# RAMESHCHANDRA KACHARDAS PORWAL & ORS v. STATE OF MAHARASHTRA & ORS. ETC

- **Citation:** [1981] 2 S.C.R. 866
- **Court:** Supreme Court of India
- **Decided:** 1981-02-17
- **Case number:** Civil Appeal Nos. 3297 & 2689 of 1979
- **Bench:** R. S. Pathak, 0. Ch!Nnappa Reddy A~D Baharul !Slam
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/rameshchandra-kachardas-porwal-ors-v-state-of-maharashtra-ors-etc-7976
- **Pages:** 28

## Headnote

Constitution of India 1950, Article 91 ( 1) (~)-Maharashtra Agricultural
•
P1oduce Marketing, (Regulation) Act 1963, SS : and 6 & Maharashtra Agricultural Produce Afarketing (Regulation)
Rules
1963, Rule
5-Karnataka
Agricultural Produce Marketing (Regulation) Acl 1966, SS. 8, 10 and
11 'ii:,_.
Bilzar Agricultural Produce Marketing Act 1960 Sections
5,
15-Trading in
~
specified agricultural produce-State Government--Setting up of new market
area-Whether valid.
Notification declaring that traditional trading acllvlty in old market area be
shifted to new 1narket-Whether permissible-lnf1ingement of fundamental right
to carry on trade-Whether arises.
Adtninistrative law-Principles of natural justice-Markel yard disestablisfred
at one place and established at another place-l>uty to invite and hear objections-Whether arise3.
The Maharashtra Agricultural Produce Marketing (Regulation) Act
1963
provides for the regulation of the marketing of agricultural produce in market
area6 to be established therefor in the State, M<Lrket Committees to be constituted for purposes connected with such markets, establishment of Market Fund
for purposes of the Market Committees, and for purposes connected with these
matters. Section 3 empowers the Government b:r a notification to be published
in the Official Gazette, to declare its intention of regulating the marketing of
:such agricultural produce in such areas as rna·y be specified and section 4
provides that the marketing of the agricultural produce shall be regulated. under
lhe Act in the area specified in the notificatior. SeC'tlnn
5 ( J)
provides
a
principal market for every market area and On( or more subsidiary
markets,
and section 5(2) empowers the Director to est:Lblish the principal market for
the marketing of specified agricultural produce. Section 6 provides
that no
person shall use any place in the market area fo: the marketing of the declared
agricultural produce or operate in the market ar~a or in any market therein as
d trader, conunission agent, broker, processor, 'veighma-n, measurer,
surveyor,
warehouseman or in any other capacity in rela· ion to the marketing of the
declared agricultural produce, on and after the date on which the declaration
under section 4(1) is made. Section 6(2) prov.des that section 6(1) shall not
apply to sales by retail, sales by an agriculturist who sells his own produce; and
sales by a person to a-nother .for the latter's per >Onal consumption.
TI1e Maharashtra Agricultural Prnduce Marketing (Regulation) Rules, 1963
were promulgated pursuant to the power confe1 Ted by section 60 of the Act.
Rule 5 provides that no person shall market any declared agricullutal produce
in any place in a market area other than the r rincipal market or subsidiary
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R. K. PORWAL v. MAHARASHTRA
867
n1arket established therein. The proviso to the rule enables the Director of
A
Aitark.eting to authorise a Market Committee to permit a trader or commission
agent to market declared agricultural produce or to permit any other market
functionary to operate at any place within the market area as may be nientioned
by the· Market Comn1ittee in the licence granted to such trader.
The petitioners who were wholesale traders in onions and potatoes in their
writ petitions to the Supreme Court assailed the notices requiring them to carry
on business in regulated agricultural produce in the market yard at the specified
areas of the State, and at no other place, contending that : ( 1) the 1963 Act,
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Jid not invest the Director of Marketing or the Market Committee with
any
po\ve'r, to co1npel a trader to transfer this activity from a previously existing
ffiarket to a principal or subsidiary market established under section 5 of the
Act (2) Rule 5 was inconsistent with section 6 and therefore ultra vires.
(3)
The Bombay Agricultural Produce Markets Act, 1939 and the Agricultural Pro·
duce Marketing Acts of other States such as Karnataka provided or indicated
by an express provisio

## Text

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RAMESHCHANDRA KACHARDAS PORWAL & ORS.
v.
STATE OF MAHARASHTRA & ORS. ETC.
February 17, 1981
(R. S. PATHAK, 0. CH!NNAPPA REDDY A~D BAHARUL !SLAM, JJ.]
Constitution of India 1950, Article 91 ( 1) (~)-Maharashtra Agricultural
•
P1oduce Marketing, (Regulation) Act 1963, SS : and 6 & Maharashtra Agricultural Produce Afarketing (Regulation)
Rules
1963, Rule
5-Karnataka
Agricultural Produce Marketing (Regulation) Acl 1966, SS. 8, 10 and
11 'ii:,_.
