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Khushi Ram and ors. Vs. the State of Himachal Pradesh and ors. - Court Judgment

LegalCrystal Citation
SubjectOther Taxes;Constitution
CourtHimachal Pradesh High Court
Decided On
Case NumberCivil Writ Petns. Nos. 82, 252, 254 and 259 of 1974, 236 of 1979 and 68 and 89 of 1981
Judge
Reported inAIR1982HP97
ActsHimachal Pradesh Agricultural Produce Markets Act, 1970 - Sections 1, 3 and 4
AppellantKhushi Ram and ors.
RespondentThe State of Himachal Pradesh and ors.
Appellant Advocate K.D. Sud, Adv.
Respondent Advocate Inder Singh, Adv. General and; Chhabil Dass, Adv.
DispositionPetition partly allowed
Cases ReferredMohammad Hussain Gulam Mohammad v. State of Bombay
Excerpt:
- h.s. thakur, j.1. civil writ petitions nos. 82 of 1974, 252 of 1974, 254 of 1974, 259 of 1974, 236 of 1979, 68 of 1981 and 89of 1981, can be conveniently disposed of together, since the main points involved in these writ petitions are common to all of them. however, additional point or points raised in any petition would be also dealt with in the judgment that follows.2. to start with, it is desirable to narrate the facts and contentions raised in c. w. p. no. 254 of 1974. in this writ petition, besides other reliefs, it is prayed that the himachal pradesh agricultural produce markets act, 1969 (9 of 1970) (hereinafter referred to as the act) be declared ultra vires of the constitution. it is stated that the petitioner is carrying on the business of commission agent in fruits and other.....
Judgment:

H.S. Thakur, J.

1. Civil Writ Petitions Nos. 82 of 1974, 252 of 1974, 254 of 1974, 259 of 1974, 236 of 1979, 68 of 1981 and 89of 1981, can be conveniently disposed of together, since the main points involved in these writ petitions are common to all of them. However, additional point or points raised in any petition would be also dealt with in the judgment that follows.

2. To start with, it is desirable to narrate the facts and contentions raised in C. W. P. No. 254 of 1974. In this writ petition, besides other reliefs, it is prayed that the Himachal Pradesh Agricultural Produce Markets Act, 1969 (9 of 1970) (hereinafter referred to as the Act) be declared ultra vires of the Constitution. It is stated that the petitioner is carrying on the business of commission agent in fruits and other vegetable articles within the territorial jurisdiction of Simla District. It is pointed out thatthe Act was promulgated in the State of Himachal Pradesh in the year 1970 and a notification to this effect was published in the Gazette dated 19th Sept., 1970. It is stated that the object of the Act stipulates to consolidate and amend the law relating to better regulation of purchase and sale, storage and processing of the agricultural produce and establishment of markets for agricultural produce in Himachal Pradesh. It is provided under Section 3 (19) of the Ad that the Board may, with the prior approval of the State Government, by notification, declare its intention of exercising control over the purchase, sale, storage and processing of such agricultural produce, and in such area as may be specified in the notification. Such notification shall state that any objections or suggestions which may be received by the Board within the period to be specified in the notification will be considered. It is further stated that a notification (Annexure 'A') in the Official Gazette under Section 3 (19) was published. It is further alleged that the State Legislature under its rule-making powers under the Act framed rules in 1971 and that Rule 5 provided as to how the publication of the notifications is to be effected. Rule 5 thereof may be reproduced for a ready reference:

'5. (1) Copies of a notification issuedunder Sections 3 (19) and 4 of the Act shall be published in one or more of the undermentioned modes under the orders of the Chairman of the Himachal Pradesh Marketing Board:--

(i) in Hindi and if necessary in English language in all such newspapers as the Chairman may decide;

(ii) the Board will give publicity among persons likely to be affected by or interestedin the sale and purchase of agricultural pro-duce in the proposed notified market area -

(a) by affixing a copy of the notification in Hindi and if necessary in English language as may be considered expedient by the Chairman of the Board in the office of every Municipal Corporation, Municipal Committee, Small Town Committee, Notified Area Committee, Panchayat and/or any other organisation or society, if any, within whose jurisdiction the notified market area or any part thereof is situated and at some conspicuous place(s) in the existing market, if any.

(b) by affixing a copy of the notification in Hindi, and if necessary, in English language as may be considered appropriate by the Chairman of the Board in the principal common meeting place or any rendezvous of interest, if any, of every village in the countryside within the notified market area; and

(c) by beat of drum in the village within the notified market area.

(2) The time of publication under clauses 5 (1) (i), (a) (a), (b) and (c) and the time and frequency of the drum-beating under clause (c) shall be determined by the Chairman, Himachal Pradesh Marketing Board.

(3) Expenses of notification.-- The expenses of the publication under Sub-rule (1) of the notification issued under Sections 3 (19) and 4 of the Act shall be met out by the Government of Himachal Pradesh.' It is pointed out that no publication was effected in accordance with Rule 5, as reproduced above. It is urged that it has not been published at all in conformity with the Act and the petitioner was not in the know of the said notification. According to the petitioner, the respondent No. 1 issued a notification (Annexure 'B') under Section 4 (3) implementing the said Act in the market area of Simla district. A reference has been made to Section 4 (1) which provides that after the expiry of the period specified in the notification under Section 3 (19) and after considering such objections and suggestions as may be received before the expiry of the specified period, the Board may, by notification and in any other manner that may be prescribed, declare the area notified under Section 3 or any portion thereof to be notified market area for the purpose of this Act in respect of the agricultural produce. It is contended that the State Government did not apply its mind before issuing Annexures 'A' and 'B' and thereby violated the rules. It is also contended that Annexures 'A' and 'B' are vagueand indefinite and incapable of being enforced. On this account, it is urged that no one could have properly raised objection inasmuch as no market areas have been notified or established. It is stated that the Act has provided for the acquisition of land for the Board and the Committee under Section 29 thereof. According to the petitioner, the Land Acquisition Act being a Central Legislation already in force no legislation can be made by the State without the approval of the President. As such, according to the petitioner, the Act providing for acquisition, is ultra vires of the Constitution without the approval of the President. It is pointed out that the State has delegated its legislative powers to the Marketing Board and the Market Committees under Section 4 (1) to notify the market areas and to levy fee which is a legislative function and could not be delegated. It is further contended that there are no plans for rendering any service, nor any provisions have yet been made for rendering services. According to the petitioner, no fee can be levied nor the petitioner can be asked to take licence unless the services are rendered. The petitioner has contended that the levying of market fee is a colourable legislation amounting to indirect taxation inasmuch as no service is being rendered but fee is being charged. According to the petitioner, the fee is in the nature of tax on sale. On this basis, it is urged that the market fee demanded from the petitioner amounts to imposition of tax which the Market Committee is not empowered to do. The petitioner reiterates that the market fee is in fact a tax inasmuch as the purposes for which the market fee is being collected is that the market funds can be spent under Sections 23 and 25 which provide that the same be used for national and public interest. According to the petitioner, it has no nexus with the object of the Act. It is contended that the levying of a market fee and issuing a licence is an unreasonable restriction on the right of the petitioner to do free trade. It is also urged that no guidelines have been provided nor the restrictions have any nexus with the objects of the Act. The petitioner submits that the entire action of the respondents is without foundation and without the authority of law. It is averred that the erstwhile Union Territory of Himachal Pradesh was granted Statehood on 25th Jan., 1971 and the Act had already been enacted and that on attaining Statehood, the Act was not again passed by the Legislature of Himachal Pradesh. According to the petitioner, the Act cannot be treated to be law in force ascontemplated by the provisions of State of Himachal Pradesh Act, as no notification has been issued in exercise of powers under Sub-section (1) and Sub-section (19) of Section 3 and Section 9 of the Act. It is further urged that the constitution of respondents Nos. 2 and 3 is without the authority of law and based on invalid notification. According to the petitioner, he was never allowed an opportunity to file objections as no notification in accordance with the rules was published. It is pointed out that before the enforcement of the Act, the petitioner as also other commission agents used to charge 7% on fruits and 4% on vegetables from the growers. According to him, no commission was charged from the purchasers in respect of fruits. It is urged that the Act and the Rules provide that the commission agent cannot charge any commission from the growers but only from the purchasers. The petitioner has also contended that the commission agents engaged in business do not render any service to the purchasers but merely help the growers in marketing their commodities. According to the petitioner, the commission agents are coerced to charge fee from the purchasers although they render no service to them. The petitioner contends that there is no intelligible basis on which commission can be charged from the purchasers. According to the petitioner, no notification in accordance with Rule 5 was published. The petitioner on his belief contends that no publication was made in English or Hindi paper. He claims that the persons affected, including the petitioner, were not given due notice of the notification as envisaged by Sub-rule (ii) of Rule 5 (1). No copy of the notification was affixed on or near about the premises where the petitioner was carrying on business nor it was affixed in the principal common meeting place of interest. According to the petitioner, the commission agents, like him, have to market the commodities at places like Delhi, Bombay, Calcutta and Madras. At all these places, the commission agents, it is asserted, are authorised to charge between 8% to 10% commission from growers and not from the purchasers. On this account, it is urged that the petitioner is handicapped in competing with the persons engaged in similar business and contends that it is in violation of Arts. 14 and 19 of the Constitution of India. It is also urged that according to the scheme of the Act, the market can only be established by a Market Committee under the Act. It is canvassed that if it is required to be so done by the State Government, the requirementby the State Government is a condition precedent to the establishment of a market. It is pointed out that no direction was given by the State Government to establish market-yard or market. According to the petitioner, the Committee took no steps after the receipt of the said directions for the establishment of a principal market-yard of sub-market yard, if any. It is urged that during the pendency of the case after the enforcement of the Act and till 3tst March, 1975, the peiitioner has deposited a sum of Rs. 1,0008.13 on account of fee with respondents Nos. 2 and 3. The petitioner states that the respondents cannot retain this amount. It is pointed out that the association of which he is a member, made representation to the respondents seeking information of the facilities to be provided for which they claim fee and the licences are being granted. According to him, the respondents gave the reply Annexure 'C' saying inter alia that steps are being taken to provide them amenities. The petitioner has urged that without providing the amenities and services, no fee can be charged and they cannot be forced to take the licences to do the business. According to the petitioner, no facility either of storage or of processing or any other amenity worth the name hat been conceived as yet, germane to the dealing in business.

