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1980 DIGILAW 5 (KAR)

GADADIAH v. AGRICULTURE PRODUCE MARKET COMMITTEE, SAGAR

1980-01-04

K.J.SHETTY

body1980
K. J. SHETTY, J. ( 1 ) THE petitioners are licensed traders operating within the market area of the agricultural Produce Market Committee, Sagar. Their activities in buying and selling agricultural produce are not only within the market area, but sometimes also outside the said area. In view of their extended activities, the Market Committee has called upon them to take exporter's licence The contention of the petitioners is that they have taken 'trader's licence' and it is not obligatory to obtain exporter's licence as they are, not exclusively engaged in exporting agricultural produce. The question that falls for decision in these petitions is whether a market functionary who has obtained a trader's licence should also take exporter's licence if he wants to engage himself in export business. ( 2 ) THE question presented has to be examned with reference to the Karnataka agricultural Produce Marketing (Regulation) Act, 1966 (called shortly as "the Act") and the Rules and the Bye-laws framed thereunder. Under S. 85 of the Act, traders are classified into four categories Traders who are entitled to purchase notified agricultural produce anywhere in the market area are called 'a' Class traders; traders who are entitled to purchase agricultural produce only in the yard or yards in the market area are called 'b' Clsss traders; traders who are entitled to purchase notified agricultural producer only outside the market or markets in the market area are called 'c' class traders; and those who are entitled to purchase in the market area for sale to consumers for domestic purchase and whose total annual purchase turnover does not exceed Rs. 15,000 are called 'd' Class traders. Bye-law No. 19 framed by the Market Committee prescribes licence fees for these traders. For 'a' Class traders, Rs. 125 has been prescribed, for 'b' Class traders, Rs. 75, for 'c' Class traders, rs. 50 and for 'd' Class traders, Rs. 15. Likewise, the bye-law also prescribed fees for- exporter's licence Formerly it was Rs. 50; and now with effect from 5th September, 1979, it has been reduced to Rs. 25 ( 3 ) S. 8 (1) (b) of the Act prohibits persons from using any place in the market area for the marketing of notified agricultural produce or to operate in the market area in any capacity without a license granted by the Market Committee in that Behalf. 25 ( 3 ) S. 8 (1) (b) of the Act prohibits persons from using any place in the market area for the marketing of notified agricultural produce or to operate in the market area in any capacity without a license granted by the Market Committee in that Behalf. Section 72 provides for grant of licences by the Market committee for the use of any place in the market area either for the sale of the notified agricultural produce or for operating therein as a trader, commission agent, broker, etc. , or as any other market functionary. Sub-section (2) thereof states that licenses may be granted in such forms for such periods and on such terms and conditions or restrictions. Rule 79 provides that no person shall do business as a broker, processor, exporter etc. , or any other market functionary in any market area except under a licence in Form No. 37 granted by the Committee. Sub-rule (4) provides that no person shall be entitled to do business as a market functionary other than that for which he holds a licence. The market functionary referred to above has been, defied under S. 2 (21) to mean, broker, a commission agent, anexporter, a, ginner, an importer, a presser, a processor, a stockist, a trader and such other person as may be declared under the rules or the bye- laws Again 'exporter' and 'trader' are separately defined. S. 2 (13) defines 'exporler to mean :'a person other than a producer who exports goods or causes goods to be exported on one's own account or as agent of another person, from the market area outside such area for the purpose of selling, processing, manufacturing or for any other purpose except for the purose of one's own domestic consumption, but shall not include a public carrier; and the expression 'importer' shall be construed accordingly. "section 2 (48) defines 'trader' as follows : 'trader' means a person who buys notified agricultural produce either for himself or as 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. " it is seen from these definitions that the exporter need not necessarily be a buyer of the goods. He may be a buyer or he may not be a buyer. " it is seen from these definitions that the exporter need not necessarily be a buyer of the goods. He may be a buyer or he may not be a buyer. His prime activity should however, be to send the goods from the market area to any place outside any such area for the purpose of selling, processing, manufacturing or for any other purpose. A trader on the other hand must