PETITIONER:
BRITISH INDIA CORPORATION LTD.
Vs.
RESPONDENT:
MARKET COMMITTEE, DHARIWAL & ANOTHER
DATE OF JUDGMENT16/12/1982
BENCH:
VARADARAJAN, A. (J)
BENCH:
VARADARAJAN, A. (J)
TULZAPURKAR, V.D.
CITATION:
1983 AIR 162 1983 SCR (2) 159
1983 SCC (1) 196 1982 SCALE (2)1339
ACT:
Punjab Agricultural Produce Markets Act, 1961 Section
23-Rule 29 (7)-Scope of-Goods purchased by head office but
weighed and delivered within the market committee area-If
attract fee.
HEADNOTE:
The appellant, with its head office at Kanpur in U.P.,
runs two woollen mills-one of which is in Dhariwal in the
State of Punjab. The raw material purchased by the head
office at Kanpur was sent from various centres to the mills
and no raw material used in the mills was purchased locally
or within the area of the Market Committee.
On demand of market fee by the Committee under section
23 of the Punjab Agricultural Produce Markets Act, 1961 the
appellant stated that no purchase or sale of the raw
material received by the mills took place within the area of
the Market Committee and that for this reason the Committee
had no jurisdiction to levy any fee in respect of those
materials.
A Writ Petition filed by the appellant in the High
Court was dismissed a infructuous since the Market Committee
agreed to withdraw the assessment and to make fresh
assessment according to the rules.
Some time later, however, the Market Committee once
again levied market fee and penalty. A single Judge of the
High Court quashed the demand notice of the Market Committee
on the ground that the assessment order was not in
accordance with the provisions of the Act and Rules. But a
Division Bench of the High Court allowed the Committee’s
Letters Patent Appeal.
On the question whether the Market Committee was
competent to levy fees.
Dismissing the appeal,
^
HELD: Clauses (b) and (c) of rule 29 (7) of the Punjab
Agricultural Produce Markets (General) Rules, 1962 would be
attracted bringing the transaction within the term ‘bought
or sold’ if in pursuance of the agreement of sale or
purchase, even if entered at the head office of the mills at
Kanpur, the agricultural produce was weighed in the market
area or if in pursuance of the
160
agreement of sale or purchase the agricultural produce was
delivered in the said area to the purchaser or to some other
person on behalf of the purchaser. [163 E-F]
In the instant case both clauses (b) and (c) would be
applicable provided the transaction of sale was completed
immediately on the delivery of the goods to the mills on
weighment within the market area, if the delivery and/or
weighment are such that without both or either of them there
will no sale at all in law.
[164 A-B]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 681 of
1978.
Appeal by special leave from the judgment and order
dated the 2nd day of September, 1976 of the Punjab & Haryana
High Court in Letters Patent Appeal No. 208 of 1974.
Y.S. Chitale, Mrs. A.K. Verma and Ashok Gupta for the
Appellant.
Hardev Singh and R.S. Sodhi for the Respondents.
The Judgment of the Court was delivered by
VARADARAJAN, J. This appeal by special leave is
directed against the judgment of a Division Bench of the
Punjab and Haryana High Court at Chandigarh in Letters
Patent Appeal No. 208 of 1974 by the respondent in that
appeal. The appellant who filed the Writ Petition, has its
head office at Kanpur and is running two woollen mills, one
at Dhariwal, in the name and style of New Egerton Woollen
Mills’ (hereinafter referred to as ‘Dhariwal Mills’) and
another at Kanpur in the name and style of ‘Lal-Imli
Cawnpore Woollen Mills’ (hereinafter referred to as ‘Kanpur
Mills’). The case of the appellant-company was that after
the purchase of raw material made by its head office at
Kanpur the raw material is sent from various centres in
India as well as from abroad to both the mills in accordance
with their requirements and no raw material used in the
Dhariwal Mills is purchased locally or within the area of
the Market Committee, Dhariwal excepting that during the
years 1969 and 1970 two contracts for the purchase of raw
wool of the value of Rs. 6,000/- and Rs. 5,000/- were
entered into within the area of the said Market Committee.
The appellant’s case was that no purchase or sale of the raw
material received by the Dhariwal Mills takes place within
the area of the Market Committee and that, however, the
Market Committee made a demand for payment of market fee on
all raw wool purchased by the appellant from 7.3.1962 to
29.6.1968 by a letter dated 21.6.1968 on pain of
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recovery of that amount and penalty as arrears of land
revenue, if not paid within the specified time. After a
series of correspondence between the appellant and the
Market Committee-first respondent, the latter made an
assessment of market fee due from the appellant and demanded
a sum of Rs. 3,67,200/- made up for Rs. 2,44,800/- being fee
payable for the period from 26.5.1961 to 31.12.1970 and Rs.
1,22,400/- being penalty. As the amount was not paid the
Market Committee took steps under s. 41 (2) of the Punjab
Agricultural Produce Markets Act, 1961 for the recovery of
the amount as arrears of land revenue. It is in these
circumstances that the appellant filed a Writ Petition No.