Bilzar Agricultural Produce Marketing Act 1960 Sections
5,
15-Trading in
~
specified agricultural produce-State Government--Setting up of new market
area-Whether valid.
Notification declaring that traditional trading acllvlty in old market area be
shifted to new 1narket-Whether permissible-lnf1ingement of fundamental right
to carry on trade-Whether arises.
Adtninistrative law-Principles of natural justice-Markel yard disestablisfred
at one place and established at another place-l>uty to invite and hear objections-Whether arise3.
The Maharashtra Agricultural Produce Marketing (Regulation) Act
1963
provides for the regulation of the marketing of agricultural produce in market
area6 to be established therefor in the State, M<Lrket Committees to be constituted for purposes connected with such markets, establishment of Market Fund
for purposes of the Market Committees, and for purposes connected with these
matters. Section 3 empowers the Government b:r a notification to be published
in the Official Gazette, to declare its intention of regulating the marketing of
:such agricultural produce in such areas as rna·y be specified and section 4
provides that the marketing of the agricultural produce shall be regulated. under
lhe Act in the area specified in the notificatior. SeC'tlnn
5 ( J)
provides
a
principal market for every market area and On( or more subsidiary
markets,
and section 5(2) empowers the Director to est:Lblish the principal market for
the marketing of specified agricultural produce. Section 6 provides
that no
person shall use any place in the market area fo: the marketing of the declared
agricultural produce or operate in the market ar~a or in any market therein as
d trader, conunission agent, broker, processor, 'veighma-n, measurer,
surveyor,
warehouseman or in any other capacity in rela· ion to the marketing of the
declared agricultural produce, on and after the date on which the declaration
under section 4(1) is made. Section 6(2) prov.des that section 6(1) shall not
apply to sales by retail, sales by an agriculturist who sells his own produce; and
sales by a person to a-nother .for the latter's per >Onal consumption.
TI1e Maharashtra Agricultural Prnduce Marketing (Regulation) Rules, 1963
were promulgated pursuant to the power confe1 Ted by section 60 of the Act.
Rule 5 provides that no person shall market any declared agricullutal produce
in any place in a market area other than the r rincipal market or subsidiary
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R. K. PORWAL v. MAHARASHTRA
867
n1arket established therein. The proviso to the rule enables the Director of
A
Aitark.eting to authorise a Market Committee to permit a trader or commission
agent to market declared agricultural produce or to permit any other market
functionary to operate at any place within the market area as may be nientioned
by the· Market Comn1ittee in the licence granted to such trader.
The petitioners who were wholesale traders in onions and potatoes in their
writ petitions to the Supreme Court assailed the notices requiring them to carry
on business in regulated agricultural produce in the market yard at the specified
areas of the State, and at no other place, contending that : ( 1) the 1963 Act,
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F
Jid not invest the Director of Marketing or the Market Committee with
any
po\ve'r, to co1npel a trader to transfer this activity from a previously existing
ffiarket to a principal or subsidiary market established under section 5 of the
Act (2) Rule 5 was inconsistent with section 6 and therefore ultra vires.
(3)
The Bombay Agricultural Produce Markets Act, 1939 and the Agricultural Pro·
duce Marketing Acts of other States such as Karnataka provided or indicated
by an express provision tha.t once a market was established it was not permis-
~ible to market or trade outside the market and that the absence of such an
expre'3s provisiou in the 1963 Act :-.howed that no such ban was coutemplatcd
by the Act. ( 4) The transactions between trader and trader and transa-ctions by
which the agricultural produce was imported into- the 111arket area from outside
the market areas were outside the purview of the Act and if section 5 and rule
5 were intended to cover such tran~actions also they \Vere
invalid.
(5)
The
statue itself imposed and provided for stringent supervision and control, sufficient to regulate transactions between traders and traders, that it was superfluous to insist that such transactions do take place in the market only. (6)
Section 6 of the Act made a distinction between (a) the use of any place jn
the market area for the marketing of the declared agricultural produce, and (b)
the operation in the market areas or in any market therein as a trader, commission agent, broker etc. in relation to the marketing of agricultural produce
and that the distinction was in reality a distinction between a sale by a producer to a trader and a subsequent sale by a trader to a trader, and consequently
the ban imposed by Rule 5 applied only to a sale of the agricultural produce
by a producer to a trader.
(7) Section 13(1A) which declared the area comprising greate~ Bombay a market area for the purposes of the Act was invalid
as it was wholly unreasonable to constitute such a large area into a single
market area.
( 8) when a market yard was dis-established at one place and
_.-----.-.--.. established at another place it was the duty of the concerned authority to invite
and hear objections and failing to do so, was a violation of the principles of
natural justice and the notification establishing the market yard elsewhere was
bad.
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Dismissing the writ petitions and appeals :-
l-lELD: 1. (i) The power cunferred by S. 5 of the Act to establish a principal market or a subsidiary market carries with it the power to dis-csta-blish
such market. Section 5 of the Act, read \Vith section<;
14
and
21
of the
Maharashtra General Clauses Act vest enongh power in the Director to close
H
an existing market and establish it elsewhere. The repealed Act of 1939 also
empowered the State Government to declare any market area to be a principal
market yard for the area. 'The power to issue notifications, orders etc. includes
868
SUPREME COURT REP,JRTS
(1981] 2 S.C.R.
