Krishi Utpadan Mandi Samiti v. Jai Narain Hanuman Bux
1971-12-09
R.L.GULATI, S.N.DWIVEDI
body1971
DigiLaw.ai
JUDGMENT S.N. Dwivedi, J. - These cases are being disposed of by a common judgment. They raise a common question of law. The question is: Whether Rule 76 (1) of the U.P. Krishi Utpadan Mandi Niyamavali is invalid? There are six Petitioners in Writ Petition No. 4057 of 1969 out of which the Special Appeal has arisen. Petitioner Nos. 1 to 4 are commission agents and traders. They carry on the business of buying and selling food-grains, pulses, oil-seeds, gur, etc. in the town of Gonda. Petitioner Nos. 5 and 6 are producers of agricultural produce in villages Nagwa Bodh and Chaurasia in the district of, Gonda. They bring their agricultural produce for sale to the market of Gonda. 2. F.A.F.O. No. 225 of 1971 arises out of a suit instituted by 32 persons in the court of the Additional Civil Judge, Bulandshahr. The Appellants, who are the Plaintiffs in the suit, have instituted the suit. One of the reliefs claimed by them in the suit is that the court may issue a permanent injunction restraining the Krishi Utpadan Mandi Samiti, Gulaothi and the Secretary of the said Samiti from enforcing Rule 76(1). They also prayed for the issue of an interim injunction to the same effect. The prayer was refused. Hence they have filed the appeal here The impugned Rule 76 (1) reads: Every consignment of specified agricultural produce brought for sale into the Principal Market Yard or any Sub-Market Yard shall be sold by open auction: Provided that nothing in this sub-rule shall apply to a retail sale as-may be specified in the bye-laws of the committee. Rule 76 includes thirteen other sub-rules. Except for Sub-rules 6, 10, 11, 12 and 13, the remaining rules are plainly dependent on and subordinate to the impugned Sub-rule (1); so that if Sub-rule (1) is found to be invalid, those rules will automatically fall down even though their validity is not questioned. 3. In the writ petition a learned Single Judge has held that Sub-rule (1) of Rule 76 is invalid. Counsel for the Respondents have supported the judgment of the learned Single Judge. They have made a four-pronged attack on Sub-rule (1) of Rule 76. The first argument is that Sub-rule (1) is beyond the rule making power of the State Government u/s 40 of the U.P. Krishi Utpadan Mandi Adhiniyam.
Counsel for the Respondents have supported the judgment of the learned Single Judge. They have made a four-pronged attack on Sub-rule (1) of Rule 76. The first argument is that Sub-rule (1) is beyond the rule making power of the State Government u/s 40 of the U.P. Krishi Utpadan Mandi Adhiniyam. The second argument is that as there is no express provision in the said Act for restricting any fundamental right the rule is invalid. The third argument is that Sub-rule (1) does not serve any purpose of the Act. The last argument is that Sub-rule (1) is inconsistent with Section 9(2) of the Act. 4. Sub-rule (1) of Rule 76 has been enacted by the State Government in exercise of its power u/s 40. Section 40(1) empowers the State Government to make rules "for carrying out the purposes" of the Act. This is the general-rule making power. Section 40(2) enumerates certain specified matters which will fall within the expression "carrying out the purpose" in Section 40(1). Section 40(2) has got 32 clauses. For our immediate purpose only two of them are material. They are Clauses (xix) and (xxvii). Clause (xix) reads the manner in which the sale or auction of the specified agricultural produce shall be conducted and bids made and accepted in the market Area." Clause (xxvii) reads: "The time, place and manner of sampling, sale, purchase, weighment and recording of transactions and mode of payments." These two clauses were relied upon by the Appellant before the learned Single Judge. But he has taken the view that Sub-rule (1) of Rule 76 will not fall within either of these two clauses. Counsel for the Respondents have supported this view before us. With great respect to the learned Judge, we are unable to share his view. 5. What does the word 'manner' meant in Clauses (xix) and (xxvii)? It is said that it means how the sale shall be conducted or negotiated and in what circumstances the sale transaction shall be completed and enforceable. It cannot refer to the mode of sale. In other words, acting under either of these two clauses, the State Government cannot enact that a sale may be made by auction only or by private treaty only or by barter only. All the modes in which a thing may legitimately be sold will be open to the buyer and seller in the Market Yard. 6.
