{"id":26321,"date":"2006-11-16T00:00:00","date_gmt":"2006-11-15T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/krishi-utpadan-mandi-parishad-vs-i-t-c-ltd-on-16-november-2006"},"modified":"2017-10-29T16:23:32","modified_gmt":"2017-10-29T10:53:32","slug":"krishi-utpadan-mandi-parishad-vs-i-t-c-ltd-on-16-november-2006","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/krishi-utpadan-mandi-parishad-vs-i-t-c-ltd-on-16-november-2006","title":{"rendered":"Krishi Utpadan Mandi Parishad & … vs I.T.C. Ltd on 16 November, 2006"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Krishi Utpadan Mandi Parishad & … vs I.T.C. Ltd on 16 November, 2006<\/div>\n
Author: A Pasayat<\/div>\n
Bench: Arijit Pasayat, S.H. Kapadia<\/div>\n
           CASE NO.:\nAppeal (civil)  4824 of 2000\n\nPETITIONER:\nKrishi Utpadan Mandi Parishad & Anr.\t\t\n\nRESPONDENT:\nI.T.C. Ltd.\t\t\t\t\t\t\t\t\n\nDATE OF JUDGMENT: 16\/11\/2006\n\nBENCH:\nARIJIT PASAYAT & S.H. KAPADIA\n\nJUDGMENT:\n<\/pre>\n
J U D G M E N T<\/p>\n
ARIJIT PASAYAT, J.\n<\/p>\n
\tIn this appeal challenge is to the judgment rendered by a
\nlearned Single Judge of the Allahabad High Court allowing the
\nwrit petition filed by the respondent.  The matter came to be
\nplaced before learned Single Judge as there was difference of
\nopinion between two Hon’ble Judges constituting the Division
\nBench and the learned Single Judge as the third judge decided
\nthe Writ Petition.\n<\/p>\n
\tThe facts giving rise to present petition, filtering out
\nunnecessary details are as follows:-\n<\/p>\n
Respondent ITC Ltd is a company incorporated under the
\nCompanies Act, 1956 (in short ‘Company’) having its registered
\noffice at 37, Chowringee Road, Calcutta. This company is
\nengaged in manufacture of cigarette and has established
\nseveral factories for this purpose including a factory at Sardar
\nPatel Marg, Saharanpur. For manufacture of cigarette, leaf
\ntobacco is required which is excisable to fee levied and
\ncollected by the Tobacco Board (in short the ‘Board’)
\nconstituted under Tobacco Boards Act, 1975 (in short ‘Tobacco
\nAct’). The Company purchases tobacco in its raw form from
\nthe auction body established by the Tobacco Board at various
\nplaces throughout the country.  The raw tobacco so purchased
\nis brought to the factory at Saharanpur where it is processed
\nand cut tobacco is prepared.  This cut tobacco is further
\nprocessed and then such tobacco is used for manufacture of
\ncigarette.  The cut tobacco prepared in the factory at
\nSaharanpur is dispatched to the factories of the company at
\nCalcutta where it is used for manufacturing cigarettes. Some
\nof the cut tobacco produced at Saharanpur factory is
\ndispatched to certain contract manufacturers who entered into
\nagreements with the respondent for manufacture of cigarettes.
\nRespondent company’s supplies them raw material i.e. cut
\ntobacco paper and packing materia1 etc. and pays them
\nmanufacturing charges.\n<\/p>\n
Under Section 12 of the Uttar Pradesh Krishi Utpadan
\nMandi Adhiniyam, 1964 (hereinafter referred to as the ‘Act’), a
\ncommittee called Mandi Samiti is established for every market
\narea which is a body corporate having perpetual and official
\nseal. Mandi Samiti is entitled to levy and collect fee under
\nSection 17 of the Act in respect of all transactions of sale of
\nspecified agricultural produces in the market area at such
\nrates, being not less than 1% per centum and not more than
\n2% of the price of aricultura1 produce as sold, as the State
\nGovernment may specify by notification. By U.P. (Amendment)
\nAct No.12 of 1987 an explanation was inserted which provided
\nthat for the purpose of clause (iii) unless the contrary is
\nproved, any specified agricultural produce taken out or
\nproposed to be taken out of the market area by or on behalf of
\nlicensed dealer shall be presumed to have been sold within
\nsuch area for levying Mandi fee, and in such case, the price of
\nsuch produce presumed to be sold shall be deemed to be such
\nreasonable price as may be ascertained in the manner
\nprescribed. This explanation came into force w.e.f. 31st March,
\nl987.\n<\/p>\n
Respondent filed a Writ Petition before the High Court
\nalleging that appellants for the first time demanded market fee
\nit on cut tobacco being transported from Saharanpur for the
\npurpose of use in its another factory at Calcutta or to be used
\nby the contract manufacturers for manufacturing cigarettes. It
\nrepresented against the said demand on 22nd April. 1987.