4247 of 1971 which was dismissed as infructuous on
15.11.1972 as the Market Committee agreed to withdraw the
assessment and to make a fresh assessment according to the
rules.
The appellant contended in the present Writ Petition
out of which this appeal has arisen that although it made
all efforts for associating itself with the fresh assessment
proceedings by producing the necessary records, the Market
Committee once again levied market fee of Rs. 4,26,000/- and
penalty of a like sum and made a demand for the total sum of
Rs. 8,52,000/- by notice dated 16.8.1973. The present Writ
Petition was filed under Articles 226 and 227 of the
Constitution for quashing that demand notice and restraining
the Market Committee from recovering the amount. The learned
Single Judge allowed the Writ Petition on a legal point that
the assessment order made is not accordance with the
provisions of the aforesaid Act and the Rules, without
expressing any opinion on the merits of the case. The Market
Committee, therefore filed the aforesaid Letters Patent
Appeal.
There is no dispute that the raw material received by
the Dhariwal Mills is an agricultural produce as defined is
s. 2A of the Act and that the said commodity after being
received by the Dhariwal Mills is weighed within the
notified area of the Market Committee. The contest between
the parties is on the question whether in the circumstances
of the case the provisions of s. 23 of the Act were
attracted or not.
Section 23 of the Act reads thus:
“A Committee shall, subject to such rules as may
be made by the State Government in this behalf, levy on
ad
162
valorem basis fees on the agricultural produce bought
or sold by licensees in the notified market area at a
rate not exceeding two rupees and twenty paise for
every one hundred rupees.
Provided that:-
(a) no fee shall be leviable in respect of any
transaction in which delivery of the
agricultural produce bought or sold is not
actually made; and
(b) a fee shall be leviable only on the parties
to a transaction in which delivery is
actually made.”
A perusal of the records produced by the appellant
reveals the existence of a number of original contracts
entered into by the appellant at Kanpur with various
suppliers of raw wool in India with a provision practically
in all the transactions that 80 per cent of the goods was
payable against the documents and the balance after receipt
and examination of the goods which were to be despatched to
Dhariwal Mills directly. There are certain terms and
conditions on the back of the contract forms in regard to
the procedure for scouring yield. It will be necessary to
state only a few of those terms and conditions. Clause A
relating to the procedure for scouring yield read thus:-
(A) Two bales at random are taken and issued to
Scouring Department. The weight recorded at the
time of receipt of the consignment is taken. After
scouring in three bowl Scouring Machine using warm
water, the wool is dried in the dryer and spread
in a covered place for about 12 hours to regain
normal moisture. The wool is then weighed and
yield calculated”.
Clauses 2 and 3 read thus:
’2. The Mills have every right to reject a portion or
bulk if the quality is not up to the suppliers’
samples given at the time of offers.
3. Weight received in the mills will be taken as
final weight.”
163
Rule 29 of the Punjab Agricultural Produce Market
(General) Rules 1962 framed under the Act provides for levy
of the fees on agricultural produce bought or sold by
licensees in the notified market area. Rule 29 (7) read
thus:
“29 (7) For the purposes of this rule agricultural
produce shall be deemed to have been bought or sold in
a notified market area:
(a) if the agreement of sale or purchase thereof
is entered into the said area;
(b) if in pursuance of the agreement of sale or
purchase the agricultural produce is weighed
in the said area; or
(c) if in pursuance of the agreement of sale or
purchase the agricultural produce is
delivered in the said area to the purchaser
or to some other person on behalf of the
purchaser.”
Clauses (b) and (c) would be attracted bringing the
transaction within the term ‘bought or sold’ if in pursuance
of the agreement of sale or purchase, even if entered into
at Kanpur, the agricultural produce is weighed in the market
area or if in pursuance of the agreement of sale or purchase
the agricultural produce is delivered in the said area to
the purchaser or to some other person on behalf of the
purchaser.
The Division Bench of the High Court in the Letters
Patent Appeal was of the opinion that both clauses (b) and
(c) are applicable to the facts of the present case even on
the admitted facts of this case as the transaction of sale
is completed immediately on the delivery of the goods to the
Dhariwal Mils. In that view the learned Judges allowed the
appeal and set aside the judgment of the learned Single
Judge and left it open to the appellant-company to satisfy
the Market Committee in respect of any transaction which
does not fall within the scope of their judgment.
The question is as regards the sites of the sale. If
the sale transaction took place within the Market Committee
either by delivery of the goods or by weighment thereof, the
transaction would fall within the ambit of Rule 29 (7).
After having heard
164
learned counsel for the parties we are of the opinion that
no interference with the judgment under appeal is called for
except that it is necessary to make it clear that the
delivery and weighment to be taken into consideration by the
market Committee in respect of the past transactions
regarding which the demand has been made and also future
transactions must be delivery an/or weighment without which
there will be no sale at all in law. Subject to this
clarification we dismiss the appeal and direct the parties
to bear their own costs.
P.B.R. Appeal dismissed.
165