Patna High Court
Bihar State Marketing Board vs Chief Inspecting Officer And Ors. on 26 March, 1985
Equivalent citations: 1986(34)BLJR100
JUDGMENT Hari Lal Agrawal, J.
1. The petitioner, Bihar State Marketing Board, which has been established under Section 33-A of the Bihar Agricultural Produce Markets Act, 1960 (for short 'the Markets Act') and is a body corporate (Section 33-B), and which, inter alia, has been controlling and enforcing the Markets Act within the State of Bihar and compelling the traders to take out licences for carrying trade and business in a large number of agricultural produces, has now itself fallen a victim to the order of the authority under the Bihar Shops and Establishments Act, 1953 (for brevity 'the Shops Act') who is now compelling the Board and the various Market Committees under it to get themselves registered under the Shops Act.
2. The Chief Inspecting Officer (respondent No. 1) by his letter dated 8-9-1979 (Annexure-2) rejecting the objection of the petitioner, has held that the petitioner and the Market Committee under it were covered under the mischief of the Shops Act and thus liable to get themselves registered under the provisions thereof. The petitioner has accordingly filed this application for quashing the said communication (Annexure-2) and for restraining the respondents from taking any action for enforcement of the Shops Act.
3. The main thrust of the petitioner's case is that none of the activities of the petitioner or its constituent Market Committees can be said to be such which could amount to carrying on any business, trade or profession or work in connection or incidental or ancillary thereto, and thus the Shops Act had no application. The expression "establishment has been defined under the Shops Act as follows:
'establishment' means an establishment which carries on any business, trade or profession or any work in connection with, or incidental or ancillary to, any business, trade or profession and includes--
(i) administrative or clerical services appertaining to such establishment;
(ii) a shop, restaurant, residential hotel, eating house, theatre or any other place of public amusement or entertainment; and
(iii) such other establishment as the State Government may, by notification, declare to be an establishment to which the Act applies;
but does not include a 'motor transport undertaking' as defined in Clause (g) of Section 2 of the Motor Transport Workers Act, 1961 (27 of 1961).
4. The controversy now necessitates the reference to the various provisions of the Markets Act. I would do better to start with the preamble itself, according to which the legislation was enacted to provide for the better regulation of buying and selling of agricultural produce and the establishment of markets for agricultural produce in the State of Bihar and for matters connected therewith. Under this legislation various rules and byelaws have also been framed with an ambitious target of providing a net work of markets wherein facilities for correct weighment, storage, accommodation and regulating of price of the agricultural produce brought in the markets have been provided so that the growers may bring their commercial crops and other agricultural produce to the market and sell them at reasonable price. After the markets are opened by the Market Committees in the market yards, all the growers will have to resort to that place for selling their goods. One of the intentions of the legislation is to eliminate, as for as possible, the middlemen and give reasonable facilities to the growers to secure best price for the commodity.
The Act contemplates providing reasonable services in the markets by the Market Committees and the cost of these services is to be met by imposition and realisation of market fee (see Mahabir Tea Co. v. State of Bihar 1979 B.L.J.R. 560 and R.K. Porwal v. State of Maharashtra 1982 P.L.J.R. (S.C.) 32.
Section 6 of the Markets Act provides for establishment of Market Committees for every market area notified by the State Government. Chapter III of this Act deals with the incorporation of Market Committee, its objects, powers and duties. The relevant sections for our purpose under this Chapter are Sections 17 and 18 which read as follows:
17. Incorporation of Market Committee.--Every Market Committee shall be a body corporate by such name as the State Government may specify by notification in the Official Gazette and shall have perpetual succession and a common seal, with power to acquire and hold property, both movable and immovable, and to lease, sell or otherwise transfer any such property, subject to the prescribed conditions and restrictions, and may by the said name sue and be sued, and subject to rules, bye-laws and the provisions of this Act, it shall be competent to do all other things necessary for the purposes for which it is established.
18. Powers and Duties of the Market Committee.--(1) It shall be the duty of a Market Committee to implement the provisions of this Act, the rules and bye-laws made, thereunder in the market area, to provide such facilities for marketing of agricultural produce therein as the Board may from time to time direct, and do such other acts as may be required in relation to the superintendence, direction and control of market, or for regulating the marketing of agricultural produce in any place in the market area, and for purposes connected with the matters aforesaid, and for that purpose the Market Committee may exercise such powers and perform such functions and discharge such duties as may be provided by or under this Act.
