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From the Judgment and Order dated 21-9-1978 of the Allahabad High Court in W.P. No. 4445 of 1978.

AND WRIT PETITION Nos. 257 & 600 of 1979.

(Under Article 32 of the Constitution).

F.S. Nariman, R. F. Nariman and P. C. Bhartari for the Appellants in CA Nos. 2260 & 2261.

S. P. Gupta, H. K.Puri, V. K Bahl and Miss Madhu Moolchandani for the Appellants in CAs 1841 to 1846, 2426 to 2428, 929, 1007 to 1009, 1630, 2169 to 2172 and 1635.

V.M. Tarkunde, G. B. Pai, Mrs. Saran Mahajan, Mr. Arvind Kumar, Mrs. Lakshmi Arvind and R. K. Sinha for the Appellants in CA Nos. 2507, 2322, 2457 and 871.

Shanti Bhushan, S. P. Gupta, H. K Puri and Miss Madhu Moolchandani for the Appellants in CA 174.

L. N. Sinha, S. S. Ray, Ghayyas Alam and R. K Jain for the Appellants in CA 2269, 2270 to 2272.

Shanti Bhushan, Subhash Chandra Birla and Shreepal Singh for the Appellants in 2373, 2302, 2374 and 2375.

Yogeshwar Prasad and Mrs. Rani Chabra for the Appellants in CA 599, 142 to 144, 385, 1638, 2219 to 2226, 1921, 1960, 2173, 2178, 2180 to 2187, 2179, 386 to 388, 429 to 438 and W.P. 257.

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 therefor 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 quo 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 (b) of s.17(iii) of the Act a minimum and maximum limit of market fee chargeable has been fixed by the legislature. The minimum is 1% and the maximum is 1 1/2 of the price of the agricultural produce sold. The fixing of the minimum of 1% fee by itself is not illegal but it would be subject to the rendering of adequate services as explained by this Court in Kewal Krishan Puri's case. The facts placed before the High Court as also before us were too meagre to indicate that services to the extent of the fee levied at 1% are not being rendered. In Puri's case we upheld the levy of market fee at 2% on the value of the goods sold. But there we found that the Market Committees were rendering greater services than are being rendered by the Market Committees of Uttar Pradesh. Yet charging of 1% fee as is being charged throughout the State of Uttar Pradesh by all the Market Committees is not illegal and does not go beyond the quid pro quo theory discussed in Puri's case.