\nAuthorities allowed respondent to take their stock of cut
\ntobacco without payment of market fee and it continued to do
\nso except on two occasions in the year 1995 and 1996. On
\n9.9.1998, the President of the Mandi Samiti, Saharanpur by
\nhis order dated 28th October, 1998 held that respondent-
\nCompany is not liable to pay market fee on the consignment of
\ncut tobacco dispatched to its Calcutta Factory. However, with
\nregard to the consignments dispatched to contract
\nmanufacturers he sought a direction from the Director, Mandi
\nParishad. In response to the notice served on the respondent
\nby Director, it furnished its reply and placed materials before
\nthe Director, Mandi Parishad on 2.12.1998.  The Director,
\nMandi Parishad however, by order dated 14.1.1999 rejected
\nthe case of the respondent-Company and required the
\nPresident  Mandi Samiti to take fresh decision with regard to
\nthe levy of market fee in the light of the guidelines provided in
\nthe order. Aggrieved by this order petitioners have filed present
\nwrit petition was filed under Article 226 of the Constitution of
\nIndia, 1950 (in short the ‘Constitution’) <\/p>\n
\tThe High Court held that the Director could not have
\nexercised the power of revision under Section 32 of the Act
\nand therefore, the order impugned i.e. one dated 14.1.1999
\nwas without jurisdiction.  Even on merits it was held that the
\nDirector had reopened all the cases since 1987, and even in
\nrespect of proceedings which was not referred to him at all.\n<\/p>\n
\tAccording to learned counsel for the appellant the
\napproach of learned Single Judge constituting the majority
\nsuffer from various infirmities.  The High Court has
\nerroneously considered the provisions to hold that the Director
\nhad no power. Even otherwise on merits, it is submitted that
\nthe view of learned single judge cannot be sustained.\n<\/p>\n
\tLearned counsel for the respondent-writ petitioner on the
\nother hand supported the judgment of learned Single Judge.\n<\/p>\n
\tThe position of various provisions, more particularly
\nSection 26 (I) (L), Section 32 and Section 33 at different points
\nof time need to be noted:\n<\/p>\n
ORIGINALLY
\nSec. 32. Powers of the State Government to
\ncall for the proceedings of a Committee and pass
\norder thereon.- The State Government may, for the
\npurpose of satisfying itself as to the legality or
\npropriety of any decision of, or order passed by, a
\nCommittee, at any time call and examine the
\nproceedings of the Committee, and, where it is of
\nthe opinion that the decision or order of the
\nCommittee should be modified, annulled or
\nreversed, pass such orders thereon as it may deem
\nfit.\n<\/p>\n
Sec. 33. Delegation of powers.- The State
\nGovernment may, by notification in the Gazette,
\ndelegate, subject to such conditions and restrictions
\nas may be specified therein, any of its powers or the
\npowers of any other authority under this Act, to any
\nofficer or authority subordinate to it.\n<\/p>\n
AMENDEMENT BROUGHT BY PRESIDENT ACT
\nNO. 13 OF 1973<\/p>\n
Sec. 26-I.  Delegation of powers. Subject to the
\nprovisions of this Act, the Board may, by general or
\nspecial order, delegate, either unconditionally or
\nsubject to such conditions as may be specified in
\nthe order, to any sub-committee appointed by it or
\nto the Member-Secretary or any other officer of the
\nBoard such of its powers and duties under this Act,
\nas it may deem fit.\n<\/p>\n
Sec. 26-L. Powers and functions of the Board.
