KRISHI UTPADAN MANDI SAMITI CHANDPUR BIJNOR v. AGARWAL KHANDSARI UDYOG
1995-12-03
R.B.MEHROTRA, R.K.SINGH
body1995
DigiLaw.ai
R. B. MEHROTRA, J. In both the aforesaid !first Appeal From Orders similar facts are up for consideration and similar question of law are involved, as such both the appeals have been heard and are being decided together. First Appeal From Order No. 857 of 1995 has been treated as leading case. 2. Agrawal Khandsari Udyog and 9 others filed Civil Suit No. 177 of 1995 in the court of the Civil Judge, Bijnor impleading Krishi Utpadau Mandi Samiti, Chandpur, district Bijnor through its secretary as defendant No. 1, Secretary, Krishi Utpadan Mandi Samiti, Chandpur, district Bijnor as defendant No. 2 and Sabhapati Krishi Utpadan Mandi Samiti Chandpur, district Bijnor as defendant No. 3. 3. The plaintiffs case as stated in the plaint of original Suit No. 177 of 1995 are : The plaintiffs are the partnership concerns and the Units of the plaintiffs are situate within the limits of Krishi Utpadan Mandi Samiti, district Bijnor. The plaintiffs are carrying out business of manufacturing Gur, Gur Badla, Rab, Salawat and Khandsari. It was further stated that the plaintiffs are doing business of manufacturing the aforesaid products by processing sugarcane and are purchasing the sugarcane for the purposes of production. Sugarcane is not a specified agricultural produce on which the market fees should be levied. It was further stated that the plaintiffs are not purchasing or selling any material within the market area of defendant No. 1. The plaint alleged that the plaintiffs used to send their own produce to various Mandis for sale on commission basis through commission agents. As such the plaintiffs are neither selling nor purchasing any specified agricultural Produce within the market area and it was further contended that on the aforesaid basis, no licence fee is imposable on the plaintiffs under the provisions of U. P. Krishi Utpadan Mandi Adhiniyam, 1964 (hereinafter referred as the Act. ). 4. Paragraph 14 of the plaint of the aforesaid suit is relevant for the purposes of the present case, as such the same is reproduce herein : "that the defendant No. 1 is not compent to charge, assess and levy and market fee on the Produce of the plaintiffs. But in spite of this the defendant Nos. 2 and 3 -have sent the alleged orders dated 5-1- 1995 to the plaintiffs. Through. These orders the defendants Nos.
But in spite of this the defendant Nos. 2 and 3 -have sent the alleged orders dated 5-1- 1995 to the plaintiffs. Through. These orders the defendants Nos. 2 and 3 informed the plaintiffs that they are liable to pay the market fee on the transactions, as demanded by the said alleged orders, details where of are given in Annexured B attached to this plaint. In fact the produce of the plaintiff regarding the aforesaid transactions has been sent on commission basis outside the market yard of defendants No. 1. As such the defendant No. 1 is not entitled to charge, assess and levy any market fee on the plaintiffs. " 5. Paragraphs15,16and 17 of the plaint stated that the details of the transactions of the products are given in Annexures b, c and d. The market fee has been challenged on the grounds in the plaint wherein it is contended that:- (1) The sale of the Products of the plaintiffs have taken place outside the market Yard of the defendant No. 1, in spite of it defendant No. 1 is levying the market fee on the plaintiffs illegally and that the plaintiffs has sent their products to commission agent and the commission agents had disposed of these products on commission to various Mandis outside the market yard of defendant No. 1. (2) That the sale has not taken place within the market yard of the defendant No. 1 and products were directly sent, to the commission agents by the plaintiffs. (3) the plaintiffs had not disposed of their products to any person but they are sending their products to the commission agents, consequently the commission agents are liable to pay market fee in view of the provisions of the Section 17 of the Act. That the transactions details of which have been given Annexure c took place outside the area of operation defendant No. 1 and outside the State of Uttar Pradesh. Grounds No. (d) and (f) of the grounds are only repetition the grounds, as such are not being mentioned. Thereafter it was contended that since there is no procedure provided for assessment of the market fee, therefore, the defendant No. 1 is imposing the market fee which is wholly illegal, unauthorised and without jurisdiction.
