PETITIONER:
RAMESHCHANDRA KACHARDAS PORWAL & ORS.
Vs.
RESPONDENT:
STATE OF MAHARASHTRA & ORS. ETC.
DATE OF JUDGMENT17/02/1981
BENCH:
REDDY, O. CHINNAPPA (J)
BENCH:
REDDY, O. CHINNAPPA (J)
PATHAK, R.S.
ISLAM, BAHARUL (J)
CITATION:
1981 AIR 1127 1981 SCR (2) 866
1981 SCC (2) 722 1981 SCALE (1)334
CITATOR INFO :
R 1985 SC 679 (33)
RF 1986 SC 515 (76)
R 1987 SC1802 (10)
ACT:
Constitution of India 1950, Article 91(1)(g)-
Maharashtra Agricultural Produce Marketing (Regulation) Act
1963, SS 5 and 6 & Maharashtra Agricultural Produce
Marketing (Regulation) Rules 1963, Rule 5-Karnataka
Agricultural Produce Marketing (Regulation) Act 1966, SS. 8,
10 and 11 & Bihar Agricultural Produce Marketing Act 1960
Sections 5, 15-Trading in specified agricultural produce-
State Government-Setting up of new market area-Whether
valid.
Notification declaring that traditional trading
activity in old market area be shifted to new market-Whether
permissible-Infringement of fundamental right to carry on
trade-Whether arises.
Administrative law-Principles of natural justice-Market
yard disestablished at one place and established at another
place-Duty to invite and hear objections-Whether arises.
HEADNOTE:
The Maharashtra Agricultural Produce Marketing
(Regulation) Act 1963 provides for the regulation of the
marketing of agricultural produce in market areas to be
established therefor in the State, Market Committees to be
constituted for purposes connected with such markets,
establishment of Market Fund for purposes of the Market
Committees, and for purposes connected with these matters.
Section 3 empowers the Government by a notification to be
published in the Official Gazette, to declare its intention
of regulating the marketing of such agricultural produce in
such areas as may be specified and section 4 provides that
the marketing of the agricultural produce shall be regulated
under the Act in the area specified in the notification.
Section(1) provides a principal market for every market area
and one or more subsidiary markets, and section 5(2)
empowers the Director to establish the principal market for
the marketing of specified agricultural produce. Section 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 section 4(1) is made. Section 6(2) provides that
section 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.
The Maharashtra Agricultural Produce Marketing
(Regulation) Rules, 1963 were promulgated pursuant to the
power conferred by section 60 of the Act. Rule 5 provides
that no person shall market any declared agricultural
produce in any place in a market area other than the
principal market or subsidiary
867
market established therein. The proviso to the rule enables
the Director of Marketing to authorise a Market Committee to
permit a trader or commission agent to market declared
agricultural produce or to permit any other market
functionary to operate at any place within the market area
as may be mentioned by the Market Committee in the licence
granted to such trader.
The petitioners who were wholesale traders in onions
and potatoes in their writ petitions to the Supreme Court
assailed the notices requiring them to carry on business in
regulated agricultural produce in the market yard at the
specified areas of the State, and at no other place,
contending that: (1) the 1963 Act, did not invest the
Director of Marketing or the Market Committee with any power
to compel a trader to transfer this activity from a
previously existing market to a principal or subsidiary
market established under section 5 of the Act (2) Rule 5 was
inconsistent with section 6 and therefore ultra vires. (3)
The Bombay Agricultural Produce Markets Act, 1939 and the
Agricultural Produce Marketing Acts of other States such as
Karnataka provided or indicated by an express provision that
once a market was established it was not permissible to
market or trade outside the market and that the absence of
such an express provision in the 1963 Act showed that no
such ban was contemplated by the Act. (4) The transactions
between trader and trader and transactions by which the
agricultural produce was imported into the market area from
outside the market areas were outside the purview of the Act
and if section 5 and rule 5 were intended to cover such
transactions also they were invalid. (5) The statue itself
imposed and provided for stringent supervision and control,
sufficient to regulate transactions between traders and
traders, that it was superfluous to insist that such
transactions do take place in the market only. (6) Section 6
of the Act made a distinction between (a) the use of any
place in the market area for the marketing of the declared
agricultural produce, and (b) the operation in the market
areas or in any market therein as a trader, commission
agent, broker etc. in relation to the marketing of
agricultural produce and that the distinction was in reality
a distinction between a sale by a producer to a trader and a
subsequent sale by a trader to a trader, and consequently
the ban imposed by Rule 5 applied only to a sale of the
agricultural produce by a producer to a trader. (7) Section
13(1A) which declared the area comprising greater Bombay 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. (8) when a market yard was
disestablished at one place and established at another place
it was the duty of the concerned authority to invite and
hear objections and failing to do so, was a violation of the
principles of natural justice and the notification
establishing the market yard elsewhere was bad.
Dismissing the writ petitions and appeals:-
^
HELD: 1. (i) The power conferred by S. 5 of the Act to
establish a principal market or a subsidiary market carries
with it the power to disestablish such market. Section 5 of
the Act, read with sections 14 and 21 of the Maharashtra
General Clauses Act vest enough power in the Director to
close an existing market and establish it elsewhere. The
repealed Act of 1939 also empowered the State Government to
declare any market area to be a principal market yard for
the area. The power to issue notifications, orders etc.
includes
868
the power to exercise in like manner to add to, amend, vary
or rescind any notification, order, rule etc. Any other
construction would frustrate the object of the legislation.
[880 A-C, 881 C, D]
Bapubhai Ratanchand Shah v. State of Bombay LVII 1955
Bom. L.R. p. 892, 903-904, approved.
