{"id":73473,"date":"1974-05-01T00:00:00","date_gmt":"1974-04-30T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/vishnu-dayal-mahendra-pal-and-vs-state-of-uttar-pradesh-and-another-on-1-may-1974"},"modified":"2017-05-25T00:33:31","modified_gmt":"2017-05-24T19:03:31","slug":"vishnu-dayal-mahendra-pal-and-vs-state-of-uttar-pradesh-and-another-on-1-may-1974","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/vishnu-dayal-mahendra-pal-and-vs-state-of-uttar-pradesh-and-another-on-1-may-1974","title":{"rendered":"Vishnu Dayal Mahendra Pal And … vs State Of Uttar Pradesh And Another on 1 May, 1974"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Vishnu Dayal Mahendra Pal And … vs State Of Uttar Pradesh And Another on 1 May, 1974<\/div>\n
Equivalent citations: 1974 AIR 1489, \t\t 1975 SCR (1) 376<\/div>\n
Author: P Goswami<\/div>\n
Bench: Ray, A.N. (Cj), Mathew, Kuttyil Kurien, Alagiriswami, A., Goswami, P.K., Sarkaria, Ranjit Singh<\/div>\n
           PETITIONER:\nVISHNU DAYAL   MAHENDRA PAL AND OTHERS\n\n\tVs.\n\nRESPONDENT:\nSTATE OF UTTAR PRADESH AND ANOTHER\n\nDATE OF JUDGMENT01\/05\/1974\n\nBENCH:\nGOSWAMI, P.K.\nBENCH:\nGOSWAMI, P.K.\nMATHEW, KUTTYIL KURIEN\nALAGIRISWAMI, A.\nSARKARIA, RANJIT SINGH\n\nCITATION:\n 1974 AIR 1489\t\t  1975 SCR  (1) 376\n 1974 SCC  (2) 306\n\n\nACT:\nUttar  Pradesh\tKrishi Utpadhan Mandi  Adhiniyam,  1964\t and\nRules made thereunder-If violative of Arts. 14 and  19(1)(g)\nof the Constitutional.\n\n\n\nHEADNOTE:\nThe  Uttar Pradesh Krishi Utpadhan Mandi Adhiniyam, 1964  as\namended by U.P. Acts 25 of 1964 and 10 of 1970. was  enacted\nto  provide for the regulation of the sale and\tpurchase  of\nagricultural   produce,\t to  protect  the   producers\tfrom\nexploitation and for the establishment, superintendence\t and\ncontrol of markets in U.P. Under s. 5, the State  Government\nis empowered to declare a particular area as market area and\nunder  s. 7. the principal market yard and sub-market  yards\nare declared.  Section 7(2) provides that no person shall in\na principal market yard or sub-market yard carry on business\nas  a trader, broker, commission agent etc., in respect\t  of\nspecified agricultural produce except in accordance with the\nconditions  of a licence obtained from he  concerned  market\ncommittee.   Sec.  13 provides for the constitution  of\t the\nmarket\tcommittee  and for representation on  the  committee\nfrom  different\t sources.  Under s. 17.\t the  committee\t has\npower to issue, renew, suspend or cancellicences.\nSection\t 25  provides  for appeals  against  orders  of\t the\ncommitteeto  the  Director  of Agriculture and\ts.  32\tfor\nrevision by the State Government Under s. 16(2)(vii), the\ncommittee has to provide accommodation for storage.  Sec. 40\nenables\t  the-'\t  State\t Government  to\t make\trules\tRule\n70(4)(1)provides  that the Committee may issue a licence  to\nan  applicant if it is satisfied. (a) that the applicant  is\nsolvent\t and (b) that the applicant is a desirable   person.\nRule  76(1)  provides that every  consignment  of  specified\nagricultural produce brought for sale into the principal  or\nsub-market yard shall be sold by open auction.\nThe  petitioners  who  were traders  or\t commission  agents,\ndealing in agricultural produce, challenged the validity  of\nthe  Act,  and the rules made thereunder on  the  ground  of\nviolation of Arts. 14 and19(1)(g).\nThey contended that : (1) that constitution of the committee\nis  prejudicial\t to their interests since. it  will  have  a\nperpetual  majority  of producers, (2)\tthe  entrustment  of\nlicensing to such a committee is an unreasonable restriction\non  their  right to trade, (3) there is no guidance  in\t the\nmatter\tof grant of licences, the criteria mentioned  in  r.\n70(4)  being vague, (4) the requirement to  provide  storage\nspace\tfor   the  producers  by  the  petitioners   is\t  an\nunreasonable restriction, and (5) r. 76(1) is ultra vires s.\n40  and\t also  places an  unreasonable\trestriction  on\t the\npetitioners.\nDismissing the petitions,\nHELD  :-(1) Under s. 13, the Committee is to consist  of  23\nmembers\t and  out of, them only 10 are from  the  producers.\nTherefore the submission is factually inaccurate as there is\nno question of a perpetual majority of producers. [381G-H]\n(2)  There  are\t no unreasonable features in the  scheme  of\nrepresentation in the\t committee.    Under   8.   13,\t   8\nproducers are elected who may represent the 8 categories  of\nagricultural  produce  mentioned  in the  schedule  and\t two\nproducers  are\tnominated from the schedule  castes  by\t the\nGovernment, because, they may not get due representation  in\nthe  election.\tThe performance of the duty of licensing  by\nsuch a committee cannot prejudice the petitioners.  