Karnataka High Court
Vijay Industries vs The State Of Karnataka on 2 April, 2024
Author: S.R. Krishna Kumar
Bench: S.R. Krishna Kumar
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WA No. 100398 of 2017
C/W WA No. 100400 of 2017
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 2ND DAY OF APRIL, 2024
PRESENT
R
THE HON'BLE MR JUSTICE S.R. KRISHNA KUMAR
AND
THE HON'BLE MR JUSTICE G BASAVARAJA
WRIT APPEAL NO. 100398 OF 2017 (APMC)
C/W
WRIT APPEAL NO. 100400 OF 2017(APMC)
IN W.A.No.100398/2017
BETWEEN:
VIJAY INDUSTRIES
T.M.C. UNIT, P.O. BOX NO.12
BELAGAVI ROAD,
BAILHONGAL-591 102
REPRESENTED BY ITS PROPRIETOR
SHRI.VIJAY
S/O SHRISHAIL METGUD
AGE: 41 YEARS, OCC.BUSINESS
R/O BELAGAVI ROAD,
VINAYAKA BAILHONGAL.
BV ...APPELLANT
Digitally signed by
VINAYAKA B V
Location: High Court of
Karnataka, Dharwad
Bench
Date: 2024.08.29 11:27:46
(BY SRI.JAYAKUMAR S. PATIL., SENIOR COUNSEL FOR
+0530
SRI. CHETAN MUNNOLI, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA
REPRESENTED BY ITS SECRETARY
DEPARTMENT OF AGRICULTURE MARKETING
M.S. BUILDING,
BENGALURU.
2. THE DIRECTOR
DEPARTMENT OF AGRICULTURE MARKETING
NO.16, 2ND RAJ BHAVAN ROAD
BENGALURU-01
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WA No. 100398 of 2017
C/W WA No. 100400 of 2017
3. THE ADDITIONAL DIRECTOR
DEPARTMENT OF AGRICULTURE MARKETING
NO.16, 2ND RAJ BHAVAN ROAD,
BENGALURU-01
4. THE AGRICUALTURAL PRODUCE MARKET COMMITTEE
BAILHONGAL, APMC YARD, BELAGAVI ROAD
BAILHONGAL, DISTRICT BELAGAVI
REPRESENTED BY ITS SECRETARY.
...RESPONDENTS
(BY SRI. GANGADHAR.J.M., AAG A/W
SRI. PRAVEEN UPPAR, AGA FOR R-1 TO R-3
SRI. K. ANANDKUMAR AND
SRI. B. ANAND SHETTY., ADVOCATES FOR R-4)
THIS WRIT APPEAL IS FILED U/S.4 OF KARNATAKA HIGH COURT
ACT, 1961, PRAYING TO, SET ASIDE THE ORDER DATED:25.04.2017
PASSED IN WP.NO.109226/2015 BY THE LEARNED SINGLE JUDGE AND
WRIT PETITION BE ALLOWED, IN THE INTEREST OF JUSTICE AND
EQUITY.
IN W.A.No.100400/2017
BETWEEN:
M/S. THUNGABHADRA GINNING AND PRESSING FACTORY
REPRESENTED BY ITS PARTNER
SRI. K.G. THIMMA REDDY
AGED ABOUT 64 YEARS
ANDRAL ROAD, BALLARY DISTRICT - 583 101.
...APPELLANT
(BY SRI.R.V. PRASAD., SENIOR COUNSEL FOR
SRI. K. HEMAKUMAR, SRI. H.R. KAMBIYAVAR AND
SRI. SRIDHAR MURTHY.A., ADVOCATES)
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NC: 2024:KHC-D:6956-DB
WA No. 100398 of 2017
C/W WA No. 100400 of 2017
AND:
1. THE SECRETARY
AGRICULTURAL PRODUCE MARKETING COMMITTEE
BELLARY - 583 101.
2. THE ADDITIONAL DIRECTOR (PLANNING)
OFFICE OF THE AGRICULTURAL
PRODUCE MARKETING COMMITTEE
NO.16, 2ND RAJBHAVAN ROAD,
BENGALURU - 560 001.
3. THE DIRECTOR
AGRICULTURAL PRODUCE
MARKETING COMMITTEE
NO.16, 2ND RAJBHAVAN ROAD
BENGALURU - 560 001.
...RESPONDENTS
(BY SRI. GANGADHAR J.M. AAG A/W
SRI. PRAVEEN UPPAR AGA FOR R-2 TO R-3
SRI. B. ANAND SHETTY., ADVOCATE FOR R-1)
THIS WRIT APPEAL IS FILED U/S.4 OF KARNATAKA HIGH COURT
ACT, 1961, PRAYING TO, SET ASIDE THE JUDGMENT AND ORDER
DATED: 25.04.2017 PASSED BY THE LEARNED SINGLE JUDGE OF THIS
HON'BLE COURT IN W.P.NO.109404/2015 AND AS A CONSEQUENCE,
ALLOW THE WRIT PETITION FILED BY THE APPELLANT, INT
HEINTEREST OF JUSTICE AND EQUITY.
THESE APPEALS BEING HEARD AND RESERVED ON 22.08.2023
COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, S.R.
KRISHNA KUMAR J. DELIVERED THE FOLLOWING:-
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C/W WA No. 100400 of 2017
JUDGMENT
Both these intra-court appeals arise out of the impugned common order dated 25.04.2017, whereby the writ petitions filed by the appellants - writ petitioners were dismissed by the learned Single Judge.
2. Heard learned Senior counsel appearing for the appellants and learned AAG for respondents-State as well as learned counsel appearing for APMC and perused the material on record.
3. Both the appellants are engaged in the activity of Ginning and Pressing of cotton and for the purpose of their business, they directly purchased raw cotton from the agriculturists, which is a notified agricultural produce under the Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966 (for short 'the said Act of 1966') and the Karnataka Agricultural Produce Marketing (Regulation and Development) Rules, 1968 (for short 'the said Act of 1968').
4. The appellant in W.A.No.100398/2017 was granted licence for effecting direct purchase of notified agricultural produce -5- NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 from agriculturists vide licence dated 06.06.2014, while the appellant in W.A.No.100400/2017 was also granted licence vide licence dated 29.05.2009 and both of them have been carrying on business since then. The respondents 1 to 3 are the State of Karnataka, the Director and Addl.Director of Department of Agricultural Marketing respectively in both the writ petitions / appeals, while the 4th respondent in W.A.No.100398/2017 is the jurisdictional Agricultural Produce Market Committee.
5. By Karnataka Act No.5 of 2014, various provisions of the said Act of 1966 were amended w.e.f 04.01.2014. The said amendments included insertion of a 4th proviso to Section 65 of the said Act of 1966, which provided that in case of any private markets established under Section 72-A of the said Act of 1966, the petitioners / appellants would be liable to pay a market fee at 33% as against 70% being paid prior to the amendment.