Grounds No. (d) and (f) of the grounds are only repetition the grounds, as such are not being mentioned. Thereafter it was contended that since there is no procedure provided for assessment of the market fee, therefore, the defendant No. 1 is imposing the market fee which is wholly illegal, unauthorised and without jurisdiction. Mainly on the aforesaid basis, the plaintiffs claimed relief that the defendants, their agents, servants and employees be permanent restrained by means of a permanent prohibitory injunction from realising market fee on the basis of illegal assessment order, dated 5-1-1995, details whereof are given in Annexure a. 6. Annexure a attached to the plaint gives details to as many as on orders passed by the Mandi Samiti in respect of various plaintiffs. All these orders are, dated 24-1-1995. None of the transactions attached to the plaint relate to the order, dated 5-1-1995 against which the relief to claimed in the plaint. The copy of the plaint which has been filed along with the counter-affidavit does not contain Annexures B C and D. However that is not relevant for the purposes of decision of the present First Appeal From Order. The copy of the application for temporary injunction filed the plainttiffs before the trial court has also been filed as Annexure 3 to the counter affidavit (filed in reply to interim application filed in this appeal ). In the application filed for temporary injunction, in Paragraph 7 therefore, it is again reiterated that the defendant No. 1 has illegally issued demands against the plaintiffs for recovery of the market fee in the tune of Rs. 6,77,952. 37 on the basis of the orders, dated 5-1-1995, details whereof are given in Annexure a to the plaint need not to reiterate that Annexure a did not contain the details of the order passed on 5-1-1195 instead it contained only the substance of the order passed on 24-1-1995. 7. Another document of which reference is required to be made for the purposes of disposal of the present case is Annexure b filed with the counter affidavit which is a detailed order passed by the Krishi Utpadan Mandi Samiti, Chandpur, district Bijnor, dated 24-1-1995 in the afore?
7. Another document of which reference is required to be made for the purposes of disposal of the present case is Annexure b filed with the counter affidavit which is a detailed order passed by the Krishi Utpadan Mandi Samiti, Chandpur, district Bijnor, dated 24-1-1995 in the afore? said order it is mentioned that on investigation it is revealed that in all 76 gate passes had been issued by the Krishi Utpadan Mandi Samiti Chandpur to Agrawal Khandsari Udyog, Akbarpur Tigri and out of the aforesaid 76 gate passes, 19 were classified in class I and the details of those 19 gate passes were given wherein it was stated that in respect of aforesaid gate passes, the assessee has accepted advance money as such m accordance with the provisions of Section 2 (r) of the Act the assesses is liable to pay market fee of Rs. 25,660. 18 on a sale value of Ks. 17,10,679. 36. 8. The aforesaid annexure is wholly irrelevant for purposes of determining the present controversy as Annexure b filed with the counter affidavit is not and order, dated 5-1-1995 which was under challenge instead ft is an order, dated 24-1-1995. 9. It may also be mentioned that it was also contended in the plaint that defendant No. 1 had issued notice to the plaintiffs and in reply thereof the plaintiffs had filed their objection contending therein that they arc selling produce through commission agents outside the market area. On consideration of the plaintiff objection the Mandi Samiti had imposed market fee. In the plaint it was further contended that the market fee had been imposed on wrong basis. Thus it is clear that the market fee-was imposed only after hearing the plaintiffs version and after giving opportunity to the plaintiffs. 10. The trial court issued notice to the defendants in both the suits as well as on temporary injunction application. 11. The defendants filed their objection to the application of temporary injunction contending that the defendants have imposed market fee only on these transactions where the sale has taken place in the market area.
