# Irhud•bwt Ohhipa v. Tht Stott of Gujorol

- **Citation:** [1962] Supp. 3 S.C.R. 875
- **Court:** Supreme Court of India
- **Decided:** 1961-06-23
- **Bench:** P. B. Ga.Jendragadkar, A. K. Sarkar, K. N. WANCHoo, K. C. DAS GuPI'A, N. Ra.Tagopala Ayyangar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/irhud-bwt-ohhipa-v-tht-stott-of-gujorol-2506
- **Pages:** 32

## Headnote

Agricu.lturaf Produc'! ]Jfarkets-Market committees-Levy
of fees-Notijication-Validzt1;-A clas8 and B class traderslicences-Discrimination-Ruz;s. declared invalid-S1tbsequent
amendments to ena_ctment-Validzty of rules-Doctrine of eclipse
. -Saurashtra .Ag~icultural Produce Mai·kets (Gujarat Amendment and Va~1dating Provisions) Ordinance, 1961 (1of1961)-
Bombay Agricultural Produce Market.s Ar;t, 7939 (Bam, 22 of
.793.'J),_
a.~ am,ended, 8s.5A, 11, 2.<J.B, rr. 58, Ct/, 65; G6, fJ7Constitutwn of India, Art.,.u, (.11)(1), 2G5,
Consequent on the decision in Gula.m Mohammad v, The
Jtate ~!Bombay, (1962] 2 S.C.R. 659, by 'l'hich rr. 53, 65, 611
1962
Pukhraj .
y,
D. R;Kohli
Qajendtagadkar J
1062
March 15.
1962
JI oh""'1!14d6ha;
Irhud•bwt Ohhipa
v.
Tht Stott of Gujorol
876 SUPREME COURT REPORT5 [1982] SUPP.
and 67, f~amed under the Bombay Agricultural
Produce
Markets Act, 1939, were held to he ultra. 11irr.s the provisions of
ss. 6A and 11 of the Act, the State nf Gnjarat amended r.5'.l
by a notification dated June 23, 1%1, and also promulgated
an Ordinance on June 26, 1901, by which amendments were
made in certain sections of the Act and a ne\v s 29 B was
inserted in the Act \'aJidating certain acts or things <lone
prior
to
the
promulgation of the
Ordinance.
The
petitioners, some of v.rhom \Vf!re \vholcsale dealers and the re.::t
retail dralr.rs, filed petitions under Art. 32 of thr. Constit11tion
of India for certain reliefs on the ground, (I) that the notifica·
tion dated June 23, 1961, was discriminatory and thus offended
Art. 14 because under it a rnarkct r.on1mittec could Jcvy fee.s
on agricultnral produce by different modes, (2) that s. 29-Jl
was insufficient to validate the defects noticed in the earlier
decision of the Supreme Court inasmuch a'i the rclevcnt provisions of the Act and the Rules \Yerc not retrospectively
amended, (3) that undr.r the bye-laws .\class traders '''ere
charged
much
higher fees
than n class
traders
an<l,
further, B class traders , .. ·ere allo\ved to sell to consumers
any, ... ·hcre in the market area ,,·hercas 1\ class trader~ wrre not
so al1ov.·ed, and this amonntecl to dic;crimination, (4) that the
main provisions of tho Act had been amende<l by the Ordinancr. and, ther~forc, the basis on ,,•hich the Suprr.mc Court
upheld the Act no lon!(er existed, (o) that rr. 65, 6G and fi7
which had been declared to be ultra vin• had neither been
rc·framcd no validated hy the Ordinance and, therefore, it \.\.·ac;;
not open to the market committr.e to issue licences 1111dt;r those
rules, and (6) thats. 29-ll was had in so far as it prevented
refund of her.nee fees collrcted before the Ordinance camr.
into force in view of Art.31 (I) of the Constitution.
Held, that: (I) the notification dated .June 23, 1961, by
itself could not Uc said to .Ue discriminatory because imposi.
tion of the f('C,; WiLS made only lJy the bye-Ja.vs framed by the
market committee under the power conferred on it by s. 11
subject to thr. maxima prescribed in the notification; if a bycla\Y prescrihcd rates of fees in two modes in such a \\'ay as to
result in discrirnination then such a byc·la\Y ,,·ould have to
be struck down.
(2) the fact that un<ler r.5'.{ the rnarket com1nittr.e might
levy fees by one metho<l on one agricuhural produce and liy
another method on another agricultural produce, \\'Ould not
be a grouud of discrin1ination 1 beca11se each co1nn1odity must
be treated as a class by itself.
(3) s. 29-ll was sufficient to cure the defects pointed out
~!1 the earlier judgrnent of the Supreme Court and to validate
ii s.c.R.
SUPREME COURT REPOH.TS
~
877
the actions taken and the things done before the promulga•
tion of the Ordinance dated June 26, 1961.
( 4) the1e was a basis for classification of traders into A
class and B class, and the restrictions placed Ly the Act,
llules and Bye-laws were reasonable restrictions in the interests
of the general public.
(5) the purpose of the licence granted to B Class traders
was to permit them to

## Text

_Characters 0–39,989 of 63,861. This is a partial read: ask again with offset=39989 for what follows._

3 S.C.R.
SUPREME COURT REPORTS
875
have been smuggled. The story subsequently men•
tioned by the appellant about his journey to Tata- ,
nagar which has been disbelieved brings into bold
belief the purpose which the appellant had in mind
in travelling without a ticket. After-all, when we
are dealing with a question as to whether the belief
in the mind of the officer who effected the seizure
was reasonable or not, we are not sitting in appeal
over the decision of the said officer.
