Bombay High Court
Babasaheb Devram Sathe vs Daga Mahadu Gavande & Ors on 22 July, 2011
Author: S.C.Dharmadhikari
Bench: S.C.Dharmadhikari
1
wp355-11.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.355 OF 2011
Babasaheb Devram Sathe ..Petitioner
versus
Daga Mahadu Gavande & Ors ..Respondents
ALONGWITH
CIVIL APPLICATION NO.257 OF 2011
Daga Mahadu Gavande ..Petitioner
versus
Babasaheb Devram Sathe & Ors ..Respondents
Mr.P.N.Joshi with Mr.R.A.Haridas for the petitioner.
Mr.P.B.Shah with Mr.Vivek Salunkhe for respondent No.1.
Ms.P.S.Cardozo, A.G.P for respondent Nos.3 to 5.
CORAM : S.C.DHARMADHIKARI, J.
22nd July 2011.
JUDGMENT:
. Rule. Respondents waive service. By consent Rule made returnable forthwith.
::: Downloaded on - 09/06/2013 17:32:32 ::: 2wp355-11.doc 2 By this petition under Article 226 and Article 227 of the Constitution of India, the petitioner is challenging the order dated 21st December 2010 passed by the Additional Commissioner, Nasik Division, Nasik in Gram Panchayat Appeal No.97 of 2010.
3By this order, the Additional Commissioner, Nasik Division, Nasik has proceeded to dismiss petitioner's appeal and confirmed the order of the Additional Collector, Malegaon dated 7th October 2010 in Dispute Application No.17 of 2010.
4 The proceedings are under the Bombay Village Panchayat Act, 1958 (for short "the Village Panchayat Act").
It is held that the petitioner is disqualified from continuing as a member of the Gram Panchayat, Jalgaon Budruk, Taluka Nandgaon, District Nasik, because he is a servant of Agricultural Produce Market Committee, Nandgaon.
::: Downloaded on - 09/06/2013 17:32:32 ::: 3wp355-11.doc 5 The petitioner has been elected as a member of the said Village Panchayat in an election which was held in the year 2010. There are total 9 elected members. The petitioner was elected from Ward No.3. After the petitioner was elected as a member, he also functioned as a Sarpanch. He has a tenure of five years.
6The petitioner states that his election was not challenged by filing an election petition. The 1st respondent lost the election, so also his wife but they preferred an Application under section 16 of the Village Panchayat Act, alleging therein that the petitioner was working as a clerk in the Nandgaon Agricultural Produce Market Committee. Thus, as a servant of the said Market Committee, he incurs a disqualification under section 14(1)(i) of the Village Panchayat Act. He, therefore, cannot continue as such.
7 The petitioner filed a reply and contended that he cannot be disqualified because Nandgaon Agricultural ::: Downloaded on - 09/06/2013 17:32:32 ::: 4 wp355-11.doc Produce Market Committee is not controlled by the State Government and he cannot be said to be a servant of local authority. In these circumstances, there is no merit in the application and it should be dismissed. The petitioner pointed out as to how the Market Committee functions and what are its powers under the Agricultural Produce Market Committee Act, 1963.
8 The application, however, has been allowed by the Collector and the said order has been confirmed by the Commissioner.
9 The Collector, so also the Commissioner have held that the petitioner could not point out anything which would enable them to hold that Agricultural Produce Market Committee is not a local authority. Further, he was unable to point out anything from the terms and conditions of service or any applicable law, wherein a servant of the Agricultural Produce Market Committee is permitted to contest the ::: Downloaded on - 09/06/2013 17:32:32 ::: 5 wp355-11.doc elections of the Panchayat. In the light of the fact that the Agricultural Produce Market Committee is a "local authority"
within the meaning of the said term, as defined in section 3(31) of the General Clauses Act, 1897, that the petitioner incurs disqualification. Holding thus, the petitioner was disqualified. It is also held that the officers and servants of the Agricultural Produce Market Committee are public servants within the meaning of section 21 of the Indian Penal Code and, therefore, the petitioner stands disqualified.
10 It is this conclusion which is assailed in this writ petition.
11 Mr.Joshi, learned counsel appearing on behalf of the petitioner submits that the Collector as also the Commissioner were in error in allowing the application filed by the 1st respondent and holding that the petitioner is disqualified under section 14(1)(i) of the Village Panchayat Act. Mr.Joshi submits that the finding overlooks the fact that ::: Downloaded on - 09/06/2013 17:32:32 ::: 6 wp355-11.doc section 14 is attracted only when a person is Government servant or servant of any local authority. Therefore, the term "local authority" should take its colour from the earlier part of section, namely, servant of the Government. It is in such circumstances, it is not as if every local authority is discharging governmental functions or exercising identical powers. Its constitution, its functioning and its duties in all cases cannot be said to be governmental in nature. It is not as if every authority which is functioning at a local level can be said to be a local authority. Before that concept can be applied, the Collector should be satisfied that the local authority is either a Municipal Corporation or a Municipality or Local Board or Body of Port Trustees or Commissioners or other authority, legally entitled to or entrusted by the Government with the control or management of the municipal or local fund. No where in the impugned orders, it is indicated that this tests is satisfied. Mr.Joshi submits that a question of servant of the Agricultural Produce Market Committee being disqualified to continue as a member of the ::: Downloaded on - 09/06/2013 17:32:32 ::: 7 wp355-11.doc Village Panchayat, cannot be decided unless the authorities are satisfied that there will be conflict between interest and duty and purity of administration demands, that members like petitioners are disqualified. Infact, the trend is that a Village Panchayat should have the benefit of expertise in other fields meaning thereby that all persons with expertise are involved in village management. The trend is also not that merely because a particular statute terms the authority therein as a local authority that it becomes a local authority for the purposes of the Village Panchayat Act. Mr.Joshi submits that it is not a sound rule of interpretation and particularly to import a definition of a term in one Act into another unless the acts are para materia and their object and purpose is similar and identical. For all these reasons, the impugned orders cannot be sustained and should be set aside.
