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Allahabad High Court · body

1992 DIGILAW 494 (ALL)

Aalu Phal Arhati Veyapari Sangh v. Krishi Utpadan Mandi Samiti, Haldwani

1992-04-09

M.K.MUKHERJEE, R.A.SHARMA

body1992
JUDGMENT R.A. Sharma, J. - Petitioner, which is a registered society, formed by the dealers of fruits, vegetables and potatoes in the town of Haldwani, has by means of this writ petition challenged the validity of Rule 79(2) of The Uttar Pradesh Krishi Utpadan Mandi Niyamawali, 1965 (hereinafter referred to as the Rules), framed under the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam (hereinafter referred to as the Act) and has also prayed for consequential relief in connection therewith. Grievance of the petitioner is that its members, who carry on business of Kachcha Arhat of fruits, vegetables and potatoes in the town of Haldwani, act as commission agents in commercial sense by virtue of which they bring about privity of contract between the agricultural producers and the purchasers, for which they charge commissions and in addition to that they render various other services to the agricultural producers, such as inducing buyers for immediate cash payment, facilities of loading/unloading, weighment, sorting, transporting, giving prompt information regarding prevailing market conditions, arranging for packing material such as gunny bags and in lieu of these services they have been charging various commissions, such as Arhat, rebate, Mazdoori, postage, Sangh, agency commission, Keraya, cost of wear and tear of the packing materials etc. It is stated that in this manner the members of the petitioner society charge commission at the rate of 7 per cent on all purchases, except potatoes on which the rate of commission is 4 per cent, but the Mandi Samiti does not permit them to realise anything other than the charges specified in Rule 79(2). Hence this writ petition. 2. Sri Rakesh Dwivedi, learned counsel for the petitioner has made two submissions, namely, (i) Rule 79 (2) is ultra vires, and (ii) even if the rule is held to be valid, Mandi Samiti cannot prevent the members of the petitioner from realising their dues from the producer sellers. Sri B. D. Mandhyan, learned counsel for Mandi Samiti has, on the other hand, disputed the aforesaid submissions. 3. Before enactment of the Act in 1964 by State Legislature, traders used to realise innumerable charges and exactions from agricultural producers, who had no alternative but to pay the same due to mal-practice in the market. The State Legislature had to inter vene by enacting the Act. 3. Before enactment of the Act in 1964 by State Legislature, traders used to realise innumerable charges and exactions from agricultural producers, who had no alternative but to pay the same due to mal-practice in the market. The State Legislature had to inter vene by enacting the Act. Objects and reasons of the Act are reproduced below: "The present chaotic state of affairs as obtaining in agricultural produce markets is an acknowledged fact. There are innumerable charges, levies and exactions which the agricultural producer is required to pay without having any say in the proper utilisation of the amount so paid by him. In matters of dispute between the seller and the buyer, the former is generally put at a disadvantage by being given arbitrary awards. The producer is also denied a large part of his produce by manipulation and defective use of weights and,scales in the market. The Government of India and the various committees and commissions appointed to study the condition of agricultural markets in the country have also been inviting the attention of the State Government from time to time towards improving the conditions of these markets. The proposal to enact a marketing legislation was first taken up in 1938, but it could not go through as the then Ministry went out of office soon after its inception. The Planning Commission stressed long ago the legislation in respect of regulation of markets should be enacted and enforced by 1955-56. Most of the other States have already passed legislation in this respect. The Planning Commission stressed long ago the legislation in respect of regulation of markets should be enacted and enforced by 1955-56. Most of the other States have already passed legislation in this respect. The proposed measure to regulate the markets in this State has been designed with a view to achieving the following directions : (i) to reduce the multiple trade charges, levies and exactions charged at present from the producer sellers; (ii) to provide for the verification of accurate weights and scales and see that the producer-seller is not denied his legitimate due; (iii) to establish market committees in which the agricultural producer will have his due representation; (iv) to ensure that the agricultural producer has his say in the utilisation of market funds for the improvement of the market as a whole; (v) to provide for fair settlement of disputes relating to the sale of agricultural produce; (vi) to provide amenities to the producer seller in the market; (vii) to arrange for better storage facilities; (viii) to stop inequitable and unauthorised charges and levies from the producer-seller; and (ix) to make adequate arrangements for market intelligence with a view to posting the agricultural producer with the latest position in respect of the markets dealing with his produce". Vide U.P. Gazette Extraordinary dated 4th August, 1964". As is apparent from the objects and reasons, the Act was enacted to reduce, regulate and stop multiple trade charges, levies and exactions from the producer-sellers