TMI Blog1999 (8) TMI 919X X X X Extracts X X X X X X X X Extracts X X X X ..... ition will be treated to be unauthorised. This judgment will have only prospective operation and will not affect past transactions entered into prior to the date of this judgment. - Appeal (civil) 398 of 1977 - - - Dated:- 10-8-1999 - A. S. Anand, S. B. Majmudar, Sujata V. Manohar, K. Venkataswami And V. N. Khare,JJ. JUDGMENT: Leave granted in the Special Leave Petitions. These appeals and writ petitions mainly raise the question regarding the legality of the levy of market fee under the provisions of Bihar Agricultural Produce Markets Act, 1960 (hereinafter referred to as the Market Act for short). The grievance made by the appellants/writ petitioners pertained to the following commodities with which the respective proceedings are concerned. 1.Sugarcane, Sugar and molasses (briefly referred to as Sugar matters) matters) 2. Wheat products Atta, Maida, Suzi, Bran etc.; 3.Vegetable Oil; 4. Rice milling; 5. Milk and milkproducts; 6. Tea. It will, therefore, be appropriate to deal seriatimthe grievances centering round the levy of market fee ontransactions concerning the aforesaid commodities. GRIEVANCES IN CONNECTION WITH MARKET FEE CONCERNING SUGAR MATTERS So far ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Molasses(Control) Act, 1947. 2. In the alternative, whether imposition of market fee under the Market Act by the respective market committees is justified in the absence of any service rendered to the appellant sugar mills under the provisions of the Market Act and consequently the levy of market fee can be said to benot supported by any quid pro quo. RIVAL CONTENTIONS : Learned senior counsel for the appellants vehemently submitted in support of the aforesaid twin contentions thatthe Market Act which was enacted by the Bihar legislatureunder Entries 26 and 27 of the State List read with Entry 28therein had to be read subject to Entry 33 of the ConcurrentList and as the Bihar Legislature itself had enacted the Sugar Act in exercise of its legislative powers under Entry33 of the Concurrent List, there was no occasion left forthe State of Bihar to get satisfied about the need to regulate the production and sale of sugarcane as well asmanufactured items therefrom as per the Market Act. Inshort, the invocation of Section 3 read with Section 4 ofthe Market Act was totally misconceived and uncalled for.It was further contended that once the State of Bihar in-exercise of its power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uyers were not licensed under the Act but in most of thecases the appellant sugar companies were selling levy sugarto the Food Corporation of India and even free sugar wasmostly sold by them to licensed buyers. Same was the case of sale of molasses to the concerned buyers. They, however,rightly conceded that the appellants cannot be said to benot having any locus standi to challenge the market feelevied on their purchase of sugarcane as the charge ofmarket fee would be on them as buyers of sugarcane. On the merits of the contentions raised by learnedsenior counsel for the appellants, learned senior counsel for the respondents submitted that even if the exemption notification under Section 42 of the Act purports to exemptthe appellant sugar companies from whole of Section 15 ofthe Market Act, in substance the exemption is confined toSection 15(2) of the Act as there is already a declaration under Section 4 of the Market Act treating the purchase centres of the appellant sugar companies at the factory gates as well as at other places in the market area assub-market yards. On a conjoint reading of these twonotifications, therefore, it can be seen that exemptionunder Section 42 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at the outset. LOCUS STANDI OF THE APPELLANTS TO MAINTAIN THE SEPROCEEDINGS : It has to be kept in view that as per Section 27 of the Market Act the charge of the market fee is on the buyer of the agricultural produce bought or sold in the market area. The said section reads as under : "Power to levy fees - (1) The Market Committee shalllevy and collect market fees on the agricultural producebought or sold in the market area at the rate of rupee oneper Rs.100 worth of agricultural produce. xxxxx xxxx xxxx (2) The market fee chargeable under sub-section (1)shall be payable by the buyer, in the manner prescribed. (3) The fee chargeable under sub-section (1) shall notbe levied more than once on a notified agricultural producein the same notified Market Area. It is not in dispute between the parties that sugarcane is an agricultural produce as it is grown infields by the cultivators. Both sugarcane and sugar arelisted as Item nos. 1 and 3 in Para XII dealing with miscellaneous items as found in the Schedule to the Market Act enacted as per Section 2(1)(a) of the Act. Section 2(1)(a) of the Act defines agricultural produas under : Agricultural produce means all produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they may nothave to undertake this liability as collecting agents of themarket committee, so far as the market fee is concerned.Still even if partially in case of sale of free sugar tounlicensed buyers they have to be called upon to dischargetheir statutory obligation under Rule 82 (iii), it cannot besaid that they have no locus standi to challenge theimposition of market fee on the transactions of saleeffected by them in connection with sugar and molasses. Thepreliminary objection of learned senior counsel for therespondents against the locus standi of the appellants tomaintain these proceedings is, therefore, over-ruled. Thistakes us to the consideration of the main twin contentionscanvassed by learned senior counsel for the appellants forour consideration. CONTENTION NO. 1 : Applicability ofthe Market Act to appellants transaction of purchase ofsugarcane and sale of sugar and molasses. So far as this contention is concerned, we have tokeep in view the relevant provisions of the Market Act,Sugar Act as well as the Orders under the EssentialCommodities Act. In the first instance, we shall deal withthe transactions of purchase of sugarcane by the sugarfactories functioning in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udedqua sugarcane and the products prepared out of it. So faras the Market Act is concerned, it is necessary to note thatit is an Act to provide for better regulation of buying andselling of agricultural produce and the establishment ofmarkets for agricultural produce in the State of Bihar andfor matters connected therewith. The said Act is enactedessentially to protect the growers of agricultural producein the State who on account of their ignorance, illiteracyand lack of collective bargaining power may get exploited bymiddlemen and economically strong purchasers of theiragricultural produce with the result that the agriculturistsmay not get adequate price for their produce. It is withthat end in view that the Market Act has been enacted. Theconstitutional validity of the Madras Commercial CropsMarkets Act, concerned with the regulation of purchase andsale of commercial crops grown by agriculturists wasconsidered by a Constitution Bench of this Court in the caseof M.C.V.S. Arunachala Nadar Etc. vs. The State of Madras Others [(1959) Supp.