Judgment :- D.V. SHYLENDRA KUMAR, J. Writ Petition by a private limited Company, having a processing unit of agricultural products essentially approved within the market area of the second respondent – Special Agricultural Produce Market Committee for Fruits and Vegetables. While this is the fourth round of writ litigation before this Court, petitioner is basically aggrieved by an endorsement dated 14.12.2004 issued by the third respondent (copy produced at Annexure – "C" to this Writ Petition) where under the petitioner has been asked to remit a total amount of Rs.43,42,776/-by way of market fee and penalty in respect of the petitioner's transactions within the market yard during the periods from 1996-97 upto 22.6.2004. 2. Petitioner had been asked to remit this amount on the premise that petitioner, a person is required to carry out his transaction within the market yard by obtaining a license, had not obtained a license and having also not paid the market fee payable in respect of agricultural produce purchased by him which was being processed in his processing unit and marketed as a processed agricultural product. 3. Version of the petitioner is that the petitioner had made an application for grant of a license in the year 2001, but had taken the stand that they were not liable to pay any market fee as they are an exporter; that the Market Committee rejected the application because of the stand of the petitioner and the appeal to the Director of Marketing under Section 74 of the Act was rejected on the ground that the period for which the petitioner had applied for license itself had expired, and the petitioner was directed to file fresh application and another application was filed by the petitioner in the year 2003 which also came to be dismissed by the Market Committee and against this order of rejection, petitioner had approached this Court by filing Writ Petition No. 36610/2004: that the Writ Petition was disposed of as per the order dated 8.11.2004 (copy produced at Annexure – "B" to this Writ Petition) permitting the petitioner to file fresh application in the prescribed proforma and directions to the Market Committee to consider the said application, expeditiously, etc. 4. It is the version of the petitioner that another application was made in the year 2004 to the Market Committee and the Market Committee promptly rejected this application also. 4. It is the version of the petitioner that another application was made in the year 2004 to the Market Committee and the Market Committee promptly rejected this application also. An appeal under Section 74(1)(a) of the Act to the Director, was disposed of as per the order dated 27.6.2005 rejecting the appeal for the reason that the petitioner had not deposited or paid the arrears of fee payable by the petitioner (Copy produced at Annexure – "D" to this Writ Petition). 5. It is further contended that the petitioner approached this Court yet again by filing W.P. no. 24478/2005 and this petition was ordered on 2.1.2006 remanding the matter to the Appellate Authority for reconsideration of the matter in the light of the directions contained in the order itself (copy produced at Annexure – ‘E' to this Writ Petition). 6. It is thereafter the Appellate Authority proceeded to pass order on 13.3.2006 observing inter alia that the petitioner had indulged in carrying on transaction in notified agricultural produce in the market yard without obtaining a license from the Marketing Committee and therefore the writ petitioner was liable to pay the market fee and the penalty amount as per the order dated 14.12.2004 (Annexure – "C"), but in the light of the directions issued by this Court, petitioner was permitted to remit the balance amount of Rs.43,42,776/-either by way of Demand Draft or by furnishing bank guarantee and to apply for license in the prescribed form and the amount/bank guarantee being furnished by the petitioner subject to the outcome of the verification of account book and other particulars regarding payment of market fee from the other dealers from whom the petitioner had purchased the agricultural products and depending on the outcome, the petitioner to claim either refund of the amount or to pay the differences. Copy of the order is produced as Annexure – "A" to this writ petition. 7. Copy of the order is produced as Annexure – "A" to this writ petition. 7. It is aggrieved by this order, the present writ petition questioning the legality of the order on the premise that the petitioner is not an evader of payment of fee to the market committee; that the orders have been passed presumptively even before verification of the books of accounts and other particulars, petitioner being called upon to pay the balance amount is neither justifiable nor legal; that the petitioner's appeal before the Appellate Authority has not been disposed of on merit, but instead the petitioner was directed either to deposit the amount or furnish bank guarantee; that when the Market Committee was yet to verify the liability of the petitioner with reference to the books of account and other particulars, such as payment of market fee by other 4 centers from whom the petitioner had purchased fruits; that there is no justification to levy of penalty even before such verification; that the Market Committee denying issue of a license to the petitioner only on the premise that the petitioner has not paid penalty amount, is not justified and at any rate it cannot be used as a ground to further penalise the petitioner holding that the petitioner is transacting without having a license; that the petitioner had filed a memo even in the earlier round of litigation before this Court as per Annexures – "F" and "F-1" produced to this writ petition and which had earlier been produced along with the memo in W.P. No. 24478/2005 indicating that the particulars of purchases made by the petitioner from other market functionaries, who had deducted the market fee and had remitted it to the Market Committee and therefore the petitioner was not liable to pay the market fee and in such state of affairs, the order both for levying market fee and penalty are not sustainable and are liable to be quashed. 