# RAMAKRISHNA HARi HEGDE & ANR v. MARKET COMMITTEE, SIRSI & ORS

- **Citation:** [1971] 3 S.C.R. 370
- **Court:** Supreme Court of India
- **Decided:** 1971-01-15
- **Case number:** Civil Appeal No. 1072 of 1966
- **Bench:** S. M. S!Kri, P. Jaganmohan Reddy, I. D. Dua
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ramakrishna-hari-hegde-anr-v-market-committee-sirsi-ors-5212
- **Pages:** 8

## Headnote

Bombay Agricultural Produce Market• Act (22 of 1939), as amended
in 1954, ss. 4 and 4A-Notificalion changing Principal Market YardTitne insuffir;ient for per.sons carrying on business to shift to new yardNotification, if violates their fundamental right to carry on business.
Under the Bombay Agricultural Produce Mar1<ets Act, 1939 as amend-
·ed in 1954, a Market area is first declared unuer s. 4( 1), after which,
under s. 4A, a Principal Market Yard and one or more sub-Market Yards
may be constituted for the area. The effect of constituting the Market Area
and Market Yard is that the purchase or sale of agricultural produce in
any place in the area is prohibited except in the Principal and sub-Market
Yards.
Under s. 5 the State Government may establish a Market Committee fpr the market area.
In .195 r, the town in which the appellants were carrying on business in
agricultural produce w~s declared, along with ourrounding villages, as the
Market Area.
In 1954, after the Act was amended by the addition of
s. 4A, the Government notified the area in which the appellants were carrying on business as the Principal Market Yard of the Market area. On 5th
January 1965, the Government issued a Notification by which land grant-
·ed to the Market Committee established under the Act for
the
Market
Area, was declared to be the Principal Market Yard with effect from 15th
January 1965. The appellants challenged the Notification,
but the High
Court dismissed their writ petition.
In appeal to this Court:
HELU : ( 1) The Government has the power to issue the Notification
in public interest, but the prohibition on the appellants, implicit in the Notification, was unreasonable and to that extent violated the fundamental rights
B
c
D
E
of the appellants to carry on their business, because, it was impossible for
them to shift their business to the new Principal Market Yard within ten
F
days. [376 A-C, D-F]
( 2) The Government could have dec:ared the area in which the appellants were carrying on the business as a Sub-MarRet
Yard and rectified
the Notification, but this Court cannot assume the functions of the Government and direct the Government to do so. [376 F-G]
·
( 3) Since the Market Committee had however agreed to grant a 'reaG
sonable period of one and a half years time to the appellants to enable them
to shift to the Principal Market Yard and to permit them to continue their
business in the old Market Yard during that ~eriod, the Notification need
can be struck down. [376 G-H, 377 Al

## Text

370
RAMAKRISHNA HARi HEGDE & ANR.
v.
MARKET COMMITTEE, SIRSI & ORS.
January 15, 1971
[S. M. S!KRI, P. JAGANMOHAN REDDY AND I. D. DUA, JJ.]
Bombay Agricultural Produce Market• Act (22 of 1939), as amended
in 1954, ss. 4 and 4A-Notificalion changing Principal Market YardTitne insuffir;ient for per.sons carrying on business to shift to new yardNotification, if violates their fundamental right to carry on business.
Under the Bombay Agricultural Produce Mar1<ets Act, 1939 as amend-
·ed in 1954, a Market area is first declared unuer s. 4( 1), after which,
under s. 4A, a Principal Market Yard and one or more sub-Market Yards
may be constituted for the area. The effect of constituting the Market Area
and Market Yard is that the purchase or sale of agricultural produce in
any place in the area is prohibited except in the Principal and sub-Market
Yards.
Under s. 5 the State Government may establish a Market Committee fpr the market area.
In .195 r, the town in which the appellants were carrying on business in
agricultural produce w~s declared, along with ourrounding villages, as the
Market Area.
In 1954, after the Act was amended by the addition of
s. 4A, the Government notified the area in which the appellants were carrying on business as the Principal Market Yard of the Market area. On 5th
January 1965, the Government issued a Notification by which land grant-
·ed to the Market Committee established under the Act for
the
Market
Area, was declared to be the Principal Market Yard with effect from 15th
January 1965. The appellants challenged the Notification,
but the High
Court dismissed their writ petition.
