# Arvind Kumar v. Director, R.K.U.M.P., U.P. & others

- **Citation:** (1999) 2 ILRA 112
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 1999
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/arvind-kumar-v-director-r-k-u-m-p-u-p-others-39191
- **Pages:** 15

## Text

THE INDIAN LAW REPORTS [1999
112
principle would apply even when appointment is made orally on
daily wage basis to serve a temporary need through stop gap
arrangement. One has to show that he has acquired a right to the
position order to claim a right to livelihood. Unless right to post is
established, one cannot claim infringement of the right of livelihood.
One cannot expect such right to be established de hors the rule. Such
decision was arrived at relying on the decision in the case of
Himanshu Kumar Vidyarthi Vs. State of Bihar (1997(76) FIR 237)
of the apex court, and some other decisions mentioned in the said
judgement.

23. For the foregoing reasons, the petitioner having been unable to
establish any legal right as observed herein before, this writ petition
fails and, is , accordingly, dismissed. There, will ,however no order
as to costs.
Petition Dismissed.

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1999
------
Arvind
Kumar
 Vs.
Director,
R.K.U.M.P.,
U.P. & others
------
D.K. Seth, J.
1999
------
Februar, 26
2 All.] ALLAHABAD SERIES
113
By the Court

1. This writ petition has been filed praying for a writ of certiorari
quashing the impugned order dated 22.7.98 passed by the Mandi
Samiti .... Copy of which is Annexre - 2 to the petition and for a writ
of madamus restraining the respondent from recovering the amount
including interest under the aforesaid order and for restraining the
respondents 3 to 5 from with holding issuing of Gate Passes or
taking any coercive action against the petitioners in future. There
was also a prayer in the petition for declaring the explanation to
section 17 (iii) of the U.P. Krishi Utpadan Mandi Adhiniyam, 1964
(hereinafter referred to as Mandi adhiniyam) as ultra vires, but this
prayers has not been pressed by the learned counsel for the
petitioner.

2. We have heard Sri Shanti Bhusan learned counsel and Sri. Tarun
Agarwal, learned counsel for the petitioners, and Sri B.D. Mandhyan
learned counsel for the Krishi Utpadan Mandi Samiti,Etah

3. The facts of the case are that the petitioner is a Come in
corporated under the Indian Companies Act having its registered
office at Mumbai. Earlier the business was being run by M/s Lipton
India Ltd. Which was amalgamated with M/s Brook Band India Ltd.
With effect from 7.3.1994, and this company in turn was
amalgamated with the petitioner Company M/s Hindustan Lever Ltd.
With effect from 21.3.1997 .

4. The petitioner Company is engaged in the manufacture,
distribution/sale of serveral consumer products in its various
factories located in different parts of India. The present relates to the
petitioners factory at Etah in which it produce ghee.

5. In paragraph 9 of the writ petition it has been mention that the
sales and distribution system followed by the petition Company over
the last about 40 years is uniform throughout India.. The consumer
products which are manufactured at the petitioned factory are not
sold at the factory gates but there is a stock transfer from the factory
to the Company depots which are own leased / managed by the
petitioner Company at its own costs and expenses through Agents
called " Clearing & Forwarding Agents" (hereinafter called C.& F
Agents). It is alleged that after the goods are manufactured at the
factories, the petitioner Company makes a 'stock transfer' of these
goods to the Company Depots through trucks. At the Depots the
1999
------
H.L. Ltd. &
another
 Vs.
State of U.P. &
others.
------
M.Katju, J.
B.K.Sharma,J
THE INDIAN LAW REPORTS [1999
114
goods are unloaded stored by C & F Agents for and on account of
the petitioner company as per the terms of the Contractual Agency
signed and executed between the petitioner company and the C&F
Agents. A sample copy on one such contract dated 21.3.1997
between the petitioner Company and one of the C.& F Agents
located at agreement is Annexure - 4 to the petition.

