Mohammad Hussain Gulam Mohammad &
ANR Vs. The State of Bombay & ANR [1961] INSC 206 (2 May 1961)
WANCHOO, K.N.
GAJENDRAGADKAR, P.B.
SARKAR, A.K.
GUPTA, K.C. DAS AYYANGAR, N. RAJAGOPALA
CITATION: 1962 AIR 97 1962 SCR (2) 659
CITATOR INFO :
R 1962 SC1517 (1) R 1966 SC 385 (2,3,8,11) RF
1971 SC1017 (8) D 1974 SC1489 (6) R 1980 SC 350 (10) E 1980 SC1008 (22) RF 1983
SC1246 (15) R 1990 SC 560 (13)
ACT:
Agricultural Produce Markets-Enactment for
regulation of purchase and sale of such produce Constitutional validityValidity
of rules framed under the Act-Bombay Agricultural Produce Markets Act, 1939
(Bom. 22 of 1939), ss. 4, 4A, 5, 5A, 5AA, 11, 29, rr. 53, 64, 65, 66,
67-Constitution of India, Arts. 19(1)(g), 19(6).
HEADNOTE:
The Bombay Agricultural Produce Markets Act,
1939, was enacted by the Bombay Legislature to provide for the better
regulation of buying and selling of agricultural produce in the State of Bombay
and the establishment of markets for such produce. Under the provisions of the
Act power was given to the commissioner by notification to declare certain
areas as market areas as a result of which such areas could not thereafter be
used for the purchase or sale of any agricultural produce specified in the
notification, except under a licence. Markets were to be established and market
committees constituted with power to grant licences for operation in the
market. By s. 11 a market committee may, subject to the provisions of the Rules
and subject to such maxima as may be prescribed, levy fees on the agricultural
produce bought and sold by licencees in the market area.
Section 29 enabled the State Government by
notification in tile official Gazette to add to, amend or cancel any of the
items of agricultural produce specified in the Schedule to the Act. The
petitioners challenged the validity of the Act and the rules framed thereunder,
and in particular ss. 4, 4A, 5, 5A, and 5AA which provided for the declaration
of a market area and the establishment of a market, as unconstitutional on the
ground that they placed unreasonable restrictions on their right to carry oil
trade in agricultural produce and thus infringed their fundamental right
guaranteed under Art. 19(1)(g) of the Constitution of India. They also attacked
the validity of ss. 11 and 29 and rr. 53, 64, 65, 66 and 67.
Held: (1) that ss. 4, 4A, 5, 5A and 5AA of
the Act are constitutional and intra vires and do not impose unreasonable
restrictions on the right to carry on trade in the agricultural produce
regulated under the Act.
M. C. V. S. Arunachala Nadar v. The State of
Madras, [1959] Supp. 1 S.C.R. 92, followed.
660 (2) that the fee provided by s. 11 though
calculated on the amount of produce bought and sold, is not in the nature of
sales tax as it is only a levy charged for services rendered by the market
committee in connection with the enforcement of the various provisions of the
Act. Accordingly, s. 11 is valid.
(3) that r. 53 in so far as it enables the
market committee to fix any rates as it liked of the fees to be collected on
agricultural produce bought and sold in the market area, is not valid, because
under s. 11 unless the State Government fixes the maxima by rule it is not open
to the committee to fix any fees at all.
(4) that under S. 29, the power given to the
State Government to add to, or amend, or cancel any of the items of the
agricultural produce specified in the Schedule in accordance with the local
conditions prevailing in different parts of the State is only in pursuance of
the legislative policy which is apparent on the face of the Act, and,
therefore, the section is intra vires.
The Edwards Mills Co. Ltd., Beaway v. State
of Ajmer and Another, [1955] 1 S.C.R. 735, applied.
(5) that r. 64 is merely a method of
enforcing the regulatory provisions with respect to market yards and submarket
yards and is valid.
(6) that rr. 65, 66 and 67, in so far as they
authorise the market committee to grant a licence for doing business in any
market area, go beyond the power conferred on the market committee by S. 5A,
and are ultra vires.
ORIGINAL JURISDICTION: Petition No. 129 of
1959.
Petition under Art. 32 of the Constitution of
India for the enforcement of fundamental rights.