8. Petition had been admitted and the respondent had been put on notice. The Market Committee is represented by Sri C.S. Patil, learned Counsel and has filed statement of objections. The Writ Petition is opposed. 8. Petition had been admitted and the respondent had been put on notice. The Market Committee is represented by Sri C.S. Patil, learned Counsel and has filed statement of objections. The Writ Petition is opposed. It is mainly urged that the fact of the matter is that the petitioner is running a processing unit in food product without obtaining a license from the Market Committee ever since the year 1999-2000; that there is a continuing violation by the petitioner all these days; that the petitioner has neither paid the market free on his own nor has been paying the market fee, but has deposited a total sum of Rs.11,00,000/-so far towards market fee only as per the direction of this Court and not on his own; that the Market Committee has been constrained to file Criminal case against the petitioner in C.C. No.16908/2000 before the Metropolitan Magistrate Court as also C.C. Nos.10743/2004 and 680/2004 for various violation committed by the petitioner under the provisions of the Act; that the petitioner taking advantage of the pendency of the writ petition, has neither paid the penalty amount nor furnishing particulars of purchases and names and full addresses of the selling dealers; that the petitioner not having complied with the requirement of furnishing a bank guarantee and security deposit for the penalty of Rs.43,42,776/-, etc., and having not complied with the interim direction issued by this Court as on 14.8.2006, question of issue of license did not arise to the petitioner; that the petitioner even today is carrying on his activities without obtaining a license; that there are no bonafides for the petitioner to prosecute this petition and the writ petition is liable to be dismissed. 9. I have heard Sri B.R. Satenahalli, learned Counsel for the petitioner, Sri H.K. Basavaraj, learned High Court Government Pleader for respondent Nos. 1 and 3 and Sri C.S. Patil, learned Counsel for the respondent No.2. 10. 9. I have heard Sri B.R. Satenahalli, learned Counsel for the petitioner, Sri H.K. Basavaraj, learned High Court Government Pleader for respondent Nos. 1 and 3 and Sri C.S. Patil, learned Counsel for the respondent No.2. 10. While Sri B.R. Satenahalli, learned Counsel would submit that the levy of market fee and penalty are not justifiable; that it has not been quantified after giving a proper opportunity; that the levy of penalty at 300% on the market fee computed by the committee on its own is neither justified nor authorized in law; non issue of license on such premise only compounds the violation and that the petitioner is not to be blamed for such a situation and the petitioner has in fact stopped the processing activities from the year 2005; that there is no further liability nor requirement on the part of the petitioner to obtain a license and his application was pending which has not been examined on proper consideration and therefore the Market Committee be directed to issue a license for the period for which he had applied and regularize the whole thing; penalty amount is not sustainable; that the Market Committee be directed to be provide the petitioner proportionate refund in respect of the amount which is not liable to be paid by the petitioner, but for covering it, the petitioner has already deposited a sum of Rs.11,00,000/-. 11. 11. On the other hand, submission of Sri C.S. Patil, learned Counsel appearing for respondent No.2 is that the petitioner who has not co-operated with the Market Committee for effectuating the impugned order dated 13.3.2006 passed by the Director of Marketing -Appellate Authority; that the petitioner has not even furnished the particulars of the details such as from whom the petitioner had made purchase; that the petitioner has not produced purchase bills, which could evidence the deduction and payment of market fee by the selling dealer and paid by the petitioner; that in the absence of the same, there is no way of the Market Committee accepting the claim of the petitioner that he has already paid the market fee by paying the same to the selling dealer; that the Market Committee has already filed prosecution in respect of various violations committed by the petitioner; that the quantification of market fee and the (levy of) penalty is full justified under Section 70(1)(a) of the Act and there is no need for interference and submits that the petition may be dismissed. 12. While it is a fact that the petitioner's unit is carrying on activity of processing agricultural products from the year 1999-2000 onwards and till as of now the petitioner does not have a license, it is also to be taken note that an application had been made by the petitioner for the first time in the year 2001 seeking for a license, though this was occasioned in the background of an inspection by the staff of the Legal Enforcement Cell of the Market Committee at the premises of the petitioner on 7.3.1999 and the follow-up action. 13. Criminal cases it appears were filed consequently as per the direction of the Director of Marketing. In this background, while there might have been some mistake on the part of the petitioner in not having obtained the license from the very beginning of his activities,, nevertheless an application has been made in the year 2001, but that has not enabled the petitioner to get a license in the circumstances noted above. 14. In this background, while there might have been some mistake on the part of the petitioner in not having obtained the license from the very beginning of his activities,, nevertheless an application has been made in the year 2001, but that has not enabled the petitioner to get a license in the circumstances noted above. 