ANDANESH DANDAPPA MANVI v. STATE OF KARNATAKA — 1989 DIGILAW 446 (KAR)

K. A. SWAMI, J. ( 1 ) IN all these petitions under Articles 226 and 227 of the Constitution of India, the petitioners, who are proprietors of Ginning and Pressing Factories in the State of Karnataka, have sought for a declaration that Section 2b (2) of the Cotton Ginning and Pressing Factories Act, 1925, as substituted by the Cotton Ginning and Pressing Factories (Karnataka Amendment) Act, 1986 (hereinafter referred to as the Karnataka Act), is violative of Article 14 of the Constitution. They have also sought for quashing the Notification dated 13-3-1987 bearing No. AHD 471 AMS 86 (Annexure-E) published in the Karnataka Gazette dated 16th March 1987. They have further sought for a direction to the respondent to fix the rates in accordance with Rule 8 of the karnataka Cotton Ginning and Pressing (Rate Fixing Committee) Rules, 1982 (hereinafter referred to as the Rules ). ( 2 ) WRIT Petitions Nos. 5216 to 5218, 13321, 13332 of 1987 and W. P. No. 3516 of 1988 relate to the fixation of rates for ginning and pressing for the year 1986-87; whereas, Writ Petitions Nos. 17352 to 17354 of 1987 relate to the fixation of rates for ginning and pressing of cotton for the year 1987-88. For the aforesaid two years. e. , 1986-87 and 1987-88 rates are fixed State-wise and not District-wise. ( 3 ) HAVING regard to the contentions urged on either side, the following points arise for consideration: (1) Whether Section 2b (2), as substituted by the Karnataka Act No. 18 of 1986, is violative of article 14 of the Constitution? and (2) Whether the rates fixed for the years 1986-87 and 1987-88 for ginning and pressing of cotton are in accordance with law? ( 4 ) POINT NO. 1: The Cotton Ginning and Pressing Factories Act is intended to control and regulate the cotton ginning and pressing factories regarding the rates to be charged for ginning and pressing cotton and other aspects relating thereto. In the instant case we are concerned with Section 2b (2) of the Act as substituted by the karnataka Act 18 of 1986. The State of Karnataka even prior to the Karnataka Act 18 of 1986, had inserted Section 2b by the Karnataka Act 21 of 1961 relating to the control of rates chargeable for ginning and pressing of cotton. The said Section provided for rate fixing committee for each local area. The State of Karnataka even prior to the Karnataka Act 18 of 1986, had inserted Section 2b by the Karnataka Act 21 of 1961 relating to the control of rates chargeable for ginning and pressing of cotton. The said Section provided for rate fixing committee for each local area. The Rules framed in the year 1982, are known as "the Cotton ginning and Pressing Factories (Karnataka) Rules 1982". Earlier to 1982 the Rules framed by the erstwhile Bombay State and erstwhile Mysore State were in force and they came to be repealed by Rule 14 of the 1982 Rules. Pursuant to the Karnataka Act No. 18 of 1986, 1982 rules came to be amended by the Karnataka Cotton Ginning and Pressing (Rate Fixing committee) (Amendment) Rules, 1986. The 1986 Rules omitted Rules 3 to 6, 10 and 11 of 1982 rules and also omitted Clause (d) in Rule 2 of 1982 Rules. 1986 Rules inserted in Rule 9 of 1982 Rules the words "of the District" after the words "principal Agricultural Officers. " ( 5 ) THE contention of Sri Narayana Rao, learned Counsel for the petitioners is that, as the conditions of each cotton growing area wherein cotton ginning and pressing factories are situated differ from area to area, and, as a result thereof, cost incurred by the proprietors of cotton ginning and pressing factories varies to a large extent, therefore, fixing of one rate for the entire state is arbitrary. On the contrary, it is submitted on behalf of the respondents that Sub-section (2) of Section 2b, as substituted by the Karnataka Act No. 18 of 1986, enable the State Government to constitute rate Fixing Committees for fixing maximum rates for ginning and pressing of cotton in the state, and, the statute itself names the members of the Committee; that the statute has taken into account the interest of the proprietors and members of the Cotton Ginning and Pressing factories; that it is also open to the Committee to fix the rates either State-wise or District-wise; that if the Committee, on taking into consideration all the relevant factors, fixes the rates state-wise, and, if that fixation is not in accordance with the Rules and does not square with the facts and circumstances existing in each District or local area, it may be open to challenge and that does not by itself make the Sub-section (2) of Section 28, as substituted by the Karnataka act No. 18 of 1986, unconstitutional or violative of Article 14 of the Constitution. ( 6 ) NO doubt, earlier Section 2b