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TMI Blog1965 (8) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of that Act and a market yard and a market proper were established for transactions in specified commodities. A, market committee was established under s. 5 of the Act for he Ahmedabad market area. In 1959 a locality known as the 'Kalupur market" was declared a sub-market yard for the purposes of the Bombay Act, and traders carrying on business in the Kalupur market yard were required by the market committee to take out licences authorising them to carry on their trade. Certain traders in agricultural produce faild petition No. 129 of 1959 in this Court under Art. 32 of the Constitution challenging diverse provisions of the Act and the rules and bye-laws framed thereunder on the plea that those provisions placed unreasonable restrictions on their right to carry on trade in agricultural produce and thereby infringed their fundamental right guaranteed under Art. 19 (1) (g) of the Constitution. This Court by judgment dated May 2, 1961 (Mohammad Hussain Gulam Mohammad and another v. The State of Bombay and Anr) (1) upheld the validity of s. 4 (authorising declaration of market areas), s. 4A (authorising declaration of principal and sub-market yards), S. 5 (authorisin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d r. 53 (specifying the maxima of fees to be charged) as offending Art. 14 of the Constitution. It was also contended that s. 5A (authorising the grant of licences in accordance with the rules to traders, commission agents, brokers, weighmen, measurers, surveyors, warehousemen and other persons to operate in the market area) which was amended was only prospective and therefore the infirmity noticed in the earlier judgment of this Court still remained, and that the new section 29-B which rectified the defect in the establishment of markets under the Act was insufficient, to validate what had been done before the Ordinance came into force. It was also contended that the bye-law under which the market committee issued licences to dealers was discriminatory and imposed unreasonable restrictions on the fundamental right to carry on trade and business and was therefore unlawful and that the market committee was not entitled to control retail trade as the same was not within the provisions of the Act and in consequence the market committee was using r. 64 in a manner in which it was not intended to be used and therefore that rule though it was upheld in the earlier judgment had become ult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Act 22 of 1939 had expired in 1961, but the committee continued to function and no fresh elections were held; and (7) that the rules pursuant to which the market committee was constituted and functioned not having been placed before the Legislature in the first meeting after the rules were promulgated under the Bombay Agricultural Produce Markets Act, 1939, as required by that Act, the rules were unauthorised and there was complete absence of machinery for enforcement of the Act. Counsel submitted that the petitioners fundamental rights under Arts. 14, 19 & 31 of the Constitution were infringed by enactment of the Act and the promulgation of the Rules and byelaws and the exercise of the authority by the State of Gujarat and the market committee pursuant thereto. It may at once be observed that the President of India having declared in the month of December 1962 a state of emergency in exercise of the powers reserved under the Constitution, the right to enforce the fundamental rights guaranteed under Art. 19 of the Constitution remains suspended by virtue of Art. 358 for the duration of the period of the emergency. On this ground alone, a large majority of the contentions raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f regulating the purchase and sale of such agricultural produce and in such area, as may be specified therein. Section 6 authorises the Director to declare an area specified in the notification as market area. It provides that after the expiry of the period specified in the notification issued under s. 5 and after considering the objections and suggestions received before its expiry and holding such inquiry as may be necessary, the Director may, by notification in the Official Gazette declare the area specified in the notification or any portion thereof to be a market area for the purposes of the Act in respect of all or any ,of the kinds of agricultural produce specified in the said notification. By sub-s. (2) of S. 6 it is provided that notwithstanding anything contained in any law for the time being in force, from the date on which any area is declared to be a market area under sub-s. (1), no place in the said area shall be used for the purchase or sale of any agricultural produce specified in the notification except in accordance with the provisions of the Act. By sub-s. (3 it is provided that nothing in sub-s. (2) shall apply to the purchase or sale of any such agricultural pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be prescribed or determined by the bye-laws and on payment of fees determined by the market committee within such maxima as may be prescribed. By sub-s. (3) power is conferred upon the market committee to suspend or cancel a licence. Section 28 authorises the market committee to levy from time to time prescribed fee and to collect the same on the agricultural produce bought or sold in the market area. Chapter V deals with the Market Committee Fund and State Agricultural Produce Market Fund. Chapter VI prohibits the collection of trade allowances, other than allowances prescribed by rules or byelaws made under the Act. Chapter VII deals with offences, penalties, investigation and procedure for the trial of offences. Chapter VIII deals with the control by the Director and the State Government in the matter of administration of the Act and Ch. IX deals with miscellaneous matters, including the power to frame rules and bye-laws. The Act was, as is clear from its preamble and this review of its provisions, enacted with a view to provide satisfactory conditions for the growers of agricultural produce and to sell their produce on equal terms and at reasonable prices. The ordinary culti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. The State of Madras and Ors([1959] 1 S.C.R. 92.) was called upon to deal with the validity of the Madras Commercial Crops Markets Act 20 of 1933. In that case certain traders had challenged the validity of Madras Act 20 of 1933) on the round that the provisions of the Act imposed unreasonable restrictions upon their right to do business, and the Court on an exhaustive review of the provisions of the Act hold that the provisions which imposed liability to take out a licence for carrying on trade in "commercial crops", and the restrictions relating to the place where