TMI Blog1966 (10) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of Madras, in exercise of the power conferred on it by section 2(1)(a), declared coconuts and copra to be commercial crops. Under section 4 of the Act, the State Government also declared the District of East Godavari as the notified area for purposes of the Act in respect of coconuts and copra. By a further notification dated December 5, 1950 issued under section 4(a) of the Act it established a Market Committee at Rajahmundry for the said notified area. The said Market Committee levied the following fees, viz., (1) a licence fee under s. 5(1) of the Act read with Rule 28(3); (2) a licence fee for storage, wharfage etc., under section 5(3) read with Rule 28(3); (3), a registration fee under s. 18 read with Rule 37; (4) a fee on the said goods bought and sold within the notified area and under s. II (1) read with Rule 28(1); and (5) a fee under the same section on consign ments of coconut oil. Contesting the levy of fees under items 2 to 5 as being illegal on the ground that they sold coconuts and copra to customers outside the notified area and in some cases outside the State, the appellants filed various suits in the court of the District Munsif, Amalapuram for refund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted matter of the levy under section 11(1) were transactions consisting of purchase of the said goods by the appellants and the corresponding sales to them by the producers and petty dealers and not the subsequent sales effected by them to their customers outside the notified area or the State, that therefore the transactions on which the said fee was levied were effected and completed inside the notified area and fell within the expression bought and sold in section 11 (1) and therefore the Market Committee rightly levied the said fee on those. transactions. In the result, the Division Bench allowed the appeals and dismissed the appellants suits. It is this judgment and decree against which these appeals are directed. The preamble of the Act states that the Act was passed for making provisions for better regulation of buying and selling of and the establishment of markets for commercial crops. As stated in M.C.V.S. Arunachala Nadar v. The State of Madras([1959] Suppl. 1 S.C.R. 92), the Act was the result of long exploratory investigation by experts in the field, conceived and enacted to regulate the buying and selling of Commmercial crops to provide suitable and regulated ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers not exceeding twelve as may be fixed by the State Government and provides for representatives of licencees under section 5 and buyers, sellers and buyers and sellers registered under the Rules prescribed in that behalf. Section II (1) with which we are concerned in these appeals reads: The Market Committee shall, subject to such rules as may be made in this behalf, levy fees on the notified commercial crop or crops bought and sold in the notified area at such rates as it may determine. The Explanation to sub-section (1) provides that all notified commercial crops leaving a notified area shall, unless the contrary is proved, be presumed to be bought and sold within such area. Sub-section 2 provides that the fee chargeable under sub-section(1) shall be paid by the purchaser of the commercial crop concerned provided that where such a purchaser cannot be identified the fee shall be paid by the seller. Section 12 provides that all monies received by a market committee shall be paid into a fund and all expenditure incurred by the market committee shall be defrayed out of the said fund. The expenditure which the committee can incur is for purposes set out in section 13 which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereunder took place outside the notified area the sales in respect thereof were made within the notified area and therefore the question of the levy under section 11 (1) being repugnant to Art. 286 of the Constitution did not arise. Besides these pleadings Mr. Agarwala drew our attention to certain notices of demand and circulars issued by the Committee in which it was stated that the said fee was being levied on goods exported outside East Godavari District and that the traders were liable to pay it both on coconuts exported to outsiders and also consumed internally. That presumably was stated because if the goods were bought and sold within the notified area, even if they were subsequently exported outside, section 11(1) would apply. The practice followed by the appellants and not denied by the Committee was that they used to despatch these goods by rail to their customers. Railway receipts and hundies were then sent to their bankers at the destination and railway receipts were delivered to the customers on their honouring the hundies Thus the goods were delivered outside the notified area and the sales effected by the appellants to their customers were also completed at pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igation. There was therefore no question of the High Court allowing the respondent-Committee to make out a new case. The question from the very inception was whether the Committee was competent to levy the fee in question under section 11(1). To answer that question the court necessarily had to enquire on which transactions could the said fee be levied under section 11(1) and whether it was rightly levied by the Committee. The High Court answered these questions by holding that it was levied, on the transactions effected by the appellants with those from whom they bought the said goods, that section 11(1) dealt with those transactions and was not therefore concerned with the subsequent sales entered into by the appellants with their customers outside the notified area. Since, according to the High Court, those transactions were admittedly effected within the notified area the levy was valid and warranted under s. 1 1 (1). In our view the High Court approached the question from a correct angle and therefore there was no question of its having allowed the Committee to change its case or make out a new case. That being the position, the next question is whether the Committee could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vour as far as possible to construe a statute in such a manner that the construction results in validity rather than its invalidity and gives effect to the manifest intention of the legislature enacting that statute. The object in passing the Act was to prevent the mischief of exploitation of producers of commercial crops such as coconuts and copra and to see that such producers got a fair price for their goods. The mischief to prevent which the Act was enacted was the exploitation of these producers by middlemen and those buying goods from them and therefore the Act provided facilities such as market place, place for storage, correct weighment etc., so that the producers and his purchasers come face to face in a regulated and controlled market and a fair price was obtained by them. If the construction suggested by Mr. Agarwala were to be accepted and the section were to be construed as being applicable to those transactions only which have a dual aspect, that is, buying by a dealer from a producer and the dealer selling those identical goods within the notified area, the object of the Act would be defeated, for in a large number of cases the transactions would halt at the stage of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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