provided for constitution of Rate Fixing Committees for each local area. Merely because Sub-section (2) of Section 2b, as substituted by the Karnataka Act no. 18 of 1986, provides for constitution of one Rate Fixing Committee for the entire State, it is not possible to hold that the Section is violative of Article 14 of the Constitution. The Committee has to fix the rates in accordance with the Rules. Rule 8 of the Rules provides that the Rate fixing Committee shall take into consideration the masters' enumerated therein for purposes of fixing the rates. Therefore, it is not possible to hold that the impugned Section is violative of article 14 of the Constitution. The Committee is required to take into consideration several aspects having a bearing on the rates to be fixed for the cotton ginning and pressing, and, those relevant aspects are enumerated in Rule 8 of the Rules. Sub-section (2) of Section 28 does not compel the Committee to fix the rates State-wise only. It is open to the Committee to fix either state-wise or District-wise or Division-wise according to the facts and circumstances which enable the Committee to fix common rates for specific areas. Further, the Committee consists of two representatives of cotton growers in the State nominated by the State Government. It is open to the Committee to fix either state-wise or District-wise or Division-wise according to the facts and circumstances which enable the Committee to fix common rates for specific areas. Further, the Committee consists of two representatives of cotton growers in the State nominated by the State Government. There is also one representative of owners of Cotton Ginning and Pressing factories in the State nominated by the State Government. The Director of Agriculture is also one of the members. The Chief Inspector of Factories in Karnataka is another member. In addition to this, there is one representative of Co-operative Ginning Factory as nominated by the State Government and also the Chairman of the State Co-operative Spinning Mills Federation. In addition to this, the secretary to Government in charge of the Co-operation Department, the Registrar of co-operative Societies and the Chairman and Managing Director of the Cotton Corporation of india Limited or his nominee, are the members of the Committee. The Secretary to Government in charge of Agriculture is the Chairman of the Committee. Thus, the Committee consists of high officials of the State Government and also the representatives of growers and also of factories. The Rules provide for the mode of fixation of the rates. The Act gives sufficient guidance for fixing the rates. Therefore, it is not possible to hold that the Sub-section (2) of Section 2b of the act, as substituted by the Karnataka Act 18 of 1988, merely because it does away with the local area committee and the local area, cannot be held to be violative of Article 14 of the constitution, Accordingly, Point No. 1 is answered in the negative, and, it is held that sub-section (2) of Section 2b of the Act, as substituted by the Karnataka Act No. 18 of 1986, is valid and it is not violative of Article 14 of the Constitution. ( 7 ) POINT NO. 2: the rates fixed for the year 1986-87 for cotton ginning and cotton pressing are: (i) For extra long and long staple cotton -Rs. 54. 00 for ginning per quintal and Rs. 58. 00 for pressing per bale of 170 Kgs. (ii) For ginning other categories of cotton per quintal Rs. 52. 00 and for pressing per bale of 170 kgs Rs. 58. 00. 54. 00 for ginning per quintal and Rs. 58. 00 for pressing per bale of 170 Kgs. (ii) For ginning other categories of cotton per quintal Rs. 52. 00 and for pressing per bale of 170 kgs Rs. 58. 00. These rates were applicable through out the State and were effective for the period from 1st september 1986 to 31st August 1987. ( 8 ) THE proceedings of the State Level Cotton Ginning and Pressing Rate Fixing Committee are produced at Annexure-G in Writ Petition Nos. 5216 to 5218 of 1987. No doubt, in the proceedings Rule 8 and the matters stated therein are quoted and the average rates for the last four years are also quoted. But, it is not possible to infer from the proceedings as to on what basis the aforesaid rates are fixed. Even if the rates are fixed on the basis of the average of the rates deduced from the rates of the last four years, it is not possible to appreciate that the committee has followed certain pattern. In view of the fact that it is not possible to find out as to what is the basis on which the rates are fixed, it is not possible to sustain the rates fixed for the year 1986-87. Mere quoting of the matters stated in Rule 8 of the Rules is not sufficient compliance with the Rules. How those aspects are applied for fixing the rates and on the application of those factors the