{"id":213329,"date":"1961-05-02T00:00:00","date_gmt":"1961-05-01T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/mohammad-hussain-gulam-vs-the-state-of-bombay-and-another-on-2-may-1961"},"modified":"2018-07-03T19:27:20","modified_gmt":"2018-07-03T13:57:20","slug":"mohammad-hussain-gulam-vs-the-state-of-bombay-and-another-on-2-may-1961","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/mohammad-hussain-gulam-vs-the-state-of-bombay-and-another-on-2-may-1961","title":{"rendered":"Mohammad Hussain Gulam … vs The State Of Bombay And Another on 2 May, 1961"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Mohammad Hussain Gulam … vs The State Of Bombay And Another on 2 May, 1961<\/div>\n
Equivalent citations: 1962 AIR 97, \t\t 1962 SCR (2) 659<\/div>\n
Author: K Wanchoo<\/div>\n
Bench: Gajendragadkar, P.B., Sarkar, A.K., Wanchoo, K.N., Gupta, K.C. Das, Ayyangar, N. Rajagopala<\/div>\n
           PETITIONER:\nMOHAMMAD HUSSAIN GULAM MOHAMMADAND ANOTHER\n\n\tVs.\n\nRESPONDENT:\nTHE STATE OF BOMBAY AND ANOTHER\n\nDATE OF JUDGMENT:\n02\/05\/1961\n\nBENCH:\nWANCHOO, K.N.\nBENCH:\nWANCHOO, K.N.\nGAJENDRAGADKAR, P.B.\nSARKAR, A.K.\nGUPTA, K.C. DAS\nAYYANGAR, N. RAJAGOPALA\n\nCITATION:\n 1962 AIR   97\t\t  1962 SCR  (2) 659\n CITATOR INFO :\n R\t    1962 SC1517\t (1)\n R\t    1966 SC 385\t (2,3,8,11)\n RF\t    1971 SC1017\t (8)\n D\t    1974 SC1489\t (6)\n R\t    1980 SC 350\t (10)\n E\t    1980 SC1008\t (22)\n RF\t    1983 SC1246\t (15)\n R\t    1990 SC 560\t (13)\n\n\nACT:\nAgricultural  Produce  Markets-Enactment for  regulation  of\npurchase  and sale of such produce Constitutional  validity-\nValidity  of rules framed under the Act-Bombay\tAgricultural\nProduce\t Markets Act, 1939 (Bom. 22 of 1939), ss. 4, 4A,  5,\n5A,  5AA,  11, 29, rr. 53, 64, 65,  66,\t 67-Constitution  of\nIndia, Arts. 19(1)(g), 19(6).\n\n\n\nHEADNOTE:\nThe  Bombay  Agricultural  Produce Markets  Act,  1939,\t was\nenacted by the Bombay Legislature to provide for the  better\nregulation of buying and selling of agricultural produce  in\nthe  State  of Bombay and the establishment of\tmarkets\t for\nsuch  produce.\t Under the provisions of the Act  power\t was\ngiven to the commissioner by notification to declare certain\nareas as market areas as a result of which such areas  could\nnot  thereafter\t be  used for the purchase or  sale  of\t any\nagricultural  produce specified in the notification,  except\nunder a licence.  Markets were to be established and  market\ncommittees  constituted\t with power to\tgrant  licences\t for\noperation  in the market.  By s. 11 a market committee\tmay,\nsubject\t to the provisions of the Rules and subject to\tsuch\nmaxima\tas may be prescribed, levy fees on the\tagricultural\nproduce\t bought\t and sold by licencees in the  market  area.\nSection\t 29 enabled the State Government by notification  in\ntile official Gazette to add to, amend or cancel any of\t the\nitems  of agricultural produce specified in the Schedule  to\nthe Act.  The petitioners challenged the validity of the Act\nand  the rules framed thereunder, and in particular  ss.  4,\n4A,  5, 5A, and 5AA which provided for the declaration of  a\nmarket\t area  and  the\t establishment\tof  a\tmarket,\t  as\nunconstitutional on the ground that they placed unreasonable\nrestrictions   on  their  right\t to  carry  oil\t  trade\t  in\nagricultural  produce and thus infringed  their\t fundamental\nright guaranteed under Art. 19(1)(g) of the Constitution  of\nIndia.\tThey also attacked the validity of ss. 11 and 29 and\nrr. 53, 64, 65, 66 and 67.\nHeld:\t  (1)  that ss. 4, 4A, 5, 5A and 5AA of the Act\t are\nconstitutional\t and   intra  vires  and   do\tnot   impose\nunreasonable restrictions on the right to carry on trade  in\nthe agricultural produce regulated under the Act.\nM.   C.\t V.  S.\t Arunachala Nadar v. The  State\t of  Madras,<\/a>\n[1959] Supp. 1 S.C.R. 92, followed.\n660\n(2)  that the fee provided by s. 11 though calculated on the\namount\tof produce bought and sold, is not in the nature  of\nsales tax as it is only a levy charged for services rendered\nby  the market committee in connection with the\t enforcement\nof the various provisions of the Act.  Accordingly, s. 11 is\nvalid.\n(3)  that r. 53 in so far as it enables the market committee\nto fix any rates as it liked of the fees to be collected  on\nagricultural produce bought and sold in the market area,  is\nnot  valid, because under s. 11 unless the State  Government\nfixes the maxima by rule it is not open to the committee  to\nfix any fees at all.\n(4)  that under S. 29, the power given to the State  Govern-\nment to add to, or amend, or cancel any of the items of\t the\nagricultural produce specified in the Schedule in accordance\nwith  the local conditions prevailing in different parts  of\nthe  State  is only in pursuance of the\t legislative  policy\nwhich  is apparent on the face of the Act,  and,  therefore,\nthe section is intra vires.\nThe  Edwards  Mills Co. Ltd., Beaway v. State of  Ajmer\t and\nAnother, [1955] 1 S.C.R. 735, applied.\n(5)  that  r. 64 is merely a method of enforcing  the  regu-\nlatory\tprovisions  with respect to market  yards  and\tsub-\nmarket yards and is valid.\n(6)  that rr. 65, 66 and 67, in so far as they authorise the\nmarket\tcommittee to grant a licence for doing\tbusiness  in\nany market area, go beyond the power conferred on the market\ncommittee by S. 5A, and are ultra vires.\n\n\n\nJUDGMENT:\n<\/pre>\n
ORIGINAL JURISDICTION: Petition No. 129 of 1959.