3. On the above averments, the petitioner claims that the Act be declared as ultra vires of the Constitution and a writ of mandamus be issued directing respondent No. 1 not to enforce the same. It is further prayed that a proper writ or direction be issued to respondents Nos. 2 and 3 to refund a sum of Rs. 1,008.13 to the petitioner as also the amounts which may be collected during the pendency of the writ petition.

4. Replies to the writ petitions have been filed by the respondents. It is submitted therein that the petitioner has no right to maintain the writ petition as he is not a person to pay the levy as the same is not to bo paid by a dealer or producer. It is urged that the scheme of levy is that the market fee is to be paid by the buyer and not by the producer or a dealer. According to the respondents, the Act received the assent of the President of India and was published in the Himachal Pradesh Government Gazette on 6th April, 1970. It is urged that the Himachal Pradesh Marketing Board was constituted under Section 3 of the Act by the State Government vide notification dated 5th Feb., 1972. The preliminary notification indicating intention to regulate Simla Marketunder Section 3 (19) was issued on 5th May, 1973 and was published in the Gazette on 12th May, 1973. According to the respondents, the petitioner did not file any objection to the said notification and the final decision was taken, and final notification under Section 4 (1) was published on 21st May, 1973. It is alleged that the first Market Committee for Simla notified market area was constituted by a notification dated 15th Sept., 1973 and the first meeting of the said Committee was held on 12th March, 1974. The petitioner is alleged to have applied for a licence and deposited licence fee of Rupees 100/- on 10th April, 1974. On the basis of these facts, it is contended that the petitions suffer from laches. According to the respondents, the Act is a step towards an agrarian reform and benefit is intended to be given to the growers of agricultural produce. It is contended that the object of the Act is to give a fair-deal, and fair rates to the growers and also to save them from exploitation of intermediaries. It is contended that the provisions of the Act are saved by Article 31-A of the Constitution and the Act is not open to challenge on the basis of alleged violation of the provisions of Articles 14, 19 and 31 of the Constitution of India. It is pointed out that otherwise also, non-publication of the preliminary notification under the rules is protected by the provisions contained in Sub-section (4) of Section 4 of the Act. It is contended that the petitioner besides the business in fruits and vegetables, is also wholesale dealer in these articles. It is pointed out that the intention to create a Market Committee was proposed by the erstwhile State of Punjab during the year 1965 and a preliminary notification was issued on 12th Jan., 1965. Wide publicity to the aforesaid notification is alleged to have been given by the Government of Punjab and, in consequence thereof, several representations were received from various traders within the city of Simla. The matter was also brought to the notice of the Simla Municipal Committee in which there were as many as sixteen elected representatives of the then Municipal Committee, and they passed a resolution as contained in Annex-ure 'PB'. It is pointed out that after receiving the objections, the then Government of Punjab considered the objections and took the decision on 27th May, 1965. In pursuance of that notification, it is contended, the Market Committee was constituted, but further steps could not be taken within the present territory of Simla town. It is con-tended that thereafter the Himachal PradeshAssembly passed the Act which received the assent of the President of India on 3rd March, 1970 and was published in the Raj-patra. It is also urged that in view of the changed circumstances, it was decided to constitute one consolidated Market Committee for the entire district of Simla after the reorganisation of districts in Sept., 1972. On the reorganisation of the districts, large area comprising of erstwhile Mahasu district came within the district of Simla. Due to this reorganisation, it was decided to amalgamate the two areas into one Committee and by notification dated 13th June, 1973, the previous notifications were denotified and a fresh notification under Section 3 was issued declaring intention of the Himachal Pradesh Government of constituting a Market Committee in the area including Simla. According to the replying respondents, the aforesaid notification was given a wide publicity and its copies were distributed and affixed on the notice boards of the Deputy Commissioner, Simla, Municipal Corporation, Simla, and also other conspicuous places within Simla town and other areas of Himachal Pradesh. Copies were also sent to the District Agriculture Officers and Agriculture Inspectors to give wide publicity to the notification. No objections were, however, received and consequently the Government of Himachal Pradesh decided to constitute the Market Committee and a final notification was issued and published in the Official Gazette. Notifications under Sections 3 and 4 of the Act were published in the Official Gazette. It is also pointed out that otherwise also, in view of the provisions contained in Sub-section (4) of Section 4 of the Act, the omission, if any, would not affect the constitution of the Committee. It is denied by the replying respondents that notification did not comply with Rule 5 framed under the Act. It is further pointed out that the petitioner knew the factum of the enforcement of the Act. It is also pointed out that the petitioner is the President of Krishna Fruit and Vegetable Dealers Association, Simla which had filed objections to the earlier notification. These objections were considered by the appropriate authorities. It is urged that it is within the competence of the Government to decide and notify a particular area as market area and to apply the provisions of the Act after following the necessary procedure. It is contended that the notifications Annexures 'A' and 'B' are not vague. The replying respondents contend that the acquisition of land is a common subject of the Centre and the State.At the same time, it is pointed out, that the acquisition of land for market yards etc. is the ancillary object of the Market Committee. In any event, it is pointed out that the petitioner cannot make any grievance in this behalf. Further, it is denied that any essential legislative powers have been delegated to the Board. The Board has been given limited powers to fix the market fee subject to a maximum, provided under the Act. It has been elaborated by the respondents that the main object of the Act is to remove the disabilities of the producers' share in the price paid by the consumers and to avoid the exploitation and other malpractices followed by middlemen. It is urged that keeping in view the difficulties of illiterate producers of agricultural produce, the countries of the world, including India, have sought to remove the socio-economic disabilities of the farmers and to increase the production and improvement of agricultural produce. Accordingly, the first socio-economic measure in this behalf is to establish the regulated markets. Such legislations are stated to have been enacted by numerous other States in India. In para 15 of the reply filed by the respondents Nos. 2 and 3, the evils and malpractices prevailing in the purchase and sale of agricultural produce have been elaborated. The Act is intended to give protection to the producers of such produce. The reply indicates that the various traders in the market area, including the petitioner, met the Deputy Commissioner, Simla in deputation. The meeting was held on 26th Sept., 1974 and they demanded certain facilities. The Deputy Commissioner agreed to provide certain facilities. It is contended that other facilities are also being provided and more facilities would be provided when sufficient funds are available to the Market Committee. The staff is alleged to have been appointed and preliminary steps to provide facilities are stated to have been already taken. It is pointed out that the Act received the President's assent on 3rd March, 1970 and was published in Himachal Pradesh Gazette of 26th March, 1970. In reply to para 18-B, it has been alleged that the petitioner is a commission agent and used to charge the commission at the rate of 7% on fruits and 4% on vegetables from growers. No commission or fee was to be charged from the purchasers in respect of fruits. It is, however, alleged that the petitioner in fact had been charging 4% commission from sellers and 1 1/2% from the purchasers on vegetables. Onfruits, the petitioner is alleged to be charging commission at the rate of 7% from the sellers and 25 P. per box (unit) from the purchasers. Under the Act, the growers have, however, been completely exempted from paying market charges. The commission at the rate of 5 % is fixed by the Committee to be charged by the commission agent for themselves whereas one per cent is to be paid to the Committee. The petitioner, accordingly, is entitled to 5% commission which is to be paid by the purchasers. It is pointed out that in Punjab and Haryana, no commission is charged from the producers. According to the replying respondents, the establishment of the principal market yard under Section 5 (1) (2), is not a precondition that the market-yards be established before enforcement of the Act. The licensed dealers who were taken as members of the Market Committee can suggest the better places for the purpose. It is pointed out that the petitioner has already deposited the market fee. As desired by the traders in the meeting held with the Deputy Commissioner, Simla, the order for the installation of weigh-bridge has already been placed with a firm. In the end, it is pointed out that various facilities are being provided under the Act. Almost similar reply has been filed on behalf of respondent No. 1, on the affidavit of the Joint Agriculture Production Commissioner, Himachal Pradesh and it is not necessary to reproduce the same over again.