6. The appellant in W.A.No.100398/2017 who is the writ petitioner in W.P.No.109226/2015 contended that pursuant to grant of licence dated 06.06.2014 in favour of the petitioner to establish a direct purchase center of notified agricultural produce from agriculturists, the 3rd respondent addressed a communication to the -6- NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 petitioner informing it that 70% market fee was liable to be paid by the petitioner. In pursuance of the same, the Agricultural Produce Marketing Committee also issued a notice dated 24.01.2015 to the petitioner calling upon them to pay market fee and penalty at the rate of 70%, to which, the petitioner submitted his reply dated 07.02.2015 specifically contending that it was liable to pay only at the rate of 33% by virtue of the amendment to Section 65 and not at 70% as demanded from the petitioner. Thereafter, the 3rd respondent issued an intimation dated 24.06.2015 calling upon the petitioner to pay market fee and penalty at 70% to which also, the petitioner submitted a detailed reply dated 29.06.2015 reiterating that it was liable to pay market fee only at 33% and not at 70% as claimed in the said intimation. In pursuance of the same, the 3rd respondent issued the impugned communication dated 04.08.2015 (wrongly shown as 04.08.2014) demanding market fee at 70% together with penalty.
7. In the aforesaid writ petition, the petitioner / appellant not only assailed the aforesaid impugned communication dated 04.08.2015 but also assailed the impugned communication dated 26.07.2014 addressed by the 3rd respondent to all the Agricultural -7- NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 Produce Marketing Committees in the State of Karnataka to the effect that under Section 65(2) of the said Act of 1966, persons / entities who purchased the notified agricultural produce directly from agriculturists would be liable to pay market fee at 70% and only private market yards established under Section 72-A of the said Act of 1966, in whose favour, licence was granted under Rule 87-C of the said Rules of 1968 would be liable to pay market fee at 33%, which was not applicable to the direct purchasers.
8. The appellant in W.A.100400/2017 contended that on 29.05.2009, it was granted licence for effecting direct purchase of notified agricultural produce from agriculturists. On 30.06.2014, the 2nd respondent addressed a communication to the appellant demanding market fee at 70% instead of 33% which was being paid earlier. The appellant submitted a reply dated 10.07.2014 pursuant to which, the 2nd respondent issued one more demand dated 26/28.07.2014, to which the petitioner submitted a detailed reply dated 04.09.2014 which was followed by a letter dated 29.10.2014 issued by the 3rd respondent to the petitioner once again demanding payment of market fee at 70% from the petitioner.
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9. The appellant submitted an appeal / application on 24.12.2014 to the 2nd respondent requesting him to hold that the appellant was liable to pay 33% market fee and not 70% as demanded by the respondents. In pursuance of the same, there was correspondence between the petitioner, 2nd respondent and 3rd respondent which culminated in the impugned order at Annexure-J dated 28.07.2015, whereby the appeal filed by the petitioner seeking benefit of payment of only 33% market fee instead of 70% market fee was rejected by the 2nd respondent. Aggrieved by the impugned order, the appellant preferred the instant W.P.No.109404/2015.
10. By the impugned common order dated 25.04.2017, the learned Single Judge rejected all the contentions of both the petitioners - appellants and proceeded to dismiss both the writ petitions, aggrieved by which, the appellants are before this Court by way of the present appeals.
11. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned Senior counsel for the petitioners submit that the respondents having granted licences in favour of the petitioners to purchase -9- NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 notified agricultural produce directly from agriculturists as contemplated under Section 72-A of the said Act of 1966 r/w Rule 87-C of the said Rules of 1968, the petitioners would fall within the meaning of "any private markets" as contemplated in the 4th proviso to sub-section (2) of Section 65 of the said Act of 1966 and would consequently be liable to pay market fee at 33% pursuant to the amendment vide Act No.5 of 2014 w.e.f 04.01.2014 and not at 70% as it stood prior to amendment. It was submitted that the learned Single Judge has not properly considered or appreciated the material on record and has misconstrued and misinterpreted the relevant statutory provisions resulting in erroneous conclusion. It was further submitted that even according to the respondents themselves as per their own website and the Karnataka Agricultural Marketing Policy, 2013, private markets include both private market yards and direct purchase centers.
11.1 It was also submitted that apart from the fact that the expression "any private market" would include both "private market yards" and "direct purchasers / direct purchase centers" as provided in Section 72-A, the learned Single Judge erred in reading the word "yard" after the expression "private market" in the said 4th proviso, which is impermissible in law and as such, the impugned
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 order passed by the learned Single Judge deserves to be set aside and the writ petitions filed by the appellants deserve to be allowed.
In support of their contentions, learned Senior counsel for the appellants have placed reliance upon the following judgments:-
(i) K.Prabhakaran vs. P.Jayarajan - (2005) 1 SCC 754;
(ii) Sri.Balaganesan Metals vs. M.N.Shanmugam Chetty - AIR 1987 SC 1668;
(iii) Lucknow Development Authority vs. M.K.Gupta - (1994) 1 SCC 243;
(iv) Dadi Jagannadham vs. Jammulu Ramulu - (2001) 7 SCC 71;
(v) P.K.Unni vs. Nirmala Industries - (1990) 2 SCC 378;
(vi) Union of India vs. Deoki Nandan Agarwal - (1992) SUPP(1) SCC 323.
12. Per contra, learned AAG for the respondents would support the impugned order and submit that the learned Single Judge has correctly and properly considered and appreciated the material on record as well as the relevant statutory provisions and has passed the impugned order which does not warrant interference in the present appeals, which are liable to be
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 dismissed. In support of his contentions, learned AAG has placed reliance upon the following judgments:-
(i) J.K.Industries Ltd., & others vs. Chief Inspector of Factories and Boilers - (1996) 6 SCC 665;
(ii) Mavilayi Service Co-operative Bank vs. Commissioner of Income Tax - (2021) 7 SCC 90;
13. We have given our anxious consideration to the rival submissions and perused the material on record.
14. The following points arise for consideration in the present appeals:-
(i) Whether the expression "any private market" contained in the 4th proviso to sub-section (2) of Section 65 of the Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966 includes "direct purchasers / direct purchase centers"
established under Section 72-A of the said Act in whose favour licence has been issued under Rule 87-C of the Karnataka Agricultural Produce Marketing (Regulation and Development) Rules, 1968?
(ii) Whether the appellants / petitioners who are direct purchasers / direct purchase centers are liable to pay market fee at 33% as contemplated in the 4th proviso to Section 65(2) of the said
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 Act of 1966 or whether they would be liable to pay market fee at 70% as provided in the 3rd proviso to Section 65(2)?
(ii) Whether the impugned order passed by the learned Single Judge warrants interference in the present appeals?