R. Ganapathy Iyer, J. B. Dadachanji, S. N.
Andley, Rameshwar Nath and P. L. Vohra, for the petitioners.
N. S. Bindra and R. H. Dhebar, for the
respondents.
S. T. Desai, Trikamlal Patel and I. N.
Shroff, for the Interveners.
1961. May 2. The Judgment of the Court was
delivered by WANCHOO, J.-This petition raises a question as to the
constitutionality of the Bombay Agricultural Produce Markets Act, No. XXII of
1939 (hereinafter referred to as the Act) and the Rules framed thereunder. The
petitioners are businessmen of Ahmedabad. Their case is that by a notification
under the 661 Act the whole area within a radius of 12 miles of Ahmedabad city
was declared to be a market area under s. 4 of the Act for the purposes of the
Act in respect of certain agricultural produce from June 1, 1948. At the same
time a market yard and a market proper were established for dealing in the
commodities mentioned above; and simultaneously a market committee was
established under s. 5 of the Act for the Ahmedabad market area by the name of
"The Agricultural Produce Market Committee, Ahmedabad." By later
notifications certain other agricultural produce was declared to be regulated
under the provisions of the Act in this market area. ID 1959 a locality known
as the "Kalupur market" in the Telia Mill compound near the railway
station Ahmedabad was declared to be a sub-market yard for the purposes of the
Act. The petitioners apparently were carrying on business in the Kalupur market
and therefore after the declaration of that area as sub-market yard, the market
committee required the petitioners to take out licences under the Act without
which they were not to be allowed to carry on business. The petitioners contend
that the various provisions of the Act and the Rules and bye-laws framed there
under place unreasonable restrictions on their right to carry on trade in
agricultural produce and thus infringe their fundamental right guaranteed under
Art. 19 (1)(g) of the Constitution.
In particular, the heavy fees payable to the
market committee for taking out licences in order to trade in various markets impose
a heavy burden on trade in the regulated commodities resulting in an
unreasonable restriction on the right of the petitioners to carry on their
trade. Further the declaration of the market area and the establishment of
market yard and sub-market yards has resulted in compelling producers of
agricultural commodities to carry their produce for long distances, thus
imposing an unreasonable restriction on their right to carry on trade.
The petitioners thus assail the main
provisions of the Act and some of the provisions of the Rules and the bye-laws
framed by the market committee, 84 662 which we shall specify at their proper
place later. The petitioners also contend that the State of Bombay has never
required the market committee to establish a market as required by s. 5AA of
the Act and no market has in law been established by the market committee and
therefore the market committee has no power to issue licences and to exercise
other powers conferred under the Act on market committees.
They therefore pray that the Act and the
Rules and the byelaws framed there under may be declared unconstitutional,
ultra vires and void. In the alternative a direction should be issued to the
respondents, in particular the market committee, not to enforce the provisions
of the Act, the Rules and the bye-laws against the petitioners so long as a
market has not been established as required under the law.
The petition has been opposed on behalf of
the respondents, and their contention is that the Act, the Rules and the byelaws
provide reasonable restrictions on the fundamental right to carry on trade
under Art. 19(1)(g). It is further contended that a market has been established
as required by law, and therefore the market committee in particular has the
right to enforce all the provisions of the Act, the Rules and the bye-laws and
to insist upon the petitioners taking out licences as provided therein.
Before we consider the attack made on the
constitutionality of the Act, the Rules arid the bye-laws framed thereunder, we
should like to refer to the main provisions of the Act and the scheme of
regulation provided in it. The Act deals with the regulation of purchase and
sale of agricultural produce in the State of Bombay and establishment of
markets for such produce. Section 2 of the Act is the definition section.
Section 3 provides for the constitution of markets and market committees and
gives power to the Commissioner by notification to declare his intention of
regulating the purchase and sale of such agricultural produce and in such area
as may be specified in the notification; and objections and suggestions are
invited within a month of the publication of the notification. Thereafter the
Commissioner after considering the objections and suggestions, if any, and 663
after holding such inquiry as may be necessary, declares the area under s. 4(1)
to be a market area for the, purposes of the Act. The consequence of the
establishment of the market area is given in s. 4(2) which lays down that after
the market area is declared, no place in the said area shall, subject to the
provisions of s. 5A, be used for the, purchase or sale of any agricultural
produce specified in the notification. After the declaration of the market
area, the State Government is given the power under s. 5 to establish a market
committee for every market area.
