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Patna High Court · body

2008 DIGILAW 1155 (PAT)

Lakshmi Narayan Singh v. State of Bihar

2008-08-13

body2008
ORDER Petitioner challenges in CWJC No. 15658 of 2006 the order of the Managing Director of the Bihar State Agriculture Produce Marketing Board, a Board constituted under the provision of Bihar State Agricultural Produce Marketing Act, 1960 (since repealed). By the said order dated 29.4.2004 being Annexure-8 to the said writ application, petitioner's prayer for remission for deposit of the entire year bid amount has been rejected. 2. The second writ application being CWJC No. 16019 of 2006 is for quashing the certificate proceeding initiated by the respondent-Market Committee for recovery of the said balance amount. 3. Though no counter affidavit has been filed in the first writ application, in the second writ application counter affidavit and rejoinder have been filed and in that view of the matter with the consent of the parties, the writ applications have been heard for the purpose of disposal at the stage of admission itself. . 4. Under Section 27(1) of the Act, Market Committee are authorized to levy and collect market fees on the agricultural produce bought or sold in the market area at the rate of rupee one per Rs. 100 worth of agricultural produce. In sub-section (2) it is provided that the market fee chargeable under sub-section (1) shall be payable by the buyer, in the manner prescribed. Rule 82 of the Bihar Agricultural Produce Market Rules, 1975, provides for manner of collection of market fee. Though the levy assessment and collection of market fee are in the nature of taxes as contemplated under Article 265 of the Constitution of India and thus an attribute of sovereignity, curiously, under authorization of the Board, the Market Committee were auctioning the right of collection of market fee to private individual, the constitutionality of which is seriously doubted by this Court but not being an issue, is not being decided herein. This method of auctioning sovereign function trading in taxation is unauthorized under our constitutional scheme. 5. Under these auctioning of right to collect market fee, instead of Marketing Board/Market Committee setting up their own machineries for establishing regulated market, which is the primal object under the Act, even where unorganized markets are concerned, market fee is imposed and right to collect market fee therein is auctioned to private citizen, it seems, in over zealous manner to collect revenue. This auctioning exceeded the permissible limit set by the Board. This auctioning exceeded the permissible limit set by the Board. Market Committee started auctioning road side area whereby the collecting agents started intercepting vehicles moving on the Roads and Highways and collecting marketing fee, which was wholly unconstitutional. When these excess exceeded limit, these were brought to the notice of the Board, which ultimately led to issuance of a general direction by the Board dated 11.7.1999 (Annexure-2) to the first writ application, whereby it was directed that this effect from 1.8.1999 all such settlements which entail collecting agents, collecting market fee from vehicles, be cancelled forthwith. This materially affected the petitioner. 6. It appears that the Agriculture Produce Market Committee, Masaurhi within the district of Patna advertised for settlement of right to collect market fee for various places including "Gourichak Palaki Awam Pabheri More" for which the reserve amount was Rs. 28 lacs per year. The settlement was to be made for the financial year 1999-2000. The advertisement is Annexure-A to the counter affidavit in the second writ application. Petitioner participated and ultimately the bid for appointment of collecting agent of marketing fee was settled with the petitioner for an amount of Rs. 44.51 lakhs and the petitioner immediately deposited Rs. 22.25 lakhs. Then an agreement was executed between the petitioner and the said Agriculture Produce Market Committee, Masaurhi through its Secretary and authorized signatory which is Annexure-1 to the writ application. Clause (1) of the said agreement provides period for settlement and clearly mentions that the settlement is for Gaurichak Palaki Awam Pabheri More. A reference to clause (4) thereof would show it restricts the right of the petitioner to collect market fee only from the aforesaid Gaurichak Palaki Awam Pabheri More and he had been restricted to collect market fee anywhere else. A reference to clause (13) of the said agreement would show that the petitioner was authorized to collect market fee from vehicles transporting agricultural produce through the area. These clauses, in my view, clearly establish what petitioner assert that he was given the right to collect market fee primarily with regard to road area as there did not exist organized market in that area. 7. It is pointed out that if one takes reserve jama stipulated in the agreement itself at Rs. These clauses, in my view, clearly establish what petitioner assert that he was given the right to collect market fee primarily with regard to road area as there did not exist organized market in that area. 7. It is pointed out that if one takes reserve jama stipulated in the agreement itself at Rs. 20 lakhs then calculating on basis market fee liability at one per cent for that small area, the turnover of sale and purchase of agriculture produce had to be to the extent of Rs. 20 crores, which is an imaginary amount if collection On the road or the Highway was not to be taken into account. Such an enormous turnover cannot be even imagined much less expected from any unorganized market even less from such a small place as in question. "Pabheri More" itself shows that it is road area-“More” in Hindi means turning. 