Re-Point No.1:
15. Before proceeding to examine the rival contentions, it would be apposite to state that vide Amendment Act No.23 of 2007, Section 72-A to 72-E were inserted into the said Act of 1966 w.e.f 16.08.2007. Section 72-A prohibited establishment of 3 categories of persons / entities unless they possessed a valid licence issued under the Act and the Rules viz., (i) private market yard (ii) direct purchasers from agriculturists (iii) Farmer Consumer Market; it is relevant to state that the 3rd category, i.e., the Farmer Consumer Market is not relevant and it is only private market yards and direct purchasers who are relevant for the purpose of the instant cases. Section 72-A of the said Act of 1966, reads as under:-
" 72A. Establishment of private market yards and direct purchase from agriculturist or from producer. (1) No person shall,
(a) establish a private market yard; or
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(b) purchase notified agricultural produce directly from an agriculturist; or
(c) establish a farmer consumer market;
unless he possess a valid licence issued under the provisions of this Act or rules made thereunder.
(2) Subject to such conditions and such fees as may be prescribed the Director of Agricultural Marketing or any other officer authorised by him may grant a licence for purchase or sale of notified agricultural produce by establishing private market yards or to purchase notified agricultural produce directly from the agriculturist in one or more market area for the purpose of -
(a) processing of the notified agricultural produce;
(b) establish a Direct Purchase Center to purchase notified agricultural produce directly from an agriculturist; or
(c) export of notified agricultural produce;
(d) grading packing and transaction in other way by value addition of notified agricultural produce."
15.1 Section 72-A(2) (b) was also amended vide Act No.5 of 2014 w.e.f. 04.01.2014 by permitting licence to be granted to establish a direct purchase center to purchase notified agricultural produce directly from agriculturists. As stated supra, while Section 72-A(1)(a) and (b) mandated that a licence was necessary to establish a private market yard or to purchase directly agricultural
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 produce from agriculturists, the aforesaid amendment also permitted the direct purchasers to establish direct purchase centers also; in other words, Section 72-A (1) (a) and (b) r/w Section 72- A(2) and 72-A(2) (b) provided for a licence to be granted to establish a private market yard as well as a licence to be granted in favour of direct purchasers / direct purchase centers.
15.2 Section 72-C of the said Act of 1966 reads as under:-
" 72.C. Grant /Renewal of licence of private market yard and farmer-consumer market.- (1) Any person who,-
(a) under section 72A desires to purchase notified agricultural produce directly from the agriculturist or wishes to establish a private market yard; or
(b) under section 72B desires to establish farmer-
consumer market in one or more in the market area; shall apply to the Director of Agricultural Marketing or authorised officer for grant or renewal of licence, as the case may be, in the manner and for the period, as may be prescribed.
(2) Along with every such application for licence, fee prescribed shall be deposited.
(3) Application received under sub-section (1) for grant or renewal of licence may be accepted or rejected for reasons recorded in writing by the concerned authority, as the case may be. No licence shall be granted to an applicant, where,-
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(i) the market committee dues are outstanding against the applicant;
(ii) the applicant is a minor or not bonafide;
(iii) the applicant has been declared defaulter under the Act and rules and bye-law made thereunder;
(iv) the applicant having been declared guilty in any criminal case and convicted by imprisonment;
(v) the concerned authority is satisfied that the applicant don't' possess the infrastructure credentials, experience or adequate capital for investment or any other requirements as may be prescribed for establishments of a private market yard or farmer-consumer market; or
(vi) for any other reason as the licensing authority deems appropriate."
15.3 Section 72-C provides the procedure for grant / renewal of licence, while, Section 72-D and 72-E provided for cancellation / suspension of the said licence, appeal by an aggrieved person and other provisions in this regard.
15.4 The statutory scheme envisaged under Section 72-A by virtue of the amendment vide Act No.23 of 2007 w.e.f 16.08.2007 and vide Act No.5 of 2014 w.e.f 04.01.2014 clearly contemplated two categories of persons who were entitled to a licence for the purpose of purchasing agricultural produce viz., (i) by establishing a private market yard and (ii) by persons who
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 intended to purchase directly from agriculturists including establishing a direct purchase centers.
15.5 Rules 87-B and 87-C of the said Rules of 1968, reads as under:-
" 87-B. Grant of licence for establishment of private market yard. - (1) Subject to the provisions of Section 72-A and 72-C of the Act, any person who has already established the infrastructure or desiring to establish a private market yard in one or more market areas may submit an application in writing to the Director of Agricultural Marketing in Form 46 for grant of licence or renewal thereof, along with the documents. The Director of Agricultural Marketing may grant licence for establishment of private market yard or renew the same.-
(2) Private Market Yard shall be three types, namely. - (1) Private market yard licensee develops, manages and controls the yard.-
(a) Private market yard licensee develops, manages and controls the yard by providing infrastructure facilities such as auction halls, sheds, shops, godowns, storages, pre-
cooling, cold storages, raitha bhavan, canteen, ripening chambers, laboratory facilities to evaluate quality of produce, grading and packaging facilities, loading and unloading site, electronic display of market rates, electronic weighbridges, internal roads, drinking water and sanitary facilities, etc., with an investment of not less than the amount as specified below excluding the cost of land.-
(i) Rupees ten crores in Bangalore city.
(ii) Rupees five crores in other district head quarters.
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(iii) Rupees two crores in other places.
(b) The Land earmarked for establishment of Private Market Yard shall bear a clear title or lease hold right by agreement for a period of not less than ten years with possession. The extent of such land for establishment of a Private Market Yard shall not be less than three acres conforming to norms of Town and country planning Act and fire safety regulations.
(2) The Terminal Market Complex shall have the following objectives, namely-:
xxxxxxxx xxxxxxxxx (3) The licence fees payable for grant or renewal of licence per annum for each categories of private market yards shall be as specified below payable by demand draft in favour of the Director of Agricultural Marketing, Bangalore.
(i) Bangalore city - Rupees fifteen thousand
(ii) District Headquarters - Rupees five thousand.
(iii) Other places - Rupees two thousand.
Provided that the amount of licence fee paid by the applicant may be refunded if the licence is not granted or renewed for any reason after deducting ten per cent of the fees towards processing cost.
(4) The Director of Agricultural Marketing shall record the date of receipt of the application in the register maintained in From 47 and shall evaluate the project report. He may also in consultation with the person/persons as he deemed fit may suggest necessary measures for improving the efficiency of private market yard.
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 (5) The Director of Agricultural Marketing on the basis of the evaluation report may within sixty days from the date of submission of application issue. -
(i) A letter of permission for the commencement of the project specifying the period for completion which shall not be more than two years in case of new projects.
OR
(ii) Refuse to issue permission letter for the reasons to be recorded in writing and communicated to the applicant.
Further that no letter of refusal under this rule shall be issued unless a reasonable opportunity of being heard is given to the applicant.
(6) [ xxxxx] the applicant shall complete the project within the period specified in such permission letter and if the applicant could not complete the project within the specified period, he may apply to the Director of Agricultural Marketing explaining the reasons for extension of the period. The Director of Agricultural Marketing after inspection of the project may consider extension of time not exceeding one year.
(7) In case of new projects, after completion of the project and for existing projects at the time of application, the applicant shall give intimation to the Director of Agricultural Marketing. The Director of Agricultural Marketing after inspection and enquiry as are considered necessary and shall by a notification issued under Section 6 of the Act declare the private market yard for the regulation of marketing of notified agricultural produce specified in the notification.
