2001 (12) TMI 862 - SC - Indian Laws

Validity of the notifications declaring a market area and establishing a market for agricultural produce in Gaya and the legality ,of the levy of market fees and licence fees therein under the Bihar Agricultural Produce Markets Act, 1960 (Bihar Act 16 of 1960) and the Bihar Agricultural Produce Markets Rules 1962 Held that - The market committee has taken-steps for the establishment of a market where buyers and sellers meet and sales and purchases of agricultural produce take place at fair prices. Unhealthy market practices are eliminated, market charges are defined and improper ones are prohibited. Correct weighment is ensured by employment of licensed weighment and by inspection of scales, weights and measures and weighing and measuring instruments. The market committee has appointed a dispute sub-committee for quick settlement of disputes. It has set up market intelligence unit for collecting and publishing the daily prices and information regarding the stock, arrivals and despatches of agricultural produce It has provided a grading unit where the technique of grading agricultural produce is taught. The contract form for purchase and sale is standardised. The, provisions of the Act and the Rules are enforced through inspectors and other staff appointed by the market committee. The fees charged by the market committee are correlated to the expenses incurred by it for rendering these services. The market fee of 25 naye paise per ₹ 100/worth of agricultural produce and the licence fees prescribed by Rules 71 and 73 are not excessive. The fees collected by the market committee form part of the market committee fund which is set apart and ear-marked for the purposes of the Act. There is sufficient quid pro quo for the levies and they satisfy the test of fee as laid down in Commissioner Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt 1954 (4) TMI 29 - SUPREME COURT . It is then said that the setting up of a market in Gaya is discriminatory and violative of Art. 14 of the Constitution as the Act and the Rules have not been implemented in all parts of Bihar. There is no force in this Contention. The State Government is not bound to implement the, Act and the Rules in all parts of Bihar at the so time. I It may establish markets regulating the sale and purchase of Agricultural produce in different parts of Bihar gradually and from time to time. Appeal dismissed.

Issues Involved:
1. Validity of the notifications declaring a market area.
2. Establishment of a market by the market committee.
3. Legality of the levy of market fees and license fees.
4. Discriminatory enforcement of the Act and the Rules in Gaya without implementing them in the whole of Bihar.

Issue-wise Detailed Analysis:

1. Validity of the Notifications Declaring a Market Area:
The contention was that the notification declaring the market area is void as the notified market area is too wide. The Supreme Court found this objection to be unfounded. The Court stated that there was no material on record to show that the Government acted unreasonably or that the market area was so wide that the sale and purchase of agricultural produce within it could not be effectively controlled by the market committee. The market area was duly declared under Section 4(1) after considering all objections and suggestions made in that behalf.

2. Establishment of a Market by the Market Committee:
The argument was that the market committee had not established any market. The Court clarified that according to the definition of "market" in Section 2(h), the market consists of the market proper and the market yards. The market yards are well-defined enclosures, buildings, or localities, while the market proper is a larger area. For establishing a market, it is sufficient to make a declaration under Section 5(2) fixing the boundaries of the market proper and the market yards on the recommendation of the market committee. The Court found that the market was established following the procedure laid down in Sections 5, 18(i), and Rule 59.

3. Legality of the Levy of Market Fees and License Fees:
The contention was that the fees levied by the market committee were in the nature of taxes as the committee did not render any services to the users of the market. The Court rejected this contention, stating that the market committee had taken steps for the establishment of a market where buyers and sellers meet, and sales and purchases of agricultural produce take place at fair prices. The fees charged by the market committee were correlated to the expenses incurred by it for rendering these services. The Court held that there was sufficient quid pro quo for the levies, and they satisfied the test of "fee" as laid down in Commissioner Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt.

4. Discriminatory Enforcement of the Act and the Rules in Gaya:
The argument was that the setting up of a market in Gaya was discriminatory and violative of Article 14 of the Constitution as the Act and the Rules had not been implemented in all parts of Bihar. The Court found no force in this contention, stating that the State Government is not bound to implement the Act and the Rules in all parts of Bihar at the same time. It may establish markets regulating the sale and purchase of agricultural produce in different parts of Bihar gradually and from time to time.

Conclusion:
The Supreme Court dismissed the appeals and writ petitions, upholding the validity of the notifications, the establishment of the market by the market committee, the legality of the levy of market fees and license fees, and the non-discriminatory enforcement of the Act and the Rules in Gaya. The constitutionality of the Act and the Rules was not challenged during the hearing. The petitions and appeals were dismissed with costs, and one hearing fee was awarded.

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