A
the power to exercise in like manner to add to, 'mend, vary or rescind any
notification, order, rule etc.
Any other construction would frustrate the· object
of the legislation. [880 A-C, 881 C, D]
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Bapubhai Ratanchand Shah v. State of Bomlay LVII
1955
Born.
L.R.
p. 892, 903-904, approved.
(ii) Rule 5 is not ultra vires.
Jf for the n1ore
effective regulation
of
marketing it is thought that all marketing ope1 ations in respect of declared
agricultural produce should be carried on only i 11 the principal and subsidiary
markets established under the Act, it cannot be ;aid that a rule made fei:, that
purpose is beyond the competence of the rule making authority under the
Act. [881G, 882C]
(iii) 'fhe submission that all regulatory mea:;ures contemplated by the Act
and the Rules may be enforced equally effecthely wherever business in agricultural produce is carried on in the market ar!a outside the
principal and
subsidiary markets as within the principal and sub:ddiary markets is without force.
If that is done, the regulation will very soar. be reduced to a farce.
The
Market Committee will be forced to employ an unduly large number of officers.
The producer's interest will not be properly serv!d because a producer will not
be able to deal face to face with several trader> and would have little chance
of obtaining the best price for his produce. T:1is cannot happen if he is persuaded to take his produce to the place of busiress of an individual trader outside the principal or subsidiary market. There .s a greater possibility of abuse
and greater likelihood of the object of the Act being frustrated. Fair price to
the agriculturist will soon be a mirage and the !Vil sought to be prevented will
persist. [882 E-H]
Kewal Krishan Puri & Anr. v. State of PuHjab & Ors.
[1979]
3 S.C.R.
p. 1217, 1247, referred to.
2. There can be no question of any incoHsistency between section 6 and
rule 5. Section 6 is applicable to both the sltuations before and
after
the
establishment of mairkets, and is expressly declared to be subject to the rules
prc.viding for regulating the marketing of agricultural produce in the
market~-~
area by stipulating that the marketing shall be carried on in the market esta·
blished in the market area. [883F, D~E]
3. 'The rule prescribing that no marketing operation in any declared agri~
cultural produce shall be carried on outside th! principal or subsidiary market-;
is consistent and in consonance with the sche1 nc of the Act and is within the
competence of the rule making authority and is reasonable. Absence
of an
express provision in the Act to the effect that once a market is established
it
was not permissible to market or trade in agricultural prcxluce outside
the
market itself merely means that greater latitude is given to the rule
making
authority to introduce regulation of marketing by stages and to b&n all marketing activity outside the market. This cannot I !ad to the inference that the rule
making authority has no po\ver to make a rule banning marketing activity
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R. K. PORWAL V. MAHARASHTRA
869
outside the market once the market is established even when such a ban is found
A
to be necessary.
[884 B, 883 H-884 Al
4. (i) The assumption that the Act was conceived in the interest of the
agriculturists on1y and intended for their sole benefit is not well founded.
One
of the principal objects sought to be achieved by the Act is the securing of a
fair price to the agriculturist for his produce oy the elimination of middlemen
and other detracting factors.
But that is not the only object. The Act
is
intended to regulate marketing of agricultural and certain other produce. The
marketing of agricultural produce is not confined to the first transaction of sale
by _the producer to the trader but must necessarily include all subsequent tran&--
actions in the course of the movement of the commodity into the ultimate hands
of the consumer so long, of course, as the commodity retains its original character &S agricultural prcx:1uce. While middlemen are sought to be eliminated, it
is wrong to view the Act as one aimed at legitimate and genuine traders. [884DF]
(ii) Promotion of grading, standardisation of agricultural produce,
weighn1ent, the provision for settlement
of disputes
arising out of transactions
connected with the marketing of agricultural produce and
oo.cilliary matters
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are as much to the benefit of the producer as the consumer. Oearly thereD
fore
the regulation of marketing contemplated by the Act involves benefits to
the traders too in a large way.
Regulation of marketing of agricultural produce, if confined to the sales by producers within the
marketing area to
traders, wilt very soon lead to circumvention in the guise of sales by traders to
traders or import of agricultural produce from outside
the market
area to
within the market area. [884G-885BJ
5. (i) It is not correct to say that the statute itself imposed and provided
for such stringent supervision, and control sufficient
and more, to regulate
transactions between traders and traders, that it was superfluous to insist that
such transactions do take place in the
market only. The other supervisory
measures in the Act cannot be said to be sufficient to make it unnecessary for
the traders to move their places of business into the market. No amount of
supervision may be as effective as when all the transactions take place within
the market. Nor is effective supervision at all possible if traders are dispersed
all over the market area. The rendering of services to the traders also will be
far easier. Therefore, localising marketing i'i helpful and necessary for regula~
tion and control and for providing facilities. [887E-888A]
(ii) The requirement that the locus of transactions of sale and purchase
of agricultural produce, including those between trade and trader, should be
in the market cannot be said to be harsh or an excessive restriction on the
Fundamental Right to carry on trade. [888B]
6. The proviso to ru1e 5 speaks of operating at any place within the
mar~
ket area by a trader, commission agent or other market functionary after obtaining a licence while the main provision refers to the marketing of
dee~
tared agricultural produce at any place in the market area. It cannot be
contended that 1he proviso is unrelated
to the main provision. According
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870
SUPREME COURT REPORTS
[\98!] 2 S.C.R.
