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TMI Blog2003 (2) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... Other Advocates: T.V. Ratnam, K. Subba Rao, Ms. Anjani Aiyagari, A.V. Rangam, A. Ranganadhan, Buddy A. Ranganadhan, Y. Prabhakar Rao, N. Sreedhar and K. Ram Kumar. for the parties. Senior Advocates: Ms. K. Amareswari and R.F. Nariman for the parties. -------------------------------------------------- The judgment of the Court was delivered by ARUN KUMAR, J.- This appeal is directed against the judgment dated February 20, 1992 passed by the Andhra Pradesh High Court allowing the second appeal and decreeing the suit filed by the plaintiff-association, respondent herein. Briefly, the facts are that the respondent filed a suit for declaration and injunction in the court of subordinate Judge, Rajam, District Srikakulam, Andhra Pradesh. The plaintiff sought a declaration to the effect that the defendant- market committee had no right to levy, demand and collect any market fee from the members of the plaintiff-association. An injunction was also sought to restrain the defendant-Committee from collecting market fee from the members of the plaintiff-Association. The case set up by the plaintiff as per the plaint was that Rajam Sub-taluk was under the jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en appointed to inspect the premises of the traders to ensure proper weighment. Thirteen persons had been licensed for the weighment job. Thus, according to the market committee, it had already started various services in the market area and the process for providing further services was already on. The levy, demand and collection of market fee by the defendant was sought to be justified on this basis. The defendant also raised a plea that the plaintiff- association had filed a writ petition in the High Court challenging increase in the market fee. The writ petition had been dismissed. In view of the dismissal of the writ petition, an argument was raised by the learned counsel for the market committee that the suit was barred by the principles of res judicata. Although the issue raised in the writ petition was only with respect to enhancement of the market fee, yet it was submitted that the plaintiff could have agitated the question of levy of market fee in the said petition and since it failed to do so, the principle of constructive res judicata would come into play. It would be deemed that the point which was available to the plaintiff-association for being raised at that stage, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with power to acquire, hold and dispose of property. It is the duty of the market committee to enforce the provisions of the Act and the Rules and the bye-laws thereunder in the notified area. A market committee under sub-section (iii) is required to establish such number of markets as the Government may from time to time direct for the purchase and sale of any notified agricultural produce, livestock or products of livestock. The market committee is required to provide such facilities in the market as may be specified by the Government from time to time by a general or special order. Section 12 contains provision regarding levy of fee by the market committee. It is reproduced as under: "12(1): The market committee shall levy fees on any notified agricultural produce, livestock or products of livestock purchased or sold in notified market area at such rate, not exceeding two rupees as may be specified in the bye-laws for every hundred rupees of the aggregate amount for which the notified agricultural produce, livestock or products of livestock is purchased or sold, whether for cash or deferred payment or other valuable consideration." Section 14(1) provides for market commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt by general or special order." 5.. It is the case of the plaintiff that the market committee had failed to establish a market yard within the notified market area. The committee had also to provide facilities like weighing of market produce/commodities, laying roads, providing storage space, platforms for grading and displaying of the products. Inspite of passage of considerable time after its constitution, the defendant-committee had not made provision for these facilities and amenities in the market area. On account of these failures, the market committee was not entitled to levy any fee or cess on the members of the plaintiff- association. A fee or cess has an element of quid pro quo which was missing in the present case. Therefore, the levy of fee was illegal according to the plaintiff. The immediate provocation for filing of the suit was the two notices dated May 25, 1982 and December 8, 1982 issued by the market committee to the members of the plaintiff- association demanding market fee from the members. As already noted, the trial court accepted the case set up by the plaintiff. However, on appeal the learned District Judge, Srikakulam, allowed the appeal and dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the proper payment to the ryots by the traders in respect of the goods sold by the ryots to the traders. The market committee was exhibiting price list in respect of notified agricultural produce on the notice board. He stated in the cross-examination that the market yard was already under construction. The witness was cross- examined at length but nothing could emerge to show that his statement about the services provided in the market was not correct. 