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TMI Blog1999 (8) TMI 919X X X X Extracts X X X X X X X X Extracts X X X X ..... WITH MARKET FEE CONCERNING SUGAR MATTERS So far as this group of matters is concerned, first two Civil Appeal Nos. 398 & 399 of 1977 arise out of certificates of fitness granted by the High Court of Judicature at Patna under Articles 132(1) and 133(1) of the Constitution of India. The said certificates pertain to a common judgment of the High Court rendered in two writ petitions of two sugar mills located in the State of Bihar.By the common judgment dated 20th April, 1976 the High Court dismissed both the writ petitions. The said judgment of the High Court is reported in The Belsund Sugar Co. Ltd., Rigaand another vs. The State of Bihar and others, (AIR 1977Patna 136). By the impugned common judgment, the imposition of market fee under the Market Act on the transactions of purchase of sugarcane by the sugar mills concerned and also on their transactions covering sale of sugar and molasses manufactured by utilising the purchased sugarcane was up held by the High Court. In view of the fact that the certificates of fitness were granted by the High Court as aforesaid this group of matters was directed to be placed before a Constitution Bench of this Court as per Article 145of the Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the State of Bihar in-exercise of its power of exemption under Section 42 of theMarket Act had exempted the appellant sugar factories from applicability of Section 18 of the Market Act, the entiremachinery under the Market Act became inapplicable toregulate the sale and purchase of transactions concerning sugarcane, sugar and molasses as entered into by the appellant sugar factories. Consequently, there remained nooccasion for the authorities functioning under the Market Act for demanding any market fee from the appellants under Section 27 of the Market Act. It was also contended infurther support of this submission that the SugarcaneControl Order, 1966 as well as the Sugar (Control) Order of the same year issued under Section 3 of the Essential Commodities Act, 1955 and also the provisions of the Bihar Molasses (Control) Act, 1947 fully occupied the field of regulation of sale and purchase of sugarcane, sugar andmolasses and on that ground also the provisions of the Market Act could not be pressed in service against theappellant sugar factories undertaking the purchase and saleof the concerned transactions. In the alternative, it wascontended that once Section 15 of the Market A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be seen that exemptionunder Section 42 of the Act was confined to excluding the operation of Section 15(2) of the Act qua these sugarfactories. In the alternative, it was submitted that if the exemption notification is treated to cover entire Section 15even then once the transactions of sale and purchase take place within the market area, charge under Section 27 wouldget settled on these transactions. It was further submittedthat there is enough return benefit made available to thesugar factories admittedly situated within the market area.That, in fact, their service centres are also declared to besub-market yards even beyond the factory gate. That theyutilise the link roads made available by the marketcommittee for bringing sugarcane produce to the factory premises by giving facility of swift transportation. Thus the sugarcane as a raw material is brought to the factory premises before it gets dried up. This yields betterquality and larger quantity of sugar and molasses. In addition thereto facilities of supply of necessary information regarding the prevalent prices of sugarcane aremade available by the market committee. But even apart fromthat, the market committee can act as a m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gricultural produce means all producewhether processed or non-processed, manufactured or not, ofAgriculture, Horticulture, Plantation, Animal, Husbandry,Forest, Sericulture, Pisciculture, and includes livestock orpoultry as specified in the Schedule. In the light of the aforesaid provisions, it isobvious that the sugar factories operating in the marketarea within the jurisdiction of the market committeeconcerned can be said to be buyers of sugarcane, anagricultural produce. Their purchase centres are situatedwithin the market area. As submitted by learned seniorcounsel for the respondents, all the purchase centres atwhich the appellant sugar factories purchase sugarcane asraw material are not only situated within the market areabut are also declared as submarket yards. In fact theentire Bihar State is comprised of various market areaswithin the jurisdiction of different market committees. Ifthat is so, it has to be held that when the charge underSection 27 of paying market fee is imposed on the sugarfactories as buyers of sugarcane within the market area,they have to be treated to be having sufficient locus standias buyers of sugarcane to challenge the imposition of marketfee on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sugarfactories functioning in the market areas falling within thejurisdiction of respective market committees constitutedunder the Market Act. The Market Act has been enacted bythe Bihar Legislature as per the legislative power vested init by Entries 26, 27 and 28 of List II of Seventh Scheduleof the Constitution. These entries read as under : 26.Trade and commerce within the State subject to the provisions of entry 33 of List III. 27. Production, supplyand distribution of goods subject to the provisions of entry33 of List III. 28. Markets and fairs. It becomes at once clear that if location of marketsand fairs simpliciter and the management and maintenancethereof are only contemplated by the Market Act, then theywould fall squarely within the topic of legislative powerenvisaged by Entry 28 of List II. However, the Market Act,as we will presently show, deals with supply anddistribution of goods as well as trade and commerce thereinas it seeks to regulate the sale and purchase ofagricultural produce to be carried on in the specifiedmarkets under the Act. To that extent the provisions ofEntry 33 of List III override the legislative powers of theState Legislature in connection with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hasised the necessity of such enactment witha view to protect the producers of commercial crops frombeing exploited by the middlemen and profiteers and toenable them to secure a fair return for their produce. Thelearned Judge referred to, with approval, the followingrecommendations of Royal Commission on Agriculture in Indiaappointed in 1928. That cultivator suffers from manyhandicaps : to begin with he is illiterate and in generalignorant of prevailing prices in the markets, especially inregard to commercial crops. The most hopeful solution ofthe cultivators marketing difficulties seems to lie in theimprovement of communications and the establishment ofregulated markets and we recommend for the consideration ofother Provinces the establishment of regulated markets onthe Berar system as modified by the Bombay legislation. Theestablishment of regulated markets must form an essentialpart of any ordered plan of agricultural development in thiscountry. The Bombay Act is, however, definitely limited tocotton markets and the bulk of the transactions in Berar market is also in that crop. We consider that the systemcan conveniently be extended to other crops and, with a viewto avoiding dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Constitution Bench, justified the need forsuch legislations and upheld the Act by laying down as under: The aforesaid observations describe the pitiable dependence of the middle-class and poor ryots on the middlemen and petty traders, with the result that the cultivators are not able to find markets for their produce where in they can expect reasonable price for them. With aview to provide satisfactory conditions for the growers ofcommercial crops to sell their produce on equal terms and at reasonable prices, the Act was passed on July 25, 1933. The preamble introduces the Act with the recital that it isexpedient to provide for the better regulation of the buying and selling of commercial crops in the Presidency of Madrasand for that purpose to establish markets and make rules fortheir proper administration. The Act, therefore, was the result of a long exploratory investigation by experts in thefield, conceived and enacted to regulate the buying andselling of