{"id":129399,"date":"1959-09-15T00:00:00","date_gmt":"1959-09-14T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/chimanlal-premchand-vs-the-state-of-bombay-on-15-september-1959"},"modified":"2016-11-28T07:44:23","modified_gmt":"2016-11-28T02:14:23","slug":"chimanlal-premchand-vs-the-state-of-bombay-on-15-september-1959","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/chimanlal-premchand-vs-the-state-of-bombay-on-15-september-1959","title":{"rendered":"Chimanlal Premchand vs The State Of Bombay on 15 September, 1959"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Chimanlal Premchand vs The State Of Bombay on 15 September, 1959<\/div>\n
Equivalent citations: 1960 AIR 96, \t\t 1960 SCR (1) 764<\/div>\n
Author: K Subbarao<\/div>\n
Bench: Subbarao, K.<\/div>\n
           PETITIONER:\nCHIMANLAL PREMCHAND\n\n\tVs.\n\nRESPONDENT:\nTHE STATE OF BOMBAY\n\nDATE OF JUDGMENT:\n15\/09\/1959\n\nBENCH:\nSUBBARAO, K.\nBENCH:\nSUBBARAO, K.\nIMAM, SYED JAFFER\n\nCITATION:\n 1960 AIR   96\t\t  1960 SCR  (1) 764\n\n\nACT:\nAgricultural  produce-Packed or Pressed-If  loses  identity-\nState  Government-Powers  to  make rule\t for  regulation  of\nbusiness  and  condition   of  trading-Bombay\tAgricultural\nProduce\t Market Act, 1939 (Bom. 22 of 1939), ss. 2  and\t 26-\nBombay Agricultural Produce Market Rules 1941, r. 65.\n\n\n\nHEADNOTE:\nThe  appellant as a trader made purchases of  full  pressed,\ncotton bales in the market area of Broach without  requisite\nlicence from the market committee, thereby contravening\t the\nprovisions  of r. 65(1) of the Bombay  Agricultural  Produce\nMarket Rule 1941.  The appellant, inter alia, contended that\nthe Act and Rules passed thereunder did not apply to pressed\ncotton\twhich  having been pressed into bales had  lost\t its\nidentity and was no more an agricultural produce and that r.\n65 was ultra vires inasmuch as its provisions were in excess\nof the rule making power of the State Government.\nHeld,  that  an\t agricultural produce  by  being  packed  in\ncontainers or pressed into bales does not in any way  change\nits essential character, and continues to be an agricultural\nproduce,\n765\nThe fact that the cotton ginned or unginned is pressed\tinto\nbales,\tor  packed otherwise does not make it any  less\t the\ncotton and is an agricultural produce as defined under S.  2\nof the Bombay Agricultural Market Act, 1939.\nUnder  S.  26  of the Act, the State  Government  has  ample\npowers\tto  make rules for the regulation  of  business\t and\nconditions  of trading in the market and sub-s. (1)  of\t the\nsaid s. 26 confers power on the State Government to make  r.\n65.\n\n\n\nJUDGMENT:\n<\/pre>\n