12 On the other hand, Mr.Shah, learned counsel appearing for the 1st respondent supports the impugned orders. He submits that if the orders are tested on the ::: Downloaded on - 09/06/2013 17:32:32 ::: 8 wp355-11.doc touchstone of the object and purpose that is sought to be achieved and that is to avoid conflict between private and public duty, then, serving two public functionaries which may have conflicting, interests would also attract the disqualification. Thus, one is holding a public office as a member of Village Panchayat. Equally, if another public post is held by the member of Village Panchayat that would give rise to conflict between two public and governmental functions. Ultimately, the Village Panchayat is an institution of local self-government at village and local level. Considering the object and purpose that is sought to be achieved by the Village Panchayat Act, 1958, and the intent of establishing an Agricultural Produce Market Committee, a conflict between the two duties that the petitioner is suppose to be discharging, cannot be ruled out. Mr.Shah submits that the term "local authority" is not defined in Village Panchayat Act, 1958, but, an Agricultural Produce Market Committee is a local authority within the meaning of the Maharashtra Agricultural Produce Marketing (Development and ::: Downloaded on - 09/06/2013 17:32:32 ::: 9 wp355-11.doc Regulation) Act, 1963. Thus, if it is a local authority and the word used in section 14(1)(i) of the Bombay Village Panchayats Act, is "any local authority", then, it is enough to incur the disqualification. There is no necessity of examining as to whether the Agricultural Produce Market Committee is a local authority and for a limited purpose or not. Further, the amendments to the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963, and particularly, with regard to not disqualifying members of Parliament and members of Legislative Assemblies, even if they are associated with the Agricultural Produce Market Committee, must be seen in the context of these elections.
The level at which these elections are held, is a distinguishing factor. Ultimately, at local level and village level, a conflict can always arise as pointed out above. For all these reasons, the conclusion drawn is sustainable and in consonance with law. There is no reason to disturb the same.
The petition, therefore, be dismissed.
::: Downloaded on - 09/06/2013 17:32:32 ::: 10wp355-11.doc 13 In view of the rival contentions, the only question that arises for determination is, whether a servant of the Agricultural Produce Market Committee is a servant of any local authority and, therefore, disqualified to contest the elections to a Village Panchayat or to continue as a member thereof. The undisputed factual position is that the petitioner is employed as a clerk in the Nandgaon Agricultural Produce Market Committee. Thus, he is a servant of the Agricultural Produce Market Committee. The argument is that the said Agricultural Produce Market Committee does not fit in or fulfill the requirement of being a local authority. In this behalf, a perusal of section 14(1)(i) shows that no person shall be a member of the panchayat or continue as such, who is a servant of government or servant of any local authority.
Explanation 3 below this sub-section states that for the purpose of clause (i), a Police Patil appointed under section 5 of the Maharashtra Police Act, 1967, shall be deemed to be servant of government. However, the explanation does not say anything beyond the same. The term "local authority" is ::: Downloaded on - 09/06/2013 17:32:32 ::: 11 wp355-11.doc not defined in the Bombay Village Panchayat Act, 1958.
Therefore, one ought to seek its meaning elsewhere. The Bombay General Clauses Act, 1904 and prior thereto the General Clauses Act, 1897, both define the term "local authority" in identical manner. The said definition reads thus:
" "local authority" shall mean a municipal committee, ig district board, body of port commissioners or other authority legally entitled to, or entrusted by the Government with, the control or management of a municipal or local fund;"
14 It is not as if the controversy, whether a authority like the Agricultural Produce Market Committee would be a local authority or not, has never fallen for consideration of either this Court or the Hon'ble Supreme Court.
15 In one of the earliest decisions reported in AIR 1981 Supreme Court 951 (Union of India & Ors v. R.C.Jain & Ors), ::: Downloaded on - 09/06/2013 17:32:32 ::: 12 wp355-11.doc the Hon'ble Supreme Court had an occasion to consider as to whether the Delhi Development Authority would be a local authority for the purposes of the Payment of Bonus Act, 1965. The Hon'ble Supreme Court while referring to the settled principle that a particular expression being not defined in an Act, but is defined in another Act, cannot be imported in former Act, refused to take assistance of the term "local authority" from any other enactment, such as, the Cattle Trespass Act, 1871. However, it took assistance of the General Clauses Act. It also referred to two earlier decisions rendered in the case of Valjibhai Muljibhai Soneji & Anr Vs. The State of Bombay (now Gujarat) & Ors reported in AIR 1963 Supreme Court 1890) and case of the Municipal Corporation of Delhi v. Birla Cotton, Spinning and Weaving Mills, Delhi reported in AIR 1968 Supreme Court Cases 1232 and proceeded to hold thus:
"2. Let us, therefore, concentrate and confine our attention and enquiry to the ::: Downloaded on - 09/06/2013 17:32:32 ::: 13 wp355-11.doc definition of 'Local Authority' in section 3(31) of the General Clauses Act. A proper and careful scrutiny of the language of section 3(31) suggests that an authority, in order to be a local Authority, must be of like nature and character as a Municipal Committee, District Board or Body of Port Commissioners, possessing, therefore, many, if not all, of the distinctive attributes and characteristics of a Municipal Committee, District Board, or Body of Port Commissioners, but, possessing one essential feature, namely, that it is legally entitled to or entrusted by the Government with, the control and management of a municipal or local fund.