\nPetition under Art. 32 of the Constitution of India for\t the
\nenforcement of fundamental rights.\n<\/p>\n
R.   Ganapathy\tIyer,  J.  B.  Dadachanji,  S.\tN.   Andley,
\nRameshwar Nath and P.  L. Vohra, for the petitioners.
\nN.   S. Bindra and R. H. Dhebar, for the respondents.
\nS.   T.\t Desai,\t Trikamlal Patel and I. N. Shroff,  for\t the
\nInterveners.\n<\/p>\n
1961.  May 2. The Judgment of the Court was delivered by
\nWANCHOO,  J.-This  petition  raises a  question\t as  to\t the
\nconstitutionality of the Bombay Agricultural Produce Markets
\nAct,  No. XXII of 1939 (hereinafter referred to as the\tAct)
\nand  the  Rules\t framed\t thereunder.   The  petitioners\t are
\nbusinessmen   of  Ahmedabad.   Their  case  is\tthat  by   a
\nnotification under the
\n\t\t\t    661<\/span>
\nAct the whole area within a radius of 12 miles of  Ahmedabad
\ncity was declared to be a market area under s. 4 of the\t Act
\nfor  the  purposes  of\tthe  Act  in\trespect\t  of certain
\nagricultural produce from June 1, 1948.\t At the same time  a
\nmarket yard and a market proper were established for dealing
\nin  the\t commodities mentioned above; and  simultaneously  a
\nmarket\tcommittee was established under s. 5 of the Act\t for
\nthe  Ahmedabad market area by the name of “The\tAgricultural
\nProduce Market Committee, Ahmedabad.” By later notifications
\ncertain\t other\tagricultural  produce  was  declared  to  be
\nregulated  under  the provisions of the Act in\tthis  market
\narea.  ID 1959 a locality known as the “Kalupur\t market”  in
\nthe  Telia Mill compound near the railway station  Ahmedabad
\nwas declared to be a sub-market yard for the purposes of the
\nAct.   The petitioners apparently were carrying on  business
\nin the Kalupur market and therefore after the declaration of
\nthat area as sub-market yard, the market committee  required
\nthe  petitioners to take out licences under the Act  without
\nwhich they were not to be allowed to carry on business.\t The
\npetitioners  contend that the various provisions of the\t Act
\nand  the  Rules\t and bye-laws framed  thereunder  place\t un-
\nreasonable restrictions on their right to carry on trade  in
\nagricultural  produce  and thus infringe  their\t fundamental
\nright  guaranteed under Art. 19 (1)(g) of the  Constitution.
\nIn  particular,\t the  heavy  fees  payable  to\tthe   market
\ncommittee  for\ttaking\tout licences in order  to  trade  in
\nvarious\t markets  impose  a heavy burden  on  trade  in\t the
\nregulated   commodities\t  resulting   in   an\tunreasonable
\nrestriction  on\t the right of the petitioners  to  carry  on
\ntheir trade.  Further the declaration of the market area and
\nthe  establishment of market yard and sub-market  yards\t has
\nresulted in compelling producers of agricultural commodities
\nto carry their produce for long distances, thus imposing  an
\nunreasonable  restriction on their right to carry on  trade.
\nThe  petitioners thus assail the main provisions of the\t Act
\nand  some  of the provisions of the Rules and  the  bye-laws
\nframed by the market committee,
\n84<\/span>
\n662<\/span>
\nwhich  we  shall specify at their proper place\tlater.\t The
\npetitioners also contend that the State of Bombay has  never
\nrequired  the  market  committee to establish  a  market  as
\nrequired by s. 5AA of the Act and no market has in law\tbeen
\nestablished by the market committee and therefore the market
\ncommittee  has\tno power to issue licences and\tto  exercise
\nother  powers conferred under the Act on market\t committees.
\nThey therefore pray that the Act and the Rules and the\tbye-
\nlaws  framed  thereunder may be\t declared  unconstitutional,
\nultra vires and void.  In the alternative a direction should
\nbe  issued  to\tthe respondents, in  particular\t the  market
\ncommittee,  not\t to enforce the provisions of the  Act,\t the
\nRules and the bye-laws against the petitioners so long as  a
\nmarket has not been established as required under the law.
\nThe petition has been opposed on behalf of the\trespondents,
\nand their contention is that the Act, the Rules and the bye-
\nlaws  provide  reasonable restrictions\ton  the\t fundamental
\nright to carry on trade under Art. 19(1)(g).  It is  further
\ncontended that a market has been established as required  by
\nlaw,  and therefore the market committee in  particular\t has
\nthe  right  to enforce all the provisions of  the  Act,\t the
\nRules  and the bye-laws and to insist upon  the\t petitioners
\ntaking out licences as provided therein.\n<\/p>\n
Before we consider the attack made on the  constitutionality
\nof  the Act, the Rules arid the bye-laws framed\t thereunder,
\nwe  should like to refer to the main provisions of  the\t Act
\nand the scheme of regulation provided in it.  The Act  deals
\nwith  the  regulation of purchase and sale  of\tagricultural
\nproduce in the State of Bombay and establishment of  markets
\nfor  such produce.  Section 2 of the Act is  the  definition
\nsection.  Section 3 provides for the constitution of markets
\nand market committees and gives power to the Commissioner by
\nnotification  to  declare his intention\t of  regulating\t the
\npurchase  and sale of such agricultural produce and in\tsuch
\narea as may be specified in the notification; and objections
\nand   suggestions  are\tinvited\t within\t a  month   of\t the
\npublication    of   the\t  notification.\t   Thereafter\t the
\nCommissioner   after   considering   the   objections\t and
\nsuggestions, if any, and
\n\t\t\t    663<\/span>
\nafter holding such inquiry as may be necessary, declares the
\narea under s. 4(1) to be a market area for the, purposes  of
\nthe Act.  The consequence of the establishment of the market
\narea  is  given in s. 4(2) which lays down  that  after\t the
\nmarket\tarea is declared, no place in the said\tarea  shall,
\nsubject\t to  the  provisions  of s. 5A,\t be  used  for\tthe,
\npurchase  or sale of any agricultural produce  specified  in
\nthe notification.  After the declaration of the market area,
\nthe  State  Government\tis given the power  under  s.  5  to
\nestablish   a  market  committee  for  every  market   area.