CRIMINAL  APPELLATE JURISDICTION Criminal Appeal No. 200  of
\n1957.\n<\/p>\n
Appeal\tby special leave from the judgment and\torder  dated
\nthe  September\t11,  1956,  of the  Bombay  High  Court,  in
\nCriminal Appeal No. 742 of 1956, arising out of the judgment
\nand order dated December 31, 1955, of the Joint Civil  Judge
\n(J.D.)\tand  Judicial Magistrate, First Class,\t‘Broach,  in
\nCriminal Case No. 605 of 1953.\n<\/p>\n
Purshottam  Tricumdas,\tJ. B. Dadachanji, S. N.\t Andley\t and
\nRameshwar Nath, for the appellants.\n<\/p>\n
H.   J. Umrigar and R. H. Dhebar, for the respondent.
\n1959.\tSeptember  15.\t The  Judgment\tof  the\t Court\t was
\ndelivered by
\nSUBBA RAO J.-This is an appeal by special leave against\t the
\njudgment  of the High Court of Judicature at Bombay  setting
\naside  that  of\t the First  Class  Magistrate,\tBroach,\t and
\nconvicting the appellant for contravening the provisions  of
\nr. 65 (1) of the Bombay Agricultural Produce Markets  Rules,
\n1941,  hereinafter called the Rules, and imposing on  him  a
\nfine of Rs. 25.\n<\/p>\n
The appellant was a trader carrying on business in cotton at
\nBroach.\t  On  February\t7 and 9,  1953,\t he  purchased\tfull
\npressed\t cotton bales from M\/s.\t Ratanji Faramji &  Sons  in
\ntwo instalments of 200 bales each through a licensed broker,
\nDahyabhai  Acharatlal.\t He also purchased  100\t bales\tfrom
\nHalday\t Multi-Purpose\tCo-operative  Society.\t All   these
\npurchases  were\t made by the appellant as a  trader  in\t the
\nmarket area of Broach without the requisite licence from the
\nMarket Committee.  He was charged in the Court of
\n97<\/span>
\n766<\/span>
\nthe  Joint  Civil  Judge  (Junior  Division)  and   Judicial
\nMagistrate,  First Class, Broach, for committing the  breach
\nof  r.\t65 (1) of the Rules.  The Judicial  Magistrate\theld
\nthat  pressed  cotton was not cotton,  ginned  or  unginned,
\nwithin\tthe  meaning of one of the items  mentioned  in\t the
\nschedule  to  the Bombay Agricultural  Produce\tMarkets\t Act
\n(hereinafter  called  ”\t the Act  “),  and,  therefore,\t the
\nappellant  did not commit any offence under the Act  or\t the
\nRules  framed thereunder.  The State of Bombay\tcarried\t the
\nmatter\tby way of appeal to the High Court of Bombay, and  a
\nDivision  Bench\t of  the  said\tHigh  Court,  consisting  of
\nChainani and Shah, JJ., allowed the appeal and convicted the
\nappellant for contravening the provisions of r. 65(1) of the
\nRules  and imposed upon him a fine of Rs. 25.\tThis  appeal
\nchallenges  the\t correctness  of the judgment  of  the\tHigh
\nCourt.\n<\/p>\n
Learned\t Counsel  for  the appellant raised  before  us\t the
\nfollowing  three  contentions:\t(i) the Act  and  the  Rules
\nframed\tthereunder  did not apply to  pressed  cotton,\tand,
\ntherefore,  the appellant did not contravene the  provisions
\nof  r.\t65  (1)\t of the Rules; (ii) r.\t65  is\tultra  vires
\ninasmuch as its provisions are in excess of the rule  making
\npower of the State Government; and (iii) the transactions in
\nquestion were forward contracts for future delivery, and, as
\nno  delivery  was intended or in fact  made,  the  appellant
\ncannot\tbe said to have traded in cotton within\t the  market
\narea.\n<\/p>\n
The   answer  to  the  first  contention  turns\t  upon\t the
\ninterpretation\tof cl. (1) of sub-s. (1) of s. 2 of the\t Act
\nread along with the relevant items or items in the Schedule.
\nThe relevant provisions read:\n<\/p>\n
S.   2\t(1): In this Act unless there is anything  repugnant
\nin the subject or context,-\n<\/p>\n
(i)  “Agricaltural   Produce”\tincludes  all\tproduce\t  of
\nagriculture, horticulture and animal husbandry specified  in
\nthe schedule;\n<\/p>\n
*\t\t\t*\t\t       *\n<\/p>\n
(vi) “Market  Area ” means any area declared to be a  market
\narea under section 4.\n<\/p>\n
767<\/span><\/p>\n
Schedule E.\n<\/p>\n
1. Fibres:\n<\/p>\n
(i) Cotton (ginned and unginned)
\nThe.Bombay Agricultural Produce Markets Rules, 1941:
\nRule  65. (1): No person shall do business as a trader or  a
\ngeneral commission agent in agricultural produce  in\t any
\nmarket area except under a licence granted   by\t the  market
\ncommittee under this rule.\n<\/p>\n
*\t\t      *\t\t\t\t   *\n(7): Whoever\tdoes   business\t  as   a   trader    or\t   a\n<\/pre>\n
general\t commission  agent in agricultural  produce  in\t any
\nmarket\tarea  without a licence granted under this  rule  or
\notherwise  contravenes\tany of the provisions of  this\trule
\nshall,\ton conviction, be punishable with a fine  which\t may
\nextend\t to  Rs.  200  and  in\tthe  case  of  a   continued
\ncontravention with a further fine which may extend to Rs. 50
\nfor every day during which the contravention continues after
\nthe date of the first conviction, subject to the maximum  of
\nRs. 200.\n<\/p>\n
The  gist of ‘the aforesaid provisions may be  stated  thus:
\nAgricultural  produce  includes all produce  of\t agriculture
\nspecified in the Schedule.  Cotton, ginned and unginned,  is
\nspecified  in  the Schedule as an agricultural\tproduce.   A
\ntrader cannot do business in the said produce in any  market
\narea  without obtaining licence from the  Market  Committee.
