{"id":12983,"date":"1958-10-06T00:00:00","date_gmt":"1958-10-05T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/m-c-v-s-arunachala-nadar-etc-vs-the-state-of-madras-others-on-6-october-1958"},"modified":"2015-01-27T10:15:20","modified_gmt":"2015-01-27T04:45:20","slug":"m-c-v-s-arunachala-nadar-etc-vs-the-state-of-madras-others-on-6-october-1958","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/m-c-v-s-arunachala-nadar-etc-vs-the-state-of-madras-others-on-6-october-1958","title":{"rendered":"M.C. V. S. Arunachala Nadar Etc vs The State Of Madras &amp; Others on 6 October, 1958"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">M.C. V. S. Arunachala Nadar Etc vs The State Of Madras &amp; Others on 6 October, 1958<\/div>\n<div class=\"doc_citations\">Equivalent citations: 1959 AIR  300, \t\t  1959 SCR  Supl. (1)  92<\/div>\n<div class=\"doc_author\">Author: K Subbarao<\/div>\n<div class=\"doc_bench\">Bench: Das, Sudhi Ranjan (Cj), Bhagwati, Natwarlal H., Sinha, Bhuvneshwar P., Subbarao, K., Wanchoo, K.N.<\/div>\n<pre>           PETITIONER:\nM.C. V. S. ARUNACHALA NADAR ETC.\n\n\tVs.\n\nRESPONDENT:\nTHE STATE OF MADRAS &amp; OTHERS\n\nDATE OF JUDGMENT:\n06\/10\/1958\n\nBENCH:\nSUBBARAO, K.\nBENCH:\nSUBBARAO, K.\nDAS, SUDHI RANJAN (CJ)\nBHAGWATI, NATWARLAL H.\nSINHA, BHUVNESHWAR P.\nWANCHOO, K.N.\n\nCITATION:\n 1959 AIR  300\t\t  1959 SCR  Supl. (1)  92\n CITATOR INFO :\n R\t    1959 SC1124\t (25,27)\n F\t    1962 SC  97\t (5)\n R\t    1966 SC 385\t (8)\n RF\t    1967 SC 973\t (4)\n R\t    1973 SC 106\t (102)\n D\t    1974 SC1489\t (6)\n E\t    1980 SC1008\t (22)\n F\t    1983 SC1246\t (15,18)\n D\t    1984 SC1772\t (15,16)\n R\t    1985 SC 218\t (3)\n R\t    1986 SC1506\t (6)\n\n\nACT:\n       Fundamental Right-Reasonable restrictions-Statute regulating\n       buying\tand  selling  of  commercial   crops-Constitutional\n       validity\t Madras Commercial Crops Markets Act (Mad.   XX\t Of\n       1933) Constitution of India, Arts. 19(1)(g) and 19(6).\n\n\n\nHEADNOTE:\nThe  Madras legislature enacted the Madras Commercial  Crops\nMarkets\t Act for providing satisfactory conditions  for\t the\ngrowers\t of commercial crops to sell their produce on  equal\nterms  with  the purchasers and at reasonable  prices.\t The\nAct,  Rules and the Bye-laws framed thereunder have  a\tlong\nterm  target  of  providing a net work\tof  markets  wherein\nfacilities  for\t correct  weighment  are  ensured,   storage\naccommodation  is provided, and reliable market\t information\nis  given.   Till  such\t markets  are  established  the\t Act\nprovides  for  the imposition of licensing  restrictions  to\nenable the buyers and sellers to meet in licensed  premises.\nAfter the establishment of the markets no licenses would  be\nissued\twithin a reasonable radius from the markets and\t all\ngrowers will have to resort to the markets for selling their\ncrops.\t The  result  would  be\t to  eliminate,\t as  far  as\npossible,  the middlemen and to give  reasonable  facilities\nfor  the growers of commercial crops to secure\tbest  prices\nfor their commodities.\nHeld,  that  the  impugned  provisions\tof  the\t Act  impose\nreasonable  restrictions  on  the  citizen's  right  to\t  do\nbusiness  and are valid.  Such a statute cannot be  said  to\ncreate\tunreasonable restrictions on the citizen's right  to\ndo  business  unless  it is  clearly  established  that\t the\nprovisions  are too drastic, unnecessarily harsh  and  over-\nreach the object for which they were made.\nChintaman Rao v. The State of Madhya Pradesh, [1950]  S.C.R.\n759  and  <a href=\"\/doc\/1880253\/\">State of Madras v. V. G. Rao,<\/a> [1952]\tS.C.R.\t597,\nreferred to.\n\n\n\nJUDGMENT:\n<\/pre>\n<p>CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 169-171  of<br \/>\n1955.\n<\/p>\n<p>Appeals from the judgment and order dated July 10, 1953,  of<br \/>\nthe Madras High Court in Writ Petitions Nos. 75, 87 and\t 135<br \/>\nof 1953.\n<\/p>\n<p>R.   Ganapathy Iyer and Shanmugavel, for the appellants.<br \/>\nV.   K. T. Chari, Advocate-General for the <a href=\"\/doc\/1571444\/\">State of  Madras,<br \/>\nV. V. Raghavan and R. H. Dhebar,<\/a> for the respondents.\n<\/p>\n<p><span class=\"hidden_text\">93<\/span><\/p>\n<p>H.   N. Sanyal, Additional Solicitor General of India and R.\n<\/p>\n<p><span class=\"hidden_text\">H. Dhebar, for Intervener No. 1<\/span><\/p>\n<p>T.   M. Sen, for Interveners Nos. 2 and 3.\n<\/p>\n<p>S.   B. Sen, Additional Government Advocate for the State of<br \/>\nMadhya Pradesh and I. N. Shroff, for Intervener No. 4.<br \/>\n1958.  October 6. The Judgment of the Court was delivered by<br \/>\nSUBBA  RAO J.-These three appeals by certificate granted  by<br \/>\nthe High Court are directed against the common order of\t the<br \/>\nHigh  Court  of Judicature at Madras, dated July  10,  1953,<br \/>\ndismissing  three  writ petitions filed\t by  the  appellants<br \/>\nimpugning  the\tvalidity  of the provisions  of\t the  Madras<br \/>\nCommercial  Crops Markets Act (Mad XX of 1933),\t hereinafter<br \/>\nreferred to as the Act, and the Rules framed thereunder, and<br \/>\ncertain notifications issued by the first respondent  herein<br \/>\nin pursuance thereof.\n<\/p>\n<p>The  Act was passed to provide for the better regulation  of<br \/>\nthe  buying and selling of commercial crops in the State  of<br \/>\nMadras\tand for that purpose to establish markets  and\tmake<br \/>\nRules for their proper administration.\tOn May 18, 1951, the<br \/>\nState  Government issued G. 0. No. 1049 (Food &amp;\t Agriculture<br \/>\nDepartment)   extending\t the  provisions  of  the   Act\t  to<br \/>\nRamanathapuram\tand  Tirunelveli  Districts  in\t respect  of<br \/>\ncotton\tand  groundnuts.  On February 25,  1952,  the  State<br \/>\nGovernment  issued  G.\t0.  No.\t 251  (Food  &amp;\t Agriculture<br \/>\nDepartment) ordering the constitution of a Market  Committee<br \/>\nat Koilpatti and Sankarankoil in Tirunelveli District.\tBy a<br \/>\nsimilar\t G.  O., viz., G. 0. No. 356  (Food  &amp;-\t Agriculture<br \/>\nDepartment) dated March 8,1952, the Government directed\t the<br \/>\nconstitution  of  a  Market Committee  at  Virudhunagar\t and<br \/>\nmarkets at (1) Virudhunagar; (2) Rajapalayan and (3)  Sattur<br \/>\nin  Ramanathapuram  District.  