TMI Blog1979 (5) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... jab Agricultural Produce Markets Act, 1961 (Punjab Act No. 23 of 1961). hereinafter referred to as the Act, and the Rules framed by the State of Punjab and Haryana under the said Act as also the validity of the fixation of market fees from time to time by the various Market Committees in the States aforesaid under the direction of the Punjab State Agricultural Produce Marketing Board and the Haryana State Agricultural Produce Marketing Board. All these cases have been heard together and are being disposed of by a common judgment. In the erstwhile composite State of Punjab the Act was passed in the year 1961 to consolidate and amend the law relating to the better regulation of the purchase, sale, storage and processing of agricultural produce and the establishment of markets for agricultural produce in the State. Under section 3 of the Act the State Agricultural Marketing Board was constituted for the entire area of the composite State, which later, in the year 1966 came to be bifurcated into the States of Punjab and Haryana. Under the various provisions of the Act, which will be noticed shortly hereinafter, market areas and market yards were declared putting restrictions on the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 8, 1974. In Punjab by Amendment Act 14 of 1975 section 23 of the Act was again amended authorizing the imposition of market fee at a rate not exceeding Rs. 2.20 per hundred rupees. Telegraphic instructions were issued by the Punjab Board to the various Market Committees directing them to charge Rs. 2/- only with effect from August 23, 1975 after the passing of the Act 14 of 1973 on August 8, 1975. The increase in the rates of fee, the last one being in August, 1975, were again challenged in the High Court. But the Full Bench which finally heard the Writ Petition upheld the increases by its judgment delivered on January 28, 1977, which is reported in Kewal Krishan Puri and another v. The State of Punjab and others. Civil Appeal 1083 of 1977 has been preferred in this Court from the said judgment of the High Court. Both in the State of Punjab and the State of Haryana the rate of market fee was further raised from Rs. 2/- to Rs.3/-. It was unsuccessfully challenged in the High Court. The dealers have preferred appeals from the judgments of the High Court as also filed Writ Petitions in this Court. In the State of Punjab the fee was raised to Rs. 3/-by Ordinance 2 of 1978 which mus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill by reason only that it provides for the demand or payment of fees for licences or fees for services rendered The Constitution, therefore, clearly draws a distinction between the imposition of a tax by a Money Bill and the impost of fees by any other kind of bill. So also in the Seventh Schedule both in List I and in a distinction has been maintained in relation to the entires of tax and fees. In the Union List entries 82 to 92A relate to taxes and duties and entry 96 carves out the legislative field for fees in respect of any of the matters in the said list except the fees taken in any Court. Similarly in the State List entries relating to taxes are entries 46 to 63 and entry 66 provides for fees in respect of any of the matters in List II but not including fees taken in any Court. Entry relating to fees in List III is entry 47. Our Constitution, therefore, recognises a different and distinct connotation between taxes and fees. The leading case of this Court which has been referred and followed in many subsequent decisions is the case of The Commissioner, Hindu religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt. The point decided therein was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities, more often than not, almost invariably, will not be able to know the individual or individuals on whom partly or wholly the ultimate burden of the fee will fall. They are not concerned to investigate and find out the position of the ultimate burden. It is axiomatic that the special service rendered must be to the payer of the fee. The element of quid pro quo must be established between the payer of the fee and the authority charging it. It may not be the exact equivalent of the fee by a mathematical precision, yet, by and large, or predominantly, the authority collecting the fee must show that the service which they are rendering in lieu of fee is for some special benefit of the payer of the fee. It may be so intimately connected or interwoven with the service rendered to others that it may not be possible to do a complete dichotomy and analysis as to what amount of special service was rendered to the payer of the fee and what proportion went to others. But generally and broadly speaking it must be shown with some amount of certainty, reasonableness or preponderance of probability that quite a substantial portion of the amount of fee realised is spent for the special b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payer and not upon the quantum of benefit that is supposed to be conferred on any particular religious institution." Benefit conferred or any particular religious institution would have been undoubtedly benefit conferred on the payer of the fee. After the decision of this Court in Shirur Mutts case (supra) section 76 of the Madras Act was amended. The effect of the amendment came to be considered by this Court in the case of H. H. Sudhundra Thirtha Swamiar v. Commissioner for Hindu Religious Charitable Endowments. Mysore. 1963 Suppl. 