\n(1) The Board shall subject to the provisions of this
\nAct, have the following functions and shall have
\npower to do anything which may be necessary or
\nexpedient for carrying out those functions-\n<\/p>\n
(i)\tsuperintendence and control over
\nthe working of the Market
\nCommittees and other affairs thereof
\nincluding programmes undertaken
\nby such Committees for the
\n[construction of new Market Yards
\nand development of existing Markets
\nand Market Areas];\n<\/p>\n
(ii)\tgiving such directions to
\nCommittees in general or any
\nCommittee in particular with a view
\nto ensure efficiency thereof;\n<\/p>\n
(iii) any other function entrusted to it by
\nthis Act;\n<\/p>\n
(iv) such other functions as may be
\nentrusted to the Board by the State
\nGovernment by notification in the
\nGazettee.\n<\/p>\n
2.\tWithout prejudice to the generality of the
\nforegoing provision, such power shall include
\nthe power-\n<\/p>\n
(i) to approve proposals of the new sites
\nselected by the Committee for the
\ndevelopment Markets;\n<\/p>\n
(ii) to supervise and guide the
\nCommittees in the preparation for site-
\nplans and estimates of construction
\nprogrammes undertaken by the
\nCommittee;\n<\/p>\n
(iii) to execute all works chargeable to the
\nBoard’s fund;\n<\/p>\n
(iv) to maintain accounts in such forms
\nas may be prescribed and get the same
\naudited in such manner as may be laid
\ndown in regulations of the Board;\n<\/p>\n
(v) to publish annually at the close of the
\nyear, its progress report, balance-sheet,
\nand statement of assets and liabilities
\nand send copies to each member of the
\nBoard as well as to the Chairman of all
\nthe Market Committees;\n<\/p>\n
(vi) to make necessary arrangements for
\npropaganda and publicity on matters
\nrelated to regulated marketing of
\nagricultural produce;\n<\/p>\n
(vii) to provide facilities for the training of
\nofficers and servants of the Market
\nCommittee;\n<\/p>\n
(viii) to prepare and adopt budget for the
\nensuing year;\n<\/p>\n
(ix) to make subventions [and loans] to
\nMarket Committees for the purposes of
\nthis Act on such terms and conditions as
\nthe Board may determine;\n<\/p>\n
(x) to do such other things as may be of
\ngeneral interest to Market Committees or
\nconsidered necessary for the efficient
\nfunctioning of the Board as may be
\nspecified from time to time by the State
\nGovernment.”\n<\/p>\n
32. Powers of the State Government to call
\nfor the proceedings of a Committee and
\npass order thereon.- The Board may, for the
\npurpose of satisfying itself as to the legality
\n‘propriety of any decision of, or order passed
\nby, a Committee, at any time call and examine
\nthe proceedings of the Committee, and, where
\nit is of the opinion that the decision or order of
\nthe Committee should be modified, annulled or
\nreversed, pass such orders thereon as it may
\ndeem fit.\n<\/p>\n
33. Delegation of powers.- The State
\nGovernment may, by notification in the
\nGazette, delegate, subject to such conditions
\nand restrictions as may be specified therein,
\nany of its powers under this Act, to the Board
\nor to any of its officers.\n<\/p>\n
AMENDMENT BROUGHT BY U.P. ACT NO. 6 OF
\n1977<\/span><\/p>\n
26-I. Delegation of powers.- Subject to the
\nprovisions of this Act, the Board may, by
\ngeneral or special order, delegate, either
\nunconditionally or subject to such conditions
\nas may be specified in the order, to the
\nDirector or the Member-Secretary or any other
\nofficer of the Board such of its powers and
\nduties under this Act, as it may deem fit.\n<\/p>\n
33. Delegation of powers.- The State
\nGovernment may, by notification in the
\nGazette, delegate, subject to such conditions
\nand restrictions as may be specified therein,
\nany of its powers under this Act, to the Board
\nor to the Director.\n<\/p>\n
AMENDMENT BROUGHT BY U.P. ACT NO. 10 OF
\n1991<\/span><\/p>\n
33. Delegation of powers.- The Board
\nmay, by regulations, delegate subject to
\nsuch conditions and restrictions and in
\nsuch manner, as may be specified therein
\nany of its powers to the Director.\n<\/p>\n
\tThe position of Section 32 and Section 33 prior to 1973,
\nafter Amending Act, 1973, after Amending Act, 1977 and after
\nthe Amending Act 1999 reads as follow:\n<\/p>\n
Prior to 1973
\nSection 32: The State Government may, for the purpose of