All that we
can consider is whether there is ground which prima
facie justifies the said reasonable belief. That being
so, we do not think there is any substance in the
argument that the seizure was effected without a
reasonable belief and so is outside section l 78A.
In the result, the appeal fails and is dismissed'
with costs.
·
Appeal di8missed.
MOHAMMADBHAI KHUDABUX CHHIPA
AND ANOTHER
1!.
THE STATE OF. GU,TARAT AND ANOTHER
(And connected. petitions)
(P. B. GA.JENDRAGADKAR, A. K. SARKAR, K. N.
WANCHoo, K. C. DAS GuPI'A and N. RA.TAGOPALA AYYANGAR, JJ.)
Agricu.lturaf Produc'! ]Jfarkets-Market committees-Levy
of fees-Notijication-Validzt1;-A clas8 and B class traderslicences-Discrimination-Ruz;s. declared invalid-S1tbsequent
amendments to ena_ctment-Validzty of rules-Doctrine of eclipse
. -Saurashtra .Ag~icultural Produce Mai·kets (Gujarat Amendment and Va~1dating Provisions) Ordinance, 1961 (1of1961)-
Bombay Agricultural Produce Market.s Ar;t, 7939 (Bam, 22 of
.793.'J),_
a.~ am,ended, 8s.5A, 11, 2.<J.B, rr. 58, Ct/, 65; G6, fJ7Constitutwn of India, Art.,.u, (.11)(1), 2G5,
Consequent on the decision in Gula.m Mohammad v, The
Jtate ~!Bombay, (1962] 2 S.C.R. 659, by 'l'hich rr. 53, 65, 611
1962
Pukhraj .
y,
D. R;Kohli
Qajendtagadkar J
1062
March 15.
1962
JI oh""'1!14d6ha;
Irhud•bwt Ohhipa
v.
Tht Stott of Gujorol
876 SUPREME COURT REPORT5 [1982] SUPP.
and 67, f~amed under the Bombay Agricultural
Produce
Markets Act, 1939, were held to he ultra. 11irr.s the provisions of
ss. 6A and 11 of the Act, the State nf Gnjarat amended r.5'.l
by a notification dated June 23, 1%1, and also promulgated
an Ordinance on June 26, 1901, by which amendments were
made in certain sections of the Act and a ne\v s 29 B was
inserted in the Act \'aJidating certain acts or things <lone
prior
to
the
promulgation of the
Ordinance.
The
petitioners, some of v.rhom \Vf!re \vholcsale dealers and the re.::t
retail dralr.rs, filed petitions under Art. 32 of thr. Constit11tion
of India for certain reliefs on the ground, (I) that the notifica·
tion dated June 23, 1961, was discriminatory and thus offended
Art. 14 because under it a rnarkct r.on1mittec could Jcvy fee.s
on agricultnral produce by different modes, (2) that s. 29-Jl
was insufficient to validate the defects noticed in the earlier
decision of the Supreme Court inasmuch a'i the rclevcnt provisions of the Act and the Rules \Yerc not retrospectively
amended, (3) that undr.r the bye-laws .\class traders '''ere
charged
much
higher fees
than n class
traders
an<l,
further, B class traders , .. ·ere allo\ved to sell to consumers
any, ... ·hcre in the market area ,,·hercas 1\ class trader~ wrre not
so al1ov.·ed, and this amonntecl to dic;crimination, (4) that the
main provisions of tho Act had been amende<l by the Ordinancr. and, ther~forc, the basis on ,,•hich the Suprr.mc Court
upheld the Act no lon!(er existed, (o) that rr. 65, 6G and fi7
which had been declared to be ultra vin• had neither been
rc·framcd no validated hy the Ordinance and, therefore, it \.\.·ac;;
not open to the market committr.e to issue licences 1111dt;r those
rules, and (6) thats. 29-ll was had in so far as it prevented
refund of her.nee fees collrcted before the Ordinance camr.
into force in view of Art.31 (I) of the Constitution.
Held, that: (I) the notification dated .June 23, 1961, by
itself could not Uc said to .Ue discriminatory because imposi.
tion of the f('C,; WiLS made only lJy the bye-Ja.vs framed by the
market committee under the power conferred on it by s. 11
subject to thr. maxima prescribed in the notification; if a bycla\Y prescrihcd rates of fees in two modes in such a \\'ay as to
result in discrirnination then such a byc·la\Y ,,·ould have to
be struck down.
(2) the fact that un<ler r.5'.{ the rnarket com1nittr.e might
levy fees by one metho<l on one agricuhural produce and liy
another method on another agricultural produce, \\'Ould not
be a grouud of discrin1ination 1 beca11se each co1nn1odity must
be treated as a class by itself.
(3) s. 29-ll was sufficient to cure the defects pointed out
~!1 the earlier judgrnent of the Supreme Court and to validate
ii s.c.R.
SUPREME COURT REPOH.TS
~
877
the actions taken and the things done before the promulga•
tion of the Ordinance dated June 26, 1961.
