Rameshchandra Kachardas Porwal &
Ors Vs. State of Maharashtra & Ors [1981] INSC 35 (17 February 1981)
REDDY, O. CHINNAPPA (J) REDDY, O. CHINNAPPA
(J) PATHAK, R.S.
ISLAM, BAHARUL (J)
CITATION: 1981 AIR 1127 1981 SCR (2) 866 1981
SCC (2) 722 1981 SCALE (1)334
CITATOR INFO :
R 1985 SC 679 (33) RF 1986 SC 515 (76) R 1987
SC1802 (10)
ACT:
Constitution of India 1950, Article 91(1)(g)-
Maharashtra Agricultural Produce Marketing (Regulation) Act 1963, SS 5 and 6
& Maharashtra Agricultural Produce Marketing (Regulation) Rules 1963, Rule
5-Karnataka Agricultural Produce Marketing (Regulation) Act 1966, SS. 8, 10 and
11 & Bihar Agricultural Produce Marketing Act 1960 Sections 5, 15-Trading
in specified agricultural produce- State Government-Setting up of new market
area-Whether valid.
Notification declaring that traditional
trading activity in old market area be shifted to new market-Whether
permissible-Infringement of fundamental right to carry on trade-Whether arises.
Administrative law-Principles of natural justice-Market
yard disestablished at one place and established at another place-Duty to
invite and hear objections-Whether arises.
HEADNOTE:
The Maharashtra Agricultural Produce
Marketing (Regulation) Act 1963 provides for the regulation of the marketing of
agricultural produce in market areas to be established therefor in the State,
Market Committees to be constituted for purposes connected with such markets,
establishment of Market Fund for purposes of the Market Committees, and for
purposes connected with these matters.
Section 3 empowers the Government by a
notification to be published in the Official Gazette, to declare its intention
of regulating the marketing of such agricultural produce in such areas as may
be specified and section 4 provides that the marketing of the agricultural
produce shall be regulated under the Act in the area specified in the
notification.
Section(1) provides a principal market for
every market area and one or more subsidiary markets, and section 5(2) empowers
the Director to establish the principal market for the marketing of specified
agricultural produce. Section 6 provides that no person shall use any place in
the market area for the marketing of the declared agricultural produce or
operate in the market area or in any market therein as a trader, commission
agent, broker, processor, weighman, measurer, surveyor, warehouseman or in any
other capacity in relation to the marketing of the declared agricultural
produce, on and after the date on which the declaration under section 4(1) is
made. Section 6(2) provides that section 6(1) shall not apply to sales by
retail, sales by an agriculturist who sells his own produce; and sales by a
person to another for the latter's personal consumption.
The Maharashtra Agricultural Produce
Marketing (Regulation) Rules, 1963 were promulgated pursuant to the power
conferred by section 60 of the Act. Rule 5 provides that no person shall market
any declared agricultural produce in any place in a market area other than the
principal market or subsidiary 867 market established therein. The proviso to
the rule enables the Director of Marketing to authorise a Market Committee to
permit a trader or commission agent to market declared agricultural produce or
to permit any other market functionary to operate at any place within the
market area as may be mentioned by the Market Committee in the licence granted
to such trader.
The petitioners who were wholesale traders in
onions and potatoes in their writ petitions to the Supreme Court assailed the
notices requiring them to carry on business in regulated agricultural produce
in the market yard at the specified areas of the State, and at no other place,
contending that: (1) the 1963 Act, did not invest the Director of Marketing or
the Market Committee with any power to compel a trader to transfer this
activity from a previously existing market to a principal or subsidiary market
established under section 5 of the Act (2) Rule 5 was inconsistent with section
6 and therefore ultra vires. (3) The Bombay Agricultural Produce Markets Act,
1939 and the Agricultural Produce Marketing Acts of other States such as
Karnataka provided or indicated by an express provision that once a market was
established it was not permissible to market or trade outside the market and
that the absence of such an express provision in the 1963 Act showed that no
such ban was contemplated by the Act. (4) The transactions between trader and
trader and transactions by which the agricultural produce was imported into the
market area from outside the market areas were outside the purview of the Act
and if section 5 and rule 5 were intended to cover such transactions also they
were invalid. (5) The statue itself imposed and provided for stringent
supervision and control, sufficient to regulate transactions between traders
and traders, that it was superfluous to insist that such transactions do take
place in the market only. (6) Section 6 of the Act made a distinction between
(a) the use of any place in the market area for the marketing of the declared
agricultural produce, and (b) the operation in the market areas or in any
market therein as a trader, commission agent, broker etc. in relation to the
marketing of agricultural produce and that the distinction was in reality a
distinction between a sale by a producer to a trader and a subsequent sale by a
trader to a trader, and consequently the ban imposed by Rule 5 applied only to
a sale of the agricultural produce by a producer to a trader. (7) Section
13(1A) which declared the area comprising greater Bombay a market area for the
purposes of the Act was invalid as it was wholly unreasonable to constitute
such a large area into a single market area. (8) when a market yard was
disestablished at one place and established at another place it was the duty of
the concerned authority to invite and hear objections and failing to do so, was
a violation of the principles of natural justice and the notification
establishing the market yard elsewhere was bad.
Dismissing the writ petitions and appeals:-
HELD: 1. (i) The power conferred by S. 5 of
the Act to establish a principal market or a subsidiary market carries with it
the power to disestablish such market. Section 5 of the Act, read with sections
14 and 21 of the Maharashtra General Clauses Act vest enough power in the
Director to close an existing market and establish it elsewhere. The repealed
Act of 1939 also empowered the State Government to declare any market area to
be a principal market yard for the area. The power to issue notifications,
orders etc.
includes 868 the power to exercise in like
manner to add to, amend, vary or rescind any notification, order, rule etc. Any
other construction would frustrate the object of the legislation.
[880 A-C, 881 C, D] Bapubhai Ratanchand Shah
v. State of Bombay LVII 1955 Bom. L.R. p. 892, 903-904, approved.
(ii) Rule 5 is not ultra vires. If for the
more effective regulation of marketing it is thought that all marketing
operations in respect of declared agricultural produce should be carried on
only in the principal and subsidiary markets established under the Act, it
cannot be said that a rule made for that purpose is beyond the competence of
the rule making authority under the Act.
[881G, 882C] (iii) The submission that all
regulatory measures contemplated by the Act and the Rules may be enforced
equally effectively wherever business in agricultural produce is carried on in
the market area outside the principal and subsidiary markets as within the
principal and subsidiary markets is without force. If that is done, the
regulation will very soon be reduced to a farce. The Market Committee will be
forced to employ an unduly large number of officers. The producer's interest
will not be properly served because a producer will not be able to deal face to
face with several traders and would have little chance of obtaining the best
price for his produce. This cannot happen if he is persuaded to take his
produce to the place of business of an individual trader outside the principal
or subsidiary market. There is a greater possibility of abuse and greater
likelihood of the object of the Act being frustrated. Fair price to the
agriculturist will soon be a mirage and the evil sought to be prevented will
persist.
[882 E-H] Kewal Krishan Puri & Anr. v.
State of Punjab & Ors.
[1979] 3 S.C.R. p. 1217, 1247, referred to.