6. In paragraph 9 of the writ petition it is also alleged that at all
times the property in the finished goods stored the depots always and
exclusively vest with the petitioner Company and never with the C &
F Agents. The C & F Agents are only hired for providing certain
services viz. Unloading of goods from the trucks, storage of the
goods at the depots of petitioner, despatch of goods by trucks to the
Re-distributor stockists as per the sale orders, raising first sale
invoice behalf of the petitioner company in the name of the Redistribution stockists, and collecting the payments of sale invoices
cheques/demand drafts from the Re-distribution stockists draw as
payable to the credit of the petitioner company. It is fully alleged
that the first sale of the company products is made at the factory gate
but always at the depot gate, which is and managed by the petitioner
company through its C & F Agent This sale is made at the depot
gate to the Re-distribution stockists, and the sale consideration for
each and every invoce is directly received by the petitioner company
from the Re-distribution stockists in its own Bank account
maintained at the respective C & F Agents locations. It is further
alleged that the sale consideration is never received by the C & F
Agents in their own names or to the credit of their own Bank
accounts. If any complaints or claims for damages, short delivery,
defects, are received from the Re-Distribution stockists after
delivery of the company products to them they are entertained and
settled by the petitioner company at its own costs, without any
exposure or liability being attached to or suffered by the C & F
Agents. It has been further alleged that the petitioner manufactures
Ghee only at one location i.e. at its Etah factory in U.P. and this
Ghee is sold by the petitioner company under brand 'Anik Ghee'. It
is alleged that the entire production of ghee is stock transferred by
trucks from time to time from the Etah factory about 20 of the
company Depots, 5 of which are within U.P., and the C & F Agents
functions are limited to operated as petitioners Delivery Agents
without any further processing of the said products which are
received by them for sale to the Re-distribution stockist in a sealed
condition.

1999
------
H.L. Ltd. &
another
 Vs.
State of U.P. &
others.
------
M.Katju, J.
B.K.Sharma,J
2 All.] ALLAHABAD SERIES
115
7. In paragraph 9 the petitioner has also quoted certain relevant
provisions of the Agreements between the petitioner and the C & F
Agents, copy of which is Annexure-4 to the petition, Thus, Clause 2
(a) of the said Agreements states " The Company shall consign from
time to time its goods to the C & F Agents by air, road or rail which
the C & F Agents shall receive, stock and hold on behalf of the
company." Clause 2 (d) of the said Agreement states "The C & F
Agent has requested the company to provide goodown space to store
the goods received by the C & F Agent from the company which
the company has provided on the terms and conditions more
particularly mentioned in this Agreement and in the Agreement
supplemental to this Agreement Provided Always that the C & F
Agent shall store in the said godown the goods belonging only to the
comp any and /or its associate/ subsidiary companies." Clause 2 (e0
of the said Agreement states ":The godown shall display a sign board
indicating that the goods belong to and are the property of the
company and/ or its associate/subsidiary companies as the case may
be." Clause 2 (f) the said Agreement states "The goods entrusted to
the C& F Agent for the purpose of this Agreement remain the
property of the company and it shall always be open to the officers
of the company duly authorised in writing by the Authorised
Signatory of the comp any for the said premises with or without
notice to inspect the stocks and accounts and for the purpose, the said
officers of the Company shall, if so warranted, be entitled to enter
the godown, inspect the condition of the goods, without let or
hindrance from the c & p Agent and for this purpose C& F Agent
shall be bound to hand over possession of the go down together with
the goods and said officers will be entitled to put lock at all exits of
the go down .......... Clause 2 (g) of the said agreement states " The
C & F Agent shall at no time have any lien of the goods or the
godown premises for its charges, remuneration or dues of what so
ever nature. " Clause 2 (h) of the said Agreement states " The C & F
Agent shall be responsible for the safety of the goods entrusted by
the Company from the time of receipt of the goods till such goods
are issued out of the godown as per instructions of the Company. The
C & F Agent shall be liable to make good any loss caused to the
Company as a result of pilferage, the ft, robbery or damage or
destruction of the goods excluding acts of God." Clause 2 (j) of the
said Agreement states "The C &F Agent shall promptly comply with
invoicing delivery/despatch instructions of the Company and shall
cause to be delivery/despatch instructions of the Company and shall
cause to be delivered to the authorised transport Contractors of the
Company and/or the Rail heads the required quantity of the goods for
1999
------
H.L. Ltd. &
another
 Vs.
State of U.P. &
others.
------
M.Katju, J.
B.K.Sharma,J
THE INDIAN LAW REPORTS [1999
116
movement to the Company's stockists, dealers or other godowns. "
Clause 2 (1) of the Agreement states " The C & F Agent shall submit
to the Company statements in Forms prescribed by the company
containing details of stock received, held and distributed. These
statements shall be submitted at such time and at such intervals as
may be instructed by the Company." Clause 2 (m) of the said
Agreement states " The C& F Agent shall raise invoice on the
Company's stockist for the value of the goods despatched to them as
per instructions of the Company and bank the cheques of the RS and
submit to the Company in the format prescribed together with all
necessary returns as are indential thereto. " Clause 3 of the said
Agreement states " For the service rendered by the C & F Agent the
Company agrees to pay service charges as mutually agreed between
the parties and communicated in writing to the C & F Agent
accordingly and which may be revised from time to time. But for the
aforesaid the C & F Agent will not be entitled to any other charges,
remunerations or reimbursements."