( 4) the1e was a basis for classification of traders into A
class and B class, and the restrictions placed Ly the Act,
llules and Bye-laws were reasonable restrictions in the interests
of the general public.
(5) the purpose of the licence granted to B Class traders
was to permit them to buy in the market yard and thus control
their activity in connection with whole-sale trade, and not
to control retail dealers. Consequently, the market committees
were acting within their powers under Act.
( 6) though s.5A had been amended, the said section
read with the Rules did not involve any radical departure from
the scheme of the Act as it was before the amendment. ·
(7) rr. 65 and 67, which were valid when they were
originally framed but became bad on the insertion of 5A in
the Act in 1953, became valid again after the amendment of
the section by the ordinance, by the application of the
doctrine of eclipse.
Dhikaji NarBin Dhakr<UJ v. The State of Madhya Pradesh,
(1955) 2 S. C.R. 589 and Deep Chand v. The State of Uttar
Pradesh ( 1959) Supp. 2 S.C.R.8. applied.
(8) s. 29-B having validated the levy and collection of
licence fees, Art. 31 (l) was not applicable to the case, since
fees were included within the taxing power of the legislature
which had also power to legislate retrospectively.
....,.__,
M. 1'. V. Sundararamier J, Co. v. The State of Andhra
Pradesh, (1958) S.C.R. 1422, relied on.
OmGINAL JuRISDIC'.l'ION : Petitions Nos. 226
tu 229 and 233 of 1961.
Petitions under Art. 32 of the Constitution of
India for the enforcement of fundamental rights.
A. S. R. Chari, J.B. Dadachanji, 0. 0. Mathur
and Ravinder Narain, for the petitioners (in Petns.
Nos. 226 to 229 of 61).
l. N. Shroff, for tu.i petitioners (in Petn.
No. 233 of 61).
A. V. Viswanatha Sastri, N. S. Bindra and
1962 .
M ohammadllhai
· K/1udcbux Chhipa
••
The State •/Gtdoral
WGZ
MDhmnmadbhai
Khudobux Chliipa
v.
Th< Siok of Oujaral
Wonthoo J ·
878 SUPRE:ME COtJHT REPORTs tl962] SUPP.
R. H. Dhebar, for respondent No. I (in all the
petitions.)
1962.
:\larch 15.
The Judgment of the
Court was deli vercd by
WANCHOO, .T.-- These fl ve pt,titions
umfor
Art. 32 of tbe constitution, which am connected and
will be dealt with together, raise questions a.A to
the constitutionality of the Bombay Agricultural
Produce Markets Act, Bombay Act No.XXII of 1939,
(hereinafter referred to as the Act), as amended
. by the Bombay and SauraBhtra Agricultural Produce Markets (Gujarat amendment and validating
Provisions) Ordinance, No. I of l!l61 (hereinafter
referred to as the Ordinance), arid the Rules and
the bye-laws framed thereunder. They are a sequal
to the judgment of this Court in Gulam Moliamined
v. The State of Bombay ('), which was delivered on
May 2, 1961. One of petitioners before us in these
petitions was also a party in that petition, which
was with respect to a market estabJished in Ahmedabad. In that petition the challenge to the constitutionality of the main provisions of the Act
failed but the provisions of certain Rules, namely
rr. 53, 65, 66 and 67 wore held to.be ultra. vires
the provisions of s. 11 and s. 5A of the Act. In
consequence, a direction was issued prohibiting tho
respondents in that petition from enforcing the
provisions of the Act, Rules and Bye-laws agaill!!t
the petit-ioners in that petition till a market
was established in law for that area under s.5AA
and from
levying any fe,, under e. 11 till the
maximum wru; prescribed under the Rulce.
Consequent on that decision, the State of Gujarat amended r. 53 by notification dated June 23, 1961.
Further the Ordinance wae promulgated on J unc
26, 1961, Ly which certain amendments were made
in certain sections of the a.ct and a news. 2!!-13
was inserted in the Act validating certain acts or
things done prior 'to the promulgation of the
(I) [11162] 2 S.C.R. 6511,
I
-
.
.
3 S.C.R.
SUPREME COURT REPORTS
879
ordinance. The present petitions were filed there·
after.
Four of tho petitions (namely, Nos. 226 to
229) are with respect to Abmedabad while the
fifth petition (No. 233) is with respect to Nadiad.
Two of the petitioners of Ahmedahad are wholesale
dealers while the other two claim to be retail
dealers. 1'he contentions on behalf of the Ahmedabad petitioners are that the notification amended
r. 53, offends Art. 14 of the Constitution and is
therefore bad. It is further contended that though
s. 5AA has been amended, the amendment is prospective ; therefore the infirmity noticed in the
earlier judgment of this Court still remains .and
s. 29-B whioh has been inserted in the Act is insufficient to validate what had been done before the
Ordinance came into force. It is further contended
that the bye-law under which the market committee issues licences to A Class and B class dealers
isdiscriminatory and imposes unreasonable restrictions on the fundamental right to carry on trade
and business and is therefore bii.d.
Lastly it is
contended that the market committee insists on
issuing licences for retail trade and this it. cannot
do for control of retail trade is not within the
provisions of the Act as held by this Court in the
earlier judgment, and further in consequence the
market committee is using r. 64 in a manner in
which it was not intended to be used and therefore
that rule though it was upheld in the earlier judgment should be declared ultra vires.