conclusions arrived at by the Committee, must be found in the proceedings of the Committee. The Committee must bear in mind that its decision is open to judicial review. Therefore, the report of the proceedings of the Committee fixing the rates must be complete in all respects. In other words the same must be self-explanatory. As the proceedings of the Committee do not state the basis on which the rates are arrived at, it is not possible to sustain the rates fixed for the year 1986-87. ( 9 ) FOR the year 1987-88 the rates are fixed on the basis of extra long staple cotton medium and other staple cotton. The rates fixed are as follows: ginning Pressing rate per rate per quintal bale of 170 rs. Ps. Kgs. Rs. Ps. Extra long 60-00 64-00 1 staple cotton. . e. , varalakshmi and jayalakshmi (DCH-32) medium 58-00 64-002 and other. staple cotton. The rates fixed are as follows: ginning Pressing rate per rate per quintal bale of 170 rs. Ps. Kgs. Rs. Ps. Extra long 60-00 64-00 1 staple cotton. . e. , varalakshmi and jayalakshmi (DCH-32) medium 58-00 64-002 and other. staple cotton. e. , jayadhar, lakshmi, suyodhar, ak-235, sharada vestern-21 and raichur-51 the proceedings of the Meeting are made available to the Court by the respondents. A reading of the report makes it clear that the Committee was wholly guided, persuaded and swayed away by what was stated by the Chairman, State Co-operative Spinning Mills Federation, Bangalore. Therefore it is not possible to sustain such a proceeding of the Committee. According to Rule 8 of the Rules, the Committee has to take into account nine matters stated therein. But there is no such examination of the subject by the Committee with reference to the nine factors stated in rule 8 of the Rules. Therefore, it is clear that the rates fixed for the year 1987-88 are clearly opposed to Rule 8 of the Rules as the same are fixed without applying the criteria or without taking into consideration the factors stated in Rule 8 of the Rules. Therefore, it is not possible to sustain the rates fixed for the year 1987-88 also. ( 10 ) FOR the reasons stated above, the rates fixed for the years 1986-87 and 1987-88 for ginning and pressing of cotton, are not in accordance with law and are not sustainable. Accordingly, point No. 2 is answered in the negative. ( 11 ) THE next question for consideration is as to whether the matters should be remitted back to the Committee for fixing the rates for the years 1986-87 and 1987-38. In these Writ Petitions, interim orders were passed staying the rates fixed for the years 1986-87 and 1987-88 and the petitioners were directed to maintain the accounts as to the rates charged by them and submit the same each month before this Court. No doubt, the petitioners have not filed statement of accounts for each month. But, at the time of hearing they have produced the same except the petitioner in Writ Petition No. 3516 of 1988. As far as the petitioner in Writ Petition no. No doubt, the petitioners have not filed statement of accounts for each month. But, at the time of hearing they have produced the same except the petitioner in Writ Petition No. 3516 of 1988. As far as the petitioner in Writ Petition no. 3516 of 1988 is concerned, he did not have the benefit of the interim order and the interim order was refused on 7-4-1988 because the Writ Petition was filed after the expiry of the period for which rates were fixed. ( 12 ) THE learned Government Pleader on going through the accounts and on receiving instructions from the officiate of the Department of Agriculture, submits that the petitioners have charged the rates which were prevalent in the year 1985-86. It is submitted on behalf of the petitioners that as the rates for the year 1987-88 were stayed, they could only collect the rates fixed for the year 1985-86 which were not challenged by them. ( 13 ) UNDER these circumstances, it appears to me that no useful purpose is served by remitting these matters to the Committee to refix the rates for the years 1986-87 and 1387-88 as those years have elapsed and the rates for the year 1988-89 have already been fixed, and, now, the committee has to fix the rates for the year 1989-90. Hence, it is not a fit case for remitting the matters to the Committee. ( 14 ) FOR the reasons stated above, these Writ Petitions are disposed of in the following terms: (1) Section 2b (2) of the Act, as substituted by the Karnataka Act No. 18 of 1986, is valid. It is not violative of Article 14 of the Constitution. (2) The rates fixed for the years 1986-87 and 1987-38 for ginning and pressing of cotton are quashed. (3) In the facts and circumstances of the case, it is not necessary to issue a direction to the committee to fix the rates afresh for the years 1986-87 and 1987-88. (4) There will be no order as to costs.