2 SCR 302 Pointout the various differences between the earlier law and the amended one at pages 320-21 the imposition of fee was upheld. In two other cases of this Court following the ratio of Shirur Mutt s decision the imposition of fee was upheld, vide, Mahant Sri Jagannath Ramanuj Das and another v. The State of Orissa and another and Ratilal Panachand Gandhi v. The State of Bombay and other [1954] SCR 1055. We now proceed to consider. some more decisions of this Court in which apparently some different phrases were used for explaining the meaning of the word fee and its distinction from tax . Both sides placed reliance upon Those de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fee nor does it get the benefit in vacuum. The fee is paid by the person who is liable to pay it and service to the payer does not mean any personal or domestic service to him but it means service in relation to the transaction, property or the institution in respect of which he is made to pay the fee. Says the learned Judge at page 549: "It is true that when the Legislature levies a fee for rendering specific services to a specified area or to a specified class of persons or trade or business, in the last analysis such services may indirectly form part of services to the public in general. If the special service rendered is distinctly and primarily meant for the benefit of a specified class or area the fact that in benefitting the specified class or area the State as a whole may ultimately and indirectly be benefitted would not detract from the character of the levy as a fee. Where, however, the specific service is indistinguishable from public service, and in essence is directly a part of it, different considerations may arise. In such a case it is necessary to enquire what is the primary object of the levy and the essential purpose which it is intended to achieve. Its prima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs). In the case of Corporation of Calcutta and another v. Liberty cinema [1965] 2 SCR 477 the respondent was charged by the Calcutta Corporation a Very high licence fee assessed according to the sanctioned seating capacity of the Cinema house. The High Court quashed the imposition. In appeal to the Supreme Court the stand of the appellant Corporation was that the levy was a tax and section 548(2) of the Calcutta Municipal Act did not suffer from the vice of excessive delegation: while the respondent cinema contended that the levy was a fee and had to be justified as being imposed in return for services to be rendered. Alternatively the respondent submitted that if it was a tax it was invalid as it amounted to an illegal delegation of legislative functions. The majority view was expressed by Sarkar J., as he then was, and the impost was upheld as a tax. In the minority opinion delivered by Ayyangar J., it was held that even in the case of a licence fee a correlation between the fee charged and the service rendered was necessary to be established. It was, therefore, held to be a tax but invalidly imposed under a power suffering from the vice of unconstitutional legislative delegat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause it would have then violated the provisions of the Sales Tax law which did not authorise the imposition of such a tax beyond a certain percentage, and as a tax it could not be but a sales tax. Finally this controversy was not pursued when we pointed out that at no stage the question was raised and no attempt any stage was made to justify it as a tax. Obviously the Market Committees could not be competent under the Act to impose any tax: on the sale and purchase of the agricultural produce in the market nor did it ever purport to do so The nature of the impost and the power. under which it was levied squarely and uniformally remained within the realm of the fee and fee of the kind which could not but sustained on the establishment of the element of quid pro quo between the authority charging the fee and its payer. The next case to be considered is the decision of this Court in Nagar Mahapalika Varanasi v. Durga Das Bhattacharya ors. [1968]3 SCR 374 in which it was held that the annual licence fee charged from the rickshaw owners and the drivers by the Varanasi Municipal Board could be justified only on the basis of the element of quid pro quo. The fee was held to be ultra vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Bench of this Court, reviewed all the earlier cases and pointed out at page 323 that-"While a tax invariably goes into the consolidated fund, a fee is earmarked for the specified services in a fund created for the purpose." Concludes the learned Judge at pages 324-25: "From the above discussion it is clear that before any levy can be upheld as a fee, it must be shown that the levy has reasonable co-relationship with the services rendered by the Government. In other words the levy must be proved to be a qui pro quo for the services rendered. But in these matters it will be impossible to have an exact co-relationship. The co-relationship expected is one of a general character and not as of arithmetical exactitude." Difference between a licence to regulate a trade, business or profess on in public interest and in a case where a Government which is the owner of a particular property may grant permit or licence to some one to exploit that property for his benefit for consideration has been pointed out at page 325. The State of Bihar had failed to place materials in the High Court to establish the reasonable corelationship between the value of the services rendered with the fee ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chief Justice further observed at the same page-"In other words, it cannot tax litigation, and make litigations pay, say for road building or