(8) After the issue of notification under sub-rule (7), the Director of Agricultural Marketing may subject to the
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 provisions of Section 72-C of the Act, grant licence in Form 48 for establishment of a private market yard subject to the conditions specified therein.
(9) Before commencement of marketing of agricultural produce the applicant shall deposit an irrevocable and continuous bank guarantee or cash security as specified below or a amount equal to two per cent of the annual turnover of the previous year whichever is more with Director of Agricultural Marketing.
(i) In Bangalore city - rupees fifty lakhs.
(ii) In places of district head quarters - rupees twenty- five lakhs.
(iii) In other places - rupees five lakhs.
(10) The private market yard licensee shall submit application for renewal of licence in Form 49 to the Director of Agricultural Marketing. The Director of Agricultural Marketing after making such enquiries as he deemed fit, may renew the licence of the private market yard for marketing of notified agricultural produce.
(11) The Director of Agricultural Marketing, after giving the applicant an opportunity of being heard, for the reasons to be recorded in writing refuse to grant or refuse to renew the licence to the applicant who is either not solvent or otherwise disqualified under the Act and Rules;
(12) A licence granted under sub-rule (8) shall, unless renewed remain in force till the end of tenth market year including the year in which it has been granted.
(13) Every application for renewal of licence shall be made one month before the expiry of its period. The
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 application for renewal of licence if is in accordance with the provisions of the Act and Rules, the applicant shall be deemed to be duly licensed until orders are passed on such application.
(14) All sale of notified agricultural produce int eh private market shall be liable for payment of market fee at the rates as specified under Section 65 of the Act.
87-C Grant of licence for direct purchase of agricultural produce from agriculturists or producers. -
(1) Subject to the provisions of Section 72-A of the Act, any person desiring to purchase agricultural produce directly from the agriculturists or producer-sellers in one or more market areas may submit a application in writing to the Director of Agricultural Marketing in From 50 for grant of licence, along with the documents specified in the form subject to the following conditions.-
(i) The applicant shall furnish details of direct purchase centers proposed to be opened initially in Form 51. He shall also submit the names of new centers likely to be opened in the course of his business in Form 52 before fifteen days of their opening.
(ii) The applicant shall submit details of financial status, resources with supportive documents, bank statements, income tax returns, list of permanent assets and liabilities, memorandum and articles of association if it is a company and other documents showing the credibility of the applicant for direct purchase of notified agricultural produce from agriculturists, producer-seller.
(iii) The applicant shall provide necessary infrastructure facilities for weighment, storage, shelter and other basic
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 facilities as may be specified by the Director of Agricultural Marketing from time to time.
(iv) The direct purchase centre may be established on the land owned by the applicant or on the land taken on a lease for a period of not less than five years with possession. The applicant shall furnish supportive documents and layout plan of the centre indicating the facilities provided along with the application.
(v) The license shall display prominently prices of commodities traded in the nearby markets on the previous day in the centre/centers.
(vi) The licenses shall not purchase produce from farmers or producer-sellers below the modal prince that had prevailed in the previous day for such produce in neighboring markets.
(vii) The license shall furnish details of transactions made in the centre/centers to the Director of agricultural marketing or concerned marketers on-line.
(2) The licence fees for grant or renewal of licence for establishment of a direct purchase centre shall be Rupees fifty thousand payable by demand draft in favour of the Director of Agricultural Marketing, Bangalore:
Provided that the amount of licence fee paid by the applicant may be refunded if the licence is not granted or renewed for the 230 conditions of licence after deducting ten per cent of the fees towards processing cost.
(3) The Director of Agricultural Marketing shall record the date of receipt of the application in the register maintained in From 47 and shall evaluate the proposal. He may also in consultation with the person/persons as he deemed fit
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 suggest necessary measures for improvement of the activities of a direct purchase center.
(4) The Director of Agricultural Marketing may after satisfying himself that the arrangements made for purchasing of notified agricultural produce from the agriculturists in the direct purchase centre are sufficient to carry on the activities, grant licence in Form 48 to start business in such centre subject to the conditions specified therein.
(5) The applicant shall deposit an irrevocable continuous bank guarantee or cash security of Rupees fifty lakhs or an amount equal to two per cent of the annual turnover of the previous year whichever is more with the Director of Agriculture Marketing:
Provided that the bank guarantee specified under this rule shall be fifty percent to the Government organizations and co-operative institutions.
(6) The direct purchase licensee shall do cash and carry business in the direct purchase center and pay the seller in ash or cheque immediately.
(7) The Direct Purchase Centre licensee shall submit application for renewal of licence in Form 49 to the Director of Agricultural Marketing. The Director of Agricultural Marketing after making such enquiries as he deemed fit, may renew the licence of the Direct Purchase Centre for purchase of notified agricultural produce from agriculturist, producer-sellers.
(8) The Director of Agricultural Marketing after giving the applicant an opportunity of being heard, for the reasons to be recorded in writing refuse to grant, suspend or cancel licence to the applicant.
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 (9) A licence granted under sub-rule (4) shall, unless renewed remain in force till the end of tenth market year including the year in which it has been granted.
(10) Every application for renewal of licence shall be made one month before the expiry of its period. If the application applied for renewal provisions of the Act and Rules, the applicant shall be deemed to e duly licensed until orders are passed on the application.
(11) Subject to the provisions of the Act, Rules and the directions issued by the Director of Agricultural Marketing from time to time, the direct purchase center licensee shall operate in the area or place for which licence has been granted.
(12) Direct purchase licensee may sell his produce either in the market established by the market committee or private market yard or sell in retail or process such agricultural produce or may export by value addition through grading, packing etc."
15.6 The relevant rules for the purpose of implementation of Section 72-A and 72-C were incorporated in the said Rules of 1968 vide Notification bearing No.CD 229 MRE 2007 dated 19.03.2008 w.e.f 20.03.2008, where under Part VI-A was inserted into the Rules including Rules 87-B to 87-J; in this context, it is significant to note that while Rule 87-B provided the procedure for grant of licence for establishment of a private market yard, the procedure for grant of licence in favour of direct purchasers of agricultural
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 produce was provided under Rule 87-C of the said Rules of 1968; it follows there from that separate / independent procedure was provided for grant of licence in favour of private market yards and direct purchasers / direct purchase centers; to put it differently, in consonance with the two categories of persons / entities who were entitled to grant of licence either as a private market yard or as direct purchasers / direct purchase centers as contemplated in Section 72-A and 72-C, the relevant Rules i.e., Rule 87-B and Rule 87-C came into force on 20.03.2008, pursuant to which, both categories of persons were entitled to seek grant of licence in their favour.
15.7 Having examined the relevant statutory provisions, the seminal question that arises for consideration in the present appeals is the interpretation of the expression "any private markets" contained in the 4th proviso to Section 65(2) of the said Act of 1966, which reads as under:-
"65. Levy of market fees -
1. [xxxxx]
2. The market committee shall levy and collect market fees from every buyer in respect of agricultural produce bought by such buyer in the market area at such rate as may be specified in the bye-laws [(which shall not be more than two rupees per one hundred rupees of the value
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 of such produce bought except in case of livestock where the market fee shall not be more than [five rupees per head] [Substituted by Act 4 of 1982 w.e.f.4.11.1981] of cattle other than sheep or goat and in the case of sheep or goat such fee shall not be more than [one rupee per head] [Substituted by Act 16 of 1991 w.e.f.1.8.1991])] in such manner and at such times as may be specified in the bye- laws.
