Sankaranainarkoil Commission v. Collector of Tirunelveli and Others
1997-02-27
JAYARAMA CHOUTA
body1997
DigiLaw.ai
Judgment :- The petitioner Sangam had filed this Writ Petition through its Secretary to issue a Writ of Mandamus or any other Writ or direction in the nature of Mandamus forbearing the respondents herein their men, agents, subordinates, representatives and Officials under their control in any manner compelling or insisting or indirectly inducting the petitioner to take out a licence under the Tamil Nadu Essential Trade Articles (Regulation of Trade) Order, 1984 with respect to the business of commission agency carried on by the members of the petitioner association in their respective commission mandies, whose names have been set out in the Annexure to the Writ Petitioner or in any manner interfering with the Commission agency business carried on by the members of the petitioner association under the purported exercise of the powers under the Tamil Nadu Essential Trade Articles (Regulation of Trade) Order, 1984. 2. The necessary facts for the disposal of this Writ Petition are these :- The facts can be gathered from the Affidavit filed by one Mr. K. Karuppasamy, who is the Secretary of the petitioner Sangam, which is a registered Association. The said Association was established during the year 1961 with an object of improving and maintaining the status of Commission agents to regulate their trade and for protection to the Commission mandy traders. The members of the petitioner association are commission agents. The farm produce and various other commodities will be brought to the respective commission agents, to whom the agriculturists are familiar. In Sankaranainarkoil town, all the commission agents have located their place of business in the market area consisting of Kalugumalai Road, South Car Street, Swamy Sannathi, Amman Sannathi, North Car Street and the connected bye-lanes. The local market is a daily market where the traders from various places used to come to purchase farm produce. The farmers used to bring their commodities to anyone of the commission agents and exhibit their commodities by sample for sale. The highest bid offered through the commission agent will be announced by the said agent, who run the commission mandy, for the particular lot. It is open to the agriculturist, whose produce were offered for sale in the secret bid, to accept the bid or reject or postpone the sale to next day or to some other day of his choice.
It is open to the agriculturist, whose produce were offered for sale in the secret bid, to accept the bid or reject or postpone the sale to next day or to some other day of his choice. Once, the bid is accepted by the agriculturists, necessary note is prepared to which the trader and agriculturist subscribe their consent. After weighing the consignment, the value of the consignment will be arrived at and the trader will directly pay the sale consideration to the agriculturists to whom the produce belongs to. Towards service charges, the commission agent used to collect 4% per rupee which include storage, weighing and unloading and other incidental charges in all. The said 4% commission is the allowance payable to the commission agent on price or value or amount of money involved in the transaction. At no point of time, the commission agent becomes the owner of the goods brought to sale nor he pays sale consideration for the said transaction. The entire sale consideration is being directly paid by the trader to the agriculturists through the commission agent who acts as a middleman. At no point of time, the title in the goods passes on to the commission agent nor the commission agent has any right or lien or hold over the produce brought to sale in his commission mandy. The commission agent neither purchases the produce nor sells the same as he never acquires any interest in the commodity, which is brought to sale to his commission mandy. Hence, the commission agent is not a dealer nor he deals with the produce which is brought to sale by the agriculturists for sale. Except, collecting a token amount of commission as an allowance for services rendered by him, the commission agent has no other interest in the transaction nor the title in the goods ever passes on to the commission agent. 3. The system of commission agency is prevalent in Sankaranainarkoil town as well as at various other towns in the District. As and when the agriculturists bring their produce to the respective commission mandy, an entry will be made in the books maintained and the consignment would be allotted a particular number or initials and full name of the owner to denote the ownership of the particular agriculturist. 4.
