TMI Blog2006 (7) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... es not apply to the purchases of sugarcane made for factories in the State of M.P. and accordingly, no fees under the Market Act can be levied on the purchases of sugarcane made for factories in the State of Madhya Pradesh and yet the Market Committees are demanding fees under the Market Act on such purchases from them. The petitioners have therefore prayed for declarations that the Market Act is not applicable to the transactions for purchase of sugarcane by occupiers of factories in the State of Madhya Pradesh and accordingly no fee is leviable on such occupiers of factories under the Market Act on such purchases of sugarcane for their factories and for quashing all demands of fees under the Market Act issued by the concerned Market Committees on such purchases of sugarcane for their factories and for refund of such fees collected from them. Mr. Kishore Shrivastava, learned Senior Counsel appearing for the petitioners in W.P. Nos. 391 of 1995, 6001 of 2000, 6209 of 2002, 6210 of 2002, 409 of 2004 and 3577 of 2004 took us through the provisions of the Sugarcane Act to show that the Sugarcane Act is a special Act providing for regulation of purchase of sugarcane for factories in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Act would show that there is no direct conflict between the two Acts and hence both the Acts are enforceable in their respective fields and the petitioner in W.P. No. 391 of 1995 is liable to pay market fees under the Market Act on purchase of sugarcane for its factory, as demanded by the respondents 2 and 3. Mr. Sanjay Yadav, learned Deputy Advocate-General for the State of Madhya Pradesh submitted that under section 19 of the Sugarcane Act, the State Government has been vested with the power to issue orders for regulating the purchase and supply of sugarcane in the reserved and assigned areas. He submitted that the State Government may or may not pass an order regulating the purchase and supply of sugarcane in the reserved and assigned areas. He submitted that where the State Government issues an order under section 19 of the Sugarcane Act regulating the purchase and supply of sugarcane in the reserved and assigned areas, there may be conflict between the provisions of the Sugarcane Act and the Market Act but if the State Government does not issue such an order regulating the purchase and supply of sugarcane under section 19 of the Sugarcane Act, the question of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oposition that the doctrine of res judicata will not apply to questions relating to pure interpretation of an enactment. He submitted that in view of the interpretation now given by the Supreme Court in Belsund Sugar Co. Ltd. v. State of Bihar AIR 1999 SC 3125 to Acts similar to the Sugarcane Act and the Market Act in the State of Bihar, the earlier order of a single judge of this court dated July 20, 1994 in M.P. No. 2250 of 1990 filed by the petitioner cannot create a bar of res judicata for this court to consider and allow the writ petitions of Gwalior Sugar Company Limited. We have examined the provisions of the Sugarcane Act. Sub-section (1) of section 1 of the Sugarcane Act states that the Act may be called the Madhya Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1958 . This sub-section, therefore, broadly indicates the object of the Sugarcane Act to be regulation of supply and purchase of sugarcane. Sub-section (2) of section 1 states that the Sugarcane Act extends to the whole of Madhya Pradesh. Hence the Sugarcane Act applies to the entire State of Madhya Pradesh, sub-section (3) of section 1 states that the Act shall come into force on such date as the St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rowers and cane-growers' cooperative societies, as shall sell cane to that factory. Section 14 provides that the State Government may, for purposes of sections 15, 16 or 17 by order, provide for various matters relating to survey to be made of the area proposed to be reserved or assigned for supply of cane to a factory. Sections 15, 16, 19, 20, 21 and 22 of the Sugarcane Act which are relevant for deciding the questions raised in these writ petitions are quoted herein below: 15. Declaration of reserved area. Without prejudice to any order under clause (d) of sub-section (2) of section 19, the Cane Commissioner may, after consulting in the manner prescribed, the occupier and cane-growers' co-operative society, if any, in any area to be reserved for a factory, reserve such area for such factory and thereupon occupier thereof shall subject to the provisions of section 22 be liable to purchase all cane grown in such area which is offered for sale to the factory. 