5. An additional affidavit has been filed by the Secretary, Market Committee, Simla in which several services which are being rendered by the Market Committee have been elaborated. It is proper to reproduce the said affidavit for a ready reference:

'I, Prem Prakash Gupta S/o Shri Makhan Lal Gupta, aged forty-two years at present Secretary, Market Committee, Simla, since 1st August, 1978 and as such, I am well conversant with affairs of the Market Committee, Simla. I solemnly declare that in Simla district, Market Committee was constituted on 15-9-1973 and the fee was levied with effect from 15-10-1974.

2. That following services are being rendered by the Market Committee in the market area of Simla :--

(a) Secretary, Market Committee has been appointed along with supporting staff of fee collectors/Market Supervisors/Auction recorders, Head Clerk, two clerks, one chowki-dar and one peon.

(b) That the Fee collectors/Market Supervisors/Auction recorders perform the following duties:

(i) Supervision of the Market, attending the auction, hearing the general complaints of the producer, sellers at the time of auction, regulating the Market charges, Market functionaries and Market practices.

(ii) Supervision of weighment and checking of malpractices and unauthorised charges etc. so as to check unhealthy practices and eliminate unauthorised/overcharges in the Market.

(iii) The Market intelligence work for collecting and publicity and broadcasting daily prices and information regarding the stock arrivals being collected periodically along with despatches of major cash crops of agricultural produces.

(iv) The supervision of grading and standardisation of the seed potatoes and apples which are the major cash crop of the area.

(c) That land for construction of the Market has been taken over at Dhalli, Theog, Rohru and Shillaru. The layout plans for Dhalli, Theog and Shillaru for the purpose have been prepared and approved. The estimated cost of the Market Yards at Dballi is about Rs. seventy lacs and that of Theog is about rupees fifteen, lacs and of Rohru, Shillaru are rupees five lacs each. Construction has been started at Dhalli and Theog.

(d) A weighing-bridge has been installed at a total cost of rupees two lacs. At Theog about 20 shops and canteens have been constructed at a cost of rupees three lacs.

(e) A storage shed for agricultural inputs has been constructed at Dhalli at a cost of rupees one lac.

(f) A grading and standardisation centre has been created at Dhalli for seed potato marketing. To promote potato grading equipment worth Rs. 18,000/- has been purchased.

(g) Parking place has been provided and convenience for the users are under construction.

(h) The efforts are being made to acquire suitable land for Market Yard for Simla town for which several proposals have been submitted. At present, Municipal Corporation, Simla is not co-operating and the matter has to be pursued at higher level as the entire Nazul land vests in the Corporation.

(i) A piece of land has been taken over in existing Municipal Sabzi Mandi, Simla for conducting auctions and a platform for the same has been provided. The weighment is checked by the Market Supervisors.

3. That the statement of Income and Expenditure of the Market Committee for theyear 1974-75 till 31st March, 1981 is annexed as Annexure 'A' to this affidavit and the Expenditure incurred is annexed as Annexure 'B' to this affidavit.

4. That the total income from levy of market fee till 31-3-1981 is Rs. 31,54,288,32 p. whereas expenditure is Rs. 18,87,736.73 p. Thus a sum of Rs. 12,66,551.59 p. has been saved from the incomes and as against that projects worth more than rupees ninety five lacs for construction of Market Yards along have been taken in hand and the balance expenditure will be met out of future in come, grant-in-aid, loans etc. A full-fledged principal markets for potatoes, apple and other cash crops are produced to be constructed at Dhalli and another proposal is afoot to construct another Marketing Complex at Shogi, besides other sub-market yards in the Notified Market Area at suitable points.

5. No suitable site to declare a principal Market Yard under Section 5 has yet been, approved in Simla Town although some proposals have been submitted to the higher authorities. Simla dated 15th July, 1981.

Sd/-(Prem Prakash Gupta) Deponent.'

Annexures 'A' and 'B' have been also filed with the additional affidavit. In Annexure 'A', the income of Market Committee, Simla of market fee as realised from 1974-75 up to 1980-81 has been detailed. In this way, the Market Committee is shown to have derived a total income of Rs. 31,54,228.32 p. for all these years. In Annexure 'B', the details of the expenses incurred by the Market Com-mittee, Simla have been given from the year 1974-75 up to 1980-81. In this way, a sum of Rs. 18,87,736.73 p. is stated to have been incurred by the Committee on the expenditure side.