\nThereafter  under s. 5AA it becomes the duty of\t the  market
\ncommittee to enforce the provisions of the Act, and also  to
\nestablish  a market therein, on being required to do  so  by
\nthe  State Government, providing for such facilities as\t the
\nState Government may from time to time direct, in connection
\nwith the purchase and sale of the agricultural produce\twith
\nwhich  the market committee is concerned.  The\tAct  however
\nenvisages  that\t there\tmay  be\t a  time  lag  between\t the
\ndeclaration  of\t a market area and the\testablishment  of  a
\nmarket;\t therefore  the proviso to s. 4(2)  lays  down\tthat
\npending\t the establishment of a market in a market area\t the
\nCommissioner  may grant a licence to any person to  use\t any
\nplace in the said area for the purpose of purchase and\tsale
\nof any such agricultural produce, and it is the duty of\t the
\nmarket committee under s. 5AA also to enforce the conditions
\nof  a licence granted under s. 4(2).  Further under  s.\t 5A,
\nwhere a market has been established, the market committee is
\ngiven  the  power to issue licences in accordance  with\t the
\nRules  to  traders, commission\tagents,\t brokers,  weighmen,
\nmeasurers,  surveyors,\tware housemen and other\t persons  to
\noperate\t in the market; provided that no such licence  shall
\nbe  necessary in the case of a person to whom a licence\t has
\nbeen  granted  under  the proviso to s.\t 4(2).\t The  effect
\ntherefore  of  these  provisions of the Act  read  with\t the
\ndefinition section is this.  A market area is first declared
\nunder  s.  4(1).   In  the market  area,  a  market  may  be
\nestablished.   The Rules make it clear that the\t market\t may
\nconsist\t of  what are called market  proper  and   principal
\nmarket yard and
\n664<\/span>
\nsub-market yards, if any.  Under s. 4A for each market\tarea
\nthere  shall  be one principal market yard and one  or\tmore
\nsub-market yards as may be necessary and the Commissioner is
\ngiven  the power by notification to declare  any  enclosure,
\nbuilding or locality in any market area to be the  principal
\nmarket yard for that area and other enclosures, buildings or
\nlocalities to be one or more sub-market yards for the  area.
\nAs we have already said, the Act envisages that there may be
\na time lag between the declaration of a market area and\t the
\nestablishment  of  a  market, and that is  why\tthere  is  a
\nprovision for licences under the proviso to s. 4(2)  pending
\nthe  establishment  of\ta  market in  a\t market\t area.\t The
\nestablishment  of a market, however, takes place  only\twhen
\nthe State Government requires the market committee under  s.
\n5AA  to establish a market in the market area.\t There\tdoes
\nnot  seem to be any provision in the Act or the Rules as  to
\nhow the market committee shall proceed, on being required to
\ndo  so by the State Government, to establish a\tmarket;\t but
\nreading\t the  provisions  of s. 4A and s.  5AA\ttogether  it
\nappears\t that  after the State Government has  required\t the
\nmarket\tcommittee to establish a market, it has to  approach
\nthe   Commissioner  with  its  recommendation\tto   declare
\nlocalities  as the principal market yard and the  sub-market
\nyards, if any, and the Commissioner makes a notification  in
\nregard\tthereto, and thereafter the market  is\testablished.
\nTill  however such action is taken by the committee and\t the
\nCommissioner notifies a principal market yard and sub-market
\nyards,\tif  any, no market can in law  be  established;\t and
\nother provisions of the Act which come into force after\t the
\nestablishment  of a market cannot be enforced and the  trade
\nis till then regulated in the manner provided in the proviso
\nto s. 4(2).\n<\/p>\n
After  the market is established, the market committee\tgets
\nthe  power to issue licences under s. 5A.  Other  provisions
\nof the Act provide for the constitution of market committees
\nand  the  establishment of a market committee fund  and\t the
\nancillary powers of market committees with which however  we
\nare not directly concerned in the present case.\t It is
\n\t\t\t    665<\/span>
\nenough\tto  refer to s. 11 only in  this  connection,  which
\nprovides  that\tthe  market committee may  subject  to(\t the
\nprovisions  of\tRules and subject to such maxima as  may  be
\nprescribed levy fees on the agricultural produce bought\t and
\nsold by licencees in the market area.  This section, it will
\nbe noticed, applies to the purchase and sale of agricultural
\nproduce\t in  the market area and the power under it  can  be
\nexercised  by  the committee as soon as the market  area  is
\ndeclared, though no market might have been established under
\ns.  5AA.   Till such time as the market is  established\t the
\nfees prescribed under s. 11 would be levied on the licencees
\nunder  the proviso to s. 4(2).\tThen come sections  creating
\noffences for contravention of the various provisions of\t the
\nAct, which it is unnecessary to consider.  Section 26  gives
\npower  to  the\tState  Government to  frame  rules  for\t the
\npurposes of carrying out the provisions of the Act.  Section
\n27 gives power to the market committee to frame bylaws\twith
\nthe  previous sanction of the Director or any other  officer
\nspecially  empowered in this behalf by the State  Government
\nand  subject  to any rules framed by  the  State  Government
\nunder  s.  26.\t Finally,  s. 29  provides  that  the  State
\nGovernment  may by notification in the official gazette\t add
\nto, amend or cancel any of the items of agricultural produce
\nspecified in the Schedule to the Act.\n<\/p>\n
These  are  the main provisions of the Act  and\t the  scheme
\nwhich  results in the declaration of a market area  and\t the
\nestablishment of a market therein.  The first contention  on
\nbehalf\tof the petitioners is that ss. 4, 4A, 5, 5A and\t 5AA
\nwhich  provide for the declaration of a market area and\t the
\nestablishment  of a market are unconstitutional as they\t are
\nunreasonable restrictions on the right to carry on trade  in
\nagricultural  produce.\tWe are of opinion that there  is  no
\nforce  in  this\t contention.  This  Court  had\toccasion  to
\nconsider a similar Act, namely, the Madras Commercial  Crops
\nMarkets Act, No. XX of 1933, in M. C. V. S. Arunachala Nadar
\netc.  v.  The  State  of  Madras  and  others  (1)  and\t the
\nregulation with respect to marketing
\n(1) [1959] Supp 1 S.C.R. 92.\n<\/p>\n
666<\/span><\/p>\n
of  commercial crops provided in that Act was  upheld.\t The
\nmain  provisions  of  the Madras Act  with  respect  to\t the
\ndeclaration  of a market area (called notified area in\tthat
\nAct)  and the establishment of markets are  practically\t the
\nsame  as  under\t the  Act.  It is  therefore  idle  for\t the
\npetitioners to contend that the main provisions contained in
\nss.  4, 4A, 5, 5A and 5AA of the Act  are  unconstitutional.