The Market  Committees.\twere<br \/>\nduly  constituted,  and,  on January  9,  1953,\t the  Market<br \/>\nCommittee  at Virudhunagar issued a notice stating that\t the<br \/>\nAct  and  the Rules had come into  force  in  Ramanathapuram<br \/>\nDistrict  on January 1, 1953, and requiring persons who\t did<br \/>\nbusiness in cotton<br \/>\n<span class=\"hidden_text\">\t\t\t     94<\/span><br \/>\nand  groundnut to take out licences as provided therein.   A<br \/>\nfurther\t notice dated January 17, 1953, stated that all\t the<br \/>\ntraders\t in  cotton and groundnut, who failed  to  take\t out<br \/>\nlicences  on  or before February 15, 1953,  were  liable  to<br \/>\nprosecution.   Similar notices dated January 22,  1953,\t and<br \/>\nFebruary 14, 1953, were issued by the Chairman,\t Tirunelveli<br \/>\nMarket\tCommittee  at Koilpatti calling\t upon  all  traders,<br \/>\nproducers  and\tweighmen  dealing  in  cotton  to  take\t out<br \/>\nlicences   before   February  28,  1953,   and\t threatening<br \/>\nprosecution for failure to comply therewith.  The appellants<br \/>\nin  the above three appeals and others filed writ  petitions<br \/>\nin the High Court of Madras against (1) the State of Madras;<br \/>\n(2)  the Collectors of the concerned Districts and  (3)\t the<br \/>\nChairmen  of the Market Committees, for the issue of a\tWrit<br \/>\nof  Mandamus  directing\t the  respondents  to  forbear\tfrom<br \/>\nenforcing  any or all the provisions of the Act\t as  amended<br \/>\nand the Rules and Bylaws framed thereunder.<br \/>\nA Bench of the Madras High Court, consisting of Rajamanna C.<br \/>\nJ. and Venkatarama Aiyar J. by an order dated July 10, 1953,<br \/>\ndismissed the applications.  The learned Judges held that s.<br \/>\n5(4)(a)\t of the Act was void to the extent it  conferred  on<br \/>\nthe  Collector\tauthority  to refuse a licence\tat  his\t own<br \/>\ndiscretion  and rule 37 was void in so far as it  prohibited<br \/>\npersons\t whose names had not yet been registered  as  buyers<br \/>\nand sellers, from carrying on business in the notified area.<br \/>\nSubject to that, the impugned Act and the Rules were  upheld<br \/>\nunder  Art.  19(6) of the Constitution as a valid  piece  of<br \/>\nmarketing legislation.\tIn the result, the applications were<br \/>\ndismissed.  The aforesaid three appellants have filed  these<br \/>\nappeals against the order of the High Court in so far as  it<br \/>\ndismissed their applications.\n<\/p>\n<p>Learned\t counsel  for  the  appellants\tcontends  that\t the<br \/>\nprovisions  of\tthe  Act and  the  Rules  framed  thereunder<br \/>\nconstitute an unreasonable restriction upon the\t appellants&#8217;<br \/>\nfundamental  right to do business and that they not only  do<br \/>\nnot achieve the object for which they are enacted but defeat<br \/>\ntheir  purpose.\t  Elaborating  this  argument,\the  took  us<br \/>\nthrough some of the provisions<br \/>\n<span class=\"hidden_text\">95<\/span><br \/>\nof  the Act and the Rules made thereunder in an\t attempt  to<br \/>\nestablish  that the provisions cripple the business  of\t the<br \/>\nappellants, restrict the rights of the small traders,  cause<br \/>\nunnecessary  and unintentional hardship to the\tgrowers\t and<br \/>\nthereby\t exceed the purpose of the enactment and defeat\t its<br \/>\nobject.\n<\/p>\n<p>Before\twe scrutinize the provisions of the Act, the law  on<br \/>\nthe subject may be briefly noticed.  Under Art. 19 (1)(g) of<br \/>\nthe  Constitution  of India all persons have  the  right  to<br \/>\npractice  any  profession, or to carry\ton  any\t occupation,<br \/>\ntrade  or business.  Clause (6) of that Article enables\t the<br \/>\nState  to make any law imposing in the interest\t of  general<br \/>\npublic reasonable restrictions on the exercise of the  right<br \/>\nconferred by sub-cl. (g) of el. (1).  It has been held\tthat<br \/>\nin  order  to  be  reasonable, a  restriction  must  have  a<br \/>\nrational relation to the object which the legislature  seeks<br \/>\nto  achieve  and must not go in excees of that\tobject\t(See<br \/>\nChintaman Rao v. The State of Madhya Pradesh) (1).  The mode<br \/>\nof approach to ascertain the reasonableness of a restriction<br \/>\nhas  been  succinctly stated by Patanjali Sastry C.  J.,  in<br \/>\n<a href=\"\/doc\/554839\/\">State of Madras v. V. G. ROW<\/a> (2) thus:\n<\/p>\n<p>It  is\timportant in this context to bear in mind  that\t the<br \/>\ntest  of  reasonableness,  wherever  prescribed,  should  be<br \/>\napplied to each individual statute impugned, and no abstract<br \/>\nstandard, or general pattern, of reasonableness can be\tlaid<br \/>\ndown  as applicable to all cases.  The nature of  the  right<br \/>\nalleged\t to have been infringed, the underlying\t purpose  of<br \/>\nthe restrictions imposed, the extent and urgency of the evil<br \/>\nsought\tto  be remedied thereby, the  disproportion  of\t the<br \/>\nimposition,  the prevailing conditions at the  time,  should<br \/>\nall enter into the judicial verdict.&#8221;\n<\/p>\n<p>Bearing the aforesaid principles in mind, we shall ascertain<br \/>\nthe object of the Act, from the circumstances under which it<br \/>\nwas  passed,  and  its\tprovisions,  and  see  whether\t the<br \/>\nprovisions have any reasonable relation to the object  which<br \/>\nthe legislature seeks to achieve.\n<\/p>\n<p>There  is  a historical background for this  Act.  Marketing<br \/>\nlegislation is now a well-settled feature of<br \/>\n(1) [1950] S.C.R. 759.\n<\/p>\n<p>(2) [1952] S.C.R. 597, 607.\n<\/p>\n<p><span class=\"hidden_text\">96<\/span><\/p>\n<p>all commercial countries.  The object of such legislation is<br \/>\nto  protect  the producers of commercial  crops\t from  being<br \/>\nexploited by the middlemen and profiteers and to enable them<br \/>\nto secure a fair return for their produce.  In Madras State,<br \/>\nas  in other parts of the country, various  Commissions\t and<br \/>\nCommittees  have been appointed to investigate the  problem,<br \/>\nto  suggest ways and means of providing a fair deal  to\t the<br \/>\ngrowers of crops, particularly commercial crops, and find  a<br \/>\nmarket\tfor selling their produce at proper rates.   