JUDGMENT
P.S. Narayana, J.
1. The Agricultural Market Committee, Rajahmundry, represented by its Secretary, is the appellant. The appellant is the defendant in OS No. 199 of 1980 on the file of Subordinate Judge, Rajahmundry. The respondent-plaintiff filed a suit for declaration and the consequential injunction and also for refund of Rs. 3,071.20 ps., with interest thereof. For the purpose of convenience, the parties are referred to as plaintiff and defendant, as shown in the suit.
2. The allegations in the plaint are as follows:
“The plaintiff is a registered firm under the Indian Partnership Act. It does business in paddy and rice at Kadium the name and style of Sri Venkata Bylimba Rice Mill. The defendant, which is Agricultural Market Committee, Rajahmundry, alleged to have formed a committee within the meaning of Section 4 of the Andhra Pradesh Agricultural Produce and Livestock Act, 1966, and notified agricultural produce and that paddy and rice is part and parcel of the said notified agricultural produce, within the meaning of the Act, but, the defendant is put to strict proof of the said allegations. The defendant-committee shall declare by notification, the limits of every market established under Clauses (a) and (b) of Section 4 under Section 4 (c) of the Act, for regulation of its business. It can frame bye-laws under Section 34 of the Act. The bye-law should be published in Gazette. Without fulfilling these conditions contemplated under law, the defendant cannot demand returns or levy market fees. The aims of the Act are to improve the marketing services, to provide fair trading in the market, to safeguard the health and sanitation of the users of the market, etc. But, the defendant has not provided any of the basic facilities to invoke the aid of Section 12 of the Act as contemplated by Rule 27 of the Rules framed thereunder. The defendant has not been conducting auctions, controlling the market or preventing the adulteration of notified committees or providing grading facilities or directing sales by the producers or testing the measurements or providing storage facilities etc., more particularly described in the Rules 26, 27, 36, 37, 54, 56, 57, 59, 72 etc. Without first complying with the provisions of law, the defendant has no right to levy market fees or enforce the provisions of law against the users of the market. Strictly speaking, the defendant has not established market yard as contemplated under Section 4(3) of the Act and it is not possible for the defendant to discharge its duties as contemplated by the rules framed thereunder, the Act or to fulfill its objects. There are, in fact, no sales or purchases taking place in the alleged market yard. There is no quid pro quo relation between the plaintiff and the defendant, for the defendant to levy market fees. However, the defendant collected an amount of Rs 3,071.20 ps. From the plaintiff on 21-3-1980 towards market fee by exercising its power under the Act and the plaintiff, under a mistaken impression that he was liable to pay, paid the amount, but the defendant is not entitled to collect the said amount. Therefore, the plaintiff submits that it is entitled to recover the said amount of Rs. 3,071.20 ps., from the defendant with interest at 6% per annum. Further, the defendant issued a notice dated 7-10-1980 and 21-10-1980 calling upon the plaintiff to pay a sum of Rs. 13,598.00 towards market fee from 1-3-1980 to 30-9-1980 in respect of the purchases made by the plaintiff. The plaintiff submits that for the reasons stated in the proceeding paras, the defendant is not entitled to demand such payment from the plaintiff. Therefore, the plaintiff prays for a declaration that the defendant is not entitled to demand and collect market fee from the plaintiff and for the consequential relief of issuing a permanent injunction against the defendant, restraining it from making any demand of market fee in pursuance of the notices dated 7-10-1980 and 21-10-1980 issued by it and also for refund of Rs. 3,071-20 ps., from the defendant with interest at 6% p.a.