(1) SCR 92]. Subba Rao J., speakingfor the Court while upholding the constitutional validity ofthe said Act emphasised the necessity of such ena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produce throughthe same agency but, unlike the rich ryot he is not free tochoose his commission agent, because he generally takesadvances from a particular commission agent on the conditionthat he will hand over his produce to him for sale. Notonly, therefore, he places himself in a position where hecannot dictate and insist on the sale being effected for thehighest price but he loses by being compelled to pay heavyinterest on the advance taken from the commission agent.His relations with middlemen are more akin to those between a creditor and a debtor, than of a selling agent and producer. In almost all cases of the poor ryots, the majorportion of their produce finds its way into the hands of thevillage money-lender and whatever remains is sold to pettytraders who tour the villages and the price at which itchanges hands is governed not so much by the market rates,but by the urgent needs of the ryot which are generallytaken advantage of by the purchaser. The dominating position which the middleman occupies and his methods ofsale and the terms of his dealings have long ago beenrealized. Relying on the aforesaid observations Subba Rao J.,speaking for the Constitution Bench, justifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of List III. We will,therefore, have to see to what extent the Sugarcane Act,which is a latter Act, has carved out a field for itself forprotecting the sugarcane growers resulting in with drawing the same subject matter from the general sweep of the Market Act which covers not only sugarcane but also number of other agricultural produce. In this connection, Section 3 of theMarket Act requires to be noted. It reads as under : 3.Notification of intention of exercising control over purchase, sale, storage and processing of agriculturalproduce in specified area - [(1) Notwithstanding anything to the contrarycontained in any other Act for the time being in force, theState Government may, by notification, declare its intentionof regulating the purchase, sale, storage and processing ofsuch agricultural produce and in such area, as may bespecified in the notification.] (2) A notification under sub-section (1) shall statethat any objection or suggestion which may be received bythe State Government within a period of not less than twomonths to be specified in the notification, shall beconsidered by the State Government. As per the aforesaid provisions, it has to be kept inview by the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the programme for thedevelopment of communications, irrigations, soil analysis and other agricultural facilities relating to sugarcane; (b) to devise ways and means for executing developmentplan in all its essential including improvement and development of communications, cane varieties, supply ofgood quality seeds, fertilisers and manures, plantprotection and prevention and control of diseases and pests; (c) to render all possible help in agricultural extension work of cane; (d) to assist in arrangements for the training ofcultivators in improved methods of sugarcane cultivation;and (e) to perform such other functions pertaining andconducive to the general development of the reserved area asmay be prescribed. Section 12 deals with Appointment of CaneCommissioner. It reads as under :- (1) The State Government may, by notification in the official Gazette,appoint any person to be the Cane Commissioner for the Stateof Bihar and to exercise the powers and perform the dutiesconferred and imposed on the Cane Commissioner by or underthis Act. (2) The State Government may, by notification in theofficial Gazette, appoint such persons as it thinks fit tobe the Additional Cane Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has failed to submit an estimate under sub section(1), he shall draw up an estimate by himself in the prescribed manner and shall publish the same in such manneras may be prescribed with such modifications, if any, as hemay think fit, after consultation with the council concerned. (3) The prescribed authority may, either suo motu oron an application made to it by the occupier of the factory,within thirty days of the publication of the estimate undersub-section (2), revise the estimate, published under thatsub-section and that authority shall cause the estimate so revised to be published in the prescribed manner. Section 28 deals with Conditions precedent to commencement of purchase of cane. It states as under :(1)The occupier of a factory or any person acting on his behalf shall not commence the purchase of cane unless adequate arrangements, as may be prescribed, have been made inrespect of the following matters, namely :- (a) weighment of cane to be purchased; (b) payment of the price of cane purchased; (c) parking of cane-carts;(d) approach roads to the place of weighment; and (e)distribution of requisition slips. (2) Where survey has not been made under section 34,the occ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Recording of correct weight of cane and reads as under :- (1) The occupier of every factory, the owner of every unit, Secretary of everyCo-operative Society and every person in charge of weighmens shall maintain, subject to such limits of erroras is prescribed by the State Government under the law relating to weights and measures, for the time being inforce, a record of the correct weight of cane purchased atthe place of weighment. (2) No cane shall be purchased without being weighed.Section 40 deals with Provisions for approach roadsetc., at the purchasing centres and reads as under :Theoccupier of a factory or a co-operative society purchasing cane at any purchasing centre shall make such provisions forthe following and keep them in such repairs as may beprescribed, namely :- (a) approach road and parking space for animal-driven carts; (b) sheds for animals and cart-drivers; (c) drinking water for persons using the purchasing centre; and (d) drinking water and water-trough for animals. Then follows Chapter V which deals with Payment of price of cane and other matters. Section 42 deals withminimum price of cane supplied to a unit and reads as under:The State Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision made undersubsection (1) or sub-section (2) may, within thirty days ofthe decision, prefer an appeal to the Collector who shall,after giving the parties a reasonable opportunity of beingheard and after such inquiry as he may consider necessary,pass such order, as he thinks fit. (4) An order of the Collector under sub-section (3)and subject to such order, the decision of the prescribedauthority under sub-sections (1) or sub-section (2) shall befinal. Section 48 deals with Payment of commission onpurchase of cane and reads as follows :(1) The StateGovernment may, by notification in the official Gazette,require the occupier of a factory to pay in the prescribedmanner a commission not exceeding fifteen paise per quintal on the purchase of cane made by him or on his behalf andmay, by a like notification exempt the occupier of any new factory to be specified in the notification, from thepayment of such commission for prescribed period.Section 49 imposes Tax on Sugarcane which reads asfollows :(1) The State Government may, by notification inthe official Gazette, impose - (a) a tax not exceeding one rupee per quintal on entry of sugarcane into a local area specified in such no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturing sugar out of the sugarcane produced for themin the reserved area. The relevant provisions of the Actproject a well knit and exhaustive machinery for regulatingthe production, purchase and sale of sugarcane for being supplied as appropriate raw material to the factories manufacturing sugar and molasses out of them. We may alsoturn to Rule 22 of the 1978 Rules, made under the Bihar Sugarcane Act, which provides that the factory shall not commence the purchase of cane at any purchasing centreunless (a) all the weighbridges to be used for weighment ofcane have duly been checked and certified as workable by the competent authority under the law relating to weights andmeasures; (b) appropriate arrangements to the satisfaction ofthe Collector have been made for arranging funds for making payment of the price of cane; (c) Cane Officer of the area concerned has certified that suitable arrangements for parking of cane carts and approach roads, as specified in rule 30 and for distribution of requisition slips and identification cards have beenmade; and (d) adequate arrangements for weighment, adequatestaff, sufficient number of weighbridges and adequate meansof transport f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural produce, namely, sugarcane. It has also tobe kept in view that the very heart of the Market Act isSection 15 of the Act which reads as under : [15. Sale ofagricultural produce - (1) No agricultural produce specifiedin notification under sub-section (1) of section 4, shall bemade bought or sold by any person at any place within the market area other than the relevant principal market yard orsub-market yard or yards established therein, except suchquantity as may on this behalf be prescribed for retail saleor personal consumption. (2) The sale and purchase of such agricultural producein such areas shall not withstanding anything contained inany law be made by means of open auction or tender systemexcept in cases of such class or description of produce asmay be exempted by the Board.] It is this section which enables the market committee concerned to monitor and regulate the sale and purchase ofthe agricultural commodity which is covered by theprotective