As and when the agriculturists bring their produce to the respective commission mandy, an entry will be made in the books maintained and the consignment would be allotted a particular number or initials and full name of the owner to denote the ownership of the particular agriculturist. 4. On conclusion of the sale, the trader will pay the sale price directly to the agriculturist besides paying sales tax to the Government. Under the Tamil Nadu Sales Tax Act as well as the Central Sales Tax Act, the commission agent is also required to be registered and all the members of the petitioner association are registered under the said provisions. 5. As a commission agent, regular accounts are being maintained, which is being scrutinised and checked by the Sales Tax Officials from time to time. The commission agent is not expected or required to take a licence for the purpose of trade regulations as he is not a dealer at all. 6. The Tamil Nadu Essential Trade Articles (Regulation of Trade) Order, 1984 (hereinafter called as Order) has been made by the State Government to maintain supplies of paddy price, wheat, wheat products, pulses, edible oils, edible oil seeds, chillies (dry), jaggery, tamarind and other essential commodities that may be notified by the State Government for securing equitable distribution and availability of the same at fair prices. The dealer is defined in clause 2(1) of the Order. The definition of dealer in the said order will not take in a commission agent like the members of the petitioner association. 7. The affidavit further reads that the State Government in their Letter No. 21787/R2/86 - Food and Consumer Protection, dated 21-6-1986 and the Commissioner of Civil Supplies in his Letter Rc. No. D1/33504/86, dated 9-7-1986 have issued a circular to the effect that the commission agents need not take out a licence under the Tamil Nadu Essential Trade Articles (Regulation of Trade) Order, 1984. Since, the respondents are insisting that the members of the petitioner association should obtain a licence under clause 4 of the Order, this Writ Petition has been filed for the relief mentioned above. 8. On behalf of the respondents, the Collector of Tirunelveli Kattabomman District has filed a counter-affidavit. He has denied all the allegations contained in affidavit of the writ petitioner, except those that are specifically admitted by him.
8. On behalf of the respondents, the Collector of Tirunelveli Kattabomman District has filed a counter-affidavit. He has denied all the allegations contained in affidavit of the writ petitioner, except those that are specifically admitted by him. According to him the members of the association are not commission agents but are actual dealers as they are receiving stocks of agricultural produce from others, store them in their premises and sell them in auction either publicly or otherwise. The dealers, who style themselves as commission agents, actually advance money to the agriculturists without any surety, and take the produce and the said produce could be auctioned or sold either in public or otherwise. The agriculturists may or may not be present at the time of sale by the self-styled commission agents. The small farmers and illiterate villagers, who offer their produce would not be ordinarily present when the bids take place. Hence, they have no other go but to accept the bid amount as intimated to them by the dealers. After the sale amount is collected from the bidders, the dealers would deduct their money already advanced and pay the remaining sums to the agriculturists, after deducting their other charges. 9. The first respondent further says that the 4% commission has been fixed by the members of the Association for the sake of suitability. According to him, these dealers act as middlemen who thrive on the helplessness of the poor agriculturists without investing any huge capital. As soon as the produce is stored in their place of business, it automatically becomes their stock. He has submitted that the system of commission agency prevail in Sankarankoil town on a very large scale which is not allowed or permitted under any law, rules or regulations. It allows a middleman or a dealer to plunder money under the camouflage of commission agents a pseudo name for this sets in this area. 10. An unauthorised custom will not confer any legal right on the petitioners and consequently they have no locus standi to file this writ petition. He reiterates that the petitioners are the dealers since they are issuing vouchers to the agriculturists for the purchases they are making and they are storing the farm produce in their place of business for sale.
An unauthorised custom will not confer any legal right on the petitioners and consequently they have no locus standi to file this writ petition. He reiterates that the petitioners are the dealers since they are issuing vouchers to the agriculturists for the purchases they are making and they are storing the farm produce in their place of business for sale. Since they are dealing in the commodities, they are the actual dealers and as such they have to necessarily obtain a licence under the order. This order is intended to regulate the trade in essential trade articles such as chillies in public interest. 11. As per the Government Letter and the letter of the Commissioner of Civil Supplies, the Collector says that it has been issued under different circumstances. Since the writ petitioners are not at all commission agents but they are the actual purchasers, the said letters will have no bar in their cases. According to him the trade of the members of the petitioner association comes under the purview of the order and hence they are bound to obtain licence as they are actually dealing in essential trade articles. He has denied the effect of seizure and has submitted that the respondents have never resorted to indiscriminate storage and seizure and the said seizure was strictly made in accordance with the provisions of law and rules. On all these grounds, the said respondents submitted that there is no merit in this writ petition and accordingly asked this Court to dismiss the Writ Petition. 12. I heard the learned Advocate Mr. P. Srinivas, on behalf of the petitioner, the learned Government Advocate Mr. Gopinathan on behalf of the respondents. The said ground of appeal of the learned Advocate for the petitioner was that since the petitioner association is not a dealer as defined under Sec. 2(1) of the Order, they need not obtain licence. It is further submitted that the members of the petitioner association are only commission agents who are collecting 4% of commission for the work they do and hence there is no question of they being considered as dealers. From the definition he has made out that the commission agent is not required to obtain licence. 13. In this connection, he has also invited my attention to the provisions of the other orders wherein the commission agents have been included as the dealers.