the business may be carried on were reasonable and did not infringe the right guaranteed by Art. 19(1)(g) of the Constitution. In Mohammad Hussain's case([1962] 2 S.C.R. 659) this Court held following the judgment in Arunachala Nadar's case ([1959] Supp. 1 S.C.R. 92) Nadar's that the impugned provisions viz. ss. 4, 4A, 5, 5A and 5AA of the Bombay Agricultural Produce Markets Act 22 of 1939 were not unconstitutional. It was pointed out by this Court that the provisions impugned in that case were substantially the same as were contained in Madras Act 20 of 1933 and therefore the restrictions impose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation of the trade in agricultural produce in the specified area that he may proceed to declare the market area. It was urged on behalf of the petitioner that in Mohammad Hussain's case(1) this Court had upheld the validity of provisions in the Bombay Act 22 of 1939 analogous to ss. 5 & 6 of the Gujarat Act only on the ground that by the Bombay Act retail trade was not intended to be controlled, whereas under the Gujarat Act authority is given to control the retail trade also, and on that account the provisions of ss. 5 & 6 would be regarded as infringing the fundamental right to carry on trade and business. The question whether by the provisions of the Act and the rules framed thereunder the Legislature has attempted to impose restrictions upon retail trade in agricultural produce will be presently considered when we deal with the second and the third contentions advanced by the petitioner. But assuming that such a power is conferred, we fail to appreciate how solely on that account it can be said that the provisions of the Act infringe Art. 19(1)(g) of the Constitution or may be regarded as conferring an arbitrary authority. Reasonable restrictions on the right of a citizen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f s. 4 provided that nothing in subs. (2) shall apply to the purchase or sale of such agricultural produce, if the producer of such produce is himself its seller and the purchaser is a person who purchases such produce for his own private use or if such agricultural produce is sold to such person by way of a retail sale. There was an express provision made in the Bombay Act 22 of 1939 which excluded from the operation of sub-s. (2) sale of agricultural produce by way of retail sale. Under the Gujarat Act no such exclusion is expressly prescribed. But, apart from the generality of the provisions made in the Gujarat Act and the omission of retail sales from the scheme of exclusion, the Act and the rules clearly indicate that retail sales are not sought to be regulated by the provisions of the Act. It may be noticed that the State of Gujarat has not framed any new rules the rules framed under the Bombay Act 22 of 1939 remain in operation by virtue of s. 64 and the rules framed under the Bombay Act 22 of 1939 have been framed on the footing that no retail sale is sought to be regulated thereby. Clause (4) of r. 53 excludes from the levy of fee sellers who are themselves producers of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il to ,consumers anywhere in the market area. The "B" class trader' licence is manifestly for purchasing agricultural produce. It was then contended that s. 30 conferred power upon the market committee of summarily evicting from the market any person, if he is found in the market area without holding a valid licence. This, it was urged, made a large inroad upon the fundamental right guaranteed to the citizens to move freely throughout the territory of India, and to reside and settle in any part of the territory in India. But s. 30 authorises the eviction from the market any person found to be operating in the market without holding a valid licence. The power of eviction by the market committee is limited to eviction from the precincts of the market. The provision is apparently enacted for the purpose of imposing an additional penalty against infraction of the prohibition contained in s. 6 (2). "Operating in the market area" can in the context only mean using a place in the market area for the purchase or sale of agricultural produce specified in the notification under s. 6(2) otherwise than in accordance with the provisions of the Act. The apprehension of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 64(2) (ii). It is common ground that no fresh elections were held for the election of members of the market committee since, May 1958. Under s. 6 of Bombay Act 22 of 1939 which dealt with the constitution of market committees by sub-s. (3) it was provided that every member of a market committee elected or nominated, when it is first constituted, shall hold office for a term of two years and every such member elected or nominated thereafter shall hold office for a term of three years. In the normal course, the members of the committee elected in 1958 would have held offence for three years. But by sub-s. (3A) it was provided that the term of office of the outgoing members of a market committee shall be deemed to extend to and expire with the day before the date of the first general meeting of the market committee constituted in its place. This provision was enacted by Bombay Act 26 of 1951, presumably with a view to provide for the interrenum between the expiration of the period of office of the members and the constitution of a fresh committee after elections. The lawful authority of the members of the market committee was, notwithstanding the expiry of the period, extended by sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extended up to March 1965 by s. 2 thereof. in the meanwhile the Gujarat Act 20 of 1964 being the Gujarat Agricultural Produce Markets Act was enacted and was brought into force and by virtue of s. 64 thereof the market committee established under the earlier Acts was deemed to be a market committee established for the said market under the new Act and members of the market committee holding office immediately before the commencement of the new Act continued to hold office under ,he new Act. The contention that there is no legally constituted market committee has therefore no force. Finally, the validity of the rules framed under the Bombay Act 22 of 1939 was canvassed. By s. 26(1) of the Bombay Act the State Government was authorized to make rules for the purpose of carrying out the provisions of the Act. It was provided by sub-s. (5) that the rules made under s. 26 shall be laid before each of the Houses of the Provincial Legislature at the session thereof next following and shall be liable to be modified or rescinded by a resolution in which both Houses concur and such rules shall, after notification in the Official Gazette, be deemed to have been modified or rescinded accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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