8. In paragraph 10 of the writ petition it is alleged that the petitioner
Company does not conduct sale of Ghee through any commission
agents in U.P. or outside U.P. as the entire sales made from its own
Depots at 20 different locations through C & F Agent.

9. In paragraph 11 of the writ petition it is alleged that the petitioner
Company appoints its Re-distribution stockists by entering into a
formal agreement called Redistribution stockists Agreements. A
sample copy of one such agreement dated 11.12.97 has been annexed
as annexure-5 to the petition paragn 13 of this agreement between
the petitioner company and Re-distribution stockists is as follows:-

"It is clearly agreed between the RS and the Company that the
despatch/delivery of goods by the Company to the RS shall always
be on payment by cash/DD/Cheque against supply as may be
required by the Company from time to time. Such payment against
despatch shall always be the essence of supply order which
Company may accept to execute partly or wholly on receipt of a
supply order from the RS. Such orders may be placed by him on the
company through telephonic orders, or orders though company's
representative/C & F A (orally or in writing) depending upon the
expediency of the business and mutual convenience of the parties
hereto. In such circumstances, and in order to enable the company to
execute smoothly the order so placed by the RS without loss of time,
the RS hereby agrees to entrust and keep in deposit, and the company
1999
------
H.L. Ltd. &
another
 Vs.
State of U.P. &
others.
------
M.Katju, J.
B.K.Sharma,J
2 All.] ALLAHABAD SERIES
117
agrees to accept such deposit, the pre-signed crossed cheques of the
RS drawn in favour of the company with standing instructions and
authorisation to the company filling up the sale price of the goods
despatched as per company's sale invoice. The company shall have
the right to complete the cheques so deposited with the price as per
its sale invoice as soon as the goods ordered for the despatched. In
addition the RS also hereby authorises the company to use such presigned desposited cheques for payment and discharge of any amount
out standing the RS in the company's books of accounts. The signed
Cheque shall constitute a representation and assurance on the part of
the Redistribution Stockist to the company that the Redistribution
Stockist has sufficient funds with his banker to cover the amount of
the Cheque. without prejudice to the foregoing provisions the
company shall have the right to make a demand for payment by any
other mode of payment like cash, demand draft, etc. and the RS shall
make all payments to the company in the manner so prescribed by
the company."

10. In paragraph 12 of the petition it is alleged that the petitioner
company puts its goods in the streem of trade by on selling it to the
redistribution stockist.

11. Thus the case of the petitioner is that it does not making sale at
the factory get at Etah, and instead there is a stock transfer from the
Etah factory to the petitioners Depots, and it is the C & F A gents at
the Depots who make the sale at depots who make the sale at the
Depot to the Redistribution Stockists. Hence the petitioner has
contended that the Mandi Samiti, Etah has no right to levy Mandi fee
since there is no sale within the market area of Etah.