In appeal to this Court:
HELU : ( 1) The Government has the power to issue the Notification
in public interest, but the prohibition on the appellants, implicit in the Notification, was unreasonable and to that extent violated the fundamental rights
B
c
D
E
of the appellants to carry on their business, because, it was impossible for
them to shift their business to the new Principal Market Yard within ten
F
days. [376 A-C, D-F]
( 2) The Government could have dec:ared the area in which the appellants were carrying on the business as a Sub-MarRet
Yard and rectified
the Notification, but this Court cannot assume the functions of the Government and direct the Government to do so. [376 F-G]
·
( 3) Since the Market Committee had however agreed to grant a 'reaG
sonable period of one and a half years time to the appellants to enable them
to shift to the Principal Market Yard and to permit them to continue their
business in the old Market Yard during that ~eriod, the Notification need
can be struck down. [376 G-H, 377 Al
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1072 of
1966.
Appeal by special leave from the judgment and order dated
July 30. 1965 of the Mysore High Court in Writ Petition No. 141
of 1965.
H
f
~y_
)
•
A
B
RAMAKRISHNA v. MARKET COMMITTEE
371
(Jagunnwhan Reddy, J.)
V. M. Tarkunde and Naunit Lal, for the appellants.
R. B. Datar, for respondent No. I.
S. K. Dholakia and S. P. Nayar, for respondent No. 2.
The J ud5ment of the Court was delivered by
P. Jaganmoban Reddy, J.
This
Appeal
is
by
Special
Leave against the Judgment of the Mysore High Court dismissing
the Writ Petition filed by the Appeallants and Respondent No. 3
against Respondents 1 and 2, the Market Committee Sirsi and
the State of Mysore respectively, by which they challenged the
Notification of the Govt. of Mysore No. DPC 203 CMD 64(i)
C
dated 5th January 1965. The Town of Sirsi in the North Canara
which was once part of the Bombay State is one of the leading
markets for Areca, Cardimom and Pepper. The Appellants have
been carrying on business in these 3 commodities on a large scale
for many years in this town mainly in the localities comprising
D
E
F
Channapattan Galli, Basti Galli and Nadged Galli, while the Respondent 3 who is a dealer in the said commodities was carrying
on business in Nadged Galli.
In the Channapattan Galli there
are nearly 20 Commission Agents who own shops and goaowns
who also deal in these commodities. It was stated that the three
Ga!lis constitute the main market where wholesale business in the
aforesaid commodities is being carried on for more than a century.
The Bombay Legislature had passed the Bombay Agricultural
Produce Markets Act 1939 (Act XXII of 1939) and thereafter
made rules under the Act known as Bombay Agricultural Produce Mark.~t Rules hereinafter referred to as the Act and Rules
respectively.
In. 1951 under the provisions of Section 4( 1) o'
the Act the Govt.
of Bombay declared the town of Sirsi and
various surrounding villages. 59 in number.as a market area in
respect of Areca. Pepper and Cardimom and by Notification dated
24th April I 951 had also declared the 3 Gall is referred to above as
the Market Yard under the Act.
Jn 1954 the Act was amend hy
the addition of Section 4A to which a reference will be made preG
sently. After the amendment of the said Act, on 31-8-1954 the
Govt. of Bombay Notified the three Gailis of Chann~pattan, Basti
and Nadged which previously had been declared as a Mar\cet
Yard, as the Principal Market Yard of the said Market area under
Section 4-A(2) proviso.
After this declaration it is said
the
Appellants invested large amounts in buildings which are worth
ten lacs of Rupees and improved their trade.
Similarly in the
Nadged Galli the properties of Commission Agents are worth about
Rs. 5 lacs and in the Basti Galli the business premises are worth
about.Rs. 2 lacs.
H
372
SUPREME COURT REPORTS
[1971 J 3 s.C.R.
