TMI Blog1981 (2) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... P. Sinha and Naresh K. Sharma for the Interveners JUDGMENT: The Judgment of the Court was delivered by CHINNAPPA REDDY, J. Reluctant traders, unwilling to move their places of business into the markets or market yards, as they are differently called in the States of Maharashtra, Bihar and Karnataka, set up by respective Market Committees under various State Agricultural Produce Marketing Acts, offer their resistance through these Writ Petitions and Civil Appeals. We will first recite the facts in one of the cases (Writ Petition No. 692 of 1980) and thereafter consider the questions raised in that as well as the other cases. The Petitioner in Writ Petition No. 692 of 1980 is a trader presently carrying on business in 'Gur' and other commodities at 1221 Bhavani Peth, Pune. In exercise of the powers conferred by Sec. 4A(2) of the Bombay Agricultural Produce Markets Act, 1939, by a notification dated July 6, 1961, the locality known as Bhavanipeth and Nanapeth of the Pune City was declared as one of the principal market yards for the market area consisting of Pune City and Haveli Talukas. The market area had been so declared by a notification dated May 1, 1957, pursu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... postponed from time to time, Finally, by a public notice dated March 6, 1980, all wholesale traders, commission agents and others dealing in agricultural produce in Bhavanipeth-Nanapeth and surrounding areas were informed that with effect form March 17, 1980, wholesale trade in the regulated agricultural produce could be carried on in the Gultekadi market yard only. The petitioner seeks to resist the situation thus sought to be forced upon him and challenges the notification dated October 4, 1975, and the consequential notices requiring him to carry on business in regulated agricultural produce in the Gultekadi market yard and at no other place. Similarly, in Writ Petition Nos. 937 to 1063 of 1980 and Writ Petition Nos. 1111 to 1115 of 1980, 132 other traders who are presently carrying on business in the existing market of Bhavanipeth-Nanapeth question the notification and the notices following the notification. In Writ Petition Nos. 1558 of 1980 and 5441 to 5462 of 1980 the petitioners are wholesale traders in onions and potatoes who carry on their business in the Maulana Azad Road Market in Bombay. They complain against a notification dated December 5, 1978 by which it was de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e language permitted such a construction-as to make a distinction between a sale of agricultural produce by a producer to a trader which had to be within a market and a subsequent sale by a trader to a trader which could be anywhere in the market area. It was submitted that if Sections 5 and 6 and Rules 5 and 6 were to be construed as compelling transactions between trader and trader also to take place within a market they were invalid. In the petitions of the Bombay merchants it was further urged that Sec. 13(1A) which was a special provision declaring Greater Bombay and Turbhe village a Market Area was unreasonable and invalid. For a proper appreciation of the submissions made, it is necessary to refer to some of the relevant provisions of the Maharashtra Agricultural Produce Marketing (Regulation) Act 1963 and the Maharashtra Agricultural Produce Marketing (Regulation) Rules 1967. The long title of the Act is An Act to regulate the marketing of agricultural and certain other produce in market areas and markets to be established therefor in the State; to confer powers upon Market Committees to be constituted in connection with or acting for purposes connected with such market ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltural produce . Sec. 6 provides that, no person shall use any place in the market area for the marketing of the declared agricultural produce or operate in the market area or in any market therein as a trader, commission agent, broker, processor, weighman, measurer, surveyor, warehouseman or in any other capacity in relation to the marketing of the declared agricultural produce, on and after the date on which the declaration under Sec. 4(1) is made, except in conformity with the terms and conditions of a licence granted by the Market Committee or by the Director when a Market Committee has not yet started functioning. It is important to mention here that Sec. 6(1) is expressly made subject to the rules providing for regulating the marketing of agricultural produce in any place in the market area. Sec. 6(2) also provides that Sec. 6(1) shall not apply to sales by retail; sales by an agriculturist who sells his own produce; and sales by a person to another for the latter's personal consumption. Sec. 6 also may be extracted here: (6) (1) Subject to the provisions of this section and of the rules providing for regulating the marketing of agricultural produce in any place in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me direct and to do such other acts as may be required in relation to the superintendence, direction and control of markets or for regulating marketing of agricultural produce in any place in the market area. The Market Committee is also empowered to maintain and manage the market, including admissions to, and conditions for use of, markets; to regulate marketing of agricultural produce in the market area of the market; to establish centres for the collection of such agricultural produce in the market area as the State Government may notify from time to time; to collect, maintain, disseminate and supply information in respect of production, sale, storage, processing, prices and movement of agricultural produce (including information relating to crops, statistics and marketing intelligence); to take all possible steps to prevent adulteration; to promote grading and standardization of agricultural produce; and, to enforce the provisions of the Act, rules and bye-laws and conditions of licences. Sec. 10A enables the Market Committee to open Collection Centres for marketing of notified produce. Any person wishing to sell any notified produce in a market area may tender such produce at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cribed form and submit with the application a solvency certificate, cash security or bank guarantee and a character certificate. The Director or the Market Committee as the case may be, may grant or renew a licence, after satisfying himself or itself about the solvency certificate, cash security or bank guarantee, the capacity of the applicant for providing adequate equipment for