(ii) Rule 5 is not ultra vires. 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, it cannot be
said that a rule made for that purpose is beyond the
competence of the rule making authority under the Act.
[881G, 882C]
(iii) The submission that all regulatory measures
contemplated by the Act and the Rules may be enforced
equally effectively wherever business in agricultural
produce is carried on in the market area outside the
principal and subsidiary markets as within the principal and
subsidiary markets is without force. If that is done, the
regulation will very soon be reduced to a farce. The Market
Committee will be forced to employ an unduly large number of
officers. The producer's interest will not be properly
served because a producer will not be able to deal face to
face with several traders and would have little chance of
obtaining the best price for his produce. This cannot happen
if he is persuaded to take his produce to the place of
business of an individual trader outside the principal or
subsidiary market. There is a greater possibility of abuse
and greater likelihood of the object of the Act being
frustrated. Fair price to the agriculturist will soon be a
mirage and the evil sought to be prevented will persist.
[882 E-H]
Kewal Krishan Puri & Anr. v. State of Punjab & Ors.
[1979] 3 S.C.R. p. 1217, 1247, referred to.
2. There can be no question of any inconsistency
between section 6 and rule 5. Section 6 is applicable to
both the situations before and after the establishment of
markets, and is expressly declared to be subject to the
rules providing for regulating the marketing of agricultural
produce in the market area by stipulating that the marketing
shall be carried on in the market established in the market
area. [883F, D-E]
3. The rule prescribing that no marketing operation in
any declared agricultural produce shall be carried on
outside the principal or subsidiary markets is consistent
and in consonance with the scheme of the Act and is within
the competence of the rule making authority and is
reasonable. Absence of an express provision in the Act to
the effect that once a market is established it was not
permissible to market or trade in agricultural produce
outside the market itself merely means that greater latitude
is given to the rule making authority to introduce
regulation of marketing by stages and to ban all marketing
activity outside the market. This cannot lead to the
inference that the rule making authority has no power to
make a rule banning marketing activity
869
outside the market once the market is established even when
such a ban is found to be necessary. [884 B, 883 H-884 A]
4. (i) The assumption that the Act was conceived in the
interest of the agriculturists only and intended for their
sole benefit is not well founded. One of the principal
objects sought to be achieved by the Act is the securing of
a fair price to the agriculturist for his produce by the
elimination of middlemen and other detracting factors. But
that is not the only object. The Act is intended to regulate
marketing of agricultural and certain other produce. The
marketing of agricultural produce is not confined to the
first transaction of sale by the producer to the trader but
must necessarily include all subsequent transactions in the
course of the movement of the commodity into the ultimate
hands of the consumer so long, of course, as the commodity
retains its original character as agricultural produce.
While middlemen are sought to be eliminated, it is wrong to
view the Act as one aimed at legitimate and genuine
traders.[884D-F]
(ii) Promotion of grading, standardisation of
agricultural produce, weighment, the provision for
settlement of disputes arising out of transactions connected
with the marketing of agricultural produce and ancillary
matters are as much to the benefit of the producer as the
consumer. Clearly therefore the regulation of marketing
contemplated by the Act involves benefits to the traders too
in a large way. Regulation of marketing of agricultural
produce, if confined to the sales by producers within the
marketing area to traders, will very soon lead to
circumvention in the guise of sales by traders to traders or
import of agricultural produce from outside the market area
to within the market area. [884G-885B]
5. (i) It is not correct to say that the statute itself
imposed and provided for such stringent supervision, and
control sufficient and more, to regulate transactions
between traders and traders, that it was superfluous to
insist that such transactions do take place in the market
only. The other supervisory measures in the Act cannot be
said to be 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. The rendering of services to the
traders also will be far easier. Therefore, localising
marketing is helpful and necessary for regulation and
control and for providing facilities. [887E-888A]
(ii) The requirement that the locus of transactions of
sale and purchase of agricultural produce, including those
between trade and trader, should be in the market cannot be
said to be harsh or an excessive restriction on the
Fundamental Right to carry on trade. [888B]
6. The proviso to rule 5 speaks of operating at any
place within the market area by a trader, commission agent
or other market functionary after obtaining a licence while
the main provision refers to the marketing of declared
agricultural produce at any place in the market area. It
cannot be contended that the proviso is unrelated to the
main provision. According
870
to ordinary canons of construction the proper function of a
proviso is to accept and deal with a case which would
otherwise fall within the general language of the main
enactment. [888F-G]
7. There was nothing unreal and unreasonable in
establishing a single market for a large area. It had become
imperative in the public interest that the markets should be
shifted from their former place to the new area. The present
village was chosen because it was free from congestion,
conveniently located near another trunk road. A railway line
linking with both the Western Railway and the Central
Railway and so on. There is, therefore, nothing unreasonable
in the statutory declaration of Greater Bombay and Turbhe
Village as a market area; nor in the establishment of a
single market in Turbhe Village for the entire market area.
[889B-E]
8. Where a market yard was disestablished at one place
and established at another place, no exercise of a judicial
or quasi-judicial function is involved. All that is involved
is the declaration by a 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 this context is an act
legislative in character and does not obligate the
observance of the rules of natural justice. [891C-F]
Baits v. Lord Hailsham (1972) 1 WLR 1373 & Tulsipur
Sugar Co. v. Notified Area Committee [1980] 2 SCR 1111
referred to.
