1997 (5) TMI 424 - SC - Indian Laws

Summary

Issues Involved:
1. Validity of Rule 74(2) and Bye-law 24(5).
2. Nature of the transaction relating to the sale/purchase of "Copra".

Summary:

Validity of Rule 74(2) and Bye-law 24(5):
The Supreme Court examined the validity of Rule 74(2) and Bye-law 24(5) u/s 12 of the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966. Rule 74(2) and Bye-law 24(5) contained a statutory presumption that if a notified agricultural produce was weighed, measured, or counted within the notified area, it shall be deemed to have been purchased or sold within that area. The Court held that these provisions were beyond the scope of the Act and thus ultra vires. The Court emphasized that the statutory presumption u/s 12 was limited to the movement of notified agricultural produce out of the notified market area and could not be extended by delegated legislation. The Court stated, "The creation of legal fiction is thus beyond the legislative policy. Such legal fiction could be created only by the Legislature and not by a delegate in exercise of the rule-making power."

Nature of the Transaction Relating to Sale/Purchase of "Copra":
The Court considered whether the transaction of sale/purchase of "Copra" by the respondent from dealers in Kerala took place in Kerala or at Hyderabad. The High Court had concluded that the sale took place in Kerala based on the evidence that the goods were despatched from Kerala at the risk of the respondent, and the seller had no liability for any future losses. The Supreme Court agreed with this view, noting that the property in the goods passed to the buyer at the time of despatch from Kerala, as per Sections 19 and 20 of the Sale of Goods Act, 1930. The Court observed, "The weighment of the goods at Hyderabad or the collection of documents from the bank or payment of price through the bank at Hyderabad were immaterial inasmuch as the property in the goods had already passed at Kerala."

Conclusion:
The Supreme Court dismissed the appeal, upholding the High Court's judgment that Rule 74(2) and Bye-law 24(5) were ultra vires and that the sale of "Copra" took place in Kerala, not at Hyderabad. The appeal was dismissed with no order as to costs.