GURUMURTHY S. MARATHE v. AGRICULTURAL PRODUCE MARKET COMMITTEE, SAGAR
1970-07-01
BHEMIAH, NARAYANA PAI
body1970
DigiLaw.ai
NARAYANA PAI, J. ( 1 ) IN these ten writ petitions the question raised is the validity or propriety of the demand made by the common respondent, the Agricultural Produce Marketing Committee, Sagar that the petitioners were bound to take processor's licence under the terms of S. 8 (l) (b) (ii) of the Mysore Agricultural Produce Marketing (Regulation) Act, 1966. Out of the ten petitioners, the petitioner in W. P. 3953 of 1969 carries on a process where-by paddy is converted into 'chira' (meaning avalakki) ; the other nine petitioners are owners of rice mills who carry on the process of converting paddy into rice. ( 2 ) THE portion of S. 8 on the strength of which the respondent Market committee contends that the petitioners are bound to take out a licence, leads as follows:"8 (1) (b) no person shall, without, or otherwise than in conformity with the terms and conditions of, a licence granted by the market committee in this behalf,- x x x x x (ii) operate in the market area or in any market therein as a trader, commission agent, broker processor, weighman, warehousman, or in any other capacity in relation to the marketing of the notified agricultural produce. " ( 3 ) THE principal argument on behalf of the petitioner is that they could be brought within the scope of the licensing provision, only if the process carried on by them is "in relation to the marketing of the notified agricultural produce", and that unless the process is related to the marketing of the notified agricultural produce and unless the produce both before and after processing is, or retains the character of, a notified agricultural produce, the process carried on by them cannot attract the liability to take out a licence therefor. ( 4 ) ACCORDING to the petitioner in W. P. 3953 of 1959, the only business the petitioner does is to convert the paddy into 'chira' or 'avalakki' or to convert certain other food grains into flour and that he gives back to the person who brings the paddy or prains the produce processed by him after receiving his charges for it. He therefore contends that the aforesaid operations have nothing to do with the marketing of the notified agricultural produce and that there is no seller, no buyer, and there is no marketing involved in this business.
He therefore contends that the aforesaid operations have nothing to do with the marketing of the notified agricultural produce and that there is no seller, no buyer, and there is no marketing involved in this business. ( 5 ) THE petitioners in the other cases say that the only business they do is to hull the paddy which is brought by any individual, and that they return it to the same individual after hulling on receipt of the charges of hulling. They contend that "the rice milling operation has nothing to do with the marketing of the notified agricultural produce. The petitioner's business is only to hull the paddy brought by any owner of the paddy and return the rice and other products to the very person after collecting the hulling charges. There is no seller, no buyer and there ig no marketing involved in his business. " ( 6 ) THE first question is one of interpretation. In the common counter-affidavit filed on behalf of the marketing committee, one set of averments relate to the committee's case on the question of interpretation The facts, or what appear to be allegations of facts, are in the nature of a suggestion that what the petitioners have stated in their affidavits is not a complete statement of the facts. ( 7 ) WE prefer to deal with the question of interpretation in the first instance and then consider whether, and if so, to what extent the allegations of fad have any effect on or lend any support to the case of the contending parties. ( 8 ) BEFORE analysing the language of the eighth section itself with which we are directly concerned, it is necessary in the first instance to point out that in interpreting the provisions of a statute, particularly a special statute intended to achieve a particular purpose, the safest guide is the purpose sought to be achieved by the statute. Hence, the content, nature and extent of the power conferred upon any statutory authority have necessarily to be ascertained or limited by the nature of the purpose sought to be achieved and the necessity for exercising such power to achieve the said purpose.