education or other beneficial schemes that a State may have. There must be a broad corelationship with the fees collected and the cost of administration of civil justice." If the view taken by the High Court in the market fee cases were to hold good, then pushing it to the logical conclusion one will have to say that giving all sorts of facilities to the litigants for their travel from the village homes to the Courts would also be a service of them In cases of court fees one has to take broad view of the matter to find out whether there exists a broad co-relationship with the fees collected and the cause of administration of justice. Even mixing the amount of court fee collected with the general fund will be permissible. It may not be kept in a separate fund or earmarked separately. The very fact that in relation to court-fees there are separate Entries in the Seventh Schedule e.g. Entry 77 List I and Entry 3 of List II, indicates that even though the character of the levy is not very much different from that of the general types of fees, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be struck down as being illegal. In the instant case also it would be noticed that the Market Committees and the Market Boards assumed to themselves the liberty of utilizing and spending the realizations from market fees to a consider able extent, as if it was a tax, although in reality it was not so. In The Municipal Council Maduri v. R. Narayanan etc. [1976] 1 SCR 333 endeavour was made as in the case of Nagar Mahapalika Varanasi (supra) to justify the impost by the Municipal Council as a tax. Krishna Iyer J., speaking for the Court repelled that argument and since the impost could not to justified as fee the resolution of the Municipal Council was held to be invalid. In the Chief Commissioner, Delhi and another v. The Delhi Cloth and General Mills Co. Ltd. and others 1970 2 SCR 348 the question for consideration was whether the registration fee charged on the document satisfied the two conditions of fee which were enumerated in the fol- lowing language:- "(i) there must be an element of quid pro quo that is to say the authority levying the fee must render some service for the fee levied however remote the service may be; (ii) that the fee realised must be spent for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the buyer so that they may meet on equal terms, thereby eradicating or at any rate reducing the scope for exploitation in dealings." At page 102 is to be found some discussion with regard to the licence fees which, says the learned Judge, "do not appear to be so high as to cripple the trader s business." The question of charge of the market fee apart from the licence fee did not fall for consideration in this case. The Bombay Marketing Statute came to be considered in the case of Mohammad Hussain Gulam Mohammad and another v. The State of Bombay and another. [1962] 2 SCR 659 Wanchoo J., as he then was, speaking for the Court repelled the attack at page 669 on section 11 of the Bombay Act which gives power to the Market Committee subject to the provisions of the rules and subject to such maxima as may be prescribed to levy fees on the agricultural produce bought and sold by licensees in the market area. The attack was that the impost was in the nature of sales tax. It was repelled on the ground that: "Now there is no doubt that the market committee which is authorised to levy this fee renders services to the licensees, particularly when the market is established. Under the circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inted a dispute subcommittee for quick settlement of disputes. It has set up a market intelligence unit for collecting and publishing the daily prices and information regarding the stock, arrival and despatches of agricultural produce. It has provided a grading unit where the techniques of grading agricultural produce is taught. the contract form for purchase and sale is standardised. The provisions of the Act and the Rules are enforced through inspectors and other staff appointed by the market committee. The fees charged by the market committee are correlated to the expenses incurred by it for rendering these services. The market fee, of 25 naya paise per Rs. 100/ worth of agricultural produce and the licence fees prescribed by Rules 71 and 73 are not excessive. The fees collected by the market committee form part of the market committee fund which is set apart and earmarked for the purposes of the Act. There is sufficient quid pro quo for the levies and they satisfy the test of "fee" as laid down in Commissioner Hindu Religious Endowments Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt-[954] S.C.R., 1005." It would be noticed that even the rate of 25 paise per hund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fees that the amount is being spent for rendering services to those on whom falls the burden of the fee. (7) At least a good and substantial portion of the amount collected on account of fees, may be in the neighbourhood of two-thirds or three-fourths, must be shown with reasonable certainty as being spent for rendering services of the kind mentioned above. In the light of the principles culled out and enunciated above, we now proceed to examine the relevant provisions of the Act and the rules framed thereunder as in force in the States of Punjab and Haryana. We shall examine the relevant provisions with reference to the Punjab Act and the Rules and will only refer to those of Haryana when some difference of some significance or consequence has got to be pointed out. Under clause (f) of section 2 of the Act "dealer" is defined to mean :- "any person who within