In other words, acting under either of these two clauses, the State Government cannot enact that a sale may be made by auction only or by private treaty only or by barter only. All the modes in which a thing may legitimately be sold will be open to the buyer and seller in the Market Yard. 6. At the outset it is necessary to notice two things: firstly, the word 'manner' has got a wide amplitude. In the "Words and Phrases" (Permanent Edition, Vol. 26 p. 542) various meanings of the word 'manner' are given. Ordinarily it means "way of performing, or executing method, custom; habitual practice". Ordinarily it refers to "the mode or way in which a thing is to be done and does not include the result to be accomplished." It is "the way of performing, or effecting anything, the way in which an act is performed, method of doing anything or mode of procedure in any case, or situation and includes both method and mode." 7. In the Act itself the word has been used in different senses at different places. Section 5(1) provides that where the State Government is of opinion that it is necessary or expedient in the public interest to regulate the sale and purchase of any agricultural produce in any area, wherein such transactions are usually carried on and for that purpose to declare that area as a Market Area, it may, "by notification in the Gazette and in such other manner as may be prescribed", declare its intention so to do and invite objections against the proposed declaration. Obviously the word 'manner' here is used in the sense of 'mode' or the way of publishing the declaration of the Government. The word is used in the same sense in Section 6 of the Act. The word is used in certain clauses of Section 40 also. Clause (x) refers to the manner in which plans and estimates for the work to be carried out by a committee shall be prepared and submitted for sanction or approval. Clause (xii) refers to the form in which the accounts of the Committee shall be kept and the manner in which the accounts shall be audited. Clause (xiv) refers to the manner of investment and disposal of surplus fund of the Committee.
Clause (xii) refers to the form in which the accounts of the Committee shall be kept and the manner in which the accounts shall be audited. Clause (xiv) refers to the manner of investment and disposal of surplus fund of the Committee. Evidently in Clause (xiv) the word 'manner' is used in the sense of mode or the way of doing a thing. Clause (xxi) refers to the authority for and the manner of making contracts on behalf of the Committee. In some of the clauses the word is used in the sense of method or procedure. The problem is whether the word is used in Clauses (xix) and (xxvii) in the sense of method only or in one of those two clauses it means the mode or the way of doing a thing. The second important matter of which we have to take notice at this stage is the rule of construction against redundancy. It may be observed that the word 'manner' is used along with sale in Clause (xix) as well as in Clause (xxvii). It cannot be assumed that the Legislature used the expression 'manner of sale' in Clause (xxvii) in the same sense in which it has used the expression in Clause (xix). Such a view will impute redundancy to the legislature. Accordingly, if reasonably possible, the expression 'manner of sale' in Clause (xxvii) should receive a different meaning from the one given to it in Clause (xix). 8. In Clause (xix) the word sale occurs in juxta position with 'sale' or 'auction'. The words used in Clause (xix) suggest that the word 'manner' is used there in the sense of method or procedure. The rule against redundancy requires us not to impute the meaning of method or procedure to the word 'manner' in Clause (xxvii). Had the legislature intended to use the word in that sense in Clause (xxvii), it would not have included the expression 'manner of sale' in Clause (xxvii) at all. So we think that the expression 'manner of sale' has been used in Clause (xxvii) in the sense of mode or the way of doing a thing. The context of the expression 'manner of sale' in Clause (xxvii) supports this view. The expression occurs in the context of time and place of sale.
So we think that the expression 'manner of sale' has been used in Clause (xxvii) in the sense of mode or the way of doing a thing. The context of the expression 'manner of sale' in Clause (xxvii) supports this view. The expression occurs in the context of time and place of sale. By the expression 'time, place and manner of sale' in Clause (xxvii), the legislature seems to provide for the making of rule in regard to when, where and how a sale may be held. Rule 76(1) provides for a mode of sale. It says that a sale will be held by auction only. The other modes of sale are thereby eliminated. In the result we are of opinion that Sub-rule (1) of Rule 76 falls within the purview of Clause (xxvii) of Sub-section (2) of Section 40 and does not travel beyond and rule making power. 9. The Appellant relied on Sales Tax Officer Ponkunnam v. K.I. Abraham (1967) 20 STC 367 and Sant Saranlal and Another Vs. Parsuram Sahu and Others, AIR 1966 SC 1852 . In the first case it was held that the phrase "in the prescribed manner" will not include the time limit for the submission of the returns. It may be stated that the element of time is not ordinarily included in the meaning of the word 'manner' See Words and Phrases (Permanent Edition Vol. 26 p. 537. In the next case the expression 'in the prescribed form' was held not to include the upper limit of the loans to be advanced. It is sufficient to state that the word 'manner' is not used in the Act which was construed in that case. These cases do not, in our opinion, support the Respondents' constructions. 10. We are unable to accept the second argument that the Respondents have got a right to carry on the business of buying and selling. It is admitted that Section 9(2) places a restriction on that right. It requires them to obtain a licence for carrying the business and to carry on the business in accordance with the conditions of the licence. But it is asserted that these two restrictions cannot be supplemented by additional restrictions by the exercise of the rulemaking power u/s 40. In this connection it is necessary to notice Section 17(1).
