K. A. SWAMI, J. ( 1 ) THE State of Karnataka is a necessary party. Accordingly, the petitioner is permitted to implead the State of Karnataka as respondent-3. Cause title be amended. Sri Udayashankar, learned Government Pleader who appears for respondent-2 also to appear for respondent-3. ( 2 ) IN this petition under Article 226 of the Constitution, the petitioner has sought for quashing the order dated 24-7-1987 passed by the Agricultural Produce Market Committee, Sagar (for short "market Committee') and also the communication dated 29-7-1987 bearing No-334/87-88 annexure-C issued by the very same Market Committee. The petitioner has also sought for a declaration that he has not incurred a disqualification as specified in Rule 77 of the Karnataka agricultural Produce Marketing (Regulation) Rules 1968 (hereinafter referred to as the 'rules' ). The petitioner has also sought for quashing the order dated 21-4-1988 passed in Appeal No. CR 36/37 by the 2nd respondent. By way of amendment, the petitioner has also sought for striking down Rule 77 (2) (iii) as violative of the fundamental right to carry on trade or business. ( 3 ) THE petitioner is a trader carrying on the trade within the market area of the 1st respondent-Market Committee. The petitioner is a registered partnership firm consisting of three partners. Shri Jagadeesha Nayak is the Managing Partner of the petitioner-firm. He is also the managing Partner of another Partnership firm known as M/s A. R. S. Gramodyoga, Anandapuram, sagar Taluk. The 1st respondent has refused to renew the licence of the petitioner/for the year 1987-88 on the ground that Shri S. Jagadeesha Nayak who is the Managing Partner of the petitioner firm is also the Managing Partner of M/s A. R. S. Gramodyoga, to which the renewal of licence has been refused on the ground that it has fallen in arrears of Market Fee. The Market committee has relied upon Clause (iii) of Sub-rule (2) of Rule 77 of the Rules in refusing to renew the licence. In the appeal preferred before the 2nd respondent, the same reasoning has been affirmed and the appeal has been dismissed. ( 4 ) OF course, Sri S. Jagadeesha Nayak, the Managing Partner of the petitioner-firm has not disputed the liability of M/s A. R. S. Gramodyoga to pay the arrears of market fee of Rs. 50,000/ -. In the appeal preferred before the 2nd respondent, the same reasoning has been affirmed and the appeal has been dismissed. ( 4 ) OF course, Sri S. Jagadeesha Nayak, the Managing Partner of the petitioner-firm has not disputed the liability of M/s A. R. S. Gramodyoga to pay the arrears of market fee of Rs. 50,000/ -. In fact, before the Appellate Authority (the second respondent) he has given a letter dated 13-5-1987 on behalf of M/s A. R. S. Gramodyoga as its Managing Partner admitting the liability of Rs. 50,000/- and enclosing a cheque for Rs. 5,000/-dated 13-5-1987 towards the part payment of the arrears of market fee. This letter is produced as Annexure-R. 1 by the second respondent. In respect of the remaining amount, in Annexure-R. 1, he has sought for instalment of Rs. 1,000/per month. The Market Committee (first respondent) has not agreed to it. It is not in dispute that so far till today no amount has been paid. Learned Counsel for the Market Committee is not in a position to say whether the cheque for Rs. 5,000/- which was enclosed with Annexure-R-1 has been encashed or not. Thus the position is that even to this day M/s. A. R. S. Gramodyoga, of which Shri S. Jagadeesha Nayak, the Managing Partner of the petitioner-firm is also the managing Partner, is in arrears of market fee. ( 5 ) HAVING regard to the contentions urged on behalf of the petitioner and the respondents, the following points arise for consideration: 1) Whether Clause (iii) of Sub-rule (2) of Rule 77 of the Rules is violative of Article 19 (1) (g) of the Constitution? 2) Whether the impugned orders are liable to be quashed? point NO. 1 ( 6 ) SUB-SECTION (1) of Section 72 of the Karnataka Agricultural Produce Marketing (Regulation) act, 1966, (hereinafter referred to as the 'act'), empowers the Market Committee to grant or renew or refuse to grant or renew a licence for the use of any place in the market area for the sale of the notified agricultural produce or for operating therein as a trader, commission agent, broker, processor, weighman, measurer, surveyor, warehouseman or any other market functionary in relation to the marketing of agricultural produce. Sub-section (2) thereof provides that the licence may be granted under Sub-section (1) in such forms for such periods on such terms and conditions and restrictions including provision for prohibiting brokers and commission agents from acting in any transaction both as buyer or seller or on behalf of both the buyer and seller and also provision for prohibiting brokers from acting in any transaction. Sub-section (2) further provides for prescribing the qualifications and disqualifications of licensees, the circumstances in which licences may be refused, suspended or cancelled and prescribing the manner in which and the places at which auctions of agricultural produce shall be conducted and the delivery of agricultural produce shall be made in any market or market area and on payment of fees not being In excess of such maximum, as may be prescribed. 