commercial crops by providing suitable andregulated markets by eliminating middlemen and bringing faceto face the producer and the buyer so that they meet onequal terms, thereby eradicating or at any rate reducing thescope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be kept inview by the State Government concerned while forming therequisite intention whether there is any special legislationof the same State Legislature holding the field and servingthe very same purpose of regulating such transactions. Mr.Shanti Bhushan, learned senior counsel for the appellant,vehemently contended that the Bihar Legislature itself hadenacted the Sugarcane Act of 1981 whereunder adequateprovision was made for regulating the purchase, sale,storage and processing of sugarcane. The complete machinerywas provided thereunder for protecting the sugarcane growersand, therefore, there was no occasion for the State of Biharto continue the regulation of purchase and sale transactionsof sugarcane atleast after 1981 as per Section 3(1) of theMarket Act. The preamble of the Sugarcane Act shows thatamongst others it is enacted to regulate the production,supply and distribution of sugarcane intended for use insugar factories and taxation of sugarcane and mattersincidental thereto. Chapter II of the Sugarcane Actprovides for Administrative Machinery for carrying out the purposes of the Act. Section 3 there of deals with Establishment of Sugarcane Board. Section 4 lays down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional Cane Commissioner, Joint CaneCommissioner, Deputy Cane Commissioner and Assistant CaneCommissioner to assist the Cane Commissioner within suchlocal limits as may be assigned to them and confer andimpose upon them all or any of the powers and duties of theCane Commissioner within their respective jurisdiction. Section 13 deals with Appointment of Cane Officer.Then comes Chapter IV which deals with Purchase and Supplyof Cane to sugar factories. Section 25 deals with Appointment of Manager and provides as under :- (1) Within thirty days of the commencement of this Act and there after within the same period before the commencement of everycrushing year the occupier of a factory shall send to the Collector a notice of appointment of any person as manager for the purposes of this Act or the rules :Provided that until the first notice of appointment of manager under this Act is sent, the person appointed ordeemed to be appointed as manager under the Bihar Sugarcane (Regulation of Supply and Purchase) Ordinance, 1973 (BiharOrdinance 47 of 1973) shall be deemed to be a manager underthis Act. (2) No person shall be deemed to have been appointedas manager until a sum of two thousand a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... occupier of the factory shall, before the commencement of purchase of cane, have the survey of the standingcane-crop made as the prescribed manner. Then follows Section 29 which deals with Establishment of purchasing centres. It reads as under :- (1) Theoccupier of a factory, or the Secretary of a Cooperative Society may establish a purchasing centre after giving anotice in writing to the Collector at least thirty daysbefore the commencement of purchase of cane and copies ofsuch notice shall be sent by the occupier of the factory orthe Secretary of the Society forthwith to the Cane Officer concerned and the Cane Commissioner . The remaining sub-sections of Section 29 lay down theprocedure under which the Collector can direct shifting of the location of any purchasing centre to another place andalso the power of the prescribed authority to revise theorder of the Collector. Section 31 deals with Declaration of reserved area and provides as follows :(1) The Cane Commissioner may, having regard to the crushing capacity of the factory, the availability of sugarcane in such area andthe need for production of sugar and after consulting the council concerned and the occupier of the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , after consulting the Board,determine by notification in the official Gazette, inrespect of any area the minimum price of cane payable by theowners of units to the cane-growers or co-operativesocieties for cane supplied to them in the crushing year concerned : Provided that the minimum price so determined shallnot exceed the minimum price payable by the occupier of afactory under any law for the time being in force, inrespect of the cane supplied from the same area.Mode of payment of price of cane to the sugarcane growers is provided by Section 43. Section 44 deals withDeduction and provides as follows :(1) The occupier of afactory or any person on his behalf shall not make any other deductions from the price of cane except the deduction on account of any loan advanced by him, or on his guarantee or otherwise advanced by a bank or other institutions under section 50(1). The remaining sub-sections of Section 44 deal with the circumstances under which any person in charge of payment of price of cane on behalf of a co-operative society cannot make deductions from the price of cane as fixed. Section 46deals with Decision of certain disputes andreads as under :- (1) If any dispute a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsumption or use of, or sale to afactory situated therein : (b) a tax not exceeding one rupee per quintal on the purchase of sugarcane by or on behalf of the occupier of afactory :Section 50 deals with Advance of loan by occupier offactory and lays down as follows :(1) The occupier of afactory or any person working on his behalf or any bank mayadvance loan to a cane-grower or a Co-operative Society forsuch purposes connected with cultivation or supply of caneto the extent of the amount and in the manner as may be prescribed. (2) Interest at the rate specified in section 51 shallbe payable on the loan advanced under sub-section (1) andthe loan and the interest shall be realisable in theprescribed manner. Chapter VI deals with miscellaneous items. Section 52of the said chapter deals with penalty for offences andprovides as follows :If any person contravenes or attempts to contravene or abets the contravention of any of the provisions of this Act or the rules or of any order made ordirection given thereunder or the terms and conditions ofany licence, he shall be punishable with imprisonment whichmay extend to six months or with fine which may extend tofive thousand rupees or with b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utlying purchasingcentres to the factory, to the satisfaction of the Collector, have been made.Rule 30 requires the sugar factory to : (a) provideat every purchasing centre suitable approach roads connecting the nearest public roads with the parking groundand likewise suitable tracks from the parking ground to the point where cane is unloaded after weighment; (b) keep such roads and tracks repaired and satisfactorily workable at all times the purchasing centreis in operation; (c) provide space in the parking ground foraccommodating at least one-fourth of the maximum number ofanimal-driven carts carrying cane required to be brought tothe purchasing centre on any day for weighment and purchase; (d) keep the metalled tracks neat and clean andseparated by railing or trenches; (e) provide shelters for animals and cart-drivers atevery purchasing centre, to the satisfaction of theCollector; (f) provide at least four water taps or hand pumps atconvenient points of each purchasing centre located at oradjoining factory premises (referred to hereinafter as millgate purchasing centre) and one such water tap or hand pumpat every purchasing centre other than the mill gate purchasing centre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no question ofsugar factory being called upon to enter into a publicauction for purchasing sugarcane which is special year marked for it out of the reserved area. In fact, provisions of the Sugarcane Act and the provisions of theMarket Act, especially Section 15 read with Section 3(1),cannot harmoniously co-exist. It is precisely to avoid sucha possible conflict and head-on collision between generalAct, namely, the Market Act and the special Act, namely, theSugarcane Act which was later on enacted in 1981 by the verysame Bihar Legislature, that the State Government inexercise of its exemption power under Section 42 of the Market Act issued a notification dated 22nd March, 1976 tothe following effect: S.O. 550 the 22nd March, 1976(Published in Bihar Gazette (ex-order) dated 23-3-1976) .