThe Agricultural Produce Market Committee and anr.
Cases ReferredState of Mysore v. H. Sanieeviah
Excerpt:
- - 5. according to the petitioners, rule 48 of the rules which authorises the respondent-committee to levy market fees and rule 54 which prohibits the sale and purchase of agricultural produce beyond the market yard, are ultra vires the act as well as the provisions contained in article 19(1)(g) of the constitution. 4. if rules 48 and 54 apply to the transactions between traders and trades as well as to the transaction between traders doing business within the market area and those doing business outside that area, whether these rules are ultra vires either the act or article 19 of the constitution. ..it is now proposed to provide for better regulation of buying and selling of all agricultural produce including cotton and the establishment of regulated markets for that purpose in this.....t.u. mehta, j.1. the petitioners herein have by this petition challenged the vires of the rules 48 and 54 of the gujarat agricultural produce markets rules, 1965 (hereinafter referred to as 'the rules') framed by the state government under section 59 of the gujarat agricultural produce markets act, 1963 (hereinafter referred to as 'the act').2. the petitioners are dealing in agricultural produce at dohad, district panchmahals, and are holding 'a' class licence granted by the respondent no. 1, the agriculture produce market committee at dohad established under section 9 of the act and which is hereinafter referred to as 'the committee'.3. the case of the petitioners is that they are interested in the business of buying and selling of agricultural produce on a large scale and hence they.....
Judgment:

T.U. Mehta, J.

1. The petitioners herein have by this petition challenged the vires of the Rules 48 and 54 of the Gujarat Agricultural Produce Markets Rules, 1965 (hereinafter referred to as 'the Rules') framed by the State Government under Section 59 of the Gujarat Agricultural Produce Markets Act, 1963 (hereinafter referred to as 'the Act').

2. The petitioners are dealing in agricultural produce at Dohad, district Panchmahals, and are holding 'A' class licence granted by the respondent No. 1, the Agriculture Produce Market Committee at Dohad established under Section 9 of the Act and which is hereinafter referred to as 'the Committee'.

3. The case of the petitioners is that they are interested in the business of buying and selling of agricultural produce on a large scale and hence they have to purchase goods from the places situated either outside the market area established for the purpose of the Act or from outside the State of Gujarat. After purchasing goods in this manner they sell those goods either to the persons who are carrying on business within the market area or to the persons who carry on business outside the market area. According to the petitioners, the provisions of the Act and the Rules do not apply to the following categories of transactions entered into by them:

1. The transactions wherein the first petitioner acting as an agent of merchants, who carry on their business outside the market area of the respondent-committee or outside the State of Gujarat sells the goods within the market area for or on behalf of those persons.

2. The transactions wherein the first petitioner and other such merchants who act as agent of other merchants, who are residing outside the market area of the respondent-committee directly transfer the builty to other merchants so as to enable them to procure the agricultural produce purchased by the petitioners from outside Dohad market area.

3. The transactions in which the sales and purchases are effected between a merchant and a merchant within Dohad market area, because, according to the petitioners, the object of the Act is merely to regulate the first sales of agricultural produce by agriculturists to the merchants and not the subsequent sales of the said agricultural produce, between a merchant and a merchant.

4. The petitioners have also challenged the power of the respondent-Committee to levy market fees in case of transaction of sales and purchases between merchants and merchants in the market area.

5. According to the petitioners, Rule 48 of the Rules which authorises the respondent-Committee to levy market fees and Rule 54 which prohibits the sale and purchase of agricultural produce beyond the market yard, are ultra vires the Act as well as the provisions contained in Article 19(1)(g) of the Constitution.

6. Criminal Revision Applications Nos. 347 and 348 of 1972 also raise many points which are common with those raised in this writ petition and hence Shri Vin, the learned abvocate of the petitioners in those revision applications was allowed to intervene during the course of the hearing of this writ petition and was heard on the common points.

7. Though in the petition and during the course of the arguments, the petitioners have raised many points, some of which were overlapping, only the following points have been pressed and they do survive for our consideration in this petition:

1. Whether the Act and the Rules apply only to the sale and purchase of agricultural produce which is grown and produced in the market area notified under Section 6 of the Act.

2. Whether the Act and the Rules apply only to those transactions of Sale and purchase which are between agriculturists and traders and do not apply to those which are between traders and traders. In this connection Shri Oza had also contended that agricultural product becomes a commercial commodity when it changes hands and, therefore, the provisions of the Act and the Rules do not apply when these products are bought or sold as between a trader and a trader.

3. Whether the Act and the Rules do not apply to the transactions of sales and purchases between a trader carrying on business within the market area and a person residing outside the said market area.

4. If Rules 48 and 54 apply to the transactions between traders and trades as well as to the transaction between traders doing business within the market area and those doing business outside that area, whether these rules are ultra vires either the Act or Article 19 of the Constitution.

5. Whether the market fee can be levied on subsequent transactions if once levied in the same yard of the original transactions of sales or purchases.

6. Whether bye-law No. 52 which fixes working hours in the market yards is ultra vires the Article 19 of the Constitution.

8. At this stage, it should be mentioned that Shri Zaveri, who appeared on behalf of the respondent-Committee raised a preliminary objection against this writ petition by contending that the allegations contained in the said writ petition are of general nature and do not pinpoint any action of the Committee which can be construed as having given the cause of action to the petitioners to file this writ petition. We shall first deal with this preliminary objection of Shri Zaveri.

9. It is true that Paragraphs 1 to 7 of the petition are containing the allegations of general nature. But if a reference is made to para 8 of the petition, it is found that it refers specifically to a criminal complaint which has been filed against the petitioners for breach of some of the Rules and by-laws of the respondent-Committee. After referring to the facts relating to this criminal complaint, the petitioners have further stated that the respondent-Committee is bent on enforcing the provisions of law with regard to the several points raised in the petition and is also proposing to take further actions in form of further complaints against the petitioners. The petitioners have further averred that since the respondent Committee has no authority to regulate the business of the petitioners and since further prosecutions are contemplated by the respondent-Committee for breach of the impugned provisions of law, this writ petition is found necessary. On a reference to the affidavit-in-reply filed on behalf of the respondent-committee we find that therein the respondent-committee has taken up a plea that in all the transactions which are mentioned above, the impugned Rules 48 and 54 apply and, therefore, they are in law bound to implement the provisions of these rules if the petitioners are found to be disobeying them. Looking to these pleadings, it cannot be said that the general averments which are contained in paras 1 to 7 of the petition, are required to be decided merely on academic grounds. We find that in view of the averments made by the petitioners in para 8 of the petition and also in view of the affidavit-in-reply produced on behalf of the respondent-committee, the petitioners are in eminent danger of being prosecuted and if that is so, it would be open to the petitioners to come before this Court to get a proper redress by filing a suitable writ petition. Under these circumstances, we see no substance in this preliminary objection raised by Shri Zaveri against this petition.