\nLearned\t counsel  for the petitioners, however,\t urges\tthat
\nthere  is a difference between the Madras Act and;  the\t Act
\ninasmuch  as  the  Madras Act dealt  with  commercial  crops
\nwhereas the Act makes it possible to bring every crop  under
\nits  sweep.   It  is conceded that though  it  may  be\tcon-
\nstitutional to regulate the sale and purchase of  commercial
\ncrops,\tregulation of all crops made possible under the\t Act
\nwould  mean an unreasonable restriction on  the\t fundamental
\nright  enshrined in Art. 19(1)(g).  We are of  opinion\tthat
\nthere is no force in this contention.  The Madras Act  which
\ndealt  with  commercial\t crops specified  certain  crops  as
\ncommercial  crops in the definition section and\t added\tthat
\nthe  words “commercial crop” used in that Act would  include
\nany other crop or product, notified by the State  Government
\nin the Fort St. George Gazette as a commercial crop for\t the
\npurposes of that Act.  In view of this inclusive  definition
\nof  “commercial crop” in the Madras Act, it was open to\t the
\nState  Government under that Act to include any crop  within
\nthe  meaning  of  the  words  “commercial  crop”  which\t was
\nregulated  by  that  Act.  The Act had a  schedule  when  it
\noriginally passed in which certain crops were included.\t The
\nState  Government was however given the power to add to,  or
\namend  or cancel any of the items mentioned in the  Schedule
\nby  s.\t29.  It is true therefore that under the Act  it  is
\nopen  to the State Government to bring any crop\t other\tthan
\nthose  specified  originally  in  the  Schedule\t within\t its
\nregulatory  provisions; but the fact that it is possible  to
\nbring  any crop within the regulatory provisions of the\t Act
\nby amendment of the Schedule would not necessarily make\t the
\nAct  an\t unreasonable  restriction on the  exercise  of\t the
\nfundamental right guaranteed under Art.\n<\/p>\n
\t\t\t    667<\/span><\/p>\n
19(1)(g).  As we have already pointed out, the definition of
\nthe words “commercial crop” in the Madras Act was also\twide
\nenough\tto  bring  any\tcrop  which  the  State\t  Government
\nconsidered  fit to be included as a commercial crop for\t the
\npurposes  of  that  Act.  There is thus in  our\t opinion  no
\ndifference  in the ambit of the Madras Act and of  the\tAct.
\nBesides we see no reason why a crop which can be dealt\twith
\non  a  commercial  scale should not  be\t brought  under\t the
\nregulatory  provisions of the Act.  Section 4(2A)  makes  it
\nclear that the Act does not apply to the purchase or sale of
\nspecified  agricultural\t produce, if the  producer  of\tsuch
\nproduce is himself its seller and the purchaser is a  person
\nwho  purchases\tsuch produce for his own private use  or  if
\nsuch agricultural produce is sold to such person by way of a
\nretail sale.  Thus it is clear from this exception that\t the
\nprovisions  of the Act do not apply to retail sale  and\t are
\nconfined to what may be called wholesale trade in the  crops
\nregulated thereunder.  This would suggest that the Act\talso
\ndeals  with commercial crops in the same way as\t the  Madras
\nAct, for the notion of wholesale trade implies that the crop
\ndealt  with therein is a commercial crop.  There is thus  no
\ndistinction  so\t far as the main  provisions  are  concerned
\nbetween the Act and the Madras Act, and for the reasons that
\nhave been elaborately considered in Arunachala Nadar’s\tcase
\n(1)  we are of opinion that ss. 4, 4A, 5,5A and 5AA  of\t the
\nAct are constitutional and intra vires and do not impose un-
\nreasonable  restrictions on the right to carry on  trade  in
\nthe agricultural produce regulated under the Act.