smooth conduct of the business and the conduct of the applicant. If the licence is refused, reasons are required to be recorded in writing. Rule 7 deals with the grant of licences to warehousemen, measurers, surveyors, processors, weighmen, etc. Rule 8(2) bans the employment of a broker in relation to marketing of any declared agricultural produce except in relation to marketing of such produce by a trader with another trader. Rule 12 stipulates that every declared agricultural produce shall be sold by public auction. Rule 15 requires every declared agricultural produce to be weighed by licensed weighmen or measurer. Rule 16, 17 and 18 deal with the preparation of records in connection with the transactions of purchase of declared agricultural produce. Rule 20 obliges every purchaser of declared agricultur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... market yard for the market area under the proviso to S. 4A(2) of the Act. A few days later another notification was issued declaring some other place as the principal market yard for the market area. Vakhar Bagh was not even declared as a sub-market yard. The effect was that Vakhar Bagh Market Yard ceased to be a market yard. This was questioned in Bapubhai Ratanchand Shah v. The State of Bombay. The argument was that Vakhar Bagh had necessarily to be declared as a Principal Market Yard since there was no sub-market yard under the proviso to Sec. 4A(2) and that once having been so declared another market yard could not be substituted in its place. This argument was repelled by Chagla, C. J. and Tendolkar, J. It was observed (at p. 903, 904): Now, s. 4A(2) confers upon the Government the power to declare any enclosure, building or locality in any market area to be a principal market yard for the area and other enclosures, buildings or localities to be one or more sub- market yards for the area. It is clear that by reason of s. 14 of the General Clauses Act any power that is conferred on Government can be exercised from time to time as occasion requires. Therefore, it would be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed is only to further and to give effect to the purposes of the Act. The scheme of the Act shows that the agricultural produce whose marketing is proposed to be regulated should first be notified, a market area has to be declared in respect of the notified agricultural produce, a Market Committee has to be constituted for the market area, a principal market and one or more subsidiary markets have to be established for every market area, traders etc. have to be licensed and the Market Committee is required to provide facilities for marketing of agricultural produce, to superintend, direct and control the markets and regulate marketing of agricultural produce. Regulation of marketing of notified agricultural produce and the establishment of principal and subsidiary markets are among the prime objects of the Act. If for the more effective regulation of marketing it is thought that all marketing operations in respect of declared agricultural produce should be carried on only in the principal and subsidiary markets established under the Act, we do not see how it can possibly be said that a rule made for that purpose is beyond the competence of the rule making authority under the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, Rule 5 which banned marketing at any place outside the principal and subsidiary markets though such place was within the market area was inconsistent with Section 6 and hence ultra vires. The submission ignores the circumstance that Section 6 is applicable to both the situations before and after the establishments of markets. Where a market area is specified under Sec. 4 of the Act but no markets are yet established, marketing is regulated by licensing the traders etc. under Sec. 6. After markets are established also, traders have to be licensed under Sec. 6. But Sec. 6 is expressly declared to be subject to the rules providing for regulating the marketing of agricultural produce in any place in the market area. Rule 5 is a rule providing for regulating the marketing of agricultural produce in the market area by stipulating that the marketing shall be carried in the market established in the market area. Section 6 is, therefore, subject to Rule 5. There can be no question of any inconsistency between Section 6 and Rule 5. Yet another submission of the learned counsel was that the Bombay Agricultural Produce Markets Act 1939 and the Agricultural Produce Marketing Acts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produce. While middlemen are sought to be eliminated, it is wrong to view the Act as one aimed at legitimate and genuine traders. Far from it. The regulation and control is as much for their benefit as it is for the benefit of the producer and the ultimate consumer. The elimination of middlemen is as much in the interest of the trader as it is in the interest of the producer. Promotion of grading and standardization of agricultural produce is as much to his benefit as to the benefit of the producer or consumer. So also proper weighment. The provision for settlement of disputes arising out of transactions connected with the marketing of agricultural produce and ancillary matters is also for the benefit of the trader. It is because of these and various other services performed by the Market Committee for the benefit of the trader that the trader is required to pay a fee. It is, therefore, clear that the regulation of marketing contemplated by the Act involves benefits to traders too in a large way. It is also clear to our mind that the regulation of marketing of agricultural produce, if confined to the sales by producers within the market area to traders, will very soon lead to its c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e benefit of a regulated market will no doubt primarily accrue to the agriculturists but traders also will be profited by it. Furthermore, no market can be regulated effectively unless and until the regulation covers all the stages of marketing within a particular area. Above all, it is not possible to distinguish between the agricultural produce subjected to resale or changing hands between the traders themselves and the one sold by the agriculturists through the commission agents to the traders. We, therefore, recommend that all transactions including the resales between the traders and traders in respect of the agricultural commodities, which are regulated should be covered by the Act and the Rules. Thus in a regulated market, trading in agricultural commodities irrespective of the fact as to whether they are produced