(2) Without prejudice to the generality of the foregoing provision, a Market Committee may:
(i) when so required by the State Government, to establish a market for the market area providing for such facilities as the State Government may, from time to time, direct in connection with the purchase and sale of the agricultural produce concern;
(ii) where a market is established under Sub-clause (i), to issue licenses in accordance with the rules to traders, brokers, weighmen, measures, surveyors, warehousemen and other persons including persons of firms engaged in the processing, storing or pressing of agricultural produce concerned operating in the market area;
(iii) to maintain and manage the principal market yard and sub-market yards and to control, regulate and run the market in the interest of the agriculturists and licensees in accordance with the provisions of this Act and the rules and bye-laws made there under;
(iv) to act in the prescribed manner as mediator, arbitrator or surveyor in all matters of differences, disputes, claims, etc., between licensees inter se or between them and persons making use of the market as sellers of the agricultural produce;
(v) to control and regulate the admission of persons and vehicular traffiic to the principal market yard or sub-market yards, to determine the conditions for the use of market and to check and prosecute persons trading without a valid licence in the market area;
(vi) to bring prosecute or defend or aid in bringing, prosecuting or defending any suit, action, proceeding, application, or arbitration in regard to any matter on behalf of the committee, or otherwise when directed by the Board;
(vii) to enforce the provisions of this Act, the rules and bye-laws; and
(viii) to perform such other duties and exercise such other powers as are imposed or conferred upon it by or under this Act, the rules or the bye-laws.
Section 27 authorises the Market Committees to levy fees on the agricultural produce according to the prescribed rate on the commodity bought or sold in the market area. It has also got the power of making assessments and realising the market fee and the like. Sections 29 and 30 deal with the establishment of a fund and application of the same for the purposes provided therein which are of the nature of acquisition of site for construction of markets, means of communication, repair, maintenance, payment of salaries etc. to their officers and servants.
5. On reference to these provisions learned Counsel submitted that none of the activities mentioned above can even remotely be said to appertain to the activities of carrying business, trade or profession or any ancillary or incidental work in that connection, particularly when there was no element of profit and the right to levy and realise market fee was dependent upon sufficient 'quid pro quo' by the Market Committees therefor. It was held by this Court in the case of B.& K. Traders v. State of Bihar 1975 B.B.C.J. 1 that the provisions directing the payment of market fee are in the interest of general public within the meaning of Article 19(6) as well as Article 304(b) of the Constitution. The fee under this Act is a sort of return or consideration for services rendered, although mathematical exactitude and co-relationship between the amount realised as fee and thus spent for the services cannot be renderd see Belsand Sugar Co. v. State of Bihar 1976 B.B.C.J. 453.
6. A counter-affidavit has also been filed on behalf of respondents 1 and 2 in this case and their stand is that part of the services rendered by the Market Committee, such as maintenance of stalls/godowns and construction of shop which are given on rent to the traders, would amount to an activity incidental and ancillary to business and trade and that the main purpose of the Market Committee is to regulate and provide facilities for marketing of agricultural produce, the range of which is very wide, which activities would amount to incidental to business and trade, and in any event they are administrative, supervisory and regulatory functions as well as that of development of agricultural and other trade activities which would bring them within the wide definition of the term 'establishment'. Then it has been submitted that the view taken by respondent No. 2 in Annexure 2 was quite valid.
7. The submissions of the learned Government Advocate appearing for the respondents, were on the same lines. He sought to derive support from the case of the Electrical Executive Engineer, Electric Supply Division, Muzaffarpur and Ors. v. Surendra Prasad Pankaj and Anr. 1966 B.L.J.R. 120. In that case the Bihar State Electricity Board in an action by its employee under Section 26 of the Shops Act before the labour court challenging his removal, took a preliminary objection regarding the application of the Shops Act to the Board on the ground that it being a local authority, the Act could have no application to it. This objection was overruled and it was held by this Court that the Electricity Board was an autonomous body and would not come within the definition of 'local authority'.