10. The trial court issued notice to the defendants in both the suits as well as on temporary injunction application. 11. The defendants filed their objection to the application of temporary injunction contending that the defendants have imposed market fee only on these transactions where the sale has taken place in the market area. It was further contended, (i) that the plaintiffs are liable to pay the market fee, (ii) that the High Court has laid down that in respect of the goods where the traders claimed that sale has taken place outside the market area, the traders will produce that sale vouchers within the prescribed limits and those vouchers will be scrutinised by the Mandi Samiti and if on the basis of sale vouchers the Mandi Samiti is not satisfied, then the Mandi Samiti is competent to impose the market fee and (iii) that in pursuance of the order of the High-Court, dated 3-11-1993, the gate passes were issued which did not mean that wherever the gate passes had been issued, the sale had taken place outside the Mandi Yard. Market fee has been imposed wherein it has been found that the sale has taken place within the market area. The allegation to the contrary, made in the plaint was denied. It was also stated that since defendant No. 2 refused to oblige the plaintiffs, he has been impleaded as a defendant in personal capacity and wrong allegations have been made against him, only for the purposes of harassing him. 12. Details of Suit No. 178 of 1995-Maheswari Khandsari Udyog v. Krishi Utpadan Mandi Samiti, giving rise to First Appeal From Order No. 858 of 1995 had not been brought on record before us. However, the parties agreed that the facts in both the cases are similar and on the basis of the aforesaid concession, we are deciding both the aforesaid First Appeal From Orders together in the present matter. On the basis of the agreement of the parties, First Appeal From Order No. 857 of 1995 has been treated as leading case and submissions of the counsel were confined only in respect of record of First Appeal From Order No. 857 of 1995. 13.
On the basis of the agreement of the parties, First Appeal From Order No. 857 of 1995 has been treated as leading case and submissions of the counsel were confined only in respect of record of First Appeal From Order No. 857 of 1995. 13. The trial court, vide its order, dated 31-5-1995, allowed the application for temporary injunction of the plaintiffs taking a view that, prima facie, the plaintiffs have succeeded in establishing that the sales in dispute have take n place outside the market area and for arriving at the aforesaid finding mainly relied upon the report of Sri P. K. Kaushik, who was appointed as a Commissioner to verify the correctness of the dis puted vouchers filed by the plaintiffs in respect 01 their sales. 14. The vouchers filed by the plaintiffs in support of their case have now been placed on record in the present case by means of a supple mentary-affidavit regarding which the Commissioner examined the controversy. 15 We have carefully examined all the aforesaid vouchers which are contained in as may as 20 pages in respect of various plaintiffs and have been filed collectively as Annexure !. None of the vouchers relates to order, dated 5-1-1995 which was under challenge in the present suit. However, along with the supplementary rejoinder affidavit, Krishi Utpadan Mandi Samiti has filed an order, dated 5-1-1995 passed in respect of Agrawal Khandsari Udyog. Along with the order aforesaid, the details of the transactions on which market fee has been imposed are also given. We will refer to the said documents at appropriate place. 16. Aggrieved by the aforesaid order of temporary injunction, the Krishi Utpadan Mandi Samiti has filed the present First Appeals. From Order. 17. The plaintiffs have filed a caveat and the counsel for the plain tiffs, who are arrayed as respondents herein, prayed for time for filing counter-affidavit at the admission stage which was granted to them, the parties have exchanged their affidavits in pursuance of the order of this Court and in the circumstances of the case, we finally heard the matter at the admission stage itself with the consent of the parties. 18. We have heard learned counsel for the appellants Sri B. D. Mandhyan in support of this appeal and Sri Sudhir Chandra, the learned Senior Advocate ably assisted by Sri Anil Sharma, the counsel for the respondents in opposition thereof. 19.