in the market area or sold by the agriculturists or not, will be brought within the scope of the legislation. Nor are we without any guidance from this Court itself in answering the question posed. In Mohammadbhai Khudabux Chhippa Anr. v. The State of Gujarat Anr., it was pointed out while dealing with the provisions of the Bombay Agricultural Produce Marke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apes will always be found in any system of controls. We are unable to say that the other supervisory measures for which there is provision in the Act are sufficient to make it unnecessary for the traders to move their places of business into the market. No amount of supervision may be as effective as when all the transactions take place within the market. Nor is effective supervision at all possible if traders are dispersed all over the market area. Every Market Committee will then require a large contingent of officers for the purpose of supervision only. The rendering of services to the traders also will be far easier and, in the ultimate analysis, it will be in the interests of the traders themselves, at any rate in the interests of the vast majority of the traders, that transactions between traders and traders also are carried on in the market only. There cannot be any doubt that localising marketing is helpful and necessary for regulation and control and for providing facilities. If all transactions are carried on in the market under the watchful and at the same time, helpful vigil of the Market Committee and its officers, there is surely a greater chance of the success of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay and Turbhe village a market area for the purposes of the Act was invalid as it was wholly unreasonable to constitute such a large area into a single market area. The validity of the notification establishing a market at Turbhe was attacked as unreasonable. It was said that it was unreal and unreasonable to establish a single market for so large an area and that, at such an inconvenient place as Turbhe village. It has been explained in the counter affidavit filed on behalf of the respondent that the existing markets in Maulana Azad Road and Mahatma Phule Mandal were highly congested and located in areas which were over-crowded with the result that it took several hours to even unload onions and potatoes from the trucks which carried them. It has become imperative in the public interest that the markets should be shifted from Maulana Azad Road and Mahatma Phule Mandai. Turbhe village was chosen as an area free from congestion and conveniently located as it was on the main trunk road from Pune. It was also very near the other trunk Road going towards the East. A Railway linking the area with both the Western Railway and the Central Railway networks was fast coming up. It was al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aharashtra Act, the Karnataka Act has a three- tier scheme, Market Area, Market and sub-market and market- yard, sub-market yard and sub-yard. Market Area is a larger area within which smaller areas are declared as a Market and sub-markets. Within a market are located a market yard and market sub-yards and within a sub-market is located a sub market yard. The 'market yard' in the Karnataka Act is what corresponds to a 'market' in the Maharashtra Act. Unlike the Maharashtra Act, the Karnatka Act itself [S. 8(2)] expressly provides that no place in the Market or the sub-market, except the market-yard, sub-yard or the sub-market yard as the case may be, shall be used for the purchase or sale of notified agricultural produce. Originally, after the words purchase or sale of notified agricultural words occurred the words belonging to a producer in Section 8(2). The words belonging to a producer were omitted by a 1976 amendment and this makes the provisions of S. 8(2) applicable to transactions between trader and trader too. The shifting of market yard from one place to another and the application of the Act to transactions between traders and traders are what were p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to act fairly. We are concerned with legislative activity; we are concerned with the making of a legislative instrument, the declaration by notification of the Government that a certain place shall be a principal market yard for a market area, upon which declaration certain statutory provisions at once spring into action and certain consequences prescribed by statute follow forthwith. The making of the declaration, in the context, is certainly an act legislative in character and does not oblige the observance of the rules of natural justice. In Bates v. Lord Hailsham, Megarry J., pointed out that the rules of natural justice do not run in the sphere of legislation, primary or delegated, and in Tulsipur Sugar Co. v. Notified Area Committee, our brothers Desai and Venkataramaiah JJ approved what was said by Megarry J., and applied it to the field of conditional legislation too. In Paul Jackson's Natural Justice (Second Edn.), it has been pointed out (at p.169): There is no doubt that a Minister, or any other body, in making legislation, for example, by statutory instrument or by-law, is not subject to the rules of natural justice- Bates v. Lord Hailsham of St. Mayleborne (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was issued, to the effect that Mohalla Purani Godown would continue as the market yard as before. Finally on June 27, 1979, Chandauti was declared as the Principal Market yard once more. This was questioned in Writ Petitions filed in the Patna High Court. The Patna High Court rejected all but one of the contentions raised. The only contention which was accepted was that the procedure prescribed by Rule 80 was not followed before Chandauti was declared as the principal market yard by the notification dated February 28, 1978. Rule 80, as already mentioned by us provides that a market shall be established for a market area and that after the establishment of a market a notification declaring the market yard shall be issued. The contention which was accepted was that a market had not been established before a market yard was declared. Against the judgment of the High Court the merchants have filed Civil Appeal No. 1715 of 1980 and the State of Bihar has filed Civil Appeal No. 36 of 1980. Not-withstanding the filing of the appeal, the State of Bihar chose to issue a fresh notification after observing the procedure prescribed by Rule 80. This was again questioned in the High Court. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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