\nIf he does such business without a licence, he is liable  to
\npunishment under r. 65 of the Rules.\n<\/p>\n
If pressed cotton is ” cotton, ginned or unginned  specified
\nin  the\t Schedule,  the appellant,  having  admittedly\tdone
\nbusiness  in  the  said\t cotton\t in  the  market  area,\t has
\ncontravened  the provisions of r. 65, and therefore,  he  is
\nliable to be convicted under r. 67 of the Rules.
\nIt  is contended that ginned cotton which has  been  pressed
\ninto  bales  is not cotton within the meaning  of  the\tAct.
\nWhat  is ” pressed cotton ” in bales ? It involves a  simple
\nprocess\t described as pressing, and cotton is  pressed\tinto
\nbales  only  to facilitate its transport from one  place  to
\nanother; it does not involve
\n768<\/span>
\nany chemical change or even a manufacturing process.  Ginned
\ncotton,\t after\tit is pressed into bales,  continues  to  be
\nginned cotton, and it is sold and purchased only as  cotton,
\nthough\tin  bales.   We\t find it  difficult  to\t accept\t the
\nargument that pressed cotton is a different commodity.\t Nor
\ndo  we\tfind any relevancy in the argument  that  stockists,
\nindustrialists\tand exporters deal with pressed\t cotton\t and
\nnot loose cotton, because the said fact does not in any\t way
\nchange the essential character of the agricultural  produce.
\nIf  a  trader  carries on business in  that  commodity,\t the
\nconsideration  whether\tthe  trader  or\t the  buyer  is\t  an
\nagriculturist or a non-agriculturist is not relevant to\t the
\nenquiry.\n<\/p>\n
Items  11  to XI of the Schedule  specify  cereals,  pulses,
\noilseeds,  narcotics, sugarcane, fruits, vegetables,  animal
\nhusbandry products, condiments, spices and others, and grass
\nand  fodder.  A perusal of the items indicates that most  of
\nthem  would  be sold in containers like\t baskets,  packages,
\ntins etc.  It cannot be argued that when the pulses,  fruits
\nor  vegetables are packed in a basket, the basket  with\t its
\ncontents  becomes a different commodity from that  contained
\nin  it.\t  So  too, when tobacco is pressed  and\t packed,  it
\ncannot\tbe  suggested that packed tobacco  has\tchanged\t its
\ncharacter.  So also in the case of other products  mentioned
\nin the Schedule.  We do not, therefore, see any principle or
\nreason\tfor  treating cotton in a different way\t from  other
\nagricultural products.\n<\/p>\n
It  is\tsaid that the primary object of the Act is  to\thelp
\nagriculturists,\t that agriculturists do not ordinarily\tdeal
\nor  do business in bales of cotton and that the\t legislature
\ncould  not,  therefore,\t have  intended\t to  make  the\t Act
\napplicable  to pressed cotton.\tIt cannot be  disputed\tthat
\none  of the objects of the Act is to protect the  producers.
\nThat  object  would  certainly be defeated,  if\t within\t the
\nmarket area a trader, whether he is an agriculturist or not,
\ncan  do business of buying and selling cotton  pressed\tinto
\nbales, for by that simple process he would be free from\t the
\nrestrictions  imposed  to protect the  agriculturists.\t The
\nobject\tof such legislation is to protect the  producers  of
\nagricultural crops from being exploited by the middlemen and
\nprofiteers
\n769<\/span>
\nand  to\t enable\t them  to secure a  fair  return  for  their
\nproduce.  This object would certainly be defeated if we were
\nto  accept  the contention of the learned  Counsel  for\t the
\nappellant.\n<\/p>\n
Shortly\t stated\t the  position is this:\t Cotton,  ginned  or
\nunginned, continues to be cotton till it loses its  identity
\nby  some  chemical or industrial process.  So  long  as\t the
\nidentity is not lost, the fact that it is pressed into bales
\nor  packed  otherwise does not make it any the\tless  cotton
\nspecified  in  the Schedule to the Act.\t In this  view,\t the
\npressed\t cotton\t in  bales is  an  agricultural\t produce  as
\ndefined\t in  s.\t 2(1)(i) of the\t Act,  and,  therefore,\t the
\nappellant  in  doing business in the  said  produce  without
\nlicence has contravened r. 65 of the Rules.
