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Issues Involved
1. Constitutionality of the Bombay Agricultural Produce Markets Act, 1939, and the Rules framed thereunder. 2. Reasonableness of restrictions imposed by the Act on the right to carry on trade. 3. Validity of Section 29 of the Act. 4. Validity and interpretation of Section 11 and related Rules (53 and 54). 5. Validity of Rule 64. 6. Validity of Rules 65, 66, and 67. 7. Proper establishment of a market under Section 5AA of the Act. Issue-wise Detailed Analysis 1. Constitutionality of the Bombay Agricultural Produce Markets Act, 1939, and the Rules framed thereunder The petitioners challenged the constitutionality of the Act and its Rules, arguing that they imposed unreasonable restrictions on their right to trade under Article 19(1)(g) of the Constitution. The Court upheld the constitutionality of the Act, noting that similar provisions in the Madras Commercial Crops Markets Act had been upheld previously. The Court found no significant difference in the ambit of the two Acts and concluded that the provisions did not impose unreasonable restrictions on trade. 2. Reasonableness of Restrictions Imposed by the Act on the Right to Carry on Trade The petitioners argued that the heavy fees and the requirement to carry produce over long distances imposed unreasonable restrictions on their trade. The Court held that the Act's regulatory provisions, including the establishment of market areas and market yards, were reasonable and necessary for the orderly marketing of agricultural produce. The Court emphasized that the Act did not apply to retail sales but was confined to wholesale trade, which justified the regulatory framework. 3. Validity of Section 29 of the Act Section 29 allows the State Government to amend the Schedule of agricultural produce. The petitioners contended that this gave the State Government uncontrolled power. The Court rejected this argument, stating that the guidance for including or excluding crops from the Schedule was inherent in the Act's provisions. The State Government would consider whether the volume of trade in a particular crop justified its inclusion in the Schedule, thereby providing sufficient control and guidance. 4. Validity and Interpretation of Section 11 and Related Rules (53 and 54) Section 11 allows the market committee to levy fees on agricultural produce bought and sold in the market area. The petitioners argued that the fees were akin to a sales tax and that Rules 53 and 54 were ultra vires. The Court held that the fees were for services rendered by the market committee and were not a sales tax. However, the Court found that Rule 53 was ultra vires because the State Government had not prescribed the maximum fees as required by Section 11. Rule 54 was deemed valid only if proper provisions for refund were made in the bye-laws for produce brought into the market but not sold. 5. Validity of Rule 64 Rule 64 imposes penalties for contravening directions regarding the movement and placement of agricultural produce within the market yard. The petitioners argued that this rule imposed unreasonable restrictions on trade. The Court found no merit in this argument, holding that Rule 64 was a reasonable method of enforcing regulatory provisions within the market yards. 6. Validity of Rules 65, 66, and 67 Rules 65, 66, and 67 pertain to the licensing of traders and commission agents in the market area. The petitioners contended that these rules went beyond the powers conferred by Section 5A, which allows for licensing only after a market is established. The Court agreed, stating that these rules were ultra vires as they encroached on the Commissioner's power under the proviso to Section 4(2) and were not confined to operations within the market. 7. Proper Establishment of a Market under Section 5AA of the Act The petitioners argued that no market had been properly established under Section 5AA, which requires a direction from the State Government to the market committee to establish a market. The Court found that although a notification was issued in 1955, there was no evidence that the market committee took steps to establish a market as required by law. Consequently, the market committee could not enforce the Act's provisions or issue licenses until a market was properly established. Conclusion The Court upheld the constitutionality of the main provisions of the Act and Rule 64. However, it found that Rule 53 was ultra vires due to the absence of prescribed maximum fees, and Rules 65, 66, and 67 were ultra vires as they exceeded the powers conferred by Section 5A. The Court also held that the market had not been properly established under Section 5AA, preventing the market committee from enforcing the Act's provisions or issuing licenses. The petition was allowed in part, with the Court directing the respondents not to enforce the Act, Rules, or bye-laws against the petitioners until a market was properly established and maximum fees were prescribed. Each party was ordered to bear its own costs.
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