Jharkhand High Court
Agricultural Produce Market ... vs Jagdish Singh & Sons And Ors. Etc. Etc. on 11 February, 2002
Equivalent citations: 2002 AIR - JHAR. H. C. R. 546, (2002) 1 JLJR 605 (2002) 1 JCR 323 (JHA), (2002) 1 JCR 323 (JHA)
Author: D.N. Prasad
Bench: D.N. Prasad
JUDGMENT V.K. Gupta, C.J.
1. By this common judgment, we propose to dispose of all the connected Appeals which arise out of the judgments delivered by the learned Single Benches in identical connected writ applications. Actually, two sets of judgments were delivered by the learned Single Judges in separate, but two identical and connected sets of writ applications. Whereas, Justice Eqbal, the learned Single Judge in C.W.J.C. 3602/2000(R) vide his judgment dated 7th August, 2001 (see 2001 (3) JCR 238), has, even while upholding the authority, right and jurisdiction of the Marketing Board and the Marketing Committee to levy and demand 'occupation charges' from the traders for occupying the shops, godowns etc. allotted to them and under their occupation, held that there is no specific provision which permits these authorities to enhance the rent or licence fee and even if this enhancement may have to be resorted to the same has to be on the basis of the observance of principles of natural justice and after affording opportunity of hearing to them. Since, according to the learned Single Judge, this was not done in the present case, he set aside the enhancement orders which were impugned before him and issued a mandamus directing the Marketing Board and the Marketing Committee to take a fresh decision in the matter of enhancement of the rent of the shops after giving a reasonable opportunity of hearing to the occupiers. This is one set of the judgments under challenge in these Appeals. These Appeals are naturally filed by the Agricultural Produce Marketing Committee. The other set of judgments is by Justice Mukhopadhaya in C.W.J.C. No. 3190/1998(R) (see 2002 (1) JCR 21) and other related writ applications whereby he vide judgment dated 26th November, 2001. has unequivocally and clearly upheld the right of the Marketing Committees and the Marketing Board to charge rent from the occupiers and also to enhance the same from lime to time. By thus upholding these twin rights unequivocally, he has dismissed the writ applications. Obviously and naturally, the appeals against such set of judgments have been filed by the occupiers of the shops. In the first set, the shop-occupiers have filed cross objections in the Appeal of the Agricultural Produce Marketing Committees, aggrieved as they appeared, against that part of Justice Eqbal's judgment in which he upheld the right of the Committees and the Board to charge the rent/occupation charges from the occupiers.
2. Bihar Agricultural Produce Markets Act. 1960 ('Act' for short) was enacted to provide for the better regulation of buying and selling of Agricultural Produce and the Establishment of Markets for Agricultural Produce and for matters connected therewith. Section 2(1)(a) of the Act defines 'Agricultural produce' to mean all produce whether processed or non-processed, manufactured or not, of Agriculture. Horticulture, Plantation, etc. and includes livestock or poultry as specified in the Schedule. Section 3 of the Act empowers the State Government to regulate the sale, purchase, storage and processing in any area or areas as may be specified by it in a Notification issued by the State Government declaring its intention of so regulating the sale, purchase, storage or processing of any such agricultural produce. What Section 3 therefore, suggests is that the State Government may by Notification both regulate the sale and purchase of agricultural produce and also prescribe such areas in which such regulatory mechanism would come into force. Section 4 of the Act empowers and authorises the State Government to declare the area specified in the Notification under Section 3 as a "Market Area" for the purposes of the Act with respect to any or all kinds of agricultural produce which may be specified in the Notification issued under Section 3. Section 5 of the Act lays down that for each Market Area, there would be one Principal Market Yard and one or more Sub-market Yards as may be necessary. Section 6 empowers the State Government to establish Market Committees for every Market Area.
3. Section 33-A deals with the issue of establishment of a Marketing Board for the purposes of exercising superintendence and control over the Market Committees and for exercising such other powers and performing such functions as are conferred or entrusted under the Act by Notification in the Official Gazette. The Marketing Board constituted under Section 33-A of the Act, as per Section 33-B. would be a Body Corporate having perpetual succession and a common seal etc.
4. Section 27 of the Act empowers the Market Committees to levy and collect 'market fee' on the agricultural produce bought or sold in the Market Area and it suggests that the market fee chargeable shall be paid by the buyer in the manner prescribed under the Act and that the fee chargeable shall not be levied more than once on a notified agricultural produce. For ready reference. Section 27 of the Act is reproduced as hereunder. It reads thus :
"27. Power to levy fees:--(1) The Market Committee shall levy and collect market fees on the agricultural produce bought or sold in the market area at the rate of rupee one per Rs. 100 worth of agricultural produce.