[Provided that in the case of any co-operative society doing business in agricultural produce within a market yard market fee shall be levied and collected at the rate of eighty per cent of the market fee payable under this Act.] [Provided further that if on any agricultural produce market fee has already been levied and collected under sub-section (2) in any market area within the State and such agricultural produce is processed and sold in any other market area within the State or exported out side the State it shall be exempted from the levy of market fee.
Explanation. - Nothing in this proviso shall apply to,-
(i) any processed agricultural produce imported from out side the State and sold in any market area within the State ; or
(ii) any agricultural produce imported or caused to be imported by any person either on his own account or as an agent for another person from out side the State into any market area within the State for the purpose of processing or manufacturing except for one's own domestic consumption.] Provided also that in case of a buyer in a spot exchange established by a licencee or a licencee for direct
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 purchase of notified agricultural produce or a contract farming sponsor buying from a contract forming producer market fee shall be levied and collected at the rate of seventy percent of the market fee payable under this Act.] Provided also that in case of any private markets established under section 72-A of the Act market fee shall be levied and collected at the rate of thirty three percent of market fee payable under this Act provided that no market fee is leviable on flowers fruits and vegetables. Instead the Market committee may collect user charges in respect of the above articles user charges for such services provided by the Market Committee from the buyer of the produce at such rates as may be specified in the bye-laws as approved by the Director of Agricultural Marketing."
15.8 As is clear from the aforesaid provision, the market committee would be entitled to levy and collect market fees from every buyer in respect of agricultural produce bought by such buyer in the market area as provided in the said provision; the 1st proviso to Section 65(2) relates to co-operative societies which is not relevant for the purpose of the instant cases; so also, the 2nd proviso and the explanation thereto relates to exemption from levy of market fee which is also not germane for the present cases.
15.9 The 3rd proviso which was inserted vide Act No.23 of 2007 dated 16.08.2007 along with the insertion of Sections 72-A to
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 72-E provided for payment of market fee at the rate of 70%.
However, a reading of the said 3rd proviso will indicate that the same applied only to buyers in a spot exchange established by a licencee or licencee in a spot exchange for direct purchase of notified agricultural produce or a contract farming sponsor at the rate of 70% of market fee; in this context, it is significant to state that "spot exchange" has been defined under Section 2(46-A) of the said Act of 1966 by virtue of the amendment vide Act No.23 of 2007 w.e.f 16.08.2007 as to mean an exchange for trading of notified agricultural produce through electronic media licenced under Sections 131-D to 131-J of the said Act, which provided for establishment of a spot exchange, grant of licence etc., 15.10 Though Section 72-A to Section 72-E were also inserted under the aforesaid amendment thereby permitting grant of licence in favour of private market yards and direct purchasers, there was no separate provision in Section 65 as regards levy of market fee pursuant to licences granted under Sections 72-A to Section 72-E in favour of private market yards and direct purchasers / direct purchase centers and the 3rd proviso was applicable to both private market yards and direct purchasers, who were liable to pay 70% market fee; under these circumstances,
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 both private market yards and direct purchasers who were granted licences started paying market fee at 70% in terms of the 3rd proviso to Section 65(2) of the said Act of 1966.
15.11 Subsequently, the 4th proviso was inserted to Section 65(2) of the said Act of 1966 by Act No.5 of 2014 w.e.f 04.01.2014 and by virtue of the same, "any private markets" established under Section 72-A would be liable to pay only 33% market fee as against 70% market fee as it stood prior to amendment; in other words, both private market yards and direct purchasers who were hitherto paying market fee at 70% became liable to pay market fee at 33% by virtue of the insertion of the 4th proviso vide Amendment Act No.5 of 2014 w.e.f 04.01.2014. The aforesaid statutory provisions clearly indicate that the ambiguities that had occurred in the 3rd proviso in not indicating the rate of market fee payable in respect of private market yards and direct purchasers other than in a spot exchange by virtue of Amendment Act No.23 of 2007 w.e.f 16.08.2007 whereby Section 72-A to Section 72-E were inserted along with 3rd proviso which complemented each other were sought to be removed by insertion of the 4th proviso by specifically providing for payment of 33% market fee only in relation to private market yards and direct purchasers.
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 15.12 We are therefore of the considered opinion that having regard to Section 72-A providing for licences to be granted in favour of both private market yards and direct purchasers / direct purchase centers established under the said provision, the reference to any private markets established under Section 72-A would lead to the unmistakable conclusion that both persons / entities would be completely and totally covered by the 4th proviso and become liable to pay 33% market fee and not 70% market fee as mandated in the 3rd proviso which would not be applicable to private market yards and direct purchasers. Under these circumstances, it is clear that the expression "any private markets"
contemplated under the 4th proviso to Section 65(2) of the said Act of 1966 includes both private market yards and direct purchasers / direct purchase centers and failure to appreciate this by the learned Single Judge has resulted in erroneous conclusion.
15.13 The statutory scheme envisaged under the said Act of 1966 will also indicate that the expression "private market"
employed in the 4th proviso has not been defined under the Act;
however, the said expression is found / contained in other provisions of the Act viz., Sections 81, 117-B, 118-A and 126-A, which reads as under:-
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017
81. Reports by market functionaries.- Every licensed trader, commission agent, ginner, presser, processor, warehouseman, importer, exporter, stockiest and any other market functionary operating in the market area except the licencee of a private market and farmer -
consumer markets]1 shall maintain accounts in such manner and submit to the market committee or to the officer specified by the committee in this behalf such periodical reports and returns at such times and in such forms as may be Prescribed by the rules or bye-laws or as the market committee may by standing orders from time to time direct.
Provided that if the market functionary fails to file the returns within the stipulated time, the market committee shall impose a penalty which shall not be less than rupees one thousand but shall not exceed rupees five thousand."
117-B. Penalty for contravention of Section 75.- (1) If any person carrying on business in agricultural produce in the market yard, private market, spot exchange or farmers- consumer market fails to pay the price to the seller the price without any reasonable cause shall on conviction be punished with imprisonment for a term which may extend to six months and with fine which may extend to twice the value of the price and in the case of continuing contravention with a further fine which may extend to rupees one thousand per day during which the contravention is continued after the first conviction.
(2) Any person prosecuted under sub-section (1) shall not be absolved from his obligation of payment of price to the
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 seller or any other amount due from him under this Act, rule, bye-laws or regulations."
118 - A. Penalty for contravention of Section 78.- (1) If any person carrying on business in notified agricultural produce as a commission agent in the market yard or private market fails to comply his duty as specified under clause (a) and (b) of sub-section (2) of section 78 without any reasonable cause he shall on conviction be punished with fine not exceeding rupees five thousand.