10. Now dealing with the points at issue, which are mentioned above, it would first be necessary to refer to the relevant provisions of law. The long title of the Act is as under:

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.

This long title suggests that the Act was enacted mainly for two purposes, namely, (1) regulation of buying and selling of agricultural produce and (2) the establishment of markets for agricultural produce. This Act replaces the prior Act which was Bombay Agricultural Produce Markets Act, 1939. Reference to the Statement of Objects and Reasons of the said Bombay Act of 1939 shows that Act was placed on the statute book with the following objectives in mind:

The Indian Cotton Committee which reported in 1919 came to the conclusion that the cultivator is heavily handicapped in securing an adequate price for this produce and that one of the most satisfactory ways in which this can be removed is the establishment of regulated markets...it is now proposed to provide for better regulation of buying and selling of all agricultural produce including cotton and the establishment of regulated markets for that purpose in this province....

Agricultural produce has been defined in the Bill to include the produce of horticulture and animal husbandary and power is taken to regulate the buying and selling of any agricultural produce not mentioned in Schedule by notification in the Bombay Government Gazette.

Power is taken to exercise control over the purchase and sale of agricultural produce in specified areas. This control will be exercised by the market committees constituted under the Act. These committees are made bodies corporate and are given, power to levy fees and to form a market committee fund to be used for the purposes defined in the Bill. All trade allowances, except those that may be prescribed by rules or bye-laws of the market committee, are prohibited....

This Statement of Objects and Reasons which inspired the Legislature to put the Bombay Act of 1939 on the statute book shows that the object of the Act was not merely to protect cultivators who desire to put their agricultural produce in the market for sale but also to provide for better regulation of buying and selling of all agricultural produce.

11. Initially when the Act (Gujarat Act No. XX of 1964) was enacted, the Rules framed under the Bombay Act of 1939 continued till the present Rules were framed on 2-9-65 for the purpose of carrying out the provisions of the Act as contemplated by Section 59 of the Act. Section 60 of the Act provides for the framing of bye-laws. While the Rules are to be framed by the State Government, the bye-laws are to be framed by the market committee 'for regulation of business and the conditions of trading in the market area and for any other markets as may be prescribed.'

12. So far as the Act is concerned, it would be necessary to refer to some of its provisions which are found relevant to the petition. Section 2 of the Act gives certain statutory definitions, Clause 1(i) thereof defines 'agricultural produce' as meaning all produce, whether processed or not, of agriculture, horticulture and animal husbandry, specified in the Schedule. Clauses (xii) and' (xiii) define the words 'market' and 'market area'. Clause (xiv) defines 'market committee' while Clauses (xvii) and (xxi) define the words 'principal market yard' and 'sub-market-yard'. These definitions have nothing special therein because they refer to the relevant sections under which they are declared as such. Clause (xxiii) defines the word 'trader' as meaning a person who carries on business of buying or selling of agricultural produce or of processing of agricultural produce for sale.

13. Chapter III of the Act, is with reference to declaration of market area, constitution of markets and establishment of market committees. It is Section 6 of this Chapter which provides for the declaration of market area. Sub-section (2) of this section is material for the purpose of this petition. It provides as under:

(2) 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.

There is a proviso attached to this sub-section with which we are not concerned in this petition and is, therefore, not quoted here.

14. Section 7 prescribes for the constitution of a principal market yards, special market yards and markets proper. The Director is authorised under the Act to notify all these areas. Section 7 provides that when a principal market yard or sub-market yard is notified, the Director is also expected to notify simultaneously some further area which is called market proper. So, the area which is declared as principal market yard or sub-market yard together with the area which is declared as market proper, constitutes what is known as 'market' under the Act. Market area which is declared under Section 6 is larger than the area covered by 'market.' It is this evident that market area is the largest area within the jurisdiction of the market committee but the area which is covered by the 'market' is a smaller area compared to the 'market area.' Principal market yard or sub-market yard are covering still smaller areas. Market proper which is simultaneously declared along with the market yard or sub-market yard is an area which is attached to the market yard or sub-market yard but that also falls within the area covered by 'market.'

15. Proceeding further with the scheme of the Act we find that Section 8 provides that 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 this Act. Section 9 which follows it provides for the establishment of market committee.

16. Section 23 of the Act which is placed in Chapter IV provides that a market committee shall exercise the powers and perform the functions and duties conferred or imposed upon it by the Act and the Rules, Section 26 prescribes the duties of the market committee as under:

26. It shall be the duty of every market committee to maintain and manage the market, to take all possible steps to prevent adulteration and to promote grading and standarisation of the agricultural produce as may be prescribed, to provide such facilities in the market as the Director may from time to time direct and to enforce in the market area the provisions of this Act. The rules, bye-laws and the condition of licences granted under the Act in connection with the purchase and sale of the agricultural produce with which it is concerned, It shall also be the duty of every market committee to collect and maintain such information relating to market intelligence (sic) may be prescribed and to supply the same to Government whenever to required.

Next section which should be referred to is Section 28 which is very relevant so far as this petition is concerned. This section in terms states (sic) under:

28. The market committee shall, subject to the provisions of the rules and the maxima and minima from time to time prescribed levy and collect fees on the agricultural produce bought or sold in the market area:Provided that the fees so levied may be collected by the market committee through such agents as it may appoint.

17. Now coming to the Rules the impugned rules are Rules 48 and 54. They are put in Chapter VI of the Rules. Rule 48 refers to the levy of the market fees. It is in the following terms:

4. 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 10 paise and shall not exceed 40 paise per hundred ruppes; (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. 21- 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 os 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 out said the market area. (2) No fees shall be levied on agricultural produce brought from out said the market area into the market area for use therein by the industrial concerns situated in the market area or for export and in respect of which declaration has been made and a certificate has been obtained in From V:

Provided that if such agricultural produce brought into the market area for export is not exported or removed therefrom before the expiry of twenty days from the date on which it was so brought, the market committee shall levy and collect feet on such agricultural produce from the person bringing the produce into the market area at such rate as may be specified in the bye-laws subject to the maxima and minima specified in Sub-rule (i):Provided that no fee shall be payable on a sale or purchase to which Sub-section (3) of Section 6 applies.

Rule 49 is with regard to the recovery of market fees and provides that the fees on agricultural produce shall be payable as soon as it is brought into the market area. Rule 54 which is one of the Rules challenged in this petition, requires that all agricultural produce arriving in the market must be brought into the market yard and sold there. This rule is in the following terms:

54. (1) all agricultural produce arriving into the market shall be brought into the principal market yard or sub-market yard in the first instance and shall not, be bought or sold at any place outside 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(2) Details of all agricultural produce resold in whole-sale in the market Area shall be reported to the market committee.