umbrella of the Act. Once such an agricultural produce is brought for sale in the market yard or sub-market yard, the sale is to be effected by auction or by invitingtenders. Such a scheme is in direct conflict with thescheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ionof market yard or sub-market yards as per Section 5 would remain an empty formality or would represent an emptyeggshell with its contents taken out. The entire machineryof the Market Act would be rendered redundant quaagricultural produce to which Section 15 does not apply.Section 15 is the heart and soul of the Act. Due to its in applicability to a given agricultural produce there wouldremain no occasion for the market committee concerned toexercise its regulatory functions for such a produce. Thisis the precise result which has ensued regarding regulation of purchase and sale of sugarcane by the market committeeconcerned in view of the combined operation of the relevant provisions of the Sugarcane Act and the exemption notification under Section 42 of the Market Act excludingthe application of Section 15 of the Market Act to the saleand purchase transactions of sugarcane in the market area.It is not possible to agree with learned senior counsel forthe respondents that notification under Section 42 of theAct in substance excludes only the applicability of Section15(2). On the express wordings of the said notification itis not possible to countenance this contention. Even if dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of agricultural produce-sugarcane are concerned, it is of no avail to contend as submitted by learned counsel for the respondents that for avoiding such conflicts, Section 15 isdispensed with by the State in exercise of its power underSection 42 of the Market Act, whether such an exemption canbe granted by the State under Section 42 or not is not arelevant consideration for deciding the moot questionwhether the statutory scheme of the Market Act canharmoniously co-exist with the statutory scheme of theSugarcane Act as enacted by the very same legislature. Itis possible to visualise that the State Authorities may notexercise powers under Section 42 of the Act. In such aneventuality, the Sugarcane Act would not countenance apublic auction of sugarcane to be supplied by cane grower tothe earmarked factory for which sugarcane is grown in thereserved area. On the other hand, the Market Act wouldrequire the very same sugarcane to be brought to the marketyard for being sold at the public auction to the highestbidder who may not be the sugar factory itself. Thus whatis reserved for the sugar factory by way of raw material bythe Sugarcane Act would get de-reserved by the sweep ofSection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price of sugarcane fixed under Clause 3, or the price agreedto between the producer or his agent and the sugarcanegrower or the sugarcane growers co-operative society.There is a provision for additional price to be paid to thesugarcane grower by the purchaser of sugarcane as laid downin Clause 5. Clause 5-A deals with additional price forsugarcane purchased on or after 1st October, 1974 by theproducer of sugar. Clause 6 deals with power of the CentralGovernment by Order to regulate distribution and movement ofsugarcane. As per this clause the Central Government can,by order, direct the sugarcane growers to supply theearmarked quantity of sugarcane grown by them in thereserved area fixed for sugar factories to ensure continuoussupply of sugarcane as raw material to such factories. Thisprovision is parallel to the statutory provisions enacted bythe Bihar Legislature in the Sugarcane Act referred toearlier by us. Clause 9 refers to the power of the CentralGovernment or any person authorised in this behalf to callfor information from various sources as enacted therein.Clause 9-A deals with the power of entry, search and seizureof premises which obviously has to be exercised forfructify ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Commodities Act, 1955, and theSugarcane (Control) Order made thereunder? While answering point no.3 in affirmative, the learned Judge at para 39 of the report, made the following pertinent observations : It appears to us that the Sugarcane(Control) Order regulates every aspect of marketing of sugarcane and its provisions are irreconcilable with the provisions relating to the marketing under the Act. Forinstance, the place of delivery, the price, the manner ofits payments are all fixed by the statutory order. The sameaspects of marketing are sought to be regulated by the Act.The two sets of provisions collide. S.6 of the EssentialCommodities Act gives overriding effect to the orders madeunder S.3 of that Act as against any other Law. The smallportion of the sugarcane grown by the grower the sale ofwhich is left regulated under the statutory Order is again amatter - and part - of the policy of the regulation itself. Accordingly, point no.3 in that case was answered inaffirmative apart from the question of repugnancy whichstrictly did not arise for their consideration. Theaforesaid reasoning of the learned Judges of the KarnatakaHigh Court clearly indicates that the entire fiel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the operation of Section 15 of the Act, which notedearlier, is the soul of the Act. It is easy to visualize that if transactions concerning an agricultural produceare excluded from the operation of Section 15 of the Act,the entire machinery available to the market committee to regulate such transactions would get out of picture and there would be no room for the market committee to supply any infrastructural facility or other benefits to the sellerof such agricultural produce on the one hand and the purchaser thereof on the other. Before parting with the discussion on this point, it is necessary to note onesubmission of learned senior counsel Shri Rakesh Dwivedi forthe respondents - State of Bihar. He submitted that thelegal proposition regarding special Act excluding theoperation of general Act can be invoked only when the general Act irreconciliably derogates or conflicts with thespecial Act while dealing with the same subject matter andcannot be harmonised. He submitted that the broad objectiveof the two enactments is different. The Sugarcane Actpurports to regulate production, supply and distribution ofsugarcane whereas the Market Act lays emphasis on regulating the market. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct can both be treated asdealing with socio-economic balancing of interests ofgrowers of agricultural produce and the purchasers thereof,but if it is impossible to reconcile them, the statutelaying down the general scheme of operation has to make roomfor a special statute for which a separate and exclusivefield is carved out by the legislature itself. Relianceplaced by Shri Dwivedi, senior counsel for the State of Bihar, on a decision of the two judge Bench of this Court inthe case of S. Satyapal Reddy and Others vs. Govt. ofA.P. and Others (1994(4) SCC 391) for submitting thatminimum qualifications prescribed by the rules framed under the Central Act could co-exist with higher qualificationsprescribed by the State rules also cannot be of realassistance to him for the simple reason that if minimumprices were fixed by the Sugarcane (Control) Order and theSugarcane Act had stopped short by providing only minimumprice and had not regulated the fixation of even highercontractual price by providing for a machinery for the sameand had not fixed and regulated the production, control,distribution, sale and purchase of sugarcane, it could havebeen urged by counsel for the respondents with s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e available. The entire machineryprovisions enacted for the purpose would fulcrum round thevibrant operation of Section 15. Once Section 15 isexcluded qua any agricultural produce the entire machineryof the Market Act would come to a grinding halt so far assuch an excluded agricultural produce is concerned.Sugarcane is one such produce as we have already seenearlier. Consequently, qua such a produce the general sweep of the Market Act will be a total non-starter. Logically,there fore, there would remain no occasion for the marketcommittee to justify levy of market fee under Section 27 ofthe Act read with Section 30 on these transactions. On aconjoint reading of Sections 27 and 30 of the Market Act, itbecomes clear that a market committee which has to effectively control and regulate the sale and purchase