(2) If any person carrying on business in notified agricultural produce as a commission agent in the market yard or private market fails to comply the responsibility of payment of price to the seller under clause (c) of sub-section (2) of section 78 without any reasonable cause shall on conviction be punished with imprisonment for a term which may extend to six months and with fine which may extend to twice the value of the price and in the case of continuing contravention with a further fine which may extend to rupees one thousand per day during which the contravention is continued after the first conviction."
126-A. Power of the Government to give direction to the market committee, private market licensee and farmer - consumer licensee.-
The State Government may give such directions to the market committee, private market licensee and farmer - consumer market licensee as in its opinion are necessary or expedient for carrying out the purposes of this Act and it shall be the duty of such market committee, private market
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 licensee and farmer- consumer market licensee, as the case may be, to comply with such directions."
15.14 The aforesaid provisions clearly indicate that the expression "private market" in those provisions would include both private market yards and direct purchasers and are not restricted only to private market yards as incorrectly held by the learned Single Judge; in this regard, it is interesting to note that the expression "private market yard" has been defined under Section 2 (31-A) to mean as under:-
2 (31-A) " Private Market Yard" means such place other that he market yard, market sub-yard and sub-market yard in the market area where infrastructure has been developed, managed and controlled by a person for marketing of notified agricultural produce holding a licence for this purpose under this Act;
15.15 An harmonious and conjoint reading of the aforesaid definition, the 4th proviso to Section 65(2) and Section 72-A is sufficient to come to the conclusion that since licence can be granted to both private market yards and direct purchasers, both established under Section 72-A, the expression "any private market" in the 4th proviso would be wide / broad enough to encompass both categories of persons / entities viz., private
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 market yards and direct purchasers / direct purchase centers and the contrary view taken by the learned Single Judge deserves to be set aside on this ground also.
15.16 The learned Single Judge has also failed to appreciate that the expression "private markets" employed in the 4th proviso is with reference to private markets established under Section 72-A of the said Act of 1966; as stated supra, since both private market yards and direct purchasers would be entitled to get established and obtain licences under Section 72-A, both categories of persons / entities would also fall within the scope and ambit of the expression "private markets" contained in the 4th proviso and on this ground also, the learned Single Judge erred in coming to the conclusion that direct purchasers / direct purchase centers are not covered by the 4th proviso to Section 65(2) of the said Act of 1966.
15.17 A perusal of the 4th proviso to Section 65(2) will indicate that the State Legislature has consciously used / employed the word "any" before private market; it is well settled that under certain circumstances and with reference to the context of a statutory provision and its aims and objectives, the word "any" is to
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 be construed, treated and interpreted as "all", "every" etc., so as to include more than one category of persons, situations etc., 15.18 In Prabhakaran's case supra, the Apex Court held as under:-
" 48. It was submitted by Shri K.K. Venugopal, the learned Senior Counsel for the respondent in CA No. 8213 of 2001, that the phrase "any offence" as occurring in Section 8(3) of RPA should be interpreted to mean a single offence and unless and until the term of imprisonment for any one of the offences out of the several offences for which the accused has been convicted and sentenced is 2 years or more, the disqualification enacted under Section 8(3) would not be attracted. We are not impressed.
49. In Shri Balaganesan Metals v. M.N. Shanmugham Chetty [(1987) 2 SCC 707] the word "any"
came up for consideration of this Court. It was held that the word "any" indicates "all" or "every" as well as "some" or "one" depending on the context and the subject-matter of the statute. Black's Law Dictionary was cited with approval.
50. In Black's Law Dictionary (6th Edn.) the word "any" is defined (at p. 94) as under:
"Any.--Some; one out of many; an indefinite number. One indiscriminately of whatever kind or quantity. One or some (indefinitely).
'Any' does not necessarily mean only one person, but may have reference to more than one or to many.
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 Word 'any' has a diversity of meaning and may be employed to indicate 'all' or 'every' as well as 'some' or 'one' and its meaning in a given statute depends upon the context and the subject-matter of the statute.
It is often synonymous with 'either', 'every', or 'all'. Its generality may be restricted by the context; thus, the giving of a right to do some act 'at any time' is commonly construed as meaning within a reasonable time; and the words 'any other' following the enumeration of particular classes are to be read as 'other such like', and include only others of like kind or character."
51. The word "any" may have one of the several meanings, according to the context and the circumstances. It may mean "all"; "each"; "every"; "some"; or "one or many out of several". The word "any" may be used to indicate the quantity such as "some", "out of many", "an infinite number". It may also be used to indicate quality or nature of the noun which it qualifies as an adjective such as "all" or "every". (See The Law Lexicon, P. Ramanatha Aiyar, 2nd Edn. at p.
116.) Principles of Statutory Interpretation by Justice G.P. Singh (9th Edn., 2004) states (at p. 302)--
"When a word is not defined in the Act itself, it is permissible to refer to dictionaries to find out the general sense in which that word is understood in common parlance. However, in selecting one out of the various meanings of a word, regard must always be had to the context as it is a fundamental rule that 'the meanings of words and expressions used in an Act must take their colour from the context in which they appear'. Therefore, 'when the context makes the meaning of a word quite clear, it becomes unnecessary to search for and select a particular meaning out of the diverse meanings a word is capable of, according to lexicographers'."
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017
52. In Section 8(3) of RPA, the word "any" has been used as an adjective qualifying the word "offence" to suggest not the number of offence but the nature of the offence. A bare reading of sub-section (3) shows that the nature of the offence included in sub-section (3) is "any offence other than any offence referred to in sub-section (1) or sub-section (2) (of Section 8)". The use of adjective "any" qualifying the noun "offence" cannot be pressed into service to countenance the submission that the sentence of imprisonment for not less than two years must be in respect of a single offence.
15.19 So also, in Balaganesan's case supra, the Apex Court held as under:-
" 18. In construing Section 10(3)(c) it is pertinent to note that the words used are "any tenant" and not "a tenant"
who can be called upon to vacate the portion in his occupation. The word "any" has the following meaning:
"some; one of many; an indefinite number. One indiscriminately or whatever kind or quantity.
Word 'any' has a diversity of meaning and may be employed to indicate 'all' or 'every' as well as 'some' or 'one' and its meaning in a given statute depends upon the context and the subject-matter of the statute. It is often synonymous with 'either', 'every' or 'all'. Its generality may be restricted by the context;" (Black's Law Dictionary, 5th Edn.)
19. Unless the legislature had intended that both classes of tenants can be asked to vacate by the Rent
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 Controller for providing the landlord additional accommodation, be it for residential or non-residential purposes, it would not have used the word "any" instead of using the letter "a" to denote a tenant.