2. There can be no question of any
inconsistency between section 6 and rule 5. Section 6 is applicable to both the
situations before and after the establishment of markets, and is expressly
declared to be subject to the rules providing for regulating the marketing of
agricultural produce in the market area by stipulating that the marketing shall
be carried on in the market established in the market area. [883F, D-E]
3. The rule prescribing that no marketing operation
in any declared agricultural produce shall be carried on outside the principal
or subsidiary markets is consistent and in consonance with the scheme of the
Act and is within the competence of the rule making authority and is
reasonable. Absence of an express provision in the Act to the effect that once
a market is established it was not permissible to market or trade in
agricultural produce outside the market itself merely means that greater
latitude is given to the rule making authority to introduce regulation of
marketing by stages and to ban all marketing activity outside the market. This
cannot lead to the inference that the rule making authority has no power to
make a rule banning marketing activity 869 outside the market once the market
is established even when such a ban is found to be necessary. [884 B, 883 H-884
A]
4. (i) The assumption that the Act was
conceived in the interest of the agriculturists only and intended for their
sole benefit is not well founded. 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 elimination of middlemen and other detracting factors. But
that is not the only object. The Act is intended to regulate marketing of
agricultural and certain other produce. The marketing of agricultural produce
is not confined 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.[884D-F] (ii) Promotion of grading, standardisation of agricultural
produce, weighment, the provision for settlement of disputes arising out of
transactions connected with the marketing of agricultural produce and ancillary
matters are as much to the benefit of the producer as the consumer. Clearly
therefore the regulation of marketing contemplated by the Act involves benefits
to the traders too in a large way. Regulation of marketing of agricultural
produce, if confined to the sales by producers within the marketing area to
traders, will very soon lead to circumvention in the guise of sales by traders
to traders or import of agricultural produce from outside the market area to
within the market area. [884G-885B]
5. (i) It is not correct to say that the
statute itself imposed and provided for such stringent supervision, and control
sufficient and more, to regulate transactions between traders and traders, that
it was superfluous to insist that such transactions do take place in the market
only. The other supervisory measures in the Act cannot be said to be sufficient
to make it unnecessary for the traders to move their places of business into
the market. No amount of supervision may be as effective as when all the
transactions take place within the market. Nor is effective supervision at all
possible if traders are dispersed all over the market area. The rendering of
services to the traders also will be far easier. Therefore, localising
marketing is helpful and necessary for regulation and control and for providing
facilities. [887E-888A] (ii) The requirement that the locus of transactions of
sale and purchase of agricultural produce, including those between trade and
trader, should be in the market cannot be said to be harsh or an excessive
restriction on the Fundamental Right to carry on trade. [888B]
6. The proviso to rule 5 speaks of operating
at any place within the market area by a trader, commission agent or other
market functionary after obtaining a licence while the main provision refers to
the marketing of declared agricultural produce at any place in the market area.
It cannot be contended that the proviso is unrelated to the main provision.
According 870 to ordinary canons of construction the proper function of a
proviso is to accept and deal with a case which would otherwise fall within the
general language of the main enactment. [888F-G]
7. There was nothing unreal and unreasonable
in establishing a single market for a large area. It had become imperative in
the public interest that the markets should be shifted from their former place
to the new area. The present village was chosen because it was free from
congestion, conveniently located near another trunk road. A railway line
linking with both the Western Railway and the Central Railway and so on. There
is, therefore, nothing unreasonable in the statutory declaration of Greater
Bombay and Turbhe Village as a market area; nor in the establishment of a
single market in Turbhe Village for the entire market area.
8. Where a market yard was disestablished at
one place and established at another place, no exercise of a judicial or
quasi-judicial function is involved. All that is involved is the declaration by
a notification of the Government that a certain place shall be a principal
market yard for a market area, upon which declaration certain statutory
provisions at once spring into action and certain consequences prescribed by
statute follow forthwith. The making of the declaration in this context is an
act legislative in character and does not obligate the observance of the rules
of natural justice. [891C-F] Baits v. Lord Hailsham (1972) 1 WLR 1373 &
Tulsipur Sugar Co. v. Notified Area Committee [1980] 2 SCR 1111 referred to.
9. The seeming confusion in the large number
of notifications issued by the Government from time to time was not the result
of any arbitrary or erratic action on the part of the Government but was the
result of a desire to accommodate the traders as much as possible. The old
markets had existed from ancient days and it had become necessary to establish
modern market yards with conveniences and facilities. When this was sought to
be done there were representations by the traders and the Government thought
that it was advisable to give the traders sufficient time to enable them to prepare
themselves to move into the new market yards. The notifications establishing
new market yards were therefore, cancelled and the old markets were allowed to
function for some time. Later when the time was thought to be ripe,
notifications establishing new market yards were once again issued. [893 F,
D-E]
ORIGINAL JURISDICTION: Writ Petition Nos.
692,937-1063, 1111-1115, 1558/80, 5441-62, 6217/80 and 6529-6551/80.
(Under Article 32 of the Constitution.) AND
Civil Appeal Nos. 3297 & 2689 of 1979.
Appeals by special leave from the Judgment
and Orders dated 25-5-1979 & 22-1-1979 of the Karnataka High Court in
Regular Second Appeal No. 551/77 & W.P. Nos. 551/77 and 6555/78. 871 WITH Civil
Appeal No. 1895 of 1979.
Appeal by special leave from the Judgment and
Order dated 22-1-1979 of the Karnataka High Court in W.P. No. 35/76.
AND Civil Appeal No. 1507 of 1980.
Appeal by Special Leave from the Judgment and
Order dated 2-5-1980 of the Patna High Court in Civil Writ Jurisdiction Case
No. 394 of 1980.
AND Civil Appeal No. 1715-1716 of 1980.
Appeals by special from the Judgements and
Orders dated 30-8-1979 and 2-5-1980 of the Patna High Court in C.W.J.C. Nos.
5136/78 & 840/80.
S. V. Gupte, V. M. Tarkunde, Soli J.
Sorabjee, K. K. Venugopal, K. N. Bhatt and T. S. Sundrajan for the Petitioners
in WP Nos. 692, 937-1063 and 1111-1115/80.
Dr. Y. S. Chitale, R. P. Bhatt and A. K. Goel
for the Petitioner in W. P. No. 1558/80.
S. G. Sundraswamy, Ravindran, Vijay Kumar
Verma and K. N. Bhat for the Appellant in CA Nos. 1895/79 & 2689/79.
V. M. Tarkunde, K. R. Nagaraja, P. K. Rao and
Aloke Bhattacharya for the Appellant in CA No. 3297/79.
Soli J. Sorabjee, B. P. Maheshwari, Suresh
Sethi and Miss Asha Jain for the Appellant in CA No. 1507/80.
Lal Narain Sinha, attorney General, O. P.
Rana and M. N. Shroff for Respondent No. 1 in WP Nos. 692, 937-1063 and
1111-1115/80.
A. K. Goyal for the Petitioner in WP 5441-62
of 1980.
K. K. Singhvi, A. K. Gupta, Brij Bhushan and
N. P. Mahindru for RR-3 in WP 692, 937-1063, 1111-1115/80 and RR in WP No.
1558/80.
Lal Narain Sinha, Attorney General and N.
Nettar for RR-1 in CA 1895 and 2689/79.
B. Keshava Iyengar, Advocate General and N.
Nettar for State of Karnataka in CA 1895 & 2689/79.