ofagricultural produce brought for sale and purchase in themarket area as enjoined by Section 15 can effectivelydischarge its functions and spend its funds for supplyingthe necessary infrastructure for this purpose as laid down by Section 30. At this stage, we may also refer to anadditional submission of the Addl. Solicitor General ofIndia Shri R.N. Trivedi in support of the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cence issuedin this behalf. Clause 4 thereof deals with permissibledirections to be issued by the Central Government to theeffect that no producer shall sell or agree to sell orotherwise dispose of or deliver or agree to deliver any kindof sugar or remove any kind of sugar from the bonded godowns of the factory in which it is produced. Clause 5 enablesthe Central Government to issue directions to producers anddealers of sugar regarding the production, maintenance ofstock, storage, sale grading, packing, marking, weighment,disposal, delivery and distribution of (any kind of sugar).Clause 6 deals with the power of the Central Government toregulate movement of sugar. Clause 7 deals with the powerto regulate quality of sugar. Clause 10 deals with thepower of the Central Government to call for requisite information from different sources enacted therein. Clause11 deals with the power of any officer authorised by theCentral Government to inspection, entry, search, sampling, seizure, etc. as enacted therein. The Sugar (Packing andMarking) Order, 1970 provides statutory directions as to the quality of sugar to be packed in each bag. The Sugar(Restriction on Movement) Order, 1970 deals with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offree sugar would, therefore, be available and the capacityof market committee to regulate these transactions is notaffected by these Orders and to that extent there is norepugnancy between them and the Market Act. It is notpossible to agree with this submission for the simple reasonthat the provisions of Sugar (Control) Orders have not to be read in isolation but will have to be read with the specialprovisions controlling the production, sale and purchase ofsugarcane out of which sugar is manufactured by the verysame sugar factories functioning in the market area. Theyare all integrated transactions and are subject to a wellknit statutory scheme of control of these commodities. It is obvious that regulation of sugarcane supply and distribution is not in isolation. The main purpose of suchregulation is for ensuring better quality and adequatequantity of sugar manufactured out of sugarcane supplied by sugarcane growers to earmarked sugar factories which manufacture sugar by crushing sugarcane in their factories by resorting to vacuum pan manufacturing process.Therefore, it is the ultimate sale of the manufactured article, namely, sugar by way of levy sugar or in free market that is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng tostocks of molasses as the Controller may, by order from time to time, direct. Section 4 of the Act provides that No molasses produced in the State nor any molasses held by the stockists in this State, shall, without the permission of the Controller, be moved by rail, road or river from any placein the State to any other place therein. As per Section 5 of the Act, a sugar factory cannot even enter into an agreement or contract with any person other than the Government or person licensed by the controller for supply of molasses. All molasses have to besold by sugar factories in accordance with the directions of the Molasses Controller issued under Section 6 of the Molasses Act. The price of molasses is regulated by Section 8 of the Act. Section 8A provides that the State Government may impose administrative charges on the sale of released molasses for meeting the cost of establishment for supervision and control over such release. It is thus clear that the sale of molasses is also regulated by the StateGovernment and the cost of such regulation is recoveredunder the Molasses Act in the form of administrativecharges. Section 8C requires every owner occupier andmanager of suga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n FormM.F.6. Rule 11 provides that molasses cannot be moved fromthe premises of any sugar factory except under a movement order in Form M.F.7 issued by the Controller as provided inthe Act and Rules. The aforesaid provisions leave no roomfor doubt that the sale and purchase of molasses which would be an agricultural produce as defined by Section 2(1)(a) ofthe Market Act being a by-product resulting from manufacture of sugar by utilising the basic agricultural produce,namely, sugarcane are wholly controlled by the Molasses Control Act enacted by the very same legislature which hasenacted the Market Act. It is easy to visualise that thevery same legislature which enacted both these provisionswas pressed to be alive to the need of having specialprovisions for regulating the sale and purchase of molassesand that by itself would exclude the need to get thesetransactions generally controlled and regulated by the sweepof the Market Act as per Section 3 of the said Act. That is precisely the reason for even its delegate, the State of Bihar in its wisdom to exclude the applicability of Section 15 of the Market Act, so far as the sale transactions ofmolasses by the sugar factories operating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vied under the Market Act is a fee and not a tax.The Market Act in so far as it enacts Section 27 levyingmarket fee is referable to Entry 66 of the State List readwith Entry 47 of the Concurrent List. Both of them dealwith topics of legislation pertaining to fees in respect ofthe matters enumerated in the respective lists. In the case of Kewal Krishan Puri and Anr. vs. State of Punjab andAnr. etc. etc. (1980 (1) SCC 416), a Constitution Benchof this Court, while upholding the levy of market fee underthe Punjab Agricultural Produce Markets Act, 1961, has madethe following pertinent observations in paragraph 23 of thereport. Untwalia J., speaking for the Court observed :From a conspectus of the various authorities of this Courtwe deduce the following principles for satisfying the testsfor a valid levy of market fees on the agricultural producebought or sold by licensees in a notified market area : (1) That the amount of fee realised must be earmarkedfor rendering services to the licensees in the notifiedmarket area and a good and substantial portion of it must beshown to be expended for this purpose. (2) That the services rendered to the licensees mustbe in relation to the transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fee on such transactions. It was vehemently contended by learned senior counsel for the respondents that various types of infrastructural facilitiesare being made available to sugar factories who arepurchasing sugarcane in the market area and sellingmanufactured sugar and molasses in the very same market area. The following are the various facilities and service shighlighted in this connection :1. Link road facilities bywhich market committees were to spend monies for connectingvillages in the market area with the main roads forfacilitating the movement of agricultural produce includingthe sugarcane from the farms to the purchase centres of the factories. 2. Spread of information regarding prices of agricultural produce for information of growers ofsugarcane. 3. Providing mediation facility to enable the growersof sugarcane to get higher price for sugarcane as comparedto the minimum prices fixed under the control orders. 4. Supervision of weighment of sugarcane. 5. Licensing of weighing inspectors. 