What then are the distinctive attributes and characteristics, all or many of which a Municipal Committee, District Board or Body of Port Commissioners shares with any other local authority? First, the authorities must have separate legal existence as Corporate bodies. They must not be mere Governmental agencies but must be legally independent entities. Next, they must function in a defined area and must ordinarily, wholly or partly, directly or indirectly, be elected by the inhabitants of the area. Next, ::: Downloaded on - 09/06/2013 17:32:32 ::: 14 wp355-11.doc they must enjoy a certain degree of autonomy, with freedom to decide for themselves questions of policy affecting the area administered by them. The autonomy may not be complete and the degree of the dependence may vary considerably but, an appreciable measure of autonomy there must be. Next, they must be entrusted by Statute with such Governmental functions and duties as are usually entrusted to municipal bodies, such as those connected with providing amenities to the inhabitants of the locality, like health and education services, water and sewerage, town planning and development, roads, markets, transportation, social welfare services etc. etc. Broadly we may say that they may be entrusted with the performance of civic duties and functions which would otherwise be Governmental duties and functions. Finally, they must have the power to raise funds for the furtherance of their activities and the fulfilment of their projects by levying taxes, rates, charges, or fees. This may be in addition to moneys provided by Government or obtained by borrowing or otherwise. What is essential is ::: Downloaded on - 09/06/2013 17:32:32 ::: 15 wp355-11.doc that control or management of the fund must vest in the authority.
3. In Municipal Corporation of Delhi v. Birla Cotton Spinning and Weaving Mills Delhi, (1968) 3 SCR 251 at p.228: (AIR 1968 SC 1232), Hidayatullah, J., described some of the attributes of local bodies in this manner:
"Local bodies are subordinate branches of Government activity. They are democratic institutions managed by the representatives of the people. They function for public purposes and take away a part of the Government affairs in local areas. They are political sub-divisions and agencies which exercise a part of State functions. As they are intended to carry on local self-government the power of taxation is a necessary adjunct to their other powers. They function under the supervision of the Government"."
16 Prior thereto, there is a authoritative ::: Downloaded on - 09/06/2013 17:32:32 ::: 16 wp355-11.doc pronouncement of the Hon'ble Supreme Court in the case of Patel Premji Jive v. State of Gujarat reported in (1971) 3 SCC 815-16. There, the controversy pertained to acquisition of lands for a Agricultural Produce Market Committee in Gujarat and whether it was a local authority for the purpose of that Act. Holding that it is a local authority, the Supreme Court observes thus:
"4. The expression "local authority" is not defined in the Land Acquisition Act. But by the General Clauses Act 10 of 1897 the expression "local authority" is defined as meaning "a municipal committee, district board, body of port commissioners or other authority legally entitled to or entrusted by the Government with, the control or management of a municipal or local fund". By virtue of section 10(2) of the Gujarat Agricultural Produce Markets Act, 1963, the market committee is a local authority within the meaning of the Bombay General Clauses Act. A local authority being by virtue of entrusted by Government with control or management, inter ::: Downloaded on - 09/06/2013 17:32:32 ::: 17 wp355-11.doc alia, of a local fund, there is no scope for the argument that the market committee constituted under Gujarat Agricultural Markets Act, 1963, is not a local authority within the meaning of section 6 of the Land Acquisition Act."
17. The broad test indicated is that the authority must have separate legal existence as a corporate body. The authority must not be mere governmental agency, but, must be legally independent entity. It must function in defined area and must ordinarily, wholly or partly, directly or indirectly be elected by the inhabitants of the area. It must enjoy a certain degree of autonomy, with freedom to decide for themselves questions of policy affecting the area administered by them.
The autonomy may not be complete and the degree of the dependence may vary considerably but, an appreciable measure of autonomy there must be. It must be entrusted by Statute with such governmental functions and duties as are usually entrusted to municipal bodies, such as those connected with providing amenities to the inhabitants of the ::: Downloaded on - 09/06/2013 17:32:32 ::: 18 wp355-11.doc locality, like health and education services, water and sewerage, town planning and development, roads, markets, transportation, social welfare services etc. Broadly it must be entrusted with the performance of civic duties and functions which would otherwise be governmental duties and functions.
Finally, it must have power to raise funds for the furtherance of the activities and the fulfilment of the projects by levying taxes, rates, charges or fees. This may be in addition to monies provided by government or obtained by borrowing or otherwise. What is essential is that control or management of the fund must vest in the authority.
18 It is in this back drop that one must consider the situation and the role of the Agricultural Produce Marketing Committee.