\nThe second contention is that r. 65 is in excess of the rule
\nmaking\tpower  of the State Government.\t  This\targument  is
\nelaborated  by the learned Counsel in the following  manner:
\nPurporting to exercise the powers conferred by s. 26 of\t the
\nAct,  the  Government of Bombay made r. 65  prohibiting\t any
\nperson\tfrom doing business as a trader, or as a  commission
\nagent, in any agricultural produce in any market area except
\nunder  a licence granted by the Market Committee under\tthat
\nrule.\tUnder s. 26(2)(e) of the Act, the  State  Government
\nhas  power only to make rules fixing the maximum fees  which
\nmay  be\t levied\t by  the  Market  Committee  in\t respect  of
\nagricultural  produce, bought and sold by persons holding  a
\nlicence under the Act in the market area.  Under the Act the
\nState Government is only empowered to grant a licence to any
\nperson\tto use any place in the market area for the  purpose
\nof buying or selling of any agricultural produce; therefore,
\nunder s. 26(2) (e) of the Act, the Government can only\tmake
\na  rule prescribing the fees in respect of a licence  issued
\nto  a  person  to use any place in the\tsaid  area  and\t not
\nprohibiting  any other person from doing business without  a
\nlicence in that area.  So stated the argument appears to  be
\nplausible, but a scrutiny of the relevant provisions of\t the
\nAct,  the  Rules  made by the Government  and  the  Bye-laws
\nframed by the Market Committee shows that there is no  basis
\nfor this contention.  The relevant provisions read:\n<\/p>\n
770<\/span><\/p>\n
The Bombay Agricultural Produce Markets Act, 1939.
\nS.26 (1): The Provincial Government may, either generally or
\nspecially  for any market area or market areas,\t make  rules
\nfor the purposes of carrying out the provisions of this Act.
\n(2).\t  In   particular  and\twithout\t prejudice  to\t the
\ngenerality  of\tthe  foregoing provisions,  such  rules\t may
\nprovide for or regulate
\n*\t\t       *\t\t\t\t  *\n<\/p>\n
(e)  the management of the market, maximum fees which may be
\nlevied\tby the market committee in respect  of\tagricultural
\nproduce\t bought and sold by persons holding a licence  under
\nthe Act in the market area.\n<\/p>\n
S.   27\t (1):  Subject to any rules made by  the  Provincial
\nGovernment  under section 26 and with the previous  sanction
\nof the Director or any other officer specially empowered  in
\nthis  behalf  by  the  Provincial  Government,\tthe   market
\ncommittee  may\tin  respect of the  market  area  under\t its
\nmanagement make bye-laws for the regulation of the  business
\nand the conditions of trading therein.\n<\/p>\n
The Bombay Agricultural Produce Markets Rules, 1941.
\nRule  65 (1): No person shall do business as a trader  or  a
\ngeneral\t commission  agent in agricultural  produce  in\t any
\nmarket\tarea  except under a licence granted by\t the  market
\ncommittee under this rule.\n<\/p>\n
(2).\t  Any  person  desiring to hold such  licence  shall
\nmake  a\t written  application for a licence  to\t the  market
\ncommittee and shall pay such fee as may be’ specified in the
\nbye-laws.\n<\/p>\n
(3). On receipt of such application together with the proper
\namount\tof  the fee the market committee may,  after  making
\nsuch  enquiries,  as  may be considered\t necessary  for\t the
\nefficient  conduct  of\tthe market, grant  him\tthe  licence
\napplied\t for.\tOn the grant of such licence  the  applicant
\nshall  execute\tan  agreement in such  form  as\t the  market
\ncommittee  may\tdetermine, agreeing to\tconform\t with  these
\nrules  and the bye-laws and such other conditions as may  be
\nlaid down by the market committee for holding the licence.\n<\/p>\n
771<\/span><\/p>\n
(4).\t  Notwithstanding  anything  -contained\t in  subrule
\n(3),  the market committee may refuse to grant a licence  to
\nany  person,  who, in its opinion, is not solvent  or  whose
\noperations  in\tthe market area are not\t likely\t to  further
\nefficient  working  of the market under the control  of\t the
\nmarket committee.\n<\/p>\n
(5).\t  The  licence shall be granted for a period of\t one
\nyear,\tafter  which  it  may  be  renewed  on\t a   written
\napplication, and after such enquiries as are referred to  in
\nsub-section  (3)  as  may be considered\t necessary,  and  on
\npayment of such fees as may be specified in the bye-laws.
\n(6).\t  The  names  of  all  such  traders  and   general,
\ncommission  agents  shall  be entered in a  register  to  be
\nmaintained for the purpose.\n<\/p>\n
(7).\t  Whoever  does\t business as a trader or  a  general
\ncommission agent in agricultural produce in any market\tarea
\nwithout\t a  licence  granted under this\t rule  or  otherwise
\ncontravenes  any  of the provisions of this rule  shall,  on
\nconviction, be punishable with fine which may extend to\t Rs.