6. Providing for drinking facility and park. 7. Parking facilities at the purchase centres. Shri Trivedi, Addl.Solicitor General, in his turn,tried to highlight the concept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... theMarket Act, it must be held that before any charge of marketfee can settle regarding any purchase and sale transactionsconcerning the agricultural produce, such agriculturalproduce must have been required to be sold or purchased atthe relevant principal market yard or sub-market yards. Itis obvious that principal market yard or submarket yardswould be situated within the market area, but if any agricultural produce is exempted from the provisions of Section 15(1) of the Act as in the case of sugarcane, sugarand molasses there would remain no occasion for transactionsof sale and purchase of these commodities to be carried on only in the principal market yard or sub-market yards andnot elsewhere in any other part of market area. It is onlythose agricultural produce which are required to be boughtand sold in the relevant principal market yard or sub-marketyards situated within the market area that attract charge ofSection 27 of the Act. Once this charge is attracted, the further question whether it is backed by any quid pro quowould survive for consideration. On the facts of thepresent case, Section 15 as a whole is out of picture for controlling purchase and sale of sugarcane, su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants and the writ petitioners in this sugar group of matters. It is obvious that during the pendency of these proceedings no interim relief was given to the appellantsand the writ petitioners. Therefore, they must have paidthe market fee on the concerned transaction all these years. In the common course of events, they would have passed on the burden of market fee on purchasers and the ultimate consumers of sugar and molasses produced by the sugar factories by utilising sugarcane as raw material. Shri Shanti Bhushan, learned senior counsel for the appellants,in this connection, submitted that accepting the principleof unjust enrichment we may reserve liberty to the appellants to show before the authorities whether they havein fact passed on the burden of impugned market fee at therelevant time and if they could show to the satisfaction ofthe authorities that in fact they have not passed on the burden then they may be treated to be entitled to get refund of all the appropriate amounts of market fee not passed on.In our view it is not possible to accept this contention asyears have rolled by since the impugned market fees havebeen levied by the different market committees in the Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be applicable inconnection with the purchase of sugarcane by the sugarfactories as well as the sale of manufactured sugar and molasses by these factories functioning in the areas of market committees concerned and whose transactions are governed by the provisions of the Sugarcane (Control) Order,1966 as well as the Sugarcane Act of 1981 and also by the relevant provisions of the Sugar Orders and the provisions of Molasses Control Act. Any other transactions of purchase and sale, in principal market yard or sub-market yards, of sugarcane, sugar or molasses by any other licensed dealers not governed by the aforesaid provisions will not be covered by the ratio of this judgment. 2. WHEAT PRODUCTS - ATTA, MAIDA, SUZI, BRAN ETC. Inthis group of matters, six flour mills functioning in marketareas within the jurisdiction of market committees concerned have brought in challenge the applicability of the Market Act to the transactions of purchase of wheat by these mills and manufacture out of the same different wheat products like atta, maida, suzi, bran, etc. The High Court of judicature at Patna repelled their contentions against the applicability of the Market Act. On grant of special l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in any other provision of this Act, by notified order,provide for regulating the supply and distribution thereofand trade and commerce therein. It is obvious that unless the Central Government inexercise of its statutory power under Section 18Gpromulgates any statutory order covering this field, itcannot be said that mere existence of a statutory provisionfor entrustment of such power by itself would result intoregulation of purchase and sale of flour even if it is ascheduled industry. Shri Ranjit Kumar fairly stated that nosuch order has been promulgated by the Central Governmentfor regulating the purchase and sale of flour in the marketarea. According to him, however, the mere existence of sucha statutory provision in the Act enabling the CentralGovernment to issue such orders would be sufficient tooccupy the filed contemplated by this provision. In supportof this contention, he invited our attention to a decisionof this Court in the case of The Hingir-Rampur Coal Co.,Ltd. and Others vs. The State of Orissa and Others (1961(2) SCR 537). At page 558 of the report Gajendragadkar J.,speaking for the Court, made the following pertinentobservations : .Entry 54 in List I dealing wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . and Others (supra) wherein one of us,Sujata V. Manohar, J was a member. It has rightlydistinguished the ratio of the Constitution Bench decisionin the case of The Hingir-Rampur Coal Co., Ltd. and Others(supra) and taken the view that merely because an industryis controlled by a declaration under Section 2 of the I.D.R.Act enacted by Entry 52 of the Union List, the StateLegislature would not be denied of its powers to regulatethe products of such an industry by exercise of itslegislative powers under Entry 24 of the State List. In that case the question was whether U.P. Sheera Niyantran Adhiniyam, 1964 could be said to be repugnant to theMolasses Control Order issued by the Central Government under Section 18-G of the I.D.R. Act imposing restrictionson the sale of molasses and fixing the maximum price ofmolasses. Answering the question in negative, it was heldthat the term industry in Entry 24 would not take withinits ambit trade and commerce or production, supply anddistribution of goods which are within the province ofEntries 26 and 27 of List II. Similarly, Entry 52 in List Iwhich deals with industry also would not cover trade andcommerce in, or production, supply and distribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uce as defined bySection 2(1), as already noted earlier, would include allagricultural produce whether processed, non-processed ormanufactured out of any primary agricultural produce. Wheatis a produce of agriculture, therefore, any productresulting after processing such basic raw material or whichresults after process of manufacture is carried on qua suchbasic raw material would remain agricultural produce. ShriRanjit Kumar fairly stated that he has not challenged thevires of Section 2 (1)(a) but in his submission items 14 to16 as found in the Schedule to the Act under the captionCereals are wrongly included as agricultural produce asthey are not produce of agriculture. Moment the artificialdefinition of agricultural produce as aforesaid holds thefield, as a logical corollary these three disputed itemswould squarely get covered by the sweep of the termagricultural produce and hence their inclusion in theschedule enacted under Section 2(1)(a) as types of cerealscannot be found fault with. These were the only contentionscanvassed by Shri Ranjit Kumar in support of his appeals.As they fail the inevitable result is that all the civilappeals would be liable to be dismissed. 3. VEGETA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied by the Central Act and if the StateAct like the Market Act seeks to encroach upon the saidfield, it would become repugnant to the Central Act. Aclose look at the relevant provisions of the said Act showsthat it does not seek to cover the aforesaid field.Sub-section (1) of Section 6 of the said Act reads as follows :Any owner of an existing rice mill or of a ricemill in respect of which a permit has been granted undersection 5 may make an application to the licensing officerfor the grant of a licence for carrying on rice-milling operation in that rice mill. Section 8 deals withrestrictions statutorily imposed on rice mills. Section 9empowers the licensing officer or any person authorised bythe Central Government to inspect the working of the ricemill. The aforesaid relevant provisions of the Act leavesno room for doubt that the working of the rice milling industries was sought to be regulated by the said Act and ithas nothing to do with the regulation of purchase and saleof products of such mills. It was then submitted that theappellant rice mills import paddy from other Stateterritories which are outside the notified market area falling under the Market Act and such imported pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st be shifted to themarket yard. In this connection, our attention was invited to the notice (page 156 of the paper book) as a specimen notice. In the said notice addressed to Janta Rice Flour Mills issued by the advocate acting on behalf of the Secretary, Agricultural Produce Market Committee, Chakulia,in the last but one paragraph, the addressee was requested to shift the establishment of business in the main marketyard at Dighi of the Agricultural Produce Market Committee,Chakulia within 7 days. It was