18. We have heard learned counsel for the appellants Sri B. D. Mandhyan in support of this appeal and Sri Sudhir Chandra, the learned Senior Advocate ably assisted by Sri Anil Sharma, the counsel for the respondents in opposition thereof. 19. Learned counsel for the appellants has contended that the market fee having been imposed in accordance with the procedure prescribed and in accordance with the Division Bench decision of this Court in the matter of Shri Mahal axmi Sugar Works, Farid Nagar v. State of Uttar Pradesh, 1987 UPLBEC 957, the. only remedy available to the plaintiffs is to file a revision under Section 32 of the Act against the impugned order, the civil court has no jurisdiction to entertain a suit wherein the Mandi Samit has imposed the levy in accordance with the procedure prescribed by the High Court in the aforesaid decision. 20. Sri Mandhyan has contended, that an Explanation has been added to Section 17 of the Act, which is as under : Explanation.-For the purpose of clause (iii) unless the contrary is proved, any specified agricultural produce taken or proposed to be taken out of market area by or on behalf of a licenced trader shall be presumed to have been sold within such area and in such case, the price of such produce presumed to be sold shall be deemed to be such reasonable price as may be ascertain ed in the manner prescribed. " For the purposes of clause (iii), unless the contrary is proved, any specified agricultural produce taken or proposed to be taken out of the market area by or on behalf of the licenced trader shall be presumed to have been sold within the area and in such case, the price of such produce presumed to be sold shall be deemed to be recorded price as may be ascertained in the manner prescribed. 21. The aforesaid Explanation clearly mandates that there is a presumption of a sale in respect of agricultural produce to have taken place in the market area where the unit is situate unless the contrary is proved. The plaintiffs failed to prove that the sale had taken outside the place and prima facie the Mandi Samiti having been satisfied that the market fee is leviable, the contrary could not have been proved merely on prima facie basis.
The plaintiffs failed to prove that the sale had taken outside the place and prima facie the Mandi Samiti having been satisfied that the market fee is leviable, the contrary could not have been proved merely on prima facie basis. The court below has committed patent error of law in by passing the aforesaid presumption on irrelevant consideration. 22. Next contention of Sri B. D. Mandhyan was that in any case in matters where dues are recoverable as arrears of land revenue, as in the case of market fee, the civil court could not have granted injunction except by ensuring security for the said amount. The trial court committed a gross error in granting temporary injunction in favour of the plaintiffs without even ensuring the security for the aforesaid amount. 23. Lastly it was contended that since by imposing the market fee only some money was to be recovered from the plaintiffs and the plaintiffs failed to prove that, they will suffer an irreparable injury, if they are compelled to pay the aforesaid amount. It was contended that neither in the plaint nor in the application for temporary injunction, it was stated that the plaintiffs are not in a position to pay the assessed amount. For want of such averment, the plaintiffs failed to demonstrate any irreparable injury which is a condition precedent for granting any temporary injunc tion in favour of the plaintiffs. 24. Sri Sudhir Chandra, learned Senior Advocate in reply to the aforesaid contentions, strenuously contended that it is settled proposition of law that under Section 9 of the Code of Civil Procedure, all suits are cogni zable by civil courts unless the jurisdiction of the civil court is excluded either expressly or impliedly by any statutory provision. No such pro vision is contained in the Act, as such the civil court was competent to examine the validity of levy for an amount alleged to be a market fee which is completely outside the purview of the Act.
No such pro vision is contained in the Act, as such the civil court was competent to examine the validity of levy for an amount alleged to be a market fee which is completely outside the purview of the Act. According to him the trial court did not commit any error by granting temporary injunction in favour of the plaintiffs as on the fact of the record, the trial court was satisfied that no sale has taken place within the market area and in any case, it was established from the record that sales have been conducted by the plaintiffs through Commission Agents and in view of Section 17 of the Act, it is mandated that market fee in respect of sales conducted through Commission Agents, is recoverable only from the Commission Agents and not from the licenced traders. According to him it is established on record that all sales in the present cases were conducted through their Commission Agents and as such the amount alleged to be market fee could not have been recovered from the plaintiffs in any case, in view of the statutory mandate of Section 17 of the Act. Sri Chandra has placed reliance on following decisions in support of his contention : (1) Shri Mahalaxmi Sugar Works, Farid Nagar v. State ofuttar Pradesh, (supra) ; (2) Ram Chandra Kail ash Kumar & Co. v. State of U. P. , AIR 1980 SC 1124 ; and (3) Ram Koran v. Krishi Utpadan Mandi Samiti, Saharanpur, (1994) 2 UPLBEC 1405. 25. We have given a careful consideration to the submissions made by the learned counsel for the parties. Without examining the details of the submissions made by the counsel for the parties in the present matter, we are of the view that the controversy in the present matter is confined only to the orders passed by defendant No. 1 on 5-1-1995. We are constrained to say that in the entire impugned judgment, the trial court failed to refer to any document relating to the order passed on 5-1-1995. 26. At this stage, we will like to place on record the order, dated 5-1-1995 which has been filed alongwith the Supplementary Rejoinder Affidavit filed by the appellants in reply to the Supplementary counter affidavit filed by the respondents.
