Punjab-Haryana High Court
The Haryana Cooperative ... vs M/S Gupta Trading Company And Others on 19 March, 2014
Author: Rakesh Kumar Garg
Bench: Rakesh Kumar Garg
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
1 RSA No.5361 of 2012
The Haryana Cooperative Marketing-cum-Processing Society
Appellant
Versus
M/s Gupta Trading Company and others
Respondents
2 RSA No.3152 of 2013 (O&M)
Managing Director, The Haryana Cooperative Marketing-cum-
Processing Society, Panchkula and others
Appellants
Versus
M/s Gupta Trading Company and another
Respondents
3 RSA No.4425 of 2013 (O&M)
HCMS Limited, Narwana
Appellant
Versus
M/s Johari Mal Ram Niwas
Respondent
4. RSA No.4426 of 2013 (O&M)
HCMS Limited, Narwana
Appellant
Versus
M/s Meghraj Gian Chand
Respondent
5 RSA No.4427 of 2013 (O&M)
HCMS Limited, Narwana
Appellant
Versus
M/s Om Parkash Jai Parkash
Respondent
6 RSA No.4428 of 2013 (O&M)
HCMS Limited, Narwana
Appellant
Versus
M/s Johari Mal Sanjiv Kumar
Respondent
Date of decision: 19th March, 2014
Singh Rattan Pal
2014.03.28 15:56
I attest to the accuracy and
integrity of this document
Punjab & Haryana High Court
RSA Nos.5361 of 2012; and 3152, 4425, 4426, 4427, 4428 of 2013 2
CORAM: HON'BLE MR. JUSTICE RAKESH KUMAR GARG
1. Whether Reporters of Local Newspapers may be allowed
to see the judgment?
2. Whether to be referred to the Reporters or not?
3. Whether the judgment should be reported in the Digest?
Present: Mr. Pankaj Gupta, Advocate for the appellant(s)
in RSA No.5361 of 2012 and
RSA Nos.4425, 4426, 4427, 4428 of 2013.
Mr. Gaurav S. Hooda, Advocate for the appellant(s)
in RSA No. 3152 of 2013.
Mr. Narayan Prasad Gupta, Advocate for the respondent(s)
in RSA Nos. 4425, 4426, 4427, 4428, of 2013
RAKESH KUMAR GARG, J.
The foremost point, which falls for consideration of this Court in all these appeals, is as to how the weighment of agricultural produce is made and what are the rules governing the weighment?
Since a common question of law on similar facts is being raised in all these appeals, the same are being decided by one common judgment of this Court.
Respondents in all these appeals, who are carrying on the business of commission agency in different market yards of the State of Haryana, have filed these suits against the appellants for recovery of the amount towards total cost of wheat sold by them through their commission agencies, to the extent of amount, which has been withheld by the appellants and has not been paid despite repeated requests and demands by service of notices.
It may be worthwhile to notice that the appellants have admitted in their written statement that the plaintiffs have sold wheat as Singh Rattan Pal 2014.03.28 15:56 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA Nos.5361 of 2012; and 3152, 4425, 4426, 4427, 4428 of 2013 3 mentioned in the suits for a total amount, as claimed; however, it has been submitted that the plaintiffs are very much in knowledge about deduction/withholding of the disputed amount in each case on account of shortage of wheat and as such the said amounts were deducted/withheld and the remaining amounts were received by the plaintiffs without any objection. It has been submitted that the defendants have paid all the balance amounts to the plaintiffs and nothing remains due towards them, however, the plaintiffs have intentionally avoided to mention the shortage of wheat supplied by them to the defendants to take undue advantage. It has been denied that the wheat was weighed in the presence of officials. A further defence has been taken that as per the norms of the department, final payment is to be made subject to the conditions mentioned in letter dated 07.04.2007 (Ex.D1). It is their further case that final weighment is made at the storage point of the appellants and if there is any shortage, then the Commission Agents are responsible for the same, and thus, the disputed amounts have been correctly deducted. Refuting all other allegations, prayer for dismissal of the suits has been made by the defendant-appellants.