9. The seeming confusion in the large number of
notifications issued by the Government from time to time was
not the result of any arbitrary or erratic action on the
part of the Government but was the result of a desire to
accommodate the traders as much as possible. The old markets
had existed from ancient days and it had become necessary to
establish modern market yards with conveniences and
facilities. When this was sought to be done there were
representations by the traders and the Government thought
that it was advisable to give the traders sufficient time to
enable them to prepare themselves to move into the new
market yards. The notifications establishing new market
yards were therefore, cancelled and the old markets were
allowed to function for sometime. Later when the time was
thought to be ripe, notifications establishing new market
yards were once again issued. [893 F, D-E]
JUDGMENT:
ORIGINAL JURISDICTION: Writ Petition Nos. 692,937-1063,
1111-1115, 1558/80, 5441-62, 6217/80 and 6529-6551/80.
(Under Article 32 of the Constitution.)
AND
Civil Appeal Nos. 3297 & 2689 of 1979.
Appeals by special leave from the Judgment and Orders
dated 25-5-1979 & 22-1-1979 of the Karnataka High Court in
Regular Second Appeal No. 551/77 & W.P. Nos. 551/77 and
6555/78.
871
WITH
Civil Appeal No. 1895 of 1979.
Appeal by special leave from the Judgment and Order
dated 22-1-1979 of the Karnataka High Court in W.P. No.
35/76.
AND
Civil Appeal No. 1507 of 1980.
Appeal by Special Leave from the Judgment and Order
dated 2-5-1980 of the Patna High Court in Civil Writ
Jurisdiction Case No. 394 of 1980.
AND
Civil Appeal No. 1715-1716 of 1980.
Appeals by special from the Judgements and Orders dated
30-8-1979 and 2-5-1980 of the Patna High Court in C.W.J.C.
Nos. 5136/78 & 840/80.
S. V. Gupte, V. M. Tarkunde, Soli J. Sorabjee, K. K.
Venugopal, K. N. Bhatt and T. S. Sundrajan for the
Petitioners in WP Nos. 692, 937-1063 and 1111-1115/80.
Dr. Y. S. Chitale, R. P. Bhatt and A. K. Goel for the
Petitioner in W. P. No. 1558/80.
S. G. Sundraswamy, Ravindran, Vijay Kumar Verma and K.
N. Bhat for the Appellant in CA Nos. 1895/79 & 2689/79.
V. M. Tarkunde, K. R. Nagaraja, P. K. Rao and Aloke
Bhattacharya for the Appellant in CA No. 3297/79.
Soli J. Sorabjee, B. P. Maheshwari, Suresh Sethi and
Miss Asha Jain for the Appellant in CA No. 1507/80.
Lal Narain Sinha, attorney General, O. P. Rana and M.
N. Shroff for Respondent No. 1 in WP Nos. 692, 937-1063 and
1111-1115/80.
A. K. Goyal for the Petitioner in WP 5441-62 of 1980.
K. K. Singhvi, A. K. Gupta, Brij Bhushan and N. P.
Mahindru for RR-3 in WP 692, 937-1063, 1111-1115/80 and RR
in WP No. 1558/80.
Lal Narain Sinha, Attorney General and N. Nettar for
RR-1 in CA 1895 and 2689/79.
B. Keshava Iyengar, Advocate General and N. Nettar for
State of Karnataka in CA 1895 & 2689/79.
872
H. B. Datar, Miss Madhu Moolchandani and R. B. Datar
for RR-2 in CA 1895 & 2689/79.
K. K. Singhvi, N. P. Mahindru and A. K. Gupta for RR
No. 3 in WP Nos. 5441-62/80.
S. S. Javali, B. P. Singh, Ranjit Kumar and Ravi
Prakash for Intervener in CA Nos. 1895/79.
Lal Narain Sinha, Attorney General, R. B. Mehto, B. P.
Sinha and Naresh K. Sharma for the Intervener in WP No.
692/80.
Lal Narain Sinha, Attorney General, R. B. Mehto, B. P.
Singh Ravi Prakash, Ranjit Kumar and Naresh K. Sharma for RR
3-5 in CA 1507/80.
K. G. Bhagat and D. Goburdhan for State of Bihar in CA
1507/80.
S. S. Ray and M. P. Jha for the Appellant in CA 1715-
1716/80.
Lal Narain Sinha, Attorney General, R. B. Mehto, B. P.
Singh. Ravi Prakash, Ranjit Kumar, Naresh K. Sharma and J.
S. Rathore for RR 3-5 in CA Nos. 1715-1716/80.
V. M. Tarkunde, K. R. Nagaraja, P. K. Rao and Aloke
Bhattacharya for Petitioner in WP 6217/80, 6529-6551/80.
H. B. Datar, Miss Madhu Moolchandani and R. B. Dattar
for the Respondent (Market Committee).
H. B. Datar and N. Nettar for RR (State of Karnataka).
K. G. Bhagat and D. Goburdhan for the State of Bihar in
CA 1715-1716/80.
V. M. Tarkunde, P. K. Rao, Aloke Bhattacharya and K. R.
Nagaraja for the Petitioner in WP 6529-51/80.