- In exercise of the powers conferred under Section 42 of theBihar Agricultural Produce Markets Act, 1960, the Governorof Bihar is pleased to exempt all sugar mills from theprovisions of Section 15 of the Bihar Agricultural ProduceMarkets Act, 1960 with regard to their sale and purchase ofagricultural produce notified under sub-section (1) ofSection 4 of the said Act) This very notification shows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emises of thesugar factories and the purchase centres from which theyhave to purchase sugarcane as per the Sugarcane Act is to beheld to be operative, such a declaration would be devoid ofany efficacy under the Market Act as the very purpose of the declaration of such market yard would not get fructi fied once sugarcane will not be required to be brought for purchase and sale in such declared market yard. It has tobe kept in view that the relevant provisions of the Market Act laying down the machinery for effecting the regulation of purchase, sale, storage and processing of agricultural produce cannot be of any avail once purchase and sale of such an agricultural produce are not required to be effectedat the relevant market yard and have not to be subjected too pen auction or tender for fixing proper prices for such agricultural produce to be paid to the growers of suchproduce. It must, therefore, be held that the entire machinery of the Market Act cannot apply to the transactions of purchase of sugarcane by the appellant sugar factories as they are fully covered by the special provisions of the Sugarcane Act. It is also necessary to note that if both these Acts are treated to be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad-onconflict, it has to be held that the Market Act is a general Act covering all types of agricultural produce listed in the Schedule to the Act, but out of the listed items if any ofthe agricultural produce like sugarcane is madesubject-matter of a special enactment laying down an independent exclusive machinery for regulating sale,purchase and storage of such a commodity under a specialAct, then the special Act would prevail over the general Actfor that commodity and by necessary implication will takethe said commodity out of the sweep of the general Act.Therefore, learned counsel for the appellants are right whenthey submit that because of the Sugarcane Act the regulationof sale and purchase of sugarcane has to be carried outexclusively under the Sugarcane Act and the said transactions would be out of the general sweep of the Market Act. None of its machinery would be available to regulate these transactions. But even apart from the provisions ofthe Sugarcane Act, learned senior counsel for the appellants also placed reliance on the Sugarcane (Control) Order, 1966enacted under the provisions of Section 3 of the EssentialCommodities Act, 1955 for submitting that purchase and sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls withdelegation of powers by the Central Government to anyofficer or authority thereof or to any State Government orany officer/authority of a State Government. The aforesaid relevant provisions of the Sugarcane (Control) Order showthat it seeks to lay down the minimum guaranteed price ofsugarcane to the sugarcane growers with a corresponding obligation on them to supply sugarcane to the earmarked factories for which the reserved areas can be fixed. ThisOrder also contemplates negotiated price between the sugarcane growers on the one hand and the sugarcane factories on the other, for whom fixed quota of sugarcanecan be earmarked. It has to be appreciated that the aforesaid provisions of the Sugarcane (Control) Order operate in the same field in which the Bihar Legislative enactment, namely, the Sugarcane Act operates and both ofthem are complementary to each other. When taken together,they wholly occupy the field of regulation of price of sugarcane and also the mode and manner in which sugarcanehas to be supplied and distributed to the earmarked sugar factories and thus lay down a comprehensive scheme of regulating purchase and sale of sugarcane to be supplied by sugarcane grower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cane in the market area is occupied by the Sugarcane Control Order. Thisreasoning was left untouched by this Court in appeal against the said decision and, therefore, got confirmed in the caseof I.T.C. Ltd. and Others vs. State of Karnataka andOthers (1985 (Suppl.) SCC 476). Learned senior counsel forthe respondents was right when he contended in the aforesaiddecision before this Court that the merits of the reasoning which appealed to the High Court were not gone into as the appeal arising from the judgment on this point was notpressed. However, the fact remains that the aforesaidreasoning of the Karnataka High Court remained untouched by this Court, nor was it dissented from. The facts of thepresent case project even a stronger situation, so far asthe appellants are concerned. Whatever shortfall is found in the Sugar (Control) Order has been supplemented by theSugarcane Act by the Bihar legislation itself. Reasoning which appealed to the Karnataka High Court in the above judgment rendered in absence of a separate complementary legislation by the Karnataka Legislature gets furtherstrengthened in the light of the Sugarcane Act in thepresent case. Consequently on a conjoint reading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vertheless distinct. He placed reliance on two decisions of this Court in support of his aforesaid contention. Inthe case of Jugal Kishore vs. State of Maharashtra and Others (1989 Suppl. (1) SCC 589), this Court was concerned with the question whether the provisions regarding Ceilingon Land as fixed by the Maharashtra Agricultural Lands(Ceiling on Holdings) Act, 1961 could be reconciled andcould harmoniously co-exist with 1958 Act. In thisconnection, Sabyasachi Mukharji J., speaking for the Courtmade the following pertinent observations : Unless theActs, with the intention of implementing varioussocio-economic plans, are read in such complementary manner,the operation of the different Acts in the same filed wouldcreate contradiction and would become impossible. It is,therefore, necessary to take a constructive attitude ininterpreting provisions of these types and determine themain aim of the particular Act in question for adjudication before the court. The aforesaid observations cannot be of any assistanceto learned senior counsel for the respondents as the schemes of the relevant Acts to which we have made a detailed reference contra-indicate the possibility of harmonious operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons could harmoniouslycoexist but as discussed earlier such a possibility is notonly remote but incapable of visualisation. It is also notpossible to agree with the contention of learned seniorcounsel Shri Dwivedi that the Sugarcane Act of 1981 does notexpressly purport to exclude the Market Act, especially whenthe Bihar Legislature that had enacted the former Act wasaware of the Market Act, 1960 holding the field. That thiscircumstance shows that the legislature purposely did notexclude the applicability of the Market Act so far as thepurchase and sale of sugarcane in market areas wereconcerned. However, this contention by itself cannot clinchthe issue. If the very same legislature had felt thatexisting general Act was sufficient to foot the bill, thenthere would have been remained no occasion for the very samelegislature to enact a special Act for control, regulation,sale and purchase of sugarcane after passage of 21 years.Therefore, the latter Act clearly envisaged carving out of aspecial field for regulating the sale and purchase ofsugarcane and to that extent pro tanto it excluded theoperation of the Market Act for that commodity. Theintention of the legislature is thus very c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Seventh Scheduleof the Constitution operates on its own and cannot be affected by any legislation pertaining to industry as found in Entry 52 of List I of Seventh Schedule of theConstitution. To that extent the learned senior counsel isright. However, as we have seen earlier, Entry 28 of ListII dealing with Markets and Fairs has to be read jointlywith Entries 26 and 27 dealing with Trade and Commerce andonce the State Legislation deals with these topics then italso squarely invokes legislative powers under Entry 33 ofList III. That is precisely the entry under which theSugarcane Act, 1981 can be said to have been enacted. Itis, of course, true that the Union Parliament has notexercised its concurrent