Ramakrishna Hari Hegde & ANR Vs.
Market Committee, Sirsi & Ors [1971] Insc 13 (15 January 1971)
REDDY, P. JAGANMOHAN REDDY, P. JAGANMOHAN
SIKRI, S.M.
DUA, I.D.
CITATION: 1971 AIR 1017 1971 SCR (3) 370 1971
SCC (1) 349
ACT:
Bombay Agricultural Produce Markets Act (22
of 1939), as amended in 1954, ss. 4 and 4A-Notification changing Principal
Market Yard Time insufficient for persons carrying an business to shift to new
yard Notification, if violates their fundamental right to carry on business.
HEADNOTE:
Under the Bombay Agricultural Produce Markets
Act, 1939 as amended in 1954, a Market area is first declared under s. 4(1),
after which, under s. 4A, a Principal Market Yard and one or more sub-,Market
Yards may be constituted for the area. The effect of constituting the Market
Area and Market Yard is that the purchase or sale of agricultural produce in
any place in the area is prohibited except in the Principal and sub-Market
Yards. Under s. 5 the State Government may establish a Market Committee for the
market area.
In 1951, the town in which the appellants
were carrying on business in :agricultural produce was declared, along with
surrounding villages, as the .Market Area. In 1954, after the Act was amended
by the addition of s: 4A, the Government notified the area in which the
appellants were carrying on business as the Principal Market Yard of the Market
area.
On 5th January 1965, the Government issued a
Notification by which land granted to the Market Committee established under
the Act for the Market Area, was declared to be the Principal Market Yard with
effect from 15th January 1965.
The appellants challenged the Notification,
but the High Court dismissed their writ petition.
In appeal to this Court :
HELD : (1) The Government has the power to
issue the Notification in public interest, but the prohibition on the
appellants, implicit in the Notification, was unreasonable and to that extent
violated the fundamental rights of the appellants to carry on their business,
because, it was impossible for them to shift their business to the new
Principal Market Yard within ten days. [376 A-C, D-F] (2) The Government could
have declared the area in which the appellants were carrying on the business as
a Sub-Market Yard and rectified the Notification, but this Court cannot assume
the functions of the Government and direct the Government to do so. [376 F-G]
(3) Since the Market Committee bad however agreed to grant a reasonable period
of one and a half years time to the appellants to enable them to shift to the
Principal Market Yard and to permit them to continue their business in the old
Market Yard during that period, the Notification need can be struck down. F376
G-H, 377 A]
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 1072 of 1966.
Appeal by special leave from the judgment and
order dated July 30, 1965 of the Mysore High Court in Writ Petition No. 141 ,of
1965.
371 (Jagunohan Reddy, J.) V. M. Tarkunde and
Naunit Lal,for the, appellants.
R. B. Datar, for respondent No. 1.
S. K. Dholakia and S. P. Nayar, for respondent
No. 2.
The Judgment of the Court was delivered by P.
Jaganmohan Reddy, J. This Appeal is by Special Leave against the Judgment of
the Mysore High Court dismissing the Writ Petition filed by the Appeallants and
Respondent No. 3 against Respondents 1 and 2, the Market Committee Sirsi and
the State of Mysore respectively, by which they challenged the Notification of
the Govt. of Mysore No. DPC 203 CMD 64(i) dated 5th January 1965. The Town of
Sirsi in the North Canara which was once part of the Bombay State is one of the
leading markets for Areca, Cardimom and Pepper. The Appellants have been
carrying on business in these 3 commodities on a large scale for many years in
this town mainly in the localities comprising Channapattan Galli, Basti Galli
and Nadged Galli, while the Respondent 3 who is a dealer in the said
commodities was carrying on business in Nadged Galli. In the Channapattan Galli
there are nearly 20 Commission Agents who own shops and godowns who also deal
in these commodities. It was stated that the three Gallis constitute the main
Market where wholesale business in the aforesaid commodities is being carried
on for more than a century.