Thereafter under s. 5AA it becomes the duty
of the market committee to enforce the provisions of the Act, and also to
establish a market therein, on being required to do so by the State Government,
providing for such facilities as the State Government may from time to time
direct, in connection with the purchase and sale of the agricultural produce
with which the market committee is concerned. The Act however envisages that
there may be a time lag between the declaration of a market area and the
establishment of a market; therefore the proviso to s. 4(2) lays down that
pending the establishment of a market in a market area the Commissioner may
grant a licence to any person to use any place in the said area for the purpose
of purchase and sale of any such agricultural produce, and it is the duty of
the market committee under s. 5AA also to enforce the conditions of a licence
granted under s. 4(2). Further under s. 5A, where a market has been established,
the market committee is given the power to issue licences in accordance with
the Rules to traders, commission agents, brokers, weighmen, measurers,
surveyors, ware housemen and other persons to operate in the market; provided
that no such licence shall be necessary in the case of a person to whom a
licence has been granted under the proviso to s. 4(2). The effect therefore of
these provisions of the Act read with the definition section is this. A market
area is first declared under s. 4(1). In the market area, a market may be
established. The Rules make it clear that the market may consist of what are
called market proper and principal market yard and 664 sub-market yards, if
any. Under s. 4A for each market area there shall be one principal market yard
and one or more sub-market yards as may be necessary and the Commissioner is
given the power by notification to declare any enclosure, building or locality
in any market area to be the principal market yard for that area and other
enclosures, buildings or localities to be one or more sub-market yards for the
area.
As we have already said, the Act envisages
that there may be a time lag between the declaration of a market area and the
establishment of a market, and that is why there is a provision for licences under
the proviso to s. 4(2) pending the establishment of a market in a market area.
The establishment of a market, however, takes place only when the State
Government requires the market committee under s. 5AA to establish a market in
the market area. There does not seem to be any provision in the Act or the
Rules as to how the market committee shall proceed, on being required to do so
by the State Government, to establish a market; but reading the provisions of
s. 4A and s. 5AA together it appears that after the State Government has
required the market committee to establish a market, it has to approach the
Commissioner with its recommendation to declare localities as the principal
market yard and the sub-market yards, if any, and the Commissioner makes a notification
in regard thereto, and thereafter the market is established.
Till however such action is taken by the
committee and the Commissioner notifies a principal market yard and sub-market
yards, if any, no market can in law be established; and other provisions of the
Act which come into force after the establishment of a market cannot be
enforced and the trade is till then regulated in the manner provided in the
proviso to s. 4(2).
After the market is established, the market
committee gets the power to issue licences under s. 5A. Other provisions of the
Act provide for the constitution of market committees and the establishment of
a market committee fund and the ancillary powers of market committees with
which however we are not directly concerned in the present case. It is 665
enough to refer to s. 11 only in this connection, which provides that the
market committee may subject to( the provisions of Rules and subject to such
maxima as may be prescribed levy fees on the agricultural produce bought and
sold by licencees in the market area. This section, it will be noticed, applies
to the purchase and sale of agricultural produce in the market area and the
power under it can be exercised by the committee as soon as the market area is
declared, though no market might have been established under s. 5AA. Till such
time as the market is established the fees prescribed under s. 11 would be
levied on the licencees under the proviso to s. 4(2). Then come sections
creating offences for contravention of the various provisions of the Act, which
it is unnecessary to consider. Section 26 gives power to the State Government
to frame rules for the purposes of carrying out the provisions of the Act.
Section 27 gives power to the market committee to frame bylaws with the previous
sanction of the Director or any other officer specially empowered in this
behalf by the State Government and subject to any rules framed by the State
Government under s. 26. Finally, s. 29 provides that the State Government may
by notification in the official gazette add to, amend or cancel any of the
items of agricultural produce specified in the Schedule to the Act.