Illustration: Paddy sold in the market area as well rice produced from such paddy, shall both be leviable.
Explanation: All notified agricultural produce leaving a market area, shall unless the contrary is proved be presumed to have been bought or sold in such area provided that, when any agricultural produce brought in any market area for the purpose of processing or export is not processed or exported therefrom as the case may be or any such produce processed in the market area is not exported therefrom within twenty one days from the date of its arrival therein it shall until the contrary is proved, be presumed to have been bought or sold in the market area, and shall be liable for the levy of fees under this section, as if, it had been so bought or sold.
(2) The market fee chargeable under Sub-section (1) shall be payable by the buyer, in the manner prescribed.
(3) The fee chargeable under Sub-section (1) shall not be levied more than once on a notified agricultural produce in the same notified Market Area."
5. Section 17 of the Act with which we would be mainly concerned in this case stipulates that every Market Committee shall be a body corporate by such name as the State Government may specify and shall have perpetual succession and a common seal with the power to acquire and hold property, both movable and immovable and to lease or otherwise transfer such property etc. etc. Section 17 reads as under :
"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, shall 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 purpose for which it is established."
6. In the case of Belsund Sugar Co. Ltd. v. State of Bihar and Ors., (1999) 9 SCC 620 a Five Judge Bench of the Supreme Court while dealing with the question of the nature and extent of the application of Section 27 of the Act with respect to the legality and validity of the imposition of Market Fee approved the right of the Market Committees to levy market fee on the agricultural produce bought or sold in the Market Areas by holding that before justifying levy of market fee the services to be rendered by the Market committee must be in connection with the sale and purchase transactions of agricultural produce. The following observations of their Lordships in Belsund Sugar Co. Ltd. (supra) are apposite:
"It becomes at once clear that before justifying levy of market fee on any transaction the services to be rendered by the Market Committee must be in connection with the sale and purchase transactions of agricultural produce falling for regulation under the Market Act when the purchase and sale of agricultural produce like sugarcane sugar or molasses are not governed by the Market Act, as we have seen while considering Contention there would remain no occasion for the Market Committee to be statutorily under any obligation to provide any services or infrastructural facilities for covering such transactions so as to be entitled to charge market fee on such transactions. It was vehemently contended by learned Senior Counsel for the respondents that various types of infrastructural facilities are being made available to sugar factories who are purchasing sugarcane in the market area and selling manufactured sugar and molasses in the very same market area.
The following are the various facilities and services highlighted in this connection:
1. Link road facilities by which Market Committee were to spend monies for connecting villages in the market area with the main roads for facilitating the movement of agricultural produce including the sugarcane from the farms to the purchase centres of the factories.
2. Spread of information regarding prices of agricultural produce for information of growers of sugarcane;
3. Providing mediation facility to enable the growers of sugarcane to get higher price for sugarcane as compared to the minimum prices fixed under the Control Orders.
4. Supervision of weighment of sugar-cane.
5. Licensing of Weighing inspectors.
6. Providing for drinking facility and park.
7. Parking facilities at the purchase centres."
Directly touching upon the element of quid pro quo with respect to levy of market fee under Section 27 of the Act their Lordships made the following pertinent observations. We quote thus :
"In order to attract the charge under Section 27 the agricultural produce concerned on which the market fee is to be levied must be required to be bought and sold in the market area within the jurisdiction of the Market Committee concerned as per Section 15 of the Market Act which enjoins that no agricultural produce specified in the notification under Sub-section (1) of Section 4 shall be bought or sold by any person within the market area other than the relevant principal market yard or sub-market yards. Thus, on a conjoint reading of Sections 27 and 15 of the Market Act, it must be held that before any charge of market fee can settle regarding any purchase and sale transactions concerning the agricultural produce, such agricultural produce must have been required to be sold or purchased at the relevant principal market yard or sub market yards. It is obvious that the principal market yard or sub-market yards would be situated within the market area, but if an agricultural produce is exempted from the provision of Section 15(1) of the Act as in the case of sugarcane sugar and molasses there would remaining occasion for transactions of sale and purchase of these commodities to be carried on only in the principal market yard or sub market yards and not elsewhere in any other part of the market area. It is only those agricultural produce which are required to be bought and sold in the relevant principal market yard or sub-market yards situated within the market area that attract the charge of Section 27 of the Act. Once this charge is attracted, the further question whether it is backed by any quid pro quo would survive for consideration. On the facts of the present case. Section 15 as a whole is out of the picture for controlling the purchase and sale of sugarcane sugar and molasses by sugar factories operating in the market area and as we have seen earlier, the charge of market fee as envisaged by Section 27 would not get attracted at all for them. Hence, the aforesaid list of the infrastructural facilities made available to sugar factories in general with other dealers in agricultural produce attracting Section 15 of the Act would pale into insignificance. Market Committees would not supply adequate quid pro quo for levying market fee as the charge itself does not settle on these transactions by the sugar factories. It may be as submitted by learned Senior Counsel for the respondents that some sugar factories may have taken the benefit of electric lighting and preparation of approach roads by the Market Committees which might have spent sufficient funds for giving these facilities, still they would not be a part and parcel of the statute obligations of the Market Committees qua such sugar factories and may remain in the domain of Section 72 of the Indian Contract Act and if such benefits are received by the factories they may be liable on the principle of quantum merit to reimburse or compensate the Market Committees for the Voluntary facilities given by them but they would not support any legal quid pro quo by way of statutory obligation of the Market Committees for giving facilities to the sugar mills for supporting the levy of Market fees on their transactions.