(3) Any parson who contravenes the provisions of this rule shall, on conviction be punishable with fine may extend to Rs. 500/-.

18. So far as the bye-laws are concerned, the relevant bye-laws are bye-laws Nos. 20, 44 and 52. Bye-law No. 20 fixes the market fees to be levied on different agricultural produce in accordance with the market value of such produce. Bye-law No. 44 provides that a trader and a commission agent, who holds licence shall be treated as an authorised agent of the committee and as such would be responsible to pay the market fees to the committee. Bye-law No. 52 provides for the working hours of the market yard with reference to the agricultural produce and cattle. So far as the agricultural produce which is dealt with by the petitioners is concerned, it provides that the working hours would be from 8. 30 to 12.30 and from 2.00 to 8.00 p.m.

19. The above are the relevant provisions of the Act, the Rules and the Bye-laws framed under the Act. In the foregoing portion of this judgment, we have already referred to the Objects and Reasons for which the Act is enacted by the Legislature. The purpose of this Act is further explained by the Supreme Court in M. C.V.S. Arunachala Ngdar v. State of Madras A.I R. 1959 S.C. 500 in the following word:

Shortly stated, the Act, Rules and 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 restriction, 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 Rules, 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.

Bearing this purpose as well as the Object and Reasons for which the Act is framed in mind, we now proceed to consider, the different points raised on behalf of the petitioners by Shri Oza as well as by Shri Vin, who was allowed to intervene in the petition on behalf of the petitioners of above referred Criminal Revision Applications.

20. So far as the first point is concerned, the contention is that the Act, and the Rules as well as the Bye-laws framed thereunder apply only to the sale and purchase of agricultural produce which is grown in the market area and not in the area which falls outside the market area. This contention finds no support from any of the provisions of the Act. We have already referred to the definition of the expression 'agricultural produce'. This definition is comprehensive enough to cover all produce whether processed or not of agriculture, horticulture and animal husbadry specified in the Schedule attached to the Act. Therefore, this definition makes no distinction between the agricultural produce grown inside the market area and the produce grown outside the market area. Under these circumstances, even if the petitioners have imported any agricultural produce, which is specified in the Schedule attached to the Act and brought it in the market area, such a produce would be covered by the provisions of the Act. This particular position is quite settled in view of the decision given by the Supreme Court in Muhammadbhai Khudabax Chhipa and. Anr. v. State of Gujarat : AIR1962SC1517 , wherein a similar contention was raised but was rejected as found by reference to para 20 at page 1527 of the report. The point is also decided by a Division Bench decision given by this Court in Haji Isaq Haji Mahomed v. State (1961) 2 G.L.R. 31, wherein it is held that the definition of the expression 'agricultural produce' given in Section 2(1)(i) of the Bombay Agricultural Produce Markets Act, 1939 (which was similar to the definition given by the Act) does not make any distinction as between agricultural produce grown or produced within the market area or the local area within which the market is situated. In view of this concluded position, we find that it is not necessary to discuss this point at greater length. We are, therefore, of the opinion that the petitioners should fail in the first point.

21. So far as the second point is concerned, the contention of the petitioners is that the Act and the Rules do not apply to the transactions of buying and selling of agricultural produce entered into between the traders and traders. Shri Oza, further contended that the moment a particular agricultural produce comes in the hands of a trader, it loses its character of an agricultural produce and assumes the character of a commercial produce. Even this contention of the petitioners is not found acceptable for the reasons which follow.

22. The scheme of the Act shows that its provisions apply to all types of transactions relating to an agricultural produce mentioned in the Schedule whether these transactions are between a trader and a trader or between a trader and an agriculturist. As already noted above, the Act aims at regulating buying and selling of all agricultural produce and the establishment of markets for such produce. It follows, therefore, that unless markets are established for regulating every type of transaction of buying and selling of an agricultural produce covered by the Act, between all types of persons whether agriculturists or not, the aim and purpose of the Act would be destroyed. It need not be emphasised that the existence of a parallel market relating to agricultural produce mentioned in the schedule in the same area having different rates and different regulations would frustrate the very object of the Act which is not only to facilitate the sales of agricultural produce by the agriculturists but also to stabilise the market rates of such produce and to see that proper control, supervision and regulation of buying and selling of such produce is achieved. M/s. Oza and Vin, the learned advocates of the petitioners, contended that since the main object of the Act is to protect the interest of the agriculturists and not the interest of traders, the provisions of the Act should not be made applicable to the transactions between traders and traders. This contention obviously misses the fact that the interest of the agriculturists for which the Act is mainly framed would not be served properly without putting a proper control and regulation on all sorts of transactions relating to such agricultural produce taking place in the market area. Therefore, it is with this purpose that the Act seeks to provide for the establishment of markets for the agricultural produce which is governed by the Act. If we again make a reference to Statement of Object and Reasons which promoted the Legislature to put the Bombay Act of 1939 under the statute book, we find that it clearly shows that the Act was enacted to provide for 'better regulation of buying and selling of all agricultural produce including cotton and the establishment of regulated markets for that purpose'. It was with this purpose in mind that the Legislature has enacted two important provisions, the one which is found in Sub-section (2) of Section 6 and the other which is found in Section 8. We have already quoted the provisions of Sub-section (2) of Section 6 which says that no place in the market area established under the Act, shall be used for purchase or sale of any agricultural produce specified in the notification except in accordance with the provisions of the Act and Section 8 provides that 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. A cumulative effect of both these provisions is that a person, who wants to operate in the market area, has to obtain a licence and has to carry out his operations only in accordance with the conditions of the licence as well as in accordance with the provisions of the Act. Shri Vin contended that requirement to act in accordance with the provisions of the Act, which is found in Sub-section (2) of Section 6 cannot be held to be referring to the Rules and Bye-laws framed under the Act. In this connection, he further pointed out that the Act itself does not say either that the market produce should be bought or sold in the market yard or that the fees should be levied on the sale of market produce as between a trader and a trader. It is true that the Act itself does not make any of these provisions but we cannot read the Act fully without reading the rules and the bye-laws which are framed under the powers acquired by the relevant authorities under the Act. As already noted above, Section 59 of the Act authorises the State Government to frame rules either generally of specially for any market area 'for the purpose of carrying out the provisions of the Act'. Thus, the Legislature has delegated its powers of framing rules with regard to any market area, for purpose of carrying out the provisions of the Act, to the State Government. It cannot be gainsaid that the power to impose market fees, subject of course, to the maxima and minima fixed under the Rules is a power to carry out the provisions of the Act, nor can it be gainsaid that the power to require a person to bring the notified agricultural produce in the market yard and to enter into transactions of buying and selling with regard to the produce only In the market area is also the power which is derived for the purpose of carrying cut the provisions of the Act, The same can be said even with regard to the power to frame bye-laws under Section 60 of the Act. Under this section the legislature has authorised the market committee to frame regulations of business and conditions of trading, subject, of course, to the provisions of the Act and the Rules framed thereunder. Under these circumstances, it is apparent that the Rules which are framed by the State Government under Section 59 and the Bye-laws which are framed by the market committee under Section 60 are part and parcel of the Act itself and, therefore, when a person is required to make purchase and sale of agricultural produce specified in the Notification only in accordance with the provisions of the Act, he is required also to carry out the provisions of the Rules and Bye-laws with regard to the said purchase and sale of an agricultural produce. We, therefore, find no substance in this contention of Shri Vin.