The trial Court, in all Civil Suits except Civil Suit No.97 of 2012 and 93 of 2012 (out of which RSA Nos.4426 & 4427 of 2013 have arisen), after giving a thoughtful consideration to the rival contentions and evidence on record, recorded a finding that the weighment of wheat sold to the appellants was made at the site of weighment as per the Punjab Agricultural Produce Markets (General) Rules, 1962 Singh Rattan Pal 2014.03.28 15:56 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA Nos.5361 of 2012; and 3152, 4425, 4426, 4427, 4428 of 2013 4 (hereinafter referred to as, 'the Rules') after filling up the wheat in gunny bags and weighed through a licensed weighman in accordance with Rule 24(9) of the Rules and as such, the said weighment shall be deemed to have been made by the appellants (i.e. buyers). Moreover, the appellants, at the time of alleged weighment at the storage point, have not adopted the procedure and have got the wheat purchased by them weighed at their own in the absence of plaintiffs. The trial Court further found that no notice was ever issued to the plaintiffs to be present at the place where weighment was carried out by the appellants, and thus, the suits were decreed.
Aggrieved from the aforesaid judgment and decree of the trial Court, the defendants in all these cases filed appeals before the first appellate Court, which were also dismissed.
Civil Suits No.93 and 97 of 2012 were dismissed by the trial Court. However, the lower appellate Court accepted the appeals and decreed their suits on the analogy, as discussed above.
Still not satisfied, the defendants have filed the instant appeals submitting that the following substantial questions of law arise for consideration in all these appeals:
(a) Whether the judgments and decrees passed by the trial Court and the first appellate Court are legally sustainable?
(b) Whether the respondents No.1 and 2/plaintiffs were bound by the Instructions issued by HAFED, Narwana Singh Rattan Pal 2014.03.28 15:56 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA Nos.5361 of 2012; and 3152, 4425, 4426, 4427, 4428 of 2013 5 vide letter No.Wheat/Procurement/6-8 dated 7.4.2007 (Exhibit D1)?
(c) Whether the trial Court and the first appellate Court have recorded correct findings on the issues No.1 to 4?
(d) Whether it was mandatory on part of the respondents No.1 and 2/plaintiffs to give prior notice under Section 124 of the Haryana Cooperative Societies Act to the appellant-Society and the respondents No.3 and 4 before filing the civil suit?
(e) Whether the Courts below have rightly interpreted the provisions of the Punjab Agricultural Produce Markets (General) Rules, 1962, as applicable to the State of Haryana?
In support of their case, counsels for the appellants have vehemently argued that as per the Government circular (Ex.D1), it was the duty of the Commission Agents (i.e. the plaintiff-respondents) to ensure supply of agricultural produce with required weight upto the storage point. According to learned counsels for the appellants, the courts below have not appreciated the dispute in correct perspective and the suits have been decreed wrongly, and thus, the substantial questions of law, as raised, do arise in these appeals and the impugned judgments and decrees of the Courts below are liable to be set aside.
Singh Rattan Pal 2014.03.28 15:56 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA Nos.5361 of 2012; and 3152, 4425, 4426, 4427, 4428 of 2013 6 At this stage, Rules 24 and 25 of the Rules, as noticed in the impugned judgments, which are relevant to be referred to, read thus:
"24. Sale of Agricultural Produce [Section 43(2) (vi)] (1) All agricultural produce brought into the market for sale shall be sold by open auction in the principal or sub market yard:
Provided that with the permission of the Secretary of the Board or any officer authorized by him in this behalf, the agricultural produce may also be brought or sold through bi-lateral transactions within the notified market area of a committee at a place of business of a licensee outside the principal or sub market yard on the terms and conditions as may be specified by the board. The buyer shall maintain a register in form 'R' and furnish information in form R-I to the committee alongwith return in Form 'M'. (2) Nothing in sub-rule (1) shall apply to a retail sale as may be specified in the bye-laws of the committee. (3) A committee may, and on being directed by the [Chairman of the Board or an officer authorized by him] shall fix timing for the starting and closing of the auction in respect of any agricultural produce, other than fruits and vegetables.
(4) The price of agricultural produce shall not be settled by secret sign or secret bid and no deduction shall be made from the agreed price of the consignment. (5) The auction shall not be conducted by any person other than the person engaged by the committee:
Provided that under special circumstances the [Chairman of the Board or an officer authorized by him] may allow a committee to make or permit any alternative arrangement:Singh Rattan Pal 2014.03.28 15:56 I attest to the accuracy and integrity of this document Punjab & Haryana High Court
RSA Nos.5361 of 2012; and 3152, 4425, 4426, 4427, 4428 of 2013 7 Provided further that nothing in this sub-rule shall apply to the auction of vegetables and fruits. (6) The highest bid offered by a buyer at an auction and at which the seller of the produce gives his consent to sell his produce, shall be sale price of the produce. (7) The buyer shall be considered to have thoroughly inspected the agricultural produce for which he has made a bid and he shall have no right to retract from it. (8) As soon as the auction for a lot is over the auctioneer shall fill in the particulars in a book to be maintained in Form H and shall secure the signatures of both the buyer and the seller or their respective representatives, whoever may be present at the spot.