Hence, the content, nature and extent of the power conferred upon any statutory authority have necessarily to be ascertained or limited by the nature of the purpose sought to be achieved and the necessity for exercising such power to achieve the said purpose. ( 9 ) SO far as the Mvsore Agricultural Produce Marketing (Regulation) act is concerned, there can be no doubt that the purpose of the statute in providing for better regulation of buying and selling of agricultural produce is to see that the argriculturists producer gets what in all circumstances can be regarded as a fair price for his produce, and is not deprived of any part thereof by the intervention of middlemen and merchants who are not directly connected with the production. Much discussion on this matter is rendered unnecessary by reason of the statement of principles made by the Supreme Court in the case of Krishna Coconut Co. v. East godavari Coconut and Tobacco Market Committee, AIR 1967 SC 978 in relation to the madras Commercial Crops Markets Act which was cited as apposite to and applicable with equal force to the statute with which we are now concerned, by a Bench of this Court in Mallaradhyal v. Regulated Market committee, (1969)1 Mys. L. J. 533. The observations of Shelat, J. in the judgment of the supreme Court in the said case are extracted at page 546 of the report in the Mysore case. Those observations are:"the legislature had thus principally the producer in mind who should have a proper market where he can bring his goods for sale and where he can secure a fair deal and a fair price. The Act thus aims at transactions which such a producer would enter into with those who buy from him. The words "bought and sold" used in S. 11 (1) aim at those transactions whereunder a dealer buys from a producer who brings to the market his goods for sale. " ( 10 ) THAT the statute selects for treatment the first sale by an agriculturist producer to a non-agriculturist trader or dealer is also clear from the various provisions as well as specific definitions of the terms contained in the Act.
" ( 10 ) THAT the statute selects for treatment the first sale by an agriculturist producer to a non-agriculturist trader or dealer is also clear from the various provisions as well as specific definitions of the terms contained in the Act. A 'trader', for example, is defined as "a person who buys notified agricultural produce either for himself or as an agent of one or more persons for the purpose of selling, processing, manufacturing or for any other purpose, except for the purpose of domestic consumption". A 'broker' is defined as " an agent who in consideration of a commission, fee or reward, merely negotiates and brings about a contract for the purchase or sale of notified agricultural produce on behalf of his principal, but does not receive, deliver, transport, pay for the purchase of, or collect the payment for the sale of notified agricultural produce ". A 'commission agent' is defined as " a person who on behalf of his principal and in consideration of a commission or percentage upon the amount involved in each transaction keeps in his custody the goods of his principal and sells the same and holds himself liable to deliver it to the buyer and to make payment of its price to his principal". The 'goods' with which the commission agent is defined as dealing is itself a term separately defined as meaning any kind of notified agricultural produce. ( 11 ) NOW it will be seen that it is the agriculturist or the producer who figures as the seller in a transaction taken up for treatment by the statute. A trader is one who buys from him. A broker may act either on behalf of the seller or on behalf of the buyer; but for the purposes of the statute he is one who brings about a contract for the purchase or sale of notified agricultural produce. A commission agent who is defined as an agent only of the seller is obviously the agent of the agriculturist, because the goods with which he is said to deal with, are notified agricultural produce. ( 12 ) IT may also be noted that although the expression 'trade' or 'trading' may involve both buying and selling, the word 'marketing' means either selling or buying.
( 12 ) IT may also be noted that although the expression 'trade' or 'trading' may involve both buying and selling, the word 'marketing' means either selling or buying. That apparently is the reason why the statute selected the word 'marketing' because it deals with a person who only sells and another person who only buys, and not with a person who both buys and sells. ( 13 ) ONCE that much is borne in mind, the importance and effect of the expression "in relation to the marketing of the notified agricultural produce" becomes clear. If the idea is to secure to the producer a fair price and for the said purpose the transaction taken up for treatment by the statute is one in which the producer sells his notified agricultural produce to a trader, all control or controlling measures may be expected to be formulated or devised for the purpose of securing the main object of the statute, namely, a fair price for the producer. Such controls could therefore be either those that directly control the said transaction itself or those which control other activities which are intimately connected with the mam transaction and may in the ordinary course of human conduct be expected to affect or influence the main transaction. ( 14 ) IT is in ithis view that Mr. Rama Jois has laid stress on the expression quoted above and has contended that the operation of every one of the persons named therein, namely, a trader, commission agent, broker, processor, weighman, warehouseman, should be an operation in relation to the marketing of the notified agricultural produce. Mr. Ramachandra on the other hand, on behalf of the committee, contends that the said expression qualifies only the operation of a person "in any other capacity" (that is, capacity other than that of a trader, commission agent, broker, processor, weighman, warehouseman ). In elaborating his contention he has drawn attention to the specific definition of the terms "trader, commission agent, broker" etc. to which we have already referred, in all of which, according to him, the relation which each one of those described persons bears to the notified agricultural produce is expressly stated. ( 15 ) WE may also at this stage add the definition of a 'process' and a 'processor'.