7. On the question of validity of Section 27 of the Act and the levy of market fee by the Market Committees, a Division Bench of the Patna High Court in the case of Delhi Cloth & General Mills Co. Ltd. and Ors. v. The Agricultural Produce Market Committee and Ors. reported in 1992 (2) PLJR 253, made the following pertinent observations:
"The law in this regard is now well settled. It is not necessary that the services must be to the payers of the fees individually nor can the co-relation between the payment of fees and the services rendered, be established with mathematical exactitude. If the primary and essential purpose of the imposition be service of some special kind to the users of the market or payers of fees, even if there are other consequences or other benefits to others, these do not in the least affect the position. Any incidental benefit to those other than the payers of the fee is decisive of the fact whether it is a 'tax' or a 'fee'. The concept of benefit to the users of market must be looked at from a broad commonsense point of view taking an integrated view. A fee must have relation to the services rendered, or the advantages conferred. Such relation need not be direct but a mere casual relation may be enough. Further, neither, incidence of the fee nor the service rendered need be uniform. Special benefit or advantage to the payers of the fees may even be secondary as compared with the primary motive of regulation in the public interest. The cost of services rendered etc. against the amount of fee collected so as to evenly balance the two is neither necessary nor expedient. A broad co- relationship is all that is necessary.
Under Section 29 of the State Act all the money received by the Market Committee is to be paid into a fund and all the expenditure incurred by the Market Committee for the purpose of this Act shall be defrayed out of the said amount. The fund may be utilised for the purpose specified in Section 30 of the State Act quoted above. An examination of the relevant provisions of the State Act and particularly purposes specified in Section 30, make it clear that the utilisation of the fund is substantially for the purpose of rendering service to the persons from whom funds are being collected. Moreover, a Board has been constituted under Section 33 of the State Act for the purpose of exercising superintendence over the control of Market Committee. Every Market Committee has to pay, out of its fund, to the Board as contribution, such percentage of its income derived from the licence fees and market fees as may be prescribed to meet expenses of the establishment of the Board and also those incurred in the interest of the Market Committee.
Having regard to the aforesaid and particularly applying the test laid down by 5 judges Bench in the case of Kewal Krishna v. State of Punjab, (supra), I am of the opinion that the test of a 'fee' has been fully satisfied in this particular case. I fully agree with the Division Bench decisions in Belsund Sugar case and Rap-tokos Brett (supra), which have dealt with this point and upheld the validity of the State Act on this question. I am of the opinion that there is relationship between the fee collected and the services intended to be rendered under the State Act. There is no attempt to impose any tax by the said Act. It is not only expressed as 'fee' but in reality and substance also it is a 'fee'. Accordingly, in my opinion, there is no merit in this contention and I reject the same.
8. In the case of Krishi Upaj Mandi Samiti and Ors. v. Orient Paper & Industries Ltd., reported in (1995) 1 SCC 655. their Lordships of the Supreme Court while approving the principle of levy of market fee by Market Committees under Section 27 of the Act and dwelling on the question of quid pro quo clearly distinguished between the 'tax' and 'fee' and held that whereas the tax is a compulsory exaction of money by public authority for public purposes enforceable by law and is not payment for services rendered, levy of fee is a particular form of exercise with respect to particular items and that if a fee is generally defined to be charge for a special service rendered to individuals by some governmental agency and that the amount of fee levied is supposed to be based on the expenses incurred by the Government in rendering its service. Ordinarily the fees are uniform and no account is taken of the varying abilities of different recipients to pay the fees.
