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TMI Blog2008 (7) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondents. Pradeep Misra, Advocate, for the petitioners. -------------------------------------------------- The judgment of the court was delivered by Dr. ARUJIT PASAYAT J. The challenge in this appeal is to the judgment of a Division Bench of the Allahabad High Court holding that the appellant was not entitled to levy market fee under section 17(iii)(b) of the U.P. Krishi Utpadan Mandi Adhiniyam, 1964 (in short, "the Adhiniyam") if the agricultural produce is neither brought nor taken out of the market place, and deciding in favour of respondent No. 1. The background facts in a nutshell are as follows: The respondent is a registered partnership firm having its business premises and office at 14, Navyug Market, Ghaziabad, and it carried on the business of sale and purchase of iron and steel and also export of rice. It wanted to purchase broken rice from the rice millers of U.P. for the purpose of export to foreign countries and accordingly, made an application on July 31, 1997, to Krishi Utpadan Mandi Samiti, Ghaziabad, for grant of a licence. It was also stated in the application that the respondent had exported rice in November, 1996 by purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The case of respondent No. 1 was that the rice was exported by it because certain dealers in South Africa wanted to buy rice from India. Respondent No. 1 quoted the rates and entered into negotiations. After the deal was settled, the rice was purchased from rice millers in Haryana, Punjab, Madhya Pradesh from where it was directly dispatched to the ports of Mumbai and Kandla and clearing and forwarding agents of respondent No. 1 loaded the same on the ship. After the goods had been loaded a bill of lading was prepared and signed by the Master of the ship in the capacity of carrier acknowledging the receipt of the goods. The bill of lading was given to the clearing and forwarding agents and on receipt of the bill of lading by the buyer through respondent No. 1's bankers, the rice was retired by the buyer in South Africa. The sale price of the rice was received by respondent No. 1 through its banker, viz., Oriental Bank of Commerce at Delhi. It is the specific case of respondent No. 1 that the entire quantity of the exported rice was purchased from places outside the State of U.P., and was directly sent to the ports without it ever coming within the market area of Ghaziabad or in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a trader from another trader, the trader selling the produce may realise it from the purchaser and shall be liable to pay the market fee to the Committee; and (4) in any other case of sale of such produce, the purchaser shall be liable to pay the market fee to the Committee: Provided that no market fee shall be levied or collected on the retail sale of any specified agricultural produce where such sale is made to the consumer for his domestic consumption only." The object for which the Act was enacted is as follows: "(i) to reduce the multiple trade charges, levies and exactions charged at present from the produce-sellers; (ii) to provide for the verification of accurate weight and scales and see that the producer-seller is not denied his legitimate due; (iii) to establish market committees in which the agricultural producer will have his due representation; (iv) to ensure that the agricultural producer has his say in the uti- lisation of market funds for the improvement of the market as a whole; (v) to provide for fair settlement of disputes relating to the sale of agricultural produce; (vi) to provide amenities to the producer-seller in the mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid on it in any market yard of the same market area and in respect of which a declaration has been made and a certificate has been given to the seller in Form No. V." A plain reading of section 17(iii)(b) of the Act shows that the Committee is empowered to levy and collect market fee which shall be payable on transaction of sale of agricultural produce in the market area. The words "specified agricultural produce in the market area" have great relevance. The manner of realisation of market fee has been enumerated in sub- clauses (1), (2), (3) and (4) of section 17(iii)(b). Reference is to "produce". This apparently shows that physical presence of the agricultural produce within the market area is necessary for levy of market fee. The Explanation to section 17(iii)(b) appended at the end of the section lays down that unless the contrary is proved any specified agricultural produce taken out or proposed to be taken out of a market area by or on behalf of the licensed traders shall be presumed to have been sold within such area. The Explanation has application only if the agricultural produce is physically present within the market area. The Explanation becomes redundant if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was held as follows: "The contention on behalf of the Union of India is that property in the goods cannot pass in law to the holders of the pucca delivery orders till the goods are actually appropriated to the particular order; therefore, as in this case it is not in dispute that no goods were actually appropriated towards the pucca delivery orders concerned, the property in the goods did not pass to the holders thereof but was still in the mills. Reliance in this connection is placed on section 18 of the Indian Sale of Goods Act, No III of 1930. That section lays down that 'where there is a contract for the sale of unascertained goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained'. In the present case, as we have already said, it is not in dispute that the goods covered by the pucca delivery orders are not ascertained at the time such orders are issued and ascertainment takes place in the shape of appropriation when the goods are actually delivered in compliance therewith. Therefore, till appropriation takes place and goods are actually delivered, they are not ascertained. The contract therefore represented by the pucca deliv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese cases had not passed to the holders of the pucca delivery orders on September 30, 1946, for the goods were not ascertained till then, whatever may be the position of the holders of the pucca delivery orders in a suit between them and the mills to enforce them." Under section 17(iii)(b) the measure of levy of the fee is on the price of the goods sold. It obviously means that there must be a complete transaction of sale or a concluded sale. If there is only an agreement and the agreement fails, the remedy for the aggrieved party is to sue for damages. Obviously, no fee can be charged on damages. The action for levy of fee can arise only on a concluded sale and as the sale has not taken place within the market area of Ghaziabad, no mandi fee can be levied. The stand of the appellant is that the market fee is levied on "transaction of sale" and not on "sale" only and, therefore, what is to be seen is where the transaction took place and not the situs of the sale. If this argument is accepted then even an agreement to sale without the presence or existence of the agricultural produce will come within the ambit of the charging provision. It would also mean that if the agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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