872 H. B. Datar, Miss Madhu Moolchandani and
R. B. Datar for RR-2 in CA 1895 & 2689/79.
K. K. Singhvi, N. P. Mahindru and A. K. Gupta
for RR No. 3 in WP Nos. 5441-62/80.
S. S. Javali, B. P. Singh, Ranjit Kumar and
Ravi Prakash for Intervener in CA Nos. 1895/79.
Lal Narain Sinha, Attorney General, R. B.
Mehto, B. P.
Sinha and Naresh K. Sharma for the Intervener
in WP No. 692/80.
Lal Narain Sinha, Attorney General, R. B.
Mehto, B. P.
Singh Ravi Prakash, Ranjit Kumar and Naresh
K. Sharma for RR 3-5 in CA 1507/80.
K. G. Bhagat and D. Goburdhan for State of
Bihar in CA 1507/80.
S. S. Ray and M. P. Jha for the Appellant in
CA 1715- 1716/80.
Lal Narain Sinha, Attorney General, R. B.
Mehto, B. P. Singh. Ravi Prakash, Ranjit Kumar, Naresh K. Sharma and J. S.
Rathore for RR 3-5 in CA Nos. 1715-1716/80.
V. M. Tarkunde, K. R. Nagaraja, P. K. Rao and
Aloke Bhattacharya for Petitioner in WP 6217/80, 6529-6551/80.
H. B. Datar, Miss Madhu Moolchandani and R.
B. Dattar for the Respondent (Market Committee).
H. B. Datar and N. Nettar for RR (State of
Karnataka).
K. G. Bhagat and D. Goburdhan for the State
of Bihar in CA 1715-1716/80.
V. M. Tarkunde, P. K. Rao, Aloke Bhattacharya
and K. R. Nagaraja for the Petitioner in WP 6529-51/80.
N. Nettar for the Respondent in WP No.
6529-51/80.
The Judgment of the Court was delivered by
CHINNAPPA REDDY, J. Reluctant traders, unwilling to move their places of
business into the markets or market yards, as they are differently called in
the States of Maharashtra, Bihar and Karnataka, set up by respective Market
Committees under various State Agricultural Produce Marketing Acts, offer their
resistance through these Writ Petitions and Civil Appeals. We will first recite
the facts in one of the cases (Writ Petition No. 692 of 1980) and thereafter
consider the questions raised in that as well as the other cases. The
Petitioner in Writ Petition No. 692 of 1980 is a trader presently carrying on
business in 'Gur' and other commodities at 1221 Bhavani Peth, Pune. In exercise
of the powers conferred by Sec.
4A(2) of the Bombay Agricultural Produce
Markets Act, 1939, by a notification dated July 6, 1961, the locality known as
Bhavanipeth and Nanapeth of the Pune City was declared as one of the principal
market yards for the market area consisting of Pune City and Haveli Talukas.
The market area had been so declared by a notification dated May 1, 1957,
pursuant to a declaration that it was intended to regulate the purchase and
sale of 'gur' in the market area. The Bombay Agricultural Produce Markets Act,
1939, was repealed and replaced by the Maharashtra Agricultural Produce
Marketing (Regulation) Act, 1963. By Sec. 64 of the Act the notifications
previously issued etc. under the provisions of the repealed Act were kept alive
for the purposes of the new Act. On March 23, 1971, the present Market
Committee known as Krishi Utpanna Bazar Samiti, Pune, was constituted under
Sec. 4(1) of the 1963 Act. On April 21, 1971, the Director of Agricultural
Marketing published a notification declaring his intention to regulate marketing
of a large number of commodities in the market area of Haveli and Pune City
Taluks. On October 4, 1975, the Director of Agricultural Marketing, Maharashtra
State, exercising his powers under Sec. 5(2) of the Maharashtra Agricultural
Produce Marketing (Regulation) Act, 1963, declared the locality known as Market
Yard Gultekadi as the principal market for the market area for the marketing of
various commodities specified in the notification. Thereafter on October 8,
1975, a Circular was issued to all Adatis, merchants, and licence holders,
particularly wholesale dealers dealing in Gur, Halad, Dhania, etc. in the
vicinity of Bhavanipeth-Nanapeth informing them that Bhavanipeth-Nanapeth will
cease to be a market from the midnight of October 13, 1975 and that the market
yard Gultekadi had been declared as the principal market for the market area.
The circular went on to say that anyone carrying on business anywhere except
Gultekadi was liable to be prosecuted. The result of the notification dated
October 4, 1975, and the Circular dated October 8, 1975 was that it was not
permissible for anyone to carry on trade in any of the notified agricultural
commodities outside the Gultekadi market yard on and after October 14, 1975. It
meant that traders like the petitioner who had for generations been carrying on
business in these commodities in Bhavanipeth-Nanapeth had perforce to move into
Gultekadi market yard if they wanted to stay in the business.
Consequent upon representations made by the
Pune Merchants Chamber and the interim order in a Writ petition filed in the
Bombay High Court by the Chamber the date notified for the commencement of the
functioning of the Principal Market in Gulekadi 874 was postponed from time to
time, Finally, by a public notice dated March 6, 1980, all wholesale traders,
commission agents and others dealing in agricultural produce in
Bhavanipeth-Nanapeth and surrounding areas were informed that with effect from
March 17, 1980, wholesale trade in the regulated agricultural produce could be carried
on in the Gultekadi market yard only. The petitioner seeks to resist the
situation thus sought to be forced upon him and challenges the notification
dated October 4, 1975, and the consequential notices requiring him to carry on
business in regulated agricultural produce in the Gultekadi market yard and at
no other place. Similarly, in Writ Petition Nos. 937 to 1063 of 1980 and Writ
Petition Nos. 1111 to 1115 of 1980, 132 other traders who are presently
carrying on business in the existing market of Bhavanipeth-Nanapeth question
the notification and the notices following the notification.
In Writ Petition Nos. 1558 of 1980 and 5441
to 5462 of 1980 the petitioners are wholesale traders in onions and potatoes
who carry on their business in the Maulana Azad Road Market in Bombay. They
complain against a notification dated December 5, 1978 by which it was declared
that after January 26, 1979, marketing of potatoes and onions shall be carried
on at the Principal Market at Turbhe and at no other place. It appears that
initially, for the market area comprising Greater Bombay and Turbhe Village in
Thana Taluka, the newly established market at Turbhe was declared as the
Principal Market and the existing markets at Maulana Azad Road and Mahatma
Phule Mandai were declared subsidiary markets. This was by a notification dated
January 15, 1977.
Later by the impugned notification dated
December 5, 1978, the subsidiary markets were abolished and the market at
Turbhe alone was declared as the Principal Market for the area comprising
Greater Bombay and Turbhe village.