20. Thirdly it is significant to note that there is no reference in clause (c) to the nature of the user of the tenant occupying the leased portion of the building viz. whether he is using it for residential or non-residential purposes. If it was the intention of the legislature that only a tenant occupying a residential portion of a building can be asked to vacate for providing additional residential accommodation to the landlord and correspondingly a tenant occupying a portion of a building for non-residential purposes alone being asked to vacate for the non- residential requirements of the landlord, the legislature would have provided specific stipulations to that effect in clause (c). On that ground also it must be construed that clause (c) has been provided in order to enable a landlord to seek the eviction of any tenant occupying the whole or any portion of the remaining part of the building for residential or non-residential purposes for satisfying the additional needs of the landlord irrespective of whether the need is for residential or business purposes."
15.20 In M.K.Gupta's case supra, the Apex Court held as under:-
" 4. What is the meaning of the word 'service'? Does it extend to deficiency in the building of a house or flat? Can a complaint be filed under the Act against the statutory
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 authority or a builder or contractor for any deficiency in respect of such property. The answer to all this shall depend on understanding of the word 'service'. The term has variety of meanings. It may mean any benefit or any act resulting in promoting interest or happiness. It may be contractual, professional, public, domestic, legal, statutory etc. The concept of service thus is very wide. How it should be understood and what it means depends on the context in which it has been used in an enactment. Clause (o) of the definition section defines it as under:
"'service' means service of any description which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;"
It is in three parts. The main part is followed by inclusive clause and ends by exclusionary clause. The main clause itself is very wide. It applies to any service made available to potential users. The words 'any' and 'potential' are significant. Both are of wide amplitude. The word 'any' dictionarily means 'one or some or all'. In Black's Law Dictionary it is explained thus, "word 'any' has a diversity of meaning and may be employed to indicate 'all' or 'every' as well as 'some' or 'one' and its meaning in a given statute depends upon the context and the subject-matter of the statute". The use of the word 'any' in the context it has been used in clause (o) indicates that it has been used in wider sense extending from one to all. The other word 'potential' is
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 again very wide. In Oxford Dictionary it is defined as 'capable of coming into being, possibility'. In Black's Law Dictionary it is defined as "existing in possibility but not in act. Naturally and probably expected to come into existence at some future time, though not now existing; for example, the future product of grain or trees already planted, or the successive future installments or payments on a contract or engagement already made." In other words service which is not only extended to actual users but those who are capable of using it are covered in the definition. The clause is thus very wide and extends to any or all actual or potential users. But the legislature did not stop there. It expanded the meaning of the word further in modern sense by extending it to even such facilities as are available to a consumer in connection with banking, financing etc. Each of these are wide-ranging activities in day to day life. They are discharged both by statutory and private bodies. In absence of any indication, express or implied there is no reason to hold that authorities created by the statute are beyond purview of the Act. When banks advance loan or accept deposit or provide facility of locker they undoubtedly render service. A State Bank or nationalised bank renders as much service as private bank. No distinction can be drawn in private and public transport or insurance companies. Even the supply of electricity or gas which throughout the country is being made, mainly, by statutory authorities is included in it. The legislative intention is thus clear to protect a consumer against services rendered even by statutory bodies. The test, therefore, is not if a person against whom complaint is made is a statutory body
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 but whether the nature of the duty and function performed by it is service or even facility.'' 15.21 As is clear from the aforesaid judgments, the expression "any private market established under Section 72-A"
contained in the 4th proviso to Section 65(2) of the said Act of 1966 has to be interpreted, construed and understood as "all" and "every" category of persons / entities contemplated in Section 72-A i.e., private market yards and direct purchasers, both of whom are established under Section 72-A and are entitled to a licence under the said provisions. Viewed from this angle also, the learned Single Judge clearly fell in error in rejecting the contention of the petitioners - appellants and the impugned order deserves to be set aside on this score also.
15.22 The intention of the State Legislature to include both private market yards and direct purchasers within the 4th proviso is also apparent and borne out from the website of the respondents and the Karnataka Agricultural Marketing Policy, 2013 which speak about 3 separate categories viz., direct purchase center, private market yards and spot exchanges to be included under the main category 'private market' and consequently, we are of the view that
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 the 4th proviso would be applicable to the direct purchasers / direct purchase centers who would be liable to pay market fee at the rate of 33% and not 70% as it stood prior to the amendment.
15.23 As stated supra, the 4th proviso to Section 65(2) of the said Act of 1966 was inserted w.e.f 04.01.2014 vide Amending Act 05 of 2014, which contains the following statement of objects and reasons:-
STATEMENT OF OBJECTS AND REASONS Amending Act 05 of 2014.-
The Government considers it necessary to carry out certain reforms in the Agricultural Marketing sector, with a view to provide expanded market access to the farmers and provide for improved marketing processes for greater transparency and avoiding delay in payment to farmers. In this direction it is necessary to carry out certain amendments to Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966. Hence, the Bill. [L.A. Bill No. 11 of 2013, File No. Samvyashae 41 Shasana 2013] [Entry 14 of List II of the Seventh Schedule to the Constitution of India.] 15.24 As can be seen from the aforesaid statement of objects and reasons, the various amendments including insertion of 4th proviso to Section 65(2) were done / made in order to carry out certain reforms in the Agricultural Marketing sector, with a view to provide expanded market access to the farmers and provide for
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 improved marketing processes for greater transparency and avoiding delay in payment to farmers; it follows therefrom that the said amendment including insertion of 4th proviso was a beneficial amendment made with the intention to grant benefit to the farmers and all other stake holders, particularly by reducing the market fee from 70% to 33% to both private market yards and direct purchasers / direct purchase centers, since it cannot be gainsaid that if higher market fees are charged to the direct purchasers / direct purchase centers, the same would ultimately be fastened either upon the consumers or the farmers whose interest would be prejudicially affected by imposition of higher market fees. Viewed from this angle also, the impugned order passed by the learned Single Judge deserves to be set aside.
15.25 The learned Single Judge has misdirected himself in reading the word "yard" after the expression "private market" in the 4th proviso to Section 65(2) of the said Act of 1966 without assigning reasons as to how the doctrine of "casus omissus" was applicable and can be invoked to the said provision; it is well settled that the said doctrine / principle can be invoked and applied only under exceptional circumstances and should not be ordinarily resorted to as held by the Apex Court and this Court in several
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 judgments including the judgment of the Hon'ble Division Bench in the case of Chetana Education Trust vs. State of Karnataka -
ILR 2019 KAR 5291, wherein it was held as under:-
The Learned AGA appearing for the Respondents argued that letter (b) in Rule 4(3)has been omitted by mistake, oversight and inadvertence while drafting Rule 4(3) with reference to sub-rule (2) found in the first line of Rule 4(3) and that Rule 4(3) should be actually read as "The minimum requirements specified in sub-rule (2)(b)" instead of "The minimum requirements specified in sub-rule (2)". The Respondents have therefore contended that the said omission to include the letter (b) in Rule 4(3) is a case of casus omissus on the part of the legislature and that under the circumstances, having regard to the scheme of the Act and the rules as well as the other provisions contained in the rules, it is necessary to read the letter (b) in Rule 4(3) to read as "The minimum requirements specified in sub-rule (2)(b)". Thus it is the specific contention of the respondents that the letter (b) has been inadvertently and by oversight omitted in the first line of Rule 4(3) after the words "sub-rule 2". In other words, the respondents contend that the letter 'b' has to be read into first line of Rule 4(3) by applying the principle of casus omissus.