Several<br \/>\nCommittees,  in their reports, considered this question\t and<br \/>\nsuggested   that  a  satisfactory  system  of\tagricultural<br \/>\nmarketing  should  be introduced to achieve  the  object  of<br \/>\nhelping the agriculturists to secure a proper return for the<br \/>\nproduce grown by them.\tThe Royal Commission on\t Agriculture<br \/>\nin India appointed in 1928, observed:\n<\/p>\n<p>&#8220;That cultivator suffers from many handicaps: to begin\twith<br \/>\nhe  is\tilliterate  and in general  ignorant  of  prevailing<br \/>\nprices\tin the markets, especially in regard  to  commercial<br \/>\ncrops.\t The  most  hopeful  solution  of  the\tcultivator&#8217;s<br \/>\nmarketing  difficulties seems to lie in the  improvement  of<br \/>\ncommunications\tand the establishment of  regulated  markets<br \/>\nand  we recommend for the consideration of  other  Provinces<br \/>\nthe  establishment of regulated markets on the Berar  system<br \/>\nas modified by the Bombay legislation.\tThe establishment of<br \/>\nregulated markets must form an essential part of any ordered<br \/>\nplan  of  agricultural\tdevelopment in\tthis  country.\t The<br \/>\nBombay Act is, however, definitely limited to cotton markets<br \/>\nand the bulk of the transactions in Berar market is also  in<br \/>\nthat crop.  We consider that the system can conveniently  be<br \/>\nextended  to  other  crops  and, with  a  view\tto  avoiding<br \/>\ndifficulties,  would suggest that regulated  markets  should<br \/>\nonly be established under Provincial legislation.&#8221;<br \/>\nThe Royal Commission further pointed out in its report:<br \/>\n&#8221;  The\tkeynote\t to the\t system\t of  marketing\tagricultural<br \/>\nproduce\t in  the  State is the predominant  part  played  by<br \/>\nmiddlemen.&#8221;\n<\/p>\n<p>It is the cultivator&#8217;s chronic shortage of money<br \/>\n<span class=\"hidden_text\">97<\/span><br \/>\nthat  has allowed the intermediary to achieve the  prominent<br \/>\nposition he now occupies.&#8221;\n<\/p>\n<p>The  necessity\tfor marketing legislation  was\tstressed  by<br \/>\nother  bodies also like the Indian Central  Banking  enquiry<br \/>\nCommittee, the All India Rural Credit and Survey  Committee,<br \/>\netc.  Recently the Government of Madras appointed an  expert<br \/>\nCommittee  to review the Act.  In its report  the  Committee<br \/>\ngraphically  described the difficulties of  the\t cultivators<br \/>\nand their dependence upon the middlemen thus:<br \/>\n&#8221; The middleman plays a prominent part in sale\ttransactions<br \/>\nand  his terms and methods vary according to the  nature  of<br \/>\nthe  crop and the status of the cultivator.  The  rich\tryot<br \/>\nwho is unencumbered by debt and who has comparatively  large<br \/>\nstocks\tto  dispose of, brings his produce to the  taluk  or<br \/>\ndistrict  centre and entrusts it to a commission  agent\t for<br \/>\nsale.  If it is not sold on the day on which it is  brought,<br \/>\nit  is\tstored\tin  the commission  agent&#8217;s  godown  at\t the<br \/>\ncultivators&#8217;  expense  and as the  latter  generally  cannot<br \/>\nafford\tto wait about until the sale is effected  he  leaves<br \/>\nhis  produce to be sold by the commission agent at the\tbest<br \/>\npossible  price,  and it is doubtful whether  eventually  he<br \/>\nreceives  the best price.  The middle class ryot  invariably<br \/>\ndisposes of his produce through the same agency but,  unlike<br \/>\nthe rich ryot he is not free to choose his commission agent,<br \/>\nbecause\t he  generally\ttakes  advances\t from  a  particular<br \/>\ncommission agent on the condition that he will hand over his<br \/>\nproduce\t to  him for sale.  Not only, therefore,  he  places<br \/>\nhimself in a position where he cannot dictate and insist  on<br \/>\nthe  sale being effected for the highest price but he  loses<br \/>\nby  being  compelled to pay heavy interest  on\tthe  advance<br \/>\ntaken  from  the  commission  agent.   His  relations\twith<br \/>\nmiddlemen  are more akin to those between a creditor  and  a<br \/>\ndebtor, than of a selling agent and producer.  In almost all<br \/>\ncases of the poor ryots, the major portion of their  produce<br \/>\nfinds its way into the hands of the village money-lender and<br \/>\nwhatever  remains  is  sold to petty traders  who  tour\t the<br \/>\nvillages and the price at which it changes hands is governed<br \/>\nnot so much by the<br \/>\n<span class=\"hidden_text\"> 13<\/span><br \/>\n<span class=\"hidden_text\">98<\/span><br \/>\nmarket rates, but by the urgent needs of the ryot which\t are<br \/>\ngenerally   taken  advantage  of  by  the   purchaser.\t The<br \/>\ndominating  position  which the middleman occupies  and\t his<br \/>\nmethods of sale and the terms of his dealings have long\t ago<br \/>\nbeen realized.&#8221;\n<\/p>\n<p>The aforesaid observations describe the pitiable &#8216;dependence<br \/>\nof  the\t middle-class and poor ryots on\t the  middlemen\t and<br \/>\npetty traders, with the result that the cultivators are\t not<br \/>\nable  to  find markets for their produce  wherein  they\t can<br \/>\nexpect reasonable price for them.\n<\/p>\n<p>With  a\t view  to provide satisfactory\tconditions  for\t the<br \/>\ngrowers\t of commercial crops to sell their produce on  equal<br \/>\nterms  and at reasonable prices, the Act was passed on\tJuly<br \/>\n25, 1933.  The preamble introduces the Act with the  recital<br \/>\nthat it is expedient to provide for the better regulation of<br \/>\nthe buying and selling of commercial crops in the Presidency<br \/>\nof Madras and for that purpose to establish markets and make<br \/>\nrules for their proper administration.\tThe Act,  therefore,<br \/>\nwas  the result of a long exploratory investigation  by\t ex-<br \/>\nperts  in the field, conceived and enacted to  regulate\t the<br \/>\nbuying and selling of commercial crops by providing suitable<br \/>\nand regulated markets by eliminating middlemen and  bringing<br \/>\nface  to- face the producer and the buyer so that  they\t may<br \/>\nmeet  on  equal terms, thereby eradicating or  at  any\trate<br \/>\nreducing  the  scope for exploitation in dealings.   