\nsatisfying itself as to the legality or propriety of any decision of,
\nor order passed by a Committee, at any time call and examine
\nthe proceedings of the Committee and where it is of the
\nopinion that the decision or order of the Committee should be
\nmodified, annulled, or reversed, pass such orders thereon as it
\nmay deem fit.\n<\/p>\n
 Section 33: The State Government may, by notification in the
\nGazette, delegate, subject to such conditions or restrictions as
\nmay be specified therein, any of its powers o the powers of any
\nother authority under this Act, to any officer or authority
\nsubordinate to it.\n<\/p>\n
After 1973 Amending Act
\nSection 32: The Board may, for the purpose of satisfying itself
\nas to the legality or propriety of any decision of’, or order
\npassed by a Committee, at any time call and examine the
\nproceedings of the Committee and where it is of the opinion
\nthat the decision or order of the Committee should be
\nmodified, annulled, or reversed, pass such orders thereon as it
\nmay deem fit.\n<\/p>\n
Section 33: The State Government may, by notification in the
\nGazette, delegate, subject to such conditions or restrictions as
\nmay be specified therein, any of its powers tinder this Act, to
\nthe Board or to any of its officers.\n<\/p>\n
After the 1977 Amending Act
\nSection 32: The Board may, for the purpose of satisfying itself
\nas to the legality or propriety of any decision of, or order
\npassed by a Committee, at any time call and examine the
\nproceedings of the Committee and where it is of the opinion
\nthat the decision or order of the Committee should be
\nmodified, annulled, or reversed, pass such orders thereon as it
\nmay deem fit.\n<\/p>\n
Section 33: The State Government may, by notification in the
\nGazette, delegate, subject to such conditions or restrictions as
\nmay be specified therein, any of its powers under this Act, to
\nthe Board or to the Director.\n<\/p>\n
After the 1991 Amending Act
\nSection 32: The Board may, for the purpose of satisfying itself
\nas to the legality or propriety of any decision of, or order
\npassed by a Committee, at any time call and examine the
\nproceedings of the Committee and where it is of the opinion
\nthat the decision or order of the Committee should be
\nmodified, annulled, or reversed, pass such orders thereon as it
\nmay deem fit.\n<\/p>\n
Section 33: The Board may, by regulations, delegate subject to
\nsuch condition and restrictions and in such manner, as may
\nbe specified therein, any of its powers to the  Director.\n<\/p>\n
After the 1973 amendment power was given to the Board
\nto delegate its powers.  After the 1977 amendment, power to
\ndelegate was given to State Government under Section 33
\nrelating to exercise of power to the Board or the Director.  After
\n1991 amendment  under Section 33, the State had no power
\nof delegation and it was vested on the Board.\n<\/p>\n
 A comparison of the provisions shows that Sections
\n32 and 33 relate to provisional powers while Section
\n26(L) deals with powers and functions of the Board.
\nSection 26(L)(iv) deals with powers and functions of the
\nBoard.  After the 1973 amendment, in Section 32 the
\nword “State” was substituted by the word “Board” while
\nthe power exercisable under Section 33 continued with
\nthe State Government.  The High Court seems to have
\nerroneously proceeded on the basis that the sole
\nrepository power was the State Section 33 A deals with
\npowers of Director to ensure performance of duties of
\nMarket Committees.  Section 33-B deals with State
\nGovernments’ power relating to general power of
\nsupervision but there was no scope for revising the
\ndelegatees’ decision.   On 22.11.1973 the Board resolved
\nto delegate powers.  On 21.3.1974 there was a specific
\norder of Board to delegate powers to the Director.  From
\n1974 till 1991, Director was exercising power under
\nSection 26(I).  According to the High Court after 1991
\nDirector cease to have authority because of Section 33.
\nRegulations in terms of Section 26(X) were brought in by
\nthe 1973 amendment.  Submissions of the appellant is
\nthat when Section 26(F) came into question and was not
\nrepealed and was continued, repository of the power was
\nthe Director and the source of power continued.  Till
\n1991, the existing arrangements continued
\nnotwithstanding amendment to Section 33.