N. Nettar for the Respondent in WP No. 6529-51/80.
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 Peti-
873
tion 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,
pursuant to a declaration that it was intended to regulate
the purchase and sale of ‘gur’ in the market area. The
Bombay Agricultural Produce Markets Act, 1939, was repealed
and replaced by the Maharashtra Agricultural Produce
Marketing (Regulation) Act, 1963. By Sec. 64 of the Act the
notifications previously issued etc. under the provisions of
the repealed Act were kept alive for the purposes of the new
Act. On March 23, 1971, the present Market Committee known
as Krishi Utpanna Bazar Samiti, Pune, was constituted under
Sec. 4(1) of the 1963 Act. On April 21, 1971, the Director
of Agricultural Marketing published a notification declaring
his intention to regulate marketing of a large number of
commodities in the market area of Haveli and Pune City
Taluks. On October 4, 1975, the Director of Agricultural
Marketing, Maharashtra State, exercising his powers under
Sec. 5(2) of the Maharashtra Agricultural Produce Marketing
(Regulation) Act, 1963, declared the locality known as
Market Yard Gultekadi as the principal market for the market
area for the marketing of various commodities specified in
the notification. Thereafter on October 8, 1975, a Circular
was issued to all Adatis, merchants, and licence holders,
particularly wholesale dealers dealing in Gur, Halad,
Dhania, etc. in the vicinity of Bhavanipeth-Nanapeth
informing them that Bhavanipeth-Nanapeth will cease to be a
market from the midnight of October 13, 1975 and that the
market yard Gultekadi had been declared as the principal
market for the market area. The circular went on to say that
anyone carrying on business anywhere except Gultekadi was
liable to be prosecuted. The result of the notification
dated October 4, 1975, and the Circular dated October 8,
1975 was that it was not permissible for anyone to carry on
trade in any of the notified agricultural commodities
outside the Gultekadi market yard on and after October 14,
1975. It meant that traders like the petitioner who had for
generations been carrying on business in these commodities
in Bhavanipeth-Nanapeth had perforce to move into Gultekadi
market yard if they wanted to stay in the business.
Consequent upon representations made by the Pune Merchants
Chamber and the interim order in a Writ petition filed in
the Bombay High Court by the Chamber the date notified for
the commencement of the functioning of the Principal Market
in Gulekadi
874
was 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 declared that after
January 26, 1979, marketing of potatoes and onions shall be
carried on at the Principal Market at Turbhe and at no other
place. It appears that initially, for the market area
comprising Greater Bombay and Turbhe Village in Thana
Taluka, the newly established market at Turbhe was declared
as the Principal Market and the existing markets at Maulana
Azad Road and Mahatma Phule Mandai were declared subsidiary
markets. This was by a notification dated January 15, 1977.
Later by the impugned notification dated December 5, 1978,
the subsidiary markets were abolished and the market at
Turbhe alone was declared as the Principal Market for the
area comprising Greater Bombay and Turbhe village.
It was argued on behalf of the petitioners that the
Maharashtra Agricultural Produce Marketing (Regulation) Act
1963 did not invest the Director of Marketing or the Market
Committee with any power to compel a trader to transfer his
activity from a previously existing market to a principal or
subsidiary market established under Sec. 5 of the Act. There
was no provision in the Act by which a trader could be
compelled to market declared agricultural produce in the
principal or subsidiary market established under Sec. 5 and
in no other place. This was a feature which distinguished it
from the Bombay Act of 1939 and the Agricultural Produce
Marketing Acts of some other States. Rule 5 of the
Maharashtra Agricultural Produce Marketing (Regulation)
Rules, 1967, which purported to provide that no person shall
market any declared agricultural produce
875
in any place in a market area other than the Principal
Market or subsidiary market established therein was ultra
vires. It was also submitted that once a principal or
subsidiary market was established at one place there was no
provision in the Act which enabled the principal or
subsidiary market to be transferred to another place. In any
event it was urged that the notification was an unreasonable
restriction on the right of the petitioners to carry on
their trade. It was also submitted. and this appeared to be
the main thrust of the argument of most of the counsel for
the various petitioners that the Act did not cover
transactions between trader and trader and transactions by
which the agricultural produce was imported into the market
area from outside the market area. Secs. 5 and 6 and Rules 5
and 6 had to be so read-the 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 markets; to establish
Market Fund for purposes of the Market Committees and to
provide for purposes connected with the matters aforesaid”.
Sec. 2(1)(h) defines “market” as meaning “any principal
market established for the purposes of this Act and also a
subsidiary market”. Sec. 2(1)(i) defines “market area” as
meaning “an area specified in a declaration made under Sec.
4”. Sec. 2(1)(o) defines “retail sale” as meaning “in
relation to any agricultural produce, sale of that produce
not exceeding such quantity as a Market Committee may by
bye-laws determine to be a retail sale”. Sec. 2(1)(t)
defines “trader” as meaning “a person who buys or sells
agricultural produce, as a principal or as duly authorised
agent of one or more persons”. Sec. 3 empowers the
Government to declare its intention of regulating the
marketing of such agricultural produce, in such area as may
be
876
specified in a notification to be published in the official
Gazette. Objections or suggestions which may be received by
the State Government within a specified period are to be
considered by the State Government. Thereafter, Sec. 4
provides, the State Government may declare, by another
notification that the marketing of the agricultural produce
specified in the notification. The area specified shall be
the market area. Sec. 5(1) provides that there shall be a
principal market for every market area and there may also be
one of more subsidiary markets. Sec 5(2) empowers the
Director, by notification, to establish any place in any
market area to be the principal market for the marking of
agricultural produce specified in the notification.
Subsidiary markets may also be established likewise. Sec. 5
is important and it may, therefore, be extracted here:
“5(1) For every market area, there shall be
established a principal market, and there may be
established one or more subsidiary markets.
(2) The Director shall, as soon as possible after
the issue of a notification under sub-section (1) of
section 4, by a notification in the Official Gazette
establish any place (including any structure,
enclosure, open place or locality) in any market area
to be the principal market for the marketing of the
agricultural produce specified in that notification;
and may by the same notification, or by like
notification, establish in any other like places in the
market area, subsidiary markets for the marketing of
such agricultural 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
877
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 the market
area, no person shall, on and after the date on which
the declaration is made under sub-section (1) of
section 4, without, or otherwise than in conformity
with the terms and conditions of, a licence (granted by
the Director when a Market Committee has not yet
started functioning; and in any other case, by the
Market Committee) in this behalf,-
(a) use any place in the market area for the
marketing of the declared agricultural produce, or
(b) 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.