A
to ordinary canons of construction the proper function of a proviso is to accept
and deal with a case which would otherwise fall within rhe general language of
the main enactment. [888F-G]
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7. There was nothing unreal arid unreasonable in establishing a single market
for a large area. It had
become imperative in the public interest that
the markets should be shifted from their former place to the new area.
The
present village was chosen because it was free from congestion,
conveniently
located near another trunk road.
A railway line linking with both the Western·
Railway and the' Central Railway and so on. There is, therefore, nothing unreasonable in the statutory declaration of Greater Bombay and Turbhe Villa.ge as
a market area; nor in the· establishment of a single market in Turbhe Village,
for the entire market area. [889B-E]
8. Where a market yard was dis-established at one place and established at
another place, no exercise of a judicial or quasi-judicial function
is
involved.
All that is involved is the declaration by a notification of the Government that
a certain place shall be a principal market yard for a market area, upon which
declaration certain statutory provision.<;; at once spring into action and certain
consequences prescribed by statute follow forthwith. The making of the decla·
ration in this context is an act legislative in character ood does not obligate the
observance of the rules of natural justice. [89!C-F]
Baits v. Lord Hai/sham (1972) I WLR 1373 & Tulsipur Sugar Co. v. Notified
Arca Committee [1980] 2 SCR 1111 referred to.
9. The seeming confusion in the large number of notifications issued by the
Government from time to time was not the result of any arbitrary or erratic
action on the· part of the Government but was the result of a desire to accommodate the traders as much as possible. The old markets had existed
from
a·ncient days and it had become necessary to establish modem market yar9s
with conveniences and facilities. When this was sought to be done there were
representations by the traders and the Government thought that it was advisable
to give the traders sufficient time to enable them to prepare themselves fo move
into the new market yards.
The notifications establishlng new market yards
V.'ere therefore, cancelled and the old markets were allowed to function for some-
' •
time. L'lter when th'°' time was thought to be ripe, notifications
establishing ~
new market yards were once again issued.
[893 F, D-E]
ORIGINAL JURISDICTION: Writ Petition Nos. 692, 937-1063, 1111G
1115, 1558/80, 5441-62, 6217 /80 and 6529-6551180.
(Under Article 32 of the Constitution.)
AND
Civil Appeal Nos. 3297 & 2689 of 1979.
H
Appeals by special leave from the Judgment and Orders dated
25-5-1979 & 22-1-1979 of the Karnataka High Court in Regular
Second Appeal No. 551/77 & W.P. Nos. 551/77 and 6555/78.
'
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R. K. PORWAL V. MAHARASHTRA
WITH
Civil Appeal No. 1895 of 1979 .
871
Appeal by special leave from the Judgment and Order dated
22-1-1979 of the Karnataka High Court in W.P. No. 35/76.
A
AND
B
Civil Appeal No. 1507 oj 1980.
Appeal by Special Leave from the Judgment and Order dated
2-5-1980 of the Patna High Court in Civil Writ Jurisdiction Case No.
394 of 1980.
AND
Civil Appeal No. 1715-1716 of 1980.
Appeals by special from the Judgements and Orders dated
30-8-1979 and 2-5-1980 of the Patna High Court in C.W.J.C. Nos.
5136/78 & 840/80.
S. V. Gupte, V. M. Tarkunde, Soli l. Sorabjee, K. K. Venugopal,
K. N. Bhatt and T. S. Sundrajan for the Petitioners in WP Nos. 692,
937-~063 and 1111-1115/80.
Dr. Y. S. Chitale, R. P. Bhatt and A. K. Goel for the P0titioner in
W.P. No. 1558/80.
S. G. Sundraswamy, Ravindran, Vijay Kumar Verma and K. N.
Bhat for the Appellant in CA Nos. 1895/79 & 2689/79.
V. M. Tarkunde, K. R. Nagaraja, P. K. Rao and Aloke Bhattacharya for the Appellant in CA No. 3297 /79.
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SoU l. Sorabjee, B. P. Maheshwari, Suresh Sethi and Miss Asha
F
_/~ lain for the Appellant in CA No. 1507/80.
•
Lal Narain Sinha, attorney General, 0. P. Rana and M. N. Shroff
for Respondent No. 1 in WP Nos. 692, 937-1063 and 1111-1115/80.