3. The appellant herein as defendant in the suit filed a written statement in detail denying all the material allegations and also pleaded as follows:
“The Government notified under G.O. Ms. No. 962 of the Food and Agriculture Department, dated 15-7-1971, declaring paddy and rice also as commodities, the dealings of which are covered by the Act and the said notification was done in A.P. Gazette dated 16-9-1971. Market area was also notified for Rajahmundry market as the entire area within the Municipal limits of Rajahmundry Town and also 16 K.Ms. radius from the Sub-Collector’s Office, Rajahmundry. The allegation that the defendant did not frame the bye-laws and that it has no right to demand returns or levy the market fee, is not correct. The Market Committee was properly constituted under the provisions of the A.P. Agricultural Produce and Live Stock Markets Act 16 of 1966 and the bye-laws were also framed for the defendant-Committee and they were published as back as in 1972. Thus, the defendant-Committee was validly constituted and it has every power to demand returns or levy market fee under the provisions of the Act. The plaintiff cannot question the powers of the defendant. In exercise of its powers under the Act, the defendant already issued notices to the plaintiffs producers demanding market fee and they paid and subsequently, the defendant also when demand, paid the market fee. Therefore, the plaintiff is estopped from saying that the collecting of the market fee from the plaintiff, is illegal. The allegation that the defendant has not provided the basic amenities for users of the market yard and there is no quid-pro-quo relationship between the plaintiff and the defendant is also false. This defendant purchased an extent of Ac. 11.87 cents in S.No. 36/3 in Rajahmundry town and it is adjacent to Rajahmundry-Korukonda road and lay-outs were made and roads were also formed in the said site. The office building of the defendant-Committee was also constructed, two weighing sheds-cum-auction platforms were constructed and two godowns are under the process of construction. The defendant has plans to develop the market yard by spending 25 lakhs. Already some amount has been spent for the above said constructions. The remaining works have to be done in course of time, subject to the availability of funds. This defendant is making all efforts to provide further facilities to the business people including the plaintiff. Under Sections 14 and 15 of the Act, this defendant has to provide facilities to the business to the extent the funds are available. The plaintiff as well as other businessmen is enjoying the facilities within the market area. Even if there is no quid pro quo relationship, this defendant is entitled to collect market fee from the plaintiff. The allegation that the plaintiff paid Rs. 3071.20 ps., on 21-3-1980 to the defendant under mistaken impression, is false. The plaintiff paid the amount voluntarily in pursuance of the demand made by the defendant and it cannot ask for refund of the said amount. The allegation that this defendant is not entitled to a demand and collect an amount of Rs. 13,598/- from the plaintiff under the notices dated 7-10-1980 and 21-10-1980, is baseless. This defendant is empowered under the Act to collect the amount The plaintiff has not properly valued the suit and separate Court fee has to be paid for separate reliefs and thus, the Court fee paid by the plaintiff is not correct. The plaintiff is not entitled to any of the reliefs it has prayed for.”
4. On the strength of the respective pleadings of the parties, the trial Court had settled the following issues:
(1) Whether the notices issued dated 7-10-1980 and 2MO-1980 are illegal and invalid and unenforceable?
(2) Whether the Court fee paid is incorrect in law?
(3) Whether the plaintiff is entitled for declaration prayed for?
(4) Whether the plaintiff is entitled for injunction prayed for?
(5) Whether the plaintiff is entitled for refund of Rs. 3,071-20 ps., as prayed for?
(6) To what relief?
5. One of the partners of the plaintiff firm, one Satyanarayana, was examined as PW1 and the then Secretary of the defendant Market Committee, one Sreeramulu, was examined as DW1. Apart from it, Exs.A.1 to A5 were marked on behalf of the plaintiff and Exs.Bl to B8 were marked on behalf of the defendant and on appreciation of both oral and documentary evidence, mainly placing reliance on several admissions made by DW1, the suit was decreed and aggrieved by the same, the present appeal is filed.
6. Sri Vijay, the learned Counsel representing the appellant-defendant had made the following submissions:
The learned Counsel contended that the trial Court had grossly erred in holding that the Market Committee is not entitled either to demand or to collect the market fee from the respondent-plaintiff. The learned Counsel also contended that the trial Court had not properly understood the provisions of the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966 (hereinafter referred to as “the Act” in short). The learned Counsel further pointed out that it is not as though no amenities had been provided at all. The Market Committee had taken all the preliminary steps such as laying of roads, construction of office building and establishment of market, and the same is in progress. The learned Counsel further submitted that the establishment of market yard had no connection for demand and levy of market fee under Section 12 of the Act. The learned Counsel also had drawn my attention to both Sections 12 and 15 of the Act and also placed reliance on Sreenivasa General Traders v. State of A.P., .