19 The Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963 is an Act to develop and regulate marketing of agricultural and certain other ::: Downloaded on - 09/06/2013 17:32:32 ::: 19 wp355-11.doc produce in market areas and markets, including private markets and farmer-consumer markets, to be established therefor in the State, to confer powers upon Market Committees to be constituted in connection with or acting for purposes connected with such markets, to establish Market Fund for purposes of the Market Committees and to provide for purposes connected with the matters aforesaid. This is how the Act came to be enacted and the term "local authority" is defined therein in section 2(g) to include a Panchayat Samiti. The term "Market Committee" or "Committee" is defined thus:
"2(j) "Market Committee" or "Committee"
means a committee constituted for a market area under section 11 [and includes [The Bombay Agricultural Produce Market Committee established under clause (a) of sub-section (1A) [and the Divisional or Regional Market Committee declared under clause (a) of sub-section (1B)] of section 13 and ] a committee or committees constituted as a result or amalgamation of Market ::: Downloaded on - 09/06/2013 17:32:32 ::: 20 wp355-11.doc Committee or division of a Market Committee under section 44];"
20 The Market Areas and Markets are dealt with by sections 3, 4 and 5 of the said Act. These speak of issuance of notification of intention of regulating marketing of agricultural produce in specified area and declaration of regulation of marketing of specified agricultural produce in market area. Thus, the area specified in the notification published in the Official Gazette by virtue of powers conferred by sub-section 1 of section 4 of the Act, is a market area for the purposes of this Act. Once declaration under sub-section 1 is published, no local authority or any other person shall thereafter notwithstanding anything contained in any law for the time being in force, establish, authorise or continue or allow to be established, authorised or continued any place in the market area for the marketing of that agricultural produce. Thus, the Act enables the Agricultural Produce Market Committee to take over marketing of that ::: Downloaded on - 09/06/2013 17:32:32 ::: 21 wp355-11.doc Agricultural Produce in that market area to the exclusion of any other person. This is the extent of its power. Thereafter, for every market area, there shall be established a principal market, and there may be established one or more subsidiary markets, which can been done vide section 5. Chapter I-A provides for establishment of National Integrated Produce Market. Chapter I-B provides for direct marketing, establishment of private market and redressal of disputes, whereas, Chapter I-C deals with Contract Farming Agreement. Chapter II deals with Marketing of Agricultural Produce and section 6 therein provides for regulation of marketing of agricultural produce and provision for licence is made so as to undertake marketing of agricultural produce.
The grant of licence is provided by section 7. Then, there is power to cancel or suspend licences and further appeal vide section 9. Section 10 provides for settlement of disputes and then comes Chapter III which deals with Constitution of Market Committees. Section 12 therein provides for incorporation of market committees and it reads thus:
::: Downloaded on - 09/06/2013 17:32:32 ::: 22wp355-11.doc "12. Incorporation of Market Committees.
[(1) Every Market Committee shall be a body corporate by the name of "the Agricultural Produce Market Committee" and shall have perpetual succession and a common seal, and may in its corporate name sue and be sued, and shall be competent to contract, acquire and hold property, both movable and immovable, and to do all other things necessary for the purposes for which it is established.
[Provided that, no immovable or movable property the value of which exceeds the prescribed limits shall be acquired or disposed of by the Market Committee without the prior permission of the Director.] [(2) Notwithstanding anything contained in any law for the time being in force, every Market Committee shall, for all purposes, be deemed to be a local authority.] [(3) The Market Committees shall be classified by the Director, subject to the guide- lines prescribed, considering the volume and nature of the turnover for the purpose of laying ::: Downloaded on - 09/06/2013 17:32:32 ::: 23 wp355-11.doc down the norms for staff schedule, establishment expenditure, other expenses and allowances.]"
21 Then comes section 13 which provides for constitution of marketing committees and it is clear that persons residing in market area, namely, 15 agriculturalists whose names appear in voter's list for the concerned constituency would constitute the market committee and their election is provided for, so also other ancillary provisions.
The election and term of office of members is an aspect dealt with by section 14. Section 14A deals with election fund.
Section 15 provides for commencement of term of office of members and there is also a provision for appointment of administrator in terms of section 15A. All aspects of resignation, removal and casual vacancies of members and nomination in certain circumstances are dealt with including the election of Chairman and Vice-Chairman, their term of office, their honorarium , procedure for election, resignation and motion of no confidence against them. Then, comes ::: Downloaded on - 09/06/2013 17:32:32 ::: 24 wp355-11.doc Chapter IV wherein the powers and duties of the Market Committees are enlisted and section 29 therein reads thus:
"29. Powers and duties of 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 agriculture produce therein as the Director [the State Marketing Board or the State Government, as the case may be,] may, from time to time, direct; do such other acts as may be required in relation to the superintendence, direction and control of market or for regulating marketing of agriculture produce in any place in the market area, and for purposes connected with the matters aforesaid, and for that purpose may exercise such powers and perform such duties and discharges such functions as may be provided by or under this Act.
[(2) Without prejudice to the generality of ::: Downloaded on - 09/06/2013 17:32:32 ::: 25 wp355-11.doc the foregoing provisions, a Market Committee may-
(i) regulate the entry of persons and of vehicular traffic into the market;
(ii)supervise the behavior of those who enter the market for transacting business;
(iii)grant, renew, refuse, suspend or cancel licence;
(iv)maintain
ig and manage the market
including admissions to, and conditions for use of, markets within the market area;
(v)provide for necessary facilities for the marketing of agriculture produce within the market in the market areas;
(vi)regulate and supervise the auctions of notified agricultural produce in accordance with the provisions and procedure laid down under the rules made under this Act or the bye-laws of the Market Committee;
(vii)regulate the making, carrying out and enforcement or cancellation of sales, weighment, delivery, payment to be ::: Downloaded on - 09/06/2013 17:32:32 ::: 26 wp355-11.doc made in respect thereof and all other matters relating to the marketing of notified agriculture produce in the prescribed manner;
(viii)take all possible steps to prevent adulteration and to promote and organise grading and standardization of the agricultural produce;
(ix)take measures for the prevention of purchases and sales below the minimum support prices as fixed by the Government from time to time;