These are the main provisions of the Act and
the scheme which results in the declaration of a market area and the
establishment of a market therein. The first contention on behalf of the
petitioners is that ss. 4, 4A, 5, 5A and 5AA which provide for the declaration
of a market area and the establishment of a market are unconstitutional as they
are unreasonable restrictions on the right to carry on trade in agricultural
produce. We are of opinion that there is no force in this contention. This
Court had occasion to consider a similar Act, namely, the Madras Commercial
Crops Markets Act, No. XX of 1933, in M. C. V. S. Arunachala Nadar etc. v. The
State of Madras and others (1) and the regulation with respect to marketing (1)
[1959] Supp 1 S.C.R. 92.
666 of commercial crops provided in that Act
was upheld. The main provisions of the Madras Act with respect to the
declaration of a market area (called notified area in that Act) and the
establishment of markets are practically the same as under the Act. It is
therefore idle for the petitioners to contend that the main provisions
contained in ss. 4, 4A, 5, 5A and 5AA of the Act are unconstitutional.
Learned counsel for the petitioners, however,
urges that there is a difference between the Madras Act and; the Act inasmuch
as the Madras Act dealt with commercial crops whereas the Act makes it possible
to bring every crop under its sweep. It is conceded that though it may be constitutional
to regulate the sale and purchase of commercial crops, regulation of all crops
made possible under the Act would mean an unreasonable restriction on the
fundamental right enshrined in Art. 19(1)(g). We are of opinion that there is
no force in this contention. The Madras Act which dealt with commercial crops
specified certain crops as commercial crops in the definition section and added
that the words "commercial crop" used in that Act would include any
other crop or product, notified by the State Government in the Fort St. George
Gazette as a commercial crop for the purposes of that Act. In view of this
inclusive definition of "commercial crop" in the Madras Act, it was
open to the State Government under that Act to include any crop within the
meaning of the words "commercial crop" which was regulated by that
Act. The Act had a schedule when it originally passed in which certain crops
were included. The State Government was however given the power to add to, or amend
or cancel any of the items mentioned in the Schedule by s. 29. It is true
therefore that under the Act it is open to the State Government to bring any
crop other than those specified originally in the Schedule within its
regulatory provisions; but the fact that it is possible to bring any crop
within the regulatory provisions of the Act by amendment of the Schedule would
not necessarily make the Act an unreasonable restriction on the exercise of the
fundamental right guaranteed under Art.
667 19(1)(g). As we have already pointed out,
the definition of the words "commercial crop" in the Madras Act was
also wide enough to bring any crop which the State Government considered fit to
be included as a commercial crop for the purposes of that Act. There is thus in
our opinion no difference in the ambit of the Madras Act and of the Act.
Besides we see no reason why a crop which can
be dealt with on a commercial scale should not be brought under the regulatory
provisions of the Act. Section 4(2A) makes it clear that the Act does not apply
to the purchase or sale of specified agricultural produce, if the producer of
such produce is himself its seller and the purchaser is a person who purchases
such produce for his own private use or if such agricultural produce is sold to
such person by way of a retail sale. Thus it is clear from this exception that
the provisions of the Act do not apply to retail sale and are confined to what
may be called wholesale trade in the crops regulated there under. This would
suggest that the Act also deals with commercial crops in the same way as the
Madras Act, for the notion of wholesale trade implies that the crop dealt with
therein is a commercial crop. There is thus no distinction so far as the main
provisions are concerned between the Act and the Madras Act, and for the
reasons that have been elaborately considered in Arunachala Nadar's case (1) we
are of opinion that ss. 4, 4A, 5,5A and 5AA of the Act are constitutional and
intra vires and do not impose unreasonable restrictions on the right to carry
on trade in the agricultural produce regulated under the Act.
The next attack is on s. 29 of the Act, which
provides that the State Government may by notification in the official gazette,
add to, amend or cancel any of the items of agricultural produce specified in
the Schedule. It is submitted that this gives a completely unregulated power to
the State Government to include any crop within the Schedule without any
guidance or control whatsoever. We are of opinion that this contention must
also fail. It is true that s. 29 itself does not provide for any criterion for
determining which crop shall be put into the Schedule or which shall (1) [1959]
Supp. 1 S.C.R. 92.