submitted that this part ofthe direction is totally without jurisdiction as no market committee can compel the shifting of the business premisesof the rice milling industries to any particular market yardas Section 15 of the Act only requires the sale and purchase transactions regarding the agricultural produce to becarried on in the market yard or sub-market yards. To that extent, learned senior counsel for the appellant is right.The statutory mandate of Section 15 does not go beyond the regulation of transactions regarding purchase and sale of agricultural produce and that can be required to be effectedonly at the relevant principal market yard or sub-marketyard or yards. None ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these places in the market areas. The appellant contended in the Writ Petition before the High Court that the direction of the marketing authorities requiring the appellant to take licences under the MarketAct was clearly ultra vires and illegal for the simple reason that the products sold by it within the market areawere not agricultural produce at all. Therefore, they werenot governed by the sweep of the Act. The High Court in the impugned judgment negated this contention and held that boththese articles sold in packed tins were in substance milk products and, therefore, agricultural produce as definedby Section 2(1)(a). Learned counsel appearing for theappellant vehemently submitted that before the aforesaid twoproducts can be subjected to the regulatory procedure of theMarket Act, it must be shown by the respondents that theyare agricultural produce. He invited our attention to Section 3 of the Act and submitted that the very first step of the applicability of the Act is the declaration ofintention by the State Government for regulating thepurchase, sale, storage and processing of agricultural produce as mentioned in the notification. That the saidterm agricultural produce as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs to milk except liquid milk. Byno stretch of imagination, tinned baby food containingvarious ingredients which may include some milk fats orproteins though in powder form can be said to be milk powdersimpliciter or whole milk not in liquid form. It is alsopertinent to note that there is no item of milk products inthe Schedule to the Act under the caption "Animal HusbandryProducts". In this connection, it is profitable tocontradistinguish this entry in the Schedule with items14,15 and 16 under the caption "Cereals" in the very sameSchedule. In the listed items under the caption "Cereals",we find "Wheat" separately mentioned at item no.3 as compared to Wheat Atta, Suzi and Maida separately mentionedat items 14,15 and 16. This shows that basic agricultural produce - "wheat" is treated as a separate agricultural produce as compared to its own products manufactured out ofwheat, namely, atta, suzi and maida. Those products of theconcerned basic agricultural produce are separatelymentioned as "agricultural produce" in the Schedule so faras "cereals" are concerned. But similar is not the schemein connection with milk. Milk products like baby foods arenot separately mentioned. Under the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to take any licence under that Act. It is not thecase of the appellant that any market fee was required to be charged from him by the market committee. The only grievance made was that the appellant was required to takelicence under the Market Act. Hence the question of refund of any market fee would not survive for consideration in thepresent case. This appeal will have to be allowed and theWrit Petition filed by the appellant in the High Court also consequently will have to be allowed by quashing the impugned notice calling upon the appellant to take licencesunder the Market Act. 6. TEA MATTERS In the appeal filed by M/s. LiptonTea (India) Ltd., the appellant company has brought inchallenge the order of the High Court of judicature at Patnain Writ Petition No.1027 of 1977 which was disposed of alongwith other cognate matters by a common judgment. The appellant had contended before the High Court that the Market Act cannot apply to the transaction of manufacturedblended tea sold in packed tins and packets by it in theState of Bihar, consisting of areas of different market committees. According to the appellant, the object of theMarket Act was to provide for better regulation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons. Accordingly, the Writ Petition was dismissed. Hence this appeal by special leave. The learned senior counsel for the appellant Shri Shanti Bhushan vehemently submitted that the very purpose of the Market Act is not toregulate the sale of tea manufactured by big tea manufacturing companies like the appellant whose factories are situated outside the State of Bihar. They purchase tea leaves in auction under the Tea Act held at different centres outside the State of Bihar and manufacture afterproper blending tea by packing it in suitable packing shaving labels showing different qualities of tea like green label tea, red label tea etc. That because the appellantimports manufactured tea only for the purpose of sale in Bihar markets, it cannot be said that the machinery of the Market Act which is essentially meant to regulate the sale and purchase of agricultural produce, gets attracted. That the Market Act is, in substance, meant to cover agricultural produce which are first grown in the market area and then sold within the same area. It was also contended that teawas not one of the scheduled items earlier covered by theAct enacted as early as in 1960. That only after 16 yearsin 197 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produceraw material taking place within the market area arerequired to be regulated by the Act so that illiterate andignorant agriculturists who would, otherwise, suffer at thehands of middlemen and may not get adequate price for theirproduct and due compensation for the toil undertaken by themin producing these agricultural commodities, may getadequate return for their products. The benevolentprovisions of the regulatory scheme of the Act are essentialto protect the agriculturists from exploitation ofmiddlemen. In this connection, our attention was drawn tothe salient observations highlighting the basic purpose forenactment of such Market Acts as laid down by theConstitution Bench of this Court in M.C.V.S. ArunachalaNadar case (supra). Shri Shanti Bhushan submitted that thelarge scale manufacturers like Lipton Tea (India) Ltd. whomanufacture tea outside the State in their sophisticatedfactories having latest machinery are not illiterateagriculturist producers of agriculture goods and commoditiesin their fields and do not require protection under the Act.That as these salient features of the Act are not kept inview by the State Authorities while inserting entry of teain the Schedul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turing theblended tea may be outside the State of Bihar, the momentthe blended tea in packed form is sold in the State of Biharin the market areas concerned, it cannot be said that theprovisions of the Market Act would not apply to such saletransactions. On a conjoint reading of Section 2(1)(a) andthe Schedule under Miscellaneous item XII sub-item 30,therefore, it has to be held that the Market Act wouldsquarely get attracted to regulate the sale of such produceof tea by the appellant in the Bihar markets. So far as theTea Act is concerned, it is submitted that it only regulatesthe sale of plucked tea from the tea gardens and providesmachinery for sale by auction of such tea at the relevantcentres and even in such auction when the appellantpurchases these roasted tea leaves, it cannot be said thatthe Tea Act would cover any further transactions ofmanufactured tea out of the purchased tea leaves by auctionpurchasers like the appellant at its factories situatedoutside the Bihar State. That auction purchased tea leavesare processed by the appellant and blending work is donethereafter. That what is relevant for the applicability ofthe Market Act is the fact that this manufactured tea p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntention does not appear to be well sustained.Section 2(1)(a) of the Market Act, as seen earlier, includesin the definition of agricultural produce not only theprimary produce grown in the field but also covers allprocessed or non-processed, manufactured or non-manufacturedagricultural produce as specified in the Schedule. In thelight of the aforesaid