(x)collect, maintain, disseminate and supply information in respect of production, sale, storage, processing, prices and movement of notified agricultural produce including information relating to crops, statistics and marketing intelligence as may be required by the Director;
(xi)arrange to obtain fitness (health) certificate from Veterinary Doctor in respect of animals, cattles, birds, etc., which are brought or sold in the market area;::: Downloaded on - 09/06/2013 17:32:32 ::: 27
wp355-11.doc
(xii)carry out publicity about the benefits of regulation, system of transactions, facilities provided in the market area, through such media, as, in the opinion of the Market Committee, may be effective or necessary;
(xiii)provide for setting disputes arising out of any kind of transactions connected with the marketing of agricultural produce and all matters ancillary thereto;
(xiv)subject to the provisions of section 12, acquire, hold or dispose of any movable and immovable property for the purpose of efficiently carrying out its duties;
(xv)institute or defend any suit, prosecution, action, proceeding, application or arbitration and compromise such suit, action, proceeding, application or arbitration;
(xvi)make arrangement for holding of elections of the Market Committee in the prescribed manner;
(xvii)levy, take, recover and receive charges, fees, rates and other sums or money to which the Market Committee is ::: Downloaded on - 09/06/2013 17:32:32 ::: 28 wp355-11.doc entitled;
(xviii)subject to approval of the Director, obtain loans subsidies, subventions from the State and Central Government or any financing agency, for providing warehousing and marketing facilities in the market;
(xix)subject to the approval of the State Marketing Board, prepare budgets, supplementary ig budgets, make reappropriations in the budget and incur expenditure accordingly;
(xx)keep a set of standard weights and measures in the market against which weighment and measurement may be checked;
(xxi)inspect and verify scales, weight and measures in use in a market areas and also the books of accounts and other documents maintained by the licensees in such manner as may be prescribed;
(xxii)employ the necessary number of officers and servants for the efficient implementation of the provisions of this Act, rules and bye-laws of the Market ::: Downloaded on - 09/06/2013 17:32:32 ::: 29 wp355-11.doc Committee;
(xxiii)pay, salaries and other emoluments, pension, leave allowance, gratuities, compassionate allowance, contributions towards leave allowance, pension or provident fund of the officers and servants employed by the Market Committee in the manner prescribed;
(xxiv)administer Market Fund referred to in section 36 of this Act and maintain the account thereof and get the same audited in the prescribed manner;
(xxv)prosecute persons for violating the provisions of this Act, the rules and the bye-laws and compound offenses as provided under section 52-A;
(xxvi)provide storage and warehousing facilities in the market area;
(xxvii)with the prior sanction of the State Government or the State Marketing Board or the Director undertake any other activity conducive to the promotion of regulation of agricultural marketing; (xxviii)arrange for the collection of-
(a) such agricultural produce in ::: Downloaded on - 09/06/2013 17:32:32 ::: 30 wp355-11.doc the market area in which all trade
therein is to be carried on exclusively by the State Government by or under any law in force for that purpose, or
(b) such other agriculture produce in the market area, as the State Government may, from time to time, notify in the Official Gazette (hereinafter referred to as the "notified produce")]."
22 Perusal of this provision would indicate that the powers and duties to provide facilities for marketing of agricultural produce and to do such other acts requiring direction and control of a market or for regulating marketing of agriculture produce in any place in the market area, and for purposes connected with the matters aforesaid, and for that purpose may exercise such powers and perform such duties and discharges such functions as may be provided for under the Agricultural Produce Market Committee Act are enlisted therein. Then, the general provisions are made. The ::: Downloaded on - 09/06/2013 17:32:32 ::: 31 wp355-11.doc powers to be delegated by appointment of sub committee, that is dealt with by section 30. Then comes section 30A which gives power to Market Committee to open collection centres for marketing of notified produce, provisions for receipt and payment by purchaser and Section 31 reads thus:
"31.
Power of Market Committee to levy fees [and rates of commission (adat) [(1)] It shall be competent to a Market Committee to levy and collect fees in the prescribed manner at such rates as may be decided by it (but subject to the minimum and maximum rates which may be fixed by the State Government by notification in the Official Gazette in that behalf), from every purchaser of agriculture produce marketed in the market area:
Provided that, when any agricultural produce brought in any market area for the purposes of processing only is not processed within ::: Downloaded on - 09/06/2013 17:32:32 ::: 32 wp355-11.doc thirty days from the dated of its arrival therein, it shall, until the contrary is proved, be presumed to have been marketed in the market area, and shall be liable for the levy of fees under this section, as if it had been so marketed:
[Provided further that,
(a) any agricultural produce brought in any market area for the exclusive purpose of export shall be exempted for the payment of fees and supervision cost, if such exporter or his duly authorised agent present the letter of credit or confirmed order of export or confirmed export order consignment, whichever is relevant or applicable, at the time of entry of such produce in the market area, to the officer authorised in this behalf by the market committee concerned along with a declaration in that behalf, in such form as the State Government may, by order from time to time, direct;
(b) if such exporter fails to submit a certified copy of the bill of lading or the air-::: Downloaded on - 09/06/2013 17:32:32 ::: 33
wp355-11.doc freight bill or any other documents as may be specified by the State Government as a proof of such export, within ninety days from the date of entry of the agricultural produce in the market area, such agricultural produce shall be deemed to have been marketed within the market area and he shall forthwith pay the market fees under this section and shall also pay the supervision cost under section 34A on such agriculture produce, along with eighteen per cent interest on the total amount due and payable as the market fees and supervision cost, from the date of bringing of such produce in the market area.]:
Provided [also] that, no such fees shall be levied and collected in the same market area in relation to agricultural produce in respect of which fees under this section have already been levied and collected therein [or in relation to declared agricultural produce purchased by person engaged in industries carried on without the aid of any machinery or labour in any market area].
::: Downloaded on - 09/06/2013 17:32:32 ::: 34 wp355-11.doc [(2) It shall be competent to a Market
Committee to fix, within the prior approval of the State Government, the rate of commission (adat) to be charged by the commission agents in respect of an agricultural produce or class of agricultural produce marketed in the market area.