7. Sri Muralikrishna Prasad, the learned Counsel representing the respondent-plaintiff on the other hand, had contended that the findings were recorded by the trial Court mainly on the strength of the admissions made by DW1 and these are all factual aspects. The learned Counsel also contended that demand of fee without providing any basic amenities or services by itself is illegal and hence, the trial Court is justified in decreeing the suit. The learned Counsel had drawn me to several provisions of the Act and also had drawn my attention to an important admission made by DW1 that “it is true that there is no established market, technically speaking, at that time”. The learned Counsel further submitted that in the light of the same, the demand made by the appellant-defendant cannot be sustained. The learned Counsel had submitted that if the contention of the other side that just a notification is sufficient, is accepted, then it will amount to defeating the object and also the provisions of the Act. The learned Counsel placed strong reliance on R.K. Porwal v. State of Maharashtra, and also on Kewal Krishan v. State of Punjab, . The learned Counsel also had taken me through the oral evidence recorded by the trial Court
8. Heard both the learned Counsel.
9. The following points arise for consideration in the second appeal:
(a) Whether the notices, dated 7-10-1980 and 21-10-1980, issued to the respondent-plaintiff are enforceable?
(b) Whether the trial Court is justified in granting the relief of declaration, injunction and also refund of amount?
(c) If so, to what relief the appellant is entitled to?
Points (a) and (b):
10. Points (a) and (b), being interlinked, can be discussed together. PW1, one of the partners of the plaintiff firm, was examined and to show that it is a registered partnership firm, Ex. AI was marked and this witness deposed that the plaintiff is doing business at Kadium in rice and paddy and no doubt, he further deposed that he is not aware whether rice and paddy are notified products and whether the defendant is authorised to levy market fee. This witness also further deposed that he does not know the defendant passing bye-laws and rules and publication of the same. PW1 further deposed that there is no market yard during the said period and hence, no services were rendered by the defendant warranting levy of market fee and even basic amenities were not provided for as required by the Government Orders. He further deposed that under Ex.A2 receipt, the defendant illegally collected Rs. 3,071.20 ps., from the plaintiff. The two demand notices, dated 1-3-1980 and 20-9-1980 were marked as Exs.A3 and A4. Ex.A5 is the certified copy of the judgment in AS No.192 of 1980 on the file of I-Addl. District Judge, Rajahmundry. One Sreeramulu, the then Secretary, was examined as DW1. DW1 deposed that the defendant-Market Committee published the necessary notifications in the Gazette as contemplated by the Act and the notifications are marked as Exs.Bl to B4. This witness further deposed that the Market Committee purchased an extent of Acs. 11-00 and odd for the purpose of establishing the market yard at Rajahmundry and Exs.B5 and B6 speak of purchase of the said land. This witness further deposed that the site was purchased, the office building was constructed and the roads were laid and weighing platforms were built and water facilities were provided and godowns were also constructed and the Photostat copy of the cash book entry to show money was spent for such construction was filed and it was marked as Ex.B7. The bye-laws of the Agricultural Market Committee are marked as Ex.B8. The Government issued G.Os. under No. 2261, dated 7-12-1970 and No. 790, dated 27-12-1979, directing the appellant-defendant Market Committee to provide basic amenities under Section 43 of the Act. No doubt, this witness was questioned about certain suits like OS No. 28 of 1977 and OS No. 182 of 1977 filed by some persons questioning the legality of levying the market fee and no doubt, he denied about the same. DW1 further deposed that the bye-laws were published, but, however, he did not file the Gazette publications into Court. On the strength of this evidence available on record, both parties are advanced elaborate arguments. The appellant-Market Committee taking a stand that when once a notification is made and some formalities relating to amenities had been complied with, it is sufficient to make a demand and had placed strong reliance on the very language of the Act. Whereas, the learned Counsel representing the respondent-plaintiff had taken a specific stand that the mere construction of building or laying road by itself may not be sufficient unless special services are rendered for the purpose of levying the market fee. However, both the Counsel were unable to explain where exactly to draw a line of distinction relating to the providing of amenities. In this regard, strong reliance was placed by both the Counsel on Sreenivasa General Trader’s case (supra) and R.K. Porwal’s case (supra). In Sreenivasa General Trader’s case (supra) at page No. 1261, the Apex Court had observed:
“The traditional view that there must be actual quid pro quo for a fee has undergone a sea change in the subsequent decisions.