In fact,\nnone of the petitioners has been refused a licence.   Though\nusually some governments] authority is charged with the duty\nof granting licences under various Acts, that does not prove\nthat  the duty cannot be property and impartially  exercised\nby a Committee representing various interests which are\n\t\t\t    377\nvitally\t interested in the trade. of  agricultural  produce.\nIf in a particular case. the action of the Committee is mala\nfide'  or  otherwise  objectionable such  grievance  can  be\nproperly dealt with. [381H-382E]\n(3)  It\t is not correct to say that there is no guidance  in\nthe  Act in the matter of grant of license and that the\t two\ncriteria provided by rule 70(4)(1) are vague. [382E-F]\n(a)  The  Committee  which  is entrusted with  the  duty  of\ngranting licences consists of people from different  sources\nvitally interested in the marketing of agricultural produce,\nas  well as Government officials.  It is a  well-represented\nCommittee  which is expected to know the object and  purpose\nof the Act of' which it is a creature.\tThere is  sufficient\nguidance  from the preamble and other provisions of the\t Act\nwith  which the members of the Committee would\tbe  familiar\nand-conversant,\t for  example,\ts. 16 of  the  Act  and\t the\nparticulars  in Forms XI and XIII. for the application of  a\nlicence\t and  Conditions  of a licence.\t With  the  help  of\nGovernment officials in the committee there is no reason  to\nthink  that the Committee will not function smoothly  or  to\napprehend that licence would be refused arbitrarily.   There\nis  also a limitation on the power of the Committee in\tthat\nthe Act insists that the Committee should record its reasons\nwhile  refusing a licence.  Further, there is  provision  of\nappeal\tagainst the decision of the Committee and a  further\nrevision to the State Government. [382F-383D]\n(b)  One  of the two criteria mentioned in r.  70(4)(i).  is\nsolvency  and the criterion on the score or  'bankruptcy  is\nwell-known and cannot be said to be vague or indefinite.  As\nregards\t the  second criterion, namely, that  the  applicant\nshould\tbe  a  desirable  person  the  Act  itself  provides\nsufficient  guidance  to  the Committee\t in  the  matter  of\ndeciding  whether  a  particular applicant is or  is  not  a\nproper person to hold the licence. [383F-H]\n(4)  The  requirement to provide a storage space is only  an\ninterim\t measure pending arrangements by the  Committee\t for\nproper storage as required by S. 16. Under r. 52(4)  storing\nof  the specified agricultural produce shall be\t subject  to\nthe payment of such storage fee and other conditions as\t may\nbe:  specified\tin the bye-laws.  Since the storage  by\t the\ntraders\t in the market yards will always be paid  for  under\nthe  rule there is no substance in the contention  that\t the\nrequirement is unreasonable. [384A-B]\n(5)(a Rule 76(1) is not ultra vires s. 40\nSection\t 9(2) restricts the right to carry on  trade  except\nunder and in accordance with the licence_ and s. 17 provides\nfor   issuing  or  renewal  of\tlicences  subject   to\t the\nrestrictions  under  the rules, and these sections  are\t not\nchallenged.   Section  40 empowers the State  Government  to\nmake  rules  for carrying out the purposes of the  Act,\t and\nunder  s.  40(2)  (xxvii), r.  76(1)  only  prescribes\topen\nauction as the mode of sale. [384B-D]\n(b)  The rule does not violate the fundamental right of\t the\npetitioners under Art. 19(1)(g). [384G]\nThe definitions of sale and purchase in the.  Act do not run\ncounter\t to the provisions relating to auction\tsale  under,\nthe  rule and, it Could not be field to be  an\tunreasonable\nmode  considered in the entire scheme of the Act.  in  order\nthat  the  producers  may obtain the best  price  for  their\ncommodity, sale by open auction is prescribed under the rule\nto  fulfil  one of the important purposes of the  Act.\t The\nlegislature is intervening to see that the producers get the\nmaximum pecuniary return possible in the transaction and as\na\t   necessary\t     concomitant\t  eliminated\nthe made of private sale by individual negotiation resulting\nin  malpractices.  Besides, by the Proviso to the  rule\t the\nrestriction is not allowed to operate in the case of  retail\nsales. [384D-G]\nLala  Hari Chand Sarda v. Mizo District Council\t and<\/a>  all)-.\n[1967]\t1 S.C.R. 479 and Harakchand Ratanchand\tBanthia\t and\nors.  etc. v. Union of India and ors. [1970] 1\tS.C.R.\t479,\ndistinguished.\n378\n\n\n\nJUDGMENT:\n<\/pre>\n
ORIGINAL  JURISDICTION: Writ Petitions Nos. 1524,  1537-1580
\nof  1973 and 74, 75, 254, 510-512 of 19702′ 21 of  1971\t and
\n1525 & 1581-1606 of 1973.\n<\/p>\n
Petitions under Art. 32 of the Constitution of India.