to which we have already referred, in all of which, according to him, the relation which each one of those described persons bears to the notified agricultural produce is expressly stated. ( 15 ) WE may also at this stage add the definition of a 'process' and a 'processor'. A 'process' is any one of a series of treatments to which raw agricultural produce is subjected to make Jt fit for ultimate consumption. A 'processor' is defined as a person who processes notified agricultural' produce by mechanical means. ( 16 ) IN view of this direct connection between these various persons and the notified agricultural produce expressly set out in the definitions themselves, Mr. Ramachandra contends that the expression "in relation to the marketing of the notified agricultural produce" as a description of the said persons also would be a surplusage. But the very contention that it is surplusage necessarily implies or involves the admission that even by force of the respective definitions these various persons including the processor are persons whose operations taken note of by the statute are those which are "in relation to the marketing of the notified agricultural produce". ( 17 ) WE have no doubt, in our mind that the only processes which could be subjected to licence are the processes which are carried out "in relation to the marketing of notified agricultural produce". ( 18 ) THE next question is as to the exact meaning to be assigned to it. On the plain meaning of the words themselves, it can without hesitation be said that the operation must be intimately connected with the marketing of the notified agricultural produce, i. e. , a sale of notified agricultural produce by the producer to a person other than a producer. ( 19 ) SUCH operations or activities may be those anterior in point of time to the actual marketing or sale or subsequent thereto. So far as the first named activities are concerned, there can be no doubt that all activities undertaken or availed of by the producer with a view to make his produce marketable or with a view to see that the marketing thereof is more profitable than otherwise would certainly be those in relation to the marketing of the produce Indeed, on this point there was no, and there could not be ant, controversy.
( 20 ) THE controversy was limited to the question whether any activitity subsequent to the actual marketing can at all be brought within the ambit of the expression. According to Mr. Rama Jois it was altogether out of the question to do so, because once the sale as completed and the agriculturist secures thereby a fair price, there is nothinj more in the statute to achieve, and therefore, nothing more on which the statute need operate. Mr. Ramachandra's answer is that, although the purpose is to secure a fair price to the producer and the mam traction taken for treatment and control is a transaction of sale by the producer to a trader, subsequent activities may also affect the transaction in such a way as to deprive the agriculturist of some share of the fair price justly due to him. One of the contracts, according to him is the compulsion of the statute that the notified produce shall be sold in what is called the market yard (that is, the locality within the market area declared as such by a specification of limits by the Chief marketing Officer under S. 6 (2) (b) ). Another activity according to him, which is controlled for the same purpose is a transaction between a wholesale trader and a retail trader after the agriculturist has sold his produce to the first named trader. ( 21 ) AS both this argument as well as the argument of Mr Rama Jois in answer thereto proceed upon an interpretation of the provisos to s. 8 (1) (b) (ii) and S. 8 (2), it will be useful to extract them. They read :-"8 (1) (b) (ii) -. . . . . . . . . . . . . . . . . . . . . . . . . :. . . Provided that nothing contained in clause (b) shall apply,- (i) to the sale of such agricultural produce if the producer of such produce ;s himself its seller, or (ii) to the purchase of such produce if the purchaser is a person - (a) who purchases such produce for his domestic consumption ; or (b) who purchases such produce in the market or sub-markets outside the market yard or sub-yard or the sub-market yard; as the case may be, from a trader for retail sale.
