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PETITIONER: CHINT RAM CHAND & ORS.

       Vs.

RESPONDENT: STATE OF PUNJAB & ORS.

DATE OF JUDGMENT:       08/02/1996

BENCH: JEEVAN REDDY, B.P. (J) BENCH: JEEVAN REDDY, B.P. (J) KIRPAL B.N. (J)

CITATION:  1996 AIR 1406            1996 SCALE  (2)159

ACT:

HEADNOTE:

JUDGMENT:                             WITH                  CIVIL APPEAL NO. 2945/1996         (Arising out of S.L.P.(C) No. 10997 of 1995) Parduman Chand Bhandari & Ors. V. State of Punjab & Ors.                             WITH                  CIVIL APPEAL NO. 2946/1996         (Arising out of S.L.P.(C) No. 9992 of 1995) Kartar Singh Gajinder Singh & Ors. V. State of Punjab & Ors.                             WITH                  CIVIL APPEAL NO. 2947/1996         (Arising out of S.L.P.(C) No. 24712 of 1995) Guru Nanak Fruit Company & Ors. V. State of Punjab & Ors.                       J U D G M E N T KIRPAL, J.      Leave granted.      The question  which arises  for consideration  in these appeals is  that when a market yard is shifted from one site to another  whether the  licensees working in the old market yard, are entitled to have new sites in the new market yard, as a  matter of  right by  virtue of  their being earlier in business or  whether they  have also  to  compete  with  the general public in open auction for acquiring land in the new market yard.      The aforesaid  question of  law is  common in  all  the present  appeals.  Appeals  arising  out  of  Special  Leave Petition (c) Nos. 10997 of 1995 and 11139 of 1995 pertain to market in  Jagraon. appeal  arising  out  of  Special  Leave Petition (c) No. 24712 of 1995 is with regard to Fazilka.For the purpose of deciding the point in issue, it is sufficient to refer  to facts  pertaining to Jagraon only, as the facts

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regarding Ludhiana  and Fazilka  are similar,  barring minor details. Which are not relevant.      Under  the   provision  of   Section  of   the   Punjab Agricultural Markets  Act, 1961  (hereinafter referred to as the Act’).  Jagraon was  declared as a notified market area. Thereafter, on  23.8.1963.  old  grain  market  (hereinafter referred to  as ‘the  old Mandi’). Jagraon was declared as a principal market  yard under  Section 7  of the  Act by  the State of  Punjab. The  appellants herein are persons who had obtained licences as commission agents for carrying on their business of sale and purchase of agricultural produce. It is the case of the appellants that they were owners/tenants and were licensees  of shops  which were situated within the old Mandi. The  State of Punjab on 27.3.1978. under Section 7 of the Act.  declared a  new grain market. Jagraon (hereinafter referred to  as ’the new Mandi’) to be established as a sub- market yard.  On 17.9.1984,  by  Notification  issued  under Section 7  of the  Act, the  old Mandi was denotified as the principal market  yard. By  another Notification of the same date, the  Punjab Government  declared the  new Mandi as the principal yard under Section 7 of the Act. This was followed by Notification  of the Punjab Government under Section 8 of the Act,  issued on  30.3.1988, whereby it was directed that no transaction  in agricultural  produce would be transacted within the 5 k.Ms. of the new Mandi.      The promulgation  of the  aforesaid Notifications  gave rise to  the filing of a number of writ petitions before the Punjab &  Haryana High  Court. With  regard to  Jagraon, the first Writ  Petition (C)  No. 6174  of 1988  was filed by 92 dealers of  the old  Mandi of Jagraon on 26.7.1988 in favour of  the  petitions(appellants  herein).  This  petition  was dismissed on 26.7.1990 by the Single Judge and Letter Patent Appeal No.  1107 of  1990 was  filed. In  the meantime Civil Writ Petition No. 4199 of 1991 was filed on 18.3.1991 by the dealers of  Sirhind. Patiala. The said petition was admitted and referred  to the  full Bench  and, in  that  case  also, interim stay was granted.      Circular dated  2.3.193 was  issued by the Punjab Mandi Board to  the effect that the dealers/licensees will arrange for themselves  plots in  the new  Mandi. Jagraon.  This was followed by  Notices dated  18.10.1993 which  were issued by the Punjab State Agricultural Marketing Board to some of the dealers.  In  these  Notices.  reference  was  made  to  the Notification issued  under Sections 7 & 8 of the Act and the dealers/licensees were  directed to  shift to  new Mandi for the purposes of conducting the business of sale and purchase of agricultural  produce. Aggrieved  by these  Notices,  149 dealers, including  the appellants in the appeal arising out of Special Leave Petition (C) No. 11139 of 1995, filed civil Writ Petition No. 15831 of 1993. It appears that 16 of these petitioners were  the petitioners in the first Writ Petition No. 6174  of 1988  but the  fact of  filing of  earlier Writ Petition was  not disclosed  in  this  petition  Civil  Writ Petition No.  15831  of  1993  was  admitted  and  was  also referred to  the full Bench and in the meantime interim shay was granted.      On 17.2.1994, an order was passed by the Division Bench of the  Punjab & Haryana High Court High Court in Civil Writ Petition No.  15831 of 1993 vacating the interim stay on the ground that  the said 16 persons (wrongly mentioned as 19 in the High  Court’s order)  had not  disclosed that  they  had joined in  the filing  of earlier  Writ Petition No. 6174 of 1988. The interim orders were, therefore, vacated because of the concealing of this material fact, Special Leave Petition (c) No.  12306 of  1994 was filed in this court against this