23. In view of what is stated above, it must follow that all the transactions of buying and selling of a notified agricultural produce whether these transactions are between a trader and a trader or a trader and an agriculturist must conform to the Rules and Bye-laws under the Act. The power to regulate the transactions between a trader and a trader is an incidental power which the law making authority has obtained for carrying out the main purpose of the Act, namely, to regulate buying and selling of all agricultural produce for giving protection to the agriculturists who want to sell their produce in the market.

24. In the view which we are taking, we are fully supported by the above referred decision given in the case of Mohammadbhai Khudabux Chhipa 1962 S.C. 1517, wherein the following pertinant observations are made by their Lordships on this point:

But where the sale takes place outside the market area and the commodity is merely brought into the market area by the whole sale trader, there will be no question or any fee being charged on that transaction; of course, if there is a further tale in the market area or in the market yards by the wholesale trader to some one locally that a ay be liable to

Next it is urged that the provisions in the Act also affect transations between traders and traders, and also affect produce not grown within the market area if it is sold in the market area. That is undoubtedly so. But if control has to be effective in the interest of the agricultural producer such incidental control of produce grown outside the market area and brought into the market yard for sate is necessary as otherwise the provisions of the Act would be evaded by alleging that the particular produce sold in the market yard was not grown in the market area. For the tame reasons transactions between traders and traders have to be controlled, if the control in the interest of agricultural producers and the general public has to be effective. We are, therefore, of opinion that the Act and the Rules and bye-laws thereunder cannot be struck down on this ground.

25. In Arunachala Nadar's case (Supra) the Supreme Court has pointed out (vide para 12 of the reported judgment) that the Act is an integrated one, and it regulates the buying and selling of commercial crops. If the small traders are exempted, it creates loopheles in the scheme through which the big trader may operate, and thereby the object of the Act itself would be defeated. These observations therefore show that simply because the Act is enacted to protect the interest of agricultural producers, it cannot be held that incidental power to regulate and control even the business between trader and trader cannot be exercised under the Act or the Rules. This particular principle is accepted by this Court in the above referred decision given in 2 G.L.R. 31 and it is further reiterated by another Division Bench of this Court in Fulabhai Govindbhai v. The Kaira District Tobacco Market Committee and Anr. (1971) 12 G.L.R. 71, wherein the following observations are found in para 35 of the reported judgment:

We may also point out that though 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 fir as licenced traders are concerned, they are governed by the terms and conditions of the licence and it is also the dealing and transactions of such licenced 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 they effect 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.

A single Judge of the High Court of Punjab and Haryana has also taken the same view in Prem Chand Ram Lal v. State of Punjab and Ors. A.I.R. 1971 P. & H. 50. In that case a specific contention was raised that no market fee can be levied under the Act in respect of transactions of purchase or sale which are not made with the producers of the agricultural produce. Dealing with this contention, the High Court observed that the Act envisages the establishment of markets for the purchase or sale of agricultural produce and for that purpose the dealers who run their shops in the market area become a very important part of the market, and, therefore, it is not permissible to add the words 'by the producers' in the relevant rule so as to make the rule applicable only to the transactions between a trader and an agricultural producer.

26. The learned advocates of the petitioners, however, put strong reliance on the decision given by the Supreme Court in Sri Krishna Coconut Co. v. East Godavari Coconut and Tobacco Market Committee A.I.R. 1967 S.C. 973 and another decision of Mysore High Court in K.N. Marularadhya v. The Mysore State A.I.R. 1970 Mysore 114 in support of their proposition that the Act applies only to the first transactions entered into between a trader and an agriculturist who brings his agricultural produce in the market and not to subsequent transactions between a trader and a trader. On close consideration of both these decisions we find that they do not help the petitioners in any manner.

27. So far as the decision of the Supreme Court in Sri Krishna Coconut Co, is concerned, the point which was considered by their Lordships of the Supreme Court was quite different. What happened in that case was that the appellant in that matter had filed various suits in the court of the District Munsiff, Amalapuram for obtaining the refund of market fees collected by the market committee at different times on the purchase of coconuts from the producers as well as from small retailers. The contention of the appellants in the case was that this fee was levied on their transactions of sales to persons residing outside the market area and, therefore, the market committee was not entitled to levy market fee on these transactions. Ultimately the Andhra Pradesh High Court in that case found that the transactions which were subject matter of the levy of market fees, were not the transactions entered into by the appellants with the persons residing outside the market area but were the transactions of purchase which were entered into by them with the producers and retailers. The High Court, therefore, held that such transactions were liable to the payment of market fees. In context of these facts a contention was raised before the Supreme Court that even if it is held that the fees which were collected by the market committee were relating to the purchases made by the appellants from the purchasers and retailers, such fee is liable to be refunded because these were the transactions of only 'buying', and since the Act contemplated the transactions both of 'buying and selling', no market fee was leviable unless the appellants entered into a transaction of 'selling the goods which were purchased by them, from producers and retailers. This contention was rejected by the Supreme Court which came to the conclusion that every transaction of 'buying' would necessarily imply the reciprocal transaction of 'selling' because there would be no buying unless there is celling by the other side. In view of this, the Supreme Court held that the transactions by which the appellants bought coconuts from producers and retailers also involved the transactions of selling and, therefore, the fees were payable. While discussing this aspect of the matter, the Supreme Court is found to have made the following observations on which the learned advocates of the petitioners sought to put reliance:

The legislature had thus principally the producer in mind who should have a proper market where he can bring his goods for sale and where he can secure a fair deal and a fair price. The Act thus aims at transactions which such a producer would enter into with those who buy from him. The words 'bought and sold' used in Section 11(1) aim at those transactions whereunder a dealer buys from a producer who brings to the market his goods for sale.