6. The petitioner has filed a counter-affidavit to the aforesaid additional affidavit. It has been contended that to the knowledge of the petitioner, the market fee is not collected anywhere in Simla district except Simla proper. It is contended that no services, amenity, facility or comforts are being provided in Simla proper. No market-yard, sub-market yard or market proper is alleged to have been declared so far. According to the petitioner, no other facilities as content plated by Rule 44 framed under the Act have been provided. The petitioner contends that the staff only renders the service of harassment to the petitioner and others, carrying on business and also to the growers. It isalso asserted that the Market Committee is bound to spend a substantial amount collected on account of market fee on the services to be rendered. According to the petitioner, the weighing-bridge set up by the Market Committee is running on commercial basis and any person can get his truck or any other articles weighed by paying charges. The piece of land said to have been taken in the existing 'Sabji Mandi', Simla for conducting auctions is hardly 18' X 10' and that too, according to the petitioner, has been set apart for the use of the co-operatives.

C. W. P. No. 89 of 1981:

7. The petitioners in this writ petition are running their business at Manali, within district Kulu. The petitioner No. 1 is the Managing Director of M/s. Rajinder Paul Sood and SODS Private Limited, Manali and also the owner of M/s. Modem General Stores, Manali petitioner No. 2. According to Shri Rajinder Paul, petitioner No. 2 is carrying on the business of selling food-grains, edible oils, goods etc. in Manali. The petitioner No. 1 purchases most of their goods for the business from the markets at Damtal, Delhi and Punjab and they sell almost all their goods in wholesale and make no local purchases of the articles in which they deal. Inter alia, it is stated that Manali has been shown as the Principal Market-yard. The petitioners submit that the place where they carry on their business is a distinct place and is separated by three-four villages and is not a part of the Notified Area Committee, Manali, Accordingly, it is urged that no principal Market-yard or sub-market yard was declared for Manali proper. It is pointed out that respondents Nos. 2 and 3 demanded the market fee from the petitioners and they filed a C. W. P. No. 265 of 1978. It is alleged that the Joint Agricultural Production Commissioner issued a communication dated 22nd Dec., 1978 to the effect that the Government had decided that no market fee would be charged by the Marketing Committee of Solan, Simla, Kulu and Nagrota in respect of cereals, pulses, oil-seeds, gur and shakkar (khandsari). As such, direction was made that necessary instructions in this behalf be issued. A copy of the communication has been placed on record as Annexuure P-7. On the basis of this communication, the counsel for respondents Nos. 2 and 3, stated at the bar that at present, the petitioner is not liable to pay any market fee. Accordingly, the petitioner did not press this writ petition and the same was dismissed aswithdrawn on 2nd March, 1979. It is stated that they received a letter dated 3-1-1981, calling upon them to collect and deposit market fee at the rate of 1 % with effect from 1-1-1981. A notification dated 29th Jan., 1981 was thereafter issued by respondent No. 1 to the effect that in respect of Market Commiitee, Kulu, market fee on cereals, pulses, oil-seeds and gur and shakkar (Khandsari) would be levied with immediate effect. Almost similar other legal contentions as contained in C. W. P. No. 254 of 1974, have been raised in this writ petition. Inter alia, it is contended that no marketing board as envisaged by Section 3 (1) of the Act has been constituted. It is urged that at any rate, its constitution is not proper. No market-yards and any market sub-yards are alleged to have been defined or notified, it is contended that the respondents under the garb of action under Sections 8 and 20 of the Act are levying fees. The action of the respondents is branded as violative of Arts. 301 and 304 of the Constitution of India. It is pointed out that under Section 22 of the Act, the Government is enjoined by directing the Committee or the Notified Area Committee not to charge octroi in the area where the Act has been made applicable. No such action is said to have been taken and the octroi continues to be levied by the Municipal Committee, Kulu and Notified Area Committee, Manali. According to the petitioners, the Market Committee was not competent to levy the market fee till the Market Committee was constituted according to law. It is staged that the articles like rice, edible oils and other products are not agricultural produce and are not produced in the market areas, and as such, no market fee can be levied. It is pointed out that principal market-yard for Manali (Chauri Bebal) Tehsil, Kulu was notified by the respondents, as the potato business is carried out at the said place. According to the petitioners, the establishment of Market Committee is a con-dition precedent for levying market fee. As such, it is prayed by the petitioners that the Act be declared as ultra vires of the Constitution of India and the imposition of licence fee and collection of fee be declared illegal, void and arbitrary. A prayer has also been made for the refund of licence fee as also the market fee. Notifications An-nexures P-1 and P-2 and demands as contained in Annexures P-9 and P-10 are prayed to be quashed. In the alternative, however, it is prayed that the respondents be directed to enforce the provisions of the Act in accordance with law.

8. In the reply filed on behalf of the respondents Nos. 2 and 3, besides the legal objections, as contained in reply filed in C. W. P. No. 254 of 1974, it is contended that on 3rd Oct., 1977, as many as six members of the Market Area Committee, Kulu were nominated and five other members were also nominated in the year 1979. It is contended that it is not necessary that for the purposes of levying market-fee, the constitution of the Market Committee is a condition precedent. It is pointed out that under Section 12 of the Act, the outgoing members, if not replaced after the expiry of their term, the old members continue to hold the office and the Market Committee continues to be validly constituted Committee. It has been admitted in the reply that C. W. P. No. 265 of 1978 was filed in which it was stated that no market fee was levied on various items. It is, however, contended that the aforesaid items now stand included vide notification dated 29th Jan., 1981. The respondents denied that there was any assurance that the petitioners would never be made liable to pay the market fee. It is urged that it was only stated that no market fee was liable to be charged in view of the notification as it stood then. It is also urged that in connection with the statutory duty of the Market Committee and the Board to render services as prescribed under the Act, various steps are being taken. Some staff for the enforcement of the Act is alleged to have been employed and Market Committee constituted. It is pointed out that proper sheds and market yards etc. shall be built and other facilities provided gradually according to the funds available with the Market Committee. It is further contended that the market fee is levied in respect of the goods sold in the market irrespective of the source of purchase by the dealer. Ultimately, it has been pointed out that it is the statutory duty of the Market Committee and of the Board to render services as prescribed under the Act. The respondents have justified their actions under the Act and have repudiated the other contentions of the petitioners.

C. P. W. No. 82 of 1974:

9. This writ petition has been filed by M/s. Keshav Ram Chandermani and others, shop-keepers of Nalagarh, district Solan, praying that the action of the respondents constituting the Board as also imposition of the licence fee and collection of fee be declared illegal, void and arbitrary. It is further prayed that respondents be directed torefund the licence fee deposited by the petitioners. It is also prayed that the respondents be directed to enforce the provisions of the Act in accordance with law. Inter alia, it is contended that no Marketing Board as envisaged under the Act has been constituted. At any rate, it is contended that its constitution is not proper. It is urged that neither any market yards nor market sub-yards nor any market areas have been denned or notified. It is further urged that the provisions of the Act were extended to Saproon, Solan, Simla etc. but later on the respondents elected to denotjfy these areas. It is pointed out that the respondents in the garb of action under Sections 8 and 20 of the Act are levying fees. It is asserted that under the provisions of the Act, the respondents 2 and 3 are enjoined to perform various functions and to provide facilities to the producers as also to the dealers, but no facilities have been provided. The other contentions are substantially the same as raised in C. W. P. No. 254 of 1974.

10. The reply filed on behalf of the respondents 2 and 3 is almost on the identical lines as filed in C. W. P. No. 254 of 1974.