The majority of the petitioners in the Nadiad
case are wholesale dealers but a few of them claim
to be retail de&lers.
These petitioners further
challenge the constitutionality of the Act after its
amendment by the Ordinance, and their contention
is that the Ordinance makes radical changes in the
main provisions of the Act and the basis on which
these main provisions .were upheld by this Court
1962
J.1 ohamrn•dbhai
Khudabu:c Chhipa
v.
The Stole ofGujora
Wanchoo J.
1161
JI ohammadhhai
Kh11dalmx Chhipa
v.
The Stal< ojGujarot
Wanclioo I.
~so
SUPREME COURT REPORTS (1962] SUPP.
earlier, no longer applies, and therefore the Act as
it now stands after the amendment is violative of
the, fundamental right to carry on trarle and business guaranteed under Art. I U( I )(g) of the constit.ution as the restrictions placed by it on the said
right are unreasonable. Further it is contended
that rr. 65, 66 and 67 were struck down by th is
Court in the earlier judgment as beyond the power
conferred on the State under s. 26 of the Act.
These rules therefore cannot be htold to be a part of
the Rules in force now and in consequence it was
not open to the markot committee to Act as pro·
vided in these Ru leM.
Lastly it is urged on behalf
of one of the petitioners that he had paid licencefoe 'to the market, committ~e and was entitled to a
refund of that after the earlier judgment of this
Court; but s. 29-B newly inserted in the Act which
in effect deprives this petitioner of getting l·efund
is invalid and illegal as it is against the provisions
of Art. 31( I) .. Some other points have also been
raised by tho Na.diad petitioners ; but as they arc
not pressed, we shall not refer to them.
The petitions have been opposed on behalf of
the State and it has traversed a.II the points raised
on behalf of the petitioners. It is not necessary to
set out the grounds on which it is urged on behalf
of the rcspondcntB that the contentions of the petitioners have no force.
These grounds will appear
when we deal with t.he contentions raised on behalf
of the petitioners one by one.
Nor do we think
it uccessary to set out the provious history as to
the establishment of the market in Ahmeda.bad
118 that will be found in the earlier judgment ; nor
is it necessary to set out the previous history as
to the establishment of the market in Jl\adiad, for
it is not in dispute that that history is similar to
the history in the case of the Ahmedabad market.
We shall therefore proceed to indicate the points
which alone have been prnssed on behalf of the
petitioners and then consider them one by one.
l
I..
•
' 3 S.C.R.
SUPREME COURT REPOR'rS
881
Some of the points are, not common; but as they
have been raised in one petition or the other and
these petitions have been dealt with together 3nd
the decision on any point will effect even other
petitions in which it has not been raised, we shall
proceed on the basis that all the points have .been
raised in all the petitions particularly as the learned counsel appearing in the various petitions adopted the arguments of one another during the hearing.
The points therefore ·which call for decision are as
below-
( I) Is the notification dated June 23, 1961
fixing the maximum fee to be charged hit by Art.14
of the Constitution ?
( 2)
Does the insertion of s. 29-B in the Act
suffice to validate acts or things done before the
promulgation of the Ordinance?
(3) Are the by-laws by which the market
committee issues licences to A class and B class
dealers discriminatory and thus offend Art. 14-, and
do they amount to an unreasonable restriction on
the fundamental right to carry on trade and business under Art. 19(l}(g)?
·
(4)
Is the market committee acting beyond
its power under the Act in requiring retail dealers
to take out licences and is r. 64 bad on account of
the manner. in which it is being enforced by the
market committee?
(5)
Are the main provisions. of the Act after
its amendment by the Ordinance liable to be struck
down as an unreasonable restriction on the fundamental right to carry on trade and business under
Art. 19( l )(g)?
(6) 'Vas it necessary to re-frame rr. 65,66
•\
and 67 under power conferred on the State Government under s. 26; if so, what is thA effect of its not
having been done?
1962
Mohammadhh(li
Khudabux Chhipa
...
The State of Gujarat
W onchoo J,
1962
Moha1nm1d;hai
ICA.e.bux Chhipa
•.
.
~he Staie of Gujara&
w ""'hoo J.
8s2 SUPREME OOURT REPoRTs (1962] SUPP.
(7) Is s. 21!-ll bad in view of Art. 31(1) of the
Constitution insofar as it prevents refuud of Jiooncefee collected before the Ordinance ca.mo
into
force?
Re (1).
'
The notification is iu these terms:-
" So. Ai'!U/061J/i!Oi07-E-In the exercise
of the powers conferred by section 26 of the
Bombay Agricultural Prm111cc .Jiarket Act,
ID39 {Boru. XXII of l!Ji!9J, the Government
of Gujarat hereby amends the Bombay Agricultural l:'roductJ .Jlarkct ltulcs 19·11 as follows
namtJ!y:-
"ln the said rules in ruic 5:!, for sub-rule
(I) ex co pt in w:plaruition thereto tho following
shall be su bstitutcd, namely:-
( I) "fbe Market Committee shall levy
and collect fees on agricultural
produce
bought and sold m the market area at such
rates as may be specified in the by-Jaws, subject to the following maximums, namoly:-
( 1) Rate when levied according to cart
Joad shall not exceed 40 naya paise per ca.rt
load.
(2)
Rate when levied ad vuwrem shall
not exceed 40 naya paise per Hs. 100.