Such  a<br \/>\nstatute\t cannot be said to create unreasonable\trestrictions<br \/>\non  the citizens&#8217; right to do business unless it is  clearly<br \/>\nestablished   that   the   provisions\tare   too   drastic,<br \/>\nunnecessarily harsh and overreach the scope of the object to<br \/>\nachieve which it is enacted.\n<\/p>\n<p>It  is therefore necessary to scrutinize the  provisions  of<br \/>\nthe  Act and the Rules made thereunder to ascertain  whether<br \/>\nthe  restrictions  imposed  are not  reasonable.   The\tsaid<br \/>\nprovisions  fall under two groups: the first group  provides<br \/>\nthe machinery for controlling the trade in commercial  crops<br \/>\nand  the second group of provisions imposes restrictions  On<br \/>\nthe carrying on of the said trade.  Section 2(1-a) defines I<br \/>\ncommercial  crop&#8217; to mean cotton, groundnut or\ttobacco\t and<br \/>\nincludes any<br \/>\n<span class=\"hidden_text\">99<\/span><br \/>\nother  crop or product notified by the State  Government  in<br \/>\nthe  Fort  St. George Gazette as a commercial crop  for\t the<br \/>\npurposes  of  this Act.\t Under s. 3,  the  State  Government<br \/>\nissues a notification declaring their intention to  exercise<br \/>\ncontrol\t over the purchase and sale of such commercial\tcrop<br \/>\nor  crops in a particular area and calls for objections\t and<br \/>\nsuggestions to be made within a prescribed time.  After\t the<br \/>\nobjections are received, the State Government considers them<br \/>\nand  declares the areas to be specified in the\tnotification<br \/>\nor any portion thereof to be a notified area for the purpose<br \/>\nof the Act in respect of commercial crop or crops  specified<br \/>\nin the notification.  Under s. 4-A, the State Government has<br \/>\nto establish a market committee for every notified area\t and<br \/>\nit shall be the duty of the market committee to enforce\t the<br \/>\nprovisions  of\tthe Act.  Sections 6 to 10 provide  for\t the<br \/>\nconstitution  of  Market  Committees and  s.  16  for  their<br \/>\nsupersession for the reasons mentioned therein.\t In exercise<br \/>\nof  the\t powers\t conferred by s. 18 of\tthe  Act  the  State<br \/>\nGovernment made Rules which provide for the manner in  which<br \/>\nthe members of Market Committees should be elected, and also<br \/>\nfor the constitution of sub-Committees.\t In exercise of\t the<br \/>\npowers conferred by s. 19 of the Act and also subject to the<br \/>\nMadras Commercial Crops Markets Rules, 1948, the  Committees<br \/>\nfor  the  various districts made,  bye-laws  for  regulating<br \/>\ntheir meetings and for the discharge of their duties by\t the<br \/>\nvarious subordinate bodies.  The said provisions which bring<br \/>\ninto existence a machinery for regulating the trade are\t not<br \/>\nattacked by the learned counsel for the appellants.<br \/>\nUnder  the second group, there are provisions providing\t for<br \/>\nmatters\t which are succinctly stated in the &#8216;Report  of\t the<br \/>\nExpert\tCommittee  on the review of  the  Madras  Commercial<br \/>\nCrops Markets Act, 1933 at p. 7 as under:\n<\/p>\n<p>&#8220;(1) A common place is provided for seller and buyer to meet<br \/>\nand  facilities are offered by way of space,  buildings\t and<br \/>\nstorage accommodation.\n<\/p>\n<p>(2)  Market practices are regularized and Market<br \/>\n<span class=\"hidden_text\">100<\/span><br \/>\ncharges clearly defined and unwarranted ones prohibited.<br \/>\n(3)  Correct  weighment is ensured by licensed weighmen\t and<br \/>\nall weights are checked and stamped.\n<\/p>\n<p>(4)  Payment on hand is ensured.\n<\/p>\n<p>(5)  Provision is made for settlement of disputes.<br \/>\n(6)  Daily prevailing prices are made available to<br \/>\nthe   grower  and  reliable  market   information   provided<br \/>\nregarding arrivals, stocks, prices, etc.<br \/>\n(7)  Quality standards are fixed when necessary and contract<br \/>\nforms standardized for purchase and sale.&#8221;<br \/>\nSection\t 5 says: &#8216;No person shall, within a  notified  area,<br \/>\nset  up,  establish  or\t use, or continue  or  allow  to  be<br \/>\ncontinued, any place for the purchase or sale of a  notified<br \/>\ncommercial  crop,  except under and in accordance  with\t the<br \/>\nconditions  of\ta licence granted to him by  the  Collector.<br \/>\nThe  first proviso to that section provides that  after\t the<br \/>\nestablishment in such area of a market for the purchase\t and<br \/>\nsale  of  a  notified commercial crop, no  licence  for\t the<br \/>\npurchase or sale of such commercial crop shall be granted or<br \/>\nrenewed\t in  respect  of  any  place  situated\twithin\tsuch<br \/>\ndistance of the market as may from time to time be fixed  by<br \/>\nthe State Government.  The second proviso enables the Market<br \/>\nCommittee  to exempt from the provisions of the\t above\tsub-<br \/>\nsection any person who carries on the business of purchasing<br \/>\nor  selling any commercial crop in quantities not  exceeding<br \/>\nthose  prescribed  by Rules made under the Act.\t  The  third<br \/>\nproviso\t authorizes  the said Committee to exempt  a  person<br \/>\nselling\t commercial crop which has been grown by him,  or  a<br \/>\ncooperative  society registered or deemed to  be  registered<br \/>\nunder the Madras Co-operative Societies Act, 1932, selling a<br \/>\ncommercial crop which has been grown by any of its  members,<br \/>\nand also empowers it to withdraw the exemption.\t Sub-section<br \/>\n(2)  of s. 5 gives exemption to a person purchasing for\t his<br \/>\nprivate\t use a commercial crop in quantities  not  exceeding<br \/>\nthose  prescribed by Rules made under the Act.\t Sub-section<br \/>\n(3) prohibits any person within a notified area from setting<br \/>\nup,<br \/>\n<span class=\"hidden_text\">101<\/span><br \/>\nestablishing   or  using,  continuing  or  allowing  to\t  be<br \/>\ncontinued, any place for the storage, weighment, pressing or<br \/>\nprocessing of any notified commercial crop except under\t and<br \/>\nin  accordance with the conditions of a licence\t granted  to<br \/>\nhim by the Collector.  