C. W. P. No. 252 of 1974:

11. This writ petition has been filed by Shri Balwant Singh and fifteen others. In this writ petition, it is contended by the petitioners that they carry on the trade as butchers and sell goat meat and mutton for consumption of general public at Simla. It is stated that they purchase sheep and goat) from places outside Simla and sell their meat. According to the petitioners, goat meat and mutton cannot be described to be an agricultural produce and that according to law respondent No. 1 is not authorised to formulate any law in respect of goat meat or mutton. According to the petitioners, the State Legislature is not empowered to levy any fee on sellers of goat meat and mutton. It is further asserted that the action of the respondents is violative of Arts. 304 and 301 of the Constitution of India. The notifications constituting the Marketing Board as also the Market Committee are said to be non est inasmuch as they were not published in accordance with Rule 5 of the Rules framed under the Act. The other contentions raised in this writ petition are substantially the same as raised in C. W. P. No. 254 of 1974. Ultimately, it is prayed that the notification (Annexure 'D') directing the petitioners to apply immediately for the licence under the Act be quashed, and the respondents be directed not to enforce the Act and the Rules vis-a-vis the petitioners.

12. In the reply filed on behalf of the respondents, the contentions of the petitioners have been repelled and it has been contended that goat meat and mutton stand included under animal husbandry products and are treated as agricultural produce. C. W. P. No. 259 of 1974.

13. This writ petition has been filed by Shri Jagdish Raj and nine others. It is stated therein that the petitioners Nos. 1 to 6 are running business of the sale of infertile eggs and dressed chicken meat, whereas respondents Nos. 7 to 9 are carrying on the business of selling fish, at fish market, Simla. According to the petitioners, the animal hus-bandary goods cannot be included within the definition of agricultural produce. Other contentions raised in this writ petition are almost the same as contained in C. W. P. No. 254 of 1974. Ultimately, the petitioners have prayed that Notifications 'D' and 'E' and the like notices be quashed. It is further prayed that Annexure 'A' and subsequent notification notifying the Market Committee be quashed and respondents be directed not to enforce the provisions of the Act.

14. In the reply filed on behalf of the respondents, substantially the similar contentions have been raised as in the reply filed to C. W. p. No. 252 of 1974. The additional contentions of the petitioners have also been repudiated. C. W. P. No. 236 of 1979:

15. This is a writ petition filed by Shri Gurbax Singh and another of Una District. It is stated that the petitioners carry on the trade of butchers, general merchants, milk sellers, grain merchants, and deal in vegetables and allied commodities of the daily need of the general public as retail and wholesale dealers. According to the petitioners, these commodities are not the products of the State of Himachal Pradesh, where the petitioners are carrying on their business and that the petitioners have to purchase these articles from Punjab and other nearer States, outside Himachal Pradesh. Inter alia, it is contended that the notice issued to them as contained in Annexures 'C' and 'C-1' be quashed and the respondents be directed not to enforce the provisions of the Act and the Rules made thereunder vis-a-vis the petitioners. It may be pointed out that Annexure 'C' is to the effect that application form for obtaining the requisite licence under toe Act be sent to the Market Committee, Una or to the Deputy Director of Agriculture, Una.

16. The reply has been filed on behalf of respondents 2 and 3 in which the conten-tions of the petitioners have been repelled and the action of the respondents has been claimed to be perfectly valid. Other contentions raised in this writ petition as also in the reply to the writ petition are substantially the same as contained in C. W. P. No. 254 of 1974.

C. W. P. No. 68 of 1981.

17. This is a writ petition filed by Shri Surinder Nath of main bazar Una and another. It stated in the writ petition that the petitioner No. 1 is a 'karyana' merchant whereas petitioner No. 2 is a 'vanaspati' dealer, exclusively. According to the petitioners they sell the commodities which are not the products of the State of Himachal Pradesh and that they purchase these commodities from the State of Punjab and other nearer States outside Himachal Pradesh. The other contentions raised in this writ petition are also the same as raised in C. W. P. No. 236 of 1979. It has been prayed in the writ petition that the notice issued to the petitioners as contained in Annexure 'B' be quashed and the respondents be directed not to enforce the Act and the Rules made thereunder.

18. The respondents in their reply have repelled the contentions of the petitioners and have raised similar contentions as contained in reply to C. W. P. No. 236 of 1979. It is, however, not necessary to reproduce the facts as detailed either in the writ peti-tion or in the reply thereto.

19. The Act has been passed to consolidate and amend the law relating to the better regulation of the purchase, sale, storage and processing of agricultural produce and the establishment of markets for agricultural produce in Himachal Pradesh. It may be noticed that before the Act was passed there were two Acts in force in Himachal Pradesh in regard to the establishment of markets for agricultural produce and other matters connected therewith. These were, the Patiala Agricultural Produce Markets Act, 2004 BK which was in force in the area comprised in Himachal Pradesh immediately before 1st Nov., 1966 and the Punjab Agricultural Produce Markets Act, 1961, Which was in force in the areas added to Himachal Pradesh under Section 5 of the Punjab Reorganisation Act, 1966. As such, with a view to bringing about uniformity in the matter of such law, it was considered necessary to have one unified law for the whole of Himachal Pradesh. Consequently, the Act in question was passed.

20. The scheme of the Act may be briefly narrated. Under Section 3 of the Act, the State Government may, for exercising the powers conferred on, and performing the functions and duties assigned to, the Board by or under the Act, establish and constitute a Himachal Pradesh Marketing Board consisting of official and non-official members to be nominated by the State Government. Under Section 3 (19) of the Act, the Board may, with the prior approval of State Government, by notification declare its intention of exercising control over the purchase, sale, storage and processing of such agricultural produce and in such area as may be specified in the notification. Such notification shall state that any objections or suggestions which may be received by the Board within a period to be specified, in the notification, win be considered provided that such period will not be less than one month. Section 4 of the Act deals with declaration of notified market area. It provides that after the expiry of the period specified in the notification under Section 3 (19) and after considering objections and suggestions as may be received before the expiry of the specified period the Board may by notification and in any other manner that may be prescribed, declare the area notified under Section 3 or any portion thereof to be notified market area for the purposes of this Act in respect of agricultural produce, notified under Section 3 or any part thereof. Under Section 4 (4), it is declared for the removal of doubts that a notification published in the official gazette under this section or Section 3 shall have full force and effect notwithstanding any omission to publish or any irregularity or defect in the publication of a notification under this section or Section 3, as the case may be. Section 6 of the Act provides that no market is to be opened in or near places declared to be markets. Sections 7 and 8 are concerned with the grant of licences and payment of licence-fee. Under Section 9, the Board by notification is to establish Market Committee for every notified market area and specify its headquarters. Sections 10 to 15 deal with the constitution of Market Committee, its duties and powers, term of office of the members, removal of members, election of Chairman and Vice-Chairman, and filling of vacancies of members of the Market Committee. Section 16 declares that every Market Committee shall be a body corporate as well as local authority by such name as the Board may specify in the notification. Section 17 relates to the appointment of sub-committee, joint committee anddelegation of powers whereas Section 18 deals with the appointment and salaries of officers and servants of Market Committee. Sections 19 to 32 deal with other allied matters relating to the working of the Market Committee, levy of fee, the Marketing Board fund, Market Committee fund, purposes for which the Market Committee fund may be expended, acquisition of land for the Board and market committees and imposition of penalties etc. Under Section 33 of the Act, the State Government has powers to make rules for carrying out all or any other purposes of the Act. Under Section 34 of the Act, the Board has been given power to make bye-laws subject to certain conditions. Under Section 35, the State Government has power to add to the schedule to this Act any other item of agricultural produce, or amend or omit any item of such produce, specified therein. Sections 36 to 43 deal with the trial of offences, appeal, revision, power to compound offences and liability of member or employee of Market Committee or the Board. Section 44 of the Act relates to repeal and savings provision whereby the Punjab Agricultural Produce Markets Act and the Patiala Agricultural Produce Markets Act are repealed with a proviso that such repeal shall not affect certain matters. In the schedule attached to the Act, the names of agricultural produce as defined under Section 2 (a) have been given. The relevant provisions of the Act will be considered while dealing with a point or points raised in these writ petitions.