and to regulate sale and purchase of the agricultural produce in the market area. To attain its objects the Act provides for declaration of the market area, principal market yard, sub-market yard and for constitution of Mandi Samiti, which has been entrusted with various duties and functions by the Act, rules and bye-laws framed thereunder. S. 16(1) of the Act places obligation on the Mandi Samiti to enforce provisions of the Act, rules and bye-laws framed thereunder and to provide such facilities for sale and purchase of the specified agricultural produce in the market area, as may be specified by the Board or considered necessary by the Mandi Samiti. Sub-sec. S. 16(1) of the Act places obligation on the Mandi Samiti to enforce provisions of the Act, rules and bye-laws framed thereunder and to provide such facilities for sale and purchase of the specified agricultural produce in the market area, as may be specified by the Board or considered necessary by the Mandi Samiti. Sub-sec. (2) of this Section further inter alia lays down that the Mandi Samiti to ensure fair dealings between the producers and persons engaged in sale or purchase of specified agricultural produce and prompt payment to the sellers; to check and verify weights, measures, weighing and measuring instruments used in the market area; to collect and disseminate all such in formations as may be of advantage to the producers and other persons engaged in sale or purchase of specified agricultural produce to standardise and regulate trade charges, market practices and customary methods of sale and purchase of specified agricultural produce; to control and regulate admission to and use of principal market yard and sub-market yard; to provide suitable amenities in the market yard. 4. In order to give complete control to the Mandi Samiti over the market areas and to prevent the unauthorised persons from carrying on the business in the market yard, S. 9 prohibits any local bodies or other persons within the market area to set-up, establish or continue any place for the sale-purchase, storage, weighment or processing of the specified agricultural produce except under and in accordance with the conditions of licence granted by the Samiti. Sub-sec. (2) of this Section prohibits carrying on of business or work in the market yard as a trader, broker, commission-agent, warehouseman, weigh man, Palledar or in such other capacity as may be prescribed in respect of any specified agricultural produce, except under and in accordance with the conditions of licence obtained from Mandi Samiti. S. 2(b) has defined "broker" or "Dalal" as a person who negotiates or arranges contract for purchase or sale of agricultural produces on behalf of his principal on payment of commission or remuneration. The "commission agent" or "Arhatiya" have been defined by S. 2(e) to mean a person who makes or offers to make a purchase or sale of agricultural produce, on behalf of the owner or seller or purchaser of the agricultural produce for Arhat or commission. The "commission agent" or "Arhatiya" have been defined by S. 2(e) to mean a person who makes or offers to make a purchase or sale of agricultural produce, on behalf of the owner or seller or purchaser of the agricultural produce for Arhat or commission. With a view to eradicate the malpractice of realising excessive trade charges from the producer-sellers the Legislature has enacted prohibition in S. 10 against the realisation of trade charges except those prescribed by Rules and Bye-laws. S. 10 of the Act, being relevant is reproduced below: "10. No Trade Charges Permissible Except as Prescribed by Rules or bye-laws- (1) As from the date to be notified by the State Government in the Gazette, no person shall in a Principal Market Yard or Sub Market Yard, levy, charge or realise, any trade charges other than those prescribed by rules or bye-laws made under this Act, in respect of any transaction of sale or purchase of the specified agricultural produce and no Court shall, in any suit or proceeding arising out of any such transaction, allow any claim or counter-claim, any trade charges not so prescribed. (2) All trade charges shall be payable by the purchaser". Trade charges have been defined by S. 2(x), as follows:- " "trade charge" means any charge, by whatever name called, which is realised or may be realised by, or may be payable to, a trader in respect of any transaction of sale or purchase of any specified agricultural produce under or purporting to be under any custom or usage of trade, or otherwise; Explanation :- Every deduction other than a deduction made on account of deviation from sample when the purchase is made by sample, or on account of deviation from standard when the purchase is made by reference to a known standard, or on account of difference between actual and the standard weight or measure shall be deemed as a trade charge". Rule 79 of the Rules, which deals with' trade charges is also reproduced below : "79. Rule 79 of the Rules, which deals with' trade charges is also reproduced below : "79. Trade charges (Section 10):- (1) As from the date notified by the State Government under Section 10 of the Act, no person shall, in a Principal Market Yard or Sub-Market Yards, levy, charge or realise, in respect of any transaction of sale or purchase of the specified agricultural produce, any trade charges, other than those specified by the Market Committee under sub-rule (2). (2) The Market Committee shall specify in its bye-laws the trade charges that may be charged or realised by a trader or a commission agent or a broker or a weighman or a measurer or a Palledar holding licence