It was, therefore, rightly submitted by the learned lawyer appearing for the petitioner that the questions raised by the present petitioner did not fall for consideration in that case and the case was fought on entirely different footing and, therefore, the analogy of the application of the provisions of the Shops Act to the Bihar State Electricity Board, a similarly constituted autonomous body, would not apply.
8. I may now refer to some decisions given by a few High Courts with respect to similar legislation in force in those States, which may be relevant for the purpose. A Bench of the Kerala High Court in the case of A. Karunakaran Nair v. Authority under Payment of Wages Act 1972 (1) L.L.J. 350 was considering the application of the Kerala Shops and Commercial Establishments Act to the office of Maharaja of Cochin, and held that the office was covered within the second part of the definition 'administrative service' in which the persons employed are mainly engaged in office work.
The next case is of the Andhra Pradesh in Khan Mohammed v. The State of Andhra Pradesh 1973 L.I.C. 239. where the question was as to whether any premises in the definition of 'shop' of the Andhra Pradesh Shops and Establishments Act was referable to any specific or defined premises, and it was held that the place where the goods are prepared or manufactured but are sold outside, cannot be held to be a shop. Distinguishing 'business' from 'profession' it was observed that in the former the dominant motive is only to earn profit, whereas in the case of a profession which may earn some money and carries it on with his means of livelihood, it can by no stretch of reasoning be called a trade or business as a person carrying on profession is not expected to sell his special knowledge and earn profit.
These two cases are not of much help, but the next case of the Chief Commissioner, Delhi and Ors. v. Federation of Indian Chambers of Commerce and Industry, New Delhi and Ors. 1974 (29) F.L.R. 314 may be of some assistance. The question in that case was as to whether the premises of the Federation of Indian Chamber of Commerce and Industry is commercial establishment within the meaning of Section 2(5) of the Delhi Shops and Establishments Act. With reference to the various activities of the Federation described in the Memorandum and Articles of Association, it was held that they were all business activities carried on systematically, although the profit which it derived was not distributed among its members. In that Act also the expression is 'commercial establishment' like the other Act mentioned just herein before. The various activities of the Federation showed that it carried on systematic activities not only to assist its members but also other traders or businessmen who were members of the constituents of the Federation including establishment of Tribunals for arbitration in disputes arising in course' osf the trade and industry and its endeavours to attain for the traders and industrialists, material advantages by unified action which they may not be able to achieve in their individual capacity.
The case of The National Institute of Engineering (Society) v. Labour Inspector 1975 L.I.C. 1134 was the case of a hostel attached to an educational institution which obviously was so far away from being covered by the Karnataka Shops and Commercial Establishments Act.
9. The purpose of the 'Shops Act' is mainly to regulate conditions of work and employment in shops and other establishments, which are not covered by the other beneficial legislations dealing with other class of employees such as the Factories Act and the like. The emphasis in the definition of 'establishment' itself is of carrying the actual business, trade or profession or works or incidental or ancillary thereto, including administrative or clerical services there for. The various clauses of Sub-section (6) of Section 2 wherein illustrative cases have been noticed such as shops, restaurants, hotels and places of public amusement or entertainment, go to show that element of business or trade is the dominant factor for classifying a premises as an establishment.
It cannot be disputed that the petitioner Board is not doing any commercial activity as such and the dominant purpose is to render only services of entirely different kind for achieving a reasonable price to the producers so that they may not be exploited by the middlemen and the establishment of various kinds of markets and godowns, shops and yards is only for the purpose of providing facilities for the buyers so that the buyers and the sellers may have a common and convenient platform for the purpose of buying and selling of the goods. The purposes for which the fund of the Market Committee can be utilised also is a pointer that earning profit or profit making motive is not even the remote intention of the framer of this legislation. In the Bihar State Electricity Board case one of the points taken note of by this Court was that one of the dominant purpose of the Board was to produce electric energy and to sell it which was clearly a commercial activity.
10. No other case was cited at the Bar and, therefore, having given my anxious consideration to the purpose and scheme of both the statutes, I unhesitatingly conclude that the view expressed by respondent No. 1 in his order dated 8-9-1979 (Annexure 2) cannot be sustained in law. I would accordingly allow this application and quash the said order contained in Annexure 2, but in the circumstances shall make no order as to costs.