wide sweep of this definition, itcannot be said that tea leaves which are produced in teagardens being primary agricultural produce would cease to beagricultural produce once they got processed. After pluckedtea leaves are processed by roasting them and then bysubjecting them to further process of blending andultimately packing them in suitable packets they stillremain all the same agricultural produce so manufactured outof the basic agricultural raw material "tea leaves". It isalso not in dispute that Tea (leaf and dust) is a Scheduleditem. Once that is so, sale of manufactured tea in packedcondition within the market area would squarely attract thecharge under Section 27 of the Act which, as noted earlier,is widely worded. The moment the agricultural produce asdefined by Section 2(1)(a), is bought or sold in the marketarea, Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r market committee, provided the transactions ofsale take place within the limits of that market area. Itwas also held that, on the other hand, there was noprovision in the Act or the Rules to limit the operation ofthe law in a particular market area only in respect of theagricultural produce produced in that area. So far asContention no.23 was concerned, approving the Patna view itwas held that in the U.P. Act even traders under certaincircumstances had been made liable to pay such fee.Similarly, the argument that the market fee can be chargedonly on those transactions in which the seller is theproducer of agricultural produce and not on any othertransaction, was also found devoid of any substance by theConstitution Bench. In view of the aforesaid pronouncementof the Constitution Bench, therefore, it must be held thateven if an agricultural produce initially is not grown inthe market area and it is brought in manufactured formwithin the market area for sale, such sale transaction inconnection with such a produce would be covered by the sweepof the Market Act. The same view was taken by two laterjudgments of this Court. In the case of RameshchandraKachardas Porwal and Others vs. St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Rathi Khandsari Udyog and Others vs.State of Uttar Pradesh and Others (1985 (2) SCC 485) whereinFazal Ali J., speaking for majority, relying upon theearlier decisions of this Court including the ConstitutionBench judgment in the case of Ram Chandra Kailash Kumar andCompany and Others (supra), considered the very samecontention as canvassed by learned senior counsel ShriShanti Bhushan, namely, that the Market Act was meant toprotect the agriculturists who produce basic agriculturalproduce and was not meant to protect big producers havingfactories wherein they process the raw agricultural produceand manufacture marketable commodity out of it. Repellingsuch narrow view of the regulatory provisions of the MarketAct, at para 35 of the report, the following pertinentobservations were made : "The Legislature, it is alsoargued, "could not have intended" to cover the produceturned out by producers like the petitioners. While this is one of the objects of the Act, it is notthe sole or only object of the Act. The Act has many moreobjects and a much wider perspective such as development ofnew market areas, efficient collection of data, andprocessing of arrivals in Mandis with a view t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... searchand maintaining or assisting in the maintenance ofdemonstration farms and manufacturing stations; (e)assisting in the control of insects and other pests anddiseases affecting tea; (f) regulating the sale and exportof tea; (g) training in tea testing and fixing gradestandards of tea; (h) increasing the consumption in Indiaand elsewhere of tea and carrying on propaganda for thatpurpose; (i) registering and licensing of manufacturers,brokers, tea waste dealers and persons engaged in thebusiness of blending tea; (j) improving the marketing oftea in India and elsewhere; (k) Xxxx xxx xxxx" Section 12 deals with method of control of extensionof tea cultivation. Section 14 deals with grant ofpermission to plant tea. Section 15 provides for grant ofpermission to plant tea in special circumstances. Owners oftea estate can establish tea nurseries as provided bySection 16. Chapter IIIA deals with management or controlof tea undertakings or tea units by the Central Governmentin certain circumstances. Section 16E provides for power ofthe Central Government to take over tea undertaking or teaunit without investigation under certain circumstances.Chapter IV deals with control over the expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rates by the appellant at its factoriesoutside the Bihar State and then markets it throughout Indiaat fixed prices, local taxes varying from place to place.The aforesaid provisions of the Tea Act which are enacted bythe Union Parliament under Entry 52 of List I read withEntry 33 of List III deal with the control of tea industryin public interest. The basic feature of the Tea Act is toprovide for control of extension of tea cultivation in theareas where tea leaves are grown in tea gardens. However,it is pertinent to note that the said Act does not providefor regulating the sale of purchased roasted tea leavesafter they are subjected to manufacturing process ofblending and are brought in the market for sale as packedtea. The place where such packed tea is to be sold and theprice at which it has to be sold are matters on which theTea Act, 1953 does not contain any statutory provisions.However, Shri Shanti Bhushan, learned senior counsel for theappellant, strongly relied upon Section 30 of the Act. Itis true, as seen earlier, that the said section found inChapter VI deals with control by the Central Government andlays down the power of the Central Government regardingcontrol, price an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said decision at page 427 of the report as under :"When the question is whether a Provincial legislation isrepugnant to an existing Indian law, the onus of showing itsrepugnancy and the extent to which it is repugnant should beon the party attacking its validity. There ought to be apresumption in favour of its validity, and every effortshould be made to reconcile them and construe both so as toavoid their being repugnant to each other; and care shouldbe taken to see whether the two do not really operate indifferent fields without encroachment. Further, repugnancymust exist in fact, and not depend merely on a possibility.Their Lordships can discover no adequate grounds for holdingthat there exists repugnancy between the two laws indistricts of the Province of Ontario where the prohibitionsof the Canadian Act are not and may never be in force:(Attorney-General for Ontario v. Attorney-General for theDominion)" Thereafter the following pertinent observations weremade by Bhagwati, J., speaking for the Constitution Bench :"In the instant case, there is no question of anyinconsistency in the actual terms of the Acts enacted byParliament and the impugned Act. The only questions thataris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its concurrent legislativepower under Entry 33 of List III for effectively dealingwith these matters. This is precisely what has been done bythe State Legislature by enacting the Market Act. Theinsertion of item pertaining to Tea (leaf and dust) in theSchedule, therefore, cannot be said to be an unauthorisedexercise on the part of the delegate of the StateLegislature, namely, the State Government which hasexercised its power under Section 39 of the Market Act.Before parting with the discussion on the Tea Act, it isalso necessary to keep in view the history of tea industryin India. It is apparent that the Tea Committee 1934,Indian Tea Control Act, 1938 and Central Tea Board Act, 1949had been made with a view to control export of tea and teacultivation. The Tea Act, 1953 was enacted to provide fortaking several functions of licensing and vesting it in theBoard and to exercise (1) control over tea cultivation and(2) control over the export of tea and tea seeds. Thepreamble of the Act states that it is intended to providefor the control by the Union of the tea industry, includingthe control, in pursuance of the International Agreement, ofthe cultivation of tea and export of tea. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ets forselling packed tea. The requirement of packing andmarketing is again not contemplated by the Market Act, 1960.Hence, it is difficult to appreciate how this Control Orderhas occupied the field of regulation of sale and purchase ofpacked tea in market areas. The next Order on which Shri Shanti Bhushan, learned senior counsel for the appellant,strongly relied was the Tea (Marketing) Control Order, 1984.The said Order was promulgated by the Central Government inexercise of its power under subsections (3) and (5) ofSection 30 of the Tea Act, 1953. It pertains to licensingof the distributors and exporters. A mere look at the saidOrder shows that it does not provide for any regulation ofsale and purchase of tea in the markets in different Statesin India. Clause 3 requires registration of manufacturer oftea and such manufacturer has to submit monthly return underClause 5 in Form C. Clauses 6 and 7 pertain to Organiser ofTea Auction and Broker in Tea Auction. Clause 14 declaresthat the licence is personal and non-transferable. Thesepersons are to maintain records as per Clause 16. Clause 17directs the manufacturer to sell not less than 75% or suchhigher percentage, as specified by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rement to carryon the business at any particular place/market. TheseOrders do not concern themselves with establishment ofmarket or fixing place of business. The aforesaid Orders onwhich reliance was placed by learned senior counsel ShriShanti Bhushan indicate that the Central Government in itswisdom did not think it fit to issue any Order under Section30, sub-section (1), clauses (a) (b) and, therefore, keptthe field wide open in connection with the topics covered bythe said provisions of Section 30 for the State Governmentsto exercise their legislative powers and enact suitablelegislations under Entry 33 of the Concurrent List III ofthe Seventh Schedule of the Constitution. Our attention wasthen invited by Shri Shanti Bhushan, learned senior counselfor the appellant, to the Tea Waste (Control) Order, 1959.Even this order is issued by the Central Government undersub-sections (3) and (5) of Section 30 The Tea Waste(Control) Order, 1959 applies only to tea waste as definedin Clause 2 (f). Thereunder a person selling/offering forsale/buying/holding any stock in tea waste is required tohave licence. (Clauses 3,4,5, and 6). Clause 9 providesthat licence is not transferable. Clause 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thecontention of learned senior counsel Shri Shanti Bhushanthat once the retail prices are fixed by the appellant thereis no necessity of auctioning this tea in packed conditionas per Section 15 sub-section 2 of the Market Act. It hasto be kept in view that under the relevant Orders issued bythe Central Government under Section 30 of the Tea Act, asnoted earlier, the purchasers of tea have also to belicensed. Such licensed purchasers can bid at the auctionsto be held as per Section 15, sub-section (2) of the MarketAct for purchasing such packed tea. At that stage, there isno inconsistency or conflict between the earlier publicauction held under the relevant statutory Orders issuedunder Section 30 of the Tea Act concerning roasted tealeaves and the auction of packed and processed tea by theappellant selling such commodities in the market areasthrough their stockists to wholesale dealers and tradersoperating in the market area and the market yard orsub-market yards concerned. In this connection, we may noteone other submission of learned senior counsel Shri ShantiBhushan for the appellant. He submitted that for almost 16years tea was not a scheduled item governed by the MarketAct. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This exercise, by no stretch of imagination,could be said to be unauthorised, illegal or amounting tonon-application of mind. The second contention, therefore,is answered in negative against the appellant and in favourof the respondent. That takes us to the consideration ofcontention no.3 POINT NO. 3 : Once it is held that theMarket Act covers the transactions of sale of packed blendedtea in sealed packets and receptacles by the appellant sstockist in the market areas concerned especially when thesetransactions take place in the market yard or sub-marketyards as laid down by Section 15 of the Act which remainsfully operative to cover such transactions, there is noescape from the conclusion that the entire infrastructuralfacilities for regulation of such sale transactions as madeavailable by the market committee concerned would enure forthe benefit of sellers of such packed blended tea. It isalso pertinent to note that so far as the appellant isconcerned, all that is required of it is to take licence forselling packed tea in market yards, sub-market yards fromthe market committee concerned. The appellant is notrequired to bear the burden of any market fee. As perSection 27 of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... All these provisions clearly indicate that once thetransaction of sale or purchase of any agricultural produceis governed by the Act and once Section 15 of the Actapplies to such transaction, the entire machinery of the Actwould get attracted to regulate such transaction and thecomplete infrastructure for which provisions are made by themarket committee including the facilities available at suchmarkets would become available to the purchasers and sellersof such commodities in the market. For providing theseinfrastructural facilities the market committee has to spendfrom its funds. This would supply adequate quid pro quo forlevying market fee on the buyers of commodities sold at itsmarket yard or sub-market yard. It is, therefore, notpossible to agree with the learned senior counsel for theappellant that there is no quid pro quo underlyingtransactions of sale of packed tea by the appellant sstockist in the market yard or sub-market yards maintainedby the market committee concerned. The third contention,therefore, is to be answered in affirmative against theappellant and in favour of the respondent. Before partingwith this appeal, it is necessary to briefly deal with thewritten sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inition thereof under that Actinsofar as such produce is sold within the market area towhich the Market Act applies. It is difficult to appreciatethe contention in para 8 of the written submissions to theeffect that the State had not applied its mind in bringingtea within the sweep of the Market Act in exercise of itspower under Section 39 of the Act. As discussed earlier,this contention is devoid of any substance. Contention inpara 9 of the written submissions is also devoid of anymerit. It is not the case of the appellant that the sale ofmanufactured tea in Bihar markets within the market area ofthe concerned market committee requires the appellant tobear the burden of the market fee. It is obvious, as seenearlier, that charge of market fee is on the buyer ofbranded tea and not on the seller thereof, like theappellant. The purchasers of branded market teamanufactured by the appellant who purchase the said producein market areas governed by the Market Act have made nogrievance in this connection. Even otherwise, as seenearlier, once the wide definition of "agricultural produce"as found in the Market Act governs such sale transactionsand when Section 15 of the Act covers such trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant is likelyto get more price for its branded tea by subjecting its saletransactions to auction instead of the said provisionadversely affecting the appellant would, on the contrary, bemore beneficial to it. Maybe, the appellant from commercialpoint of view may not like to charge higher price for thepacked tea from its customers but that does not mean thatthe infrastructural facilities made available by the marketcommittees to the appellant to get more price of its brandedtea if so desired by it can be construed in any way to beadversely affecting its commercial business interests. Forobvious reasons, therefore, none of the contentions found inthe written submissions can advance the case of theappellant s and they necessarily have to stand repelled.These were the only contentions canvassed by learned seniorcounsel in support of the appeal and as they fail, theinevitable result is that this appeal fails and will beliable to be dismissed. FINAL ORDER : As a net result ofthe aforesaid discussion, therefore, the following ordersare passed : 1. SUGAR GROUP MATTERS: These appeals,namely, Civil Appeal Nos. 398 and 399/1977, 234/1995,8163/1994, 7432/1994, 2632-33/1982, 1282/1995 are allo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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