the notified market area sets up, establishes or continues or allows to be continued any place for the purchase, sale, storage or processing of agricultural produce notified under subsection (l) of section 6 or purchases, sells, stores or processes such agricultural produce." Clause (hh) inserted by Punjab Act 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laces of business specified in column 6 situated in a particular notified market area named at the top of the licence. There will be no sense in specifying the place of business in the licence if the licensee is to be permitted to establish his place of business any where in a notified market area which is too big and extensive for the control and supervision of a particular market committee. Market yards are declared under section 7 and for each notified market area there can be one principal market yard and one or more sub-market yards as may be necessary. The marginal note of section 8 is "No private market to be opened in or near places declared to be markets." There is some difference in the provisions of the Act as introduced by the Haryana Amendment in relation to the establishment of notified market area, declaration of market yards and the inhibition on any person to establish or continue any place for the purchase "sale, storage and processing of any agricultural produce." There was also a controversy before us as to the exact interpretation of the language of the two Statutes in relation to such inhibition. But for the purposes of the cases before us it is not necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee to establish a market in the notified market area "providing such facilities for persons visiting it in connection with the purchase, sale, storage, weighment and processing of agricultural produce concerned as the Board may from time to time direct." This also indicates that the Committee is primarily concerned with providing facilities in the market for persons visiting it and in connection with the transactions taking place there. Now we come to the most important section viz section 23. It read as follows:- "A Committee shall, subject to such rules as may be made by the State Government in this behalf, levy on ad-valorem basis fees on the agricultural produce bought or sold by licensees in the notified market area at a rate not exceeding three rupees for every one hundred rupees: Provided that- (a) no fee shall be leviable in respect of any transaction in which delivery of the agricultural produce bought or section in which delivery is actually made." (b) a fee shall be leviable only on the parties to a transaction in which delivery is actually made." Thers is a slight variation in section 23 as amended by Haryana Act 21 of 1973. Therein some market fee may be ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... controls the power of Committee to levy fees subject to the rules. The power given to the Board to fix the rate of market fees from time to time under rule 29 is not ultra vires the provisions of the Act, as in our opinion sub-section (9) of section 3 confers power on the Board to exercise superintendence and control over the Committees, which power, in the context and the scheme of the marketing law will take within its ambit the power conferred on the Board under rule 29(1). It is further to be pointed out that the fee levied is not on the agricultural produce in the sense of imposing any kind of tax or duty on the agricultural produce Nor is it a tax on the transaction of purchase or sale. The levy is an impost on the buyer of the agricultural produce in the market in relation to transactions of his purchase. The agriculturists are not required to share any portion of the burden of this fee. In case the buyer is not a licensee then the responsibility of paying the fees is of the seller who may realise the same from the buyer. But such a contingency cannot arise in respect of the transactions of sale by an agriculturist of his agricultural produce in the market to a dealer who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ratuities, compassionate allowances and contributions towards leave allowances, compensation for injuries and death resulting form accidents while on duty, medical aid, pension or provident fund of the persons employed by the Committee. (vi) payment of interest on loans that may be raised for purpose of the market and the provisions of a sinking fund in respect of such loans; (vii) collection and dissemination of information regarding all matters relating to crop statistics and marketing in respect of the agricultural produce concerned (viii) providing comforts and facilities, such as shelter, shade, parking accommodation and water for the persons, draught cattle, vehicles and pack animals coming or being brought to the market or on construction and repair of approach roads; culverts, bridges and other such purposes; (ix) expenses incurred in the maintenance of the offices and in auditing the accounts of the Committees; (x) propaganda in favour of agricultural improvements, and thrift; (xi) production and betterment of agricultural produce; (xii)meeting any legal expenses incurred by the Committee; (xiii) imparting education in marketing or agriculture; (xiv)paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the market and will confer some special benefits to the traders apart from a share of the benefit going to the agriculturists who are not required to share any burden of the market fee. But as we have pointed out above, if one were to give a very wide meaning to this phrase of construction and repair of approach roads, culverts and bridges to say that such construction can