(2) No place in the market or the sub-market, except the market, yard, sub-yard or the sub-market yard, as the case may be, shall be used for the purchase or sale of notified agricultural produce belonging to a producer: provided that nothing in this sub-section shall be applicable to the purchase or sale of such agricultural produce by way of retail sale in the producer of such produce is himself its seller and the purchaser is is a person who purchases such produce for his domestic consumption. " ( 22 ) THE control of retail transactions between two traders is found in the proviso (ii) (b) and is directly related to the positive provision or sub-sec. (2 ). It will be seen from this that the confining of marketing by the producer to the market yard or sub-yard alone, and the licensing or retail sales between traders themselves within the yard are mutually related to each other and both of them considered necessary by the statute to achieve its main purpose of securing a fair price to the agriculturist. ( 23 ) MR. Ramachandra has referred us to other sections relating to the nature of the control exercised, particularly Ss. 63, 66, 67, 81, 82, 84 and 85. But the argument constructed on the basis of these sections only amounts to this that control by way of receiving reports, conducting inspections etc. may be subsequent in point of time to the activity sought to be controlled, but the activity controlled is the activity already completed which is expressly or specifically brought within the ambit of the control by the relevant section of the statute. This part of the argument therefore does not lend much support to Mr. Ramachandra's contention that we may take it that even subsequent to the completion of the actual marketing, there are several activities which have a bearing upon the main transaction which may come within the expression "in relation to the marketing of the notified agricultural produce. " ( 24 ) THE only clear indication in the statute of the necessity of controlling subsequent activities which we have been able to discover in the statute itself is the activity brought within the scope of licence by the proviso (ii) (b) to S. 8 (1) (b) (ii), namely, retail sale to a trader after completion of the sale by the agriculturist.
( 25 ) FROM this provision it is apparent that the statute considers all activities in relation to marketing of notified agricultural produce carried on within the limits of the market yard may or do have an influence on the main transaction of a sale by a producer to a trader and the possibility of the lormer securing a fair price for his produce by such transaction. ( 26 ) THE carrying on of the activities within the market yard can also be regarded as clearly influenced by a motive quite closely connected with the marketing of the agricultural produce and may also therefore reasonably be regarded as one likely to be indulged in Immediately or shortly after the completion of the main transaction of marketing. The location of the premises for carrying on activities within the market yard may also reasonably be taken as influenced by a desire to be quite close to the market and carry on the operation in such a way as to secure an advantage both by physical proximity to the place of marketing as well as proximity in time with the transaction of marketing. ____ ( 27 ) WE are therefore of the opinion that the operations of processing (with which alone we are now concerned) which may be rightly regarded as operations in relation to the marketing of notified agricultural produce, are:- (a) operations carried on at the instance of or for the benefit of the agriculturist producer, availed of by him with a view to make his produce marketable or with a view to make its marketing more profitable in such a way as to see that the produce before processing as well as after processing answers the description of 'notified agricultural produce' and (b) 'processing' within the definition of the statute carried on within the limits of the market yard notified under S. 6 (2) (b ). A market yard for this purpose will also include a sub-yard or a sub-market yard. We do not consider that any previous activity which does not answer the terms of (a) above or any subsequent activity which falls beyond the scope of (b) can be regarded as an activity or an operation in relation to the marketing of notified agricultural produce.