\nArrangements and delegations made under the whole
\nregime continued.  According to Section 24 of the General
\nClauses Act, 1897 (in short the ‘General Clauses Act’)
\npost 1991 all delegations (after Regulation came to
\nbecome operative) has to be with prior sanction of the
\nBoard.\n<\/p>\n
Comparison Section 26-I becomes otiose and
\nirrelevant and cannot be operative if the High Court’s
\nview is accepted.  Every statute has to be read as a whole
\nand no part of the statute cannot be rendered inoperative
\nby another provision.  The power of revision continued
\nwith the State Government up to 1973.  After 1973
\namendment the revisional power was with the Board and
\nnot with State Government and it was not a case where
\ndelegation under Section 33 had to play any role.  After
\n1991 delegation can be either under Section 26  I or
\nSection 33.\n<\/p>\n
In reply it is submitted that Section 26-I did not
\nstipulate delegation the Director Office of Director came
\nin 1977and he was not an officer of the Board. Only
\ndelegation was made was on 21.3.1974.  The Director
\ncould not have been the delegatee and could be delegated
\npower after 1977.\n<\/p>\n
Section 26-I relates to the exerts  covered by Section
\n26(L)(i)(ii)(iii), while Section 33 deals with the area relatable to
\nSection 26(L)(iv).  Since the same is not a power under the Act,
\nhas to be covered by the Regulation.  It is not conferred by
\neither Section 33 or by Statute.\n<\/p>\n
 As rightly contended by learned counsel for the
\nappellant, the High Court’s view would render Section 26- I
\notiose and irrelevant.  After 1991, the delegation can be either
\nunder Section 26-I and under Section 33. In the statute there
\nis no power to reopen unlike some other statutes. The
\nChairman hold that there were two transactions i.e. one was
\noutside Saharanpur and the other relatable to job-work.
\nAccording to the Chairman the first was not covered by the
\nActand for the second transactions reference was made to the
\nDirector.  Contrary to what the Chairman had told, the
\nDirectors held that both the transactions were covered under
\nthe Act and issued guidelines for transactions from 1987
\nonwards.  Reference appears to have been made to Section 17\n<\/p>\n
(iii) (b). But there is no analysis of that provision to support
\nthe stand of the Director. Admittedly there is no power of
\nreopening of assessments. Transactions for the assessment
\nyear 1997-98 fell for consideration.  The complaint was made
\non 20.10.1998 therefore the factual position could have been
\ndetermined with effect from 01.08.1998 onwards.  The stand
\nof the respondent that the office of the Director came into
\neffect in 1977 is not correct.  In fact the office of the Director
\ncame into existence in 1973 but  not as an officer of the
\nBoard.  The delegation was done on 21.3.1974 to the Director.
\nUnder Section 32 after 1973 there is a substantive power of
\nrevision.  After 1991 under two provisions power of delegation
\ni.e. Section 26-I and Section 33 could be exercised. While
\nSection 26-I is supervisory in character.  Section 33 confers
\nthe revisional power of the Board to the Director.  The manner
\nof delegation is in terms of the “Regulation” and therefore it
\nprecludes any other mode.  Prior to 1991, Section 26 -I did not
\npertain to power of revision.  It operated dehors Sections 32
\nand 33. The revisional power went out of the domain of the
\nState Government and the same remained with the Board.
\nAfter 1991 the situation is that Section 33 deals with aspects
\nother than those covered under Section 32.  That is because
\nthe revisional power was already with the Board.  Post 1991,
\nthe delegation could be done only under the regulation.  That
\nbeing so, the High Court’s vis-`-vis, conclusions i.e. Section 32
\nof the Act are not correct.  On the merits there is no scope for
\ninterference with the High Court’s order because there was no
\npower to reopen.  The respondent shall, however, produce the
\naccounts relating to the period subsequent to 1.8.1998, and
\nthe factual aspects have to be considered by the appellants.\n<\/p>\n
The appeal is disposed of accordingly without any order
\nas to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Krishi Utpadan Mandi Parishad & … vs I.T.C. Ltd on 16 November, 2006 Author: A Pasayat Bench: Arijit Pasayat, S.H. Kapadia CASE NO.: Appeal (civil) 4824 of 2000 PETITIONER: Krishi Utpadan Mandi Parishad & Anr. RESPONDENT: I.T.C. Ltd. DATE OF JUDGMENT: 16\/11\/2006 BENCH: ARIJIT PASAYAT & S.H. KAPADIA JUDGMENT: J U […]<\/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-26321","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nKrishi Utpadan Mandi Parishad & ... vs I.T.C. 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