12. It appears that by letter dated 8.3.91 the Mandi Samiti Etah for
the first time demanded a sum of Rs 55,97,495.77 as man fee on the
alleged sale of Anik Ghee produced in the Etah facto The petitioner
challenged this demand before the High Court but the High Court
dismissed the petition on the ground that the petitioner should
approach the Board under section 32 of the Mandi Adhiniyam.
Thereafter the petitioner went up in appeal before the Supreme Court
the Supreme Court in Civil Appeal Nos. 1769 - 1773 of 2998
decided on 25.3.98, copy of which has been annexed as Annexure-1
to the petition, set aside the judgement of the High Court and
observed that the demands raised against the traders shall be taken to
have been made in provisinal assessment but the traders can file an
objection within two months which should be decided within two
1999
------
H.L. Ltd. &
another
 Vs.
State of U.P. &
others.
------
M.Katju, J.
B.K.Sharma,J
THE INDIAN LAW REPORTS [1999
118
months thereafter. Consequently the petitioner filed an objection
before the Mandi Samiti which has been rejected by the impugned
order dated 22.7.98 vide Annexure-2 to the petition. The total
amount levied by the impugned order is Rs.4,93,86,932.66 out of
which the petitioner has deposited under protest Rs.42,88,802.81 and
it was directed to deposit the balance of Rs.4,50,98,179.85.
Aggrieved this writ petition has been filed in this Court.

13. Counter affidavit has been filed on behalf of the Mandi Samiti
Etaha. In the counter affidavit a preliminary objection has been
raised that the petitioner has an alternative remedy under section 32
of the Mandi Adhiniyam and it is alleged that certain disputed
questions of facts are involved because of which the petition should
be dismissed on the ground of an alternative remedy. Another
preliminary objection was taken in the Supplementary Counter
Affidavit filed on 6.1.99 before this Court in which it was contended
that the petition is not maintainable as no objection has been filed by
M/s lipton India Ltd. Or M/s brook Bond India Ltd.

14. In paragraph 5 to 11 of the counter affidavit it is disputed that
there is any stock transfer from the Etah factory to the Depots.

15. In paragraph 19 of the counter affidavit it is stated to the sale of
Ghee takes place in Etah and it is denied that there is any stock
transfer by the petitioner.

16. In paragraph 29 of the counter affidavit it is alleged that the
petitioner did not care to produce in-trinsic evidence to show that
there was a stock transfer.

17. Before considering the rivals submissions of the parties we may
deal with the preliminary objections of the respondents. Regarding
the first preliminary objection that the petitioner has an alternative
remedy under section 32 of the Mandi Adhiniyam we are of the
opinion that this is not a fit case for relegation the petitioner to his
alternative remedy. It is settled law that existence of and alternative
remedy is not an absolute bar to the maintainability of a writ petition
under Article 226 of the Constitution of India, but it is a matter of
discretion. In the present case there are two aspects because of which
we are not inclined to dismiss this petition on the ground of an
alternative remedy. Firstly, this matter has been pending since 1991
when for the first time demand notice was sent to the petitioner by
the Mandi Samiti, Etah and the matter came up to this Court and then
1999
------
H.L. Ltd. &
another
 Vs.
State of U.P. &
others.
------
M.Katju, J.
B.K.Sharma,J
2 All.] ALLAHABAD SERIES
119
went up to the Supreme Court and thereafter the inpugned order
dated 22.7.98 has been passed in pursuance on the direction of the
Supreme Court. The matter has been pending for long and has gone
up even to the Supreme Court and it will be in the interest of justice
that the matter should be decided by this Court finally now. There is
a latin maxim " Interest Republic and sit finis lititum" which menas
"it is in the interest of the republic that there should be an end to
litigation." The controversy in this case has been dragging on for
many year and it is high time that it should be finally decided by this
Court, instead of relegating the matter to the Board. Secondly this
court had earlier dismissed the petition on the ground of alternative
remedy under section 32 but the judgement of this Court was set
aside by the Supreme Court, which means that even the Supreme
Court was not impressed by the existence of an alternative remedy
under section 32. Hence we are not inclined to dismiss the petition
on the ground of an alternative remedy.