7.. Though according to the trial court and the High Court, the above facilities or amenities available in the notified market area were not sufficient so as to hold that facilities and amenities had been made available by the market committee in the notified market area, the learned District Judge, who ordered dismissal of the suit, accepted that such facilities had been made available in the notified market area and this entitled the committee to levy market fee in terms of section 12 of the Act. The learned District Judge noted from the evidence of DW 1 that no suggestion had been put to him in the cross-examination that by 1982 the market yard was not having all the basic amenities. According to the learned District Judge, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the institution in respect of which the fee is paid. The court noted the literal meaning of the phrase quid pro quo as "one for the other" meaning thereby "you charge fee for the service". A significant observation contained in the said judgment which is relevant for our purposes is: "the element of quid pro quo may not be possible, or even necessary, to be established with arithmetical exactitude but even broadly and reasonably it must be established, with some amount of certainty, reasonableness or preponderance of probability that quite a substantial portion of the amount of fee realised is spent for the special benefit of its payers. Each case has to be judged from a reasonable and practical point of view for finding an element of quid pro quo". 11.. In Rameshchandra Kachardas Porwal v. State of Maha- rashtra (1981) 2 SCC 722, this Court observed that a place ought not be notified as a market unless it is ready for use as a market with all reasonable facilities and conveniences. A view was expressed that a notification may be quashed if nothing had been done beyond publishing a notification. In cases where some facilities and conveniences have been provided for while so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. It was observed: "The traditional view that there must be actual quid pro quo for a fee has undergone a sea-change in the subsequent decisions. The distinction between a tax and a fee lies primarily in the fact that a tax is levied as part of a common burden, while a fee is for payment of a specific benefit or privilege although the special advantage is secondary to the primary motive of regulation in public interest. If the element of revenue for general purpose of the State predominates, the levy becomes a tax. In regard to fees there is, and must always be, correlation between the fee collected and the service intended to be rendered. In determining whether a levy is a fee, the true test must be whether its primary and essential purpose is to render specific services to a specified area or class; it may be of no consequence that the State may ultimately and indirectly be benefited by it. The power of any Legislature to levy a fee is conditioned by the fact that it must be 'by and large' a quid pro quo for the services rendered. However, correlationship between the levy and the services rendered (sic or) expected is one of general character and not of mathematical exactitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r challenging the increase in the rate of market fee from 50 paise to rupee one in 1978. Surely the cost of rendering services has correspondingly increased with the fall in the value of rupee. In the economic sense, 50 paise of 1972 is certainly equivalent to at least rupee one of today, if not more. There is no material placed on record by the petitioners to show that the market committees are rendering no service. Under the scheme of the Act, there are certain obligatory duties of a market committee. Sub-section (3) of section 4 provides that every market committee shall establish in the notified area such number of markets as the Government may, from time to time, direct for the purchase and sale of any notified agricultural produce, livestock or products of livestock and shall provide, such facilities in the market as may be specified by the Government from time to time by a general or special order. Chapter V provides for various regulatory measures in rules 54 to 73 for the control of a market in that correct weighments would be secured, storage facilities provided and equal powers of bargaining assured so that the growers may bring their agricultural produce, livestock an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and traders. When the funds are in any case to be utilised for specified purposes, the observation in Puri's case (1980) 1 SCC 416, to the effect that a good and substantial portion of it must be shown to be expended, does not have much significance. In Sreenivasa Traders (1983) 4 SCC 353, and other later cases, it has been accepted that the market committees may keep on extending the services and facilities in the notified market area as per availability of funds with them. 15.. In the case in hand, the levy of market fee by the market committee was challenged only on the ground that no basic amenities or services were provided in the notified market area and therefore the market committee had no right to levy, demand and collect the market fee. We have noted from the evidence on record that the market committee had made provision for certain services and facilities in the notified market area and efforts were being made for extending the services. The market committee had recently come into existence and completion of all the intended services and facilities takes time. It has clearly emerged from the evidence of DW 1 that steps were being taken for extending the services a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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