-
(3) Rate
when. levied according to
weight shall not exceed.
-
(l} per quintal
15 naya pa.ise
{ 2) per Bengali Maund
5 naya pa.ise
(4)
Rate when levied .a~cording to. ~he
number of containers contammg the agr1cultural produce shall not exceed,
(a) per bale of cotton 40 naya. paise
'
(b) per gunny bag or 5 naya pa1se
any other container,
(5) Rate when levied in respect of cattle,
sheep and goat shall and exceed per animal
Rs.2.'
By order.and in the name of Governor
of Gujarat."
The contention on behalf of• the petitioners is that
the notification is discriminatory in two ways: in
the first place; because it allowll foes to be collected
-
by different modes, i.e., by cart load, by value, by
weight and by containers. It is urged that it Is
open to the market committee to levy fees on certain agricultural produce by (say) cart load and on
certain other agricultural produce by (say) weight;
and this is very likely to result in disorimina ti on.
In the second p.lace, it is urged that the notification
gives power to the committee to · Jevy fees on the
same commodity by even two of the methods men·
tioned therein. For example, it is urged that the
same commodity, say, potatoes may be charged
under the notification by the market committee
both by weight and by cart . load depending upon
whether they are brought into the market area in a
oart, or for example, in a basket. It is said that
there is nothing in the rule which prevents the
market committee from doing so, and this may
result in discrimination.
We may however point out that the notification by itself does not impose any fee on any commodity. What it does is to carry out the terms of
s. 11 which require the maxima to be prescribed
subject to which the market committee can levy
fees on Agricultural produce. The imposition of
the fees still remains to be made by the market
committee under the power conferred on it by s. 11
subject to the maxima prescribed in the notification
and therefqre the notification by itself cannot be
ea id to be IU&orimin&tory.
·
-
M ohammadbhai
Khud®u• Chhipo
v.
The Stall of Gujara
1Vanchoo J.
•
1962
]tf ohemmadbhai
Khudabu:c Chhipa
v.
Tlir. Stoic ojGujorol
WancAoo J.
884 SUPREME COUitT REPORTS [l962j SUPP.
Let us, however, examine the two contentions
raised on behalf of tho petitioners on the basis that
though the notification may not actun lly impose
fees on any commodity, it still allows discrimination to be practised by the market <'Ommittee, when
it proceeds under s. 11 to levy fees within tho
maxima preserihed by the notification. Taking the
first contention, it may ho that by using one
method in the caso of one agricul~ural produce and
another method in the case of another agricultural
produce, there may be some differenoo in tho incidence of the fees charged, if one wern to judge that
incidence on the ha.sis of only one of the modes prescribed in the notification. But th1Lt in our opinion
cannot be said to result in discrimination for each
produc<' must for this purpose be treated to be a.
class by itself. Therefore, so long as the market
committee uses one method of levying fee with
respect to one kind of agricultural produce, it cannot be said that it is discriminating if it uses
another method· for levying fee on another kind of
Agricultural produce. It is well known even in
svstems of taxation that taxes arc levied with diff.
e~cnt incidence dependi11g upon the nature of the
article taxed, and a fee levied und!'r s. I I is only
. the exercise of the power of taxation using that
word in its widc3t sense. Therefore, the fact that
und<>r this rule, the markot committee may levy fees
by one method on one agricultural produce and
by another method on another agricultural produce
will not ho a ground of discrimination, for each
commodity must bo treated as a class by itself.
Turning now to the second contention, it is
true that there is nothing in the rule expressly to
prevent the market committee from using two of
the modos prescribed therein for the purpose of
levying fees on thv s·1me agricultural produce. It
must be rcmem bercd however that the rule is a.
gt•neral
provision
for levying fees within the
-
-
a s.c.R.
SUPREME COURT ·REPORTS 885
maxima prescribed on the.agricultural produce by
market committees in the market areas all over the
State. Various methods of levying fees have been
included in the rule, for we assume that the rule
making authority kriew that there wore various
ways in which things are brought into various
market areas. The rule is meant to apply to .all
situations that may arise in tho State and there
. m;i.y be different ways in which things may be
brought to the market areas in difforent parts of
~he State. That is why the rule has a wide sweep
and allows the market committee to levy fees
either by cart load, or by value, or by weight or by
containers. It may be that if for the same agricultural producii fees are levied subject to the maxima
two different modes, the rates fixed may result
in discrimination. It would however not be improin r to assume that in framing the bye-laws in whioh
pee rates for any particular agricultural produce
.thll be fixed the market committee shall pay due
wigard to the prohibition against discrimination
rentained in Art. 14 of the Constitution. The praccocal consequence of this is likely to be that for one
tigricultural produce the market committee will fix
ane rate only in one of the four modes: If that is
oone no discrimination can be said to arise. It will
dot also in our opinion be unreasonable to think
nhat in issuing the notificathn the Government
tproceeded on the assumption that for any particular
agricultural produce one mode of fixing feeswhether according to cart load or according to
value or according to weight or according to the
number of containers-will be adopted. Nor would
it be difficult if the rate is fixed in one of the
modes, say according to cart load, to calculate
the fees to be levied where the produce is brought
in aey other manner, say in baskets, for then the
proportional fee can bo charged on each basket on
the basis of so many basket-fuls being equal to
QIJ.e ca.rt loa.q.