668 be taken out there from but the guidance
is in our opinion writ large in the various provisions of the Act itself. As we
have already pointed out, the scheme of the Act is to leave out of account
retail sale altogether; it deals with what may be called wholesale trade and
this in our opinion provides ample guidance to the State Government when it
comes to decide whether a particular agricultural produce should be added to,
or taken out of, the Schedule. The State Government will have to consider in
each case whether the volume of trade in the-produce is of such a nature as to
give rise to wholesale trade. If it comes to this conclusion it may add that
produce to the Schedule. On the other hand if it comes to the conclusion that
the production of a particular produce included in the Schedule has fallen and
can be no longer a subject-matter of wholesale trade, it may take out that
produce from the Schedule. We may in this connection refer to The Edward Mills
Co. Ltd., Beawar v. The State of Ajmer and another (1). In that case, s. 27 of
the Minimum Wages Act, 1948, which gave power to the appropriate Government to
add to either part of the schedule any employment in respect of which it is of
opinion that minimum wages shall be fixed by giving notification in a particular
manner was held to be constitutional. It was observed in that case that the
legislative policy was apparent on the face of the enactment (impugned there);
it was to carry out effectively the purposes of the enactment that power had
been given to the appropriate Government to decide with reference to local
conditions whether it was desirable that minimum wages should be fixed in
regard to a particular trade or industry which was not included in the list.
The same considerations in our opinion apply to s. 29 of the Act and the power
is given to the State Government to add to, or amend, or cancel any of the
items of the agricultural produce specified in the Schedule in accordance with
the local conditions prevailing in different parts of the State in pursuance of
the legislative policy which is apparent on the face of the Act. Therefore, in
enacting s. 29, (1) [1955] 1 S.C.R. 735.
669 the legislature had, not stripped itself
of its essential powers or assigned to the administrative authority, anything
but an accessory or subordinate power which was deemed necessary to carry out
the purpose and policy of the Act.
We therefore reject the contention that s. 29
of the Act gives uncontrolled power to the State Government and is therefore
unconstitutional.
The next attack is on s. 11 of the Act and
the rules framed in that connection. Section II gives power to the market
committee subject to the provisions of the rules and subject to such maxima as
may be prescribed to levy fees on the agricultural produce bought and sold by
licencees in the market area. It is said that the fee provided by s. 11 is in
the nature of sales tax. Now there is no doubt that the market committee which
is authorised to levy this fee renders services to the licencees, particularly
when the market is established. Under the circumstances it cannot be held that
the fee charged for services rendered by the market committee in connection
with the enforcement of the various provisions of the Act and the provisions
for various facilities in the various markets established by it, is in the
nature of sales tax. It is true that the fee is calculated on the amount of
produce bought and sold but that in our opinion is only a method of realising
fees for the facilities provided by the committee. The attack on s. 11 must
therefore fail. Besides this however, it is also contended that rr. 53 and 54
which provide for levying of fees under s. II are ultra vires, as they do not
conform to s. 11 of the Act. It will be noticed that s. 11 provides for levy of
fees to be fixed by the market committee, subject to such maxima as may be
prescribed by the Rules and this fee is to be charged on the agricultural
produce bought and sold. There are thus two restrictions on the power of the
market committee under s. 11; the first is that the fee fixed must be within
the maxima prescribed by the Rules and naturally till such maxima are fixed it
would not be possible for the market committee to levy fees, and the second
restriction is that fees have to be charged not on the produce brought into but
only on such produce as is 85 670 actually sold. Rule 53 provides that the
market committee shall levy and collect fees on agricultural produce bought and
sold in the market area at such rates as may be specified in the bye-laws. The
Rules nowhere prescribe the maxima within which the bylaws will prescribe fees.
The first attack therefore on the Rules is that it will not be open to the
market committee to prescribe any fee under s. 11 till the State Government
prescribes the maxima by the Rules, which it has not done so far. Further there
is an attack on r. 54 which lays down that the fees on agricultural produce
shall be payable as soon as it is brought into the principal market yard or
sub-market yard or market proper or market area as may be specified in the byelaws.