14. Be that as it may, in the present writ petition in so far as the demand for payment of market fee and penalty is concerned, it is to be noticed even in terms of the order dated 13.3.2006 passed by the Appellate Authority, the quantification of market fee payable by the petitioner is still subject to further verification of books of account and therefore it cannot be said that the actual liability on the part of the petitioner for payment of market fee has been determined. 15. Whether it is the petitioner who is to be blamed for not furnishing full particulars of the purchasers or the Market Committee is not examining the records available with it, that may relate to the question of determination of market fee, it is for the petitioner to furnish proper/full addresses of the purchasers, which could enable the Market Committee to examine the matter. If the petitioner fail to furnish the correct address of the dealers from whom he claims to have made purchases, it is open to the Market Committee to determine the market fee based on the books of account available with it. 16. While the petitioner can furnish such further particulars within a period of four weeks from today and the Market Committee can act on the same. So far as levy of penalty is concerned, it is rather difficult to sustain the penalty either under the provisions of Section 65-A of the Act or under the provisions of Section 70-A of the Act or under the provisions of the Section 70-A of the Act. 17. Section 65-A of the Act is a provision, which enables the Market Committee to impose penalty in respect of a person who fails to pay the market fee before due date. Section 65-A of the Act reads as under:- "65-A. Power of market committee to impose penalty. 17. Section 65-A of the Act is a provision, which enables the Market Committee to impose penalty in respect of a person who fails to pay the market fee before due date. Section 65-A of the Act reads as under:- "65-A. Power of market committee to impose penalty. — Where a person fails to pay the market fee payable by him under clause (i), clause (ia), clause (ii) or clause (iii) of subsection (2-A) of Section 65, to the market committee on or before the due date, the market committee shall in addition to the fee as payable, (x x x x x x) impose a penalty on such person at such rates not exceeding thirty per cent of the fee due but not less than twelve per cent of the fee due as may be specified in the bye-laws." 18. Section 70-A of the Act is a provision, which enables the Market Committee to accept the request of the person who has committed or is reasonably suspected of having committed an offence under the Act, by way of composition an amount as stipulated therein. Section 70-A of the Act reads as under:- "70. Composition of offences.—(a) where the offence consists of the failure to pay or the evasion of any fee, or other amount recoverable under this Act or the rules or the byelaws, in addition to the fee or other amount so recoverable, a sum of money not exceeding five hundred rupees or (three times the amount) of the fee or other amount whichever is greater; and 19. Reliance is placed on Section 71-A of the Act by Sri C.S. Patil, learned Counsel appearing for respondent No.2 to sustain the levy of penalty at 3 times for the market fee for the four different periods referred to in the tabular column indicated in the order dated 14.12.2004 passed by the Market Committee (Annexure -"C"). 20. The penalties are simply computed at 300% of the market value. 21. A penalty is levied only on the violation and if it is so justified. 22. The provision for levying penalty is Section 65-A and not Section 70 of the Act. The penalty provided under Section 65-A of the Act is only a sum quantified at 12 to 30% of the market fee and not beyond. 23. 21. A penalty is levied only on the violation and if it is so justified. 22. The provision for levying penalty is Section 65-A and not Section 70 of the Act. The penalty provided under Section 65-A of the Act is only a sum quantified at 12 to 30% of the market fee and not beyond. 23. So far as Section 70 of the Act is concerned, it is a provision providing for composition of an offence committed by the purchaser who may be facing prosecution. 24. Composition is not penalty. It is an option in lieu of prosecution and punishment. Therefore penalty at 300% on the market fee cannot be justified. Even otherwise penalty can follow only after determination of the actual liability for payment of market fee and not, even before qualification of market fee. 25. In the present case the actual market fee payable by the petitioner is not yet finalized, as it is still subject to verification of books of account and in this state of affairs while the so called levy of penalty in a sum of Rs.34,44,582/-in respect of the market fee payable by the petitioner from 1996-97 upto 22.6.2004 is certainly not valid and not justifiable and therefore is required to be quashed. 26. Liberty is reserved to the Market Committee to take such action, as it deems fit for levy of penalty in terms of the provisions of Section 65-A of the Act, if it, is so felt necessary and if it becomes necessary and justified. 27. The penalty part of the order dated 14.12.2004 under Annexure -"C" stands quashed by issue of a writ of certiorari. In so far as market fee of the order is concerned, it is open to the Market Committee to re-verify the books of account and such other information which the petitioner can furnish within a period of one month from today and depending on the outcome, realise the fee from out of the amount of Rs.11,00,000/-, which the petitioner has deposited. 28. Rule made absolute to the extent indicated above. 29. The Market Committee to pass orders for the purposes of quantification of the market fee for the period referred above within a period of eight weeks from the date of receipt of a copy of this order. 30. Writ Petition is disposed of.