(3) It shall be the duty of the buyer, commission agent, processor and trader to pay the market fee fixed immediately after weighment or measurement of the agricultural produce is done. The buyer, the commission agent, processor or trader who fails to pay the market fee as fixed above shall be liable to pay a penalty as prescribed in addition to such fees.
(4) Notwithstanding anything contained in this Act or any other law for the time being in force or in any agreement, it shall be competent to a market Committee to recover the amount of fees along with the amount of penalty which is due to a Market Committee form a buyer, commission agent, processor or ::: Downloaded on - 09/06/2013 17:32:32 ::: 35 wp355-11.doc trader-
(a) from the amount of deposit kept with the Market Committee by the buyer, commission agent, processor or trader, as the case may be;
(b) from the Bank which gives the guarantee to such buyer, commission agent, processor or trader, and the Bank shall, on demand by the Market Committee, pay the amounts so demanded.]"
23 Perusal of section 31 would indicate that there is a power conferred on the Market Committee to levy fees and rates of commission. It has power to order production and power of entry, inspection and search and seizure (See Section 32A). Prior thereto, there is power to borrow vide section 32 and from 32B to section 32E, there are all powers including to remove encroachment. Section 33 empowers the execution of contracts by Market Committee. Then, comes ::: Downloaded on - 09/06/2013 17:32:32 ::: 36 wp355-11.doc Chapter IV-A which provides for cost of supervision. Chapter V is entitled Officers and Servants of Market Committees.
Thereunder section 35 appears which reads thus:
"35. Power of Market Committee to employ staff.
[(1)A A Market Committee may employ a
Secretary and such other officers and
servants as may be necessary for the
management of the market, for the collection, maintenance, dissemination and supply of information relating to crops statistics and marketing intelligence and for carrying out its duties under this Act; and shall pay such officers and servants such salaries and allowances, pension or gratuity and shall contribute to any provident fund and pension fund which may be established for the benefit of such employees:
Provided that, all posts other than that of a Secretary shall, subject to such general or special directions which the Director may ::: Downloaded on - 09/06/2013 17:32:32 ::: 37 wp355-11.doc issue in this behalf, be created only with the prior approval of the Director.
[Provided further that, the State Marketing Board shall prepare a list of the persons to be appointed as the Secretaries on the Market Committees according to their qualification and experience and it shall be binding on the market Committees to appoint a person as Secretary from the list of persons enrolled.] (2) The Secretary of the Market Committee shall be the Chief Executive Officer and the custodian of the records and properties of the Market Committee and shall exercise such powers as are conferred and perform such duties as are imposed upon him by or under this Act.] (3) The powers conferred by this section on the Market Committee shall be exercised subject to any rules which may be made in that behalf by the State Government."::: Downloaded on - 09/06/2013 17:32:32 ::: 38
wp355-11.doc 24 A perusal of the same would indicate that a Market Committee may employ a Secretary and such other officers and servants as may be necessary for the management of the market and for such other work as is provided therein.
Chapter VI is entitled "The Market Fund" and sections 36 and 37 following thereunder read thus:
"36 investment.
Market Fund; its custody and
(1) All monies received by a Market
Committee under this Act [(except the amount of such fees credited to the Election Fund under section 14A)] all sums realised by way of penalty (otherwise than by way of a fine in a criminal case), all loans raised by the Committee, and all grants, loans or contributions made by the State Government to the Committee shall form part of a fund to be called the Market Fund.
(2) The amount to the credit of a Market Fund shall be kept or invested in such manner ::: Downloaded on - 09/06/2013 17:32:32 ::: 39 wp355-11.doc as may be prescribed."
25 Then there are provisions for preparation of budget and how the funds should be utilised. Chapter VII deals with trade allowances and of recovery thereof, whereas, Chapter VII-A deals with establishment of State Agricultural Marketing Board. While it may be true that its members are not disqualified from contesting elections or being members of State legislature or local authorities but that is a provision in relation to the composition of membership to State Marketing Board. What we are presently concerned, is with regard to the functioning of a Agricultural Produce Market Committee as a whole. Chapter VIII of this Act provides for control by the Director or any person authorised by him and there is power given to the State Government or Director to call for and examine the proceedings of any Market Committee and pass orders. There is a provision of amalgamation or division of Market Committees and their supersession vide section 44 and section 45. Then comes Chapter IX which deals with ::: Downloaded on - 09/06/2013 17:32:32 ::: 40 wp355-11.doc penalties and Chapter X titled Miscellaneous contains sections 53 and 54 which read thus:
"53. Members to be held responsible for misapplied funds.
Every member of a Market Committee shall be personally liable for the willful misapplication of any funds to which he had been a party or which has happened through, or has been facilitated by, gross neglect of his duty as a member, and may be sued for the recovery of the monies so misapplied as if such monies had been the property of the State Government:
Provided that, no member shall be personally lliable in respect of any contract or agreement made, or of any expenses incurred by or on behalf of the Market Committee, if the contract or agreement is made, or the expenses are incurred in good faith and in the due discharge of his duties; and the Market Fund shall be liable for, and be charged with, all costs in respect of any contract or agreement and all such expenses.::: Downloaded on - 09/06/2013 17:32:32 ::: 41
wp355-11.doc
54. Chairman, Vice-Chairman, Members, Secretary and servants of Market Committee to be public servants.
The Chairman, the Vice-Chairman, the members, the Secretary and other officers and servants of a Market Committee shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code."