\nA.   K. Sen, Yogeshwar Prasad, S. K. Bagga and S. Bagga, for
\nthe petitioners (in W.Ps. Nos. 1524 and 1537-1580\/73).
\nA.   K. Sea, (in W.P. No. 74\/70), Hardyal Hardy (in W.P. No.
\n75\/70), Yogeshwar Prasad, S. K. Bagga and S. Bagga, for\t the
\npetitioners  in (W.P. Nos 74, 75, 254 and 510-512\/70,  21\/71
\nand 1525, 1581-1606\/1973).\n<\/p>\n
L.   N.\t Sinha,\t Solicitor  General  and  O.  P.  Rana,\t for
\nrespondents (in W.Ps.\t Nos. 1524, 1537-1580173).
\nO.   P.\t Rana,\tfor respondents (in W.Ps. Nos.\t74,  254\/70,
\n21171, 1525, 1581-1606\/73 and respondents nos. 1 & 3 in W.P.
\n75 and 510-512\/70).\n<\/p>\n
V.   M.\t Tarkunde and E. C. Agarwala, for respondent  No.  2
\n(in  W.-P.  No. 75\/70 and applicant\/intervener in  W.P.\t No.
\n75\/70.\n<\/p>\n
The Judgment of the Court was delivered by-
\nGoswami, J.-By the above writ applications under Article  32
\nof the Constitution the validity of the Uttar Pradesh Krishi
\nUtpadhan Mandi Adhiniyam, 1964 (U.P. Act No. XXV of 1964  as
\namended by U.P. Act No. 10 of 1970) (briefly called the Act)
\nand  the rules made thereunder are challenged on the  ground
\nof  violation  of Article 14 and Article  19(1)(g)  of\tthe,
\nConstitution.\n<\/p>\n
The  petitioners  in  all the above  cases  are\t traders  or
\ncommission agents dealing in agricultural produce.
\nThe  following\tsubmissions  are  made\ton  behalf  of\t the
\npetitioners
\n\t      (1)   The constitution of the Market Committee
\n\t      under   section  13  of  the  Act\t is   highly
\n\t      prejudicial  to  their interests\tand  of\t the
\n\t      traders  in  general  since, it  will  have  a
\n\t      perpetual majority of producers.\n<\/p>\n
\t      (2)   To\tentrustment of licensing to  such  a
\n\t      Market  Committee instead of to any  impartial
\n\t      authority\t is  unfair and an  un-.  reasonable
\n\t      restriction on the right to trade.\n<\/p>\n
\t      (3)   The\t Act  in  the  matter  of  grant  of
\n\t      licences\tgives  no guidance at all  and\teven
\n\t      under rule 70(4) two vague criteria have\tbeen
\n\t      laid  down in the matter of issue of  licences
\n\t      under the Act.\n<\/p>\n
\t      (4)   The petitioners are required to  provide
\n\t      a\t storage  space to the producers  for  their
\n\t      agricultural  produce going to the market\t and
\n\t      this  obligation is also an unreasonable\tres-
\n\t      triction\ton  the\t fundamental  right  of\t the
\n\t      petitioners.\n<\/p>\n
\t      379<\/span><\/p>\n
\t      (5)   Rule  76 (1) is invalid and ultra  vires
\n\t      section  40  of the Act and  has\talso  placed
\n\t      unreasonable  restrictions  on  the  right  to
\n\t      carry on trade or business.\n<\/p>\n
Before\twe  deal  with these submissions, we  may  turn\t out
\nattention to the Act.  As the preamble shows the Act has  to
\nprovide\t  for  the  regulation\tof  sale  and  purchase\t  of
\nagricultural\tproduce\t  and\tfox    the    establishment,
\nsuperintendence,  and control of markets therefore in  Uttar
\nPradesh.  The statement of object and reasons gives a  clear
\npicture\t of  the  evils\t sought\t to  be,  remedied  by\tthis
\nlegislation  and a portion therefrom may be extracted  below
\n:-\n<\/p>\n
\t      “The  present  chaotic state  of\taffairs\t as,
\n\t      obtaining\t in agricultural produce markets  is
\n\t      an acknowledged fact.  There  are.,innumerable
\n\t      charges,,\t levies.  and  exactions  which\t the
\n\t      agricultural  producer  is  required  to\t pay
\n\t      without\thaving\t any  say  in\tthe   proper
\n\t      utilisation of the amount so paid by him.\t  In
\n\t      matters of dispute, between the seller and the
\n\t      buyer,  the  former  is  generally  put  at  a
\n\t      disadvantage; by being given arbitrary awards.<\/p><\/blockquote>\n
\t\t\t    The producer is also denied a large pa
\nrt of his
\n\t      produce  by manipulation and defective use  of
\n\t      weights\tand  scales  in\t the  market.\t The
\n\t      Government of India and the various committees
\n\t      and   commissions\t appointed  to\t study\t the
\n\t      condition\t of  agricultural  markets  in\t the
\n\t      country have also been inviting the  attention
\n\t      of  the  State Government from  time  to\ttime
\n\t      towards  improving  the  conditions  of  these
\n\t      markets …. The Planning Commission  stressed
\n\t      long  ago\t that  legislation  in\trespect\t  of
\n\t      regulation  of markets should be, enacted\t and
\n\t      enforced by 1955-56″.\n<\/p>\n
\t      56″.\n<\/p>\n
It is also mentioned that legislation in the State was first
\nproposed  in 1938 but lapsed.  It also appears that most  of
\nthe  other  states have already passed legislation  in\tthis
\nrespect.  It is, therefore, clear that the principal  object
\nof  this  Act  is to come in aid of the\t producers  who\t are
\ngenerally  ill-organised  and  are  by\tfar  and  large\t the
\nexploited party in the bargain between unequals.