Under proviso to sub-s. (3) a  person<br \/>\nis  exempted from the operation of that Rule in\t respect  of<br \/>\nany notified commercial crop grown by him.  Sub-section\t (4)<br \/>\nenables the Collector, on the report of the Market Committee<br \/>\nand after such inquiry as he deems fit, to cancel or suspend<br \/>\nany  licence  granted  under the said  section.\t  There\t are<br \/>\nprovisions  providing for penalties for infringement of\t the<br \/>\nstatutory   regulations\t and  for  referring   disputes\t  to<br \/>\ncompulsory   arbitration.   The\t bye-laws  framed   by\t the<br \/>\nCommittees  prescribe  graded  scales  of  licence  fees  in<br \/>\nrespect\t of various licences required under the\t Act;  these<br \/>\nshow  that a trader has to take separate licences  under  s.<br \/>\n5(1)  and s. 5(3).  The licence fee payable  for  additional<br \/>\npremises  is comparatively smaller than the  amount  payable<br \/>\nfor  the  main\tpremises.  Licence fee\tis  also  fixed\t for<br \/>\nbrokers,  weighmen,  etc.   Rule 28(3) (iii)  of  the  Rules<br \/>\nstates that it shall not be necessary for a poison to obtain<br \/>\nmore  than  one\t licence for  setting  up,  establishing  or<br \/>\ncontinuing  or allowing to be continued more than one  place<br \/>\nin  the same notified area for the purchase, sale,  storage,<br \/>\nweighment,  pressing  or processing of the  same  commercial<br \/>\ncrop.  A combined reading Of the Rule and the bye-laws shows<br \/>\nthat though different licences may have to be obtained under<br \/>\ns. 5(1) and s. 5(3), one licence is sufficient for different<br \/>\nplaces\tand  only small payments have to be made  for  every<br \/>\nadditional  premises  for  the\tsame  purpose.\t It  is\t not<br \/>\nnecessary  to notice the other provisions as  nothing  turns<br \/>\nupon  them  in the present ease.  Shortly stated,  the\tAct,<br \/>\nRules  and the Bye-laws framed thereunder have\ta  long-term<br \/>\ntarget of providing a net work of markets wherein facilities<br \/>\nfor correct weigbment are ensured, storage accommodation  is<br \/>\nprovided,  and equal powers of bargaining ensured,  so\tthat<br \/>\nthe  growers may bring their commercial crops to the  market<br \/>\nand sell them at reasonable prices.  Till such markets are<br \/>\n<span class=\"hidden_text\">102<\/span><br \/>\nestablished,  the  said provisions,  by\t imposing  licensing<br \/>\nrestrictions,  enable  the  buyers and sellers\tto  meet  in<br \/>\nlicensed premises, ensure correct weighment, make  available<br \/>\nto  them reliable market information and provide for them  a<br \/>\nsimple\tmachinery  for settlement of  disputes.\t  After\t the<br \/>\nmarkets\t are  built or opened by the  marketing\t committees,<br \/>\nwithin a reasonable radius from the market, as prescribed by<br \/>\nthe  Rules,  no licence is issued ; thereafter\tall  growers<br \/>\nwill  have to resort to the market for vending their  goods.<br \/>\nThe  result  of the implementation of the Act  would  be  to<br \/>\neliminate,  as\tfar as possible, the middlemen and  to\tgive<br \/>\nreasonable facilities for the growers of commercial crops to<br \/>\nsecure best prices for their commodities.\n<\/p>\n<p>Learned\t counsel  for  the  appellants\tcontends  that\t the<br \/>\nrestrictions imposed by the provisions of s. 5 are not\tonly<br \/>\nunreasonable  but  tend to defeat the very  purpose  of\t the<br \/>\nlegislation.  Elaborating this argument, the learned counsel<br \/>\nsays  that they are unreasonable from the standpoint of\t the<br \/>\nbig  trader, the small trader and also the grower of  crops.<br \/>\nThe  trader, his argument proceeds, can only buy or sell  in<br \/>\nthe  licensed  premises paying heavy  licensing\t fees  under<br \/>\ndifferent beads and paying also heavy overhead charges, with<br \/>\nthe  inevitable consequence that he will not be able to\t run<br \/>\nhis business with profit.  It is also said that he cannot go<br \/>\nwherever he likes to buy the produce at cheap rates and\t can<br \/>\nnegotiate  for or enter into contracts of sale only  in\t the<br \/>\nlicensed premises, with the result that be has to pay higher<br \/>\nprices\t to   the  sellers.   The  first   argument   rather<br \/>\nexaggerates  the situation; for, the rates of  licence\tfees<br \/>\nshown  in the bye-laws framed by the Marketing Committee  at<br \/>\nVirudhunagar  do not appear to be so high as to cripple\t the<br \/>\ntrader&#8217;s business.  No material has been placed before us to<br \/>\nestablish  that the rates are so high and the burden  is  so<br \/>\nunbearable  that a trader, who is otherwise  making  profit,<br \/>\ncannot\tcarry on his business.\tThe second objection of\t the<br \/>\nlearned\t Counsel in itself affords a reasonable &#8211; basis\t for<br \/>\nthe  legislation ; for, what the learned counsel  in  effect<br \/>\nsays is that the trader is exploiting the small growers<br \/>\n<span class=\"hidden_text\">103<\/span><br \/>\nand  that he is prevented from doing so under the  licensing<br \/>\nregulations.\n<\/p>\n<p>From the standpoint of the seller it is said that though  he<br \/>\nmay be exempted from the operation of the said Act under the<br \/>\nsecond proviso to s. 5 (1) he is prevented from selling\t his<br \/>\nproduce\t by  insisting that he should trade  only  with\t the<br \/>\nlicensed trader and in the licensed premises.  Assuming that<br \/>\nthat is the legal position under the Rules, nothing prevents<br \/>\nthe grower from selling his produce to another grower  whose<br \/>\nrequirements  are  greater  than what he produces  or  to  a<br \/>\nsmaller trader exempted under the third proviso to s. 5 (1).<br \/>\nAfter  the market is established, it is contended, a  grower<br \/>\nwill be obliged to carry the goods to a centralised place if<br \/>\nhe is to dispose of the goods, which can hardly be described<br \/>\nas increasing the facilities for marketing the goods.  