21. Common arguments were addressed by the learned counsel for the parties in these writ petitions. It may be pointed out at the very outset that the learned counsel for the petitioners have not, at this stage, chosen to challenge the vires of the Act. As such, it is not necessary to go into that question.

22. The first question that has been raised on behalf of the petitioner is that the fee charged by the respondents is not in the nature of a tax but is a levy of fee for which in return services have to be rendered. Our attention has been drawn to a judgment of the Supreme Court in State of Maharashtra v. Salvation Army Western Territory, (AIR 1975 SC 846), to show the difference between a fee and a tax. The relevant observations may be reproduced for a ready reference (at p. 850):

'Now the first question for consideration is: What is the nature of a fee It is idle to parade the familiar learning on the question of the distinction between a tax and a fee. A tax is a compulsory exaction of money by a public authority for a public pur-pose enforceable by law and a not a payment for any specific service rendered. The levy of a tax is for the purpose of general revenue which when collected forms part of the public revenues of the State. There is no element of quid pro quo between the tax payer and the public authority. A fee is generally denned to be a charge for a special service rendered to individuals by the Government or some other agency like a local authority or statutory corporation. The amount of fee levied is supposed to be based on the expenses incurred by the Government or the agency in rendering the service though in many cases the costs are arbitrarily assessed. Fees are ordinarily uniform but absence of uniformity is not a criterion on which alone it can be said that a levy is in the nature of tax. In the case of a fee, no account is taken of the varying abilities of different recipients of the service to pay. As a fee is regarded as a sort of return or consideration for services rendered, it is necessary that the levy of fee should be correlated to the expenses incurred by the agency in rendering the services.

'If the special service rendered is distinctly and primarily meant for the benefit of a specified class or area the fact that in benefitting the specified class or area the State as a whole may ultimately and indirectly be benefitted would not detract from the character of the levy as a fee.' See Hingir Rampur Coal Co. Ltd. v. State of Orissa, (1961) 2 SCR 537 at p. 549 : (AIR 1961 SC 459 at p. 466). It is also generally necessary that the payments demanded for rendering of such services must be set apart or specifically appropriated for that purpose and that they should not be merged in the general revenue of the State to be spent for general public purposes. It may not be possible to prove in every case that the fees that are collected by the Government or the agency always approximate to the expenses that are incurred by it in rendering the particular kind of services or in performing any particular work for the benefit of certain individuals.

'A levy in the nature of a fee does not cease to be of that character merely because there is an element of compulsion or coerciveness present in it, nor is it a postulate of a fee that it must have direct relation to the actual services rendered, by the authority to the individual who obtains the benefit of the service. If with a view to provide a specific service, levy is imposed by law and expenses for maintaining the service are metout of the amounts collected there being a reasonable relation between the levy and the expenses incurred for rendering the service, the levy would be in the nature of a fee and not in the nature of a tax 'See H. H. Sudhindra Thirtha Swamiar v. Commr. for Hindu Religious and Charitable Endowments, Mysore, (1963) Supp 2 SCR 302 at p. 323 : (AIR 1963 SC 966 at p. 975). That there is correlation between the levy and the services can be proved by showing that on the face of the legislative provision itself, the collections are not merged in the general revenue but are set apart and appropriated for rendering services. Thus, two elements are essential in order that a payment may be regarded as a fee. In the first place, it must be levied in consideration of certain services which the individuals accept either willingly or unwillingly and in the second place, the amount collected must be earmarked to meet the expenses of rendering these services and must not go to the general revenue of the State to be spent for general public purposes. See Commr. Hindu Religious Endowments, Madras v. Sri Lakshmin-dra Thirtha Swamiar, 1954 SCR 1005 at pp. 1037, 1040 : (AIR 1954 SC 282 at pp. 294, 295); Sri Jagannath Ramanuj Das v. State of Orissa, 1954 SCR 1046 at p. 1053 : (AIR 1954 SC 400 at p. 403) and Ratilal Panachand Gandhi v. State of Bombay, 1954 SCR 1055 at p. 1075 : (AIR 1954 SC 388 at p. 395).'

Again, in this very judgment, the Supreme Court has further observed as under:

'As we said, the fee must, as far practically as possible, be commensurate with the services rendered. One should not seek for any mathematical accuracy in these matters but be content with rough approximations. The services are mostly rendered by the officers of the Charity Organisation. With the proliferation of public trusts in the State, it became necessary to expand the Charity Organisation and to increase the staff for supervision and control. It also became necessary to have more regional offices for the more effective and immediate supervision and control. The expenditure in constructing buildings for locating the head office and regional officer and the increase in the allowances or other amenities to the staff have also to be included in the costs of the services. When there is surplus, it cannot immediately be said that the surplus must necessarily go in reduction of the rate of contribution to be levied thereafter.'

23. In this context, a Full Bench deci-tion of Punjab and Haryana High Court inHarnam Dass Lakhi Ram v. State of Punjab, (AIR 1978 Punj & Har 53) be referred in which reference has been made to the report of Royal Commission on Agriculture in India, 1928, in respect of purchase,sale, storage and processing of agricultural produce and regulating the markets in respect of these matters. The relevant extract of the report may be reproduced (at p. 55):--

'If, as we have held in the preceding para, it is established that the cultivator obtains a much belter price for his produce when he disposes of it in a market than when he sells jt in his village, the importance to him of properly organised markets needs no emphasis. The importance of such markets lies not only in the functions they fulfil but in their reactions upon production. Well regulated markets create in the mind of the cultivator a feeling of confidence and of receiving fair play and this is the mood in which he is most ready to accept new ideas and to strive to improve his agricultural practice. Unless the cultivator can be certain of securing adequate value for the quality and purity of his produce, the efforts required for an improvement in these will not be forthcoming. The value of the educative effect of well regulated markets on the producer can hardly be exaggerated but it has yet to be recognised in India. From all provinces we received complaints of the disabilities under which the cultivator labours in selling his produce in markets as at pre-sent organised. It was stated that scales and weights and measures were manipulated against him, a practice which is often rendered easier by the absence of standardised weights and measures and of any system of regular inspection. Deductions, which fall entirely on him but against which he has no effective means of protest are made in most markets for religious and charitable purposes and for other objects. Large 'samples' of his produce are taken for which he is not paid even when no sale is effected. Bargains between the agent who acts for him and the one who negotiates for the purchaser are made secretly under a cloth and he remains in ignorance of what is happening. The broker whom he is compelled to employ in the larger markets is more inclined to favour the purchaser with whom he is brought into daily contact than the seller whom he only sees very occasionally. This inclination to favour the buyer becomes more pronounced when, as not frequently happens, he acts for both parties.'

In this very judgment, it was further observed as under (at p. 63):

'The contention of the learned counsel for the petitioners that since no services are being rendered by the Market Committee to the category of unregulated sales to which category the petitioners belong, therefore, the Committee is not entitled to charge any fee from the petitioners is really not well founded. Firstly, there is no clear-cut averment as to wbich type of services as are postulated in the provisions of the Act, were not being rendered to the petitioners. Secondly, as would be apparent from the provisions of the Act and the Rules made thereunder, the market fee is levied for the purposes of rendering services to the licensees under Sections 30 and 13 and to the producers residing in the market area. The purposes for which the fund realised from market fee is to be spent are enumerated under the provisions of Sections 26 and 28 of the Act. It may be observed that a portion of market fee recovered by the Market Committee is given to the Marketing Board for constituting the Market Development Fund, The funds of the Market Committee and that of the Board are to be spent for the purposes enumerated under the provisions of Sections 26 and 28 of the Act. The main purpose of the Act is to make provision for regulated markets for the agricultural produce and in that respect render ser-vices to all concerned. It cannot be denied that the existence of a regulated market system in State is itself a service to the sellers and to the intending purchasers of the agricultural produce. The provisions of the Act have to be administered by the Market Committees/Marketing Board and the State Government. The establishment and the administrative network involving the administra' tion of the Act by the Market Committees and the Board, does require the finances to run such an administration. If the fee is being levied under the provisions of a statute, the services to be rendered in lieu of the fee as provided under the statute, have to be kept in view with a view to uphold the provisions of the statute.'