The Bombay Legislature had passed the Bombay
Agricultural Produce Markets Act 1939 (Act XXII of 1939) and thereafter made
rules under the Act known as Bombay Agricultural Produce Market Rules
hereinafter referred to as the Act and Rules respectively. In 1951 under the
provisions of Section 4(1) of the Act the Govt. of Bombay declared the town of
Sirsi and various surrounding villages, 59 in number as a market area in
respect of Arerca Pepper and Cardimon and by Notification dated 24th April 1951
had also declared the 3 Gallis referred to above as the Market Yard under the
Act.
In 1954 the Act was amend by the addition of
Section 4A to which a reference will be made presently. After the amendment of
the said Act, on 31-8-1954 the Govt. of Bombay Notified the three Gallis of
Channapattan, Basti and Nadged which previously had been declared as a Market
Yard, as the Principal Market Yard of the said Market area under Section 4-A(2)
proviso. After this, declaration it is said the Appellants invested large
amounts in buildings which are worth ten lacs of Rupees and improved their
trade.
Similarly in the Nadged Galli the properties
of Commission Agents are worth about Rs. 5 lacs and in the Basti Galli the
business premises are worth about Rs. 2 lacs.
372 It is alleged that Shri Hegde Kadve is a
Congressman and as the Chairman of the Market Committee and also as the
Chairman, of the Sirsi Totgars Cooperative Society and President of the Taluka
Board had considerable personal influence over the Congress Ministry &
consequently prevailed on the Government to grant to the Market Committee free
of cost land measuring about 10 acres and 37 gunthas for a market at a distance
of more than a mile from the present market, which was divided into plots, on
which he managed to get shops, godowns and offices constructed with the money
secured by the Society as a loan from the Government at a very low rate of
interest. The Market Committee disposed of eleven sites to private parties and
also allowed the Cooperative Society to construct premises for a Rice mill, but
notwithstanding these constructions the new site for the Market has no amenities.
The impugned Notification had the effect of prohibiting persons from carrying
on business in the said three main commodities at the old market Yard, and has
thus destroyed the business of traders including that of the Appellants. The
new site it was said was only so declared with a view to confer on the
Cooperative Society a monopoly in trade as it would not be possible for traders
to invest money and construct new buildings and godowns for carrying on trade
at the new market site. The Notification was thus challenged as being ultra
vires of the provisions of the Act, illegal, arbitrary, capricious and
discriminatory, violating Articles, 14, 19 ( 1 ) (g) and 31 of the
Constitution.
The Respondents denied the several
allegations made against them. Respondent 1 stated that the Market Committee
having felt as early as 1958 that the area of the three Gallis was insufficient
to cope with the expanding business and made efforts to acquire a more
convenient and spacious area to house the market. In furtherance of this desire
and with the object of providing better facilities to the Agriculturists, the
Committee from time to time made representations to the Government, which
ultimately granted in all 35 acres-29 gunthas of land. Thereafter steps were
taken for the development of the said area by leasing out plots to Commission
Agents and traders who were induced to build premises for. the purpose of sale
and purchase of the Agricultural produce in the Market Yard. The Committee
thereafter resolved on 13-7-1964 to request the Government to declare the new
area as the Principal Market Yard while at the same time permitting the traders
to continue their business in the existing place for a .period of one or two
years. It was also pointed out that the Market Committee of which the Appellant
No. 1 was a Member had never objected to the shifting of the Market Yard since
1958 but on the contrary had applied for the grant of plots and was complaining
that the Government was delaying the issue of the 373 (Jaganmohan Reddy, J.)
necessary Notification. Besides the Appellant there were 14 others, who had
obtained leases of the plots and constructed buildings on these plots. The
allegation that there are no Roads or well was incorrect. The new site was only
about half a mile from the 3 Gallis and was centrally situated within the
Municipal limits of Sirsi as is evident from the fact that the Totgars Society
itself was transacting 30% of the entire business of Sirsi Market Committee in
theregulated commodities with an annual turnover of more than a crore of Rupees
within that area. These allegations were considered by the High Court which
held that it was open to the Government under Section 4 to alter the
declaration regarding the Principal Market Yard. After setting out the history
of the legislation it was of the view that the impugned Notification was issued
in the public interest, and not with any ulterior purpose and consequently
rejected the Writ Petition.The short point in this appeal is whether by reason
of the impugned Notification the Appellants have been prevented from exercising
their right to trade and whether it is discriminatory and affects in any manner
his right to property.