It is<br \/>\ntrue that the growers may be under some difficulties in this<br \/>\nregard,\t but  that  is\tcounter-balanced  by  the  marketing<br \/>\nfacilities provided for them under the Act.<br \/>\nIt  is\talso  said that when a\tmarket\tis  established,  no<br \/>\nlicence\t to  purchase,\tor sell, commercial  crops  will  be<br \/>\ngranted\t or renewed in respect of any place situated  within<br \/>\nsuch  distance from the market as may from time to  time  be<br \/>\nfixed by the State Government and that nothing under the Act<br \/>\nprevents  the  Government from fixing a long distance  as  a<br \/>\nprohibited  area;  with\t the result that a  person,  who  is<br \/>\nhaving a licence to trade ,in and about the place where\t the<br \/>\nmarket is fixed, is deprived of his livelihood, which is  an<br \/>\nunreasonable restriction upon his right to do business.\t But<br \/>\nin  our view, such a provision is necessary  for  preventing<br \/>\nthe  local business being diverted to other places  and\t the<br \/>\nobject of the scheme being defeated.  Further, ,in practice,<br \/>\nit  is seen that the Government fixes by notification  under<br \/>\ns.  5  (1) a radius of five miles around  the  building\t and<br \/>\noccasionally ten miles.\t It is also not likely that it would<br \/>\nfix  a longer distance in the present circumstances,  having<br \/>\nregard\t to  the  inadequate  facilities  for\ttransporting<br \/>\ncommodities.  That apart, the establishment of a market does<br \/>\nnot  prevent a trader from carrying on the business  in\t the<br \/>\nmarket established,<br \/>\n<span class=\"hidden_text\">104<\/span><br \/>\nbut he could not run a market for himself in respect only of<br \/>\nthe  commodities declared to be commercial crops within\t the<br \/>\nradius prescribed.\n<\/p>\n<p>While  the object of the Act is to protect the growers,\t the<br \/>\nargument proceeds, the small traders are compelled to resort<br \/>\nto distant markets, with the result that some of them  would<br \/>\nbe forced to give up their business and others would have to<br \/>\nincur  unnecessary expenditure which they could not  afford.<br \/>\nThe  Act is an integrated one, and it regulates\t the  buying<br \/>\nand  selling of commercial crops.  If the small traders\t are<br \/>\nexempted,  it creates loopholes in the scheme through  which<br \/>\nthe  big trader may operate, and thereby the  object  itself<br \/>\nwould  be defeated.  That apart, the second proviso  enables<br \/>\nthe Committee to exempt small traders in appropriate  cases.<br \/>\nThe  constitution of the Committee, in which there  will  be<br \/>\nrepresentatives\t of  the  traders  and\tthe  buyers,  is   a<br \/>\nsufficient  guarantee  against\tthe  implementation  of\t the<br \/>\nprovisions of the Act to the detriment of all concerned.  If<br \/>\na  packed  Committee abuses its powers, there is  a  further<br \/>\nprovision  to  enable the Government to supersede  it.\t We,<br \/>\ntherefore, hold that, having regard to the entire scheme  of<br \/>\nthe  Act,  the\timpugned provisions of\tthe  Act  constitute<br \/>\nreasonable restrictions on a citizen&#8217;s right to do business,<br \/>\nand therefore, they are valid.\n<\/p>\n<p>The   next  contention\tof  the\t learned  counsel  for\t the<br \/>\nappellants  is\tthat  the  G.  0.  No.\t356  dated  8-3-1952<br \/>\ndirecting  the establishment of a market at Virudhunagar  is<br \/>\nan  unreasonable restriction on the appellants&#8217; right to  do<br \/>\nbusiness,  and\tis, therefore,\tinvalid.   In  Viradhunagar,<br \/>\nthere  is already a well-established market  which  provides<br \/>\nfacilities  for\t the purchase and sale of cotton  and  other<br \/>\ngoods.\t It  is\t stated\t that  the  said  market  has\tbeen<br \/>\nfunctioning  for over fifty years, that it has been  largely<br \/>\nused by the merchants of the community, and that it contains<br \/>\nstalls\tfor  effecting sales, godowns  for  stockina  goods,<br \/>\nhalls, parks and other amenities.  Certain charges called  I<br \/>\nmahimai&#8217;  are collected on all transactions that take  place<br \/>\nwithin\tthe  market; and they are constituted into  a  trust<br \/>\nfund which is utilised for the maintenance of schools<br \/>\n<span class=\"hidden_text\">105<\/span><br \/>\nand  for  religious  purposes.\tThe  argument  is  that\t the<br \/>\nappellants  in C. A. No. 169 of 1955 are running the  market<br \/>\nas  an occupation or business with high standards  and\tthat<br \/>\nthe  notification directing the constitution of a market  in<br \/>\nthe  same  locality, when admittedly the  entire  scheme  of<br \/>\nbuilding a net work of markets could not be finished  within<br \/>\na,  predictable\t time, is not a\t reasonable  restriction  on<br \/>\ntheir  right to do business.  It is also said that the\tsame<br \/>\nadvantages  could be given to the growers by continuing\t the<br \/>\nsaid  market with suitable restrictions and controls as\t the<br \/>\nmarket established by the Market Committee would conceivably<br \/>\nprovide\t for  them,  and in those  circumstances,  when\t two<br \/>\nalternative  methods would equally achieve the objects,\t the<br \/>\nnotification  directing the constitution of a market to\t the<br \/>\nexclusion  of  the  existing one would\tbe  an\tunreasonable<br \/>\nrestriction.\tThe  learned  Advocate\tGeneral\t of   Madras<br \/>\ncontends  that\tthe appellants have really  two\t fundamental<br \/>\nrights:\t one is to carry on trade or business and the  other<br \/>\nis to hold their property, i.e., the market; that by  reason<br \/>\nof the notification they are not prevented from doing  their<br \/>\nbusiness,  for\tthey  can still do business  in\t the  market<br \/>\nestablished subject to the regulations and also do  business<br \/>\noutside\t the  prescribed  area\t;  and\tthat  they  are\t not<br \/>\nprohibited  from  holding the market as property,  for\tthey<br \/>\ncould  still  utilise  it for  commodities  other  than\t the<br \/>\nnotified  crops.  In respect of the contention that  holding<br \/>\nthe market is only an incident of ownership of the property,<br \/>\nreliance  is placed upon the decisions in <a href=\"\/doc\/1059860\/\">T. B.