16.. Declaration of assigned area. Without prejudice to any order under clause (d) of sub-section (2) of section 19, the Cane Commissioner may after consulting in the prescribed manner the occupier and cane-growe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll other sums connected therewith and where the suppliers have been made through a purchasing agent, the purchasing agent shall be similarly liable in addition to the occupier. (2a) Where a cane-grower or a Cane Growers' Co-operative Society, as the case may be, to whom price is payable under sub-section (1) has borrowed a loan for cane development from any agency notified by the State Government in this behalf, the occupier or the purchasing agent as the case may be, shall be, on being authorised by that agency so to do, entitled to deduct from the price so payable, such amount as may be prescribed, towards the recovery of such loan and pay the same to the agency concerned forthwith. (3) Where the person liable under sub-section (2) is in default in making the payment of the price for a period exceeding fourteen days from the date of delivery he shall also pay interest at a rate of 14 per cent per annum from the said date of delivery up to the date of payment but the Cane Commissioner may, in any case direct, with the approval of the State Government that no interest shall be paid or be paid at such reduced rates as he may fix. (4) The Cane Commissioner shall forward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seed cane of such variety or varieties to any person to be used by cane-growers or the members of the cane-growers' co-operative societies in any area. (4) Where cane or ratoon cane of any variety has been declared under sub-section (1) to be unsuitable for use in a factory, the occupier or any other person acting on his behalf or a cane-grower or a cane-growers' co-operative society shall not plant cane of any variety or keep ratoon cane of any such variety. It will be clear from a reading of section 15 of the Sugarcane Act quoted above that the Commissioner may after consulting the occupier and canegrowers' co-operative society, if any, in any area to be reserved for a factory, reserve such area for such factory and thereupon the occupier of the factory shall subject to provisions of section 22 be liable to purchase all cane grown in such area which is offered for sale to the factory. A reading of section 16 quoted above would further show that the Cane Commissioner may after consulting in the prescribed manner the occupier and cane-growers' co-operative society, if any, in any area to be assigned, assign such area for the purpose of the supply of cane to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f payment but the Cane Commissioner may, with the approval of the State Government, exempt such payment of interest or reduce the rate of interest. Sub-section (4) of section 20 also provides that where such price or interest is not paid, the Cane Commissioner shall forward a certificate to the collector for recovery of the amount of arrears of price plus interest as if it were an arrear of land revenue. Section 21 provides for payment of commission by the occupier to the cane growers' co-operative society and the Cane Development Council. Section 22 quoted above empowers the State Government to declare by notification any varieties of cane to be unsuitable for use in factories in which case the occupier of the factory will not be obliged to purchase such varieties for use in factory. Thus, in the Sugarcane Act, an exhaustive scheme has been made for purchase and delivery of sugarcane for factories and for payment of price of such sugarcane by occupiers of the factories to the cane growers in time and for payment of interest for delay in making such payment of price and for recovery of arrears of price and interest from the occupiers of factories as arrears of land revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fer or deposit the necessary amount in the Bank account of the seller or the co-operative society, as the case may be. (4) Where sugarcane is purchased through an agent, the producer or the agent shall pay or tender payment of such price within the period and in the manner aforesaid and if neither of them has so paid or tendered payment, each of them shall be deemed to have contravened the provisions of this clause. (5) At the time of payment at the gate of the factory or at the cane collection centre, receipts, if any, given by the purchaser, shall be surrendered by the cane grower or co-operative society. (6) Where payment has been made by transfer or deposit of the amount to the Bank account of the seller or the co-operative society as the case may be, the receipt given by the purchaser, if any, to the grower or the co-operative society, if not returned to the purchaser, shall become invalid. Sub-clause (1) of clause 3 indicates the factors which the Central Government has to take into consideration while fixing the minimum price of sugar to be paid by purchasers of sugar or their agents for the sugarcane purchased by them and these are (a) the cost of production of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ane