legislative powers under Entry 33of List III for regulating the sale and purchase ofsugarcane. But, as noted earlier, the Sugarcane (Control) Order promulgated under the central legislation of the Essential Commodities Act when read harmoniously and inconjunction with the State Sugarcane Act carves out aspecial field for their operation and by the sweep of theircombined operation the general provisions of the Market Actpro tanto get excluded so far as the transactions ofpurchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sugar. The Levy Sugar Supply (Control) Order, 1979 enables the Central Government to issue directions to any producer or recognized dealer to supply levy sugar of such type or grade to suchpersons or organisation as may be enacted in the Order. The aforesaid provisions of the various Orders issued under Section 3 of the Essential Commodities Act clearly indicatethat all sale transactions of sugar by factories manufacturing sugar out of the sugarcane, the basic agricultural produce and raw material, are regulated bythese provisions. As noted earlier, Section 15 of theMarket Act is out of picture qua even these transactions.The sale of sugar manufactured out of sugarcane and fixation of price thereof would also, therefore, go out of the sweepof Section 15(1) & (2) of the Market Act and would begoverned wholly by these special provisions of the ControlOrders. On the parity of reasons governing the transactionsof sale and purchase of sugarcane, transactions of sale ofsugar manufactured out of purchased sugarcane by the verysame sugar factories functioning in the market area wouldalso be governed by special provisions of the aforesaidspecial Sugar (Control) Orders and would prot an to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which cannot effectively operate save and except in harmonywith the provisions enacted for the control of raw material,namely, the sugarcane as envisaged by the Sugarcane Ordersas well as the Sugarcane Act. They together, therefore,provide a complete machinery for controlling the production,sale and purchase not only of the raw material - sugarcanebut also finished product sugar and in this background wehave to visualise the legislative intent underlying theenactment of the Sugarcane Act on the one hand and theexclusion of Section 15 to such transactions by the delegateof the legislature, namely, the State of Bihar on the other.It is also necessary to visualise that once Section 15 isout of the way for governing the sale and purchase transactions by sugar factories not only the purchase of sugarcane as raw material by them but also the sale of their finished product, namely - sugar is also out of the sweep of Section 15 of the Market Act. Consequently, the entire regulatory machinery and the infrastructural facilities tobe made available by the market committees for regulatingthe sale and purchase of such an agricultural producewould not give any signals and would get totally exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount for the purpose of construction and maintenance of adequate facilities for storage of molasses.Section 9C makes detailed provisions relating to storage of molasses and construction of storage tanks by the sugarfactories. Section 11 gives overriding effect to theprovisions of the Molasses Act over any provision containedin any other Act. Section 13 which is the sectionconferring the power to make Rules provides for the makingof rules for carrying out the purposes of the Act andempowers in particular a) prescribe the specifications andtests in respect of the purity of molasses; b) regulate sale and price of molasses intended foruse in distilleries or for other purposes; c) prescribe conditions in respect of storage, loadingand transport of molasses at factories; d) prescribe the forms and returns to be submitted,and the records and books to be maintained, by factories; e) prescribe the manner in which molasses produced infactories shall be graded, marketed, packed or stores forsale; f) regulate imposition and recovery of permit fee andadministrative charges on released molasses; ff) prescribe the manner in which accounts of fundsfor regulation of adequate storage faciliti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Molasses Act, 1947has been upheld by this Court in the case of SIEL Ltd. And Others vs. Union of India and Others (1998 (7) SCC 26). It has been held to be traceable to Entry 33 List III and ishaving Presidents assent. It is, therefore, obvious thatthe Molasses Act laying down a detailed statutory scheme ofcontrol of sale and purchase of molasses produced by thesugar factories in the market area will remain within thestatutory framework of the aforesaid special statute. The general provisions of the Market Act has, therefore, to giveway to the aforesaid special provisions. It was next submitted by learned senior counsel for the State of Bihar that even though the market committee may not be in aposition to regulate sale, purchase, storage or processing of molasses not released by the Controller atleast afterthey were decontrolled by the Central Government in June,1993 and even when the State Governments have partiallydecontrolled transactions regarding molasses, suchtransactions could be regulated under the Market Act. Thissubmission also cannot be countenanced. The reason isobvious. Once the State of Bihar itself has exempted thesesale transactions from the operation of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat while rendering services in the market areafor the purposes of facilitating the transactions ofpurchase and sale with a view to achieve the objects of themarketing legislation it is not necessary to confer thewhole of the benefit on the licensees but some specialbenefits must be conferred on them which have a direct,close and reasonable correlation between the licensees andthe transactions. (4) That while conferring some special benefits on the licensees it is permissible to render such service in themarket which may be in the general interest of all concernedwith the transactions taking place in the market. (5) That spending the amount of market fees for thepurpose of augmenting the agricultural produce, its facilityof transport in villages and to provide other facilitiesmeant mainly or exclusively for the benefit of the agriculturists is not permissible on the ground that such services in the long run go to increase the volume of transactions in the market ultimately benefiting the traders also. Such an indirect and remote benefit to the traders isin no sense a special benefit to them. (6) That the element of quid pro quo may not bepossible, or even necessary, to be establ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e factorygate or purchase centres provision of approach roads may bea statutory obligation of the sugar factories. Thus approach roads would connect the purchase centres with the nearby public roads. But so far as link roads areconcerned, they are also public roads other than approachroads which connect villages with main roads and all thesefacilities make possible quicker movement of sugarcane fromfarms to the purchase centres. This results in supplyingbetter quality of sugarcane for being crushed in thefactories so that before such sugarcane dries out it getscrushed resulting in better quality and larger quantity ofsugar for the benefit of sugar factories. Strong reliancewas placed in this connection on various provisions of Section 30 of the Market Act and it was submitted by learnedsenior counsel for the respondents that all these benefit sare being made available to sugar factories and there is noreason for them to oppose payment of small amounts of marketfees after getting these benefits from the market committees. The aforesaid contentions of learned seniorcounsel for the respondents for salvaging the situation forthe market committees though appearing attractive at thefirst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have seen earlier, the charge of market fee as envisaged by Section 27 would not get attracted at all for them.Hence the aforesaid list of the infrastructural facilitiesmade available to sugar factories in general with other dealers in agricultural produce attracting Section 15 of the Act would pale into in significance. Market Committees wouldnot supply adequate quid pro quo for levying market fee as the charge itself does not settle on these transactions bythe sugar factories. It may be, as submitted by learned senior counsel for the respondents, that some sugarfactories may