(2) Nothing in sub-section (1) shall apply to
sales by retail; sales by an agriculturist who sells
his own produce; nor to sales by a person where he
himself, sells to another who buys for his personal
consumption or the consumption of any member of his
family.”
Sec. 7 empowers the Market Committee, subject to rules made
in that behalf and after making such enquiry as it thinks
fit to grant or renew a licence for the use of any place in
the market area for marketing of the agricultural produce or
for operating therein as a trader etc. The Market Committee
may refuse to grant or renew any licence for reasons to be
recorded in writing. Sec. 8 enables the Market Committee to
suspend or cancel any licence. Sec. 10 makes provision for
the constitution of a Board by the Market Committee for the
settlement of disputes between buyers and sellers or their
agents inclusive of disputes relating to quality, weight,
payment etc. Sec. 11 provides for the establishment of a
Market Committee by the State Government. Sections 12 and 13
deal with the incorporation and constitution of Market
Committees. Sec. 13(1A) makes special provision for Greater
Bombay and Turbhe village. The area comprising Greater
Bombay and Turbhe village is deemed to be a market area for
the purposes of the Act and a Market Committee is
constituted with a different composition from other Market
Committees.
878
Sec. 29 enumerates the powers and duties of Market
Committees. It is the duty of a Market Committee to
implement the provisions of the Act, the rules and bye-laws
made thereunder in the market area, to provide such
facilities for marketing of agricultural produce therein as
the Director may from time to time 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 the collection centre. Sec. 31 makes it competent
to a Market Committee to levy and collect fees from every
purchaser of agricultural produce marketed in the market
area. Sec. 35 enables a Market Committee to employ a
Secretary and such other officers and servants as may be
necessary for the management of the market, for the
collection, maintenance, dissemination and supply of
information relating to crops, statistics and marketing
intelligence and for carrying out its duties under the Act.
Sec. 36 provides for the creation of Market Fund and Sec. 37
enumerates the purposes for which the Market Fund may be
expended. Among those purposes are the acquisition of a site
or sites for the market, maintenance, development and
improvement of the market, construction of, and repairs to
buildings necessary for the purposes of such market and the
health, convenience and safety of persons using it,
maintenance of standard weights and measures, collection and
dissemination of information, propaganda for agricultural
improvement and orderly marketing etc. etc. Section 60 makes
a contravention of the provisions of Section 6(1)
punishable. Section 60 empowers the State Government to make
rules for carrying into effect the purposes of the Act.
Pursuant to the power conferred by Sec. 60 of the
Maharashtra Agricultural Produce Marketing (Regulation) Act,
1963, rules have
879
been made. Rule 5 prescribes that no person shall market any
declared agricultural produce in any place in a market area
other than principal market or subsidiary market established
therein. The proviso to Rule 5 enables the Direct of
Marketing to authorise a Market Committee to permit a trader
or Commission Agent to market declared agricultural produce
or to permit any other market functionary to operate at any
place within the market area as may be mentioned by the
Market Committee in the licence granted to such trader. This
is obviously, a reserve power vested in the Market Committee
to be exercised but in exceptional cases, and, on an express
authorisation from the Director, subject to the terms and
conditions imposed by him. Rule 6 prescribes the procedure
by which any person desiring to use any place in a market
area for marketing of any declared agricultural produce or
for operating therein as a trader, commission agent or
broker may obtain a licence. He is required to make an
application in the prescribed 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 agricultural
produce to make payment to the seller or his commission
agent immediately after the sale on the same day. Rule 21
prohibits the adulteration of declared agricultural produce
in the market area or market. Rule 22 provides for grading
and standardization of agricultural produce. Rule 25
provides for inspection of weights and measures. Rule 27
requires the Market Committee to publish a daily list of
prices of the different varieties and grades of declared
agricultural produce marketed in the market area. There are
several other rules providing for the constitution of Market
Committees, preparation of their budgets, discharge of their
other duties etc., but for our purpose it may not be
necessary to refer to them.
880
We have seen that Sec. 5 authorises the establishment
of a principal market and one or more subsidiary markets.
Quite obviously the power to establish a principal market or
a subsidiary market carries with it the power to
disestablish (if such an expression may be used) such
market. Quite obviously again, the power given by Sec. 5 to
establish a principal or subsidiary market may be exercised
from time to time. These follow from Sections 14 and 21 of
the Maharashtra General Clauses Act. So, Sec. 5 of the
Maharashtra Agricultural Produce Marketing (Regulation) Act,
1963, read with Sections 14 and 21 of the Maharashtra
General Clauses Act vest enough power in the Director to
close an existing market and establish it elsewhere. Sec.
4A(2) of the Bombay Agricultural Produce Markets Act, 1939,
(the Act which preceded the Maharashtra Agricultural Produce
Marketing Regulation) Act, empowered the State Government 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. There was a proviso to Sec. 4A(2)
which provided that out of the enclosures, buildings or
localities declared to be market yards before the
commencement of the Bombay Agricultural Produce Markets
(Amendment) Act 1954, one shall be declared to be the
principal market yard for the market area and others, if
any, to be one or more sub-market yards for the area Before
the 1954 amendment Act Vakhar Bagh was the market yard for a
certain market area. In October 1954, (after the 1954
amendment came into force) Vakhar Bagh was declared as the
principal 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-
881
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
clearly competent to the State Government to declare
from time to time which should be the principal market
yard and which should be sub-market yards. It is also
clear under s. 21 of the General Clauses Act that when
a power to issue notifications, orders, rules, or bye-
laws is conferred, then that power includes a power to
exercise in the like manner and subject to the like
sanction and conditions, if any, to add to, amend, vary
or rescind any notifications, orders, rules or bye-laws
so issued”……………………. “under s. 4A(2)
Government can by issuing notifications from time to
time after the principal market yards which have been
set up and which did not exist before the passing of
the Amending Act”.