Si~ilarl~ wqere t4e b,Ye-lii.w fi~e~
1962
Mohamm odbhai
KhudabU< Chbipo
••
The Stat' of Guj•rat
Wanchoo J.
1962
MoMmtnodbhoi
Kllld.tux Chhipa
..
1hf: Stal1 of Gujarat
W1nchon J,
886 SUPREMECOURT REPORTS (1962] SUPP.
the fees according to containers and a dealer brings
the produce in cart load, it will be possible to calculate the fco due on the basis of containers, by
calculating how many containers would be equal to
one cart load.
Where the fee is fixed by weight
or value there w<1uld he no difliculty in any case.
Therefore one may
reasonably
conclude that
the
market
committee
when
acting
under
s. l l read with the notification will levy the fees on
a single commodity in one only of the permitted
modes. If that happens in actual practice there
will be no question of any discrimination.
But assume that a market committee chooses
to adopt two modes for levying fees on tho same
agricultural produce, sny one according to cart load
and another according to weight, In such a case a
question may arise whether there is discrimination
in the incidence of fees. That question may have
to be considered if and when it arises and whether
discrimination actually arises in such a case will
depend upon the rates fixed by the market committee for levying of foes on the same agricultural
produce in the two modes that it might choose. If
the rates are RO fixed that the incidence is substantially the same whether the fees arc !•~vied on the
basiR of cart load or on the basis of weight, there
will be no discrimination. On the other hand if
the rates are so fixer! that the incidence works out
substantially differently there will bo a case of discrimination and in such a ease it is the bye· law
that will have to il<l struck down as being discriminatory for the act.ual imposition of fees will be
made by tho bye-law fra.mecl hy the committee and
not by the impugnod notification. Tho chances
howevor of fixing two modes for the levy of fees
even on the same agricultural produce in such a
way as to result in discrimination are in our opini on
so remote that the notification cannot be struck
clown on that account as discriminator>'. In sqc!J
-
3 S.C.R.
SUPREME COURT REPORTS
887
a case it is not the notification which will have to
be struck down but the actual bye-law if it prescribes rates of fees in two modes in such a way as to
result in discrimination.
Turning now to the facts of the present case
we find that the bye-laws framed by the market
committees have fixed only one mode of levying
fees in these cages for one kind of produce. It is
not the petitioners' case that the market committees with which we are concerned in the present
cases have used more than one mode for levying
fees on the same agricultural produce. There is
therefore no case for discrimination made out on
the basis of the actual bye-laws which have been framed by the market committees under the power
conferred on them under s.ll read with the notifi·
cation. Iu these circumstances, the attack on
the notiffoation on the ground of discrimination
must fail.
Re. (2).
Sub-section ( 1) of s.29'.B provides that in the
case of a market area declared before the commencement of the Ordinance, a market for such market -
area shall be deemed always to have been established for the purposes of the Act. with effect from
the date on which a market yard for such market
area was declared for the first time under the R.u!es
or the Act and such market shall include and shall
be deemed always to have inc>luded the said market
yard. By this provision the defect that was pointed out in the .earlier judgm\)nt with respect to the
establishment of a market is intended to be validated. The sub -section further provides that any
action taken or anything done by a market committee or any other authority after the establishment of a market therein as aforesaid but before
the commencement of tbe Ordinance, which but for
the provisions of this clause would have been
i~valid, shall be and shall be deemed alwa,YS to
1968
M Dhammadbhai
Khudabwr Chhipa
••
'/he State ofQujaral
Wanchoo J.
19GZ
.«11hommadhhai
Khudahux Chl,ip•
- v.
Th, Stott of GujGral
Jf ON(ht>O J •
888 SUPREME COURT REPORTS [1962] SUPP.
have been valid ann shall not bo called in question
merely on the ground that no market w11s established for such market arna when
~uch action was
taken or thing done.
8uh-scction (:!) then provides
that any fees leviocl and
r:nlle0t~d on agricultural
produc~ hought :ind sold in
11 market area before
the commencement- of the Ordinance by a market
committee at the rates spc.cificd in its bye-laws shall
be deemed to have been validly levied and collectod
and such levy and collection shidl not ho called in
question merely on the ground that at the time of
such levy and collection no maxima were prescribed
as required by s. l I. The intention of this provision
is to cure the defoct which was noticed in the
earlier judgment inll.Smuch as no maxima h~d been
prescribed under s.11 by the State Government.
Sub-seotion (3) finally provides that all
licences
issued to operate in a market area or any part
thereof and fees charged therefor before the commencement of the Ordinance hy a market committee
under the Hules and bye-laws and any action taken
or thing done relating to li"ensing of personR, or
obtaining of a licence, to operate in the market area
or any part thereof, taken or done hy a market
committc" or any other authority or p1~raon nndor
the Hules and bye-laws before t.ho commencement of
the Ordinance ~hall be• and 11hall be deemed always
to have been \-alid and the validity thereof shall not
be called in question merely on
th~ ground that
when such action wa11 taken or thing done, the power
rio-ht or obligation therefor was not duly conferred
o; imposed by the Act on such market committee,
authority or person.
This provision is intended to
cure the defect arising from rr.(i!i and fi7 being
declare<! 1dtm vire.s by thio
Court in its earlier
judgment.