We do not consider that any previous activity which does not answer the terms of (a) above or any subsequent activity which falls beyond the scope of (b) can be regarded as an activity or an operation in relation to the marketing of notified agricultural produce. ( 28 ) UNDER S. 2 (28) "notified agricultural produce" means "any agricultural produce which the State Government has by notification issued under Ss. 4 and 5 declared as an agricultural produce the marketing of which shall be regulated in the market area. " So far as Sagar town municipal area is concerned (which is the subject of this petition) there was a notification under S. 4 of the Mysore Agricultural Produce Markets Act, 1939 (Mysore Act No. XVI of 1939) bearing No. A and F. 13 ERM 58 (1) dated 29th December 1958. We are informed that no notification under the Mysore Agricultural Produce Market (Regulation) Act, 1966 has yet been published. But by virtue of the proviso (a) to sub-sec. (1) of S. 154 of the Act of 1966, the said notification must be deemed to have been made under the corresponding provisions of the new Act, that is, S. 4, and be regarded as the one governing the position even now. According to the said notification, the notified agricultural produce are (1) arecanuts, (2) paddy, (3) chillies and (4) pepper. ( 29 ) IN the light of this the first question argued by Mr. Rama Jois was that neither rice nor "avalakki" can be regarded as a notified produce at all, and that therefore both the "avalakki" manufacturers as well as the rice millers are totally outside the scope of the licensing provision so far discussed. ( 30 ) SO far as the inter-relation between paddy and rice is concerned, there is considerable assistance found in the discussion of principle in a judgment of a Bench of this court in the case of Jagadeesh v. Secretary, agricultural Produce Marketing Committee, (1963) 1 Mys. L. J. 42. The question there was, whether under a certain rule of the MAPM. Rules, converting paddy into rice was a process liable to payment of a certain fee. The principle laid down was that the process under the said rule must be a process which did not change the character of the original produce.
L. J. 42. The question there was, whether under a certain rule of the MAPM. Rules, converting paddy into rice was a process liable to payment of a certain fee. The principle laid down was that the process under the said rule must be a process which did not change the character of the original produce. The decision was that, by converting paddy into rice no such change was brought about, whereas while extracting oil from ground-nut such extensive change was brought about that the process of extraction cannot be brought within the rule. The court also relied upon the meaning of rice and paddy given in Webster's New International Dictionary as well as Encyclopaedia brittannica. ( 31 ) MR. Rama Jois says that we should not apply the ruling, because the court was concerned only with the question whether the processes considered there were such as to attract the levy of fee under the relevant rule. It is of course true that that was the actual decision. But the line of reasoning is fully available to us and should, in our opinion, be followed. One important step in the reasoning is that paddy and rice are the same produce or substance, and that removing husk from paddy leaving only rice is not a process which changes the character of the produce. Indeed, the essence of the matter is that rice is foodgrain and the distinguishing feature is the edible part of it. The fact that for certain purposes of preservation or otherwise it is first extracted from the plant as husk-paddy and it is later dehusked for the purpose of consumption, makes no difference to the fact that at all times it is the same food grain called rice. ( 32 ) WE accept, therefore, the argument of Mr. Puttaswamy on behalf of the State Government that rice is within the scope of the expression 'paddy' used in the notification, and that therefore both paddy and rice are notified agricultural produce within the scope of the said notification. ( 33 ) BUT we cannot say the same about "avalakki". It is produced by a further process, or a process further than is necessary for making the the produce fit for consumption. By dehusking paddy and converting it into rice, it is made fit for human consumption (of course after cooking ).
( 33 ) BUT we cannot say the same about "avalakki". It is produced by a further process, or a process further than is necessary for making the the produce fit for consumption. By dehusking paddy and converting it into rice, it is made fit for human consumption (of course after cooking ). But it is not necessary or essential to make paddy fit for consumption, that it should be converted into "avalakki". ( 34 ) WE hold therefore that the process whereby paddy which is a notified produce is converted into "avalakki" which js not a notified product, is not a process which comes within the scope of the licensing provision. ( 35 ) ONE of the results of this discussion is that "avalakki" manufacturer's petition in WP No. 3953 of 1969 has to be allowed and the demand for licence made against him by the Market Committee set aside. We make an order accordingly in the said writ petition. ( 36 ) IN the other writ petitions we are not satisfied on the material about the exact location of the rice mills. We make an order in each of them setting aside the demand for licence made against the Petitioner, reserving liberty to the committee to investigate the facts and then demand the taking out of a licence if the case comes within the scope of the principles of law set out above. In all these writ petitions the parties will bear their own costs. --- *** --- .