\t Ibrahim  v.<br \/>\nRegional Transport Authority, Tanjore<\/a> (1); Ramunni Kurup  v.<br \/>\nThe  Panchayat Board, Badagara (2); <a href=\"\/doc\/751015\/\">Captain Ganpati  Singhji<br \/>\nv.  The State of Ajmer<\/a> (3) ; and Valia Raja of Edappally  v.<br \/>\nThe Commissioner for Hindu Religious Charitable\t Endowments,<br \/>\nMadras (4).  It is unnecessary to express an opinion on\t the<br \/>\nquestion  whether  the right of the appellants\tfalls  under<br \/>\nArt. 19(1)(f) or (g) of the Constitution of India, or  under<br \/>\nboth the sub-clauses; for, the<br \/>\n(1)  [1953] S.C.R. 290.\n<\/p>\n<p>(3)  [1955]  S.C.R. 1065.\n<\/p>\n<p>(2)  I.L R. [1954] Mad. 513.\n<\/p>\n<p>(4)  I.L.R. [1955] mad. 870.\n<\/p>\n<p><span class=\"hidden_text\">14<\/span><br \/>\n<span class=\"hidden_text\">106<\/span><\/p>\n<p>question  whether the notification imposes  an\tunreasonable<br \/>\nrestriction  on the appellants&#8217; right cannot be\t decided  on<br \/>\nthe   material\t placed\t before\t us.   That   question\t may<br \/>\nconveniently be left open to be decided at the time when the<br \/>\nmarket\tis  established\t at Virudhunagar,  pursuant  to\t the<br \/>\nnotification  issued by the Government.\t It does not  appear<br \/>\nfrom  the record that there is any early prospect of such  a<br \/>\nmarket being established in that place.\t The  reasonableness<br \/>\nof  the\t restrictions would depend  upon  the  circumstances<br \/>\nobtaining at the time the market is established. It  depends<br \/>\nupon   the  conditions\tthen  obtaining\t in  the  trade\t  in<br \/>\ncommercial  crops, the standards that will be maintained  in<br \/>\nthe  present market at that time, the comparative merits  of<br \/>\nthe existing market and the market to be built up and  other<br \/>\nrelevant considerations which cannot now be visualized.\t  We<br \/>\nwould, therefore, leave open that question to be decided  at<br \/>\nthe  proper time by the authorities concerned when a  market<br \/>\nis sought to be established in the manner provided by law.<br \/>\nThe next argument relates to I mahimai&#8217; allowances collected<br \/>\nby  the appellants from the sellers and buyers of the  crops<br \/>\nin  the market.\t The learned judges of the High\t Court\theld<br \/>\nthat  the question relating to this allowance did not  arise<br \/>\nfor decision at that stage, but having heard full  arguments<br \/>\non  the\t question, they expressed the  view  that  &#8216;mahimai&#8217;<br \/>\ncould  not be claimed as a trade allowance.  They  concluded<br \/>\ntheir discussion on the subject in the following words:<br \/>\n&#8221; It has nothing to do with -the transaction as such and  is<br \/>\nreally a contribution levied at the time of the\t transaction<br \/>\nfor  a purpose unconnected with it.  It cannot therefore  be<br \/>\nproperly regarded as a trade allowance, and bye-law 25(b) is<br \/>\nperfectly valid.&#8221;\n<\/p>\n<p>We  cannot share the opinion of the learned judges that\t the<br \/>\nquestion  does\tnot arise for decision at this\tstage.\t The<br \/>\nappellants prayed for issue of a writ of mandamus  directing<br \/>\nthe  respondents  to forbear from enforcing any or  all\t the<br \/>\nprovisions of the Act as amended and the Rules and  bye-laws<br \/>\nframed thereunder by the Ramanathapuram Committee; and,\t the<br \/>\nprovisions of<br \/>\n<span class=\"hidden_text\">107<\/span><br \/>\nthe Act read with the bye-laws prohibited the collection  of<br \/>\n&#8216;mahimai&#8217; by the appellants.  The question whether the\tbye-<br \/>\nlaw  prohibiting the collection off I mahimai&#8217; allowance  is<br \/>\nvalid  or not does directly arise for consideration in\tthis<br \/>\ncase.\tThere  is  also some  ambiguity\t in  the  conclusion<br \/>\narrived\t at by the learned judges of the High  Court.\tThey<br \/>\nstated\tthat  the  allowance  had nothing  to  do  with\t the<br \/>\ntransaction  as\t such and could not  therefore\tbe  properly<br \/>\nregarded as a trade allowance.\tThe learned counsel for\t the<br \/>\nappellants contends that if it is not a trade allowance,  it<br \/>\nis  not\t covered either by s. 14 of the Act or\tby  bye-laws<br \/>\nframed thereunder, as s. 14 prohibits the deduction of trade<br \/>\nallowance and does not operate upon any other payments\tmade<br \/>\nwhich are not trade allowances.\t There is considerable force<br \/>\nin this argument, but we think that the learned judges meant<br \/>\nonly  that  the\t said allowance is not an  admissible  or  a<br \/>\npermissible trade allowance prescribed by the bye-law.\t The<br \/>\nquestion, therefore, is whether the allowance described as I<br \/>\nmahimai&#8217;  is  a\t trade\tallowance and  if  so,\twhether\t the<br \/>\nallowance  is permitted to be received by the rules or\tbye-<br \/>\nlaws  made under that section.\tThe relevant provisions\t may<br \/>\nbe noticed at this stage.  Section 14 says<br \/>\n&#8220;No  trade allowance, other than an allowance prescribed  by<br \/>\nrules  or  by-laws  made under this Act, shall\tbe  made  or<br \/>\nreceived in a notified area by any person in any transaction<br \/>\nin respect of the commercial crop or crops concerned and  no<br \/>\nCivil Court shall, in any suit or proceeding arising out  of<br \/>\nany such transaction, have regard to any trade allowance not<br \/>\nso prescribed.\n<\/p>\n<p>Explanation:Every deduction other than deduction on  account<br \/>\nof  deviation  from  sample, when the purchase\tis  made  by<br \/>\nsample, or of deviation from standard, when the purchase  is<br \/>\nmade  by  reference to a known standard, or  on\t account  of<br \/>\ndifference between the actual weight of the sacking and\t the<br \/>\nstandard  weight, or on account of the admixture of  foreign<br \/>\nmatter,\t shall\tbe  regarded as a trade\t allowance  for\t the<br \/>\npurposes of this Act &#8220;.