(8-A) A register in form HH shall be maintained by the committee wherein the agricultural produce which remained unsold during the course of auction shall be entered and it shall be obligatory for every dealer or Kacha Arhita or commission agent, as the case may be, to report about the unsold produce to the committee as soon as his agricultural produce is sold.
(9) The buyer shall be responsible to get the agricultural produce weighed immediately after the auction or on the same day the produce is purchased by him and the seller or the buyer shall be liable for any damage to, or loss of, or deterioration in, the produce after the auction according to the local usage or custom or as per provision of rule 13. (10) A person engaged by a producer to sell agricultural produce on his behalf shall not act as a buyer either for himself or on behalf of another person in respect of such produce without the prior consent of the producer:
Provided that a Co-operative Society shall be exempt from the operation of this rule.Singh Rattan Pal 2014.03.28 15:56 I attest to the accuracy and integrity of this document Punjab & Haryana High Court
RSA Nos.5361 of 2012; and 3152, 4425, 4426, 4427, 4428 of 2013 8 (11) The Kacha Arhtiya shall make payment to the seller immediately after the weighment is over. (12) Every Kacha Arhtiya shall, on delivery of agricultural produce to a buyer, execute a memorandum in Form I and deliver the same to the buyer on the same day or the following day, mentioning sale proceeds plus market charges admissible under rules and bye-laws. The counterfoil shall be retained by the Kacha Arhtiya:
Provided that nothing in this sub rule shall apply where agricultural produce being vegetable or fruit, not exceeding one quintal in weight is delivered. (13) In the absence of any written agreement to the contrary the sale price of agricultural produce purchased under these rules shall be paid by the buyer to the Kacha Arhtiya on delivery of Form I. (14) Delivery of agricultural produce after sale shall not be made or taken unless and until the Kacha Arhtiya or, if the seller does not employ a Kacha Arhtiya, the buyer has given to the seller a sale voucher in Form J, the counterfoil who of shall be retained by the Kacha Arhtiya or the buyer, as the case may be.
25. Weighment - Section 43(2)(X) (1) The Board shall fix standards of net weight of agricultural produce to be filled in a packing unit such as bag, a half bag or a palli within each notified market area.
(2) No person shall fill or cause to be filled any agricultural produce except in accordance with standards fixed under sub-rule (1).
(3) All transactions in a market in terms of packing units shall be deemed to have been entered into in accordance with standards fixed under sub rule (1).
Singh Rattan Pal 2014.03.28 15:56 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA Nos.5361 of 2012; and 3152, 4425, 4426, 4427, 4428 of 2013 9 (4) Immediately on the completion of weighment of a lot of agricultural produce within a notified market area, either party to the contract may cause a test weighment of ten percent of the units of packing in a lot or two packing units whichever is more. The test-weighment shall be carried out at the site of weighment and if no test weighment is held at the site, the produce shall be deemed to have been correctly weighed.
(5) Test weighment under sub-rule (4) shall be carried out in the presence of both the parties to the contract. In case any of the parties refuses or otherwise evades presence, the other party may report in writing to the Secretary of the committee or any employee of the Board not lower in rank to that of the Secretary of the committee who, after satisfying himself as to the correctness of the report, shall cause the test weighment to be made in his presence or in the presence of any other official of the committee authorized by him in this behalf, and the result of such test weighment shall be final, conclusive and binding on both the parties.
(6) Before any agricultural produce weighed in pursuance of a contract of sale or purchase within a notified market area is removed from the place of its weighment, the Chairman, the Secretary of the Committee or any employee of the Board not lower in rank to that of [the Secretary of the Committee or Agricultural Inspector (Market) or Assistant Marketing officer of the Marketing section of the department of Agriculture & Forests (Agri. Wing)] shall, with a view to satisfying himself that such weighment has been correctly made or is filled in accordance with standards fixed under sub-rule (1), be entitled at any time and without any previous notice, to check the weighment by means of weights and Singh Rattan Pal 2014.03.28 15:56 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA Nos.5361 of 2012; and 3152, 4425, 4426, 4427, 4428 of 2013 10 instruments kept by the Committee or any other agency in the presence of the purchaser and the seller and if either or both of them evade presence, test weighment may be carried out in the presence of any two persons present there.