be permitted any where in the market area for the facility of the agriculturists which ultimately will benefit the traders also, then the whole concept of correlation of fee and its character of having an element of quid pro quo will dwindle down and become an empty formality. Uplift of villages and helping the agriculturists by all means is the duty and the obligation of the State no doubt and it has to do it by incurring expenses out of the public exchequer consisting of the income from various kinds of taxes etc. One may not have any serious objection to the items of expenditure mentioned in clauses (xii), (xiv), (xv) and (xvi). But the other clauses do require some careful examination. Obviously clause (x) and clause (xi) cannot form the items of expenditure out of the market fees. In face of the view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is very wide. The Act, however, is silent as to where from interest will be paid or the principal will be returned in regard to the amount of loan raised for a purpose other than the purpose of the market. Since we find that the matter has proceeded at various stages in the High Court as also in this Court under a great confusion of the correct position of law, we do not propose to express any opinion in this regard at this stage. Nor do we propose to strike any clause of section 28 as being unconstitutional merely on the ground that the expenditure authorised therein goes beyond the scope of the purpose of the utilisation of the market fees. The authorities have to bear this in mind and on a proper occasion the matter will have to be dealt with by courts in the light of this judgment where a concrete case comes of raising of a loan, spending the money so raised which cannot be reasonably connected with the purposes for which the market fee can be spent, as to whether such a loan can be repaid or interest on it can be paid out of the realizations of the market fees. One of the points mooted before us was as to how far the market committees can be compelled to part with 30% of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, medical aid, pension or provident fund to the persons employed by the Board and leave and pension contribution to Government servants on deputation; (ix) travelling and other allowances to the employees of the Board, its members and members of Advisory Committees; (x) propaganda, demonstration and publicity in favour of agricultural improvements; (xi) production and betterment of agricultural produce; (xii) meeting any legal expenses incurred by the Board; (xiii) imparting education in marketing or agriculture; (xiv)construction of godowns; (xv) loans and advances to the employees; (xvi)expenses incurred in auditing the accounts of the Board; and (xvii)with the previous sanction of the State Government, any other purpose which is calculated to promote the general interests of the Board and the Committee; or the national or public interest. On a parity of the reasoning which we have applied in the case of Market Committee Fund we may point out that the Market Development Fund constituted primarily and mainly out of the contributions by the Market Committees from realisations of market fees, can also be expended for the purposes of the market in the notified ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance upon an earlier Division Bench decision of the same High Court in Ram Sarup v. The Punjab State. In para 31 of the judgment at page 12 the view of the High Court-"that the amount of fees so collected are not to be spent exclusively for rendering services to the payers of the fees but can also be utilised for carrying out the purposes or objects of the Act under which they are levied," is not quite correct. In the same paragraph the High Court felt constrained to add that the amount cannot, however, be utilised for purposes which have no connection with the main purposes of the Act for which fee is levied, nor can it be spent for carrying out the governmental functions of the State. If many of the purposes mentioned in the Act, as we have shown above, are outside the ambit of the service element and fall within the realm of the governmental functions, then it is plain that to say by generalisation that the fee money can be spent for the purposes or objects of the Act is not quite correct. The High Court has extracted section 28 of the Act but has failed to scan the effect of the various purposes in some of the clauses. After referring to the income and expenditure statements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a link road is to be constructed from a village to the main road for enabling an agriculturist to transport his produce upto the main road then the Market Committee should be under an obligation to construct or at least to maintain the main road also in order to enable that agriculturist to react the market which may be at distance of say 20 miles from the link road. It is plain that construction of such link road is as much a part of the governmental activity as that of the main roads. It is interesting to find out from paragraph 36 of the judgment that the Market Committees were made to pay donations to educational institutions imparting general education. The Market Committee, Hissar, spent Rs. 1,07,794/- on the water supply scheme for a village. Even the High Court was constrained to disapprove of this. It also spent a sum of Rs. 6,00,000/- for the construction of a Panchayat Bhawan. Many other instances are mentioned in paragraph 37 of the judgment which show that the Market Committees were getting enormous income from market fees and they were made to squander away a good portion of that