'prescribed' according to the definition clause means prescribed by the Rules made under the Act. Section 73 of the Act provides for cancellation or suspension of licences. We are not concerned in this case with regard to the cancellation or suspension of licences. The State Government in exercise of its rule-making power has framed the Rules. Rule 76 specifically provides that no person shall operate in the market area as a trader or commission agent in notified agricultural produce except under and in accordance with the licence granted by the market committee under the said Rule. Rule 77 provides disqualifications for obtaining a licence to operate as traders. It reads: "77. Disqualifications for obtaining a licence to operate as traders.- (1) No person shall be granted a licence and no person's licence shall be renewed or continued by the Committee, to operate as a trader in the market area unless it is satisfied after such inquiry as may be provided in the Bye-laws, that the person: i) is solvent; ii) owes no outstanding or overdue debts, relating to his business to any producer or to any commission agent; and iii) has deposited with or furnished to the Committee the cash security or a bank guarantee under sub-section (2) Section 85 of the Act and the Bye-laws. "2. "2. The Committee may refuse to grant or to renew a licence to a person to operate as a trader in the market area, if after such inquiry as may be provided in the Bye-laws, it is satisfied that: i) his licence had been cancelled sometime back and that six months have not elapsed since the date of such cancellation; ii) he has been guilty of any offence or misconduct in any regulated market; iii) he is a partner with any person to whom a licence is refused; iv) he has neglected or refused to submit to abide by and carry out any award of the Arbitrator or arbitrators or decision or order of the Disputes Committee; v) he has refused to fulfil trade contracts for no valid reasons; or has failed to pay in due time to the Committee any fine or other sum payable to it by him or has failed to deposit with or furnish to it the cash security or the bank guarantee as provided in the Bye-laws in due time. vi) he has refused to submit his account books for the inspection of the Committee or to the sub-Committee or any of its officers authorised in that behalf or has failed to comply with any notice given or request made to attend any meeting of the Committee. vii) he has failed to submit the reports or returns of statements to the committee in due time in the manner laid down in these Rules and Bye-laws or as may be specified in the orders of the committee, viii) he is found to have set up or instigated to set up directly or indirectly and strikes or boycotts against the smooth working of the market or the enforcement of the provisions of the Act, Rules or the Bye-laws; ix) he has over-traded; x) he has habitually violated the provisions of the Act, the Rules or the Bye-laws or the lawful directions given by the Committee; xi) his previous conduct is such as would disturb the maintenance of a stable and healthy market or is found to have entered into any disreputable or fraudulent transactions with any person; or xii) he has not transacted any business in the notified agricultural commodities during the period of his licence, and he is not a genuine trader but obtained a licence only to avail of advantages accruing therefrom. " Thus Sub-rule (1) of Rule 77 prescribes a disqualification for refusing to grant or renew or continue a licence to operate as a trader in the market area. Sub-rule (2) empowers the Market committee to refuse to grant or renew a licence to a person to operate as a trader in the market area on any one of the twelve grounds specified therein. ( 7 ) IN this case we are concerned with Clause (iii) which as quoted above provides that if the applicant is a partner with any person to whom a licence is refused the Market Committee may refuse to grant or to renew a licence to him to operate as a trader in the Market Area. In the instant case, the trader's licence granted to the petitioner-firm is refused to be renewed. The contention of the petitioner is that even if the arrears due from M/s A. R. S. Gramodyoga of which shri Jagadeesha Nayak, the Managing Partner of the petitioner-firm is also the Managing partner, are paid, still the fact that the licence was refused once to that firm can be made a ground for refusing to renew the licence for all time to come. The clause does not limit the disqualification for any particular period nor does it provide that as soon as the ground for refusing to grant or renew the licence to the other firm of which a partner of the applicant firm or in any other case, an individual applicant himself is a partner of such firm, ceases to exist, the licence may be granted or renewed to the applicant. Thus the contention of the petitioner is that clause (iii) in its operation is very oppressive and unreasonable in as much as for all time to come grant or renewal of licence to the applicant may be refused on this ground. Apart from rule 77 there is no provision contained either in the Act or in the Rules limiting the operation of the grounds for refusing to grant or renew the licence for a specified period or on payment of the arrears. Apart from rule 77 there is no provision contained either in the Act or in the Rules limiting the operation of the grounds for refusing to grant or renew the licence for a specified period or on payment of the arrears. A disqualification which falls under Clause (iii) of Rule 77 (2) of the Rules once incurred, continues to exist for all time to come even on payment of the arrears of market fee as long as the applicant