have taken benefit of electric lighting andpreparation of approach roads by the market committees whichmight have spent sufficient funds for giving thesefacilities. Still they would not be a part and parcel ofthe statutory obligations of the market committees qua suchsugar factories and may remain in the domain of Section 72 of the Indian Contract Act and if such benefits are received by the factories they may be liable on the principle ofquantum meruit to reimburse or compensate the marketcommittees for the voluntary facilities given by them butthey would not support any legal quid pro quo by way ofstatutory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acturer would ever bear the burden of such compulsory fee or tax to be paid from his own pocket. Evenotherwise reserving such liberty would create unnecessary complication and may give rise to spate of avoid able litigations in the hierarchy of proceedings. Under these circumstances, keeping in view the peculiar facts and circumstances of these cases, we deem it fit to direct inexercise our powers under Article 142 of the Constitution ofIndia that the present decision will have only prospective effect. Meaning thereby that after the pronouncement ofthis judgment all future transactions of purchase of sugarcane by the sugar factories concerned in the marketareas as well as the sale of manufactured sugar and molasses produced therefrom by utilising this purchased sugarcane bythese factories will not be subjected to the levy of market fee under Section 27 of the Market Act by the market committees concerned. All past transactions upto the dateof this judgment which have suffered the levy of market feewill not be covered by this judgment and the collected market fees on these past transactions prior to the date of this judgement will not be required to be refunded to any ofthe sugar mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel appearing for the appellants raised two contentions for our consideration. 1. Under theIndustries (Development and Regulation) Act, 1951 (for shortI.D.R. Act) in public interest the Union of India has taken over the control of the wheat industry as specified inthe First Schedule to the Act and consequently any transaction of purchase and sale of the products of that industry cannot be regulated by the State Act like the Market Act. As a part of the very same contention, it was submitted that Wheat Rolling Flour Mills (Licensing and Control) Order, 1957 and the Bihar Trading Articles (Licenses Unification) Order, 1984 issued under Section 3 of the Essential Commodities Act, 1955 lay down a completescheme for regulating purchase and sale of wheat productsand hence these transactions cannot be covered by thegeneral sweep of the Market Act. 2. Alternatively, it was contended that wheat may be an agricultural produce, but sale of atta, maida, suzi cannot be treated as agricultural produce. We shall deal with the aforesaid contentions pointwise. Point No.1: It is true that the Union Parliament in exercise of its legislative power under Entry 52 of List Iof the Seventh Sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gulation and development under the controlof the Union is declared by Parliament by law to beexpedient in the public interest. The effect of readingthe two Entries together is clear. The jurisdiction of theState Legislature under Entry 23 is subject to thelimitation imposed by the latter part of the said Entry. If Parliament by its law has declared that regulation anddevelopment of mines should in public interest be under thecontrol of the Union, to the extent of such declaration thejurisdiction of the State Legislature is excluded. It was contended by Shri Ranjit Kumar relying on theseobservations that mere declaration under the I.D.R. Act isenough to exclude the jurisdiction of the State Legislaturein connection with such a declared industry. It is difficult to appreciate this contention. It has to be keptin view that any legislation in exercise of legislativepower under Entry 54 of List I would enable the Parliamentto regulate mines and mineral development by taking themunder the control of the Union in public interest. Thus allaspects of mining industry would be covered by the generalsweep of such a declaration. However, so far as the I.D.R.Act is concerned, it is enacted unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the industries falling in Entry 52 of List I,these subjects are carved out and expressly put in Entry 33of List III. It was also held that since the Molasses(Control) Order of 1961 passed by the Central Government inexercise of powers conferred by Section 18-G was not extended at any point of time to the State of U.P. or theState of Bihar, the question of repugnancy between theMolasses Control Order, 1961 and the U.P. Sheera NiyantranAdhiniyam, 1964 does not arise. Consequently, it must beheld that in the absence of statutory order promulgatedunder Section 18G of the I.D.R. Act, it cannot be said thatthe field for regulation of sale and purchase of products offlour industry like atta, maida, suzi, bran etc. wouldremain outside the domain of the State Legislature. ShriRanjit Kumar then placed reliance on the statutory ordersframed under Section 3 of the Essential Commodities Act,1955. So far as the Wheat Rolling Flour Mills (Licensingand Control) Order, 1957 is concerned, reliance was placedby him on Clauses 2 and 10 of the definition clause. Theseclauses clearly indicated that the said order was notconcerned with agriculturists nor was the order concernedwith the pricing, purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is now underliquidation represented through its liquidator raisessimilar contention as canvassed by Shri Ranjit Kumar insupport of the appeals moved by flour mills. All vegetableoils are treated to be agricultural produce as per serial no.4 of the schedule framed under Section 2(1)(a) of theMarket Act. In view of the general sweep of the saiddefinition, oil manufactured by the oil mills functioningwithin the areas of the Market Committees concerned by crushing oil-seeds which are undisputedly agricultural produce and subjecting them to manufacturing process cannotbe said to be outside the sweep of the regulatory provisionsof the Market Act. Reliance placed in support of thisappeal on the Vegetable Oil Products Control Order, 1947 thePulses, Edible Oilseeds and Edible Oils (Storage Control)Order, 1977, the Vegetable Oil Product Producers (Regulationof Refined Oil Manufacture) Order, 1973, all framed underSection 3 of the Essential Commodities Act, 1955, alsocannot be of any avail to the appellant industries for thesimple reason that none of these orders deals with the topicof regulation of prices and sale and purchase of vegetableoil products. Consequently, the field is wide o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red, hence such activity cannot be governed bythe Market Act. It is obvious that if the appellant ricemills import paddy already purchased from outside the marketarea then on such transactions of outside purchase andimport of paddy in the market area, there would remain nooccasion for the market committees concerned to subject suchtransactions to the regulating machinery of the Market Actor to demand any market fee thereof. This was fairly conceded by learned senior counsel for the respondents. He,however, added that if these rice milling industries locatedand functioning in the market area purchase within themarket area, raw material paddy, whether grown in the market area concerned or outside, then such purchases within themarket area will attract the regulatory provisions of theMarket Act. There cannot be any dispute on this aspect aspaddy obviously is an agricultural produce being item no.1in the category of Cereals as found in Schedule to theAct. So far as the manufactured rice out of such paddy isconcerned, once manufacturing takes place within the marketarea, it would get squarely covered by the wide sweep ofdefinition of Section 2(1)(a), as we have seen earlier.Even apart f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ist on shifting ofthe business premises of any milling company or factory processing agricultural produce located within the market area to any particular market yard or sub-market yards.Learned senior counsel for the respondents Shri Dwivedi fairly conceded that the aforesaid direction contained inthe impugned notice as worded is not correct and can be readdown to mean only the shifting of the sale and purchase transactions concerning paddy and rice to