18. As regard the second preliminary objection of the respondents
we are of the opinion that it is a hyper-technical one. It has already
been mentioned that M/s Lipton India Ltd. Amalga mated into M/s
brook Bond India Ltd. In 1994 and that Company was in turn
amalgamated with the petitioner M/s Hindustan Lever ltd. in 1997.
Thus both M/s Lipton India Ltd. And M/s Brook bond India Ltd.
were not in existence after 1997. Hence the only Company which
could have filed an objection in pursuance the judgement of the
Supreme Court dated 25.3.98 was M/s Hindustan Lever Ltd. and
this Company filed the objection .

19. The two Schemes of amalgamation of 1994 and 1997 indicate
that the liabilities of M/s Lipton India Ltd. as well as of M/s Brook
Bond India Ltd. have been taken over by the petitioner Company.
Hence the petitioner is certainly entitled to challenge the imposition
of market fee of M/s Lipton India Ltd. and M/s Brook Bond India
Ltd. Hence we find no substance in this second preliminary objection
also.

20. We may now proceed to consider the case on merits. The main
contention of Sri Shanti Bhushan, Learned counsel for the petitioner
is that there were only stock transfers from the Etah factory and not
any sale at the factory gate. No doubt the explanation to section 17 to
the Mandi Adhiniyam states that when any specified agricultural
produce is taken out of the market area by a licensed trader there is
1999
------
H.L. Ltd. &
another
 Vs.
State of U.P. &
others.
------
M.Katju, J.
B.K.Sharma,J
THE INDIAN LAW REPORTS [1999
120
presumption that the goods were sold in such area. This explanation
reads as follow.

21. For the purpose of clause (iii), unless the countrary proved, any
specified agricultural produce taken out or propose to be taken out of
a market area by or on behalf of a licensed trader shall be presumed
to have been sold within such are an in such case, the price of such
produce presumed to be sold shall be deemed to be such reasonable
price as may be ascertain in the manner prescribed'

22. Sri Shanti Bhusan contended that this explanation to section 17
only raises a rebuttable presumption and it is not conclusive proof.
We are in agreement to submission. In our opinion if no material is
produced by a trader to rebut the presumption then it will be
presumed that the goods are sold within the market area, but if
material is produced by the trader to the contrary then the
presumption can be rebutted. In this case we find that the petitioner
has produced overwhelming evidence before the Mandi Samiti to
rebut the presumption.

"It may be noted that Section 17 (iii) (b) states that the Mandi
Samiti has the power to levy market fee, "which shall be payable on
transaction of sale of specified agricultural product in the market
area."

23. A perusal of Section 17 shows that market fee is payable on
sales within the market area. In our opinion two things are
noteworthy regarding this provision. Firstly, the market is payable
on sales and not on contracts. There is a clear distinction in law
between a contract and a sale. Even if the is a contract to sell certain
goods yet there may be a breach of that contract resulting in no sale,
for which a suit damages may be maintainable or a suit for specific
performance. Learned counsel for the respondents has tried to draw a
distinction between the work "Sale' and the expression " Transaction
Sale" we are of the opinion that there is no such distinction In our
opinion the expression "Transaction of Sale" has the meaning as the
work "Sale'.

24. The second point to be notied the above provision is that market
fee is payable on sales within the market area, and not sales outside
the said area. Thus in our opinion the situs of sale as of paramount
importance to determine whether Mandi fee is payable or not. If no
1999
------
H.L. Ltd. &
another
 Vs.
State of U.P. &
others.
------
M.Katju, J.
B.K.Sharma,J
2 All.] ALLAHABAD SERIES
121
sale has taken place within the market area obviously no Mandi fee
is payable.