\nThe next attack is on s. 29 of the Act, which provides\tthat
\nthe  State  Government may by notification in  the  official
\ngazette,  add  to,  amend  or cancel any  of  the  items  of
\nagricultural  produce  specified  in the  Schedule.   It  is
\nsubmitted that this gives a completely unregulated power  to
\nthe State Government to include any crop within the Schedule
\nwithout\t any  guidance\tor control whatsoever.\t We  are  of
\nopinion\t that  this contention must also fail.\tIt  is\ttrue
\nthat  s.  29 itself does not provide for any  criterion\t for
\ndetermining  which  crop shall be put into the\tSchedule  or
\nwhich shall
\n(1)  [1959] Supp. 1 S.C.R. 92.\n<\/p>\n
668<\/span><\/p>\n
be  taken out therefrom but the guidance is in\tour  opinion
\nwrit large in the various provisions of the Act itself.\t  As
\nwe  have  already pointed out, the scheme of the Act  is  to
\nleave  out of account retail sale altogether; it deals\twith
\nwhat  may be called wholesale trade and this in our  opinion
\nprovides  ample\t guidance to the State\tGovernment  when  it
\ncomes  to decide whether a particular  agricultural  produce
\nshould\tbe  added to, or taken out of,\tthe  Schedule.\t The
\nState Government will have to consider in each case  whether
\nthe volume of trade in the-produce is of such a nature as to
\ngive  rise  to\twholesale  trade.   If\tit  comes  to\tthis
\nconclusion it may add that produce to the Schedule.  On\t the
\nother hand if it comes to the conclusion that the production
\nof a particular produce included in the Schedule has  fallen
\nand can be no longer a subject-matter of wholesale trade, it
\nmay take out that produce from the Schedule.  We may in this
\nconnection refer to The Edward Mills Co. Ltd., Beawar v. The
\nState of Ajmer and<\/a> another (1).\t In that case, s. 27 of\t the
\nMinimum Wages Act, 1948, which gave power to the appropriate
\nGovernment  to\tadd  to\t either part  of  the  schedule\t any
\nemployment in respect of which it is of opinion that minimum
\nwages shall be fixed by giving notification in a  particular
\nmanner\twas held to be constitutional.\tIt was\tobserved  in
\nthat  case that the legislative policy was apparent  on\t the
\nface of the enactment (impugned there); it was to carry\t out
\neffectively  the  purposes of the enactment that  power\t had
\nbeen  given  to the appropriate Government  to\tdecide\twith
\nreference to local conditions whether it was desirable\tthat
\nminimum\t wages\tshould be fixed in regard  to  a  particular
\ntrade  or industry which was not included in the list.\t The
\nsame considerations in our opinion apply to s. 29 of the Act
\nand the power is given to the State Government to add to, or
\namend,\tor  cancel  any of the\titems  of  the\tagricultural
\nproduce\t specified  in the Schedule in accordance  with\t the
\nlocal conditions prevailing in different parts of the  State
\nin pursuance of the legislative policy which is apparent  on
\nthe face of the Act.  Therefore, in enacting s. 29,
\n(1)  [1955] 1 S.C.R. 735.\n<\/p>\n
\t\t\t    669<\/span><\/p>\n
the  legislature had, not stripped itself of  its  essential
\npowers or assigned to the administrative authority, anything
\nbut  an\t accessory  or subordinate power  which\t was  deemed
\nnecessary  to carry out the purpose and policy of  the\tAct.
\nWe  therefore  reject the contention that s. 29 of  the\t Act
\ngives  uncontrolled  power to the State\t Government  and  is
\ntherefore unconstitutional.\n<\/p>\n
The next attack is on s. 11 of the Act and the rules  framed
\nin  that connection.  Section II gives power to\t the  market
\ncommittee subject to the provisions of the rules and subject
\nto  such  maxima as may be prescribed to levy  fees  on\t the
\nagricultural  produce  bought and sold by licencees  in\t the
\nmarket\tarea.  It is said that the fee provided by s. 11  is
\nin the nature of sales tax.  Now there is no doubt that\t the
\nmarket\tcommittee  which  is authorised\t to  levy  this\t fee
\nrenders\t services  to the licencees, particularly  when\t the
\nmarket is established.\tUnder the circumstances it cannot be
\nheld  that  the\t fee charged for services  rendered  by\t the
\nmarket\tcommittee in connection with the enforcement of\t the
\nvarious provisions of the Act and the provisions for various
\nfacilities  in the various markets established by it, is  in
\nthe  nature  of\t sales\ttax.  It is true  that\tthe  fee  is
\ncalculated on the amount of produce bought and sold but that
\nin  our opinion is only a method of realising fees  for\t the
\nfacilities  provided by the committee.\tThe attack on s.  11
\nmust  therefore\t fail.\t Besides this however,\tit  is\talso
\ncontended  that rr. 53 and 54 which provide for\t levying  of
\nfees under s. II are ultra vires, as they do not conform  to
\ns.  11 of the Act.  It will be noticed that s.\t11  provides
\nfor  levy  of  fees to be fixed\t by  the  market  committee,
\nsubject to such maxima as may be prescribed by the Rules and
\nthis fee is to be charged on the agricultural produce bought
\nand  sold.  There are thus two restrictions on the power  of
\nthe market committee under s. 11; the first is that the\t fee
\nfixed must be within the maxima prescribed by the Rules\t and
\nnaturally  till\t such  maxima  are fixed  it  would  not  be
\npossible  for  the market committee to levy  fees,  and\t the
\nsecond\trestriction is that fees have to be charged  not  on
\nthe produce brought into but only on such produce as is
\n85<\/span>
\n670<\/span>
\nactually  sold.\t Rule 53 provides that the market  committee
\nshall  levy and collect fees on agricultural produce  bought
\nand  sold  in  the  market area at  such  rates\t as  may  be
\nspecified in the bye-laws.  The Rules nowhere prescribe\t the
\nmaxima\twithin\twhich the bylaws will prescribe\t fees.\t The
\nfirst  attack therefore on the Rules is that it will not  be
\nopen  to the market committee to prescribe any fee under  s.