The judgment also observed:

'It is no doubt true that a levy by way of fee is a sort of return or consideration for the services rendered which makes it necessary that there should be an element of quid pro quo in the imposition of a fee, as has been held by their Lordships of the Supreme Court in Government of Andhra Pradesh v. Hindustan Machine Tools Ltd., AIR 1975 SC 2037. But the question has to be viewed from a broader perspective. Reference in this connection, may be usefully made to thedecision of their Lordships of the Supreme Court in Corporation of Calcutta v. Liberty Cinema, AIR 1965 SC 1107, wherein it has been observed as follows (at p. 1128):--

'It, therefore, appears to us that the word quid pro quo should be read not in the narrow and restricted sense submitted by the learned counsel for the appellant but in a somewhat wider sense as including cases where the function of the licence is to impose control upon an activity, the cost incurred for effectuating that control, and this on the basis that the industry or activity is placed under regulation and control not merely in public interest but in the interest and for the benefit of the licensees as a whole as well.'

It was also observed (at p. 65 of AIR 1978 Punj & Har):

'The contention that the area of utilisation of the funds raised from the fee should be confined to the Principal market yard, is really without any merit. The bare perusal of the provisions of the Act would show that the Committee is established for the notified market area. The principal market yard or the sub-market yard or the market is only a small place where the producers come and dispose of their agricultural produce. With the development made in the notified market area, the development of the principal market yard, or sub-market yard or the market, is closely linked. The producers, who live in villages, are to be provided facilities such as link roads, construction of culverts on the link roads for facilitating the transportation of the agricultural produce to the markets etc. If such facilities, as are specified in the Act are not offered to the Villagers who grow agricultural produce, they are not likely to get the fair return for the agricultural produce they grow with hard labour and if that is done, the real purpose for which the Act has been enacted, will be frustrated.'

It was moreover observed as under (at p. 65 of AIR 1978 Punj & Har):

'The contention of the learned counsel for the petitioners that the sales and purchases made by the petitioners, who alleged that their shops are outside the principal market yard or sub-market yards, are not regulated sales and are sales by retail sellers, is really unfounded. As is clear from the provisions of the Act, all sales and purchases of agricul-tural produce made within each market area are being regulated under the Act. It is immaterial whether the said sales or purchases take place in the principal market yard or sub-market yard or even outside.'

24. It is also desirable to understand the essence of the expression 'commission' which is to be charged by a licensee. In this context, the expression 'commission' is almost synonymous to the expression 'fee'. According to dictionary meaning, commission is a fee paid to an agent or employee for transacting a piece of business or performing a service. According to 'Venkataramaiya's Law Lexicon and Legal Maxims' 2nd Edition, the expression 'commission' has no technical meaning but both in legal and commercial acceptation of the term it has definite signification and is understood as an allowance for service or labour in discharging certain duties, such for instance of an agent, factor, broker or any other person who manages the affairs or undertakes to do some work or renders some service to another. Mostly it is a percentage on price or value or upon the amount of money involved in any transaction of sale or service or the quantum of work involved in a transaction. It can be for a variety of services and is of the nature of recompose or reward for such services. Accordingly, it cannot be disputed that the fee charged by the respondents as also by a licensee is in lieu of services to be rendered and is not a tax. Reference may, also be made to a decision of the Supreme Court in Rameshchandra Kachardas Porwa v. State of Maharashtra, (AIR 1981 SC 1127). In this judgment, their Lordships of the Supreme Court while dealing with Maharashtra Agricultural Produce Marketing (Regulation) Act observed as under:

'Next we pass on to the main submission made on behalf of the petitioners that the transactions between trader and trader and transactions by which the agricultural produce was imported into the market area from outside the market area were outside the purview of the Act and that if Section 5 and Rule 5 were intended to cover such transactions also, they were invalid. The basic assumption of the submission was that the Maharashtra Agricultural Produce Marketing Regulation Act was conceived in the interests of the agriculturists only and intended for their sole benefit. This basic assumption is not well founded. It is true that one of the principal objects sought to be achieved by the Act is the securing of a fair price to the Agriculturist for his produce, by the elimina-tion of middlemen and other detracting factors. But, it would be wholly incorrect to say that the only object of the Act is to secure a fair price to the agriculturist. As the long title of the Act itself says, the Act is intended to regulate the marketing of agricultural and certain other produce. The marketing of agricultural produce is not con-fined to the first transaction of sale by the producer to the trader but must necessarily include all subsequent transactions in the course of the movement of the commodity into the ultimate hands of the consumer, so long, of course, as the commodity retains its original character as agricultural produce. While middlemen are sought to be eliminated, it is wrong to view the Act as one aimed at legitimate and genuine traders. Far from it. The regulation and control is as much for their benefit as it is for the benefit of the producer and the ultimate consumer. The elimination of middlemen is as much in the interest of the trader as it is in the interest of the producer. Promotion of grading and standardization of agricultural produce is as much to his benefit as to the benefit of the producer or consumer. So also proper weighment.'

Again, the Supreme Court in Kewal Krishaq Puri v. State of Punjab, (AIR 1980 SC 1008), while dealing with a case under Punjab Agricultural Produce Markets Act (23 of 1961), laid down certain principles for satisfying the tests for a valid levy of market fee on the agricultural produce bought or sold by licensees in a notified market area. It is desirable to reproduce the same for a ready reference (at p. 1022):

'From a conspectus of the various authorities of this Court we deduce the following principles for satisfying the tests for a valid levy of market fees on the agricultural produce bought or sold by licensees in a notified market area:

(1) That the amount of fee realised must be earmarked for rendering services to the licensees in the notified market area and a good and substantial portion of it must be shown to be expended for this purpose.

(2) That the services rendered to the licensees must be in relation to the transaction of purchase or sale of the agricultural produce.

(3) That while rendering services in the market area for the purpose of facilitating the transactions of purchase and sale with aview to achieve the objects of the marketing legislation it is not necessary to confer the whole of the benefit on the licensees but some special benefits must be conferred on them which have a direct, close and reasonable correlation between the licensees and the transactions.

(4) That while conferring some special benefits on the licensee, it is permissible to render such service in the market which may be in the general interest of all concerned with transactions taking place in the market.

(5) That spending the amount of market fees for the purpose of augmenting the agricultural produce, its facility of transport in villages and to provide other facilities meant mainly or exclusively for the benefit of the agriculturists is not permissible on the ground that such services in the long run go to increase the volume of transactions in the market ultimately benefitting the traders also. Such an indirect and remote benefit to the traders is in no sense a special benefit to them.

(6) That the element of quid pro quo may not be possible, or even necessary, to be established with arithmetical exactitude but even broadly and reasonably it must be established by the authorities who charge the fees that the amount is being spent for rendering services to those on whom falls the burden of the fee.

(7) At least a good and substantial portion of the amount collected on account of fees, may be in the neighbourhood of two-thirds or three-fourths must be shown with reasonable certainty as being spent for rendering services of the kind mentioned above.'