If these observations are taken out of context they are liable to create a misunderstanding of the type which the petitioners are entertaining. But if they are read in the context in which they are made, it is apparent that what the Supreme Court emphasises by these observations is the fact that the transactions by which the appellants of that case purchased the produce from the agriculturists, producers and retailers, were also involving the transactions of sale and were covered by the expression 'bought and sold' which was used in Section 11(1) of the concerned Act, Madras Commercial Crops Markets Act, XX of 1933. There is, therefore, nothing in this judgment which suggests that the transactions covered by the Act were only those transactions which were entered into between a trader and an agriculturist. There is also nothing in the judgment to show that the Act did not apply to the transactions between a trader and a trader. In our view, therefore, any reference to this decision of the Supreme Court is totally irrelevant and out of place.

28. Coming to Mysore decision, the point which the learned Judges considered in that case was whether Section 65 of the Mysore Agricultural Produce Marketing (Regulation) Act (27 of 1966), contemplated a levy of market fee on plurality of transactions or not. This paint arose because the learned Advocate General, who appeared for the State in that case, requested the court to place the interpretation that the market fee could be recovered again and again by the market committee on the occasion of each subsequent sale even though such fee is recovered by the said Committee on the first transaction of sale. The court rejected this contention holding that the power to levy fee is exhausted when the agricultural produce has been sold by the producer to a trader or other person and when the fee has been once levied on the purchase so made, there is no power with the committee to demand a fee repeatedly from purchaser thereafter. While discussing this point, the learned Judges have referred to the above referred decision of the Supreme Court in Sri Krishna Coconut Co. and have recorded their conclusions as under:

The conclusion which emerges from this discussion is that under Section 65 the levy of the market fee is on the first sale by the producer inside the yard or outside the market as the case may be to a trader or any other person and that once the agricultural produce has been sold in that manner no market fee could be recovered from a buyer who buys the agricultural produce subsequently.

These observations only emphasise the fact that if the market fee is once recovered on the first transaction of the sale of agricultural produce, no fees can be recovered on subsequent transactions relating to the same identical produce. The learned Judges have referred to the first transaction as the one between a trader and an agriculturist obviously because generally the bulk of the produce which is brought in a particular market area is the produce grown by the agriculturists of the roundabout area. There is, however, nothing in the judgment to suggest that the provisions of the Act do not apply to the dealings between a trader and a trader in agricultural commodity covered by the Act. If, however, the above quoted observations of Mysore Agricultural Produce Marketing (Regulation) Act are construed in the manner in which the petitioners do, we have no hesitation in observing that looking to the provisions, of the Act, such a construction is not possible.

29. We, therefore, find that the two decisions on which the learned advocates of the petitioners have put reliance are not of any help to them to prove that the provisions of the Act do not apply to the transactions between a trader and a trader relating to the notified agricultural produce.

30. As for Shri Oza's contention that the agricultural produce when it comes into the hands of a trader ceases to be an agricultural produce, the same is covered by the decision given by this Court in 2 G.L.R. 31, to which we have already made a reference above, wherein it is emphasised that an agricultural produce remains an agricultural produce inspite of the fact that it has come into hands of a trader. Under these circumstances, we see no substance even in the second point raised on behalf of the petitioners.

31. So far as the third point is concerned, the question is whether the Act and the Rules apply to the transactions between a trader carrying on business within the market area and a person residing outside the said market area. Here also we find that there is no provision of the Act which excludes such transactions. In the foregoing portion of this judgment, we have already made a reference to the provisions contained in Sub-section (2) of Section 6 as well as Section 8. Both of these sections are comprehensive enough to cover even such transactions. Therefore, the petitioners should fair even on so far as this point is concerned.

32. As for the fourth point, the contention was that the impugned Rules 48 and 54 are ultra-vires the provisions contained in Section 28 of the Act as well as Articles. 19(1)(g) and 31 of the Constitution of India. In this connection, apart' from what Shri Oza contended, Shri Vin has formulated his points as under:

(1) Rule 48 is ultra vires the provisions contained in Section 28 inasmuch as the market fee is sought to be charged on sale by a trader to a tradea and even if it is believed that this rule is in conformity with the provisions of Section 28, the fee which is charged on transactions between a trader and a trader relating to notified agricultural produce bears no quid pro quo with the services rendered by the committee.

(2) Shri Vin also contended that Rule 48 is ultra-vires Section 28 as it seeks to charge fees not on buying and selling but on import of notified agricultural produce in the market area.

33. So far as this last contention of Shri Vin is concerned, it is apparent that Rule 48 by itself does not make a charge on import but if this rule is read in conjunction with Rule 49, then it can be said that on a mere import of a notified agricultural produce in the market area, the market fee is required to be recovered or collected. It is therefore Rule 49 which is relevant so far as this point of Shri Vin is concerned. We shall deal with that point in Criminal Revision Applications wherein Shri Vin appears for the petitioners, because, so far as this petition is concerned, considerations of vires of Rule 49 do not arise. So far as Rule 48 is concerned, it merely fixes maxima and minima of the fees to be charged. The Explanation which is attached to Sub-rule (1) makes a presumption as regards the passing of property in cases where the property has actually passed in place out side the market area. Sub-rule (2) of this rule grants exemption to the levy of market fees in cases where the agricultural produce is to be used by industrial concerns or is to be exported. It also exempts the agricultural produce which is for personal consumption contemplated by Sub-rule (3) of Section 3. It is thus apparent that Rule 48 standing by itself does not impose any levy on agricultural produce which is imported but which is not yet sold or purchased.

34. The real question which, therefore, arises to be considered with regard to this point is whether the levy of fees contemplated by Rule 48 is in any manner unwarranted by the provisions of Section 28 of the Act. Here the contention of Shri Oza was that since the Act and the Rules do not apply to the transactions between a trader and a trader, no market fee can be levied on the agricultural produce involved in such transactions. Paragraph 7 of the petition makes detailed averments with regard to this point. Shri Via contended in this connection that since the Act is enacted for protecting agricultrists and not the traders and since traders do not need any services of the market committee, there is no quid pro quo. Alternatively Shri Vin contended that the charge of fees on transactions between trader and a trader would amount to tax.