It is alleged that Shri Hegde Kadve is a Congressman and as
the Chairman of the Market Committee and alsci as the Chairman
of the Sirsi Totgars Cooperative Society and President of the
Taluka Board had considerable personal influence over the Congress Ministry & consequently prevailed on the Government to
grant to the Market Committee free of cost land measuring about
I 0 acres and 3 7 gunthas for a market at a distance of more than a
mile from the present market, which was divided into plots, o.n
which he managed to get shops, godowns and offices constmcted
with the money secured by the Society as a loan from the Governm~nt at a very low rate of inte~est. The Market Committee disposed of eleven sites to private parties and also allowed the Cooperative Society to construct premises for a Rice mill, but notwithstanding these constructions the new site for the Market has no
amenities. The 'impugned Notification had the effect of prohibiting
~ersqns from carrying on business in the said three main commodities at the old market Yard, and has thus destroyed the business of
traders including that of the.Appellants. The new site it was said
was only so declared with a view to confer on the Cooperative
Society a monopoly in trade as it would not be possible for
trad~rs to invest money and construct new buildings and godowns
for carrying on trade at the new market site. The Notification
was thus challenged as being ultra vires of the provisions of the Act,
illegal, arbitrary, capricious and discriminatory, violating Articles,
14, 19(l)(g) and 31 of the Constitution.
~
Respondents denied the several allegations made against
them.
Respondent 1 stated that the Market Committee having
felt as early as 1958 that the area of th.e three Gailis was insuffi- .
cient to cope 'e'ith the expanding business and made efforts to acquire a more convenient and spacious area to house the market.
A
B
c
D
In furtherance of this desire and with the object of providing better
F
facilities to the Agriculturists, the Committee from time to time
made representations to the Government, which ultimately granted
in all 35 acres-29 gunthas of land. Thereafter steps were taken
for the development of the said area by leasing out plots to Commission Agents and traders who were induced to build premises
for the purpose of sale and purchase of the Agricultural produce
G
in the Market Yard. The Committee thereafter resolved on
13-7-1964 to request the Government to declare the new area
as ihe Principal Market Yard while at the same time permitting
the traders to continue their business in the existing place for a
period of one or two years. It was also pointed out that the
Market Committee of which the Appellant No. I was a Member
H
had never objected to the shiftin!( of the Market Yard since 1958
but on the contrary had applied for the grant of plots and was
complaining that the Government was delaying the issue of the
--
RAMAKRISHNA V. MARKET COMMITTEE
373
(Jaganmohan Reddy, J.)
necessary Notification. Besides the Appellant there were
14
others, who had obtained leases of the plots and constructed
buildings on these plots. The allegation that there are no Roads
or well was incorrect. The ·new site was only about half a mile
from the 3 Gallis and was centrally situated within the Municipal
limits of Sirsi as is evident from the fact that the Totgars Society
B
itself 'Was transacting 30% of the entire business of Sirsi Market
Committee in the rel(ulated commodi1ies with an annual turnover
of more than a crore of Rupees within that area. . Th~se allega·
tions were considered by the High Court which held that it was
open to the Government under Section 4 to alter the declaration
regarding the Principal Market Yard. After setting out the history
C
of the legislation it was of the view that the impugned Notification
was issued in the public interest, and not with any ulterior purpose
and consequently rejected the Writ Petition.
The short point in this appeal is whether by reason of the
impugned Notification the Appellants have been prevented from
D
exercising th.~ir right to trade and whether it is discriminatory and
.affects in any manner his right to property.
The Act under which the Notification is issued deals with the
regulation of purchase and sale of agricultural produce in
the
State of Bombay including the area which has now become part
of Myrnre State as a consequence of the States Reorganisation Act
E
1956. An examination of the provisions of the Act would show
that there is no warrant for holding that th.ere is an~thin~ which
affects the freed um to carry on trade or busmess. nor 1s there anything which can be said to be discriminatory. Section 2 of the
Act
is in so far as relevant defines Market. Market Area,
Principal Market Yard, Sub-Market Yard. Section 3 provides for
F
the constitution of Markets and Market Committees and confers
power on the Commissioner by Notification to declare his intention of regulating the purchase and sale of such agricultural produce and in such area as may be specified and invi~~ng objections
and suggestions within a month of the publication of the NotifiG
H
cation. The Commissioner may after considering the objections
and sug~estions if any received by him during that period and
after. holding such enquiry as may be necessary declare the area
under Section 4-A to be Market area for the purposes of the Act.