38. It is well settled that this principle of casus omissus in relation to interpretation of statutes will be applied by the Court only in the rarest of rare cases and in exceptional/unavoidable circumstances which warrant, by way of compelling necessity to apply the said principle. It is
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 equally well settled that it is not for the courts to legislate and add/subtract words to a provision and courts are normally entitled only to interpret the statutory provisions. The well- defined parameters and limitations of applying the principles of casus omissus have been laid down in several judgments of the Apex Court including the judgments in the following cases:-
(i) Padma Sundara Rao vs. State of Tamil Nadu1
(ii) Shiv Shakti Co-operative Housing Society vs. Swaraj Developers2
(iii) Bharat Aluminium Company vs. Kaiser Aluminium Technical Services Inc.3
39. Further, the Apex Court in STATE OF JHARKHAND AND ORS. VS. GOVIND SINGH4 held as follows:
21. Two principles of construction-one relating to casus omissus and the other in regard to reading the statute as a whole-appear to be well-settled. Under the first principle, a casus omissus cannot be supplied by the Court except in the case of clear necessity and when reason for it is found in the four corners of the statute itself but at the same time, as casus omissus should not be readily inferred and for that purpose, all the parts of a statute or section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute.
This would be more so if literal construction of a particular clause leads to manifestly absurd or anomalous results which could not have been intended by the Legislature. "An 1 (2002) 3 SCC 533 2 (2003) 6 SCC 659 3 (2012) 9 SCC 552 4 (AIR 2005 SC 294)
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 intention to produce an unreasonable result", said Danackwerts, L.J. in Artemiou v. Procopiou, 1966 (1) QB 878 , "is not to be imputed to a statute if there is some other construction available". Where to apply words literally would "defeat the obvious intention of the Legislature and produce a wholly unreasonable result" we must "do some violence to the words" and so achieve that obvious intention and produce a rational construction. (Per Lord Reid in Luke v. AIR 1966 AC 557 where at p 577) he also observed: "this is not a new problem, though our standard of drafting is such that it rarely emerges".
22. It is then true that, "when the words of a law extend not to an inconvenience rarely happening, but due to those which often happen, it is good reason not to strain the words further than they reach, by saying it is casus omissus, and that the law intended quaefrequentiusaccidunt ." "But," on the other hand, "it is no reason, when the words of a law do enough extend to an inconvenience seldom happening, that they should not extend to it as well as if it happened more frequently, because it happens but seldom" (See Fenton v. Hampton, 11 MPC 345). A casus omissus ought not to be created by interpretation, save in some case of strong necessity. Where, however, a casus omissus does really occur, either through the inadvertence of the Legislature, or on the principle quod semelaut bis existitproetereunt legislators, the rule is that the particular case, thus left unprovided for, must be disposed of according to the law as it existed before such statute-casus omissus et oblivionidatusdispositionicommunis juris relinquitur; "a casus omissus," observed Buller, J. in Jones v. Smart, 1 TR 52 ,"can in no case be supplied by a court of law, for that would be to make laws."
40. In view of the above mentioned settled position of law, it is clear that when the words of a statute are clear and unambiguous and when they do not lead to manifestly absurd or anomalous results which could not have been intended by the Legislature the court ought not read any new terms or power in a statute. Under these circumstances, it is not possible to accept the contention of the respondents that
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 the word 'b' has to be supplied after the words 'sub-rule (2)found in Rule 4(3) of the said Rules of 2006 by applying the principles of casus omissus. Accordingly, Point No.3 is answered in the negative against the Respondents and their contention in this regard is hereby rejected.
15.26 As stated earlier, in the context of the amendment inserting the 4th proviso by specifically referring to Section 72-A which provided for establishment of both private market yards and direct purchasers / direct purchase centers, it was clearly impermissible to invoke the doctrine of casus omissus and read the word "yard" after the phrase "private market" which would have the effect of restricting the applicability of the said provision which is impermissible in law especially having regard to the aims and objectives of the Act and the Rules and on this ground also, the impugned order deserves to be set aside.
Accordingly, Point No.1 is answered in favour of the appellant by holding that the expression "any private market"
contained in the 4th proviso to sub-section (2) of Section 65 of the Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966 includes "direct purchasers / direct purchase centers" established under Section 72-A of the said Act in whose favour licence has been issued under Rule 87-C of the
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 Karnataka Agricultural Produce Marketing (Regulation and Development) Rules, 1968.
Re-Point Nos. 2 and 3:-
16. A perusal of the material on record will indicate that the writ petitioners / appellants are direct purchasers of notified agricultural produce from agriculturists and the respondents have granted them licence as per Section 72-A and Section 72-C of the said Act of 1966 in Form No.48 in terms of the procedure contemplated under Rule 87-C of the said Rules of 1968. While dealing with Point No.1 supra, we have already come to the conclusion that the 4th proviso to Section 65(2) of the said Act of 1966 was applicable to the petitioners / appellants and that the 3rd proviso was not applicable to them. It follows therefrom that the petitioners / appellants would be liable to pay market fee only at 33% and not at 70% as demanded by the respondents.
16.1 As stated earlier, the learned Single Judge came to the erroneous conclusion that the 4th proviso was not applicable to the petitioners / appellants who are direct purchasers / direct purchase centers and in the light of the findings recorded by us hereinbefore, we are of the view that the appellants would be liable
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017 to pay market fee only at 33%. Under these circumstances, the impugned order passed by the learned Single Judge being contrary to law and facts apart being capricious and perverse deserves to be set aside and the writ petitions deserves to be allowed.
16.2 Upon re-appreciation, re-evaluation and reconsideration fo the entire material on record, we are of the view that the impugned order passed by the learned Single Judge is opposed to law and facts warranting interference in the present appeals.
Point Nos. 2 and 3 are also answered accordingly in favour of the appellants.
17. Insofar as the judgments relied upon by the respondents are concerned, the same have been rendered in a different factual matrix which is not applicable to the instant appeals and as such, the same are not dealt with elaborately for the purpose of the present judgment.
18. In the result, we pass the following:-
ORDER
(i) Both the writ appeals are allowed.
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NC: 2024:KHC-D:6956-DB WA No. 100398 of 2017 C/W WA No. 100400 of 2017
(ii) The impugned common order dated 25.04.2017 passed in W.P.No.109226/2015 c/w W.P.No.109404/2015 by the learned Single Judge are hereby set aside.
(iii) Both W.P.No.109226/2015 c/w W.P.No.109404/2015 are hereby allowed.
(iv) The impugned clarification at Annexure-A dated 26.07.2014 and the impugned communication at Annexure-B dated 04.08.2015 in W.P.No.109226/2015 are hereby quashed.
(v) The impugned order at Annexure-J dated 28.07.2015 in W.P.No.109404/2015 is hereby quashed.
Sd/-
(S.R. KRISHNA KUMAR) JUDGE Sd/-
(G BASAVARAJA) JUDGE Srl.