1974 (5) TMI 116 - SC - Indian Laws

Summary

Issues Involved:

1. Constitution of the Market Committee.
2. Entrustment of licensing to the Market Committee.
3. Lack of guidance in the Act for the grant of licenses.
4. Requirement for petitioners to provide storage space.
5. Validity of Rule 76(1) and its restrictions on trade.

Issue-wise Detailed Analysis:

1. Constitution of the Market Committee:

The petitioners argued that the constitution of the Market Committee under section 13 of the Act was highly prejudicial to their interests as it would have a perpetual majority of producers. However, the court found this grievance factually inaccurate. The Committee consists of 23 members, out of which only 10 are from the producers. The court noted that under section 13(1)(vii), 8 producers are elected, and under section 13(1)(vii-a), two producers belonging to the scheduled castes are nominated by the State Government. This representation is intended to ensure fair representation and is not unreasonable. Therefore, the first submission of the petitioners was dismissed.

2. Entrustment of Licensing to the Market Committee:

The petitioners contended that entrusting licensing to the Market Committee instead of an impartial authority was unfair and an unreasonable restriction on the right to trade. The court found this objection hypothetical, as none of the petitioners had been refused a license. The Committee, representing various interests, is expected to perform its duties impartially. The court held that the provision does not place an unreasonable restriction on the right to trade and dismissed the second submission.

3. Lack of Guidance in the Act for the Grant of Licenses:

The petitioners argued that the Act provided no guidance for the grant of licenses and that Rule 70(4) laid down vague criteria. The court noted that the Committee, consisting of representatives from different sectors, is expected to understand the object and purpose of the Act. The preamble and other provisions of the Act provide sufficient guidance. The criteria of solvency and desirability, though perhaps not explicitly defined, are understood within the context of the Act. The court found no substance in the third submission and dismissed it.

4. Requirement for Petitioners to Provide Storage Space:

The petitioners claimed that the requirement to provide storage space for agricultural produce was an unreasonable restriction on their fundamental rights. The court pointed out that under section 16(2)(vii), the Committee is responsible for providing storage facilities. Rule 52(4) allows for the payment of storage fees and specifies conditions in the by-laws. The court found this to be a reasonable interim measure and dismissed the fourth submission.

5. Validity of Rule 76(1) and Its Restrictions on Trade:

The petitioners challenged Rule 76(1) as ultra vires section 40 of the Act and argued that it placed unreasonable restrictions on the right to trade. The court held that Rule 76(1), which prescribes open auction sales, is within the rule-making power of the State Government under section 40(2)(xxvii). The rule aims to ensure that producers obtain the best price for their commodities, fulfilling one of the important purposes of the Act. The court found no unreasonable restriction on the right to trade and dismissed the fifth submission.

Conclusion:

The court dismissed all the submissions made by the petitioners, finding no violation of Articles 14 and 19(1)(g) of the Constitution. The provisions of the Uttar Pradesh Krishi Utpadhan Mandi Adhiniyam, 1964, and the rules made thereunder were upheld as valid and reasonable. All applications were dismissed, and the parties were ordered to bear their own costs.