26. At this stage, we will like to place on record the order, dated 5-1-1995 which has been filed alongwith the Supplementary Rejoinder Affidavit filed by the appellants in reply to the Supplementary counter affidavit filed by the respondents. This is a detailed reasoned order in respect of Agrawal Khandsari Udyog, Akbarpur Tigri, who is one of the plaintiffs in the suit giving rise to First Appeal From Order No. 857 of 1995. In this order, it has been stated that Agrawal Khandsari Udyog, who is a wholesale trader of Chandpur and is a licenced firm of the Mill, purchased sugarcane obtained gate passes from the Mandi Samiti in respect of the agricultural produce and sent the produce outside the Mandi area and for proving that the sale has taken outside the Mandi area, has produced gate passes, thereafter the details of the gate passes are given, which are 17 in number. Thereafter the order contains that on examining the aforesaid gate passes, some gate passes were classified in 7 classes and in class ! details of some gate passes were mentioned regarding which it was mentioned that in respect thereof, the traders have received, advance payments as part payment and for rest of the classification, it was found that tran saction were concerned with the gate passes, thereafter it was recorded that out of the aforesaid gate passes, in respect of 17 gate passes, the trader has failed to prove that the sale has taken outside area of Mandi Samiti, Chandpur. So an amount of Rs. 36,459. 88 was imposed as market fee on the aforesaid trader. A chart has also been annexed with the aforesaid order giving details of 17 of gate passes on which market fee has been imposed and the chart includes the details of the gate passes, the date thereof and the date of the sole. In the present matter, against various gate passes, ,it is mentioned that substantial amount has been received in cash on the same date on which the sale is alleged to have taken place. Likewise in other case, it is demonstrated that even prior to the date of sale, a substantial amount has been received by the concerned trader. 27.
In the present matter, against various gate passes, ,it is mentioned that substantial amount has been received in cash on the same date on which the sale is alleged to have taken place. Likewise in other case, it is demonstrated that even prior to the date of sale, a substantial amount has been received by the concerned trader. 27. It may also be mentioned that neither in the impugned order, the details of the order passed by defendant No. 1 are mentioned nor the plaintiffs cared to bring on record the relevant orders which have been impugned in the suit nor the same were annexed with the application for temporary injunction. One of the orders which has been placed before us does, prima facie, make out that in respect of plaintiff No. 1, who has been arrayed as respondent No. 1, F. A. F. O. No. 857 of 1995 , the Mandi Samiti did not pass any arbitrary order in imposing the marked fee nor on the basis of the aforesaid order, it can be said that the amount which has been imposed as market fee has been wrongly described as market fee and the argument that no such amount is leviable, is, prima facie, not tenable. 28. The Division Bench decision of this Court in Shri Mahalaxmi Sugar Works Farid Nagar (supra), was challenged in the Supreme Court. The apex Court granted leave against the impugned order and disposal of the matter interpreting Explanation to Section 17 of the Act, referred to above, held as under : "--------In view of that presumption, it is open to the appellant-Krishi Utpalan Mandi Samiti to raise demands against the dealers before passes could be issued. If there is a valid rebuttal in that the sale did not take place within the notified market area, the dealers will be entitled to the passes otherwise not. Of course, even the dealers are compelled to- pay the market fee as demanded, It is open to them to challenge it in the manner provided under the Act. " 29. Several other orders have been brought to our notice wherein this Court has refused to pass any interim order in favour the traders restraining the Mandi Samiti to realise the market fee. 30. In the present case, we are of the opinion that all the orders need not be referred.