\n11  till the State Government prescribes the maxima  by\t the
\nRules,\twhich it has not done so far.  Further there  is  an
\nattack\t on  r.\t 54  which  lays  down\tthat  the  fees\t  on
\nagricultural  produce  shall  be payable as soon  as  it  is
\nbrought into the principal market yard or sub-market yard or
\nmarket proper or market area as may be specified in the bye-
\nlaws.\tThe  argument is that this rule allows\tfees  to  be
\ncharged on the produce brought into the market\tirrespective
\nof  whether  it\t is actually bought and sold,  and  this  is
\nagainst s. 11.\tAs we read s. 11, there is no doubt that the
\nState  Government is expected to specify the  maxima  within
\nwhich  the  market committee shall fix fees and\t until\tsuch
\nmaximum is specified by the State Government in the Rules it
\nwould  not be possible for the market committee to  fix\t any
\nfees  under  s. 11. Further, there is no doubt\tthat  s.  11
\nprovides  that fees shall be charged only on the  amount  of
\nproduce bought and sold and not on all the produce that\t may
\nhave  been brought into the market but may have to be  taken
\nback as it is not sold.\t The reply of the respondents so far
\nas  r.\t54 is concerned is that the rule only  prescribes  a
\nconvenient method of levying fees and that various  bye-laws
\nprovide\t for refund in case there is no sale of the  produce
\nbrought\t  into\tthe  market.   The  petitioners\t  in   their
\napplication  have  not specifically said that  there  is  no
\nprovision  for refund and in the circumstances all  that  we
\nneed say is that r. 54 will be valid if proper provision for
\nrefund\tis made in the bye-laws with respect to the  produce
\nbrought into the market on which fees have been charged\t but
\nwhich  has been taken back because it is not sold, for\tthen
\nit would only be a method of levying the fee permitted under
\ns. 11.\tIn the connected petition Yograj
\n671<\/span>
\nShankersingh Parihar and another v. The State of Bombay\t and
\nanother\t (57  of  1957)\t which was  heard  along  with\tthis
\npetition  there was an attack on r. 53; but the\t attack\t was
\nconfined to the fee being analogous to a sales tax and there
\nwas  no ground taken that the fee could not be levied  under
\nr.  53\tbecause\t the maxima had not been  specified  in\t the
\nRules.\t However,  it is not in dispute in  this  case\tthat
\nmaximum has not been specified in any rule and r. 53  itself
\nleaves\tit  open to the market committee to  prescribe\tsuch
\nrates as may be specified in the bye-laws.  We have  already
\nsaid that it would not be possible for the market  committee
\nto  prescribe any fees under s. 11 through byelaws till\t the
\nState Government prescribes the maximum under s. 11.  As  no
\nsuch   maximum\thas  been  prescribed  in  the\tRules,\t the
\ncontention that fees which are being charged under the\tbye-
\nlaws  for  the\tpurposes of s. 11 are ultra  vires  of\tthat
\nsection, must prevail.\n<\/p>\n
It has been urged on behalf of the respondents that the true
\nconstruction  of s. 11 is that if maxima are  prescribed  by
\nthe Rules, fees will be fixed by the market committee within
\nthe  maxima; but if no maxima are fixed under the Rules,  it
\nwill still be open to the market committee to prescribe\t any
\nfees  it thinks proper under its power under s. 11.  We\t are
\nnot prepared to accept this interpretation of s. 11, for  it
\namounts to adding the words “if any” after the word “maxima”
\ntherein.   Besides, the legislature was conferring power  of
\ntaxation  (using the word in its widest sense) by s.  11  on
\nthe  market  committee.\t  While doing  so,  the\t legislature
\napparently  intended  that  the\t committee  shall  not\thave
\nunlimited  power  to fix any fees it liked.   It  restricted
\nthat  power within the maxima to be prescribed by the  State
\nGovernment  in\tthe  Rules.  Thus the  power  given  to\t the
\ncommittee  was\tmeant to be subject to the  control  of\t the
\nState  Government which would be in a position to  view\t the
\nsituation  as  a whole and decide the maxima.  At  the\tsame
\ntime,  some  flexibility was provided by leaving it  to\t the
\ncommittee  to  fix fees within the maxima.  We may  in\tthis
\nconnection refer to various municipal Acts for example where
\nalso the power of taxation is subject to the control of the
\n672<\/span>
\ndifferent form.\t Section 11 also prescribes similar  control
\nby  the\t State\tGovernment over this  taxing  power  of\t the
\ncommittee  and\tthis  is obviously in the  interest  of\t the
\ncommunity   as\ta  whole.   The\t State\t Government   cannot
\npractically  abdicate  that power as it seems to  have\tdone
\nunder r. 53 by leaving it to the committee to fix any  rates
\nit likes.  We are therefore of opinion that unless the State
\nGovernment  fixes the maxima by rule it is not open  to\t the
\ncommittee to fix any fees at all and the construction  urged
\non behalf of the respondents is not correct.
\nThe  next attack is on r. 64 which provides that  no  person
\nshall  (a) enter a principal market yard or sub-market\tyard
\nin  contravention  of a direction given by a  servant  or  a
\nmember\tof the market committee, or (b) disobey any  of\t the
\ndirections  of the market committee in regard to the  places
\nwhere  carts  laden with agricultural produce may  stand  or
\nloads of agricultural produce may be exposed or in regard to
\nthe  road by which or in regard to the times at\t which\tthey
\nmay  proceed.  Any person contravening or disobeying any  of
\nthe   directions  referred  to\tin  sub-r.  (1)\t shall,\t  on
\nconviction  be punishable with fine.  It is urged that\tthis
\nrule   is  ultra  vires\t as  it\t imposes   an\tunreasonable
\nrestriction  on\t the  right to carry on trade.\t We  are  of
\nopinion\t that there is no force in this\t contention  because
\nthis  rule  is merely a method of enforcing  the  regulatory
\nprovisions  with  respect  to market  yards  and  sub-market
\nyards.\n<\/p>\n
The  next attack is on r. 65 which provides that “no  person
\nshall do business as a trader or a general commission  agent
\nin  agricultural produce in any market area except  under  a
\nlicence\t granted by the market committee under\tthis  rule.”
\nThe contention is that this rule goes beyond the  provisions
\nof s. 5A which lays down that “where a market is established
\nunder  s.  5AA, the market committee may issue\tlicences  in
\naccordance   with   the\t  Rules\t  to   traders,\t  commission
\nagents……..\tSo  far as the grant of licence\t to  traders
\nbefore\tthe  establishment  of a market\t is  concerned,\t the
\nprovision is to be found in the proviso to
\n\t\t\t    673<\/span>
\ns.4(2)\t and  the  power  to  grant  licences\tbefore\t the
\nestablishment  of a market for trading in any market,  area,
\nis  given  to  the  Commissioner  and  not  to\tthe   market
\ncommittee.   The  power\t of the market\tcommittee  to  grant
\nlicences  under\t s.  5A\t arises\t only  after  a\t market\t  is
\nestablished  and  is confined to operation  in\tthe  market.
\nRule  65  therefore in our opinion when\t it  authorises\t the
\nmarket\tcommittee to grant a licence for doing\tbusiness  in
\nany  market  area  goes beyond the power  conferred  on\t the
\nmarket committee by s. 5A and entrenches on the power of the
\nCommissioner  under  the  proviso  to  s.  4(2).   It\tmust
\ntherefore be struck down as ultra vires of the provisions in
\ns.   5A read with the proviso to s. 4(2).  Rule 66 which
\nis   incidental would fall along with r. 65.\n<\/p>\n
The  next attack is on r. 67.  It gives power to the  market
\ncommittee to grant licences for doing business in the market
\narea and prohibits doing of business without such  licences.