Section 4(2) provides that after the Market area is declared. no
place i,n the said area shall subject to the provisions of Section
SA be used for the purchase or sale of any agricultural produce
specified in the Notification. Section 5 confers power on the
State _Government after the declaration of the Market area to
establish a _Markel Committee for evecy Market area and under
Section SAA it becomes the duty of the Market Committee to en-
374
SUPREME COURT· REPORTS
(1971] 3 S.C.R.
force.the provisions of the Act and also to esablish a Market therein on being required to do so by the State Government. In as
much as there may be a time lag between the declaration of a
Market area and establishment of a Market; the proviso to Sec.
4 ( 2) lays down that pending the establishment of a market in a
·Market area the Commissioner may grant a licence to any person
to use any place in the said area for the purpose of purchase and
sale of any such agricultural produce and it is the duty of the
Market Committee under Sec. 5AA to enforce the conditions of
the licence granted under Section 4(2).
Section 26 confers
power on the State Government to frame rules for the purpose of
carrying out the provisions of the Act, and Section 27
confers
power on the Market Committee to frame bye,laws with the preC
vious sanction of the Director or any other officer specially empowered in this behalf by the State Gevernment under Sec. 26.
The State Government has power under S.ec. 29 to add to, a·mend
or cancel any. of the items of agricultural produce specified in the
Schedule to the Act.
The Act was amended in 1954 by the addition of Sec. 4A
D
which under sub-s. (I) makes it necessary for each Market area to
have one Principal Market Yard and one or more sub-Market
Yards as may be necessary. Sub-s. (2) of the said ·section empowers the Commissioner by Notification to declare any enclosure,
building or locality in any market area to be a frincipal Market
Yard for the area and other enclosures, buildings or localities to
E
be ime or more sub-Market Yards for the area. The proviso requires that one of the enclosures, buildings or localities declared
to be market yards beforf.! the commencement of the amendment
of that section, shall be declared to be the Principal Market Yard
for the Market area and others, if any, to be one or more SubMarket Yards for the area, subject to such variation as may be F
necessary.
The effect of these provisions is that a Market area is
first
declared undf.!r Sec. 4 (1 ) after which a market yard may
be
constituted for the market area as Princ:iJal Market Yard. and
sub-Market Yard or yards if any. The declaration of the Market
G
area sub]ect to Sec. 5A has the effect of prohibiting the purcha&~
or sale of agricultural produce in any place in that area except
in the area declared as a Principal Market Yard or sub-Market
yard or yards, if any.
This Court had earli!.!r in
Mohammed
Hussain Gu/am Mohammad & Anr. v.
The State of Bombay &
A~r. (') held Section 4, 4A, 5, 5A and 5AA to be constitutional
and that none of t)ie said provisions imposed unreasonable restrictions on the right to carry on trade in the agricultural produce
(I) [1962] 2 S.C.R. 659.
H
(
)
RAMAKRISHNA V. MARKET Cl)MMITTEE
375
(Jaganmohan Reddy. J.)
A regulated under the Act and as such were not violative cf Art.
19( 1) (g) of the Constitution.
B
c
D
It is, however, contended that the
impugned Notification
violative of Articles 19 (1 )( g), 14 and 31 of the Constitution.
The Notification as we have already stated was
issued
on
5-1-1965 under Section 4(A) of th.~ Act and is in the following
terms :
•·Jn exercise of the powers conferred by Sub-Section ( 2) of
Section 4A of the Bombay Agricultural Produce Markets Act
1939 (Bombay Act 22 of 1949) as in force in the Bombay area,
and in supersession of Bomba) Government notification Development Department No. APM 4554,
dated
31-8-1954,
the
Government of Mysore hereby declares the following lccality in
the market area of the Agricultural Produce Market Committee,
Sirsi of Sirsi Taluka of North Kanara District, to be a Principal
market yard for the area with
effect from th.~
15th
January,
1965. namely:-
Locality :
An area measuring about 35 acres and 29 gunthas and 4 acres
of Sirsi Totagaras' Cooperative Sales Society Ltd.,
Sirsi in R.S.
No. 116, 117, 59 and 60 of Sirsi Taluka.