under these rules, but not exceeding the limits prescribed hereunder- (i) Commission - (a) Rs. 1.50 percent (one and one half of one percentum) in the case of agricultural produce other than fruits and vegetables (including potato). (b) Rs. 3.00 per cent (three percent), in the cases of fruits and vegetables (including potato) (ii) Brokerage - Re. 0.50 percent (one half of one per centum). (iii) Weighment - Re. 0.15 per quintal (fifteen paise per quintal). (iv) Palledari - Re. 0.20 per quintal (twenty paise per quintal). (3) All trade charges shall be payable by the purchaser; Provided that weighment or measuring or handling charges, if any, before auction, as maybe specified by the Market Committee in its bye-laws, shall be payable by the seller. (4) Without prejudice to the provisions of Section 37 of the Act, any trader or his servant, or any commission agent or his servant, or any broker, warehouseman, weighman or measurer soliciting or receiving fees other than those prescribed in the bye laws under sub-rule (2) or sub-rule (3), as the case may be, shall be liable to be cancellation of his licence. Sub-rule (2) of Rule 79 has been substituted in 1986 and substituted Sub-rule is as follows :- "The Market Committee keeping in view the public interest shall specify in its bye-laws the trade charges that may be charged or realised by a trader, a commission agent, a broker, a weighman, a measurer or a palledar holding licence under these rules". 5. 5. From combined reading of Section 10 and Rule 79 it is apparent that no person whether a trader, commission agent or broker, can charge, levy or realise in respect of any transaction of sale or, purchase of the' specified 'agricultural produce, any trade charges other than those specified by or under Rule 79 and all these trade charges are payable by the purchasers. However, by proviso appended to sub-rule (3) such weighment or measuring or handling charges, before auction, as may be specified by Mandi Samiti, can be realised from seller. Sub-rule (4) makes a penal clause, providing for collation of the licence if any fee other than those prescribed under sub-rule (2) and (3), is cited or received. 6. One of the objects of the Act being to reduce, regulate and stop multiple trade charges from the producer-sellers, the Legislature has enacted prohibition in Section 10 so as to regulate and stop unauthorised trade charges except as may be prescribed by the rules or bye-laws. Rule 79 has been framed for carrying out the mandate contained in Section 10. This Rule is in consonance with the provisions of the Act and is perfectly valid. It is, as such, not open to any person including the members of the petitioner's society to charge or levy any amount other than trade charges and such other charges as are specified by or under Rule 79. 7. Learned counsel for petitioner has, however, contended that the members of petitioner's society are rendering various services for which they are entitled to recover the commission from producer-sellers. On this basis it has been contended that Rule 79 is ultra vires, being violative of the right to carry on business. It is further contended that the charges, which are sought to be realised by the members of the petitioner from producer sellers, do not fall within purview of the trade charges as defined in the Act and as such can neither be controlled nor prevented from being realised by the Mandi Samiti. It is not possible to agree with the learned counsel. Although the petitioner has asserted but the Mandi Samiti has disputed that the facilities are provided by the petitioner's members to the producer-sellers. It is not possible to agree with the learned counsel. Although the petitioner has asserted but the Mandi Samiti has disputed that the facilities are provided by the petitioner's members to the producer-sellers. But it is not necessary for this court to decide as to whether any such facility, as is alleged in the writ petition, is being provided by the members of the petitioner's Society to the producer-sellers, as such a controversy cannot he resolved under Article 226 of the Constitution of India. Presuming that the members of petitioner's society are providing facilities, as are mentioned in the writ petition to the producer sellers, Rule 79 cannot be declared ultra vires on that account. The Act and the Rule 79 do not prohibit any normal commercial transactions between the traders and producers or between the sellers and purchasers or their agents. If any person, whether trader or commission agent, supplies under a contract, any commodity or renders service to the producers, it is open to him to realise its value from them but it is not liable to be deducted from the price for which the agricultural produce has been sold in the market yard. The producer-seller is entitled to be paid the whole price of the agricultural produce after deducting the permissible trade charges in accordance with Rule 79. This rule does not prohibit trader or commission agent or any other person from carrying on their business of sale of goods, services. These persons are free to carry on their business, but they cannot utilise the sale of the agricultural produce through the Mandi Samiti, for realisation of their so-called dues. For that purpose they have to take recourse to the ordinary course of law and they cannot be permitted to violate the provisions contained in Section 10 and Rule 79. The mal practice which has been prohibited by the Act, cannot be re-introduced in the guise of providing so-called facilities to the producer-sellers. 8. The writ petition lacks merit and is accordingly dismissed with costs.