25. It is contended by the learned counsel for the petitioners that facilities have to be provided before an area is declared as a market area. The learned counsel have drawn our attention to a decision of the Supreme Court in Mohammad Hussain Gulam Mohammad v. State of Bombay, (AIR 1962 SC 97) in respect of their contention. After perusing the judgment, however, we find that there is no observation in this judgment that a market yard cannot be declared before all the facilities have been provided. On the contrary, in Rameshchandra Kacharadas Porwal's case, (AIR 1981 SC 1127) (supra) their Lordships of the Supreme Court observed as under (at pp. 1140-1141):

'It was also said that neither the Gul-tekdi market nor the Turbhe market had any convenience or facility or was ready for use on the date on which it was notified as the Principal Market for the concerned market area. On the material placed before us we are satisfied that all reasonable conveniences and facilities are now available in both the markets, whatever might have been the situation on the respective dates of notification. We refrain from embarking into an enquiry as to the situation obtaining on the dates of notification. We do say that a place ought not to be notified as a market unless it is ready for use as a market with all reasonable facilities and conveniences but we do not conceive it to be our duty to pursue the matter to the extreme limit of quashing the notification when we find that all reasonable facilities and conveniences are now available. While a notification may be quashed if nothing has been done beyond publishing the notification, in cases where some facilities and conveniences have been provided but not some others which are necessary the Court may instead of quashing the notification give appropriate time-bound directions for providing necessary facilities and conveniences. On the facts of the pre-sent case, we are satisfied that all reasonable facilities and conveniences are now provided.'

26. As such, we are of the view that providing of all the facilities under the Act is not a pre-condition for the enforcement of the Act and issuing of notifications under Sections 3 and 4 of the Act. A perusal of An-nexures 'A' and 'B' filed on behalf of the respondents with the additional affidavit shows that positive steps have been taken by the Market Committee, Simla and, as pointed out earlier above, expenses have been incurred on different heads as reflected in the said annexures. Accordingly, it cannot be laid that by now no facilities have been provided by the Market Committee, Simla.

27. Another question that has been raised on behalf of the petitioners is regarding the non-compliance of Section 3 (19) of the Act as prescribed under Rule 5 framed under the Act (hereinafter referred to as the Rules). This argument can be repelled on the short ground that under Section 4 (4) of the Act, even if there has been any omission in this behalf, the same shall have full force. The relevant provision may be reproduced:

'4 (4). For the removal of doubts, it is hereby declared that a notification published in the Official Gazette under this section or Section 3 shall have full force and effect notwithstanding any omission to publish or any irregularity or defect in the publication of a notification under this section or under Section 3, as the case may be.'

Accordingly, there is no force in this contention as well.

C. W. P. No. 89 of 1981.

28. It may be pointed out that at the time of arguments, it was stated by the learned counsel for the petitioners that in view of the reply filed to Para 23 of the writ petition on behalf of the respondents Nos. 2 and 3, the writ petition is not pressed. It is convenient to reproduce para 23 of the reply to this writ petition:

'Paragraph 23 of the writ petition is wrong and denied. The market fee is levied in respect of the goods sold in the market irrespective of the source of purchase by the dealer. It is further denied that there had been any discrimination. In any case, the Government has now exempted the levy of fee on cereals, pulses, oil seeds, gur and shakkar (Khandsari) as per terms of the letter An-nexure RA. Furthermore, there is a geographical reasons for distinction and there is a reasonable classification of the areas on account of geographical reasons. The petitioners have not made out any case of discrimination.'

The writ petition is accordingly dismissed atnot pressed.

C. W. P. No. 82 of 1974.

29. Since the points involved in this writ petition are substantially the same as in C. W. P. No. 254 of 1974, it is not necessary to discuss the same over again. The learned counsel for the petitioners has not even canvassed the additional points as contained in the writ petition. It has, however, been contended that the respondents be directed to discharge their duties, functions and obligations in consonance with the provisions of the Act and the Rules. Accordingly, the respondents can be directed to carry out the purpose of the Act and to discharge the duties, functions and obligations provided under the Act and the rules.

C. W. P. No. 252 of 1974.

30. The points common in this writ petition to C. W. P. No. 254 of 1974, stand already answered. The additional point raised in this writ petition is that the petitioners carry on the trade of butchers and sell goat meat and mutton It is contended that they purchase sheep and goats from out-side Simla and sell their meat. It is urged that goat meat and mutton cannot be described to be agricultural produce and the Act is not applicable to such a trade. It may be pointed out that under Section 2 (a) of the Act, agricultural produce has been defined as under:

'2(a) 'agricultural produce' means all produce whether processed or not, of agri-culure, horticulture, animal husbandry or forest as specified in the schedule to this Act.'

In the schedule attached to the Act, under item No. 8 (animal husbandry products), goat meat and mutton have been specified as agricultural produce. As such, this contention of the petitioners cannot be accepted.

C. W. P. No. 259 of 1974.

31. Besides the grounds as discussed in C. W. P. No. 254 of 1974, the additional ground taken in this writ petition is that the infertile eggs, dressed chicken meat and fish being animal husbandry goods cannot be included within the definition of agricultural produce. The definition of agricultural produce has been already reproduced above while dealing with C. W. P. No. 252 of 1974. In the schedule, poultry eggs and fish have also been declared as agricultural produce. As such, even the additional contention raised by the petitioners has no force.

C. W. P. No. 236 of 1979.

32. Besides the contentions already answered in the above writ petitions, it is contended by the petitioners that they purchase the articles of sale from outside Hima-chal Pradesh which is not the produce of Himachal Pradesh and as such the Act cannot be applied to them. Even this contention cannot be accepted. Under the Act, all transactions in the agricultural commodities covered under the purview of the Act within notified market area are coveted by the Act. As such, there is no force in this contention as well. C. W. P. No. 68 of 1981.

33. The additional contention raised in this writ petition is almost the same as in C. W. P. No. 236 of 1979 to the effect that petitioner No. I being a 'karyana' merchant whereas petitioner No. 2 a 'vanaspati' dealer exclusively, the Act does not apply. As noticed earlier above, these commodities are not stated to be the products of the State of Himachal Pradesh and that the petitioners purchase these articles from the State of Punjab and other nearer States outside Hima-chal Pradesh. All the articles, which are included in the schedule, are treated to be agricultural produce under the Act. All edible oils are agricultural produce in the schedule under the Act as also certain articles which are included in the schedule, and in which petitioner No. 1 deals. As such, this contention has also no force.

34. No other contention on behalf of the petitioners has been raised during the course of arguments. As such, it is not necessary to go into other points.

35. The points raised in the above writ petitions having been answered, it is to be considered whether any relief can be granted to the petitioners in these writ petitions. It may be noticed that the petitioners after applying for licences have subjected themselves to the provisions of the Act. At the same time, it is not the licensees who are to bear the brunt of the levy except for obtaining the licences on payment of fee prescribed therefor. The commission is to be paid by the purchasers only. As such, the petitioners cannot make any legitimate grouse in this behalf. Keeping in view the purpose of the Act and the intention of the Legislature, the Act is meant to safeguard the interests of the producers of agricultural produce so that they can get fair price for their produce and thereby incentive is to be given to them for making maximum production of such produce. In this behalf relevant observations have already been extracted earlier above. All toe same, it is the duty of the respondents to carry out and implement the statutory obligations, duties and functions as contemplated under the Act and the rules, in accordance with the resources available.

36. The result of the above discussion is that the only direction that can be given by this Court is that the respondents are directed to carry out such obligations and functions as provided under the Act and the rules framed thereunder, according to the funds available. Keeping in view the fact that a fee is not a tax, the same is to be utilised on the basis of the principle of quid pro quo, according to the principles narrated above. The direction is accordingly issued to the respondents and the writ petitions are allowed only to this extent, but with no order as to costs.

37. The above writ petitions are accordingly disposed of.


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