35. Now in this connection we have already held in the foregoing discussion that the Act as well as the Rules and Bye-laws framed thereunder do apply to the transactions between a trader and a trader relating to the notified agricultural produce. Therefore, the question is whether the provisions relating to the charge of market fees would apply to such transactions or not. Now if once it is believed that all the provisions of the Act and the Rules as well as the Bye-laws framed thereunder cover the transactions between a trader and a trader, then it necessarily follows that such transactions have to be carried only in the market yard as provided by Rule 54 and have to be carried out only in accordance with the Rules and Bye-laws framed for the purpose. The market committee has, therefore to provide all the necessary facilities and services to such transactions even though they are entered into between a trader and a trader. If in this connection a reference is again made to Section 26 of the Act, it will be found what types of services a market committee is supposed to render to those who are dealing in transactions within the precincts of a market yard. This section shows that the market committee is supposed to maintain and manage the market and to take all possible steps to prevent adulteration. The committee is also supposed to promote grading and standardisation of the agricultural produce whether the said produce belongs to an agriculturist or to a trader. This section enjoins upon the market committee to provide all facilities in the market as the Director may from time to time prescribe. It is also expected to collect and maintain such information relating to market intelligence as may be prescribed. For the purpose of such sale, it has to provice for weighing facilities as well as storage facilities. A trader who deals in the market is entitled to avail of all these facilities. Obviously these facilities are not confined only to the agricultural producers. Therefore, it would be trite to suggest that in cases of transactions between a trader and a trader, the market committee provides no service. It may be that traders left to themselves would not desire to avail of these services but it is not desire or wish of the traders which is relevant or material. The Act provides that all transactions whether they may be between a trader and a trader or between a trader and an agriculturist must conform to the provisions of the Act, the Rules and the Bye-laws framed thereunder, and if that is so, they have to avail of those facilities and the services which the committee is bound to provide. As held by Andhra Pradesh High Court in Garimell Satyanarayna v. East Godavari Coconut and Tobacco Market Committee, Rajamundry : AIR1959AP398 , it is not necessary that every one of the purposes should be beneficial to both the seller and the buyer, because it may benefit one or the other. The quid pro quo which the buyer receives from the market committee may not be in the same sense in which the expression is used in the Contract Act, and, therefore, if the services rendered by the committee can be justified as a sort of return, then it is valid. Under the circumstances, the contention of Shri Vin that in cases of transactions between a trader and a trader there is no quid pro quo as regards the sale of agricultural produce in the market and, therefore, no market fee could be levied on such sales, must be rejected. Shri Vin contended that if the Act is principally brought into the statute book for the purpose of protecting the interest of agricultural producers, then the provisions which are enacted with a view to control and regulate the transactions between a trader and a trader, should be presumed to have been made only with a view to prevent the evasion of the provisions of the Act and, therefore, the services, which the market committee renders for such purposes, to the traders, cannot be considered as services for which the market fee could be charged. For this proposition he has put reliance upon a decision given by the Supreme Court in The Indlaa Mica Micantte Industries Ltd. v. The State of Bihar and Ors. : AIR1971SC1182 , wherein it is held that the State Government in maintaining an elaborate staff to prevent the licensees from converting It into potable alcohol and thereby avoiding payment of heavy duties renders little or no service to the licensees but only protects its own interest. In out view, this decision of the Supreme Court has no application to the facts of this case, because, here it cannot be said that all the services which are rendered by the committee even to the traders are for protecting its own interest. We have already described the various services which are rendered by the committee pursuant to Section 26 of the Act. The enumeration of these services show that even the traders are benefited by these services and, therefore, most of these services work in the interest of traders themselves.

36. The next point to be considered is whether the rendering of services in case of a transaction between trader and a trader and the charge of market fee for these services would amount to the levy of tax. In our opinion, rendering of service by the committee in the market for the first transaction of sale or purchase does not amount to tax because, recovery of the market fees for such transactions has a complete quid pro quo for the services rendered. This particular point has been considered by the Supreme Court in the earlier case of Mohammad Hussain Gulam Mohammad and Anr. v. State of Bombay : [1962]2SCR659 , wherein it is held that the market committee which is authorised to levy fee renders services to the licensees particularly when the market is established and therefore, it cannot be held that the fee charged for such services by the market committee in connection with the enforcement of the provisions of the Act is in nature of tax. Therefore, even this contention of Shri Vin is liable to be rejected.

37. It should be noted that the provisions of Rule 48 are completely in accordance with the power which the rule making authority dervies from the provisions of Section 28 of the Act. It is, therefore, not possible to say that Rule 48 is in any manner ultra vires Section 28.

38. As for Rule 54, it merely provides that all agricultural produce arriving in the market should be brought to the market yard in the first instance and should not be bought or sold at any place outside the yard. Even this provision is necessary to regulate the transactions of sale and purchase of the notified agricultural produce, because, if the produce entering the market (which means market yard plus market proper) is allowed to be bought or sold anywhere in the market area, there would be no control or supervision over the transactions of such sale and purchase. Power to frame this rule is, as already noted above derived from the provisions of Sections 6(2), 8 and 59 of the Act and if, as already held by us, trader to trader transactions are covered by the provisions of the Act, there in no reason why the rule making authority cannot prescribe the rule that even goods which are imported from outside the market area but which enter the market, should be brought to the yard for sale and purchase. Thus, even Rule 54 is not found ultra vires provisions of Section 28.

39. Now what remains to be considered is Shri Oza's contention that both the impugned rules are ultra vires the Articles 19 and 31 of the Constitution. Here also we find that both these rules are merely regulatory. They do not impose a total prohibition on trade in all types of agricultural produce because the Act, the Rules and the Bye-laws apply only to the notified agricultural produce. Moreover, it is obvious from Sub-section (3) of Section 6 as well as from the second proviso of Rule 48 that the provisions of the Act and the Rules as well as Bye-laws, do not put any restriction on the purchase of agricultural goods by consumers directly from the producers. Again, Rule 54 obviously does not apply to the agricultural produce which is not brought in the 'market proper'. It is thus evident that all these provisions are merely regulatory and so far as regulatory measures are concerned, the Supreme Court held in Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan 0065/1962 : [1963]1SCR491 , that such measure or measures imposing compensatory taxes for the use of trading facilities do not come within the purview of the restrictions contemplated by Article 301 and such measure need not comply with the requirements of the proviso to Article 304(6) of the Constitution. Moreover, the vires of the relevant provisions of similar Acts have been repeatedly considered by the Supreme Court in various decisions. We may only site in this connection the decision given by the Supreme Court in Mohammad Hussain Gulam Mohammad and Anr. v. State of Bombay : [1962]2SCR659 , the one given in M.C.V.S. Arunachala Nadar v. State of Madras and Ors. A.I.R. 1959 S.C. 800 the third one in Jan Mohammad Noor Mohmad Bagban v. State of Gujarat and Anr. : [1966]1SCR505 . Considering these decisions we see no substance in Shri Oza's contention that the impugned rules contravene either Article 19 or 31 of the Constitution.