·
E
On the North by :-Sirsi-Yellapur Main Road & R. S. No. 116
On the South by :-R.S. Nos. 55, 57 and portion of R.S. No. 299.
On the East by :-Portion of R.S. Nos. 299, 58, 129-A & 118.
On the West by :-R.S. Nos. 61, 64 and 68."
F
G
It may be
mentioned
that
the earlier Notification
of
31-8-1954 also made in exercioe of the Powers conferred by subSection (2) of Section 4-A of the Act had declared as the Principal Market Yard all !!Odowns, storage places and open places
lying within the limits of the Sirsi Municipality and approved by
the Agricultural Produce Market Committee, Sirsi for storage and
for the purpooe of sale of commodities under regulation including
the area locally known as Channapattan Gali, Basti Galli
and
Nadger Galli which had earlier been declared by Notification of
the Government in the Development Department dated 24-4-1951
to be a Market Yard
The affect of the super1.~ssion of thi> Notification by the impugned Notification is that as from 15-1-1965
the area of the 3 Gallis ceased to be the Principal Market Yard.
and as such no business could be transacted therein <Jin and after
H
that date.
This position could not be seriously controverted by the
learned Advocate for the Respondents.
In our view the prohibi-
376
SUPREME COURT REPQRTS
[1971] 3 S.C.R.
A
tion imolicit in the Notification was unreasonable and to that extent violated the fundamental rights of the Appellants and Respondent 3 to carry on their business because it coμJd not have
been pos:ulated that they could immediately in 10 days shift their
business to the Principal Market Yard declared by the impugned
notification. The learned Advocate for the Market Committee
however pointed out that it was never their intention to prohibit
at-once any business being conducted in the1Market Yard ~n the
Gallis, but they had in fact in their proposals to the Government
suggested the business in th.'· Gailis should be allowed to be continued for a year or two.' Whatever their proposals may have
been we have no doubt that the effect of the ~otification as long
B.
as it is in force is to prohibit the Appellants and Respondent 3 C
trom carrying on business in the Market Yard of the Gailis.
It il submitted .. by the learned Advocate for the Respondents
that the Appellants and Respondent 3 had sufficient time till now
to make arrangements to shift their business, as such they are not
eqtitled to complain, but the contention on behalf of the.App.,llants D
is that they were entitled to challenge the Notification and as they
-h~ invested large amounts in buildings etc. 'in the 3 Gailis they
··· are justified in asking this Court to. direct Respondents to have
these areas decl:ired as a sub-Market area. While the Govern·
m1mt has the power to issue a Notification in public interest &
to declare the. area specified in the impugned Notification as the
Piincipal Market area, without necessarily declaring ot!J.'r areas
E
simu~taneously as sub-Market area, in our view sufficient time
should have been given for the Appeallants, Respondent ., and .
other petoons doing business in the area of the 3 Gailis to shift
their business.
As Jong as the Notification prohibited t)iem from
doing business in those Gailis they had a right to challenge the
validity of that Notification. No doubt the Govt. could have deF
dared the 3 Gailis as sub-Market Yard but it is not for this Court
to arrogate to itself the functions of the Govt. and direct them
to do so merely because that would be one of the ways in which
the impugned Notification cain be rectified. The learned Advocate
for the Market Committee, however, consistent with the stand
taken by the Market Committee in its counter before the High
G
Court that it had requested the Govt. to ailow the business in the
Gailis to be carried on for one or two years agrees to give one
-l!Dd a half years time for the Appellants and Respondents to
enable them to shift during this period. to the Principal Market
Yard decliiil'ed under the' impugned Notification and till then permit them to continue their business in the 3 Gailis. The period
11
agreed to in our. view is a reasonable period within which the
Aopellants and Respondents 3 can shift their business to the new
Market Area and till then they should not be prohibited from
,.
,.
RAMAKRISHNA V. MARKET COMMITTEE
377
(Jaganmohan Reddy, J.)
A doing business in the Market area of the 3 Ga!Iis as heretofore.
B
In view of this agreement except to give the above direction there
is no need to strike down the Notification.
The Appeal is accordingly allowed subject to the above directions. There will be no costs in this Appeal.
V.P.S.
Appeal allowed and direct-ions given.