\nSection\t 2  contains  the definitions.\tBy  section  2(a)  ”
\n‘agricultural  produce’\t means\tsuch  items  of\t produce  of
\nagriculture,\thorticulture,\t viticulture,\t apiculture,
\nsericulture, pisciculture, animal husbandry or forest as are
\nspecified  in the schedule, and includes admixture of  2  or
\nmore  of  such\titems, and also includes any  such  item  in
\nprocessed  form,  and further includes\tgur,  rab,  shakkar,
\nkhandsari and jaggery”.\t By section 2 (f) “‘Committee’ means
\na Committee constituted under this Act”.  By section 2(k)  ”
\n‘Market Area’ means an area notified as such under section 6
\nor  as\tmodified  under\t section  8″.\tBy  section  2(p)  ”
\n‘producer’ means a person who, whether by himself or through
\nhired  labour, produces, rears or catches, any\tagricultural
\nproduce,  not being a producer who also works as  a  trader,
\nbroker\tor  Dalal, commission agent or Arhatiya\t or  who  is
\notherwise ordinarily engaged in the business, of storage  of
\nagricultural  produce”.\t We are not concerned with the\tpro-
\nviso  attached thereto.\t By section 2(y) ” ‘trader’ means  a
\nperson who in the ordinary course of business is engaged  in
\nbuying or selling agricultural produce as a principal or  as
\na duly authorised agent of one or more
\n380<\/span>
\nprincipals  and includes a person, engaged in processing  of
\nagricultural  produce”.\t  After notification  by  the  State
\nGovernment of its intention to declare a particular area  as
\na Market Area under section 5 and after inviting  objections
\nand  consideration of the same, the State  Government  under
\nsection 6 declares the whole or any specified portion of the
\narea mentioned in the notification to be the Market Area  in
\nrespect\t of such agricultural produce as may  be  specified.
\nSimilarly  under  section 7, the Principal Market  Yard\t and
\nSub-Market  Yards  are\tdeclared.   Section  9(2)  which  is
\nmaterial for our purpose, may be quoted:-\n<\/p>\n
\t      “No  person shall, in a Principal Market\tYard
\n\t      or  any Sub-Market Yard, carry on business  or
\n\t      work  as a trader,  broker,  commission-agent,
\n\t      warehouse\t man, weighman, palledar or in\tsuch
\n\t      other capacity as may be prescribed in respect
\n\t      of  any specified agricultural produce  except
\n\t      under  and- in accordance with the  conditions
\n\t      of  a  licence  obtained\ttherefore  from\t the
\n\t      Committee concerned”.\n<\/p><\/blockquote>\n
The  petitioners  make a great grievance of  this  licensing
\nprovision by the Market Committee called the Mandi Samiti of
\nthe  Market Area.  Section 13 provides for  constitution  of
\nthe  Market Committee and provides for\trepresentation\tfrom
\ndifferent sources as detailed in (i) to (xi) thereunder.
\nThe  learned counsel draws our attention to  clauses,  (vii)
\nand (vii-a) of section 13(1) whereby ten representatives  of
\nthe producers are included in the Committee.  It is  pointed
\nout by the learned Solicitor General and not contradicted by
\nMr. Sen that ‘ the Committee under section 13 consists of 23
\nmembers out of which ten are from the producers.  Section 16
\nprovides  for  functions and duties of\tthe  Committee\tand,
\ninter  alia, under section 2(i) thereof “a  Committee  shall
\nensure\tfair  dealings\tbetween the  producers\tand  persons
\nengaged\t in the sale or purchase of  specified\tagricultural
\nproduce.”  Under  section 17, “A Committee  shall,  for\t the
\npurposes of this Act, have the powers to-\n<\/p>\n
\t      (i)   issue  or renew licences under this\t Act
\n\t      on  such terms and conditions and\t subject  to
\n\t      such  restrictions as may be  prescribed,\t or,
\n\t      after  recording reasons therefore, refuse  to
\n\t      issue or renew any such licence;\n<\/p><\/blockquote>\n
\t      (ii)  suspend  or\t cancel licences  issued  or
\n\t      renewed under this Act”.\n<\/p><\/blockquote>\n
Section\t 25 provides for appeals against the, orders of\t the
\nCommittee  to the Director of Agriculture who is  to  decide
\nthe same in accordance with the rules.\tUnder  section\t 32,
\nthe State Government also has powers of revision  and\t may
\ncall for the records of the proceedings of the Committee and
\npass  orders  modifying, annulling or  reversing  the  same.