40. Coming to the fifth point, the question to be considered is whether the market fees can be levied on subsequent transactions relating to agricultural produce on which such a fee is once charged on a previous transaction. The subsequent transactions which are to be considered with regard to this point are the transactions which are subsequent to the original transaction in the market area on which market fees have already been paid to the committee concerned, here the argument of the petitioners is that even if it is held that the committee can levy market fees in transactions between a trader and a trader entered into a market area for the first time there is no power in the committee to charge market fees on subsequent transactions relating to the same identical goods, even though they take place in the market area. Strong reliance is placed in support of this contention on the above referred decision given by the Mysore High Court in K.N. Marularadhya v. State of Mysore A.I.R. 1970 Mysore 114.

41. In reply to this contention of the petitioners, Shri Zaveri, who appeared on behalf of the committee contended that the petitioners should not be permitted to raise this contention because nowhere in this petition they have specifically raised this point. We, therefore, went through the petition as well as the affidavit-in-reply. We find by reference to para 4 of the petition and other paragraphs that the petitioners of this petition have specifically averred that 'the subsequent sales affected by the petitioners cannot be regulated by the provisions contained in the Act and by-laws and the Rules framed thereunder.' In the affidavit in reply, filed on behalf of the committee, it has been asserted that the committee is entitled to levy market fee even on subsequent transactions inspite of the fact that on an earlier transaction of buying and selling market fee is already paid. In view of these averments, we are of the opinion that he point does arise for our consideration.

42. On merits Shri Zaveri contended that there is nothing in the Act or the Rules framed thereunder to warrant a proposition that market fee cannot be levied on sub subsequent sale of the same agricultural produce if at a previous stage the market fee is already levied on a sale or purchase of such produce, According to Shri Zaveri, the market fee is levied in consideration of the services rendered by the committee and if the committee does render fresh services on each of the subsequent sales, then it matters not whether the fee on subsequent sales is charged on the same agricultural produce.

43. After considering the relevant provisions of the Act, the Rules and the Bye-laws, we find ourselves in agreement with the contention of the petitioners that if market fee is charged at an initial stage on sale or purchase of a notified agricultural produce, then on subsequent transactions of sale and purchase of this identical produce, no further market fee can be charged. Our reasons for taking this view are as under.

44. If reference is made to the provisions contained in Section 28 of the Act, it will be found that this section authorises the market committee to levy and collect fees 'on agricultural produce' 'bought or sold' in the market area. Rule 48 which is framed pursuant to these provisions of Section 28 fixes maxima and minima of the market fees which could be levied by the Committee on notified' agricultural produce. Pursuant to this rule, the committee has framed Bye-law No. 20 which seeks to levy fee on different types of agricultural produce in accordance with their market rate. If a reference is made to the provisions of Section 28, Rule 48 and Bye-law 20, it will be found that they use the same language. The language employed in these provisions makes two points quite clear. They are: (1) the fees are to be levied on 'agricultural produce' and not on transactions of sale and purchase of this produce; and (2) they are to be levied when they are either 'bought' or 'sold'.

45. Alongwith these provisions we may also consider some other provisions which indicate when the fees are to be actually recovered. These provisions are contained in Rule 54 which, as already noted above, says that all agricultural produce arriving in the market shall be brought in the market yard 'in the first instance' and shall not be 'bought or sold' at any place outside such yard. Sub-rule (2) of Rule 54 contemplates 'resale' of an agricultural produce and says that details of all agricultural produce 'resold' in wholesale in the market area shall be reported to the committee. Thus this Rule 54 envisages a clear distinction between a 'sale' and a 'resale'. So far as the 'sale' is concerned, it provides that if goods are once brought in the market, they cannot be bought or sold at any place except the market yard. These provisions, therefore, indicate that when the goods are brought to the market and taken to the yard and sold, for the first time, such sales are referred to by the rule making authority as 'sale', but when the very same goods are sold again, they are referred to as the goods 'resold'. The rule making authority should be presumed to have borne this distinction between 'sale' and 'resale' in mind while using the words 'sold' and 'bought' in Rule 48. In these circumstances, it cannot be said that the use of the words 'bought' and 'sold' in Rule 48 connotes all the successive purchases and sales of the same agricultural produce. If the matter is viewed from this angle, we further find that the use of the disjunctive 'or' in the expression 'bought' or 'sold' found in Section 28 and Rule 48 assumes good deal of significance. This disjunctive suggests the singularity and not the plurality of the transactions in question. We find that even on a plain reading of Section 28 and Rule 48 such a conclusion seems to be inescapable. The Legislature while enacting Section 28, and the State Government while framing Rule 48, have not used any language to suggest that the market fees can be levied on the 'transactions' of buying and selling. They have, instead, said that the fees shall be levied on 'agricultural produce' bought or sold. If they are again 'bought' or 'sold', they are 'rebought' and 'resold'. The use of the past tense in relation to the words 'buy' and 'sale' obviously suggests an action which is already complete. The action of buying and selling becomes complete when it is once done. Moreover if the Legislature and the Government wanted to make all subsequent transactions relating to the same product liable to market fees, there was nothing to prevent them from making the provisions explicit by using the expression 'is or has been bought or sold' instead of using the simple expression 'bought or sold'. Therefore, unless the context otherwise suggests, the use of the expression 'bought' or 'sold', simplicitor would suggest only the first transaction of buying and selling of the article concerned. Here in this case we find that there is nothing in the context to suggest that Section 28 and Rule 48 stipulate the plurality of successive transactions of buying and selling of the same agricultural produce. On the contrary, Rule 49 which is about recovery of market fees indicates that the-fees are intended to be levied on a particular produce only once and that too at the initial stage of its entry into the market area. Reference to Rule 49 shows that market fees becomes 'payable' as soon as an agricultural produce is brought into the market area. This rule not only prescribes the stage at which the fees are to be recovered but it also provides for their 'payability'. It does not say that the fee shall be payable on all successive transactions. Idea behind Rule 49 is to provide for a mode of payment of market fees in advance. Shri Zaveri contended that this rule provides merely for the first payment when the produce enters the market area or market for the first time and hence need not have said anything about the payability on subsequent transactions. If this contention of Shri Zaveri is accepted, it would follow that the rule making authority has provided for the advance payment only on the first transaction of buying or selling but not on subsequent transactions. We don't find any reason why the said authority should make such distinction between the first and subsequent transactions if the subsequent transactions also Become subject to the same liability as the first one. Rule 49 also provides for a scheme of refund. This scheme of advance recovery and refund clearly suggests that on the same produce, the market fee was intended to be charged only once. It cannot be said that the rule making authority wanted to ensure the advance payment only relating to first transaction and not to the subsequent ones.