to a factory, and the factory concerned enter into an agreement to supply or purchase, as the case may be, the quantity of sugarcane fixed under paragraph (c); (e) direct that no gur (jaggery) or khandsari sugar or sugar shall be manufactured from sugarcane except and in accordance with the conditions specified in the licence issued in this behalf; (f) prohibit or restrict or otherwise regulate the export of sugarcane from any area (including a reserved area) except under and in accordance with a permit issued in this behalf. (2) Every sugarcane grower, sugarcane growers' co-operative society and factory, to whom or to which an order made under paragraph (c) of sub-clause (1) applies, shall be bound to supply or purchase, as the case may be, that quantity of sugarcane covered by the agreement entered into under the paragraph and any wilful failure on the part of the sugarcane grower, sugarcane growers' cooperative society or the factory to do so, shall constitute a breach of the provisions of this order: Provided that where the default committed by any sugarcane growers' co-operative society is due to any failure on the part of any sugarcane grower, bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pradesh is to ensure payment of minimum and additional price to the sugarcane growers or the sugarcane growers' co-operative societies, timely supply of required quantity of sugarcane to the factories, prompt payment of price for such sugarcane to the sugarcane growers, payment of interest on unpaid price to the cane growers or canegrowers' co-operative societies and recovery of arrears price and interest from the occupiers of the factories. The Sugarcane Act and the control order thus protect the rights of the cane growers and the factories requiring sugarcane. The preamble of the Market Act makes it clear that the object of the Market Act is to provide for the better regulation of buying and selling of agricultural produce and the establishment and proper administration of markets of agricultural produce in the State of Madhya Pradesh and sugarcane has been specified in the Schedule to the Market Act as an agricultural produce for the purpose of the Market Act. Thus the question which arises for decision is whether buying and selling of sugarcane between occupiers of factories and the sugarcane growers or sugarcane growers co-operative societies would also be regulated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been declared by the State Government, shall not be settled below the price so declared and no bid shall be permitted to start, in the market yard, below the rate so fixed: (4) Weighment or measurement of all the notified agricultural produce so purchased shall be done by a licensed weighman in the market yard or any other place specified by the market committee for the purpose; Provided that the weighment measurement or counting as the case may be, of plantain, papaya or any other perishable agricultural produce as may be specified by the State Government, by notification, shall be done by a licensed weighman in the place where such produce has been grown. 37. Conditions of buying and selling. (1) Any person who buys notified agricultural produce in the market area shall execute an agreement in triplicate in such form as may be prescribed, in favour of the seller. One copy of the agreement shall be kept by the buyer, one copy shall be supplied to the seller and the remaining copy shall be kept in the record of the market committee. (2)(a) The price of the agricultural produce bought in the market yard shall be paid on the same day to the seller at the market yar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. Sub-section (1) of section 37 of the Market Act states that any person who buys notified agricultural produce in the market area shall execute an agreement in triplicate in such form as may be prescribed, in favour of the seller. Sub-section (2) of section 37 provides for payment of price of agricultural produce brought in the market yard on the same day to the seller at the market yard and additional payment at the rate of one per cent per day of the total price of the agricultural produce payable to the seller within five days. These provisions of sections 36 and 37 of the Market Act are in direct conflict with the provisions of clauses 3, 4, 5, 5A, and 6 of the control order made by the Central Government under section 3 of the Essential Commodities Act, 1955 discussed above. Similarly these provisions of the Market Act are in direct conflict with the provisions of sections 12, 15, 16, 19, 20, 21 and 22 of the Sugarcane Act made by the State Legislature of Madhya Pradesh, discussed above. In view of such conflict, either the aforesaid provisions of the Market Act apply to the transactions of buying and selling of sugarcane between the occupiers of factories and the sugarcane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ane Act and the control