25. Section 2 ® of the Mandi Adhiniyam states "sale includ barter
or deposit of goods by way of pledge or as security for the amount
received as advance"

26. This definition of sale in the Mandi Adhiniyam does no really
define a sale as is only an inclusive definition . In other words it only
states that certain transactions which was otherwise not be sale
would also be treated as a sale e.g.. or deposit of goods by way of
pledge or security. The present case does not relate to barter or
deposit of goods by way of pledge or security. Hence Section 2® of
the Mandi Adhiniyam does not at all help us in understanding the
meaning of the word's. Hence we have to go back to the general law
in the sale of Goods Act to understand the meaning of the word
'sale'. In an analogues legislation of the State of Andra Pradesh the
Supreme Court in agricultural Market Committee V. Shalimar
Chemical Works (AIR 1997 SC 2502) has applied the provisions of
the sale of Goods Act for deciding when and where a transaction of
sale place.

27. Section 4(1) of the Sale of Goods Act stated "A contra sale of
goods is a contract whereby the seller transfers or agrees to transfer
the property in goods to the buyer for a price". Section 4(3) of the
said Act states " Where under a contract of sale the property in the
goods is transferred from the seller to the buyer, the contract is called
a sale, but where the transfer of the property in the goods is to take
place at future time or subject to some condition thereafter to be ful
filled, the contract is called an agreement to sell."

28. A perusal of section 4(3) clearly indicates that for to take place
there must be a transfer of property. As to the transfer of property
takes, we have to go to Chapter I of the sale of Goods Act. Section
18, which is contained in Chapter III, states "Where there is a
contract for the sale of unascertained goods, no property in the goods
is transfer to the buyer unless and until the goods are ascertained".
Section 19 of the Sale of Goods Act states" (1) where there a
contract for the sale of specific or ascertained goods the Property in
them is transferred to the buyer at such time as parties to the contract
intend it to be transferred. (2) For the purpose of ascertaining the
intention of the parties regard shall be had to the terms of the
contract, the conduct of the Parties and the circumstances of the case.
1999
------
H.L. Ltd. &
another
 Vs.
State of U.P. &
others.
------
M.Katju, J.
B.K.Sharma,J
THE INDIAN LAW REPORTS [1999
122
(3) Unless a different intention appears, the rules contained in
sections 20 to 24 as rules for ascertaining the intention of the parties
as to the at which the property in goods is to pass to the buyer".
Section 20 of the Sale of Goods Act states "Where there is an
unconditional contract for the sale of specific goods in a deliverable
state, the property in the goods passes to the buyer when the contract
is made and it is immaterial whether the time of pay of the price or
the time of delivery of goods, or both, is postponed." Section 23 of
the sale of Goods Act states "(1) there is a contract for the sale of
unascertained or future goods by description and goods of that
description and in a deliver state are unconditionally appropriated to
the contract, either by the seller with the assent of the buyer or by the
buyer with the assent of the seller, the property in the goods
thereupon passed to the buyer. Such assent may be express or
implied, may be given either before or after the appropriation is
made (2) Where, in pursuance of the contract, the seller delivers
goods to the buyer or to a carrier or other bail (Whether by the buyer
or not) for the purpose of transmission to the buyer, and does not
reserve the right of disposal, he is deer to have unconditionally
appropriated the goods to the contract.

29. The expression specific goods has been defined in Section 2(14)
of sale of Goods Act to means "goods identified and ag upon at the
time a contract of sale is made."