be a person who buys notified agricultural produce. He may buy on his own account or as agent of another. The buying is also for the purpose of selling processing, manufacturing or for any other purpose except for the purpose of domestic consumption. It must be noted that both the trader and the exporter are required to operate within the market area. However, the distinction between the two functionaries is clear cut i. e. , that a trader must buy goods for himself or as agent of another where as an exporter exports goods on his own account or as agent of another. ( 4 ) MR. Narasimba Murthy, for the petitioners, urged that the purpose for which a trader could buy notified agricultural produce need not be limited to "selling, processing, manufacturing" within the market area, and it may be "for any other purpose" except for the purpose of one's own domestic consumption. According to the learned counsel, the expression "for any other purpose" found in the definition of 'trader' is wide enough to cover the activities of an 'exporter', that is, sending the goods for sale outside the market area and therefore a trader who buys goods and exports them need not take a separate exporter's licence. In support of the contention, he placed reliance on the decision of the Supreme court to show that the words "for any other purpose" are not restricted to the activities like selling, processing and manufacturing within the market area. The contention for the respondent, on the other hand, was that the words "for any other purpose" cannot be given too wide a meaning and it should be restricted only to the activities within the market area. ( 5 ) IT seems to me that both the contentions overlook the crux of the matter and do not stem from the essential difference in the activities of "exporter" and "trader". ( 5 ) IT seems to me that both the contentions overlook the crux of the matter and do not stem from the essential difference in the activities of "exporter" and "trader". They are giving too much importance to purposes for which a trader buys notified agricultural produce and an exporter sends such goods outside the market area,. The purposes for which goods are bought by a person within the market area or the purposes for which a person exports goods are not very much relevant to determine whether that person acts as a trader or exporter, except perhaps when he buys for his own domestic consumption. The purpose for which a trader buys or an exporter sends goods out side the market area may be the same. It may be for the purpose of selling, processing, manufacturing or for any other purpose except for the purpose of one's own domestic consumption. ( 6 ) IN my judgment, the profession of a person has to be determined having regard to his prime activities and not on the purpose for which such activities are extended. A person becomes a trader when he buys goods within the market area either for himself or as agent of another. A person becomes an exporter when he sends goods either belonging to himself or as agent of another from the market area outside such area. This is the essential difference in the activities of these two market functionaries. There is hardly any scope for overlapping the activities of one over that of the other. A trader will not become an exporter if he buys goods for the purpose of exporting. He becomes an exporter only when he sends goods outside the market area for any purpose except for the purpose of domestic consumption. The two functionaries have thus distinct and different activities although they function in the same market area. The licence granted to the petitioners under Rule 76 (4) in form No. 36, just states that they are licenced as 'a' or 'b' Class traders for the market year ending 30th June, 1980 subject to the conditions laid down in the Act, Rules and Bye-laws and such other conditions as may be laid down by the Committee. Therefore, one who has a trader's licence cannot utilise it for the purpose of functioning as an exporter. Therefore, one who has a trader's licence cannot utilise it for the purpose of functioning as an exporter. If he wants also to be an exporter or importer, he must obtain a separate licence prescribed for the purpose. ( 7 ) MY view also finds support from the provisions of S. 8 (1) (b) and Rule 79 (4) S. 8 (1) (b) prohibits persons from using any place in the market area lor the marketing of notified agricultural produce or to operate in the market area in any capacity without a licence in that behalf. And Rule 79 (4) provides that no person shall be entitled to do business as a market functionary other than that which he holds a licence. The combined operation of these provisions prevents a trader from operating as an exporter, and an exporter, operating as a trader without obtaining licence prescribed for the purpose. ( 8 ) IN the result, these petitions fail and the rule is discharged. In the circumstances, however, I make no order as to costs. --- *** --- .