\n<\/p>\n<p><span class=\"hidden_text\">108<\/span><\/p>\n<p>Section\t 19:  &#8221; (1) Subject to any rules made by  the  State<br \/>\nGovernment  under section 18 and with the previous  sanction<br \/>\nof  the Director of Agriculture, Madras, a market  committee<br \/>\nmay  in\t respect  of  the notified area\t for  which  it\t was<br \/>\nestablished  make bylaws for the regulation of the  business<br \/>\nand the conditions of trading therein.&#8221;\n<\/p>\n<p>By-law\t25: Trade allowance applying to the market  and\t the<br \/>\nnotified area:\n<\/p>\n<p>(a)&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.<br \/>\n&#8221;   (b)\t Deductions such as I mahimai&#8217; are  prohibited.\t The<br \/>\nweight\tof  alien substance such as mud and stone,  if\tany,<br \/>\ncontained  in  the lint or kapas borahs or in  the  bags  of<br \/>\ngroundnut pods or kernels shall be deducted.&#8221;<br \/>\nThe  gist  of the aforesaid provisions may be  stated  thus:<br \/>\nTrade  allowance cannot be received in any notified area  by<br \/>\nany person in any transaction in respect of commercial\tcrop<br \/>\nor crops.  Every deduction in any transaction in respect  of<br \/>\nthe said crop other than those specified in the\t explanation<br \/>\nis  trade  allowance for the purpose of the Act.   A  market<br \/>\ncommittee generally may make bye-laws for the regulation  of<br \/>\nthe   business\tand  conditions\t of  trading   therein\t and<br \/>\nparticularly  it  can  make bye-laws  prescribing  what\t are<br \/>\npermissible  trade  allowances\tunder  the  section.\tSuch<br \/>\nallowances as are prescribed by a bye-law can be deducted in<br \/>\nany transaction notwithstanding the fact that they are trade<br \/>\nallowances.   The  argument of the learned counsel  is\tthat<br \/>\nthat  bye-law is bad, because the market committee  did\t not<br \/>\nname the allowance or allowances taking them out of the pro-<br \/>\nhibition  under\t s. 14 which they are entitled to  do  under<br \/>\nthat section, but made the bye-law mentioning the &#8216; mahimai&#8217;<br \/>\nallowance  as  one not deductible in any  transaction.\t The<br \/>\nvalidity  of  that  part  of  the  bye-law  prohibiting\t the<br \/>\ndeduction of &#8216; mahimai &#8216; as trade allowance depends upon the<br \/>\nnature\tof  that deduction.  If &#8216; mahimai&#8217; is  not  a  trade<br \/>\nallowance,  the said part of the bye-law would obviously  be<br \/>\ninvalid\t as inconsistent with the provisions of s. 14.\t If,<br \/>\non  the other hand, mahimai&#8217; is a trade allowance, the\tsaid<br \/>\npart of the<br \/>\n<span class=\"hidden_text\">109<\/span><br \/>\nbye-law\t will be superfluous, as the allowance falls  within<br \/>\nthe  terms  of\tthe  section itself This  leads\t us  to\t the<br \/>\nquestion whether &#8216; mahimai&#8217; is a trade allowance, within the<br \/>\nmeaning of s. 14 of the Act.\n<\/p>\n<p>What  is  a  trade allowance?  Trade  involves\texchange  of<br \/>\ncommodities  for money, the business of buying\tand  selling<br \/>\nand  the  transaction involves the seller,  the\t buyer,\t the<br \/>\ncommodity  sold and the price paid for the sale.   Allowance<br \/>\nmeans something given as compensation, rebate or  deduction.<br \/>\nUnder  the  section,  the said deduction should\t be  in\t any<br \/>\ntransaction  in respect of commercial crops.  The  deduction<br \/>\nmay  be\t out  of the commodity or out  of  the\tprice.\t The<br \/>\nrecipient  may\tbe the seller, the buyer or a  third  party.<br \/>\nWhen A sells a quantity of cotton to B for a hundred rupees,<br \/>\nB,  the purchaser, may deduct one rupee from the sale  price<br \/>\nand pay ninety-Dine rupees to A; he may keep that amount for<br \/>\nhimself\t or  pay the same to C. So too, A, the\tseller,\t may<br \/>\npurport\t to  sell one maund of cotton but in fact  deduct  a<br \/>\nsmall part of it, retain that part for himself or give it to<br \/>\nC;  or\tboth  A and B may fix the  price  of  the  commodity<br \/>\npurchased  at Rs. 102 but the purchaser pays one rupee to  C<br \/>\nand the seller retains or pays one rupee to C; or it may  be<br \/>\nthat  payments\thave  nothing to do with the  price  or\t the<br \/>\ntransaction,  but both the parties pay C a specified  amount<br \/>\nas  consideration  for the user of the premises or  for\t the<br \/>\nservices rendered by him.  The question whether a particular<br \/>\npayment is a trade allowance or not, depends upon the  facts<br \/>\nof  each  case.\t  Firstly, it must be  a  deduction  in\t any<br \/>\ntransaction  in\t respect of commercial crops.  If  it  is  a<br \/>\ndeduction out of the price or commodity agreed to be paid or<br \/>\ntransferred,  it would be a trade allowance.  On  the  other<br \/>\nhand, if the payment is de hors the terms of the transaction<br \/>\nbut  made towards consideration for the use of the  premises<br \/>\nor  services rendered, it would not be a deduction from\t the<br \/>\nprice  or in any transaction.  No material has\tbeen  placed<br \/>\nbefore\tus  to arrive at a definite finding in\tthe  present<br \/>\ncase  whether  &#8216;mahimai&#8217; is a deduction from  the  price  or<br \/>\ncommodity  within  the\tmeaning of s. 14 of  the  Act.\t The<br \/>\nlearned judges, having expressed the view that the<br \/>\n<span class=\"hidden_text\">110<\/span><br \/>\nquestion did not arise for consideration at that stage,\t did<br \/>\nnot also consider any material to support their finding.  In<br \/>\nthe  circumstances, the only reasonable course is  to  leave<br \/>\nthat question open so that it may be decided in\t appropriate<br \/>\nproceedings.\n<\/p>\n<p>In  the result, subject to the aforesaid  observations,\t the<br \/>\nappeals are dismissed but without costs.\n<\/p>\n<p>\t\t\t     Appeals dismissed.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India M.C. V. S. Arunachala Nadar Etc vs The State Of Madras &amp; Others on 6 October, 1958 Equivalent citations: 1959 AIR 300, 1959 SCR Supl. (1) 92 Author: K Subbarao Bench: Das, Sudhi Ranjan (Cj), Bhagwati, Natwarlal H., Sinha, Bhuvneshwar P., Subbarao, K., Wanchoo, K.N. PETITIONER: M.C. V. S. ARUNACHALA NADAR [&hellip;]<\/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-12983","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>M.C. V. S. 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