8. Petitioner stated collecting market fee having already deposited Rs. 22.25 lakhs. Petitioner with difficulty was able to deposit a further amount of slightly more than Rs. 11 lakh when the said directions were issued from the Board, as contained in Annexure-2, which totally disrupted petitioner's collection efforts. This was so because petitioner was established for collecting market fee primarily from vehicles moving on road through the market area, which was disapproved by the Board and which agreement had to be cancelled. 9. Petitioner has stated that though no formal cancellation order was issued, he and all others were made aware of these directions and effectively the period of settlement was curtailed to a period of about four months only. It is on basis of this that he submits and prays that he was entitled to a remission if not was at least not required to pay the balance amount which he had bid for whole financial year. As noted above, the total bid amount was Rs. 44.51 lakhs, out of which he had already deposited about Rs. 31 lakhs and thus the order of the Managing Director rejecting his claim for remission or the initiation of the certificate proceeding for recovery of the balance amount of about Rs. 13.50 lakhs was wholly unjustified, arbitrary and unreasonable. 10. In the counter affidavit, the stand taken by the Market Committee is that the settlement was for a market though no organized market exists there. 13.50 lakhs was wholly unjustified, arbitrary and unreasonable. 10. In the counter affidavit, the stand taken by the Market Committee is that the settlement was for a market though no organized market exists there. Organized market under the scheme of the Marketing Act aforesaid is a market yard or sub-market yard established by the Marketing Board/Market Committee, which undisputedly is not in existence at Masaurhi. 11. It is then submitted by the respondents that, in fact, petitioner was prohibited from collecting market fee from vehicles and it was further submitted that, in fact, he was not collecting market fee from the vehicles moving on the road. Both of these are unsustainable. Firstly, clause (13) of the agreement, as noted above, which specifically authorizes the petitioner to collect market fee in respect of agriculture produce being transported on vehicle through the market area and secondly, even some of the receipts, as filed by the respondent being Annexure-E series to the counter affidavit in the second writ application, which are Vikraya Lekha Patra clearly show realization of fee from trucks with truck number. This belies the stand of the respondents. 12. In view of these, it is clear that, in fact- the settlement of the petitioner was for collecting market fee pre-dominatingly from vehicles crossing the area through road at "Gaurichak Palaki Awam Pabheri More" (More in Hindi means turning). 13. A reference to the impugned order of the Managing Director, as contained in Annexure-2, dated 11.7.99 to the first writ application would show that erstwhile Managing Director relies on two opinions given to him by the lawyer of the Board for the purposes of rejecting the claim of petitioner. Original records were called for and those opinions have been referred to. In my view, if anything, the two opinions clearly recommend in favour of the petitioner. They clearly hold that it would be in equitous to ask the petitioner to deposit the entire amount and hold that the petitioner was entitled to remission but the mere fact that in those opinions it was recorded that no formal order canceling petitioner's settlement having been issued, this has been made a ground to reject petitioner's claim. 14. Having considered the matter, in my view, even if petitioner is not entitled to remission, at least the respondents are not entitled to enforce any claim for the balance under the said settlement, as indicated above. 14. Having considered the matter, in my view, even if petitioner is not entitled to remission, at least the respondents are not entitled to enforce any claim for the balance under the said settlement, as indicated above. The settlement was for a period of one year at the price of Rs 44.51 lakhs and the petitioner had already deposited above Rs. 31 lakhs i.e. almost 75% whereas the directions of the Managing Director were issued in July i.e. within four months from the settlement. 15. In my view, equity would be well balanced by restraining the respondents enforcing realization of the balance amount even if no remission is granted to the petitioner. Thus, the certificate proceedings are not maintainable and permitting them to continue would be arbitrary and unreasonable. The same is quashed. Respondents will not be entitled to claim the balance of bid money. 16. The two writ applications are thus disposed of.