Document Fragment View

Matching Fragments

1. The Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 being U.P. Act XXV of 1964, hereinafter called the Act, was passed in that year. It led to the establishment of Market Areas, Principal Market Yards and Sub-Market Yards etc. and the levying of the fee in relation to transactions of certain commodities in the State of Uttar Pradesh. Various Market Committees were formed known as Mandi Samitis. In order to give effect to the working of the Act The Uttar Pradesh Krishi Utpadan Mandi Niyamavali, 1965, hereinafter called the Rules, were made by the Governor of Uttar Pradesh. The Act has been amended several times. But we were distressed to find that the Rules were not accordingly amended as and when required to make them uptodate in accordance with the amended Act. Various traders carrying on business in the State of Uttar Pradesh within the jurisdiction of several Market Committees challenged the levy of fee in the High Court of Allahabad from time to time. There were several rounds of litigation in which they by and large, failed. Finally many Writ Petitions were dismissed by the High Court by its judgment dated September 21, 1978 on which date many writ petitions were also dismissed in limine. Civil Appeal 1841 of 1978 and about 103 more appeals are from the said judgment and order of the High Court. Immediately preceding the said judgment a longer and more elaborate judgment had been delivered by the High Court on April 29, 1977. Civil Appeal 871 of 1978 and Civil Appeal 1636 of 1979 are from the said judgment. Along with these 106 appeals, two Writ Petitions were also heard being Writ Petition No. 257 of 1979 and Writ Petition No. 600 of 1979. Thus in all 108 matters have been heard together and are being disposed of by this judgment.

3. The long title of the Act indicates that it is an Act "to provide for the regulation of sale and purchase of agricultural produce and for the establishment, superintendence, and control of markets therefore in Uttar Pradesh." From the Objects and Reasons of the enactment it would appear that this Act was passed for the development of new market areas and for efficient data, collection and processing of arrivals in the Mandis to enable the World Bank to give a substantial help for the establishment of various markets in the States of Uttar Pradesh. In other States the Act is mainly meant to protect an agriculturist producer from being exploited when he comes to the Mandis for selling his agricultural produce. As pointed out by the High Court certain other transactions also have been roped in the levy of the fee, in which both sides are traders and neither side is an agriculturist. This has been done for the effective implementation of the scheme of establishment of markets mainly for the benefit of the producers. But as pointed out recently by a Constitution Bench of this Court in the case of Kewal Krishan Puri v. State of Punjab the fee realised from the payer of the fee has, by and large, to be spent for his special benefit and for the benefit of other persons connected with the transactions of purchase and sale in the various Mandis. The earlier cases on the point of fee have been elaborately reviewed in that judgment and certain principles have been called out which will be adverted to hereinafter. While deciding the question of quid pro qua in relation to the impugned fees the High Court had not the advantage of the judgment of this Court. In that regard this judgment is a settler on the point and we hope that the authorities and all other concerned in the matter will be guided by and follow the said decision in the matter of levy and utilisation of the market fee collected.

Under Clause (w) "Sub-Market Yard" means a portion of a Market Area, declared as such Under Section 7. Clause (y) defines a "trader" to mean :-
a person who in the ordinary course of business is engaged in buying or selling agricultural produce as a principal or as a duly authorised agent of one or more principals and includes a person, engaged in processing of agricultural produce.

6. Action Under Section 5 was taken by the State Government declaring its intention to regulate and control sale and purchase of agricultural produce in any area and thereafter declaration of Market Area was made Under Section 6. Under the present impugned notification, which was issued on April 11, 1978 making it effective from May 1, 1978, almost the whole of Uttar Pradesh has been declared to be Market Area dividing it into 250 areas and indicating in Schedule B of the notification 115 commodities in respect of which the Tee could be levied by the Market Committees. Under Section 7 declarations of Principal Market Yards and Sub-Market Yards have been made. Most of such areas declared so far are the markets or the Mandis where the traders are carrying on their businesses. It is proposed to establish Principal Market Yard and Sub-Market Yards separately in every market area and a question of asking the traders to carry on their business only in such Market Yards is under consideration of the Government. The State Government Under Section 8 has got the power to alter any market area and modify the list of agricultural produce. Section 9 provides for the effects of declaration of Market Area. Chapter III of the Act deals with the establishment, incorporation and Constitution of the Market Committees. The most important section is Section 17 which provides for the powers of the Committee. Clause (i) authorises a Committee to issue or renew licences under the Act on such terms and conditions and subject to such restrictions as may be prescribed. Clause (iii) authorises a Committee to levy and collect (a) such fees as may be prescribed for the issue or renewal of licences, and (b) market fee at the rate and in the manner provided therein. Clause (b) of Section 17(iii) has undergone drastic changes from time to time and that enabled the appellants to advance certain serious arguments to challenge the levy of the fees especially when the Rules were not correspondingly amended. We shall advert to this aspect of the matter later in this judgment at the appropriate place. Section 19 provides for the Market Committee Fund and its utilisation. Section 19-B was introduced in the Act by U.P. Act 7 of 1978 w.e.f. 29-12-1977 providing for the establishment of 'Market Development Fond' for each committee. The rule making power of the State Government is to be found in Section 40.

As already stated, Market Yards also have been established while issuing notifications Under Section 7. By and large, the Mandis where the traders are carrying on their business for the time being have been declared as Market Yards. When the Market Committees are able to construct their own Market Yards, as in some places they have been able to do, then a question will arise whether a trader can be forced to go to that place only for carrying on his business in agricultural produce or he can be permitted to carry on his business in his old place. For the time being this question is left open. Market Committees have not been constituted yet in accordance with the provisions contained in Section 13 of the Act. They have been constituted temporarily under Uttar Pradesh Krishi Utpadan Mandi Samitis (Alpakalik Vyawastha) Adhiniyam, 1972 which Act was a temporary Act and has been extended from year to year. But it is high time that Market Committees should be constituted in a regular manner on a permanent basis in accordance with the provisions contained in Chapter III of the Act. But the levy and collection of fee by the temporary Market Committees is not illegal as argued on behalf of the appellants. A machinery for adjudication of disputes is necessary to be provided under the Rules for the proper functioning of the Market Committees. We have already observed and expressed our hope for bringing into existence such machinery in one form or the other. But it is not correct to say that in absence of such a machinery no market fee can be levied or collected. If a dispute arises then in the first instance the Market Committee itself or any Sub-Committee appointed by it can give its finding which will be subject to challenge in any court of law when steps are taken for enforcement of the provisions for realisation of the market fee.