9. We have extracted hereinabove various passages and made references to observations in some judgments in order to highlight the point and lay emphasis on the hypothesis that the contention of the writ-petitioners with respect to the incompetence of the Market Committees to demand occupation charges in view of Section 27 of the Act. was totally devoid of any merit. The writ-petitioners erroneously and very very fallaciously mixed up the provision relating to the levy of Market fee as contained in Section 27 of the Act with their liability to pay occupation charges with respect to individual shops and godowns etc. which were allotted to them by the Market Committees and which have been under their occupation as individual occupiers of such accommodation. Levy of Market fee in terms of Section 27 by way of an element of quid pro quo is totally different and entirely distinct from the liability of an individual to pay occupation charges with respect to accommodation allotted to him individually by the Market Committees and which is under his occupation as such allottee/occupier. Section 17 of the Act, as noticed above, gives a statutory power to the Market Committees to acquire and hold property, to lease it out or transfer it in any other manner. Quid Pro Quo as an element of service to the public at large is a different concept altogether. Quid Pro Quo does not mean that merely because Market Committees charge fee under Section 27 of the Act it is under any obligation, statutory or otherwise, to construct shops/godowns/ ware-houses or any other structures and to allot them to individuals. There are various types of services which as an element of quid pro quo, the Market Committees have been rendering. These cannot be confused or mixed up with the right of the Market Committees to acquire and hold property, to construct shops for individual occupiers, to allot them and thereafter, to charge occupation charges.
10. In this context, by way of a passing reference, we can observe that in this case we are not concerned with the nature of allotment or the occupation of the shops by individual allottees, viz., whether such allotment is in the nature of licence or lease because no issue or dispute relating thereto arises on that score in these cases. It is therefore, immaterial whether the occupation charges as payable by the writ petitioners and as chargeable by the Market Committees are referred to by the name of rent, lease money, licence fee or by any other name or expression. The only question which arises for consideration in these cases is whether the Market Committees have the right and authority to charge occupation charges. As we have already observed, there is no doubt in our minds that they have such rights.
11. There is another important facet of this controversy. Almost in all the cases, the writ petitioners have been in occupation of the shops, godowns etc. since 1982. Without any protest, without any reservation, objection or demur, they have been unconditionally paying the occupation charges to the Market Committees. It is only after the Market Committees enhanced the occupation charges that these writ petitioners came to this Court. We are clearly of the opinion and firmly of the view that they are estopped from challenging the right and the authority of the Market Committees to levy and demand from them the occupation charges. They having acquiesed in the payment of the occupation charges from the very beginning are now estopped from challenging the right and authority of the Market Committees to demand from them the occupation charges.
12. This now takes us to the question of enhancement. Once we find and hold that the Market Committees have the right, authority and power to levy occupation charges, we have also to concede to them the corresponding right, authority and power to enhance the occupation charges. In fact, the concept of enhancement of occupation charges is inherent in the very nature of the right to charge. The enhancement is a feature which basically inhers in the right to charge. Occupation charges cannot remain static, With the rise in prices and inflationary trends in market structures, with the passage of time and based on various other pertinent and relevant factors and circumstances, enhancement can always be resorted to by the Market Committees.
13. Market Committees being the creatures of statute, thus, being the instrumentality of the State as covered under Article 12 of the Constitution, of course, are bound to act fairly and objectively. They cannot resort to enhancement arbitrarily. Enhancement has to be an act which is dictated by objective considerations and fairness. Enhancement cannot be resorted to arbitrarily.
14. We have seen the counter-affidavit filed by the Market Committees and find that they have given cogent reasons, supported by sufficient material, to justify the enhancements. The enhancements in question can neither be called as arbitrary nor unfair. Actually, looking to the market trends and the high level of inflations over the last few decades, we have no doubt in our, minds that the enhancement of occupation charges as ordered by the Market Committees cannot at all be termed as either arbitrary or unfair.
15. Based on the aforesaid reasoning and in the light of the observations herein-above contained, we have no hesitation whatsoever in holding and declaring that the Market Committees have the light both to levy, demand and be paid occupation charges and to enhance the same, subject to the observations contained hereinabove. We also have no hesitation in holding and declaring that the enhancements impugned in the writ petitions did not suffer from any vice of arbitrariness or lack of objectivity or fairness.
16. In the result, therefore, the Judgment of Justice Eqbal, the learned Single Judge in C.W.J.C. 3602/2000(R) delivered on 7th August, 2001 (see 2001 (3) JCR 238), is partly set aside in so far as it declared the enhancement as illegal and issued the consequential directions. The judgment of Justice Mukhopadhaya in C.W.J.C. 3190/1998(R) and related cases delivered on 26th November, 2001 (see 2001 (3) JCR 238) is upheld in its entirety. The Appeals, accordingly, are disposed of alongwith the cross-objections, but without any orders as to costs.
D.N. Prasad, J.
I agree.