\nSection\t 40 enables the State Government to make  rules\t for
\ncarrying out the purposes of this Act.\n<\/p>\n
The  rules, inter alia, provide for matters relating to\t the
\nfunctions,  powers  and duties of the  Committee,  licensing
\nfee,  or market fee which may be levied and realised by\t the
\nCommittee  and\ttheir  mode of recovery and  the  terms\t and
\nconditions for assessment and renewal of licences under this
\nAct [section 40 (2) ]. There is a schedule to the Act
\n\t\t\t    381<\/span>
\nwhich  contains the description of the agricultural  produce
\nUnder  eight  different heads.\tChapter VIII  of  the  rules
\ndeals with transaction\tof business in Market Yards and\t the
\nopening\t rule  70  provides  for  licensing  by\t the  Market
\nCommittees.   By  sub-rule(3) “any person desiring  to\thold
\nlicence\t under\tsub-rule (1) shall make, in Form No.  XI  or
\nForm No. XII, as the case may be, a written application\t for
\na licence to the Market Committee and shall pay the  licence
\nfees  prescribed under rule 67”.  Rule 70(4) (i) may now  be
\nquoted:\n<\/p>\n
\t      “On receipt of such application together\twith
\n\t      the  amount of fee prescribed under  rule\t 67,
\n\t      the Market Committee may issue him the licence
\n\t      applied for,, if-\n<\/p><\/blockquote>\n
\t      (a)   it\tis satisfied that the  applicant  is
\n\t      solvent;\n<\/p><\/blockquote>\n
\t      (b)   it is satisfied that the applicant is  a
\n\t      desirable\t person\t to whom a  licence  may  be
\n\t      granted;\n<\/p><\/blockquote>\n
\t      provided that the provisions of sub-clause (a)
\n\t      shall   not  apply  to  weighmen,\t  measurers,
\n\t      palledars, truck plyers and Thela plyers”.\n<\/p><\/blockquote>\n
This rule will have to be read with section 17 quoted above.
\nBy rule 73, the order of refusal, cancellation or suspension
\nof a licence by, the Committee shall be communicated to\t the
\nperson concerned in the specified manner indicated  therein.
\nRule 76(1) which is impugned may be quoted :\n<\/p>\n
\t      “Every  consignment of specified\tagricultural
\n\t      produce  brought for sale into  the  Principal
\n\t      Market  Yard or any sub-Market Yard  shall  be
\n\t      sold by open auction:\n<\/p><\/blockquote>\n
\t      Provided\tthat nothing in this sub-rule  shall
\n\t      apply to a retail sale as may be specified  in
\n\t      the bye-laws of the Committee”.\n<\/p><\/blockquote>\n
Some  provisions  of similar Acts of the States\t of  Madras,
\nBombay\t and  Gujarat  had  earlier  been  the\ttargets\t  of
\nunsuccessful   attack\tin   this  Court   and\t hence\t the
\nconstitutional challenge in the present applications against
\nthe  U.P. Act is necessarily on different ground,,. [See  M.
\nC.  V  ‘ S. Arunchala Nadar etc. v. The State  of  Madras  &
\nothers;(1)  Mohammad Hussain Gulam Mohammad and\t Another  v.
\nThe  State of Bombay and<\/a> another;(2) and Jan  Mohammed\tNoor
\nMohammed Begban v. State of Gujarat and Another<\/a>(3)].
\n We  may  now turn to the Submissions.\tWith regard  to\t the
\nfirst  submission,  as earlier noted, the grievance  is\t not
\nfactually  accurate.   Out of 23 members of.  the  Committee
\nonly  10  are from the producers.  Therefore,  there  is  no
\nquestion  of  a perpetual majority of the producers  in\t the
\nCommittee.   Besides under section 13(1)(vii),\t8  producers
\nare elected.  It may be even a legitimate expectation of the
\nlegislature  that  there may be reasonable  likelihood\tthat
\nProducers  of  eight  categories  of  agricultural   produce
\nmentioned in the schedule,
\n(1) [1959] (Supp) (1) S.C.R. 92. (2) [1962] (2) S.C.R. 659.