order apply and the provisions of the Market Act will not apply to such transactions of sale and purchase of sugarcane between the occupiers of the factories and the sugarcane growers or sugarcane growers' co-operative societies, it is difficult to accept the contention of Mr. Sanjay Yadav that if no orders are passed by the State Government or the Central Government under the Sugarcane Act or the control order for regulating the supply and purchase of sugarcane under the Sugarcane Act or the control order, the provisions of the Market Act will apply to even such transactions of sale and purchase of sugarcane between occupiers of factories and sugarcane growers or sugarcane growers' co-operative societies. In I.T.C. Ltd. v. Agricultural Produce Market Committee AIR 2002 SC 852 cited by Mr. Sanjay Yadav, learned Deputy Advocate-General, an order of assessment was passed by the Agricultural Produce Market Committee, Monghyr demanding a sum of Rs. 35,87,072 as fees under the Bihar Agricultural Produce Markets Act on purchases of unprocessed tobacco leaves from the growers. The said order of assessment passed by the Agricultural Produce Market Committee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he power of the Tobacco Board to purchase from growers as provided in rule 32 cannot co-exist with sale by auction or tender. Even in regard the price and manner of payment, licensing and auction procedure under the two legislations and Rules made thereunder show that they cannot co-exist. In this regard reference can also be made to the Tobacco Board (Auction) Rules, 1984 and Tobacco Board (Auction) Regulation, 1984. It is evident that the compliance with the provisions of one would involve non-compliance of the provisions of the other. The provisions of the two legislations have been referred to in the judgment of Brother Pattanaik, J.I am in respectful agreement with the opinion of Justice Pattanaik that the two cannot operate and co-exist simultaneously. In this view, the question about the legislative competence of the State Legislature will have to be examined. Brijesh Kumar, J. agreed with the conclusions of Y.K. Sabharwal, J, as he then was, on all points. Thus, as per the majority opinion stated in sub-paragraph (3) in paragraph 193, as reported in the AIR at page 937, the State legislations and Tobacco Board Act, 1975, to the extent that they relate to sale of toba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sugarcane growers or sugarcane growers' co-operative societies, the provisions of the Market Act stand excluded. Coming now to the contention of Mr. Sanjay Agrawal that the writ petitions filed by Gwalior Sugar Company Limited were barred by res judicata, in Mathura Prasad Sarjoo Jaiswal v. Dossibai N.B. Jeejeebhoy AIR 1971 SC 2355, the Supreme Court cited the following observations of Rankin, C.J. in Tarini Charan Bhattacharjee's case AIR 1928 Cal. 777 [FB] (at page 2359 of AIR): The object of the doctrine of res judicata is not to fasten upon parties special principles of law as applicable to them inter se, but to ascertain their rights and the facts upon which these rights directly and substantially depend; and to prevent this ascertainment from becoming nugatory by precluding the parties from reopening or recontesting that which has been finally decided. It will be clear from the aforesaid observations of Rankin, C.J. that the object of doctrine of res judicata is not to fasten upon the parties special principles of law applicable to them inter se. Once we have held, relying on the judgment of the Supreme Court in Belsund Sugar Co. Ltd. AIR 1999 SC 3125, tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... waiver or res judicata . . . Since we have held that no market fee can be levied under the Market Act on transactions of sale and purchase of sugarcane between the occupiers of factories and the sugarcane growers or sugarcane growers' co-operative societies, all demands of market fees on such transactions are without jurisdiction and are nullities and the principle of res judicata cannot be invoked as a bar in respect of writ petitions filed by Gwalior Sugar Company Limited. For the aforesaid reasons, we allow the writ petitions and declare that the market Act will not apply to the transactions of sale and purchase of sugarcane between the occupiers of factories and the sugarcane growers or sugarcane growers' co-operative societies and accordingly no fees can be collected under the Market Act on such transactions of sale and purchase of sugarcane between the occupiers of factories and the sugarcane growers or sugarcane growers' co-operative societies. Accordingly, demands of market fees under the Market Act which are contrary to the aforesaid declarations are quashed and the market fees collected from the petitioners contrary to the aforesaid declarations in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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