money unauthorisedly, although none of the purposes in itself was objectionable or ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal 1083 of 1977 is from this judgment of the High Court. The Full Bench judgment in this case also suffers more or less from the same kind of error in the approach of the legal problem as is to be found in the earlier Division Bench decision. In paragraph 13 of the judgment at page 352 the High Court repelled the attack on clauses (x), (xi) and (xiv) of section 26 of the Act on the ground: "The broad object of the legislation like the present one is only to protect the producers of agricultural produce from being exploited by middlemen and profiteers and to enable them to secure a fair return of their produce. The Legislation like the present one has its root in the attempt on the part of the nation to provide a fair deal to the growers of crops and also to find a market for its sale at proper rates without reasonable chances of exploitation. If this object is kept in view, then the clauses of which the constitutionality has been challenged, would certainly fall within the ambit of Entry 28. Clauses (x), (xiii) and (xiv) would help the growers to make improvements in the production of agricultural produce with the result that their agricultural produce would find a better ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board and the answering respondent have already given Rs. 5 crores to the Markfed without charging any interest. The fact of the matter is that on account of the withdrawal of the Cotton Corporation of India from the various markets, the price of cotton came down suddenly. In order to provide and ensure a reasonable price to the farmer, the Government asked the Markfed to enter the market. For this purpose, the Board contributed some amount of money. So far as the answering-respondent is concerned, it has not contributed any money at all. The answeringrespondent believes that the Board has contributed only an amount of Rs. 1.43 crores and not 5 crores." "It may, however, be submitted that the entire money collected by the Market Committees is being used for the purposes envisaged under the Act." "The Market Committees have to provide facilities as envisaged under the Act. The petitioners had asked for the copies of balance sheets. The balance sheets were originally prepared when the accounts of the Committees were being audited by "the Chartered Accountants." Now, the accounts are being audited by the Examiner, Local Fund Accounts which is a Government Agency. The preparation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truck down." In several Civil Writ Petitions filed in the High Court by the dealers of the various Market Committees of Haryana the challenge, was to the raising of the rate of market fee from Rs. 2/- to Rs.3/-. The High Court rejected all those petitions by the judgment dated 30-8-1978 which is the subject matter of appeal in Civil Appeal No. 1708 of 1978 and the analogous ones. After referring to the earlier judgments of the Court this judgment of the Division Bench also proceeds on the same lines at it was bound to. To a large extent we are saved from the unnecessary botheration of examining the voluminously new materials placed before us in view of the counter filed on behalf of the Haryana Marketing Board in the High Court portions of which are extracted in the judgment. It will be useful to give the whole of the extract from the judgment of the High Court. It runs as follows: "It is well known to every one that the recent floods in Haryana were unprecedented and created havoc in the State Almost one-third of Haryana was submerged under water damaging the standing crops and uprooting the inhabitants making them homeless. The State has to resort to quick measures, for remov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sentiment of the laudable object of the Act of doing whatever is possible to do under it for the amelioration of the conditions and the uplift of the villagers and the agriculturists. Undoubtedly the Act is primarily meant for that purpose and to the extent it is permissible under the law to achieve that object of utilising the money collected by the market fee, it should be done. But if the law does not permit carrying on of the sentiment too far for achieving of all the laudable objects under the Act, then primarily it becomes the duty of the Court to allow the law to have an upper hand over the sentiment and not vice versa. We must not be misunderstood to say that we are against the sentiment expressed in the interests of the agriculturists. Nor are we opposed in the least to the achievement of all the laudable objects envisaged under the Act. Let them all be achieved by all means known to law by meeting the expenses after augmenting the public revenue or by diverting the expenditure from wasteful or unimportant channel to the more important one under the Act. But surely we cannot countenance the achievement of all those objects by utilising a good and substantial portion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is just an impost on his person. It is not so. When the trustee is charged fee for the benefit of the religious institutions and the beneficiaries it is a benefit to the trustee. Similarly, as pointed out in the Mining Act and the factory cases charge of fee from the mine owners in the area or the factory owners in the factory for the purpose of developing and protecting the mines and the factories is a service to the owners. If one were to push the example of a factory beyond the limit of the conception of fee, one could say that the fee charged from the factory owners can be