It was argued on behalf of the petitioners
that the Maharashtra Agricultural Produce Marketing (Regulation) Act 1963 did
not invest the Director of Marketing or the Market Committee with any power to
compel a trader to transfer his activity from a previously existing market to a
principal or subsidiary market established under Sec. 5 of the Act. There was
no provision in the Act by which a trader could be compelled to market declared
agricultural produce in the principal or subsidiary market established under
Sec. 5 and in no other place. This was a feature which distinguished it from
the Bombay Act of 1939 and the Agricultural Produce Marketing Acts of some
other States. Rule 5 of the Maharashtra Agricultural Produce Marketing
(Regulation) Rules, 1967, which purported to provide that no person shall
market any declared agricultural produce 875 in any place in a market area
other than the Principal Market or subsidiary market established therein was
ultra vires. It was also submitted that once a principal or subsidiary market
was established at one place there was no provision in the Act which enabled
the principal or subsidiary market to be transferred to another place. In any
event it was urged that the notification was an unreasonable restriction on the
right of the petitioners to carry on their trade. It was also submitted. and
this appeared to be the main thrust of the argument of most of the counsel for
the various petitioners that the Act did not cover transactions between trader
and trader and transactions by which the agricultural produce was imported into
the market area from outside the market area. Secs. 5 and 6 and Rules 5 and 6
had to be so read-the language permitted such a construction-as to make a
distinction between a sale of agricultural produce by a producer to a trader
which had to be within a market and a subsequent sale by a trader to a trader
which could be anywhere in the market area. It was submitted that if Sections 5
and 6 and Rules 5 and 6 were to be construed as compelling transactions between
trader and trader also to take place within a market they were invalid.
In the petitions of the Bombay merchants it
was further urged that Sec. 13(1A) which was a special provision declaring Greater
Bombay and Turbhe village a Market Area was unreasonable and invalid.
For a proper appreciation of the submissions
made, it is necessary to refer to some of the relevant provisions of the
Maharashtra Agricultural Produce Marketing (Regulation) Act 1963 and the
Maharashtra Agricultural Produce Marketing (Regulation) Rules 1967. The long
title of the Act is "An Act to regulate the marketing of agricultural and
certain other produce in market areas and markets to be established there for
in the State; to confer powers upon Market Committees to be constituted in
connection with or acting for purposes connected with such markets; to
establish Market Fund for purposes of the Market Committees and to provide for
purposes connected with the matters aforesaid".
Sec. 2(1)(h) defines "market" as
meaning "any principal market established for the purposes of this Act and
also a subsidiary market". Sec. 2(1)(i) defines "market area" as
meaning "an area specified in a declaration made under Sec.
4". Sec. 2(1)(o) defines "retail
sale" as meaning "in relation to any agricultural produce, sale of
that produce not exceeding such quantity as a Market Committee may by bye-laws
determine to be a retail sale". Sec. 2(1)(t) defines "trader" as
meaning "a person who buys or sells agricultural produce, as a principal
or as duly authorised agent of one or more persons". Sec. 3 empowers the
Government to declare its intention of regulating the marketing of such
agricultural produce, in such area as may be 876 specified in a notification to
be published in the official Gazette. Objections or suggestions which may be
received by the State Government within a specified period are to be considered
by the State Government. Thereafter, Sec. 4 provides, the State Government may
declare, by another notification that the marketing of the agricultural produce
specified in the notification. The area specified shall be the market area.
Sec. 5(1) provides that there shall be a principal market for every market area
and there may also be one of more subsidiary markets. Sec 5(2) empowers the
Director, by notification, to establish any place in any market area to be the
principal market for the marking of agricultural produce specified in the
notification.
Subsidiary markets may also be established
likewise. Sec. 5 is important and it may, therefore, be extracted here:
"5(1) For every market area, there shall
be established a principal market, and there may be established one or more
subsidiary markets.
(2) The Director shall, as soon as possible after
the issue of a notification under sub-section (1) of section 4, by a
notification in the Official Gazette establish any place (including any
structure, enclosure, open place or locality) in any market area to be the
principal market for the marketing of the agricultural produce specified in
that notification;
and may by the same notification, or by like
notification, establish in any other like places in the market area, subsidiary
markets for the marketing of such agricultural produce".
Sec. 6 provides that, no person shall use any
place in the market area for the marketing of the declared agricultural produce
or operate in the market area or in any market therein as a trader, commission
agent, broker, processor, weighman, measurer, surveyor, warehouseman or in any
other capacity in relation to the marketing of the declared agricultural
produce, on and after the date on which the declaration under Sec. 4(1) is
made, except in conformity with the terms and conditions of a licence granted
by the Market Committee or by the Director when a Market Committee has not yet
started functioning. It is important to mention here that Sec. 6(1) is
expressly made subject to the rules providing for regulating the marketing of
agricultural produce in any place in the market area. Sec. 6(2) also provides
that Sec. 6(1) shall not apply to sales by retail;
sales by an agriculturist who sells his own
produce; and sales 877 by a person to another for the latter's personal
consumption. Sec. 6 also may be extracted here:
"(6) (1) Subject to the provisions of
this section and of the rules providing for regulating the marketing of
agricultural produce in any place in the market area, no person shall, on and
after the date on which the declaration is made under sub-section (1) of
section 4, without, or otherwise than in conformity with the terms and
conditions of, a licence (granted by the Director when a Market Committee has
not yet started functioning; and in any other case, by the Market Committee) in
this behalf,- (a) use any place in the market area for the marketing of the
declared agricultural produce, or (b) operate in the market area or in any
market therein as a trader, commission agent, broker, processor, weighman,
measurer, surveyor, warehouseman or in any other capacity in relation to the
marketing of the declared agricultural produce.
(2) Nothing in sub-section (1) shall apply to
sales by retail; sales by an agriculturist who sells his own produce; nor to
sales by a person where he himself, sells to another who buys for his personal
consumption or the consumption of any member of his family." Sec. 7
empowers the Market Committee, subject to rules made in that behalf and after
making such enquiry as it thinks fit to grant or renew a licence for the use of
any place in the market area for marketing of the agricultural produce or for
operating therein as a trader etc. The Market Committee may refuse to grant or
renew any licence for reasons to be recorded in writing. Sec. 8 enables the
Market Committee to suspend or cancel any licence. Sec. 10 makes provision for
the constitution of a Board by the Market Committee for the settlement of
disputes between buyers and sellers or their agents inclusive of disputes
relating to quality, weight, payment etc. Sec. 11 provides for the
establishment of a Market Committee by the State Government. Sections 12 and 13
deal with the incorporation and constitution of Market Committees. Sec. 13(1A)
makes special provision for Greater Bombay and Turbhe village. The area
comprising Greater Bombay and Turbhe village is deemed to be a market area for
the purposes of the Act and a Market Committee is constituted with a different
composition from other Market Committees.
878 Sec. 29 enumerates the powers and duties
of Market Committees. It is the duty of a Market Committee to implement the
provisions of the Act, the rules and bye-laws made thereunder in the market
area, to provide such facilities for marketing of agricultural produce therein
as the Director may from time to time direct and to do such other acts as may
be required in relation to the superintendence, direction and control of
markets or for regulating marketing of agricultural produce in any place in the
market area. The Market Committee is also empowered to maintain and manage the
market, including admissions to, and conditions for use of, markets; to
regulate marketing of agricultural produce in the market area of the market; to
establish centres for the collection of such agricultural produce in the market
area as the State Government may notify from time to time; to collect,
maintain, disseminate and supply information in respect of production, sale,
storage, processing, prices and movement of agricultural produce (including
information relating to crops, statistics and marketing intelligence); to take
all possible steps to prevent adulteration; to promote grading and
standardization of agricultural produce; and, to enforce the provisions of the
Act, rules and bye-laws and conditions of licences. Sec.
10A enables the Market Committee to open
Collection Centres for marketing of notified produce. Any person wishing to
sell any notified produce in a market area may tender such produce at the
collection centre. Sec. 31 makes it competent to a Market Committee to levy and
collect fees from every purchaser of agricultural produce marketed in the
market area. Sec. 35 enables a Market Committee to employ a Secretary and such
other officers and servants as may be necessary for the management of the
market, for the collection, maintenance, dissemination and supply of
information relating to crops, statistics and marketing intelligence and for
carrying out its duties under the Act.