The distinction between a tax and a fee lies primarily in the fact that a tax is levied as part of a common burden, while a fee is for payment of a specific benefit or privilege although the special advantage is secondary to the primary motive of regulation in public interest. If the element of revenue for general purpose of the State predominates, the levy becomes a tax. In regard to fees there is, and must, always be, correlation between the fee collected and the service intended to be rendered. In determining, whether a levy is a fee, the true test must be whether its primary and essential purpose is to render specific services to a specified area or class; it may be of no consequence that the State may ultimately and indirectly be benefited by it. The power of any Legislature to levy a fee is conditioned by the fact that it must be “by and large” a quid pro quo for the services rendered. However, correlationship between the levy and the services rendered expected is one of general character and not of mathematical exactitude. All that is necessary is that there should be a “reasonable relationship” between the levy of the fee and the services rendered. If authority is needed for this proposition, it is to be found in the several decisions of this Court drawing a distinction between a tax and a ‘fee’. See: The Commissioner, Hindu Religious Endowments Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, (supra); H.H. Sudhindra Thirtha Swamiar v. Commr, for Hindu Religious and Charitable Endowments, Mysore, ; Hingir-Rampur Coal Co. Ltd v. State ofOrissa, ; H.H. Shri Swamiji of Shri Admar Mutt v. The Commrr. Hindu Religious and Charitable Endowments Dept., ; Southern Pharmaceutical and Chemicals, Trichur v. State of Kerala and Municipal Corporation of Delhi v. Mohd. Yasin, .”
In R.K. Porwal’s. case (supra) while dealing with the establishment of market area and facilities and conveniences not available on the date of notification under the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1964, the Apex Court observed at paragraph No. 15 as follows;
“It was also said that neither the Gultekdi Market nor the Turbhe Market had any convenience or facility or was ready for use on the date on which it was notified as the Principal Market for the concerned market area. On the material placed before us we are satisfied that all reasonable conveniences and facilities are now available in both the markets, whatever might have been the situation on the respective dates of notification. We refrain from embarking into an enquiry as to the situation obtaining on the dates of notification. We do say that a place ought not to be notified as a market unless it is ready for use as a market with all reasonable facilities and conveniences but we do not conceive it to be our duty to pursue the matter to the extreme limit of quashing the notification when we find that all reasonable facilities and conveniences are now available. While a notification may be quashed if nothing has been done beyond publishing the notification, in cases where some facilities and conveniences have been provided but not some others which are necessary the Court may instead of quashing the notification give appropriate time-bound directions for providing necessary facilities and conveniences. On the facts of the present case, we are satisfied that all reasonable facilities and conveniences are now provided. We are also satisfied that the traders have been making one desperate attempt after another to avoid moving into the new markets and they have been successful in stalling the notifications from becoming effective for quite a number of years.”
No doubt, the learned Counsel for the appellant had pointed out that this decision was considered in the subsequent decisions and hence, the ratio in this decision may not be applicable to the facts of the present case. In. Kewal Krishan’s case (supra) the principles of satisfying the tests for a valid levy of market fee on agricultural produce had been dealt with as follows:
“From a conspectus of the various authorities of this Court we deduce the following principles for satisfying the tests for a valid levy of market fees on the agricultural produce bought or sold by licensees in a notified market area:-
(1) That the amount of fee realised must be earmarked for rendering services to the licensees in the notified market area and a good and substantial portion of it must be shown to be expended for this purpose.