We agree. Any other construction may frustrate the very
object of the legislation. Nothing may be expected to remain
static in this changing world of ours. A market which is
suitably and conveniently located today may be found to be
unsuitable and Inconvenient tomorrow on account of the
development of the area in another direction or the
congestion which may have reduced the market into an
Impossible, squalid place or for a variety of other reasons.
To so interpret the provisions of the Agricultural Produce
Marketing Regulation Act as prohibit the abolition of a
market once established and bar the transfer of the market
to another place would, as we said, be to defeat the very
object of the Act. Neither the text nor the context of the
relevant provisions of the Act warrant such a prohibition
and bar and there is no reason to imply any such. On the
other hand Sections 14 and 21 of the Maharashtra General
Clauses Act warrant our reading into Sec. 5 a power to close
a market and establish it elsewhere.
The submission that Rule 5 of the Maharashtra
Agricultural Produce Marketing Regulation Rules 1967 which
provides that no person shall market any declared
agricultural produce in any place in a market area other
than the principal market or subsidiary market established
therein is ultra vires, is, in our opinion, equally without
force. Sec. 60 of the Act empowers the State Government to
make rules for carrying into effect the purposes of the Act.
It cannot but be said that the establishment of a principal
and subsidiary markets for the marketing of declared
agricultural produce and the bar against marketing
operations being carried on elsewhere than in the markets so
882
established 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. It is not
difficult to visualise the impossibility of effective
regulation if marketing operations are allowed to be carried
on outside the principal and subsidiary markets, anywhere in
the market area. The submission was that all the regulatory
measures contemplated by the Act and the rules may be
enforced equally effectively wherever business in
agricultural produce is carried on in the market area
outside the principal and subsidiary markets as within the
principal and subsidiary markets. On the face of it, it is
difficult to accept this submission. The regulation will
become impossible and will soon be reduced to a farce if
traders are allowed to carry on marketing operations in
every nook and corner of the market area. The Market
Committee will be forced to employ an unduly large number of
officers who will have to run hither and thither, all over
the market area. The regulation and control will soon become
unmanageable. Nor will the producers’ interests be properly
served. Where a producer brings his produce to the market,
he will deal face to face not with one but with several
traders, with a greater chance of getting the best price for
his produce. This cannot happen if he is persuaded to take
his produce to the place of business of an individual trader
outside the principal or subsidiary market. There is a
greater possibility of abuse and greater likelihood of the
object of the Act being frustrated. Fair price to the
agriculturist will soon be a mirage and the evil sought to
be prevented will persist. In Kewal Krishan Puri & Anr. v.
State of Punjab & Ors.(1) this Court had occasion to
observe:
883
“No body can be allowed to establish a purchasing
centre of his own at any place he likes in the market
area without there being such a permission or authority
from the Market Committee. After all the whole object
of the Act is the supervision and control of the
transactions of purchase by the traders from the
agriculturists in order to prevent exploitation of the
latter by the former. The supervision and control can
be effective only in specified localities and places
and not throughout the extensive market area.”
One of the submissions of the learned Counsel was that
Section 6 of the Act contemplated the use of any place in
the market area for the marketing of the declared
agricultural produce on obtaining a licence from the Market
Committee and, therefore, 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 of other States such as
Karnataka provided or indicated by express provision that
once a market was established it was not permissible to
market or trade in agricultural produce outside the market,
and that the absence of such an express provision in the
Maharashtra Act showed that no such ban was contemplated by
the Act. We are unable to agree with the submission. Absence
of an express provision in the Act itself merely means that
greater latitude is given to the rule making authority to
introduce regulation of marketing by stages and to ban all
marketing activity outside the market. The latitude given to
the rule making authority cannot lead to the
884
inference that the rule making authority has no power to
make a rule banning marketing activities outside the market
once the market is established, even when such a ban is
found to be necessary.
We therefore, hold that the rule prescribing that no
marketing operation in any declared agricultural produce
shall be carried on outside the principal or subsidiary
markets is consistent and in consonance with the scheme of
the Act and is within the competence of the rule making
authority and that it is reasonable. Next we pass on to the
main submission made on behalf of the petitioners that the
transactions between trader and trader and transactions by
which the agricultural produce was imported into the market
area from outside the market area were outside the purview
of the Act and that if Sec. 5 and Rule 5 were intended to
cover such transactions also they were invalid. The basic
assumption of the submission was that the Maharashtra
Agricultural Produce Marketing Regulation Act was conceived
in the interests of the agriculturists only and intended for
their sole benefit. This basic assumption is not well
founded. It is true that one of the principal objects sought
to be achieved by the Act is the securing of a fair price to
the agriculturist. As the long title of the Act itself says,
the Act is intended to regulate the marketing of
agricultural and certain other produce. The marketing of
agricultural produce is not confined to the first
transaction of sale by the producer to the trader but must
necessarily include all subsequent transactions in the
course of the movement of the commodity into the ultimate
hands of the consumer, so long, of course, as the commodity
retains its original character as agricultural 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
885
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 circumvention in the guise of sales by traders to
traders or import of agricultural produce from outside the
market area to within the market area. The Shirname
Committee which was appointed by the Maharashtra Government
to review the working of the Bombay Agricultural Produce
Marketing Act, 1939 considered the matter and reported as
follows: (para 86):
“They (the traders) have argued that imported
produce has nothing to do with the legislation meant to
confer benefits on the agriculturist. We are afraid
that this view is untenable. In our opinion, the
benefits sought to be conferred by the Act are not
compartmental inasmuch as a regulated market seeks to
benefit the agriculturist within its area only. The
problem of regulation is to be viewed in the wider
context. This was well emphasised by the Royal
Commission on Agriculture which stated that ‘the
establishment of properly regulated markets can act as
a powerful agent in bringing about a reform which is
much needed, primarily in the interest of the
cultivator, and secondly, in that of all engaged in
trade and commerce in India’. It is in this larger
perspective that an answer to the question is to be
found. Moreover, no agricultural produce goes by a
particular brand with the result that the produce
brought from a particular source cannot be
distinguished from the one secured from the other. If
the produce imported from outside the market area were
to be exempted from the scope of the market regulation,
it would only provide an additional opportunity for the
traders to circumvent the provisions of the Act and
Rules even in respect of the agricultural commodities
produced within the market area. We, therefore,
recommend that once a commodity is regulated in a
market, it should be subjected to regulation
irrespective of its source or final destination.”