\n(3) [1966] (1) S.C.R. 505.\n<\/p>\n
382<\/span><\/p>\n
may  be represented.  Under section 13(1)(vii-a), which\t was
\nintroduced by an amendment in 1970, two producers  belonging
\nto  the\t scheduled castes are to be nominated by  the  State
\nGovernment  This  provision is made in the interest  of\t the
\nPeople belonging to the scheduled castes who may not be able
\nto. get due representation in the elections.  We do not find
\nany unreasonable features in the scheme of representation in
\nthe  Committee\tunder section 13.  This will be\t clear\teven
\nfrom  section 14 whereby the first Committee appoints  suit-
\nable  members “to represent different interests referred  to
\nin sub-section (1) of section 13”.  The first submission  of
\nthe petitioners is, therefore, of no avail.
\nWe may now take up consideration of the second and the third
\nsubmissions  which  may\t be  dealt  with  together.   It  is
\nsubmitted  that the licensing of the traders should  not  be
\nleft  in  the  hands of the Market Committee.\tWe  find  it
\ndifficult to appreciate how the performance of this duty  by
\nthe Committee will at all prejudice the traders.  To say the
\nleast  it is a hypothetical objection in this case,  as,  we
\nunderstand,  none  of the petitioners have  been  refused  a
\nlicence..   It\tis  true  that\tusually\t some\tgovernmental
\nauthority  is charged with the duty of granting of  licences
\nunder  various\tlocal Acts.  That, however, does  not  prove
\nthat  the duly cannot be properly and impartially  exercised
\nby  the Committee representing various interests  which\t are
\nvitally\t interested  in the trade of  agricultural  produce.
\nWhether in a particular case the action of the Committee  is
\nmala-fide  or otherwise, objectionable, may be\ta  different
\nmatter\tand  such a grievance can be  properly\tdealt  with.
\nThat  would, however, not make, the, provision\tinvalid\t nor
\ncan  it be said to place an unreasonable restriction on\t the
\nright of the petitioners to trade.\n<\/p>\n
It is further submitted that there is no guidance in the Act
\nin  the\t matter of grant of licence and\t the  relevant\trule
\n70(4)(1)  prescribes only two vague criteria in the  matter.
\nThis  submission  fails to take note of the  fact  that\t the
\nCommittee  which  is  entrusted with the  duty\tof  granting
\nlicences  consists of people from different sources  vitally
\ninterested  in the marketing of agricultural  produce.\t The
\nCommittee  consists  also  of  representatives\tfrom   local
\nbodies, cooperative marketing societies\t Central Warehousing
\nCorporation, State Warehousing Corporation,  representatives
\nof  traders and commission agents, Government  officials  of
\nwhom  one  shall  be a\trepresentative\tof  the\t Agriculture
\nDepartment  and the other of Food and  Supplies\t Department,
\nand  so forth.\tIt is, therefore, a fairly  well-represented
\nCommittee  which is expected to know the object and  purpose
\nof the Act of which it is a creature.  One may\tlegitimately
\nexpect\tthat the members are well aware of the\tdifficulties
\nof   the  producers,  interests\t of  the  traders  and\t the
\nintricacies of the trade.  There is sufficient guidance from
\nthe preamble and other provisions of the Act with which\t the
\nmembers of the Committee owe their duty to be conversant For
\nexample\t under section 16 the Committee is charged with\t the
\nduty  of enforcing the provisions of the Act, the rules\t and
\nthe bye-laws.  It has to exercise its powers and perform its
\nduties\tand discharge its functions in accordance  with\t the
\nprovisions of the Act and the rules.\n<\/p>\n
38 3
\nUnder  sub-section  (2) of section 16, the  Committee  shall
\nensure\tfair dealings between the producers and the  traders
\nbesides performing other functions.  Form No. XI in which  a
\ntrader\thas  to submit his application for a  licence.\talso
\ngives various particulars from which the Committee would  be
\nable to consider his claim for a licence.  It will be’\tseen
\nthat  in this form the, applicant has to undertake to  abide
\nby  the conditions of the licence and the provisions of\t the
\nAct  and the rules.  The condition of the licence which\t are
\nnoted in Form No. XIII would also give an indication of\t the
\nobligations  of the licensee.  All these would be  known  to
\nthe Committee.\n<\/p>\n
At  any rate, with the help of the Government  officials  in
\nthe  Committee there is no reason to think that the work  of
\nthe Committee will not function smoothly and that there will
\nbe  any reason to apprehend that licences would\t be  refused
\narbitrarily.   Even  the scope for such an  apprehension  is
\nsought\tto  be\tdone  away with\t by  providing\ta  provision
\nProvision  of appeal against the decision of  the  Committee
\nand  also a further revision to the State Government.  There
\nis  a  further limitation on the power of the  Committee  by
\ninsisting  upon\t recording  of\treasons\t while\trefusing   a
\nlicence.  It is, therefore, clear that a speaking order\t has
\nto  be. passed when refusing a licence and it will  have  to
\njustify\t that  the  licence  is\t refused  only\ton  relevant
\nconsiderations with regard to solvency and fitness in  terms
\nof the provisions. of the Act.\n<\/p>\n
It  is submitted that the choice of the two  criteria  under
\nrule  70(4)  (i) is bad and there is no proper\tguidance  in
\nthese\tcriteria   which  are  not  capable   of   objective
\ndetermination.\tThe two criteria laid down are solvency\t and
\ndesirability.\tThe applicant has to satisfy  the  Committee
\nthat he is solvent as opposed to insolvent that is bankrupt.