Sec. 36 provides for the creation of Market
Fund and Sec. 37 enumerates the purposes for which the Market Fund may be
expended. Among those purposes are the acquisition of a site or sites for the
market, maintenance, development and improvement of the market, construction
of, and repairs to buildings necessary for the purposes of such market and the
health, convenience and safety of persons using it, maintenance of standard
weights and measures, collection and dissemination of information, propaganda
for agricultural improvement and orderly marketing etc. etc. Section 60 makes a
contravention of the provisions of Section 6(1) punishable. Section 60 empowers
the State Government to make rules for carrying into effect the purposes of the
Act.
Pursuant to the power conferred by Sec. 60 of
the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963, rules
have 879 been made. Rule 5 prescribes that no person shall market any declared
agricultural produce in any place in a market area other than principal market
or subsidiary market established therein. The proviso to Rule 5 enables the
Direct of Marketing to authorise a Market Committee to permit a trader or
Commission Agent to market declared agricultural produce or to permit any other
market functionary to operate at any place within the market area as may be
mentioned by the Market Committee in the licence granted to such trader. This
is obviously, a reserve power vested in the Market Committee to be exercised
but in exceptional cases, and, on an express authorisation from the Director,
subject to the terms and conditions imposed by him. Rule 6 prescribes the procedure
by which any person desiring to use any place in a market area for marketing of
any declared agricultural produce or for operating therein as a trader,
commission agent or broker may obtain a licence. He is required to make an
application in the prescribed form and submit with the application a solvency
certificate, cash security or bank guarantee and a character certificate. The
Director or the Market Committee as the case may be, may grant or renew a
licence, after satisfying himself or itself about the solvency certificate,
cash security or bank guarantee, the capacity of the applicant for providing
adequate equipment for smooth conduct of the business and the conduct of the
applicant. If the licence is refused, reasons are required to be recorded in writing.
Rule 7 deals with the grant of licences to warehousemen, measurers, surveyors,
processors, weighmen, etc. Rule 8(2) bans the employment of a broker in
relation to marketing of any declared agricultural produce except in relation
to marketing of such produce by a trader with another trader. Rule 12
stipulates that every declared agricultural produce shall be sold by public
auction. Rule 15 requires every declared agricultural produce to be weighed by
licensed weighmen or measurer. Rule 16, 17 and 18 deal with the preparation of
records in connection with the transactions of purchase of declared
agricultural produce.
Rule 20 obliges every purchaser of declared
agricultural produce to make payment to the seller or his commission agent
immediately after the sale on the same day. Rule 21 prohibits the adulteration
of declared agricultural produce in the market area or market. Rule 22 provides
for grading and standardization of agricultural produce. Rule 25 provides for
inspection of weights and measures. Rule 27 requires the Market Committee to
publish a daily list of prices of the different varieties and grades of
declared agricultural produce marketed in the market area. There are several
other rules providing for the constitution of Market Committees, preparation of
their budgets, discharge of their other duties etc., but for our purpose it may
not be necessary to refer to them.
880 We have seen that Sec. 5 authorises the
establishment of a principal market and one or more subsidiary markets.
Quite obviously the power to establish a
principal market or a subsidiary market carries with it the power to
disestablish (if such an expression may be used) such market. Quite obviously
again, the power given by Sec. 5 to establish a principal or subsidiary market
may be exercised from time to time. These follow from Sections 14 and 21 of the
Maharashtra General Clauses Act. So, Sec. 5 of the Maharashtra Agricultural
Produce Marketing (Regulation) Act, 1963, read with Sections 14 and 21 of the
Maharashtra General Clauses Act vest enough power in the Director to close an
existing market and establish it elsewhere. Sec.
4A(2) of the Bombay Agricultural Produce
Markets Act, 1939, (the Act which preceded the Maharashtra Agricultural Produce
Marketing Regulation) Act, empowered the State Government 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. There was a proviso to Sec. 4A(2) which
provided that out of the enclosures, buildings or localities declared to be
market yards before the commencement of the Bombay Agricultural Produce Markets
(Amendment) Act 1954, one 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 Before the 1954 amendment Act Vakhar Bagh was the market yard for a
certain market area. In October 1954, (after the 1954 amendment came into
force) Vakhar Bagh was declared as the principal market yard for the market
area under the proviso to S. 4A(2) of the Act. A few days later another
notification was issued declaring some other place as the principal market yard
for the market area. Vakhar Bagh was not even declared as a sub-market yard.
The effect was that Vakhar Bagh Market Yard ceased to be a market yard. This
was questioned in Bapubhai Ratanchand Shah v. The State of Bombay. The argument
was that Vakhar Bagh had necessarily to be declared as a Principal Market Yard since
there was no sub-market yard under the proviso to Sec. 4A(2) and that once
having been so declared another market yard could not be substituted in its
place. This argument was repelled by Chagla, C. J. and Tendolkar, J. It was
observed (at p. 903, 904):
"Now, s. 4A(2) confers upon the
Government the power 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- 881 market yards for the area.
It is clear that by reason of s. 14 of the General Clauses Act any power that
is conferred on Government can be exercised from time to time as occasion
requires. Therefore, it would be clearly competent to the State Government to
declare from time to time which should be the principal market yard and which
should be sub-market yards. It is also clear under s. 21 of the General Clauses
Act that when a power to issue notifications, orders, rules, or bye- laws is
conferred, then that power includes a power to exercise in the like manner and
subject to the like sanction and conditions, if any, to add to, amend, vary or
rescind any notifications, orders, rules or bye-laws so
issued"......................... "under s. 4A(2) Government can by
issuing notifications from time to time after the principal market yards which
have been set up and which did not exist before the passing of the Amending
Act".
We agree. Any other construction may
frustrate the very object of the legislation. Nothing may be expected to remain
static in this changing world of ours. A market which is suitably and
conveniently located today may be found to be unsuitable and Inconvenient
tomorrow on account of the development of the area in another direction or the
congestion which may have reduced the market into an Impossible, squalid place
or for a variety of other reasons.
To so interpret the provisions of the
Agricultural Produce Marketing Regulation Act as prohibit the abolition of a
market once established and bar the transfer of the market to another place
would, as we said, be to defeat the very object of the Act. Neither the text
nor the context of the relevant provisions of the Act warrant such a
prohibition and bar and there is no reason to imply any such. On the other hand
Sections 14 and 21 of the Maharashtra General Clauses Act warrant our reading
into Sec. 5 a power to close a market and establish it elsewhere.
The submission that Rule 5 of the Maharashtra
Agricultural Produce Marketing Regulation Rules 1967 which provides that no
person shall market any declared agricultural produce in any place in a market
area other than the principal market or subsidiary market established therein
is ultra vires, is, in our opinion, equally without force. Sec. 60 of the Act
empowers the State Government to make rules for carrying into effect the
purposes of the Act.