Again they said in paragraph 95 as follows:
“We wish to record here that there appears to be a
doubt among the traders as well as the Market
Committees about the precise position of sales of
commodities after they are brought from agriculturists
by traders vis-a-vis the provisions of the Act and the
Rules. It has been the belief of
886
the traders that the law is for the benefit of
agriculturists and on this ground they have pleaded
that its scope should be restricted only to the
dealings with them. We are afraid that this plea is not
tenable. The 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 Markets Act, 1939, as follows (at p.
899):
“Next it is urged that the provisions in the Act
also affect transaction between traders and traders,
and also affect produce not grown within the market
area if it is sold in the market area. That is
undoubtedly so. But if control has to be effective in
the interest of the agricultural producer such
incidental control of produce grown outside the market
area and brought into the market yard for sale is
necessary as otherwise the provisions of the Act would
be evaded by alleging that the particular produce sold
in the market yard was not grown in the market area.
For the same reasons transactions between traders and
traders have to be controlled, if the control in the
interest of agricultural producers and the general
public has to be effective. We are therefore of opinion
that the Act and the Rules and Bye-laws thereunder
cannot be struck down
887
on this ground. The contention under this head
therefore must fail”.
Again in Ram Chandra Kailash Kumar & Co. & Ors. v. State of
U.P. & Anr.,(1) dealing with the contention that fee could
be charged only on those transactions in which the seller
was the producer and not on any other transaction this Court
disapproved the view taken by the Mysore High Court and
approved the view taken by the Patna High Court that fee
could be levied on a transaction of buying and selling
between a dealer and a dealer. Dealing with the contention
that the agricultural produce not produced in the market
area was outside the purview of the Act, it was observed (at
p. 1134):
“It is also not correct to say that the
agricultural produce must have been produced in the
market area in which the first levy is made. It might
have been produced in another market area or even
outside the State of Uttar Pradesh but if a transaction
of sale and purchase takes place of an agricultural
produce as defined in the Act and covered by the
notification within a particular market area then fee
can be charged in relation to the said transaction”.
One of the submissions strenuously pressed before us
was that the statute itself imposed and provided for such
stringent supervision, and control, sufficient and more, to
regulate transactions between traders and traders, that it
was superfluous to insist that such transactions do take
place in the market only. We do not agree. Human ingenuity
is such that vents and escapes 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
888
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 objectives of the statute. We are therefore,
not prepared to hold that the requirement that the locus of
all transactions of sale and purchase of agricultural
produce, including those between trader and trader, should
be in the market is harsh and an excessive restriction on
the Fundamental Right to carry on trade.
It was the submission of the learned counsel that Sec.
6 of the Maharashtra Act made a distinction between (a) the
use of any place in the market area for the marketing of the
declared agricultural produce and (b) the operation in the
market area or in any market therein as a trader, commission
agent, broker, etc. in relation to the marketing of
agricultural produce and that the distinction was in reality
a distinction between a sale by a producer to a trader and a
subsequent sale by a trader to a trader. The argument was
that Rule 5 which banned marketing of any declared market
agricultural produce in any place in a market area other
than the principal market or subsidiary market established
therein applied only to a sale of the agricultural produce
by a producer to trade. We do not see any warrant for the
submission of the learned counsel in the language employed
in Sec. 6 or Rule 5. If the legislature or the rule making
authority wanted to make a distinction between a sale of
agricultural produce by a producer to a trader and a
subsequent sale by a trader to a trader, nothing would have
been simpler than to say so instead of adopting the
circumlocutous way in which the learned counsel claims it
has been said. The proviso to Rule 5 speaks of operating at
any place within the market area by a trader, commission
agent, or other market functionary after obtaining a licence
while the main provision refers to the marketing of declared
agricultural produce at any place in the market area. Surely
it cannot be contended that the proviso is unrelated to the
main provision. According to ordinary cannons of
construction the proper function of a proviso is to except
and deal with a case which would otherwise full within the
general language of the main enactment. It, therefore, shows
that no such distinction as suggested by the learned counsel
for the petitioners was in the mind of the legislature or
the rule making authority.
The onion and potato merchants of Bombay advanced a
special plea that Sec. 13(1A) which declared the area
comprising Greater
889
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 net works
was fast coming up. It was also pointed out that 60% of the
population of Greater Bombay resided in the Northern suburbs
and the new market was much nearer to the majority of the
residents and traders of Greater Bombay. We are unable to
see anything unreasonable in the statutory declaration of
Greater Bombay and Turbhe village as a market area; nor, are
we able to see anything unreasonable, in view of the
circumstances mentioned by the respondents, in the
establishment of a single market in Turbhe village for the
entire market area.
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 night have been the situation on
the respective dates of notification. We refrain for
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
890
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.