the relevant market yard or sub-market yards. These directions are accordingly read down. The said notice when so read down would remain well sustained. In other words, the appellantswill not be required to shift the location of the rice mills to principal market yard or sub-market yards if otherwise they are not already so located but are functioning at any place within the market area. However, their sale and purchase transactions of paddy and rice will, of course, be required to be carried on only in market yard or sub-market yards concerned as mandated by Section 15 of the Market Act.Subject to these clarifications and modifications in the directions contained in the impugned notice, these appealsare liable to fail. 5. MILK AND ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is tobe covered by the sweep of the Act has to be one whichshould be specified in the Schedule. When we turn to theSchedule of the Act framed as per Section 2(1)(a), we findone of the animal husbandry products at item VIII, sub-item20 as milk except liquid milk. Thus any product consisting of solidified milk, like milk powder, is contemplated by thesaid item. It was submitted that in the entire Schedule nowhere we find any mention of baby food which may be asubstitute for milk or solidified milk. It was, therefore,contended that the appellant which manufactures and sellsspecial infant foods like Lactodex and "Raptakos" cannotbe required to take any licence under the Market Act.Refuting this contention, learned senior counsel for therespondents submitted that as noted by the High Court theaforesaid two products manufactured and sold by the appellant do contain as base material "milk" in solidified form. He invited our attention to the details submitted bythe appellant before the High Court and as noted by the High Court in its judgment in connection with the ingredients and constituents of these two products. "LACTODEX" Per 100 ml. When reconstituted. 6 g. : 45 ml.Protein 1.9 g. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s items 7 & 8 which are wholly manufactured outof milk. It, therefore, becomes clear that save and exceptbutter and ghee no other milk product is sought to becovered by the sweep of the Act as "Animal HusbandryProducts" and the basic Animal Husbandry Produce like "milk"only in solid form is sought to be covered by a separatesolitary item no.20 as one of the "Animal HusbandryProducts". Therefore, any other manufactured product likethe present ones, utilising same ingredients of milk powderas one of the ingredients but which are processed by addition of all other extra items with the result that finished products like baby foods emerge as manufactured items for serving as substitute for milk to be fed toinfants who cannot digest liquid milk or solidified milk assuch, cannot be treated to be "agricultural produce" as partand parcel of listed "Animal Husbandry Products" mentionedin the Schedule to the Act. Learned senior counsel for theappellant in support of his contentions tried to rely uponspecimen copies of printed material affixed to the sealedtins of these manufactured commodities, "Lactodex" and"Raptakos", which, according to him, are substitutes formother's milk and are to be u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turists by providing them a market assuring areasonable price of their products and also eliminating unhealthy competition and loss due to malpracticesprevailing in the market. That the appellant was neither anagriculturist nor did it purchase any article from any agriculturist in the Bihar State. That it purchased tea inauction under the Tea Act held at various notified centresin other States outside the Bihar territory. That the purchased tea was blended at appellant's factories whichwere also situated outside Bihar. Only after the purchasedtea had undergone manufacturing process in appellant's teafactories, after blending and preparation of appropriatefinal product packed in tins and other receptacles, this marketable commodity "tea" consisting of red label, greenlabel tea etc. was being brought for sale within the territories of the State of Bihar. Hence, there was nooccasion for the market committees to regulate the sale andpurchase of such tea by the appellant manufactured outside the State of Bihar. It was also contended that the Tea Act,which is the Central Act, fully occupied the field ofregulation of sale of such tea by the appellant. In view ofthe special machinery provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscellaneous item No. XII"as sub item 30 being Tea (leaf and dust). It was submitted that this addition to the Schedule was made by the State of Bihar in exercise of its power under Section 39 of the Act which confers power on the State Government by notification to add any of the items to be treated as "agricultural produce" for being specified in the Schedule. That this addition was made after the basic notification under Section3 of the Act was issued declaring the intention of the Stateto regulate the purchase, sale, storage and process of agricultural produce in such areas as may be specified inthe notification. This basic notification which was followed by the procedure of inviting objections and suggestions had culminated into declaration of market areaunder Section 4. That initially as the item of tea was notin the Schedule, it was obviously not sought to be subjected to the regulation under the Act. Consequently, its purchase, sale, storage and process were obviously not intended to be covered by the Act. But when tea was addedas an item in the Schedule in 1976 the procedure contemplated by Section 3 was obviously not undergone and noobjections were invited. Section 4 (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompetent.CONTENTION NO. 2: In any case, as the purchase and sale oftea were governed by the comprehensive provisions of theCentral Act, namely, the Tea Act, 1953, the said Act wouldwholly govern transactions of purchase and sale of tea bythe appellant and to that extent the Market Act would standsuperseded or at least the statutory intention of regulatingthe purchase, sale, storage and processing of tea as per theprovisions of Section 3 of the Market Act would standcompletely negated. Hence, on that ground also theinsertion of this item in the Schedule would remainunauthorised and consequently the insistence on the part ofthe authorities that the sale transactions should be carriedon only within the market yard or sub-market yard wasclearly illegal and violative of Article 19 of theConstitution of India. CONTENTION NO. 3: It was lastlycontended by Shri Shanti Bhushan that no quid pro quoexisted between the demand for market fee by the marketcommittees and the sale transactions effected by appellantsselling agents so far as tea in packed tins was concerned.No infrastructural facilities were available for or requiredto be supplied to the sellers of such tea. Learned seniorcounsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bihar State and these are thetransactions of sale of manufactured tea out of the basicagricultural produce tea leaves that would attract the sweepof the Market Act, notwithstanding the provisions of the TeaAct. That once the Market Act applies to such saletransactions, the entire infrastructural facilities would beavailable to the appellant as these sales have to take placein the market yard or sub-market yards as required bySection 15 of the Act. Once the appellant gets the benefitof this infrastructure, it cannot be said that no sufficientquid pro quo is made available under the Act by the marketcommittees concerned to justify them to levy the market feefrom the buyers of tea. That so far as the appellant isconcerned, there is no burden of paying market fee as aseller of manufactured tea. The burden will be borne by thebuyers who are not making any grievance in this connection.In the light of the aforesaid contentions, the followingpoints arise for our consideration :1. Whether the basicagricultural produce i.e. "tea leaves" which is subjectedto manufacturing process outside the Bihar State and isimported and sold in manufactured condition as packed teawithin the Bihar State in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 15sub-section (1) of the Act is applicable in the present caseto cover such transactions of sale of packed tea within themarket areas of the concerned market committees governed bythe Act. Save and except such quantity as may be prescribedfor retail sale or personal consumption to be outside thesweep of Section 15(1) of