(7) If the weighment checked under sub-rule (6) is found to be defective, the persons checking the weighment may order the lot, to be reweighed. The re-weighment shall be made at the cost of the buyer, if it is not filled in accordance with the standards fixed under sub-rule(I), and at the cost of the weighman concerned, if the weighment is otherwise defective. Such orders shall be final and the buyer or the weighman, as the case may be, shall immediately comply with the order. This sub-rule shall operate without prejudice to any other punishment that may be awarded under the Act, these rules or bye-laws made thereunder."
The argument raised is misconceived and liable to be rejected. Admittedly, Rules 24 and 25 of the Rules deal with the manner in which agricultural produce is sold and purchased, and weighment thereof is carried out. From a bare perusal of Rule 24 of the Rules, it is clearly made out that it is the duty of the buyer to get the agricultural produce weighed after auction or on the same day, the produce is purchased by him; and if any deficiency is found at that time, it has to be made good by the seller. Rule 25 of the Rules provides for test weighment, if after completion of weighment of the agricultural produce either party feels that test weighment should be carried out. These Rules also provide that in case either of the parties refuses or avoids its presence, then the matter can be brought to the notice of the Singh Rattan Pal 2014.03.28 15:56 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA Nos.5361 of 2012; and 3152, 4425, 4426, 4427, 4428 of 2013 11 Committee, which thereupon has a duty to cause test weighment carried out. These Rules also provide that result of such test weighment shall be final, conclusive and binding on the parties.
In the cases in hand, the wheat was brought to the shops of plaintiffs in the respective Grain Markets. The said wheat was put to auction as per Rules and was purchased by the defendant-appellants. The plaintiff-respondents made payment to the farmers immediately after sale of the agricultural produce as per Rule 24(11) of the Rules after getting the wheat filled up in gunny bags and weighed through a licensed weighman in accordance with Rule 24(9) of the Rules, and hence, the defendants cannot successfully argue that the weighment was not made in the presence of their officials. Further there is no allegation against the plaintiffs that they deliberately got the weighment made incorrectly. In any case, the defendant-appellants have not followed the procedure as contained in Rule 25 of the Rules for re- weighment/test-weighment. From a perusal of the aforesaid Rules, it is clear that the test-weighment can be done at the site of weighment, which was not done. The defendant-appellants had allegedly undertaken weighment of the agricultural produce purchased by them at the storage point, and that too, at the back of the plaintiff- respondents.
Much stress has been laid on the letter (Ex.D1), according to which it was the duty of the Commission Agent to ensure supply of agricultural produce with required weight upto the storage point. However, in the absence of any Rule allowing the buyer to carry out Singh Rattan Pal 2014.03.28 15:56 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA Nos.5361 of 2012; and 3152, 4425, 4426, 4427, 4428 of 2013 12 weighment at the place of his choice, the point of receipt of procuring agency, as used in letter (Ex.D1), cannot be said to mean the storage point. Rather the same has to be read to mean the place where agricultural produce was auctioned and purchased by the procuring agency. To put it in other words, as and when the agricultural produce is purchased by the procuring agency in the Grain Market, it becomes the property of such agency and thus, the point of receipt, as mentioned in letter (Ex.D1), shall be the place where agricultural produce is purchased by the said agency whereupon the ownership thereof gets transferred to it. Thus, the letter (Ex.D1) does not provide for obligation of the commission agent/seller to ensure supply of the agricultural produce with required weight up to the storage point.
At this stage, it may further be noticed that in 'M/s Mohinder Pal Mohan Lal v. State of Haryana and another' (RSA No.2893 of 2009 decided on 13.07.2010), this Court had an opportunity to interpret the provisions of Rules 24 and 25 of the Rules and after relying upon the aforesaid Rules, this Court held that the procuring agencies were not entitled to deduct the amount sought to be recovered against the shortage of food grains/wheat for alleged shortage found due to weighment done in violation of the Rules by the procuring agencies.
Further it could not be disputed before this Court that on similar facts, RSA No.4490 of 2013 filed on behalf of the Haryana State Cooperative Supply and Marketing Federation Limited, Kaithal raising Singh Rattan Pal 2014.03.28 15:56 I attest to the accuracy and integrity of this document Punjab & Haryana High Court RSA Nos.5361 of 2012; and 3152, 4425, 4426, 4427, 4428 of 2013 13 similar questions of law on similar grounds was dismissed vide judgment dated 05.02.2014.
No other point has been argued.
In view thereof, the substantial questions of law, as raised, do not arise in these appeals and the same being without any merit are dismissed.
(RAKESH KUMAR GARG) JUDGE March 19, 2014 rps Singh Rattan Pal 2014.03.28 15:56 I attest to the accuracy and integrity of this document Punjab & Haryana High Court