\nWe are informed that the original Hindi version of the\trule
\nwhich  is translated into English gives the  equivalents  as
\nfollows :-\n<\/p>\n
\t      “It  is satisfied that the applicant is not  a
\n\t      bankrupt (rindiwali) “.\n<\/p><\/blockquote>\n
\t      “It  is  satisfied  that the  applicant  is  a
\n\t      proper (upoyukta) person to whom a licence may
\n\t      be granted”.\n<\/p><\/blockquote>\n
Mr.  Sen candidly admits that the criterion on the score  of
\n“bankruptcy” is well known and cannot be said to be vague or
\nindefinite.  Hi, however, submits that the second  criterion
\nis not at all precise and definite.\n<\/p>\n
Although perhaps a more expressive guidance could have\tbeen
\ngiven, we have already observed that the Act itself provides
\nsufficient  guidance  to  the Committee\t in  the  matter  of
\ndeciding  whether  a  particular applicant is or  is  not  a
\nproper person to hold a licence and we cannot accede to\t the
\nsubmission  that  the  two criteria  taken  with  the  other
\nguidelines  from  the provisions of the Act  and  the  rules
\noffer  no proper guidance to the Committee in tic matter  of
\ngrant  of licence.  The second and the third submissions  of
\nthe petitioners are, therefore, devoid of substance.
\nWith  regard to the fourth submission, it is  sufficient  to
\npoint out that under section 16(2)(vii) the Committee has to
\nprovide, inter
\n384<\/span>
\nalia, accommodation for storage and such other facilities as
\nmay  be\t prescribed.   Under  rule  52(4)  storing  of\t the
\nspecified  agricultural\t produce  shall be  subject  to\t the
\npayment of such storage fee and such other conditions as may
\nbe specified in the by-laws.  That being the position,\tthis
\nmay  be even an interim measure pending arrangements  by.the
\nCommittee,  for proper storage.\t Even otherwise the  storage
\nby  the traders in the Market-Yards will be always paid\t for
\nunder rule 52(4).  There is, therefore, no substance in\t the
\nfourth submission of the petitioner.\n<\/p>\n
With  regard to the last submission regarding invalidity  of
\nrule  76(1),  we are not satisfied that the  same  is  ultra
\nvires section 40 of the Act.  Section 40 empowers the  State
\nGovernment  to make rules for carrying out the\tpurposes  of
\nthe Act.  Rule 76(1) is well within the rule making power of
\nthe  State Government under section 40(2),  clause  (xxvii).
\nSection\t 9(2) restricts the right to carry on  trade  except
\nunder and in accordance with a licence.\t Section 17 provides
\nfor   issuing  or  renewal  of\tlicences  subject   to\t the
\nrestrictions  under the rules.\tSection 9(2) and section  17
\nare  not  challenged before us.\t Rule 76(1)  prescribes\t the
\nmode  of sale that is to say by open auction under the\trule
\nmaking power under section 40 read with clause (xxvii).\t The
\nrule  is not ultra vires section 40 of the Act.\t It is\tsaid
\nthat prohibiting private sales by confining only to sale  by
\nopen  auction puts an unreasonable restriction on the  right
\nto trade of the petitioners.  If section 9(2) and section 17
\nare not challenged as invalid, it is not understood how rule
\n76(1)  which is within the rule making power can be said  to
\nbe  unreasonable.   In order that the producers\t obtain\t the
\nbest  price  for their commodity, sale by  open\t auction  is
\nprescribed  under rule 76(1) lo fulfil one of the  important
\npurposes  of the Act.  Sale by auction is a well known\tmode
\nof sale by which the producers, for whose interest this\t Act
\nhas  been  made,  can  obtain  the  best  price\t for   their
\ncommodities.   The definition of sale and purchase to  which
\nour  attention has been drawn by the petitioners do not\t run
\ncounter\t to the provisions for auction-sale under  rule\t 76.
\nIt  cannot  by any stretch of imagination be held to  be  an
\nunreasonable  mode  in the entire scheme of  the  Act.\t The
\nlegislature is intervening to see that the producers get the
\nmaximum pecuniary return possible in their transactions and,
\nas  a necessary concomitant, eliminated the mode of  private
\nsale  by individual negotiations resulting in  malpractices.
\nBesides by the proviso to rule 76(1) this restriction is not
\nallowed\t to operate in the case of retail sales.  There\t is,
\ntherefore,  no substance in the submission that\t rule  76(1)
\nviolates  the  fundamental right of  the  petitioners  under
\nArticle 19 (1) (g) of the Constitution.\n<\/p>\n
Mr. Sen particularly drew our attention to two decisions  of
\nthis Court.  The first is given in Lala Hari Chand Sarda  v.