\nThis  rule is open to the same objection as r. 65,  for\t the
\npower  of  the market committee to grant  licences  is\twith
\nrespect\t to  operation in the market and not in\t the  market
\narea,  the latter power being in the Commissioner under\t the
\nproviso to s. 4(2) till the market is established.  It seems
\nto us that rr. 65 and 67 as they are framed show a confusion
\nin  the\t mind of the rule making authority.  It\t would\thave
\nbeen  enough  if  the Rules had been confined  to  grant  of
\nlicences  for operation in the market, for under the law  as
\nsoon  as  the  market  area is\tdeclared  and  a  market  is
\nestablished,  s. 4(2) comes into force and no place  in\t the
\nsaid  area  can\t be used for the purchase and  sale  of\t any
\nagricultural produce except as provided by s. 5A.  It  seems
\nto  us therefore that the intention probably was to  confine
\nthe  issue of licences under rr. 65 and 67 to markets  which
\nthe  market committee has the power to do where a market  is
\nestablished  under  s. 5A; but the two\trule.-,\t as  drafted
\nrefer  to  the market area and not to the  market  and\tmust
\ntherefore  be  held to be beyond the power  granted  to\t the
\nmarket committee under s. 5A.\n<\/p>\n
The  last  point that is urged is that no  market  has\tbeen
\nestablished in law as required under s. 5AA of the
\n674<\/span>
\nAct.  We have already said while dealing with the scheme  of
\nthe  Act that the scheme envisages that there may be a\ttime
\nlag between the declaration of a market area under s. 4\t and
\nthe  establishment of a market. under s. 5AA.  We have\talso
\npointed\t out  that  a market can only be  established  by  a
\nmarket\tcommittee constituted under s. 5, if it is  required
\nso  to do by the State Government under s. 5AA.\t  Therefore,
\nthe  requirement  by  the State Government  is\ta  condition
\nprecedent to the establishment of a market under s. 5AA.  No
\nprocedure  has however been prescribed either under the\t Act
\nor under the Rules as to what the market committee has to do
\nafter  it  has\tbeen required to  establish  a\tmarket.\t  We
\npresume,  in  view of the provisions of s.  4A\twhich  gives
\npower to the Commissioner to establish a market yard or sub-
\nmarket yards, that the market committee after it receives  a
\ndirection  from the State Government to establish  a  market
\nwill   have   to   approach  the   Commissioner\t  with\t its
\nrecommendation and ask him to notify the establishment of  a
\nprincipal  market  yard and sub-market yards, if  any.\t The
\ncontention  of\tthe  petitioners is that  no  direction\t was
\nissued\tby the State Government under s. 5AA to\t the  market
\ncommittee for the establishment of a market and that in\t any
\ncase  the committee took no steps after the receipt  of\t any
\nsuch  direction for the establishment of a principal  market
\nyard  and  sub-market yards, if any.  It  appears  that\t the
\nmarket\tarea  was declared for the first time  in  Ahmedabad
\nfrom  June  1, 1948, by notification dated April  15,  1948.
\nThis was followed by another notification by which the State
\nGovernment  established a market and a market  proper  under
\nthe  Act as it stood before the amendment of 1954  by  which
\nthe  power  to establish a principal market  yard  and\tsub-
\nmarket\tyards  has now been given to the  Commissioner.\t  It
\nseems however that no direction was issued as required by s.
\n5  of the Act as it stood before the amendment (now s.\t5AA)
\nrequiring the market committee to establish a market.\tThis
\nmatter\thad come to the notice of the Bombay High  Court  in
\nBapubhai
\n\t\t\t    675<\/span>
\nRatanchand Shah v. The State of Bombay (1).  Chagla, C.\t  J.,
\nthen pointed out as follows at p. 887:-\n<\/p>\n
\t      “Now,  a very curious situation was  disclosed
\n\t      to  us  by  Mr. Joshi.   No  market  has\tbeen
\n\t      established   under  s.  5  of  the  Act\t and
\n\t      therefore\t s. 5A has not come into  operation.
\n\t      The  result is this that the Market  Committee
\n\t      cannot issue licences under s. 5A to  traders,
\n\t      commission  agents,  etc., to operate  in\t the
\n\t      market.\tIn  the absence of  a  market  being
\n\t      established  under  s. 5 and  the\t absence  of
\n\t      licences\tbeing issued under s.  5A,  licences
\n\t      can  only\t be issued by the  State  Government
\n\t      under the proviso to s. 4A(2).  But the  rules
\n\t      show  that  licences have been issued  by\t the
\n\t      Market Committee and not by the State  Govern-
\n\t      ment.   It  is  difficult\t to  understand\t how
\n\t      either the Government or the Market  Committee
\n\t      came   to\t the  conclusion  that\tthe   Market
\n\t      Committee\t was  authorised to  issue  licences
\n\t      without  s.  5 and s. 5A\tbeing  brought\tinto
\n\t      force.   Mr.  Joshi suggests that\t the  Market
\n\t      Committee\t acts  as a delegate  of  the  State
\n\t      Government and the authority to issue licences
\n\t      has  been delegated by the  State\t Government.