A. K. Goyal for the Petitioner in WP 5441-62 of 1980.
K. K. Singhvi, A. K. Gupta, Brij Bhushan and N. P. Mahindru for
RR-3 in WP 692, 937-1063, 1111-1115/80 and RR in WP No.
1558/80.
Lal Narain Sinha, Attorney General and N. Nettar for RR-1 in ·
CA 1895 and 2689/79 .
B. Keshava Iyengar, Advocate General and N. Nettar for State of
Karnataka in CA 1895 & 2689/79.
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872
SUPREME COURT REPORTS
[1981] 2 S.C.R.
El. B. Datar, Miss Madhu Maalchandani and R. B. Datar for RR-2
in CA 1895 & 2689/79.
K. K. Singhvi, N. P. Mahindru and A. K. Gupta for RR No. 3 in
WP Nos. 5441-62/80.
8
S. S. Javali, B. P. Singh, Ranjit Kumar and Ravi Prakash for Interc
vener in CA Nos. 1895/79.
Lal Narain Sinha, Attorney General, R. B. Mehta, B. P. Sinha and
Naresh K. Sharma for the Intervener in WP No. 692/80.
'
,
Lal Narain Si{lha, Attorney General, R. B. Mehta, B. P. Singh,-···yRavi Prakash, Ranjit Kumar and Naresh K. Sharma for RR 3-5 in CA
'
1507/80.
K. G. Bhagat and D. Goburdhan for State of Bihar in CA 1507 /80.
S.S. Ray and M. P. Jha for the Appellant in CA 1715-1716/80.
O
Lal Narain Sinha, Attorney General, R. B. Mehta, B. P.
Singh.
Ravi Prakash, Ranjit Kumar, Naresh K. Sharma and J. S. Rathare for
RR 3-5 in CA Nos. 1715-1716/80.
V. M. Tarkunde, K. R. Nagaraja, P. K. Rao and Aloke Bhattacharya for Petitioner in WP 6217 /80, 6529-6551/80.
E
H. B. Datar, Miss Madhu Maolchandani and R. B. Dattar for the
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Respondent (Market Committee).
H. B. Datar and N. Nettar for RR (State of Knrnataka).
K. G. Bhagat and D. Goburdhan for the State of Bihar in CA
1715-1716/80.
V. M. Tarkunde, P. K. Rao, Aloke Bhattacharya and K. R. Nagaraja for the Petitioner in WP 6529-51/80.
~---
N. Nettar for the Respondent in WP No. 6529-51/80.
The Judgment of the_ Court was delivered by
CHINNAPPA REDDY, J.
Reluctant traders, nu-willing to move their
places of business into the markets or market yards, as they are differently called in the States of Maharashtra, Bihar and Karnaraka, set up
'
by respective Market Committees under various State Agricultural PrP..
·duce Marketing Acts, offer their resistance through these Writ Petitions
H
and Civil Appeals.
We will first recite the facts in one of the cases
,
(Writ Petition No. 692 of 1980) and thereafter consider the questions
niised in that os well as the other cases.
The Petitioner in Writ Peti-
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R. K. PORWAL V· MAHARASHTRA (Chinnappa Reddy,!.) 873
tion No. 692 of 1980 is a trader presently carrying on business in 'GU11'
and other co=odities at 1221 Bhavani Peth, Pune. In exercise of
the powers conferred by Sec. 4A(2) of the Bombay Agricultural Produce Markets Act, 1939, by a notification dated July 6, 1961, the locality known as Bhavanipeth and Nanapeth of the Pune City was declared
as one of the principal market yards for the market area consisting of
Pune City and Haveli Talukas.
The market area had been so declared
by a notification dated May 1, 1957, pursuant to a declaration that it
was intended to regulate the purchase and sale of 'gur" in the market
ciea. The Bombay Agricultural Produce Markets Act,
1939, was
repealed and replaced by the Maharashtra Agricultural Produce
Marketing (Regulation) Act, 1963.
By Sec. 64 of the Act the notifications previously issued etc. under the provisions of the repealed Act
were kept alive for the purposes of the new Act. On March 23, 1971,
the present Market Committee known as Krishi Utpanna Bazar ·samiti,
Pune, was constituted under Sec. 4 (I) of the 1963 Act. On April 21,
1971, the Director of Agricultural Marketing published a notification
declaring his intention to regulate marketing of a large number of commodities in the market area of Haveli and Pune City Taluks. On October 4, 1975, the Director of Agricultural Marketing, Maharashtra State,
exercising his powers under Sec. 5(2) of the Maharashtra Agricultural
Produce Marketing (Regulation) Act, 1963,
declared the
locality
known as Market Yard Gultekadi as the principal market for the
market area for the marketing of various commodities specified in the
notification.