the Act, rest of these saletransactions regarding manufactured agricultural producewould remain governed by the sweep of the Act. On aconjoint reading of Section 2(1)(a) and Section 15 and therelevant entry in the Schedule, there is no escape from theconclusion that whether the manufactured agriculturalproduce has undergone manufacturing process within themarket area or not or whether such agricultural produce inits raw form is grown in the market area or outside orwhether the processed "agricultural produce" is importedonly for sale within the market area, the applicability ofthe Act cannot be said to be ruled out to cover all thesetypes of sale transactions. The question posed by ShriShanti Bhushan learned senior counsel appearing for theappellant for our consideration is no longer res integra. AConstitution Bench of this Court in the case of Ram ChandraKa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of this Court, speaking through Chinnappa Reddy, J.amongst others, had to consider the question whether changeof location of market under the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963 could be held to belegally justified. It was held that the power to establishprincipal market or a subsidiary market carried with it thepower to "dis-establish" such market and that power toestablish principal or sub-market yard could be exercisedfrom time to time. In para 11 of the report the furthercontention was examined as to whether agricultural producewhich is imported into the market area from outside themarket would be covered by the sweep of the Market Act.While answering this contention in affirmative, it was heldthat even if agricultural produce is imported into themarket area and subjected to sale and purchase thereof inthe market area, the provisions of the Market Act would getattracted. The very same contention which learned seniorcounsel Shri Shanti Bhushan urged for our consideration thatthe Act is enacted for the interest of agriculturists onlyand for their sole benefit was repelled. For coming to thatconclusion reliance was placed on a decision of theConstit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in Uttar Pradesh, as alsoprotection of consumers and even traders from beingexploited in the matter of quality, weight and price.." In view of this settled legal position, therefore, itcannot be held that merely because the tea leaves producedin tea gardens outside the State of Bihar are processed bythe appellant in its factories outside Bihar and areconverted into blended and branded qualities of packed tealike red label tea or green label tea etc., and even thoughsuch packed tea is sold within Bihar Market areas, theMarket Act cannot be applied to such sale transactions ofmanufactured tea after importing it in the State of Bihar.The first point, therefore, has to be rejected. That takesus to the second contention in support of the appeal. POINTNO.2 : The Tea Act of 1953 provides for control by theUnion Government of the Tea Industry, including the control,in pursuance of the International Agreement now in force, ofthe cultivation of tea in, and of the export of tea from,India and for that purpose to establish a Tea Board and levya duty of excise on tea produced in India. It is necessaryto have a bird's eye view of its relevant provisions. Section 4 deals with a board called ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontrol price and distribution of teaor tea waste. "Power to control price and distribution oftea or tea waste.- (1) The Central Government may, by ordernotified in the Official Gazette, fix in respect of tea ofany description specified therein(a) the maximum price orthe minimum price or the maximum and minimum prices whichmay be charged by a grower of tea, manufacturer or dealer,wholesale or retail, whether for the Indian market or forexport; (b) the maximum quantity which may in onetransaction be sold to any person." Sub-section (3) ofSection 30 enables the Central Government by general orspecial order to - "(a) prohibit the disposal of tea or teawaste except in such circumstances and under such conditionsas may be specified in the order; (b) direct any persongrowing, manufacturing or holding in stock tea or tea wasteto sell the whole or a part of such tea or tea waste sogrown or manufactured during any specified period, or tosell the whole or a part of the tea or tea waste so held instock, to such person or class of persons and in suchcircumstances as may be specified in the order." Sub-section (4) of Section 30 reads as under : "Wherein pursuance of any order made with referenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been issued by the Central Government under thesaid provision. Learned senior counsel submitted that oncethe Central Legislature has enacted the aforesaid provisionand evinced its intention to control price and distributionof tea or tea waste, the field gets occupied by legislationunder Entry 33 of the Concurrent List and to that extent theprovisions of Market Act would get excluded. It is notpossible to accept this contention for the simple reasonthat so long as the Central Government does not issue anyorder under Section 30 of the Tea Act, the field dealingwith fixation of maximum price or minimum price to becharged by a grower of tea, manufacturer or dealer,wholesale or retail, for Indian market leaving aside thequestion of export, would not be occupied. In other words,it would remain open for the State Legislature to cover thatfield by exercising its legislative power under Entry 33 ofthe Concurrent List. Even this aspect of the matter is alsonot res integra. It is covered by a decision of theConstitution Bench of this Court in Ch. Tika Ramji & Othersetc. vs. The State of Uttar Pradesh & Others (1956 SCR393). In that case, the Constitution Bench was concernedwith the quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bjectmatteror whether the laws enacted by Parliament were intended tobe a complete exhaustive code or, in other words, expresslyor impliedly evinced an intention to cover the whole field."and thereafter Section 18-G of the I.D.R. Act wasconsidered and it was held as under : "Even assuming thatsugarcane was an article or class of articles relatable tothe sugar industry within the meaning of Section 18-G of ActLXV of 1951, it is to be noted that no order was issued bythe Central Government in exercise of the powers vested init under that section and no question of repugnancy couldever arise because, as he has noted above, repugnancy mustexist in fact and not depend merely on a possibility. Thepossibility of an order under Section 18-G being issued bythe Central Government would not be enough. The existenceof such an order would be the essential prerequisite beforeany repugnancy could ever arise." The aforesaid decision of the Constitution Bench,therefore, clearly repels the submission of learned seniorcounsel Shri Shanti Bhushan that merely because there is apossibility of issuance of a Control Order under Section 30of the Tea Act by the Central Government, the field is fullyoccupie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acturing plants. It isquite different from that of the Market Act, 1960 made bythe Bihar Legislature. The Tea Act has no concern with theestablishment of markets in the State of Bihar or otherStates wherein packed tea could be sold in wholesale orretail markets so as to ultimately reach the Indianconsumers. That takes us to the consideration of theControl Orders issued by the Central Government in exerciseof its power under Section 30, sub-sections (3) and (5)thereof. One such order is the Tea (Distribution andExport) Control Order, 1957 which pertains to licensing ofthe distributors and exporters of tea. Clause 3 requiresdistributors carrying on the business of distributing tea tohave a licence under this order. The export of tea is nottouched by the Market Act as it has nothing to do with theexport of tea to other countries. Clause 9 says that thelicence given is personal and nontransferable. Clause 10requires the licensee to pack and mark containers of tea inthe manner mentioned therein. The proviso is significant.According to it, Clause 10 (c) does not apply to containerscontaining not more than 20 Kg. net or such other weight asto make it package tea for the purpose of the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trol of organisers of tea auction.Clause 19 exempts tea marketed directly by the manufactureras packet tea, instant tea, tea bags, aromatic tea and greentea from computation of the total production under