\n\t      It   is  rather  difficult  to   accept\tthis
\n\t      contention.”\n<\/p><\/blockquote>\n
Having\tsaid  this,  the learned Chief Justice\twent  on  to
\nobserve that as there was no such challenge in the  petition
\nitself,\t therefore whether the challenge could be  sustained
\nor  not,  it was not open to the petitioners before  him  to
\nmake that challenge.  That observation was made with respect
\nto another market area but the same, we understand,  applies
\nto the present case.  It appears that after that observation
\nof the Bombay High Court, the State Government on August 11,
\n1955, issued a notification (No.  PMA 7055) dated August  1,
\n1955,  directing the Agricultural Produce  Market  Committee
\nAhmedabad to establish a market in the market area for which
\nthe  said  committee  had been established.   But  there  is
\nnothing\t in  the affidavit of the respondents to  show\tthat
\nafter  this  direction was issued on August  11,  1955,\t the
\nmarket\tcommittee  took any steps to establish a  market  by
\nmaking\trecommendations to the Commissioner to\testablish  a
\nprincipal
\n(1)  I.L.R. [1955] Bom, 870.\n<\/p>\n
676<\/span><\/p>\n
market yard or sub-market yards under s. 4A of the Act.\t  As
\na  matter  of fact, the principal market  yard\twas  already
\nthere  from  before  this direction given in  1955  and\t has
\ncontinued.   Even  in  the  case  of  the  sub-market\tyard
\nestablished  at\t Kalupur  in 1959 there is  nothing  in\t the
\nnotification issued by the Commissioner on January 16, 1959,
\nto  show that he was doing so in pursuance of the desire  of
\nthe  market committee and on its recommendation.  We  should
\nhave thought that if the market committee had requested\t the
\nCommissioner to establish a sub-market yard and\t recommended
\nKalupur\t as the place for it, the notification\tshould\thave
\nshown that the Commissioner was acting at the desire of\t the
\nmarket\tcommittee and on its recommendation.  In  any  case,
\neven if the notification did not show this, it was the\tduty
\nof  the\t respondents, when this\t question  was\tspecifically
\nraised in para. 25 of the petition, to state when the  State
\nGovernment  directed the market committee to  establish\t the
\nmarket\tand  what steps the market committee  took  in\tthat
\nbehalf\tafter  such  direction.\t  But in  para.\t 24  of\t the
\ncounter-affidavit  filed  on behalf of the  respondents\t all
\nthat  is stated is that “with reference to paragraph  25  of
\nthe  petition, I crave leave to refer to s. 5-A of  the\t Act
\nfor  ascertaining  its\tcontents,  true\t meaning  and  legal
\neffect.\t  I  deny  all\tthe  allegations,  contentions\t and
\nsubmissions contained in paragraph 25 of the petition as are
\ncontrary to or inconsistent with what is stated herein as if
\nthey  were  specifically set out herein and  traversed.”  We
\nmust  say  that this is a most curious way  of\tmeeting\t the
\nallegations  made  on  behalf of  the  petitioners  that  no
\ndirection  as  required by s. 5AA of the Act has  been\tever
\ngiven  to the market committee to establish a market and  no
\nsteps  were ever taken by the market committee in  pursuance
\nof such a direction to establish a market.  The notification
\nNo. PMA 7055 which was produced before us during the  course
\nof  arguments  seems in the circumstances to  have  been  an
\nempty\tformality  which  was  observed\t in  view   of\t the
\nobservations of the Bombay High Court in Bapubhai Ratanchand
\nShah’s case (1).  It seems to us that the curious  situation
\nwhich
\n(1)  I.L.R. [1955] Bom. 870.\n<\/p>\n
\t\t\t    677<\/span><\/p>\n
the  Bombay  High Court noticed as far back as\tMarch,\t1955
\nstill continues with respect to the market in this( case and
\nno proper steps have been taken in law even after the formal
\ndirection made by notification No. PMA 7055 in August,\t1955
\nto  establish a market.\t It is true that in fact  the  State
\nGovernment before the amendment of 1954 and the Commissioner
\nafter that amendment have established a principal market and
\na sub-market yard for this market area; but there is nothing
\nto show in the case of the principal market yard that it was
\nestablished  at\t the instance of the market committee  on  a
\ndirection given by the State Government as required by s.  5
\nof  the Act as it was before the amendment of 1954  or\tthat
\nthe sub-market yard at Kalupur which was established in 1959
\nwas so established at the instance of the market  committee.
\nIn the circumstances the curious situation that was  noticed
\nwith  respect  to another market area by Chagla, C.  J.,  is
\nthere  with  respect to the Ahmedabad market  area  and\t the
\nAhmedabad market, with the result that the market  committee
\ncannot\tissue licences under s. 5A of the Act  and  exercise
\nsuch other powers as may be exercisable on the establishment
\nof  a  market under the law.  In the  result  therefore\t the
\npetition must be allowed and the market committee  forbidden
\nto  enforce any of the provisions of the Act, the rules\t and
\nthe  bye-laws with respect to the market until a  market  is
\nproperly established under s. 5AA.  No other point has\tbeen
\nurged before us.\n<\/p>\n
In  conclusion\twe  hold  that the  challenge  made  by\t the
\npetitioners to the constitutionality of the main  provisions
\nof  the\t Act and of the provisions in r. 64 fails;  but\t the
\nchallenge  in respect of (i) the provisions in r. 53 on\t the
\nground\tthat  they  are ultra vires s. 11,  there  being  no
\nmaximum fee prescribed by the State Government, and (ii) the
\nprovisions in rr. 65, 66 and 67 on the ground that they\t are
\nultra vires the provisions in s. 5(a) read with the  proviso
\nin  s.\t4(2)  succeeds.\t As however we have  held  that\t the
\nmarket\tin this case has not been properly established,\t the
\nmarket
\n86<\/span>
\n678<\/span>
\ncommittee cannot enforce any of the provisions of the Act or
\nthe  rules  or the bye-laws framed by it  and  cannot  issue
\nlicences till the market is properly established in law.
\nWe  therefore  allow  the petition  partly  and\t direct\t the
\nrespondents not to enforce any of the provisions of the Act,
\nthe  rules  and the bye-laws against  the  petitioners\twith
\nrespect to the market till a market is properly\t established
\nin  law for this area under s. 5AA and not to levy any\tfees
\nunder s. 11 till the maximum is prescribed under the  Rules.
\nIn  the\t circumstances we order parties to  bear  their\t own
\ncosts.\n<\/p>\n
Petition allowed in part.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Mohammad Hussain Gulam … vs The State Of Bombay And Another on 2 May, 1961 Equivalent citations: 1962 AIR 97, 1962 SCR (2) 659 Author: K Wanchoo Bench: Gajendragadkar, P.B., Sarkar, A.K., Wanchoo, K.N., Gupta, K.C. Das, Ayyangar, N. Rajagopala PETITIONER: MOHAMMAD HUSSAIN GULAM MOHAMMADAND ANOTHER Vs. RESPONDENT: THE STATE OF […]<\/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-213329","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nMohammad Hussain Gulam ... vs The State Of Bombay And Another on 2 May, 1961 - 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\/mohammad-hussain-gulam-vs-the-state-of-bombay-and-another-on-2-may-1961\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Mohammad Hussain Gulam ... vs The State Of Bombay And Another on 2 May, 1961 - 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