The argument is that this rule allows fees to be charged on the produce brought
into the market irrespective of whether it is actually bought and sold, and
this is against s. 11. As we read s. 11, there is no doubt that the State
Government is expected to specify the maxima within which the market committee
shall fix fees and until such maximum is specified by the State Government in
the Rules it would not be possible for the market committee to fix any fees under
s. 11. Further, there is no doubt that s. 11 provides that fees shall be
charged only on the amount of produce bought and sold and not on all the
produce that may have been brought into the market but may have to be taken
back as it is not sold. The reply of the respondents so far as r. 54 is
concerned is that the rule only prescribes a convenient method of levying fees
and that various bye-laws provide for refund in case there is no sale of the
produce brought into the market. The petitioners in their application have not
specifically said that there is no provision for refund and in the
circumstances all that we need say is that r. 54 will be valid if proper
provision for refund is made in the bye-laws with respect to the produce
brought into the market on which fees have been charged but which has been
taken back because it is not sold, for then it would only be a method of
levying the fee permitted under s. 11. In the connected petition Yograj 671
Shankersingh Parihar and another v. The State of Bombay and another (57 of
1957) which was heard along with this petition there was an attack on r. 53;
but the attack was confined to the fee being analogous to a sales tax and there
was no ground taken that the fee could not be levied under r. 53 because the maxima
had not been specified in the Rules. However, it is not in dispute in this case
that maximum has not been specified in any rule and r. 53 itself leaves it open
to the market committee to prescribe such rates as may be specified in the
bye-laws. We have already said that it would not be possible for the market
committee to prescribe any fees under s. 11 through byelaws till the State
Government prescribes the maximum under s. 11. As no such maximum has been
prescribed in the Rules, the contention that fees which are being charged under
the byelaws for the purposes of s. 11 are ultra vires of that section, must
prevail.
It has been urged on behalf of the
respondents that the true construction of s. 11 is that if maxima are
prescribed by the Rules, fees will be fixed by the market committee within the
maxima; but if no maxima are fixed under the Rules, it will still be open to
the market committee to prescribe any fees it thinks proper under its power
under s. 11. We are not prepared to accept this interpretation of s. 11, for it
amounts to adding the words "if any" after the word
"maxima" therein. Besides, the legislature was conferring power of
taxation (using the word in its widest sense) by s. 11 on the market committee.
While doing so, the legislature apparently intended that the committee shall
not have unlimited power to fix any fees it liked. It restricted that power
within the maxima to be prescribed by the State Government in the Rules. Thus
the power given to the committee was meant to be subject to the control of the
State Government which would be in a position to view the situation as a whole
and decide the maxima. At the same time, some flexibility was provided by
leaving it to the committee to fix fees within the maxima. We may in this connection
refer to various municipal Acts for example where also the power of taxation is
subject to the control of the 672 different form. Section 11 also prescribes
similar control by the State Government over this taxing power of the committee
and this is obviously in the interest of the community as a whole. The State
Government cannot practically abdicate that power as it seems to have done
under r. 53 by leaving it to the committee to fix any rates it likes. We are
therefore of opinion that unless the State Government fixes the maxima by rule
it is not open to the committee to fix any fees at all and the construction
urged on behalf of the respondents is not correct.
The next attack is on r. 64 which provides
that no person shall (a) enter a principal market yard or sub-market yard in
contravention of a direction given by a servant or a member of the market
committee, or (b) disobey any of the directions of the market committee in
regard to the places where carts laden with agricultural produce may stand or
loads of agricultural produce may be exposed or in regard to the road by which
or in regard to the times at which they may proceed. Any person contravening or
disobeying any of the directions referred to in sub-r. (1) shall, on conviction
be punishable with fine. It is urged that this rule is ultra vires as it
imposes an unreasonable restriction on the right to carry on trade. We are of
opinion that there is no force in this contention because this rule is merely a
method of enforcing the regulatory provisions with respect to market yards and
sub-market yards.
The next attack is on r. 65 which provides
that "no person shall do business as a trader or a general commission
agent in agricultural produce in any market area except under a licence granted
by the market committee under this rule." The contention is that this rule
goes beyond the provisions of s. 5A which lays down that "where a market
is established under s. 5AA, the market committee may issue licences in
accordance with the Rules to traders, commission agents........ So far as the
grant of licence to traders before the establishment of a market is concerned,
the provision is to be found in the proviso to 673 s.4(2) and the power to
grant licences before the establishment of a market for trading in any market,
area, is given to the Commissioner and not to the market committee. The power
of the market committee to grant licences under s. 5A arises only after a
market is established and is confined to operation in the market.