Thereafter on October 8, 1975, a Circular was issued to
all Adatis, merchants, and licence holders, particularly
wholesale
dealers dealing in Gur. Halad, Dhania, etc. in the vicinity of Bhavanipcth-Nanapeth informing them that Bhavanipeth-Nanapeth will cea5e
to be a market from the midnight of October 13, 1975 and that the
market yard Gultekadi had been declared as the principal market for
the market area. The circular went on to say that anyone carrying on
business anywhere except Gultekadi was liable to be prosecuted. The
result of the notification dated October 4, 1975, and the Circular
dated October 8, 1975 was that it was not permissible for anyone to
can-y on trade in any of the notified agricultural commodities outside
the Gultekadi market yard on and after October 14, 1975. It meant
that traders like the petilioner who had for generations been carrying
on business in these commodities in Bhavanipeth-Nanapeth had perforce to move into Gultekadi market yard if they wanted lO stay in the
business. Consequent upon representations made by the Pune Merchants Chamber and the interim order in a Writ Petition filed in the
Bombay High Court by the Chamber the date notified for the commencement of the functioning of the Principal Market in Gullekadi
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874
SUPREME COURT REPORTS
[1981] 2 S.C.R.
was postponed from time to time.
Finally, by a public notice dated
March 6, 1980, all wholesale traders, commission agents and other~
dealing in agricultural produce in Bhavanipeth-Nanapeth
and surrounding areas were informed that with effect from March 17, 1980,
whole.<ale trade in the regulated agricultural produce could be carried
on in the Gultekadi market yard only.
The petitioner seeks to
resist the situation thus sought to be forced upon him and challenges
the notific~tion dated October 4, 1975, and the consequential notices
requjring liim to carry on business in regulated agricultural prodl!ce
in the GuLtekadi market yard and at no other place.
Similarly, lit -~
Writ Petition Nos. 937 to 1063 of 1980 and Writ Petition Nos. 1111
to 1115 of 1980, 132 other traders who are presently carrying on
business in the existing market of Bhavanipeth-N anapeth question
the notification and the notices following the notification.
In Writ Petition Nos. 1558 of 1980 and 5441 to 5462 of 1980
the petitioners are wholesale traders in onions and potatoes who carry
on their business in the Maulana Azad Road Market in Bombay.
They complain against a notification dated December 5,
1978 by
which it was declared that after January 26, 1979, marketing of potatoes and onions shall be carried on at the Principal Market at Turbhe
and at no other place. It appears that initially, for the market area
comprising Greater Bombay and Turbhe Village in Thana Taluka,
the newly established market at Turbhe was declared as the Principal
Market and the existing markets at Maulana Azad Road and Mahatma
Phule Manclai were declared subsidiary markets. This was by a notification dated January 15, 1977. Later by the impugned notification
dated December 5, 1978, the subsidiary markets were abolished and
the market at Turbhe alone was declared as the Principal Market for
the area comprising Greater Bombay and Turbhe village.
It was argued on behalf of the petitioners that the Maharashtra
Agricultural Produce Marketing (Regulation) Act 1963 did not invest the Director of Marketing or the Market Committee with any
power to compel a trader to transfer his activity from a previously
exisling market to a principal or subsidiary market established under
Sec. 5 of the Act. There was no provision in the Act by which a
trader could be compelled. to market declared agricultural produce
in the principal or subsidiary market established under Sec. 5 and in
no other place. This was a feature which distingnished it from the
Bombay Act of 1939 and the Agricultural Produce Marketing Acts
of some other States.
Rule 5 of the
Maharashtra Agricultural
Produce Marketing (Regulation) Rules, 1967, which purported to
provide that no person shall market any declared agricultural produce
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875
in any place in a market area other than the Principal Market or
subsidiary market established therein was ultra vires. It was
also
submitted that once a principal or subsidiary_ market was established
at one place there was no provision in the Act which enabled the principal or subsidiary market to be transferred to another place. In any
event it was urged that the notification was an unreasonable restriction
on the right of the petitioners to carry on their trade. It was also
submit_ted. and this appeared to be the main thrust of the argument of
most of the counsel for the various petitioners that the Act did not
cover transactions between trader and trader and transactions by
which the agricultural produce was imported into the market area
from outside the market area. Secs. 5 and 6 and Rules 5 and 6 had
to be so read-the language permitted such a construction-as to make.
a distinction between a sale of agricultural produce by a producer to
a trader which had to be within a: market and a subsequent sale by
a trader to a trader which could be anywhere in the market area.
It was submitted that if Sections 5 and 6 and Rules 5 and 6 were to be
construed as compelling transactions between trader and trader also
to take place within a market they were invalid. In the petitions of
the Bombay merchants it was further urged that Sec. 13(1A) which
was a special provision
declaring Greater Bombay and
Turbhe
village a Market Area was unreasonable and invalid.
For a proper appreciation of the submissions made, it is necessary to refer to some of the relevant provisions of the Maharashtra
Agricultural Produce Marketing (Regulation) Act 1963
and
the
Maharashtra Agricultural Produce Marketing
(Regulation)
Rules
1967. The long title of the Act is "An Act to regulate the marketing
of agricultural and certain other produce in market areas and markets
to be established therefor in the State; to confer powers upon Market
Commiltees to be constituted in connection with or acting for purposes
connected with such markets; to establish Market Fund for purposes
of the Market Committees and to provide for purposes connected with
the matters aforesaid".
