Produce Market Committee Vs. Prabhat Zarda Factory  INSC 169 (31 March
M.M. Punchhi, M.M. Bharucha S.P. (J)
1994 SCC Supl. (2) 514
This appeal arises from the judgment and order of the Patna High Court allowing
Civil Writ Case No. 4432 of 1978, quashing a demand of the appellant for
recovery of market fee under the Bihar Agricultural Produce Markets Act.
respondent-firm was served with notice dated July 29, 1978 by the appellant-market committee to pay market fee on the
sale of Zarda produce by the respondent-firm on the basis that it was included
in a scheduled item under the Act by the description 'tobacco'. Since the
respondent-firm refuted the liability to pay market fee mainly on the ground
that Zarda was a different commodity though manufactured out of tobacco, it
resisted the notice. Since the payment of market fee was insisted upon and
threatening notices were issued to the respondent-firm, a writ petition was
moved in the High Court which resulted in acceptance as aforesaid.
When the notice afore-referred to was issued, the expression 'agricultural
produce' as defined in Section 2(1)(a) was as follows :
produce' includes all produce, whether processed or non-processed of
agriculture, horticulture, animal husbandry, and forest specified in the
Schedule." Later the definition was amended by an amending Act of 1982
effective from April
30, 1982, the English
rendering of which is as follows :
produce' means all produce whether processed or non-processed, manufactured or
not, product of agriculture, horticulture, plantation, animal husbandry,
forest, sericulture, pisciculture, livestock or poultry, as specified in the
appears that the amended definition of 'agricultural produce' was not pressed
into service by the appellant- market committee before the High Court.
The tenor of the judgment of the High Court goes to suggest that 'Zarda'
according to it was a variety of manufactured tobacco and not in its processed
or non-processed form.
counsel for the appellant, in this situation, has confined his plea to claim
relief for the period after the amendment of April 30, 1982 till the date of
the judgment of the High Court because, according to him, the period prior to
April 30, 1982 stands on a different footing. He otherwise was unable to point
out any infirmity in the judgment of the High Court or in its reasoning in
determining Zarda to be a variety of manufactured tobacco.
the reasoning of the judgment will have to be sustained.
the definition of 'agricultural produce', which obviously has undergone a
change so as to include the manufacturing aspect in it, would have to be viewed
afresh in the proper context, if eventually any coercive steps are taken
against the respondent-firm in relation to a demand for the post-April 30, 1982
period. Presently, the correctness of the amended provision cannot be judged in
this appeal, All what we have to do is to mould the relief and confine the
judgment of the High Court as valid up till the date of the amendment and leave
the future period from April 30, 1982 onwards in a vacuum to be filled in by
the acts of commission or omission of either party, validity of which may have
to see the light of another litigation. We make it clear however that any
reference reflecting upon the scope and ambit of 'manufacture' employed in the
judgment is not to express any opinion on the subject. Thus we mould the relief
in favour of the appellant to this extent that the judgment of the High Court,
though valid in every respect, is operative till April 30, 1982, and the period thenceforth is left in a void. Ordered
Before we part with the judgment, the claim of the parties with regard to the
refund or retention of the payments made will have to be cleared of any doubt.
When the writ petition was pending in the High Court, the following interim
order was passed :
the pendency of this application no action for realisation of the assessed
market fee will be taken, provided the petitioner goes on depositing with the
Secretary, Agricultural Produce Market Committee, Muzaffarpur, in the first
week of every following month, that is to say, for the month of September, in
the first week of October, for the month of October, in the first week of
November and so on, a sum of Rupees 15,000 (Rupees fifteen thousand only) every
amount so deposited will be on account deposit subject to the result of this
the acceptance of the writ petition, the aforesaid deposits made by the
respondent-firm became liable to be refunded. However, this Court while
granting special leave made the following order :
is ordered that the amount already collected by the petitioners which they are
now liable to refund under the judgment of the High Court against which this
appeal is filed need not be refunded till the final disposal of the appeal. If
the petitioners fail in the appeal and the Supreme Court so directs the amount
shall be refunded with interest at 12% per annum, within 90 days from the date
of the order of the Supreme Court. In other respects no stay."
fact that the operability of the judgment of the High Court has been divided,
would cast no reflection on the order of refund for both the respective
periods. The claim of the market committee, as presently set up, his no basis.
and when any demand is made under the amended provisions that would be an
effort de novo. Presently, the refund has to be made with interest at the rate
fixed by this Court while granting special leave. Those orders would have to be
worked out in the true spirit and effect. The refund is ordered to be made
accordingly. The appeal is partially allowed to the extent afore-indicated.
Parties shall bear their own costs.