It requires them to obtain a licence for carrying the business and to carry on the business in accordance with the conditions of the licence. But it is asserted that these two restrictions cannot be supplemented by additional restrictions by the exercise of the rulemaking power u/s 40. In this connection it is necessary to notice Section 17(1). It provides that a Committee shall issue or renew licences on such terms and conditions and subject to such restrictions as may be prescribed, (emphasis added). The word 'prescribed' is defined in Section 2(n). It means prescribed by rules made under the Act. So the phrase "subject to such restrictions as may be described will means subject to such restrictions as may be laid down by he rules made u/s 40. We think hat this phrase expressly empowers the rule-making authority to impose additional restrictions on the right of the Respondents to carry on business of sale and purchase in the Market Yards and Sub-Market Yards. Clause (xxvii) of Section 40 also clearly enables the State Government to impose additional restrictions on the Respondents' right to carry on business of sale and purchase in the Market Yard and Sub-Market Yard in regard to time and place of carrying on the business. It is open to the State Government to make a rule to the effect that the business of sale and purchase in the Market Yard and Sub-Market Yard shall be carried on during a particular period of time and not at odd hours of the day. Similarly the State Government can make a rule prescribing a particular place in the market-yard or sub-market yard where the business of sale and purchase may be carried on. The Government may interdict the business of sale and purchase at all place in the Market Yard and Sub-Market Yard and confine it to a particular place therein. 11. The third argument cannot also be accepted. Sub-rule (1) of Rule 76 is intended and is likely to carry out the purpose of the Act. One of the purposes of the Act is to ensure the fairest price of the agricultural produce to producers. It is well known that the producer is not on an equal footing with the middleman in the matter of bargain. He has lessor information of the prevailing market trends and the market prices than the middleman.
One of the purposes of the Act is to ensure the fairest price of the agricultural produce to producers. It is well known that the producer is not on an equal footing with the middleman in the matter of bargain. He has lessor information of the prevailing market trends and the market prices than the middleman. The public auction is calculated to ensure to him the fairest price. There will be competition he may get the fairest price. Accordingly we are of opinion that Sub-rule (1) of Rule 76 subserves the purpose of the Act. 12. We have already stated that Section 9(2) prohibits a person from carrying on the business of sale or purchase in the Market Yard and Sub-Market-Yard without obtaining a licence and compels him to carry on the business in accordance with the terms and conditions of the licence. It is said that the requirement of a licence and the requirement of carrying on business in accordance with the terms and conditions of the licence are the only two restrictions imposed by the legislature on the right of a trader or a commercial agent to carry on the business of sale and purchase but Sub-rule (1) of Rule 76 imposes an additional restriction on his right. It prohibits him from transacting sale or purchase by private negotiation. So it is inconsistent with Section 9(2). It is true that Section 9(2) imposes only two restrictions on the right of a person to carry on the business of sale or purchase in the Market-Yard or Sub-Market Yard, but it is not correct that the legislature did not intend to impose an additional restriction on his right to carry on the business. Section 17(1) clearly provides that the licence envisaged by Section 9(2) will be issued "subject to such restrictions as may be prescribed". The phrase "subject to such restrictions as may be prescribed" clearly shows that the legislature intended that restrictions other than those mentioned in Section 9(2) may be imposed by the rule. Again Clause (xxvii) of Sub-section (2) of Section 40 clearly contemplates the imposition of restrictions of the right to carry on business with respect to time and place. Similarly the rule-making authority may impose a restriction on the right to carry on business with respect to the mode of sale.
Again Clause (xxvii) of Sub-section (2) of Section 40 clearly contemplates the imposition of restrictions of the right to carry on business with respect to time and place. Similarly the rule-making authority may impose a restriction on the right to carry on business with respect to the mode of sale. A rule may be made permitting only one mode of sale excluding the other modes of sale. 13. Having regard to Section 17(1) and Section 40(2)(xxvii), we are of opinion that Sub-rule (1) of Rule 76 is not repugnant to Section 9(2). Counsel for the Appellant in the Special Appeal has relied upon Madurai Pillai Vs. T. Muthu Chetty, AIR 1914 Mad 287 , The State Vs. Agarwal, Ayengar and Co. Ltd., AIR 1951 Bom 397 , K. Muthuvadivalu v. RTO AIR 1956 Mad. 143 , Chief Settlement Commissioner, Rehabilitation Department, Punjab and Others, etc. Vs. Om Prakash and Others etc., AIR 1969 SC 33 , W. Palmer Dixon v. United States 14 Law. Edn. 223 and Queen v. Bird 1968 2 Q.B. 340 in support of his contention. We have gone through these cases and we are of opinion that they do not help the Appellant in this case. On account of the variant language of the prossions cases considered in those they do not afford any guidance in this case. 14. Sri S.C. Khare has submitted that Sub-rule (1) of Rule 76 is violative of the provisions of Article 19(1)(g) of the Constitution. In M/S. Hari Ram v. State of U.P. Sp. A. No. 468 of 1968 D/- September 16, 1969 a division Bench of this Court has held that Sub-rule (1) of Rule 76 imposes a reasonable restriction on the right of a person to carry on business and is not violative of Article 19(1)(g) of the Constitution. We are bound by the Division Bench decision. So we cannot uphold the argument. 15. We allow the Special Appeal and set aside the judgment of the learned Single Judge. The writ petition and the F.A.F.O. are dismissed. The Appellant in the Special Appeal shall get costs of the Special Appeal as well as of the writ petition and the Respondents in the F.A.F.O. shall get costs of the appeal.