\n200  and  in the case of a continued  contravention  with  a
\nfurther fine which may extend to Rs. 50 for every day during
\nwhich  the  contravention continues after the  date  of\t the
\nfirst conviction, subject to the maximum of Rs. 200.
\nBye-laws  of  the  Agricultural\t Produce  Market  Committee,
\nBroach.\n<\/p>\n
Bye-law\t 33: (1).  All traders, general\t commission  agents,
\nbrokers, weighmen, measurers, and surveyors operating in the
\nmarket area shall pay full fees for each market year or\t any
\npart  thereof  as per Schedule given in Appendix No.  2\t for
\nobtaining  licences,  required to be taken  by\tthem,  under
\nRules 65 and 67.\n<\/p>\n
The  said provisions may be summarized\tthus: Section 27  of
\nthe Act empowers the Market Committee, subject to any  rules
\nmade  by  the  State Government under s.  26  and  with\t the
\nprevious  sanction  of\tthe Director, to  make\tbye-laws  in
\nrespect of a market area for the regulation of the  business
\nand conditions of trading therein.  Section 26(1) of the Act
\nenables the State Government to make rules for the  purposes
\nof carrying out the provisions of the Act, In exercise of
\n772<\/span>
\nthat  power conferred under s. 26(1), the  State  Government
\nmade  r.  65 prohibiting any trader from doing\tbusiness  in
\nagricultural  produce except under a licence granted by\t the
\nMarket Committee.  In exercise of powers conferred under  s.
\n27  on the Market Committee, it made bye-law 33\t prescribing
\nthe  fee payable in respect of a licence under r. 65 of\t the
\nRules.\n<\/p>\n
The question is whether under s. 26(1) the State  Government
\nis  empowered  to  make r. 65 prescribing the  taking  of  a
\nlicence as a condition for doing business in a market  area.
\nIt can do so for the purposes of carrying out the provisions
\nof  the Act.  Section 27, which is a provision of  the\tAct,
\nenables\t the  Market  Committee to  make  bye-laws  for\t the
\nregulation of the business and the conditions of trading  in
\nthe  market  area.   To\t enable\t the  Market  Committee\t  to
\ndischarge  its\tfunctions  under  s.  27  of  the  Act\tmore
\neffectively, the Government made a rule prohibiting a trader
\nfrom  doing business in a market area without  licence,\t and
\nthe Market Committee prescribed the fees payable in  respect
\nof  the\t licence.  The rule was certainly one made  for\t the
\npurpose\t of  facilitating the Market Committee\tto  function
\neffectively  under s. 27 of the Act.  That  the\t legislature
\nconferred  such\t a  power on the State\tGovernment  is\talso
\nsupported  by the provisions of s. 27 of the Act.  Under  s.
\n27(1),\tthe  bye-laws made by the Market Committee  for\t the
\nregulation  of\tbusiness and conditions of  trading  in\t the
\nmarket\tarea  are  subject to the rules made  by  the  State
\nGovernment under s. 26.\t This indicates that under s. 26  of
\nthe  Act, the State Government has also power to make  rules
\nfor the regulation of business and conditions of trading  in
\nthe market area, and that power can be spelled out from\t the
\nprovisions  of\ts.  26(1) of the Act,  Therefore,  s.  26(1)
\nconfers\t ample power on the State Government to make r.\t 65.
\nIn  this view, it is not necessary to invoke the  provisions
\nof s. 26(2)(e) to sustain the power of the State  Government
\nto make r. 65.\n<\/p>\n
The  third contention though raised was not pursued in\tView
\nof  the word ,business” in r. 65(1) which  is  comprehensive
\nenough to take in even forward contracts.
\nIn the result the appeal fails and is dismissed,
\n773<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Chimanlal Premchand vs The State Of Bombay on 15 September, 1959 Equivalent citations: 1960 AIR 96, 1960 SCR (1) 764 Author: K Subbarao Bench: Subbarao, K. PETITIONER: CHIMANLAL PREMCHAND Vs. RESPONDENT: THE STATE OF BOMBAY DATE OF JUDGMENT: 15\/09\/1959 BENCH: SUBBARAO, K. BENCH: SUBBARAO, K. IMAM, SYED JAFFER CITATION: 1960 AIR […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-129399","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nChimanlal Premchand vs The State Of Bombay on 15 September, 1959 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/chimanlal-premchand-vs-the-state-of-bombay-on-15-september-1959\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chimanlal Premchand vs The State Of Bombay on 15 September, 1959 - 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