From the definition he has made out that the commission agent is not required to obtain licence. 13. In this connection, he has also invited my attention to the provisions of the other orders wherein the commission agents have been included as the dealers. He has invited my attention to the provisions of the Tamil Nadu Paddy and Rice (Regulation of Trade) Order, 1974 which defines the word 'Dealer' in clause 2(i) of the said order, and it specifically includes commission agents, brokers, auctioneers and any other mercantile agents, involved in such business. Similarly, clause 2(d) of the Tamil Nadu Wheat and Wheat Products (Regulation of Trade) Order, 1974 also defines the word 'Dealer' which includes commission agent, broker and auctioneer. In the case of definition of dealer found in the Tamil Nadu Groundnut and Groundnut Products (Regulation of Trade) Order, 1974, the commission agent is also included as a dealer. The submission of the learned Advocate is that if the intention of the legislature is to include the commission agent as a dealer, the legislature would definitely include commission agent also as a dealer as found in other orders. The very fact of not including the commission agent as a dealer in the present order goes to show that the intention of the legislature is not to include the commission agent as a dealer and hence the respondents are not justified in insisting the members of the petitioner association to obtain licence under the order. On these grounds, it is submitted that it is a fit case where the Court could grant the relief prayed for in the Writ Petition. 14. On the other hand, the learned Government Advocate appearing for the respondents took me through the counter-affidavit and submitted that even though the members of petitioner association are styling themselves as commission agents in all practical purposes, they are dealers having control over the commodities and hence their activities will be that of the activities of the dealers and hence they are required to obtain licence as required under the order. He has also submitted that these commission agents have full control over the commodities and it is they who auction the commodities and whatever amount they secure could be given to the producer since they are having the full control.
He has also submitted that these commission agents have full control over the commodities and it is they who auction the commodities and whatever amount they secure could be given to the producer since they are having the full control. They are the dealers for all practical purposes and hence the licence is a must under the said order. 15. After hearing the submissions and after perusing the affidavit and the counter-affidavit, I am of the opinion that the respondents are not justified in insisting the members of the petitioner association to obtain licence as per clause 4 of the order. It is pertinent to quote, the definition of 'Dealer' as found in clause 2(i) of the said order. Clause 2(i) deals with 'Dealer' means any person engaged in the business of purchase, movement, sale, supply, distribution or storage for sale of any essential trade article directly or otherwise including casual trader engaged in such business and also include persons engaged in house boiling to process paddy, but does not include a bulk consumer or a person who stores for sale of essential trade articles in a Village or Town, as the case may be produced by personal cultivation on land owned by him or held on lease : EXPLANATION : For the purpose of this sub-clause any person who is in possession of the following quantities of essential trade, articles at any time shall, unless otherwise established, to deemed to be a dealer and the onus of establishing that he is not a dealer, shall be on person concerned :- Paddy/Rice : : One Quintal or more Chillies : : One Quintal or more Wheat and Wheat products : : One Quintal or more Pulses : : Teb Quintals or more (all pulses taken together) Edibile Oils including hydrogenated vegetable oil taken together : : Five Quintals Edible Oil Seeds including groundnut in shell : : Thirty quintals of all edible oils seeds From the said definition, it is quite clear that to include a dealer he must be a person engaged in the business of purchase, movement, sale, supply distribution or storage for sale of any essential trade articles. 16. In the present case, the commission agent are neither purchasers, sellers and suppliers nor distributors. They are only the middlemen who have performed their duties as middlemen in between the seller and the purchaser.
16. In the present case, the commission agent are neither purchasers, sellers and suppliers nor distributors. They are only the middlemen who have performed their duties as middlemen in between the seller and the purchaser. For the work done by them they will collect commission of 4% per rupee. Hence, it cannot be said that the commission agents are dealers under the order. In the other Orders which I referred to above, the commission agents have been specifically included in the said definition. The intention of the legislature in the said orders is to include the commission agent as the dealer. There would not be any difficulty for the legislature to include the commission agent as dealer in the present order also. That has not been done deliberately. Hence, I am of the opinion that the members of the petitioner association are only commission agents and they will not come under the purview of definition of dealer as found in clause 2(i) of the order. Hence, for the reasons stated above. I allow this writ petition. However, there will be no order as to costs. Petition allowed.