Rule 65 therefore in our opinion when it
authorises the market committee to grant a licence for doing business in any
market area goes beyond the power conferred on the market committee by s. 5A
and entrenches on the power of the Commissioner under the proviso to s. 4(2).
It must therefore be struck down as ultra vires of the provisions in s. 5A read
with the proviso to s. 4(2). Rule 66 which is incidental would fall along with
r. 65.
The next attack is on r. 67. It gives power
to the market committee to grant licences for doing business in the market area
and prohibits doing of business without such licences.
This rule is open to the same objection as r.
65, for the power of the market committee to grant licences is with respect to
operation in the market and not in the market area, the latter power being in
the Commissioner under the proviso to s. 4(2) till the market is established.
It seems to us that rr. 65 and 67 as they are framed show a confusion in the
mind of the rule making authority. It would have been enough if the Rules had
been confined to grant of licences for operation in the market, for under the
law as soon as the market area is declared and a market is established, s. 4(2)
comes into force and no place in the said area can be used for the purchase and
sale of any agricultural produce except as provided by s. 5A. It seems to us
therefore that the intention probably was to confine the issue of licences
under rr. 65 and 67 to markets which the market committee has the power to do
where a market is established under s. 5A; but the two rule.-, as drafted refer
to the market area and not to the market and must therefore be held to be
beyond the power granted to the market committee under s. 5A.
The last point that is urged is that no
market has been established in law as required under s. 5AA of the 674 Act. We
have already said while dealing with the scheme of the Act that the scheme
envisages that there may be a time lag between the declaration of a market area
under s. 4 and the establishment of a market. under s. 5AA. We have also
pointed out that a market can only be established by a market committee
constituted under s. 5, if it is required so to do by the State Government
under s. 5AA. Therefore, the requirement by the State Government is a condition
precedent to the establishment of a market under s. 5AA. No procedure has
however been prescribed either under the Act or under the Rules as to what the
market committee has to do after it has been required to establish a market. We
presume, in view of the provisions of s. 4A which gives power to the
Commissioner to establish a market yard or submarket yards, that the market
committee after it receives a direction from the State Government to establish
a market will have to approach the Commissioner with its recommendation and ask
him to notify the establishment of a principal market yard and sub-market
yards, if any. The contention of the petitioners is that no direction was
issued by the State Government under s. 5AA to the market committee for the
establishment of a market and that in any case the committee took no steps
after the receipt of any such direction for the establishment of a principal
market yard and sub-market yards, if any. It appears that the market area was
declared for the first time in Ahmedabad from June 1, 1948, by notification
dated April 15, 1948.
This was followed by another notification by
which the State Government established a market and a market proper under the
Act as it stood before the amendment of 1954 by which the power to establish a
principal market yard and submarket yards has now been given to the
Commissioner. It seems however that no direction was issued as required by s. 5
of the Act as it stood before the amendment (now s. 5AA) requiring the market
committee to establish a market. This matter had come to the notice of the
Bombay High Court in Bapubhai 675 Ratanchand Shah v. The State of Bombay (1).
Chagla, C. J., then pointed out as follows at p. 887:"Now, a very curious
situation was disclosed to us by Mr. Joshi. No market has been established
under s. 5 of the Act and therefore s. 5A has not come into operation.
The result is this that the Market Committee
cannot issue licences under s. 5A to traders, commission agents, etc., to
operate in the market. In the absence of a market being established under s. 5
and the absence of licences being issued under s. 5A, licences can only be
issued by the State Government under the proviso to s. 4A(2). But the rules
show that licences have been issued by the Market Committee and not by the
State Government. It is difficult to understand how either the Government or
the Market Committee came to the conclusion that the Market Committee was
authorised to issue licences without s. 5 and s. 5A being brought into force.
Mr. Joshi suggests that the Market Committee acts as a delegate of the State
Government and the authority to issue licences has been delegated by the State
Government.
It is rather difficult to accept this
contention." Having said this, the learned Chief Justice went on to
observe that as there was no such challenge in the petition itself, therefore
whether the challenge could be sustained or not, it was not open to the
petitioners before him to make that challenge. That observation was made with
respect to another market area but the same, we understand, applies to the
present case. It appears that after that observation of the Bombay High Court,
the State Government on August 11, 1955, issued a notification (No. PMA 7055)
dated August 1, 1955, directing the Agricultural Produce Market Committee
Ahmedabad to establish a market in the market area for which the said committee
had been established. But there is nothing in the affidavit of the respondents
to show that after this direction was issued on August 11, 1955, the market
committee took any steps to establish a market by making recommendations to the
Commissioner to establish a principal (1) I.L.R. [1955] Bom, 870.