26 Lastly, section 60 provides for making of rules.
27 A perusal of the aforementioned provisions would indicate that a Market Committee is entrusted with governmental functions, civic duties and enjoys a substantial degree of autonomy. Considering the sweep of its powers, the wider range of its duties and functions, its constitution as an independent corporate entity with authority to raise funds and borrow monies, hold property and lastly its composition that it satisfies the requisite criteria for being designated as a ::: Downloaded on - 09/06/2013 17:32:32 ::: 42 wp355-11.doc local authority. It is with this intent that in section 12(2) a deeming fiction is created by virtue of which every Market Committee, notwithstanding anything contained in any law for the time being in force, shall for all purposes, be deemed to be a local authority.
28 The argument of Mr.Joshi is that the term "local authority" as contemplated and defined in the Market Committee Act is for the purposes of that Enactment and the same cannot be of any assistance in construing the term "any local authority" appearing under section 14(1)(i) of the Bombay Village Panchayats Act, 1958. It is not possible to accept this contention. The term "any local authority" even if not construed and interpreted with the assistance of the definition in the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963, yet, for understanding that concept and since that provision appears in section 14(1)(i), after words "a servant of the Government", that, section 3(26) of the Bombay General Clauses Act, 1904 ::: Downloaded on - 09/06/2013 17:32:32 ::: 43 wp355-11.doc and section 3(31) of the General Clauses Act, 1897 assume significance and relevance.
29 It is necessary to understand as to what role a Village Panchayat plays and whether while discharging its duties and performing the functions as set out by the Bombay Village Panchayat Act, 1958 can there be any conflicting interests of its members, if they are servants of a local authority like a Agricultural Produce Market Committee. As is clear from the Bombay Village Panchayats Act, 1958, it is an act to amend and consolidate the law relating to the constitution and administration of village panchayats in the State of Bombay, and for certain other matters. The Village Panchayats for one or group of villages are established so as to vest them with such powers and authority as may be necessary to enable them to function as units of local self-
government and of development activities in rural areas. If in this back drop the Bombay Village Panchayat Act, 1958 is considered, it is clear that Chapter II which deals with ::: Downloaded on - 09/06/2013 17:32:32 ::: 44 wp355-11.doc establishment and constitution of panchayats. The sections start with declaration of village and thereafter the provisions enabling establishment of panchayats appear in the statute book. The administrative powers and duties are set out by Chapter III and Chapter III-A deals with the powers and duties of Gram Sabha. The panchayat's property and fund is dealt with by Chapter IV. The property of the panchayat is an aspect which is covered by section 56, whereas, the village fund is dealt with by section 57. The fund consists of proceeds of any tax or fee imposed etc and includes all other sums and fees which are set out in section 57. Chapter V of the Act provides for Establishment, Budget and Accounts, whereas, Chapter IX deals with taxation and recovery of claims. Financial assistance to the panchayat is dealt with in Chapter X and Chapter XI deals with control. A municipality can be converted into panchayat and for amalgamation for divisions of panchayats, Chapter XII has to be referred and thereafter there are provisions which enable the panchayat to function as an institution of local self-government.
::: Downloaded on - 09/06/2013 17:32:32 ::: 45wp355-11.doc 30 Thus, both the Village Panchayat and the Agricultural Produce Market Committee work in a local area and in local back drop and set-up. In these circumstances, to hold that an Agricultural Produce Market Committee is not a local authority for the purposes of the Bombay Village Panchayat Act, 1958 would be ignoring the role of Agricultural Produce Market Committee and creating a situation of possible conflict between the duties and interests of these units. It is not possible to construe the term "local authority" by ignoring the concept explained in the General Clauses Act. While it is true that this definition of the term "local authority" has not been necessarily adopted and imported into other Enactments which deal with authorities, such as Housing Boards etc, yet, what has been done in those matters is to confine the definition and concept, both for the purposes of that enactment. If that enactment does not envisage establishing of such entity at the local level, then, definition of the term "local authority" in the General ::: Downloaded on - 09/06/2013 17:32:32 ::: 46 wp355-11.doc Clauses Act cannot be read into or imported therein. If any authority is needed for this purpose, a reference could be made to two Supreme Court decisions in the field. In a decision reported in AIR 1996 S.C 434 (Housing Board of Haryana v. Haryana Housing Board Employees Union and others), following the dictum in Jain's case (supra), what the Supreme Court has held is that Haryana Housing Board is not a local authority within the meaning of section 32(iv) of the Payment of Bonus Act, 1965. However, crucial for our purpose, is the fact that while referring to several decisions in the field, the Supreme Court observes thus:-
"45. All the aforesaid decisions of various High Courts, therefore, do not help counsel for the appellants as all of them are clearly distinguishable. Moreover, the decision of this Court in Union of India v. R.C.Jain (1981) 2 SCR 854: (AIR 1981 SC 951), which has already been referred to above by us was not referred to in any of these decisions as those decisions were rendered prior to the decision of this Court except the Allahabad decision in Kendriya Nagrik Samiti, Kanpur (AIR 1982 All
406) (supra) in which also this decision was not noticed.
46. R.C.Jain's case (AIR 1981 SC 951) (supra) ::: Downloaded on - 09/06/2013 17:32:33 ::: 47 wp355-11.doc was, however, noticed by the Bombay High Court in Krishi Utpanna Bazar Samiti v.
Income Tax Officer, 158 ITR 742 : (1985 Tax LR 589) in which the Hon'ble Judges after considering the scheme of the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963 and after scrutinizing the tests laid down by this Court in R.C. Jain's case observed as under (at p.592 of Tax LR):
"The Market Committee clearly satisfies all these tests. It is a body corporate having separate legal existence and autonomous status. It is independent of the Government and operates in a defined area. Its office-
bearers are elected and are free to take their own policy decision. It performs governmental functions such as running market, providing civil amenities and doing civil duties. It also performs judicial, legislative, executive and fiscal functions."