or a partner of the applicant firmcontinues to be the partner of the other firm to which the licence is refused. ( 8 ) THEREFORE, there is no doubt that Clause (iii) of Sub-rule (2) of Rule 77 imposes unreasonable restriction on the fundamental right to carry on any trade or business as guaranteed under Article 19 (1) (g) of the Constitution. Normally the operation of such clauses prescribing disqualifications is limited to a specified period. Even in the very Act itself, Section 16 which deals with disqualifications for becoming a member, specifies several grounds of disqualification; but at the same time It also provides as to when those disqualifications would cease to operate. In the case of disqualification falling under Clause (iii) of Sub-rule (2) of Rule 77 of the Rules and in respect of similar such disqualifications under Sub-rule (2) of Rule 77, it is necessary to limit the operation; as otherwise the applicant will not be entitled to carry on the trade or business for all time to come even though it is one of the fundamental rights guaranteed under Article 19 (1) (g) of the Constitution. Learned Government Pleader submits that the clause in question is intended to safeguard the finances of the market committee to enable it to recover the market fee. There is no doubt that one of the objects of Clause (iii) of Sub-rule (2) of Rule 77 of the Rules is to ensure prompt payment of market fee by a market functionary. But the Court cannot ignore to take note of the evil consequences of such a provision. ( 9 ) IT is true that a provision which enables the market committee to recover the market fee should in all probability be upheld. But if such a provision comes under the teeth of Article 19 (1) (g) of the Constitution, in spite of its laudable object, it is not possible to save it. ( 9 ) IT is true that a provision which enables the market committee to recover the market fee should in all probability be upheld. But if such a provision comes under the teeth of Article 19 (1) (g) of the Constitution, in spite of its laudable object, it is not possible to save it. Sub-rule (2) of Rule 77 of the Rules, not only specifies the ground of arrears of payment of market fee on the basis of which the licence is refused to the another partnership firm of which the applicant if he is an individual or a partner of the applicant if it is a partnership, is a partner of such firm, but it also specifies several other grounds on which the grant or renewal of the licence may be refused. Unless such provisions are limited in their operation in other words such disqualifications cease to operate after a specified period or after the happening of a certain specified event about which there is no uncertainty or on complying with the conditions specified therein, they cannot be free from the vice of unreasonableness. No such provision is made in Rule 77 of the Rules, There is no provision in the Rules or in the Act limiting the consequences of Sub-rule (2) of Rule 77 of the Rules. The fact that the Rule has been in force for the last 20 years, will only persuade the court to grant some time to the State Government to amend the Rule suitably in the light of the observations made in this order, falling which the Rule shall stand struck down. ( 10 ) ACCORDINGLY point No. 1 is answered as follows: "clause (iii) of Sub-rule (2) of Rule 77 of the Rules is liable to be struck down as being violative of Article 19 (1) (g) of the Constitution. " point NO. 2 ( 11 ) AS the impugned orders are passed only on the ground that Sri Jagadeesha Nayak, the managing Partner of the petitioner-firm is also the Managing Partner of M/s. A. R. S. Gramodyoga, which is a defaulter in payment of fee and to which the licence is refused on that ground, relying upon Clause (iii) of Sub-rule (2) of Rule 77 of the Rules, they are liable to be quashed. Point No. 2 is answered accordingly. Point No. 2 is answered accordingly. ( 12 ) FOR the reasons stated above, Rule is issued and made absolute in the following terms: a) The State Government is granted time till the end of December 1988 to amend Rule 77 (2) of the Rules suitably in the light of the observations made in this order. In the event the State government fails to amend Rule 77 (2) of the Rules within the aforesaid period, Clause (iii) of sub-rule (2) of Rule 77 of the Rules, shall stand struck down as unconstitutional with effect from 1-1-1989. The impugned orders shall also stand quashed on 1-1-1989 in the event the State government does not amend Rule 77 (2) of the Rules on or before 31-12-1988. b) In the event Rule 77 (2) of the Rules is amended, the Market Committee shall reconsider the application filed by the petitioner for renewal of licence for the years 1987-88 and 1988-89 afresh in the light of the amendment if the petitioner makes an application for renewal of licence for the year 1988-89 and without reference to the impugned orders. c) In the event the State Government does not amend Rule 77 (2) of the Rules, the Market committee shall reconsider the application filed by the petitioner for grant of renewal of licence for the year 1987-88 and also for 1988-89 in the event the petitioner files an application for renewal of licence for the year 1988-89 without reference to Clause (iii) of Sub-rule (2) of Rule 77 of the Rules and in the light of the observations made in this order: d) It is also further made clear that the first respondent is at liberty to recover the arrears of market fee due from M/s A. R. S. Gramodyoga, Sagar.