utilised for pushing end augmenting the output of the raw-materials required in the manufacturing process in the factory, it is also a benefit to the factory owner. Is it reasonably possible to travel as wide as that? Neither the Royal Commission nor the National Commission suggested as to how the integrated development of marketing and the agricultural produce is to be financed. They were not concerned with that aspect of the matter. None can have any objection to the carrying out of the integrated development but it must be carried out by legal means raising the finance in a way known to law. The improvem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cretary of Punjab State Agricultural Board filed in the High Court giving rise to Civil Appeal No. 1083/77, which is not a new material in that sense. It was stated in paragraph 6: "It is submitted that respondent No. 3 is duty bound to bring about general improvement of a notified market area, production and betterment of agriculture etc. Under the Act and the answering-respondent is duty bound to approve such expenditure under the Act. It is also submitted that electricity plays a major role in the production and betterment of agriculture and for the general improvement of area. In view of its importance respondent No. 3 sought and respondent No.2 approved the expenditure on the electrification of the villages situate within the jurisdiction of respondent No. 3." In the Writ Petition, respondent No. 2 was the Marketing Board and respondent No. 3 was the concerned Marketing Committee. In the same case in the High Court additional affidavit was filed by Shri Tirath Singh, Chairman of the Punjab Board. It is stated in paragraph 7 that apart from development works in the budget estimates in the year 1975-76, there were other development projects to be taken in hand some of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The figure may be exaggerated but are not quite groundless. We are merely quoting them for the future caution of the authorities concerned. Puri has further pointed out in paragraph 17 of his affidavit that in the Estimated Expenditure in the proposed Budget of the Moga Committee for the years 1976-77 and 1977-78 several lakhs of rupees were shown for insecticides and pesticides apart from other inadmissible expenses. We may again pin-point the difference. If insecticides and pesticides are for use at the place where actually the marketing operations are carried on it would be a justifiable expenditure. But if they are meant to be supplied to the agriculturists for use at their village homes or in their fields surely they cannot be valid expenditure out of the collections of the market fee. Mr. Tarkunde filed an abstract of the statement of income from market fee and licence fee and expenditure incurred therefrom by The Market Committee, Hissar as worked out from Annexure R-I to R-V filed in the High Court. It would be seen from this abstract that in the year 1974-75 the income from market fee was Rs. 24,08,141/- and from licence fee about Rs. 6,000/only. A sum of Rs. 7,89,670/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duct. This illustrates to what extent the concept of fee in lieu of service has been stretched. A sum of Rs. 6,00,000/- and odd was spent for improving the quality of cotton seeds for seeds purposes. In a Gober Gas Plant Rs. 15,55,000/- were invested. This item was sought to be explained before us by Mr. Tarkunde that this expenditure was incurred with the help of the subsidy received from the State and the Central Governments. The scheme of the Gober Gas Plant was launched for the promotion of interest of market area. It is not explained as to how it was connected with the marketing operations in the area and how much was the subsidy and what portion of the amount was spent out of the market fee Income. Similarly in Annexure R-III from the statement of income and expenditure of the Haryana Board for the year 1975-76 it would appear that a sum of Rs. 1,28,70,662/- was spent "on general improvement in M.C. and other notified area and construction of F.A.C.C." Apart from that the other items of expenditure are a sum of Rs. 20,00,000/- in purchase and acquisition of land for new mandies and Rs. 10,00,000/- and odd for purchase of land, construction of building for Board s office and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the writ Petitions to the extent and in the manner indicated above and direct the Market Committees and the State Marketing Boards not to realize market fee at the rate of Rs. 3/- per hundred rupees on the basis of their impugned decisions and actions which have been found to be invalid by us. We leave the parties to bear their own costs throughout. Before we part with these cases we would like to observe that in future if the market fee is sought to be raised beyond the rate of Rs. 2/-per hundred rupees, proper budgets, estimates, balance-sheets showing the balance of the money in hand and in deposit, the estimated income and expenditure, etc. should carefully be prepared in the light of this judgment. It may be, as was submitted before us, that it is not imperative either for the Market Committees or the Board to prepare balance-sheets because their accounts are audited by government auditors but for the purposes of raising the market fee any further, the balancesheets will give a true picture of the position also with the budgets and estimates. Then, and then only there may be a legal justification for raising the rate of the market fee further to a reasonable extent. On ..... X X X X Extracts X X X X X X X X Extracts X X X X
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