In the Writ Petitions and Civil Appeals from Karnataka
State, similar questions have been raised. Though the broad
scheme of the Karnataka Act is the same as the Maharashtra
Act, there are some differences which however are not basic.
Instead of a two tier scheme, Market Area and Markets, as
under the Maharashtra 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 principally questioned in the
Karnataka cases. Substantially the same submissions as in
the Maharashtra cases were made and we have already dealt
with them.
We my now turn to the Bihar cases. The Bihar
Agricultural Produce Markets Act, 1960, follows roughly the
same pattern as the other Acts. A market area has to be
first declared within which the marketing of specified
agricultural produce is proposed to be regulated. For every
market area there is to be a principal market yard and one
or more sub market yards. In between the market area and the
market yard there is to be a market but market does not seem
to play any part in the scheme of the Act as it now stands
after the 1974 amendments. However it should be mentioned
here that Rule 80
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which is still on the Statute Book, provides that a market
shall be established for a market area and that after the
establishment of a market, a notification under Sec. 5
(declaring market yards) shall be issued. Sec. 15 of the Act
provides that no specified agricultural produce shall be
bought or sold at any place within the market area other
than the principal market yard or sub-market yard
established therein except such quantity as may be
prescribed for retail sale or personal consumption. The
arguments advanced in the Maharashtra and Karnataka cases
were advanced in the Bihar cases also. For the reasons
already mentioned we reject the submission. In one of the
Bihar cases it was further submitted that when a market yard
was disestablished at one place and established at another
place, it was the duty of the concerned authority to invite
and hear objections. Failure to do so was a violation of the
principles of natural justice and the notification
disestablishing the market yard at one place and
establishing it elsewhere was therefore, bad. It was said
that even as there was express provision for inviting and
hearing objections before a “market area” was declared under
the Act, so should objections be invited and heard before a
‘market yard’ was established at any particular place. The
principles of nature justice demanded it. We are unable to
agree. We are here not concerned with the exercise of a
judicial or quasi-judicial function where the very nature of
the function involves the application of the rules of
natural justice, or of an administrative function affecting
the rights of persons, wherefore, a duty 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
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or by-law, is not subject to the rules of natural
justice- Bates v. Lord Hailsham of St. Mayleborne
(1972) 1 W.L.R. 1373-any more than is Parliament
itself; Edinburgh and Dalkeith Ry. v. Wauchope (1842) 8
Cl. & F. 710, 720 per Lord Brougham; British Railways
Board v. Pickin (1974) A.C. 765″.
Prof. H. W. R. Wade has similarly pointed in his
Administrative Law (4th Edn.): “There is no right to be
heard before the making of legislation, whether primary or
delegated, unless it is provided by statutes”. There is,
therefore, no substance in the invocation of the rules of
natural justice.
One of the submissions in the Bihar cases was that the
declaration of places as market yards was made in such an
erratic fashion that the exercise of the power could only be
termed as an arbitrary misuse of power. The facts in Civil
Appeal No. 1507 of 1980 were that on September 16, 1964, a
certain area was declared as a principal market yard and
Amgola, Chandwara, Sarai Said Ali and Brahmpura were
declared as Sub market yards. On February 23, 1978 instead
of the principal market yard declared by the notification of
September 16, 1964, Muradpur Dulla was declared as principal
market yard. The sub-market yards were abolished. By another
notification dated April 9, 1979, all the market yards
notified on September 16, 1964 were allowed to continue as
before, but it was also simultaneously made known that such
market yards would be closed on specified dates and
merchants were advised to move their business into the
Muradpur Dulla principal market yard as early as possible.
Finally by a notification dated July 3, 1979, the previous
notification dated April 9, 1979 was cancelled and Muradpur
Dulla market yard was alone notified as the principal market
yard. The facts in the other two appeals were that on
September 19, 1963, Gaya town was declared as a market area.
On April 6, 1964, Chandauti was declared as the market
proper under Sec.5(2)(ii) of the Bihar Act. By a
notification dated April 7, 1964, Mohalla Purani Godown was
declared as principal market yard and Kedarnath Market was
declared as the sub-market yard for the market area. On
October 19, 1973, Mohalla Purani Godown was once again
declared as the Principal Market Yard. Subsequently on
February 28, 1978, Chandauti was declared as the Principal
Market Yard. This meant that Mohalla Purani Godown ceased to
be a market yard and Kedarnath Market ceased to be a sub-
market yard. But, again on April 9, 1979, another
notification was issued, to the effect that Mohalla Purani
Godown would continue as the market yard as before. Finally
on June 27, 1979, Chandauti was
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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
High Court upheld the notification. The merchants have
preferred Civil Appeal No. 1716 of 1980 against the judgment
of the High Court. From the history of events it may appear
as if declarations regarding market yards have been made in
a most erratic fashion but as pointed out by the learned
Attorney General who appeared for the State of Bihar it was
not madness. There was a method. The old markets had existed
from ancient days and it had become necessary to establish
modern market yards with conveniences and facilities. When
this was sought to be done there were representations by the
traders and the Government appears to have thought that it
was advisable to give the traders sufficient time to enable
them to prepare themselves to move into the new market
yards. The notifications establishing new market yards were
therefore, cancelled and the old markets were allowed to
function for some time. Later when the time was thought to
be ripe, notifications establishing new market yards were
once again issued. It is, therefore seen that the seeming
confusion was not the result of any arbitrary or erratic
action on the part of the Government but was the result of a
desire to accommodate the traders as much as possible. We,
therefore, see no force in any of the submissions made on
behalf of the petitioners. All the Writ Petitions and Civil
Appeals are therefore, dismissed with costs.
N.V.K. Petitions and Appeals dismissed.
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