676 market yard or sub-market yards under s.
4A of the Act. As a matter of fact, the principal market yard was already there
from before this direction given in 1955 and has continued. Even in the case of
the sub-market yard established at Kalupur in 1959 there is nothing in the
notification issued by the Commissioner on January 16, 1959, to show that he
was doing so in pursuance of the desire of the market committee and on its
recommendation. We should have thought that if the market committee had
requested the Commissioner to establish a sub-market yard and recommended
Kalupur as the place for it, the notification should have shown that the
Commissioner was acting at the desire of the market committee and on its
recommendation. In any case, even if the notification did not show this, it was
the duty of the respondents, when this question was specifically raised in
para. 25 of the petition, to state when the State Government directed the
market committee to establish the market and what steps the market committee
took in that behalf after such direction. But in para. 24 of the
counter-affidavit filed on behalf of the respondents all that is stated is that
"with reference to paragraph 25 of the petition, I crave leave to refer to
s. 5-A of the Act for ascertaining its contents, true meaning and legal effect.
I deny all the allegations, contentions and submissions contained in paragraph
25 of the petition as are contrary to or inconsistent with what is stated
herein as if they were specifically set out herein and traversed." We must
say that this is a most curious way of meeting the allegations made on behalf of
the petitioners that no direction as required by s. 5AA of the Act has been
ever given to the market committee to establish a market and no steps were ever
taken by the market committee in pursuance of such a direction to establish a
market. The notification No. PMA 7055 which was produced before us during the
course of arguments seems in the circumstances to have been an empty formality
which was observed in view of the observations of the Bombay High Court in
Bapubhai Ratanchand Shah's case (1). It seems to us that the curious situation
which (1) I.L.R. [1955] Bom. 870.
677 the Bombay High Court noticed as far back
as March, 1955 still continues with respect to the market in this( case and no
proper steps have been taken in law even after the formal direction made by
notification No. PMA 7055 in August, 1955 to establish a market. It is true
that in fact the State Government before the amendment of 1954 and the
Commissioner after that amendment have established a principal market and a
sub-market yard for this market area; but there is nothing to show in the case
of the principal market yard that it was established at the instance of the
market committee on a direction given by the State Government as required by s.
5 of the Act as it was before the amendment of 1954 or that the sub-market yard
at Kalupur which was established in 1959 was so established at the instance of
the market committee.
In the circumstances the curious situation
that was noticed with respect to another market area by Chagla, C. J., is there
with respect to the Ahmedabad market area and the Ahmedabad market, with the
result that the market committee cannot issue licences under s. 5A of the Act
and exercise such other powers as may be exercisable on the establishment of a
market under the law. In the result therefore the petition must be allowed and
the market committee forbidden to enforce any of the provisions of the Act, the
rules and the bye-laws with respect to the market until a market is properly
established under s. 5AA. No other point has been urged before us.
In conclusion we hold that the challenge made
by the petitioners to the constitutionality of the main provisions of the Act
and of the provisions in r. 64 fails; but the challenge in respect of (i) the
provisions in r. 53 on the ground that they are ultra vires s. 11, there being
no maximum fee prescribed by the State Government, and (ii) the provisions in
rr. 65, 66 and 67 on the ground that they are ultra vires the provisions in s.
5(a) read with the proviso in s. 4(2) succeeds. As however we have held that
the market in this case has not been properly established, the market 86 678
committee cannot enforce any of the provisions of the Act or the rules or the
bye-laws framed by it and cannot issue licences till the market is properly
established in law.
We therefore allow the petition partly and
direct the respondents not to enforce any of the provisions of the Act, the
rules and the bye-laws against the petitioners with respect to the market till
a market is properly established in law for this area under s. 5AA and not to
levy any fees under s. 11 till the maximum is prescribed under the Rules.
In the circumstances we order parties to bear
their own costs.
Petition allowed in part.
Back