2003 (2) TMI 207 - SC - VAT and Sales Tax

Whether there has to be a quid pro quo for the levy of fee in the sense that services and facilities ought to be available in the market area before a fee can be levied and if so the extent to which such services and amenities be available? Held that - Appeal allowed. The law is well-settled that though quid pro quo is required in relation to a fee which is charged and collected by a market committee, the quid pro quo cannot be in exact proportion to the fee levied. Mathematical proportions are not possible in such matters. As accepted that some services and amenities were already provided for in the notified market area which fully justified the levy of market fee thus unable to agree with the finding of the High Court that the market committee had failed to provide any services or amenities in the notified market area. The findings of the High Court are accordingly set aside.

Summary

Issues Involved:
1. Right of the market committee to levy, demand, and collect market fees.
2. Provision of facilities and amenities by the market committee.
3. Application of the principle of quid pro quo.
4. Res judicata and constructive res judicata.
5. Legal provisions under the Andhra Pradesh Agricultural (Produce and Livestock) Markets Act, 1966.

Issue-wise Detailed Analysis:

1. Right of the Market Committee to Levy, Demand, and Collect Market Fees
The plaintiff sought a declaration that the defendant-market committee had no right to levy, demand, and collect any market fee from its members. The court examined whether the market committee was justified in levying fees under the Andhra Pradesh Agricultural (Produce and Livestock) Markets Act, 1966. The court noted that the market committee had already started various services in the market area and was justified in the levy, demand, and collection of market fees.

2. Provision of Facilities and Amenities by the Market Committee
The plaintiff argued that the market committee had failed to provide necessary facilities and amenities in the market area, such as a market yard, weighing sheds, and storage space. The court found that the market committee had taken possession of a site and had begun constructing facilities. The evidence showed that the committee had started providing some services and was in the process of extending them. The court concluded that the market committee had made sufficient provision for services and amenities to justify the levy of market fees.

3. Application of the Principle of Quid Pro Quo
The court discussed the principle of quid pro quo, which requires that there be a reasonable relationship between the fee levied and the services rendered. The court referred to several precedents, including Lakhan Lal v. State of Bihar and Kewal Krishan Puri v. State of Punjab, to establish that while exactitude in quid pro quo is not necessary, there must be a substantial correlation. The court found that the market committee had provided enough services to satisfy the quid pro quo requirement.

4. Res Judicata and Constructive Res Judicata
The defendant argued that the suit was barred by the principles of res judicata and constructive res judicata because the plaintiff had previously filed a writ petition challenging the increase in market fees, which was dismissed. The court noted that the earlier writ petition was filed when Rajam was under a different market committee, and the issue of non-availability of facilities might not have been relevant then. Therefore, the court did not non-suit the plaintiff on this ground.

5. Legal Provisions under the Andhra Pradesh Agricultural (Produce and Livestock) Markets Act, 1966
The court examined the relevant provisions of the Act, including the definitions of "market," "market committee," and "notified market area." Section 4 of the Act requires the government to constitute a market committee for every notified area, which is responsible for providing market facilities. Section 12 allows the market committee to levy fees, and Section 15 enumerates the purposes for which the market committee funds may be expended. The court found that the market committee was acting within its statutory powers.

Conclusion
The court concluded that the market committee had provided sufficient services and amenities to justify the levy of market fees. The principle of quid pro quo was satisfied, and the suit filed by the plaintiff was dismissed. The appeal was allowed, and the findings of the High Court were set aside. There was no order as to costs.

Appeal allowed.