30. The facts of the present case reveal that what is transferred from
the factory to the Company Depots (where the C & F Agents are
located) are unascertained goods and not ascertain goods. The goods
becomes ascertained only after out of the stock lying with the C & F
Agent at the depot certain specifications out of the stock are
separated for being sold. To give illustration, suppose there are
10,000 tins of ghee lying at the depot with the C & F Agents. If an
order of 100 tins of ghee are received then it is only when out of this
stock of 10,000 tins ghee (which are unascertained goods) 100 spec
tins are taken out of the stock. Under section 23 (1 of the Sale of
Goods Act it is only when these specific 100 tins are appropriated to
the contract that the sale takes place. Under Section 23(2) it is when
the C & F Agents delivers these 100 specific tins to the carrier
(which may be a truck or otherwise) goods can be said to be
unconditionally appropriated to the contract. These provisions
clearly show, that the exacy poi time when the sale takes place is
when the C & F Agents delay certain specific tins of ghee to the
carrier (truck or other which is meant for carrying the goods to the
1999
------
H.L. Ltd. &
another
 Vs.
State of U.P. &
others.
------
M.Katju, J.
B.K.Sharma,J
2 All.] ALLAHABAD SERIES
123
purchaser. Thus sales take place at the depot of the C & F Agents
because it is at the moment of handing over the goods to the carrier
of transportation to the buyer that the appropriation of the go to the
contract (i.e. the sale) takes place. It may be not that Section 18 to
the Sale of Goods Act makes it clear that is no question of transfer of
unascertained goods. In the present case the goods which are
transported from the factory are unascertained goods because out of
the total stock being carried in the transfer from the factory it is not
clear which particular tins are sold to which particular buyer. The
facts of the present case clearly show that in fact unascertained goods
are carried from the factory to the depots, and it is only at the depot
that out of the stock certain specific tins are separated on receiving
order from the redistribution stockist for sale of those specific tins.

31. In P.S.N.S. Ambalavana Chettiar and Co-Ltd. And another
Express Newspapers Ltd. Bombay (AIR 1968 SC 741 the Supreme
Court held that in view of Section 18 of the Sale of Goods Ac is a
condition precedent to the passing of property under a ract of sale
that the goods are ascertained. Unless and until a specified portion
of the total stock is identified and appreciated to the contract no
property passed to the buyer.

32. Section 19 of the Sale of Goods Act provides that "whether there
is a contract for the sale of specific or ascertained of the property in
them is transferred to the buyer at such time the parties to the
contract intend it to be transferred". Clause 3 of the Section 19
makes it clear that "unless a different intention appears, the rules
contained in Sections 20 to 24 and rules for ascertaining the intention
of the parties as to the time at which the property in the goods is to
pass to the buyer.

33. In the present case there is nothing to show that any different
intention existed, and hence the rules mentioned in Section 20 to 24
of the Sale of Goods Act will determine the intention of the parties.
As already observed above, Section 23 is the specific provision
which is applicable to the present case. In our opinion the situs of the
sale is at the depot C & F Agent is located, because it is at the depot
where the goods are appropriated to the contract, and the sale takes
place at the exact moment when the ascertained goods are handed
over to the carrier at the depot. Hence in our opinion no sale takes
place within the market are of Mandi Samiti Etah. In this connection
reference may also be made to the decision of the Supreme Court in
1999
------
H.L. Ltd. &
another
 Vs.
State of U.P. &
others.
------
M.Katju, J.
B.K.Sharma,J
THE INDIAN LAW REPORTS [1999
124
Mahabir Commercial Co. Ltd. Vs. C.I.T. (AIR 1973 SC 430 (paras 6
and 7).

34. Learned counsel for the respondent has relied on the judgment of
the Supreme Court in M/s Vijay Traders Vs. M/s Bajaj Auto
Vehicles Ltd. JT 1995 (7) SC 608. In our opinion this decision us
distinguishable. In the case of M/s Vijay Traders the Supreme Court
found that the distributor were buying the vehicles from M/s Bajaj
Auto Vehicles Ltd.

35. In the present case there is overwhelming evidence to show that
there was no sale by the petitioner to the C & F Agents but the sale
was by C & F Agents on behalf of the petitioner to the Redistribution
stockist. This evidence include the agreements the petitioner and the
C & F Agents (Annexure-4 to the writ petition), the agreements
between the petitioner and the Redistribution stockists (Annexure-5
to the writ petition), the stock Transfer Notes (Annexure-sa-8),
application for issue of gate pass (Annexure-Sa-11), Form F
Declaration under the Central Sales Tax Rules (Annexure-Sa-3)
Form a submitted by the petitioner to the Mandi Samiti (Annexure-2)
to the rejoinder affidavit), Sales Invoice issued by the Depot to the
Redistribution Stockist (Annexure-RA-9) cheque issued by the latter
in favour of the petitioner (Annexure-RA-9), the depot account of the
petitioner (Annexure-RA-7), Sales Tax assessment (Annexure-RA-5)
etc.