The Act under which the Notification is
issued deals with the regulation of purchase and sale of agricultural produce
in, the State of Bombay including the area which has now become part of Mysore
State as a consequence of the States Reorganisation Act 1956. An examination of
the provisions of the Act would show that there is no warrant for holding that
there is anything which affects the freedom to carry on trade or business nor
is there anything which can be said to be discriminatory. Section 2 of the Act
is in so far as relevant defines Market, Market Area, Principal Market Yard,
Sub-Market Yard. Section 3 provides for the constitution of Markets and Market
Committees and confers power on 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 and inviting objections and suggest-ions
within a month of the publication of the Notification. The Commissioner may
after considering the objections and suggestions if any received by him during
that period and after holding such enquiry, as may be necessary declare the
area under Section 4-A to be Market area for the purposes of the Act. Section
4(2) provides that after the Market area is declared, no place in the said area
shall. subject to the provisions of Section 5A be used for the purchase or sale
of any agricultural produce specified in the Notification. Section 5 confers
power on the State Government after the declaration of the Market area to
establish a Market Committee for every Market area and under Section 5AA it
becomes the duty of the Market Committee to en374 force the provisions of the
Act and also to establish a Market therein on being required to do so by the
State Government. In as much as there may be a time lag between the declaration
of a Market area and establishment of a Market; the proviso to Sec. 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 Sec. 5AA to enforce the conditions of the
licence granted under Section 4(2). Section 26 confers power on the State
Government to frame rules for the purpose of carrying out the provisions of the
Act, and Section 27 confers power on the Market Committee to frame bye-laws
with the previous sanction of the Director or any other officer specially
empowered in this behalf by the State Government under Sec. 26. The State
Government has power under Sec. 29 to add to, amend or cancel any of the items
of agricultural produce specified in the Schedule to the Act.
The Act was amended in 1954 by the additionof
Sec. 4A which under sub-s. ( 1 ) makes it necessary for each Market area to
have one Principal Market Yard and one or more subMarket Yards as may be
necessary. Sub-s. (2) of the said Section empowers the Commissioner by Notification
to declare any enclosure, building or locality in any market area to be a
Principal Market Yard for the area and other enclosures, buildings or
localities to be one or more sub-Market Yards for the area. The proviso
requires that one of the enclosures, buildings or localities declared to be
market yards before the commencement of the amendment of that section, shall be
declared to be the Principal Market Yard for the Market area and others, if
any, to be one or more Sub Market Yards for the area, subject to such variation
as may be necessary.
The effect of these provisions is that a
Market area is first declared under Sec. 4(1) after which a market yard may be
constituted for the market area as Principal Market Yard and sub-Market Yard or
yards if any. The declaration of the Market area subject to Sec. 5A has the
effect of prohibiting the purchase or sale of agricultural produce in any place
in that area except in the area declared as a Principal Market Yard or
sub-Market yard or yards, if any. This Court had earlier in Mohammed Hussain
Gulam Mohammad & Anr. v. The State of Bombay & Anr.(1) held Section 4,
4A, 5, 5A and 5AA to be constitutional and that none of the said provisions
imposed unreasonable restrictions on the right to carry on trade in the agricultural
produce (1) [1962] 2 S.C.R. 659.
375 (Jaganmohan Reddy, J.) regulated under
the Act and as such were not violative of Art. 19(1)(g) of the Constitution. .
It is, however, contended that the impugned
Notification violative of Articles 19 (1 (g), 14 and 31 of the Constitution.
The Notification as we have already stated
was issued on 5-1-1965 under Section 4(A) of the Act and is in the following
terms :
"In exercise of the powers conferred by
Sub-Section (2) of Section 4A of the Bombay Agricultural Produce Markets Act
1939 (Bombay Act 22 of 1949) as in force in the Bombay area, and in
supersession of Bombay Government notification Development Department No. APM
4554, dated 31-8-1954, the Government of Mysore hereby declares the following
locality in the market area of the Agricultural Produce Market Committee,.