para 17.Firstly, 1984 Order deals with manufacturers and organisersof tea auction and brokers of tea auction and its basicconcern is to require them to have licences in the form ofauthority. It is obvious that even this Order cannotadvance the case of the appellant. The next Order which waspressed in service was the Tea Warehouses (Licensing) Order,1989. The said order was also promulgated by the CentralGovernment in exercise of the power conferred bysub-sections (3) and (5) of Section 30 of the Tea Act, 1953.A mere look at the salient features of 1989 Order shows thatit has not covered the field tried to be occupied by theMarket Act. The public tea auctions contemplated by 1984Order are those which are held under Clause 3 of the TeaWarehouses (Licensing) Order, 1989. In fact Clause 14(7)prohibits the warehouse owner from entering into anytransaction with the manufacturer/broker/organiser of teaauction unless they have licences under the 1984 Order. Thepublic tea auctions are held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he licensing authority. UnderClause 19A false declaration is prohibited. On a conjointreading of the aforesaid statutory Orders issued under theTea Act and the relevant scheme of the Tea Act, it becomesat once clear that the provisions regarding fixation ofappropriate price at which blended and packed tea can besold to wholesalers in any established market or particularplace at which sale transactions of such manufactured teabetween the manufacturers on the one hand and the traders orother wholesale producers/dealers on the other are outsidethe sweep either of the Tea Act or of the relevant statutoryOrders framed under Section 30 by the Central Governmentunder the very same Act. The places at which publicauctions can be held in connection with sale of roasted tealeaves to be purchased by manufacturers like the appellantare the earmarked six places indicated in 1984 and 1989Orders. These auctions have nothing to do with the latersales of manufactured blended tea by such auction purchasersof tea leaves, who manufacture packed tea by blending andpacking roasted tea leaves in their factories. The publicauctions as contemplated by these Orders, therefore, serveout their purpose once the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m from theinception but it is only the delegate, namely, the State ofBihar in exercise of its power under Section 39 thought itfit to introduce Tea (leaf and dust) as a scheduled item.The procedure of Sections 3 and 4 has not to be followedwhile undertaking this exercise. In this connection, it wassubmitted that no reasonable person could have undertakensuch an exercise as tea was already a controlled commodityunder the Tea Act and also governed by the relevant Ordersissued thereunder. As we have seen earlier, under therelevant provisions of the Tea Act and the operative Orderspromulgated thereunder the Central Government has leftuntouched the field of regulation of prices and the locationof market places where such packed tea could be sold to thewholesale dealers or even to the retailers. When that fieldwas wide open, the State Government in its wisdom, couldlegitimately try to cover the filed by issuing appropriateOrders under Section 39 of the Act. It cannot be said,therefore, that such an exercise was totally ultra vires oramounted to non-application of mind. In fact, what theCentral Government should have done and did not do byissuing appropriate Orders under Section 30, subse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le dealers licensed to purchase such tea as per theCentral Orders mentioned earlier. Such purchasers have notbrought in challenge levy of market fee on them. So far asthe appellant is concerned, once its stockist sells thepacked tea in the market yard or sub-market yards maintainedby the market committee, the entire infrastructuralfacilities made available by the market committee to all thepurchasers and sellers of agricultural produce in the marketyard, would automatically become available to theappellant's stockist who sells its goods, namely, packed teain the market yard or sub-market yards concerned. In thisconnection, it has also to be kept in view thatestablishment of markets and maintenance thereof is a topicof legislation squarely covered by Entry 28 of List II ofthe Seventh Schedule. For maintaining such markets, themarket committees obviously have to spend large amounts forproviding necessary infrastructure for the benefit of thosewho use such established markets. In this connection,Section 30 of the Market Act, as noted earlier, becomesrelevant for our consideration. Amongst others, the MarketCommittee Fund has to be utilised under Section 30 for thefollowing purposes : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n dealt with by us in detail hereinabove. So faras the written submissions filed by the appellant on 8thMay, 1999 are concerned, we may state that to the extentthey tried to re-iterate what was submitted earlier andconsidered by us, will stand repelled in the light of thedetailed reasons recorded by us earlier in this connection.Processing of packed tea manufactured out of tea leavespurchased by the appellant in the auction at six placesobviously is not covered by the applicability of the MarketAct in the present case. All that the Market Act seeks tocover is the sale transactions pertaining to packed teabranded and marked in accordance with the regulations madeby the Tea Board to the extent these sealed packets are soldby the appellant within the market area. These transactionsof sale of packed tea, as discussed by us earlier, wouldsquarely attract the applicability of the Market Act as theytake place within the market area governed by the MarketAct. As seen earlier, manufacturing activities concerningthis packed tea has no relevance for arriving at anappropriate answer to this question. Contention raised inpara 2 of the written submissions is also besides the point,whether other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eof, even if theappellant may have to act as a collecting agent for themarket committee concerned as per its legal obligation ingiven circumstances, that by itself cannot exonerate it,once the statutory scheme of the Act covers transactions ofsale of branded tea carried out by the appellant in themarket area governed by the Market Act. Contentions foundin para 10 of the written submissions are to be stated to berejected. Once the sale transactions of packed tea aregoverned by the sweep of the Market Act, and once such saletransactions have to be regulated as per the machinery ofthe Market Act, on the applicability of Section 15 of theAct, the entire infrastructure available for regulating suchsale transactions at the market yard or sub-market yardswhose benefit would obviously be available to the appellantcannot entitle the appellant to contend that its fundamentalright under Article 19(1)(g) of the Constitution isviolated. To say the least, it would be a reasonablerestriction on exercise of such a right. It is pertinent tonote that the appellant has not challenged the vires ofSection 27 of the Market Act. It is difficult to appreciatethe submission that compelling the sealed and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.1250/1986 filed by the petitioner will stand allowedaccordingly as detailed in this judgment subject to theriders mentioned hereinabove. Civil Appeal Nos.4500-05 of1992, so far as they seek to challenge the levy of marketfee on sugar are concerned, will stand allowed. Therespective six petitions filed before the High Court dealingwith levy of market fee on sugar will stand allowed. CivilAppeal arising out of S.L.P. (C) No.9684 of 1992 will standallowed to the extent Civil Writ Petition No.5974 of 1988filed before the High Court deals with the contentionregarding market fee on sugar. Instead of the reliefgranted by the High Court limiting to the non-levy of marketfee on sugar after 2.5.1977, it is directed that levy ofmarket fee on sugar for the entire period covered by thewrit petition will be treated to be unauthorised. Thisjudgment will have only prospective operation and will notaffect past transactions entered into prior to the date ofthis judgment. 2. WHEAT PRODUCTS LIKE ATTA, MAIDA, SUZI, ETC. Theseappeals, namely, Civil Appeal Nos. 2951, 2952 and 2953 of1992, 3505 & 3506 of 1992 and 829/1993 are dismissed. 3.VEGETABLE OIL MATTERS : Civil Appeal No.1427 of 1979 isdismisse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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