It cannot but be said that the establishment
of a principal and subsidiary markets for the marketing of declared
agricultural produce and the bar against marketing operations being carried on
elsewhere than in the markets so 882 established is only to further and to give
effect to the purposes of the Act. The scheme of the Act shows that the
agricultural produce whose marketing is proposed to be regulated should first
be notified, a market area has to be declared in respect of the notified
agricultural produce, a Market Committee has to be constituted for the market
area, a principal market and one or more subsidiary markets have to be
established for every market area, traders etc. have to be licensed and the
Market Committee is required to provide facilities for marketing of
agricultural produce, to superintend, direct and control the markets and
regulate marketing of agricultural produce. Regulation of marketing of notified
agricultural produce and the establishment of principal and subsidiary markets
are among the prime objects of the Act. If for the more effective regulation of
marketing it is thought that all marketing operations in respect of declared
agricultural produce should be carried on only in the principal and subsidiary
markets established under the Act, we do not see how it can possibly be said
that a rule made for that purpose is beyond the competence of the rule making
authority under the Act. It is not difficult to visualise the impossibility of
effective regulation if marketing operations are allowed to be carried on
outside the principal and subsidiary markets, anywhere in the market area. The
submission was that all the regulatory measures contemplated by the Act and the
rules may be enforced equally effectively wherever business in agricultural
produce is carried on in the market area outside the principal and subsidiary
markets as within the principal and subsidiary markets. On the face of it, it
is difficult to accept this submission. The regulation will become impossible
and will soon be reduced to a farce if traders are allowed to carry on
marketing operations in every nook and corner of the market area. The Market
Committee will be forced to employ an unduly large number of officers who will
have to run hither and thither, all over the market area. The regulation and
control will soon become unmanageable. Nor will the producers' interests be
properly served. Where a producer brings his produce to the market, he will
deal face to face not with one but with several traders, with a greater chance
of getting the best price for his produce. This cannot happen if he is
persuaded to take his produce to the place of business of an individual trader
outside the principal or subsidiary market. There is a greater possibility of
abuse and greater likelihood of the object of the Act being frustrated. Fair
price to the agriculturist will soon be a mirage and the evil sought to be
prevented will persist. In Kewal Krishan Puri & Anr. v.
State of Punjab & Ors.(1) this Court had
occasion to observe:
883 "No body can be allowed to establish
a purchasing centre of his own at any place he likes in the market area without
there being such a permission or authority from the Market Committee. After all
the whole object of the Act is the supervision and control of the transactions
of purchase by the traders from the agriculturists in order to prevent
exploitation of the latter by the former. The supervision and control can be effective
only in specified localities and places and not throughout the extensive market
area." One of the submissions of the learned Counsel was that Section 6 of
the Act contemplated the use of any place in the market area for the marketing
of the declared agricultural produce on obtaining a licence from the Market
Committee and, therefore, Rule 5 which banned marketing at any place outside
the principal and subsidiary markets though such place was within the market
area was inconsistent with Section 6 and hence ultra vires. The submission
ignores the circumstance that Section 6 is applicable to both the situations
before and after the establishments of markets. Where a market area is
specified under Sec. 4 of the Act but no markets are yet established, marketing
is regulated by licensing the traders etc. under Sec. 6. After markets are
established also, traders have to be licensed under Sec. 6. But Sec. 6 is
expressly declared to be subject to the rules providing for regulating the
marketing of agricultural produce in any place in the market area. Rule 5 is a
rule providing for regulating the marketing of agricultural produce in the
market area by stipulating that the marketing shall be carried in the market
established in the market area.
Section 6 is, therefore, subject to Rule 5.
There can be no question of any inconsistency between Section 6 and Rule 5.
Yet another submission of the learned counsel
was that the Bombay Agricultural Produce Markets Act 1939 and the Agricultural
Produce Marketing Acts of other States such as Karnataka provided or indicated
by express provision that once a market was established it was not permissible
to market or trade in agricultural produce outside the market, and that the
absence of such an express provision in the Maharashtra Act showed that no such
ban was contemplated by the Act. We are unable to agree with the submission.
Absence of an express provision in the Act itself merely means that greater
latitude is given to the rule making authority to introduce regulation of marketing
by stages and to ban all marketing activity outside the market. The latitude
given to the rule making authority cannot lead to the 884 inference that the
rule making authority has no power to make a rule banning marketing activities
outside the market once the market is established, even when such a ban is
found to be necessary.
We therefore, hold that the rule prescribing
that no marketing operation in any declared agricultural produce shall be
carried on outside the principal or subsidiary markets is consistent and in
consonance with the scheme of the Act and is within the competence of the rule
making authority and that it is reasonable. 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 Sec. 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. 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 confined 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. The provision
for settlement of disputes arising out of transactions connected with the
marketing of agricultural produce and ancillary matters is also for the benefit
of the trader. It is because of these and various other services performed by
the Market Committee for the benefit of the trader that the trader is required
to pay a fee. It is, therefore, clear 885 that the regulation of marketing
contemplated by the Act involves benefits to traders too in a large way. It is
also clear to our mind that the regulation of marketing of agricultural
produce, if confined to the sales by producers within the market area to
traders, will very soon lead to its circumvention in the guise of sales by
traders to traders or import of agricultural produce from outside the market
area to within the market area. The Shirname Committee which was appointed by
the Maharashtra Government to review the working of the Bombay Agricultural
Produce Marketing Act, 1939 considered the matter and reported as follows:
(para 86):
"They (the traders) have argued that
imported produce has nothing to do with the legislation meant to confer
benefits on the agriculturist. We are afraid that this view is untenable. In
our opinion, the benefits sought to be conferred by the Act are not
compartmental inasmuch as a regulated market seeks to benefit the agriculturist
within its area only. The problem of regulation is to be viewed in the wider
context. This was well emphasised by the Royal Commission on Agriculture which
stated that 'the establishment of properly regulated markets can act as a
powerful agent in bringing about a reform which is much needed, primarily in
the interest of the cultivator, and secondly, in that of all engaged in trade
and commerce in India'. It is in this larger perspective that an answer to the
question is to be found. Moreover, no agricultural produce goes by a particular
brand with the result that the produce brought from a particular source cannot
be distinguished from the one secured from the other. If the produce imported
from outside the market area were to be exempted from the scope of the market
regulation, it would only provide an additional opportunity for the traders to
circumvent the provisions of the Act and Rules even in respect of the
agricultural commodities produced within the market area. We, therefore,
recommend that once a commodity is regulated in a market, it should be
subjected to regulation irrespective of its source or final destination."
Again they said in paragraph 95 as follows:
"We wish to record here that there
appears to be a doubt among the traders as well as the Market Committees about
the precise position of sales of commodities after they are brought from
agriculturists by traders vis-a-vis the provisions of the Act and the Rules. It
has been the belief of 886 the traders that the law is for the benefit of
agriculturists and on this ground they have pleaded that its scope should be
restricted only to the dealings with them. We are afraid that this plea is not
tenable. The benefit of a regulated market will no doubt primarily accrue to
the agriculturists but traders also will be profited by it. Furthermore, no
market can be regulated effectively unless and until the regulation covers all
the stages of marketing within a particular area. Above all, it is not possible
to distinguish between the agricultural produce subjected to resale or changing
hands between the traders themselves and the one sold by the agriculturists
through the commission agents to the traders. We, therefore, recommend that all
transactions including the resales between the traders and traders in respect
of the agricultural commodities, which are regulated should be covered by the
Act and the Rules.