The contention on hohalf of the petitionerR is
that these provisions are iJlsutTiciont to validate
-
3 S.C.R.
SUPREME COURT REPORTS
889
the defects which were noticed in the earlier judgment of this Court itrnsmnch as the relevant provisions of tho Act and the Rules have not been
retrospectively amended. We s~c no force in this
argument, for the provisions as they stand certainly
validate the defects pointed out in the earlier
judgment of this Court. It is true that the relevant
sections and the Rules have not been retrospectively amended by the Ordinance, but this in our
opinion was unnecessary. Retrospective amendmant may be necessary when it is desired to change
the law; but it seems that so far as s.11 is concern.
ea, the legislature did not intend that the control of
the State Government over levy of fees should be
done awity with for the future also. Therefore, all
that was necessary in that respect was to validate
t):te past actions and this is specifically provided for
by snb-ss.(2) and (3) of s.29-B. As for the establishment of market committees, an amendment has
been made in s.5.AA of the Act deleting the provision by which a market could be established.only if
so required by the State GovPrnment. This amendment is prospective. It could have been made
retroepective also and in that case sub-s. ( 1) of
s.29-B may not havo been necessary.
The legislature, however, adopted the method of amending
s.5-AA prospectively and .making a separate provision for validating the establishment of markets in
sub-s. (1) of s.211-B.
We see no reason why it
should be held that the validation made by sub-s.(l)
is not sufficient because the legislature has adopted
one method rather tha,n the other for carrying out
its purpose. We are therefore of opinion that
s.29-B is sufficient to cure the defects pointed out in
the earlier judgment of the Court and to validate ·
actions taken and things done before the promulgation of the Ordinance '.vhich would otherwise have
been invalid in view of the earlier judgment of
this Court.
The contention on this head must
ii.Jso be rejected.
·
· ·.
196~
Mohammadbhai
Khudabux Chh;;pa
v.
The State of G1yarat
Wanchoo J.
196t
M,,._modbhai
1171""4!ia Chippa
••
TM Blatt of Guj4rat
W onchoo J.
890 SUPREME COURT REPORTS [1962) SUPP.
Re. (3).
Gnder the bye-laws as they now stand two
classes of traders are mentioned. namely A class
traders and B class traders.
A class traders are
those who hold licences to buy and/or sell agricultural produce in quantities not below 10 lbs. in
the market yard, and tho liconce-fee which they have
to piiy per year is Rs. 75. B olass traders are those
who have licences to buy agricultural produce
in quantities not below 10 lbs. in the market yard
and to sell in retail to consumers anywhere
in tho market area. They have been divided into
three classes, namely, (a) shop-keepers, (b) /,ari
holders, and
(cl Toplawala (hawkers), with a
licence-fee of Rs. 12, Its. 6 and Rs. 3 respectively.
It is urged that th,is amounts to discrilllination between A class an<l B class traders inasmuch as A
class traders are chari;e<l much higher fees than
the B class traders. It is however clear that there
is a basis for clruisification between the two classes
of traders. A class traders are those who can both
buy and sell agricultural produce in the market
yard while B class traders can only buy iii the
markc•t yard but cannot sell there. It is submitted
on behalf of the Sui.tc Government that H class
traders arc those perHons \yho generally sell in retail
to consumers after buying wholesale in t.he market
yard from A class traders or· producers. The reason
why B class traders have been permitted to buy in
the market yard is to allow for competition,
as otherwise there woulcl have been a monrpoly
of the few
A
class
traders
who
operate
in a particular market yard. This classification in
our opinion is reasonable. A cla0s traders are
wholesale traders who are permitted both to buy
an<l sell in the market yar<l and arc thus charged a
higher licence-fee.
R class traders are ordinary rotailers who in order to carry on their retail tmcln
are permitted to buy in the 'market yarcl but they are
~ot permitteq to sell there. They are small traders
3 S.C.R.
SUPREME COURT REPORTS
891
and are therefore charged lower licence fees. It
appears to us that in order to avoid the monopoly
of A class traders, who are a few in number, with
the result that prices might be depressed by such
traders, B class traders are permitted only to buy
in the market yard on payment of a small licence
fee in.order that the producer who brings his produce in the market yard may have a fair price. We
see no reason therefore to hold that there is any
discrimination in creating the two classes of traders,
for there is a fair basis of .classification of traders
into A class and B class.
Nor can this restriction be
deemed to be an unreasonable restriction on the right
to carry on trade and business, for such regulation
is obviously envisaged by the Act in order to carry
out its purposes and this Court has already held·
in the earlier judgment that the Act is a valid piece
of legislation. It is unnecessary to repeat the reason
given in the earlier judgment, where it was held
that the restrictions placed by the Act, Rules and
Bye-laws framed thereunder are reas..,nable restrictions in the interest of general public.
It is however urged that B olass traders are
allowed to sell to consumers anywhere in the market area whereas A class traders ar.e not so allowed.
It has already been held in the earlier judgment
that retail trade iH not controlled under the Act .
. Therefore, the fact that the bye-law has added the
words "to sell in retail to consumers anywhere in
•
the market area" in the case of B class traders is
of no consequence, for B class trader8, ns they are
retailers, would be entitled in any case, without being controlled under the Act, to sell to consumers
anywhere they like. It is not the addition of these
words which gives that right to B class traders, for
that right of theirs is not controlled by the Act and
they would be entitled to exercise it without the
addition of these words, which we consider ns surplusage in tJie circumstances .. As for A class traders
196S
Mohammad61lai
Khutlabux Cliliipa
v.