Sirsi of Sirsi Taluka of North Kanara District, to be a Principal market yard
for the area with effect from the 15th January, 1965, namely:Locality :
An area measuring about 35 acres and 29
gunthas and 4 acres, of Sirsi Totagaras' Cooperative Sales Society Ltd., Sirsi
in R.S. No. 116, 117, 59 and 60 of Sirsi Taluka.
On the North by :-Sirsi-Yellapur Main Road
& R. S. No. 11 6 On the South by:-R.S. Nos. 55, 57 and portion of R.S. No.
299. On the East by :-Portion of R.S. Nos.
299, 58, 129-A & 118. On the West by :-R.S. Nos. 61, 64 and 68." It
may be mentioned that the earlier Notification of 31-81954 also made in
exercise of the Powers conferred by subSection (2) of Section 4-A of the Act had
declared as the Principal Market Yard all godowns, storage places and open
places lying within the limits of the Sirsi Municipality and approved by the
Agricultural Produce Market Committee, Sirsi for storage and for the purpose of
sale of commodities under regulation including the area locally known as
Channapattan Gali, Basti Galli and Nadger Galli which had earlier been declared
by Notification of the Government in the Development Department dated 24-4-1951
to be a Market Yard.
The affect of the supersession of this
Notification by the impugned Notification is that as from 15-1-1965 the area of
the 3 Gallis ceased to be the Principal Market Yard, and as such no business
could be transacted therein on and after that date.
This position could not be seriously
controverted by the learned Advocate for the Respondents. In our view the
prohibi376 tion implicit in the Notification was unreasonable and to that
extent violated the fundamental rights of the Appellants and Respondent 3 to
carry on their business because it could not have been postulated that they
could immediately in 10 days shift their business to the Principal Market Yard
declared by the impugned notification. The learned Advocate for the Market
Committee however pointed out that it was never their intention to prohibit
at-once any business being conducted in the Market Yard in the Gallis, but they
had in fact in their proposals to the Government suggested the business in the
Gallis should be allowed to be continued for a year or two. Whatever their
proposals may have been we have no doubt that the effect of the Notification as
long as it is in force is to prohibit the Appellants and Respondent 3 from
carrying on business in the Market Yard of the Gallis.
It is submitted by the learned Advocate for
the Respondents that the Appellants and Respondent 3 had sufficient time till
now to make arrangements to shift their business, as such they are not entitled
to complain, but the contention on behalf of the Appellants is that they were
entitled to challenge the Notification and as they had invested large amounts
in buildings etc. in the 3 Gallis they are justified in asking this Court to
direct Respondents to have these areas declared as a sub-Market area. While the
Government has the power to issue a Notification in public interest & to
declare the area specified in the impugned Notification as the Principal Market
area, without necessarily declaring other areas simultaneously as sub-Market
area, in our view sufficient time should have been given for the Appeallants,
Respondent 3 and other persons doing business in the area of the 3 Gallis to
shift their business. As long as the Notification prohibited them from doing
business in those Gallis they had a right to challenge the validity of that
Notification. No doubt the Govt. could have declared the 3 Gallis as sub-Market
Yard but it is not for this Court to arrogate to itself the functions of the
Govt. and direct them to do so merely because that would be one of the ways in
which the impugned Notification can be rectified. The learned Advocate for the
Market Committee, however, consistent with the stand taken by the Market
Committee in its counter before the High Court that it had requested the Govt.
to allow the business in the Gallis to be carried on for one or two years
agrees to give one and a half years time for the Appellants and Respondents to
enable them to shift during this period, to the Principal Market Yard declared
under the impugned Notification and till then permit them to continue their business
in the 3 Gallis. The period agreed to in our view is a reasonable period within
which the Appellants and Respondents 3 can shift their business to the new
Market Area and till then they should not be prohibited from 377 (Jaganmohan
Reddy, J.) doing business in the Market area of the 3 Gallis as heretofore. In
view of this agreement except to give the above direction there is no need to
strike down the Notification.
The Appeal is accordingly allowed subject to
the above directions. There will be no costs in this Appeal.
V.P.S. Appeal allowed and directions given.
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