Thus in a regulated market, trading in
agricultural commodities irrespective of the fact as to whether they are
produced in the market area or sold by the agriculturists or not, will be
brought within the scope of the legislation." Nor are we without any
guidance from this Court itself in answering the question posed. In
Mohammadbhai Khudabux Chhippa & Anr. v. The State of Gujarat & Anr., it
was pointed out while dealing with the provisions of the Bombay Agricultural
Produce Markets Act, 1939, as follows (at p. 899):
"Next it is urged that the provisions in
the Act also affect transaction between traders and traders, and also affect
produce not grown within the market area if it is sold in the market area. That
is undoubtedly so. But if control has to be effective in the interest of the
agricultural producer such incidental control of produce grown outside the
market area and brought into the market yard for sale is necessary as otherwise
the provisions of the Act would be evaded by alleging that the particular
produce sold in the market yard was not grown in the market area.
For the same reasons transactions between
traders and traders have to be controlled, if the control in the interest of
agricultural producers and the general public has to be effective. We are
therefore of opinion that the Act and the Rules and Bye-laws there under cannot
be struck down 887 on this ground. The contention under this head therefore
must fail".
Again in Ram Chandra Kailash Kumar & Co.
& Ors. v. State of U.P. & Anr.,(1) dealing with the contention that fee
could be charged only on those transactions in which the seller was the
producer and not on any other transaction this Court disapproved the view taken
by the Mysore High Court and approved the view taken by the Patna High Court
that fee could be levied on a transaction of buying and selling between a
dealer and a dealer. Dealing with the contention that the agricultural produce
not produced in the market area was outside the purview of the Act, it was
observed (at p. 1134):
"It is also not correct to say that the
agricultural produce must have been produced in the market area in which the
first levy is made. It might have been produced in another market area or even
outside the State of Uttar Pradesh but if a transaction of sale and purchase
takes place of an agricultural produce as defined in the Act and covered by the
notification within a particular market area then fee can be charged in
relation to the said transaction".
One of the submissions strenuously pressed
before us was that the statute itself imposed and provided for such stringent
supervision, and control, sufficient and more, to regulate transactions between
traders and traders, that it was superfluous to insist that such transactions
do take place in the market only. We do not agree. Human ingenuity is such that
vents and escapes will always be found in any system of controls. We are unable
to say that the other supervisory measures for which there is provision in the
Act are sufficient to make it unnecessary for the traders to move their places
of business into the market. No amount of supervision may be as effective as
when all the transactions take place within the market. Nor is effective
supervision at all possible if traders are dispersed all over the market area.
Every Market Committee will then require a large contingent of officers for the
purpose of supervision only.
The rendering of services to the traders also
will be far easier and, in the ultimate analysis, it will be in the interests
of the traders themselves, at any rate in the interests of the vast majority of
the traders that transactions between traders and traders also are carried on
in the market only. There cannot be any doubt 888 that localising marketing is
helpful and necessary for regulation and control and for providing facilities.
If all transactions are carried on in the market under the watchful and at the
same time, helpful vigil of the Market Committee and its officers, there is surely
a greater chance of the success of the objectives of the statute. We are
therefore, not prepared to hold that the requirement that the locus of all
transactions of sale and purchase of agricultural produce, including those
between trader and trader, should be in the market is harsh and an excessive
restriction on the Fundamental Right to carry on trade.
It was the submission of the learned counsel
that Sec. 6 of the Maharashtra Act made a distinction between (a) the use of
any place in the market area for the marketing of the declared agricultural
produce and (b) the operation in the market area or in any market therein as a
trader, commission agent, broker, etc. in relation to the marketing of
agricultural produce and that the distinction was in reality a distinction
between a sale by a producer to a trader and a subsequent sale by a trader to a
trader. The argument was that Rule 5 which banned marketing of any declared
market agricultural produce in any place in a market area other than the
principal market or subsidiary market established therein applied only to a
sale of the agricultural produce by a producer to trade. We do not see any
warrant for the submission of the learned counsel in the language employed in
Sec. 6 or Rule 5. If the legislature or the rule making authority wanted to
make a distinction between a sale of agricultural produce by a producer to a
trader and a subsequent sale by a trader to a trader, nothing would have been
simpler than to say so instead of adopting the circumlocutous way in which the
learned counsel claims it has been said. The proviso to Rule 5 speaks of
operating at any place within the market area by a trader, commission agent, or
other market functionary after obtaining a licence while the main provision
refers to the marketing of declared agricultural produce at any place in the
market area. Surely it cannot be contended that the proviso is unrelated to the
main provision. According to ordinary cannons of construction the proper
function of a proviso is to except and deal with a case which would otherwise
full within the general language of the main enactment. It, therefore, shows
that no such distinction as suggested by the learned counsel for the
petitioners was in the mind of the legislature or the rule making authority.
The onion and potato merchants of Bombay
advanced a special plea that Sec. 13(1A) which declared the area comprising
Greater 889 Bombay and Turbhe village a market area for the purposes of the Act
was invalid as it was wholly unreasonable to constitute such a large area into
a single market area. The validity of the notification establishing a market at
Turbhe was attacked as unreasonable. It was said that it was unreal and
unreasonable to establish a single market for so large an area and that, at such
an inconvenient place as Turbhe village. It has been explained in the counter
affidavit filed on behalf of the respondent that the existing markets in
Maulana Azad Road and Mahatma Phule Mandal were highly congested and located in
areas which were over-crowded with the result that it took several hours to
even unload onions and potatoes from the trucks which carried them. It has
become imperative in the public interest that the markets should be shifted
from Maulana Azad Road and Mahatma Phule Mandai. Turbhe village was chosen as
an area free from congestion and conveniently located as it was on the main
trunk road from Pune. It was also very near the other trunk Road going towards
the East. A Railway linking the area with both the Western Railway and the
Central Railway net works was fast coming up. It was also pointed out that 60%
of the population of Greater Bombay resided in the Northern suburbs and the new
market was much nearer to the majority of the residents and traders of Greater
Bombay. We are not unable to see anything unreasonable in the statutory
declaration of Greater Bombay and Turbhe village as a market area; nor, are we
able to see anything unreasonable, in view of the circumstances mentioned by
the respondents, in the establishment of a single market in Turbhe village for
the entire market area.
It was also said that neither the Gultekdi
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 night have been the situation on the respective dates of notification.
We refrain for 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 890 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 present case, we are satisfied
that all reasonable facilities and conveniences are now provided. We are also
satisfied that the traders have been making one desperate attempt after another
to avoid moving into the new markets and they have been successful in stalling
the notifications from becoming effective for quite a number of years.
In the Writ Petitions and Civil Appeals from
Karnataka State, similar questions have been raised. Though the broad scheme of
the Karnataka Act is the same as the Maharashtra Act, there are some
differences which however are not basic.
Instead of a two tier scheme, Market Area and
Markets, as under the Maharashtra Act, the Karnataka Act has a three- tier
scheme, Market Area, Market and sub-market and market- yard, sub-market yard
and sub-yard. Market Area is a larger area within which smaller areas are
declared as a Market and sub-markets. Within a market are located a market yard
and market sub-yards and within a sub-market is located a sub market yard. The
'market yard' in the Karnataka Act is what corresponds to a 'market' in the
Maharashtra Act. Unlike the Maharashtra Act, the Karnatka Act itself [S. 8(2)]
expressly provides that no place in the Market or the sub-market, except the
market-yard, sub-yard or the sub-market yard as the case may be, shall be used
for the purchase or sale of notified agricultural produce. Originally, after
the words "purchase or sale of notified agricultural words" occurred
the words "belonging to a producer" in Section 8(2). The words
"belonging to a producer" were omitted by a 1976 amendment and this
makes the provisions of S. 8(2) applicable to transactions between trader and
trader too.