Tht St.te of Gujarat
Wanehaa J.
1962
Mohommadbhai
KAudabwr ChiPP•
•..
Tht Stal• of Guj•lfol
WanchoO J.
892 SUPREME COURT REPORTS [1962] SUPP.
they are admittedly wholesalers and there is no
queAtio11 of their selling in retail. We aro therefore
of opinion that tho addition of the words mentioned
above wit.h respect to B class trader• iH a more ~ur
plusago and makeR no difference to tho basis of
classification. There is no forco therefore in the
contention under thi8 head and it must be rejected.
Re. ( 4) .
. It is next urged .that the market committee is
attempting to control retail dealt1rs and requires
them also to takn out' licences, and thiH it is not
authorised to do, as this Court has already held in
the earlier judgment that retail trade is not within
the ambit of the Act.
This argument is based on
the use of the words "to sell in retail to consumers
anywhere in the market area" in connection with B
class traders. It is said that in this way the market.
committee i.'l controlling ret'lil trade also under the
Act which it 011.nnot do. We are of opinion that this
cont{lntion )11\s no force.
13 class traders are required to take out licencrs in order to buy agricultural
produce in quantities not below 10 lbs. in the market
yard.
The licence in our opinion is not. meant to
permit thorn to carry on retail sale anywhere in the
market area.
AA we h1tve said already these wordR
are a mere surplnsage and the r<ial purpose of the
liccncP grankd to 13 class tradcrR is to prrmit them
to buy in t.hc market vard and thus control their
activity in connection with. wholesale trade.
It. iR
urgf'd, 'however, that no provision haR bcon made
under s.2(ix a) of the Act to define the limit of
retail sale under any bye-law.
It is true that no
Bpccific provision for that purpose has been made
but whP-n the limit of 10 lbs. is fixed below which no
transaction can take place in the market yard it is
some indication of what is tho limit of retail s;ile.
In any case the bye· laws which provide for A class
and 13 class traders, indicat<> the limit below which
t)1ey cannot trade in the market yard and this c)Qarly
_,
:s.c.:R.
SUPREME CoURT REPORTS
8!i3
shows that the intention of the market committee
was not to control retail trade by the issue of licence to traders for the large proportion of retail trade
may well be below 10 lbs. for each transaction. We
cannot therefore accept the contention of the· petitioners that thti bye-laws by providing for A class
and B class traders are really providing for control
of retail trade. It is clear that B class traders can
only buy in the market yard but cannot sell there
and as for sale, they will be entitled to sdl in
retail wherever they like, for the Act does not control retail trade.
As for r. 64, it inerely provides for incidental
powers ;n connection with the regulation of market
yards and it has already been held valid in the earlier judgment. We see no reason to hold that that
rule is invalid on the ground that the market committee is using that rule to control retail trade. We
have already pointed out that the market committee
cannot be said to control retail trade by providing
for A and B class licences and there is no question
therefore of r. 64 being used in a manner not intended thereunder.
Lastly, it seems that there is some dispute by
some petitioners in Petitions Nos. 228 and 229 as to
whether they hold certain shops in the market yard
from the municipal committee or must be deemed
to hold them from the market committee and what
rights the market committee has over those petitioners in that connection. It appears that there
have been suits in courts with respect to that dispute. That is a matter which in our opinion has
to be decided by the courts where the suits are said
to be pending and cannot be the subject of adjudication in a petition under Art. 32. In any case r. 64
cannot be declared bad because of any dispute between the mnrket committee, the municipal committee and stall holders as to their respective rights
196Z
M ohammadbhai
Khudabux Chhipa
v.
The State of Guja,0 1
WanchooJ.
1962
Mo"4mmdbhai
Kludobtu CllMH•
••
Th4 State of <lujorat
W-.looJ,
8114
SUPREME COlJRT REPORTS (1962] SUPP.
over the stalls in the market yard. There is therefore no force in this contention either and it must
be rejected.
Re. (5).
The main coutention under this head ii that
the main provisicns of tho Act havt' been so amended by the Ordinance that the ha.sis on which this
Court upheld the provisions as constitutional no
longer exists and therefore the Act as it now stands
aftRr its amendment by the Ordinance is an unreasonable restriction on the right to carry on trade>.
This cont<·ntion requires a .consideration of the provisions of the Act as they stand after tho amendment by the Ordinance nnd it will have to be seen
whether there has been any radiral rfoparture from
the scheme of the Act as it was before the amenrlment. If there has been no radica,l departure after
the amendment and the control envisaged by the
Act as amended is still the same, as it was before
the amendment, the basis on which tho earlier judgment of this Court upheld the main provisions of
the Act would still apply, and the Act as amended
would ho constitutional. Let us therefore see if
there has been any radical departure from the main
provisions of the Act as they stood before the
amendment. The Act still deals with the regulation
of purchase and sale of agricultural produce and
establishment of markets for such produce. Section
3 stands unamended and provideR for the eonstitu-.
tion of market areas and market committees and
gives power to the Commissioner by notification to
declare his intention of regulating the purchase and
sale of such agricultural produce and in such area
a.s m1Ly be specified in the notification. Section 4( I)
is also unamended and gives power to tho Commiesioner after holding such inquiry as may be necessary
and eonsirlering the objections and suggestions if
any made after the notification under s.