(2) That the services rendered to the licensees must be in relation to the transaction of purchase or sale of the agricultural produce.
(3) That while rendering services in the market area for the purpose of facilitating the transactions of purchase and sale with a view to achieve the objects of the marketing legislation it is not necessary to confer the whole of the benefit on the licensees but some special benefits must be conferred on them which have a direct, close and reasonable correlation between the licensees and the transactions.
(4) That while conferring some special benefits on the licensee, it is permissible to render such service in the market which may be in the general interest of all concerned with transactions taking place in the market.
(5) That spending the amount of market fees for the purpose of augmenting the agricultural produce, its facility of transport in villages and to provide other transport in villages and to provide other facilities meant mainly or exclusively for the benefit of the agriculturists is not permissible on the ground that such services in the long run go to increase the volume of transactions in the market ultimately benefiting the traders also. Such an indirect and remote benefit to the traders is in no sense a special benefit to them.
(6) That the element of quid pro quo may not be possible, or even necessary, to be established with arithmetical exactitude but even broadly and reasonably it must be established by the authorities who charge the fees that the amount is being spent for rendering services to those on whom falls the burden of the fee.
(7) Atleast a good and substantial portion of the amount collected on account of fees, may be in the neighbourhood of two-thirds or three-fourths must be shown with reasonable certainty as being spent for rendering services of the kind mentioned above.”
In the Agricultural Market Committee, Bapatla Rep., By its Secretary v. Tatavarti Malakondarayudu Atchuta Venkata Subbaiah and Co., 1984 (2) An.WR 417, it was held that in the present case, what is collected is only a fee not a tax and there is correlation between the fee collected and the services rendered and the market is at an initial stage and is being developed from time to time and it is unreasonable to compel the committee to provide all the facilities at a stretch and then collect the market fee and it is not necessary that every payer of the fee should be a recipient of the services rendered and general service to the body of traders and growers is sufficient and it is the object of the Act and it is being rendered.
11. The admissions made by DW1 also are very relevant for the purpose of deciding the matter. DW1 deposed “there is no Assistant Secretary for the defendant Committee. There is only one Supervisor by the time the suit was filed. There were no growers or farmers who brought their goods to the market yard. By then, no sales or purchases took place in the market yard. It is true that there were no facilities except weighing shed in the market yard. It is true that there is no necessity for a Supervisor to conduct the market function because there are no sales or purchases. There was no opening and closing and suspension of transaction during that time. We did not conduct any auctions. There were no weigh- men or hamalis appointed at that time. There was no list of Tak-patties (sale slips), Amanath pattis (storage slips). There were no storage facilities because the shops were under construction. No grading services were also available. Since no business took place, the question of food adulteration, prevention of food stuffs-does not arise.” The trial Court, after recording all these admissions, came to the conclusion that the appellant-market committee is not justified in making the demand at that stage. It is, no doubt, true that in Sreenivasa General Trader’s case (supra) the prior decision reported in R.K. Porwal’s case (supra) had been referred to. However, in the light of the clear admissions made by DW1 and also non-compliance of all the formalities, the trial Court was well justified in arriving the conclusion that that is not the stage where the demands can be made. Hence, I am not inclined to accept with the broad principles canvassed by the appellant that the very moment a notification is issued, automatically a Market Committee is entitled to make a demand, unless, otherwise, at least the basic amenities are provided for and as far as this aspect is concerned, this is a question of fact to be decided depending upon the facts and circumstances of a particular given case and no broad proposition as such can be laid down.
Point (c):
12. In view of the findings recorded above, especially in the light of the admissions made by DW1, the findings recorded by the trial Court are all factual findings recorded on the strength of both oral land documentary evidence and hence, such findings need not be disturbed at the appellate stage and accordingly, in the light of the same, the appeal being devoid of merits, the same is dismissed. But, however, no costs.