46. We have already noted above that the market fees are charged on the produce. The assessment of the fees is made on the value of the produce. Therefore if the fees are charged on the same produce repreatedly on each subsequent transaction of sale or purchase, the produce which happens to change many hands through successive transactions would have to bear greater burden of fees. Such a produce would obviously become costlier and the whole-seller who can afford boarding of goods would be in a better position to sell his goods in comparison with the retailer in whose hands the produce has come after more than one transaction. The rule making authority could not be presumed to have intended to bring about such a situation as it does not serve any of the objects of the Act.

47. If once It is believed that fees are charged on the produce, the same cannot be charged on transactions. It the contention that each subsequent transactions of sale or purchase of the same produce is liable to fees is accepted, it would permit the charge of fees on transactions and not on produce. It was contended by the learned Advocates of both the respondents that according to Section 28 and Rule 48 fees are to be charged not on produce but on transactions as on each separate transaction of buying and selling separate service is rendered by the committee. We are unable to accept this contention because Section 28 authorises the committee to levy fees on agricultural produce and not on the transactions of buying and selling of this produce. Buying and selling of the produce provides only an event which attracts fees, but the fees are to be levied and assessed on the produce. Therefore, if the produce is once served with the services once rendered on the occasion of its first sale or purchase and if the fees levied on that occasion, the power to levy fees is exhausted and subsequent levy on the same produce would amount to a tax on transaction of sale or purchase, which is not permissible. In this connection Shri Zaveri made much of the fact that on each subsequent occasion of sale or purchase the committee has to render fresh services and hence it is entitled to charge for these services. We are not impressed by this argument, because, it is apparent that the committee has one single establishment for rendering services on all occasions of sale and purchase. Market fees are charged to cover up the expenses which the committee is expected to incur for this establishment. Therefore, if fees are once charged on a produce at the time of its sale or purchase, committee quid pro quo with regard to that produce is satisfied. Any further charge on that produce for the service rendered with the same establishment would be a surplus in the hands of the committee. The Act does not authorise the committee to collect such surpluses which would convert the levy of fees into an imposition of tax on transactions.

48. At this stage it would be relevant to examine the object of the Act. As already noted above, the Act aims at protecting the agricultural producers, and for that purpose, at regulating the market operations in agricultural produce. Therefore when all transactions of sale and purchase even of the same agricultural produce are made subject to the regulatory and supervisory jurisdiction of the committee, the abovestated aims and purposes of the Act are fully served. The question is whether these purposes are further served in any manner by subjecting each successive transaction of sale and purchase of the same produce to the levy of fees. We find that the only purpose which such a subjection would serve is to enhance the revenue of the committee, But it is well known that a fee unlike a tax must bear some sort of quid pro quo with the services rendered. Fees are not imposed for collecting surplus funds. Therefore, if the fees which are levied on the first transaction are not enough to cover the expenditure incurred for rendering of services, their rates can be reasonably increased but it is not permissible to impose fees in a manner which would convert it into a tax.

49. Therefore, considering all these factors we are of the opinion that the Act and the Rules do not permit the committee to levy market fees on each successive transactions of sale and purchase relating to the same agricultural produce which is once already subjected to levy. On this point therefore, we find ourselves in complete agreement with the view taken by the Mysore High Court in that above referred case of K.N. Marularadhya v. State A.I.R. 1970 Mysore 114.

50. Coming to the last point in this petition, the contention of Shri Oza was that bye-law No. 52 which fixes the working hours in the market yard is ultra vires Article 19 of the Constitution as it puts unreasonable restriction on the petitioners' right to trade and to carry on their business. In support of this contention Shri Oza put reliance upon a decision given by the Supreme Court in State of Mysore v. H. Sanieeviah : [1967]2SCR673 . That was a case under Forest Act (11 of 1900). Therein Rule 2 of Rules framed under the Act carried a proviso that on permit issued under the Act, shall authorise any person to transport forest produce between sun-set and sun-rise in any of the areas specified in Schedule 'A'. Subsequently by another notification, the State Government added a second proviso that permission may be granted, to timber merchants on their request to transport timber upto 10.00 p.m. (22 hours) under certain conditions. A contention was raised that these two provisos of Rule 2 were beyond the rule making authority conferred upon the State Government by Section 37 of Mysore Forest Act, 11 of 1900, that in any event that provisos imposed unauthorised restrictions on the freedom of trade, commerce and intercourse. The Supreme Court held that prima facie a rule which totally prohibits sun-set and the movement of forest produce during the period between is prohibitory or restrictive of the right to transport forest sun-rise produce. This view was taken by the Supreme Court on the footing that the power conferred upon the State Government was merely 'to regularise the transits' of forest produce and not to restrict it. Therefore according to the Supreme Court, the prohibition made by Rule 2 was not in exercise of the power to regulate the transport of all forest produce. Shri Oza wanted to utilise this decision to challenge bye-law No. 52 which fixes the business hours of the concerned market yard and contended that by implication this bye-law provides that outside these business hours, the petitioners cannot transact any business. We are of the opinion that the above referred decision of the Supreme Court relied upon by Shri Oza is clearly distinguishable, because that decision was given on the footing that the State Government was empowered merely to regulate the transport of the forest produce and, therefore, restrictions imposed by bye-law 2 were of a prohibitory nature. In our case it cannot be said that bye-law No. 52 totally prohibits the business transactions which the petitioners would otherwise be entitled to enter into. It should be remembered that the Act, the Rules as well as the bye-laws framed thereunder apply only to that agricultural produce which is notified under the Act and that too only in so far as the transactions which should be entered into in the precincts of the market yard. The petitioners are not prohibited to carry on their business with regard to agricultural produce which is not notified under the Act or with regard to notified articles which they purpose to sell outside the market proper. The market Committee cannot be expected to keep their yard open for all the twenty four hours as even the committee has to conform with the provisions of the Shops Establishment Act.

51. Under the circumstances, when the bye-law 52 says that the market yard shall remain open only during certain hours of the day, the said provision amounts to mere regulation of business hours and does not amount to any prohibition to carry on business or trade. Under the circumstances, we find that even a challenge to bye-law 52 should fail.

52. The result of the above discussion is that this Special Civil Application succeeds only so far as the levy of market fee on subsequent transactions of the same agricultural produce which is once made subject to said levy, is concerned. The rest of the contentions raised on behalf of the petitioners fail. The impugned Rules 48 and 54 are found to be valid and not in any manner ultra vires the provisions of the Act or Articles 19 and 31 of the Constitution. The respondents are, however, restricted from levying the market fees on the subsequent transactions of sale and purchase of the notified agricultural produce which is once subjected to said levy in the market yard. Rule is accordingly made absolute without any order as to costs.


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