36. The situs of the sale, in our opinion, was clearly at the depot and
not at the factory gate and hence we are of the opinion that no
transaction of sale took place within the market area of the Mandi
Samiti, Etah. In fact market fee is paid at the depots to the other
Mandi Samitis concerned vide Annexure-RA-11 and RA-12.

37. In the impugned order dated 22.7.98 (Annexure-2 to the writ
petition) reference has been made to Article 366 (29A). We do not
see what relevance has Article 366 (29 A) to this case. That
provision relates to Tax on the Sale or purchase of Goods, and has
extended the definition of sale for the purpose of sales tax was made
in view of the decision of the Supreme Court in State of Madras V.
Gannon Dunkerly AIR 1958 560 by which the Supreme Court
invalidated the definition of sale in the Madras Sales Tax Act which
had included works Contract. In out opinion there is a distinction
between fee and a tax. Mandi fee is a fee and not a tax, and we are
unable to see that what relevance Article 366(29) has to this case.
1999
------
H.L. Ltd. &
another
 Vs.
State of U.P. &
others.
------
M.Katju, J.
B.K.Sharma,J
2 All.] ALLAHABAD SERIES
125

38. In paragraph 8 of the impugned order it has been observed that
the petitioner has not adduced any evidence of declaration of
declaration in respect of Excise. In this connection it has been
pointed out by Sri Shanti Bhusan, learned counsel for the petitioner
that ghee was not an excisable item at the relevant time. It became an
excisable item in June 1988 for a short period, and thereafter again it
became non-excisable.

39. In paragraph 10 of the impugned order it has been observed that
the sale takes place at the Etah factory, but this observation is wholly
without any basis. No reference has been made to the provisions of
the Sale of Goods Act which have been referred to above. The
observation that there is some secret stipulation between the
redistribution stockist, the C & F Agent and the petitioner is wholly
without any basis. Thus in our opinion the impugned order proceeds
on conjectures and surmises and cannot be sustained. The petitioner
pays Mandi fee on sales made at the dopots to which the stock
transfer has taken place from the Etah factory.

40. On the facts and circumstances of the case we set aside the
impugned order dated 22.7.98 and hold that thee is no sale within the
market area of Etah and the sale only takes place at the company's
depots which are all outside the market area of Etah.

41. The Mandi Samiti, Etah is hence, restrained from levying or
collecting any market fee from the petitioner. We allowed this writ
petition and quash the impugned order dated 22.7.1998 passed by the
Mandi Samiti.

42. By an interim order dated 17.8.98 passed by this court in this
case the petitioner had been directed to deposit half of the Principal
amount with the Mandi Samiti, Etah which was to be put in a Fixed
Deposit by the Samiti at once and the remaining half had to be
deposited by the petitioners as Bank guarantee to the credit of the
Mandi Samiti, and subject to the above conditions the impugned
order was stayed.

43. Since we have allowed this petition we direct that any amount
deposited by the petitioner in pursuance of the aforesaid interim
order shall be refunded to the petitioner with interest @ 12% per
annum from the date of deposit within two months the date of this
1999
------
H.L. Ltd. &
another
 Vs.
State of U.P. &
others.
------
M.Katju, J.
B.K.Sharma,J
THE INDIAN LAW REPORTS [1999
126
judgment and the Bank Guarantee furnished by the petitioner shall
stand discharged.

Petition Allowed.

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By the Court

Shri S.V.Goswsami, learned counsel for respondents had
taken a Preliminary objection as to the maintainability of the writ
petition on the ground that an appeal is provided under rule 3 of the
U.P. Municipal Servants Appeal Rules 1967. He had also contested
the case on merit on the ground that the order of termination
impugned in this writ petition is of termination Simplicitor without
casting any stigma and the decision not to retain the Petitioners is
followed by a motive that the petitions were not fit to be retained in
service. The reason for non-retention of the petitioners in service was
not a foundation for removal of the petitioner as such it was not a
1999
------
March, 16