\nMizo District Council and Anr.<\/a> (1) That was a case where the
\nExecutive Committee of the Mizo District Council refused  to
\nrenew the temporary licence issued to the appellant  therein
\nwho  was a non-tribal trader under section 3 of\t the  Lushai
\nHills  District (Trading by non-Tribals)  Regulation,  1953.
\nThis Court by majority struck down section 3 as
\n(1)  1967 (1) S.C.R. 1012.\n<\/p>\n
385<\/span><\/p>\n
violative  of Article 19(1) (g) of the\tConstitution.\tThis
\ndecision  is clearly distinguishable from the present  case.
\nIn  that case there was no right of appeal to  any  superior
\nauthority against a refusal to grant or renew a ]licence and
\nthe non-tribal trader had no remedy whatsoever against\tsuch
\nan  order.   This Court also observed in that case  that  “a
\nperusal of the Regulation shows that it nowhere provides any
\nprinciple  or standard on which the Executive Committee\t has
\nto  act\t in  granting  or refusing  to\tgrant  the  licence”
\n(emphasis added).\n<\/p>\n
The second decision, is in Harakchand Ratanchana Benthia and
\nOrs.  etc.  v. Union of India and Ors.(1) This\twas  a\tcase
\nunder the Gold (Control) Act and Mr. Sen drew our  attention
\nto the expression ‘suitability of the applicant” in  section
\n27(6)(e) of the Gold (Control) Act which was held to provide
\nno  objective  standard or norm and as such was held  to  be
\nconstitutionally invalid.  This Court while dealing with the
\nobjection  to  section 27 of the Gold  (Control)  Act  which
\nrelates to licensing of dealers held as follows :—\n<\/p>\n
\t      “Section 27(6)(a) states that in the matter of
\n\t      issue or renewal of licences the Administrator
\n\t      shall  have  regard to the number\t of  dealers
\n\t      existing in the region in which the  applicant
\n\t      intends to carry on business as a dealer,\t But
\n\t      the  word\t ‘region is nowhere defined  in\t the
\n\t      Act.   Similarly\ts.  27(6)(b)  requires\t the
\n\t      Administrator  to\t have  due  regard  to\t the
\n\t      anticipated  demand, as estimated by  him\t for
\n\t      ornaments\t in that region, but the  expression
\n\t      anticipated demand’ is vague and incapable  of
\n\t      objective assessment and is bound to lead to a
\n\t      great  deal of uncertainty.  In the  same\t way
\n\t      ‘the expression ‘Suitability of the  applicant
\n\t      in  S. 27(6 ) (e) and ‘public interest” in  s.
\n\t      27  (6)  (g)  do\tnot  provide  any  objective
\n\t      standard or norm.\t Further, the requirement in
\n\t      the  section imposing the same conditions\t for
\n\t      the renewal of the licence as for the  initial
\n\t      grant  is\t unreasonable,\tas  it\trenders\t the
\n\t      entire  future of the business of\t the  dealer
\n\t      uncertain\t and  subject  to  the\tcaprice\t and
\n\t      arbitrary\t will of the administrative  ‘autho-
\n\t      rities.  Therefore, clauses (a), (b), (e)\t and\n<\/p><\/blockquote>\n
\t      (g) of s. 27(6) are constitutionally invalid”.\n<\/p><\/blockquote>\n
In  the\t instant  case\twe have\t already  examined  the\t two
\ncriteria  laid down under rule 70(4) (i) and have held\tthat
\nthey do not place any unreasonable restriction on the  right
\nof the applicants to obtain a licence.\tBy rule, 70(4)(i)(b)
\nthe  Committee has to be satisfied that the applicant  is  a
\nfit  and proper person (upoyukta) to whom a licence  may  be
\ngranted.   This\t is not the same thing\tas  the\t suitability
\nsimpliciter  which this Court had to deal with in  the\tGold
\n(Control)  Act\tcase.  The decision is,\t therefore,  clearly
\ndistinguishable.\n<\/p>\n
In  the result all the applications fail and are  dismissed.
\nThe parties will pay and bear their own costs.
\nV.P.S. Petitions dismissed.\n<\/p>\n
(1) [1970] (1) S.C.R.479.\n<\/p>\n
386<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Vishnu Dayal Mahendra Pal And … vs State Of Uttar Pradesh And Another on 1 May, 1974 Equivalent citations: 1974 AIR 1489, 1975 SCR (1) 376 Author: P Goswami Bench: Ray, A.N. (Cj), Mathew, Kuttyil Kurien, Alagiriswami, A., Goswami, P.K., Sarkaria, Ranjit Singh PETITIONER: VISHNU DAYAL MAHENDRA PAL AND OTHERS Vs. […]<\/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-73473","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nVishnu Dayal Mahendra Pal And ... vs State Of Uttar Pradesh And Another on 1 May, 1974 - 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\/vishnu-dayal-mahendra-pal-and-vs-state-of-uttar-pradesh-and-another-on-1-may-1974\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Vishnu Dayal Mahendra Pal And ... vs State Of Uttar Pradesh And Another on 1 May, 1974 - 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