Sec. 2 (1 )(h) defines 'market" as meaning
"any principal market established for the purposes of this Act and also
a subsidiary market". Sec. 2(1) (i) defines "market area" as meaning
"an area specified in a declaration made under Sec. 4".
Sec. 2(1) (o)
defines "retail sale" as meaning "in relation to any agricultural produce,
sale of that produce not exceeding such quantity as a Market Committee
may by bye-laws determine to be a retail sale". Sec. 2(1) (t) defines
"trader" as meaning "a person who buys or sells agricultural produce,
as a principal or as duly auth-orised agent of one or more persons" .
Sec. 3 empowers the Government to declare its intention of regulating
the marketing of such agricultural produce, in such area as may be
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specified in a notification to be published in the official Gazette. Objections or suggestions which may be received by the State Government
within a specified period are to be considered by the State Government.
Thereafter, Sec. 4 provides, the State Government may declare, by another notification that the marketing of the agricultural produce specified in the notification shall be regulated under the Act in the area
specified in the notification.
The area specified shall be the 11U1rket
area. Sec. 5 (1) provides that there shall be a principal market for
every market area and there may also be one of more subsidiary markets.
Sec 5 (2) empowers the Director, by notification, to establish
any place in any market area to be the principal market for the marketing of agricultural produce specified in the notification.
Subsidiary
markets may also be established likewise.
Sec. 5 is important and it
may, therefore, be extracted here :
"5 (1 ) For every market area, there shall be established
a principal market, and there may be established one or
more subsidiary markets.
(2)The Director shall, as soon as possible
after
the
issue of a notification under sub-section {l) of section 4,
by a notification in the Official Gazette establish any place
(including any structure, enclosure, open place or locality)
in any market area to be the principal market
for
the
marketing of the agricultural produce specified in that notification; and may by the same notification, or by like notification, establish in any other like places in
the market
area, subsidiary markets for the marketing of such agricultural produce".
Sec. 6 provides that, no person shall use any place in the market
area for the marketing of the declared
agricultural
produce
or
operate in the market area or in any market therein as a
trader,
conlffiission agent, broker, processor, weighman, 1neasurer, surveyor,
warehouseman or in any other capacity in relation to the marketing
G
of the declared agricultural produce, on and after the date on which
the declaratiDn under Sec. 4( 1) is made, except in conformity with
the terms and conditions of a licence granted by the Market Committee or by the Director when a Market Committee has not
yet
started functioning.
It is important to mention here that Sec. 6(1)
is expressly made subject to the rules providing for regulating
the
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marketing of agricullural produce in any place in the market area.
Sec. 6(2) also provides that Sec. 6(1) shall not apply to sales by
retail; sales by an agriculturist who sells his own produce; and sales
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R. K. PORWAL v. MAHARASHTRA (Chinnappa Reddy, J.)
877
by a person to another for the latter's personal consumption.
Sec. 6
also may be extracted here :
" ( 6)(1) Subject to the provisions of this section and
of the rules providing for regulating
the
marketing
of
agricultural produce in any place in the market area, no
person shall, on and alter the date on which the declaration
is made under sub-section ( 1) of section 4, without, or
otherwise than in conformity with the terms and conditions
of, a licence (granted by the Director when
a
Market
Committee has not yet started functioning; and in any
other case, by the Market Committee) in this behalf, -
(a) use any place in the market area for the marketing
of the declared agricultural produce, or
(b) operate in the market area or in any market therein as a trader, commission agent, broker, processor, weighman, measurer, surveyor, warehouseman or in any other
capacity in relation to the marketing of the declared agricultural produce.
(2) Nothing in sub-section (I) shall apply to sales by
retail; sttles by an agriculturist who sells his own produce;
nor to sales by a person where he himself, sells to another
who buys for his personal consumption or the consumption of any member of his family."
Sec. 7 empowers the Market Committee,
subject to rules made in
that behalf and after making such enquiry as
it thinks
fit
to
grant or renew a licence for the use of any place in the market area for
marketing of the agricultural produce or for operating therein as a
trader etc. The Market Committee may refuse to grant or renew any
licence for reasons to be recorded in writing. Sec. 8 enables the Market
Committee to suspend or cancel any licence. Sec. 10 makes provision
for the constitution of a Board by the Market Committee for the settlement of disputes between buyers and sellers or their agents inclu"
sive of disputes relating to quality, weight, payment etc.
Sec. 11
provides for the establishment of a Market Committee by the State
Government.
Sections 12 and 13 deal with the incorporation and
constitution of Market Committees.
Sec. 13 (IA)
makes
special
provision for Greater Bombay and Turbhe village.
The area corn"
prising Greater Bombay and Turbhe village is deemed to be a market
area for the purposes of the Act and a Market Committee is constituted with a different composition from other Market Committees.