The shifting of market yard from one place to
another and the application of the Act to transactions between traders and
traders are what were principally questioned in the Karnataka cases.
Substantially the same submissions as in the Maharashtra cases were made and we
have already dealt with them.
We my now turn to the Bihar cases. The Bihar
Agricultural Produce Markets Act, 1960, follows roughly the same pattern as the
other Acts. A market area has to be first declared within which the marketing
of specified agricultural produce is proposed to be regulated. For every market
area there is to be a principal market yard and one or more sub market yards.
In between the market area and the market yard there is to be a market but
market does not seem to play any part in the scheme of the Act as it now stands
after the 1974 amendments. However it should be mentioned here that Rule 80 891
which is still on the Statute Book, provides that a market shall be established
for a market area and that after the establishment of a market, a notification
under Sec. 5 (declaring market yards) shall be issued. Sec. 15 of the Act
provides that no specified agricultural produce shall be bought or sold at any
place within the market area other than the principal market yard or sub-market
yard established therein except such quantity as may be prescribed for retail
sale or personal consumption. The arguments advanced in the Maharashtra and
Karnataka cases were advanced in the Bihar cases also. For the reasons already
mentioned we reject the submission. In one of the Bihar cases it was further
submitted that when a market yard was disestablished at one place and
established at another place, it was the duty of the concerned authority to
invite and hear objections. Failure to do so was a violation of the principles
of natural justice and the notification disestablishing the market yard at one
place and establishing it elsewhere was therefore, bad. It was said that even
as there was express provision for inviting and hearing objections before a
"market area" was declared under the Act, so should objections be
invited and heard before a 'market yard' was established at any particular
place. The principles of nature justice demanded it. We are unable to agree. We
are here not concerned with the exercise of a judicial or quasi-judicial
function where the very nature of the function involves the application of the
rules of natural justice, or of an administrative function affecting the rights
of persons, wherefore, a duty to act fairly. We are concerned with legislative
activity; we are concerned with the making of a legislative instrument, the
declaration by notification of the Government that a certain place shall be a
principal market yard for a market area, upon which declaration certain
statutory provisions at once spring into action and certain consequences
prescribed by statute follow forthwith. The making of the declaration, in the
context, is certainly an act legislative in character and does not oblige the
observance of the rules of natural justice. In Bates v. Lord Hailsham, Megarry
J., pointed out that the rules of natural justice do not run in the sphere of
legislation, primary or delegated, and in Tulsipur Sugar Co. v. Notified Area
Committee, our brothers Desai and Venkataramaiah JJ approved what was said by
Megarry J., and applied it to the field of conditional legislation too. In Paul
Jackson's Natural Justice (Second Edn.), it has been pointed out (at p.169):
"There is no doubt that a Minister, or
any other body, in making legislation, for example, by statutory instrument 892
or by-law, is not subject to the rules of natural justice- Bates v. Lord
Hailsham of St. Mayleborne (1972) 1 W.L.R. 1373-any more than is Parliament
itself; Edinburgh and Dalkeith Ry. v. Wauchope (1842) 8 Cl. & F. 710, 720
per Lord Brougham; British Railways Board v. Pickin (1974) A.C. 765".
Prof. H. W. R. Wade has similarly pointed in
his Administrative Law (4th Edn.): "There is no right to be heard before
the making of legislation, whether primary or delegated, unless it is provided
by statutes". There is, therefore, no substance in the invocation of the
rules of natural justice.
One of the submissions in the Bihar cases was
that the declaration of places as market yards was made in such an erratic
fashion that the exercise of the power could only be termed as an arbitrary
misuse of power. The facts in Civil Appeal No. 1507 of 1980 were that on
September 16, 1964, a certain area was declared as a principal market yard and
Amgola, Chandwara, Sarai Said Ali and Brahmpura were declared as Sub market
yards. On February 23, 1978 instead of the principal market yard declared by
the notification of September 16, 1964, Muradpur Dulla was declared as
principal market yard. The sub-market yards were abolished. By another
notification dated April 9, 1979, all the market yards notified on September 16,
1964 were allowed to continue as before, but it was also simultaneously made
known that such market yards would be closed on specified dates and merchants
were advised to move their business into the Muradpur Dulla principal market
yard as early as possible.
Finally by a notification dated July 3, 1979,
the previous notification dated April 9, 1979 was cancelled and Muradpur Dulla
market yard was alone notified as the principal market yard. The facts in the
other two appeals were that on September 19, 1963, Gaya town was declared as a
market area.
On April 6, 1964, Chandauti was declared as
the market proper under Sec.5(2)(ii) of the Bihar Act. By a notification dated
April 7, 1964, Mohalla Purani Godown was declared as principal market yard and
Kedarnath Market was declared as the sub-market yard for the market area. On
October 19, 1973, Mohalla Purani Godown was once again declared as the
Principal Market Yard. Subsequently on February 28, 1978, Chandauti was
declared as the Principal Market Yard. This meant that Mohalla Purani Godown
ceased to be a market yard and Kedarnath Market ceased to be a sub- market
yard. But, again on April 9, 1979, another notification was issued, to the
effect that Mohalla Purani Godown would continue as the market yard as before.
Finally on June 27, 1979, Chandauti was 893 declared as the Principal Market
yard once more. This was questioned in Writ Petitions filed in the Patna High
Court.
The Patna High Court rejected all but one of
the contentions raised. The only contention which was accepted was that the
procedure prescribed by Rule 80 was not followed before Chandauti was declared
as the principal market yard by the notification dated February 28, 1978. Rule
80, as already mentioned by us provides that a market shall be established for
a market area and that after the establishment of a market a notification
declaring the market yard shall be issued. The contention which was accepted
was that a market had not been established before a market yard was declared.
Against the judgment of the High Court the
merchants have filed Civil Appeal No. 1715 of 1980 and the State of Bihar has
filed Civil Appeal No. 36 of 1980. Not-withstanding the filing of the appeal,
the State of Bihar chose to issue a fresh notification after observing the
procedure prescribed by Rule 80. This was again questioned in the High Court.
The High Court upheld the notification. The merchants have preferred Civil
Appeal No. 1716 of 1980 against the judgment of the High Court. From the
history of events it may appear as if declarations regarding market yards have
been made in a most erratic fashion but as pointed out by the learned Attorney
General who appeared for the State of Bihar it was not madness. There was a
method. The old markets had existed from ancient days and it had become
necessary to establish modern market yards with conveniences and facilities.
When this was sought to be done there were representations by the traders and
the Government appears to have thought that it was advisable to give the traders
sufficient time to enable them to prepare themselves to move into the new
market yards. The notifications establishing new market yards were therefore,
cancelled and the old markets were allowed to function for some time. Later
when the time was thought to be ripe, notifications establishing new market
yards were once again issued. It is, therefore seen that the seeming confusion
was not the result of any arbitrary or erratic action on the part of the
Government but was the result of a desire to accommodate the traders as much as
possible. We, therefore, see no force in any of the submissions made on behalf
of the petitioners. All the Writ Petitions and Civil Appeals are therefore,
dismissed with costs.
N.V.K. Petitions and Appeals dismissed.
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