" 29. Several other orders have been brought to our notice wherein this Court has refused to pass any interim order in favour the traders restraining the Mandi Samiti to realise the market fee. 30. In the present case, we are of the opinion that all the orders need not be referred. No case has been brought to our notice where any Court has stayed realisation of the market fee after decision of the Supreme Court in the case of Shri Mahalaxmi Sugar Works Faridnagat and others (Supra ). 31. We are shocked and surprised to notice that in such a vital matter, the trial court passed an order of permanent injunction without even examining the impugned order passed by the Mandi Samiti, dated 5. 1. 1995 which was the sale basis of challenging the levy in the suit. No other order was under challenge. As such the only scope of the suit is in respect of the order passed on 5. 1. 1995. It was the plaintiffs obligation to have brought on record the aforesaid order. The material placed before us demonstrates that no such order was filed by the plaintiffs in the court below. Despite it, the court below get examined the material which was not relevant for the purposes of controversy involved in the suit and passed an order of temporary injunction in favour of the plaintiffs without even referring to the order challenged in the suit. 32. In view of the above, we are of the opinion that other contentions raised by the counsel for the parties need not be examined in the pre sent matter. Sri Mandhyan has, however, submitted that the same officer, who has passed the impugned order has also passed various other orders in such matters which have been set aside by this Court and the officer has refused to abide by the directions of this Court saying that the interim orders passed by the High Court are not binding on the court below. Sri Mandhyan has further contended that the impugned order has been passed on extraneous consideration. However, we are not expressing any view herein in respect of the aforesaid submissions. We also want to.
Sri Mandhyan has further contended that the impugned order has been passed on extraneous consideration. However, we are not expressing any view herein in respect of the aforesaid submissions. We also want to. make it clear that since the suit is pending for final decision, we are not expressing any view on the maintainability of the suit as it is likely to prejudice either party in final decision of the suit. 33. In the impugned order, much reliance has been placed on the Commissioners report which has been placed on the record of the suit as Document No. Ga-27. The impugned order while referring to the aforesaid Commissioners report records a finding that regarding the transactions in dispute, Krishi Utpadan Mandi Samiti, Agra has certified that market fee has been paid in respect of them. The said Commissioners report has been filed as Annexure 6 to the counter affidavit filed by the plaintiff respon dents. It relates to the goods sent by M/s. Ram Gopal Vijay Kumar Cane Crusher, Pawati. The Commissioners report does not refer to any tran saction relating to any other plaintiffs. 34. We have carefully seen the array of the plaintiffs in the suit. M/s. Ram Gopal Vijay Kumar Cane Crusher, Pawati is not even the plaintiff in the suit. Besides that, the report of the Commissioner cannot be in any Way associated with assessment order passed by the Krishi Utpadan Mandi Samiti, Bijnor on 5- 1-1995. We are amazed to notice that how1 the court below placed reliance on a report of the Commissioner which neither related to the plaintiffs, nor related to the assessment order challenged in the suit. 35. Taking over all view of the matter, we are of the view that there was no material available before the court below on the basis of which the court could have been satisfied itself that the plaintiffs have, prima facie, proved that the levy of market fee demanded by the Mandi Samiti is without jurisdiction. The impugned order is patently illegal and suffers from patent order of law as it have not taken the relevant material into consideration while passing an order of temporary injunction in favour of the plaintiffs. 36.
The impugned order is patently illegal and suffers from patent order of law as it have not taken the relevant material into consideration while passing an order of temporary injunction in favour of the plaintiffs. 36. We accordingly, allow both the appeals with costs, set aside the impugned order, dated 31st of May, 1995 passed by the Civil Judge (Senior Division), Bijnor in Original Suit No. 177 of 1995 giving rise to First Appeal From Order No. 857 of 1995 and also set aside the order, dated 31st of May, 1995 passed in Original Suit No. 178 of 1995 giving rise to First Appeal From Order No. 858 of 1995 and reject the plaintiffs application/ 7-C in both the aforesaid suits. . Appeal allowed, .