31 A perusal of this judgment would indicate that in para 46 it noticed the judgment of this Court in the case of Krishi Utpanna Bazar Samiti v. Income Tax Officer, reported in 158 ITR 742, in which after considering the scheme of the very enactment to which I have made a reference just now and scrutinising the tests, this Court held that the Market Committee is a local authority.
::: Downloaded on - 09/06/2013 17:32:33 ::: 48wp355-11.doc 32 In a decision in the case of Calcutta State Transport Corporation v. Commissioner of Income Tax, West Bengal, reported in AIR 1996 S.C 1316, the Supreme Court held that the State Transport Corporation is not a local authority for the purposes of section 10(20) of the Income Tax Act, 1961.
33My attention is also invited to another decision in the field which is reported in AIR 1998 S.C 1125 (Commissioner of Income Tax, Lucknow v. U.P.Forest Corporation), holding that Uttar Pradesh Forest Corporation is not a local authority only because the Uttar Pradesh Forest Corporation Act regards it as local authority. Once again, the Supreme Court was construing section 10(20) of the Income Tax Act.
34 In the series of the decisions, is the latest one in point of time and it is reported in (2008) 9 Supreme Court Cases 434 (Agricultural Produce Market Committee, Narela, ::: Downloaded on - 09/06/2013 17:32:33 ::: 49 wp355-11.doc Delhi Vs. Commissioner of Income Tax and another) where the Hon'ble Supreme Court holds that Agricultural Produce Market Committee, Narela, Delhi is not a local authority for the purposes of section 10(20) of the Income Tax Act, 1961.
It distinguishes all earlier judgments in the field, including the law laid down in R.C.Jain's case (supra) and principally because section 10(20) of the Income Tax Act has been amended by the Parliament by virtue of the Finance Act, 2002 and the insertion of an explanation therein with effect from 1st April 2003. Although this decision is relied upon by Mr.Joshi, a perusal thereof would indicate that Agricultural Produce Market Committee, is held to be neither a Municipal Committee nor District Board under section 10(20) of the Income Tax Act. The Supreme Court refrained from going into the question whether AMC is entitled to the control of the local fund, namely, market fund under the Delhi Agricultural Produce Marketing Regulation Act, 1998. The Supreme Court was clearly concerned with a definition which was exhaustive and not inclusive. In this case, the Supreme Court ::: Downloaded on - 09/06/2013 17:32:33 ::: 50 wp355-11.doc was not concerned with a enactment which did not contain the definition of the term "local authority". The Income Tax Act very much had a definition of this term and, therefore, the controversy as to whether the Agricultural Produce Market Committee is "local authority" for the purposes of Income Tax Act, 1961 was decided on the touchstone of the definition of the said term appearing in Income Tax Act and particularly the explanation inserted by way of the amendment. With respect, this decision cannot be a authority for the proposition that the APMC is not a local authority within the meaning of section 14(1)(i) of the Bombay Village Panchayat Act, 1958.
35 Ultimately, the provision such as this is inserted so as to preserve and protect the purity of administration and avoid any conflict not only between a public and private duty but between two public duties and functions. Public servants are also not expected to accept conflicting assignments.
There could be a situation where a public servant would have ::: Downloaded on - 09/06/2013 17:32:33 ::: 51 wp355-11.doc to go with or support an action of a public authority such as APMC which may be in direct conflict with that of the Village Panchayat. In such a situation and to avoid a conflict herein and to preserve and further the legislative intend that the term "local authority" in the subject provision must be interpreted to cover a body like the Agricultural Produce Market Committee. In the backdrop of constitutional role that panchayat performs and it being unit of local self government that the collision and conflict must be avoided. Equally, APMC Act will also have to be construed bearing in mind the role, the duty and function and the power that is conferred on the entity like the Agricultural Produce Market Committee by that enactment. Once agricultural produce, its marketing by making provisions for establishment of market in specified areas is an aspect dealt with exculsively and extensively only by the APMC Act, then, it cannot be said that it is not a local authority. It imports the definition of the term in view of the broad tests and criteria that has been laid down by the Supreme Court. Therefore, the contention that the test in the ::: Downloaded on - 09/06/2013 17:32:33 ::: 52 wp355-11.doc case of R.C.Jain (supra) laid down by the Supreme Court cannot be discarded while considering the instant case deserves to be accepted. If those tests are adverted to by me and also adverted by the authorities, then, I do not see how the conclusion drawn that the petitioner is disqualified can be said to be erroneous or unsustainable in law. It is not vitiated by any perversity bearing in mind either and bearing in mind the admitted factual position. For all these reasons, it is not possible to agree with Mr.Joshi that the trend in today's world is to make available expertise of all persons at all levels for village administration should also govern the interpretation of the instant provision. Once the parameters and the tests laid down by the Supreme Court cannot be ignored, then, the above view unless transmitted into any law and brought into effect by appropriate legislature cannot be accepted. For all these reasons, the petition fails. Rule is discharged but without any order as to costs. Civil Application does not survive and stands disposed off accordingly.
::: Downloaded on - 09/06/2013 17:32:33 ::: 53wp355-11.doc 36 At this stage, Mr.Haridas, appearing on behalf of the petitioner applies for continuation of the ad-interim orders so as to enable the petitioners to challenge this order in a higher Court. The request is opposed by Mr.Shah. Bearing in mind that the ad-interim order staying the operation and effect of the decision of the Collector and the Commissioner in force from 18th January 2011, interest of justice would be served if the same is continued for a period of four weeks from today subject to such conditions as are imposed, while enabling a elected candidate to question a verdict of a Court of Law setting aside his election in a higher Court.
(S.C.DHARMADHIKARI, J) ::: Downloaded on - 09/06/2013 17:32:33 :::