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Sec. 29 enumerates the powers and duties of Ma~ket Committees. It is
the duty of a Market Committee to implement the provisions of the
Act, the rules and bye-laws made thereunder in the market area, to
provide such facilities for marketing of agricultural produce therein as
the Director may from time to time direct and to do such other acts as
may be required in relation to the superintendence, direction and control of markets or for regulating marketing of agricultural produce in
any place in the market area. The Market Committee is also empowered to maintain and manage the market, including
admissions
to,
and conditions for use of, markets; to regulate marketing of agricultural produce in the market area of the market; to establish ce11tres
for the collection of such agricultural produce in the market area as
the Slate Government may notify from time to time;
to
collect,
maintain, disseminate and supply information in respect of production, sale, storage, processing, prices and movement of agricultural
produce (including information relating to
crops,
statistics
and
marketing intelligence) ; to take all possible steps to prevent adulteration; to promote grading and standardisation of agricultural produce;
and, to enforce the provisions of the Act, rules and bye-Jaws
and
conditions of licences.
Sec. l OA enables the Market Committee to
open Collection Centres for marketing of
notified
produce.
Any
person wishing to sell any notified produce in a market area
may
tender such produce at the collection centre.
Sec.
31
makes it
competent to a Market Committee to levy and
collect fees
from
every purchaser of agricultural produce marketed in
the
market
area.
Sec. 35 enables a· Market Committee to employ a Secretary
and such other officers and servants as may be necessary for
the
management of the market, for the collection, maintenance, dissemination and supply of information relating to crops,
statistics
and
marketing intelligence and for carrying out its dnties under the Act.
Sec. 36 provides for the creation of Market Fund and Sec. 37 enumerates the purposes for which the Market Fund may be expended.
Among those purposes are the acquisition of a site or sites for the
market, maintenance, development and improvement of the market,
construction of, and repairs to buildings necessary for the purposes
of such market and the health, convenience and safety of persons using
it, maintenance of standard weights and measures, collection and dissemination of information, propaganda for agricultural improvement
and orderly marketing etc. etc.
Section 46 makes a contravention
of the provisions of Section 6 ( 1) punishable. Section 60 empowers
the State Government to make rules for carrying into effect the purposes of tl:ie Act.
Pursuant to the power conferred by Sec. 60 of the Maharashtra
Agricultural Produce Marketing (Regulation) Act, 1963, rules have
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been made. _Rule 5 prescribes that no person shall market any de~-
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Jared agricultural produce in any place in a market area other than the
principal market or subsidiary market established therein. The proviw
to Rule 5 enables the Director of Marketing to authorise a Market Committee to permit a trader or Commission Agent to market declared agricultural produce or to permit any other market functionary to operate
at any place within the market area as may be mentioned by the Market
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Committee in the licence granted to such trader. This is obviously, a
reserve power vested in the Market Committee to be exercised but in
exceptional cases, and, on an express authorisation from the Director,
subject to the terms and conditions imposed by him. Rule 6 prescribes
the procedure by which any person desiring to use any place in a
market area for marketing of any declared agricultural produce or for
operating therein as a trader, coilllllission agent or broker may obtain
c
a licence.
He is required to make an application in the prescribed
form and submit with the application a solvency certifica~e, cash security or bank guarantee and a character certificate.
The Director or
the Market Committee as the case may be, may grant or renew a
licence, after satisfying himself or itself about the solvency certificate,
cash security or bank guarantee, the capacity of the applicant for providing adequate equipment for smooth conduct of the business and the
conduct of the applicant. If the licence is refused, reasons are required
to be recorded in writing.
Rule 7 deals with the grant of licences to
warehousemen, measurers, surveyors, processors, weigbmen, etc. Rule
8(2) bans the employment of a broker in relation to marketing of any
declared agricultural produce except in relation to marketing of such
produce by a trader with another trader. Rule 12 stipulates that every
declared agricultural produce shall be sold by public auction. Rule 15
requires every declared agricultural produce to be weighed by licensed
weighmen or measurer. Rule 16, 17 and 18 deal with the preparation
of records in connection with the transactions of purchase of declared
agricultural produce.
Rule 20 obliges every purchaser of declared
agricultural produce to make payment lo the seller or his commissio~
agent immediately after the sale on the same day. Rule 21 prohibits
the adulteration of declared agricultural produce in the market area
or market. Rule 22 provides for grading and standardisation of agricultural produce. Rule 25 provides for inspection of weights and
measures. Rule 27 requires the Markei Committee to publish a daily
list of prices of the different varieties and grades of declared agricultural
produce marketed in the market area.
There are several other rules
providing for the constitution of Market Committees, preparation of
their budgets, discharge of their other duties etc., but for our purpose
it may not be necessary to refer to them.
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We have seen that Sec. 5 authorises the establishment of a principal
market and one or more subsidiary markets.
Quite obviously the
power to es!'ablish a principal market or a subsidiary market carries
with it the power to dis-establish (if such an expression may be used)
such market. Quite obviously again, the power given by Sec. 5 to
establish a principal or subsidiary market may be exercised from time
to time.
These follow from Sections 14 and 21 of the Maharashtra
General Clauses Act. So, Sec.