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order and the same was dismissed on 16.8.1994.      On 30.5.1994,  yet another  Writ Petition  being  civil Writ Petition  No. 7211  of 1994  was  filed  purporting  to challenge the  constitutional validity  of Section  8 of the said Act.  It appears that out of these petitioners. 34 were those who  were party  to the  earlier Writ  Petition. While admitting this  petition interim stay was granted. This Writ Petition was dismissed by a Single Judge on 4,9.1995 for the reason that  the petitioners  had deliberately  withheld the facts from  the Court  and had  succeeded in  misleading the Court to  pass interim  orders in their favour. Furthermore, it was  observed that the conduct of the petitioners who had filed   successive    petitions   to    challenge    various Notifications issued  under Section 7(2) and 8 of the Act on one ground  or the  another was  condemnable and,  therefore they had  disentitled themselves from hearing of the case on merits. While  dismissing the  Writ petition,  cost of  Rs., 20,000/-was also imposed      The main  grievance before  the High  Court in  all the petitions which  were filed  was  to  the  effect  that  the licensees had  applied  to  the  Government  of  Punjab  for allotment of  alternative sites  in the  new Mandies  on  no profit no  loss basis.  The  licensees  had  challenged  the selling of  the plots in the new Mandies by open auction. It was contended  that in  case the  auction takes  place,  the licensees would  be compelled to shift their business to the new Mandies  even if  they fail  to buy plots in competition with other non-licensees on higher rates and, in the welfare state while  making plan  for establishment  of a new Mandi, the State  Government should  not act  with  the  motive  of profit earning  and that the petitioners/licensees should be allotted plots  first and only the remaining plots should be auctioned.  It   was  contended  that  the  application  for allotment of  alternative sites  on no  profit no loss basis having  rejected  by  the  State  Government  the  same  had resulted in violation of the petitioner’s fundamental rights under Articles  14, 19(1)(g)  and 31  of the Constitution of India.      The Punjab  Mandi Board, in its written statement filed before the High Court, raised preliminary objection that the writ petition was highly belated. The process of sale of the plots/spaces in  the new  Mandi began  as far back as in the year 1986  and allottees had taken possession and had either raised or  were in  the process  of raising  structures upon them and to disturb the process of formation of new Mandi at this belated  stage would  cause great harm. It was admitted that  the   appellants  were  licensees  carrying  on  their business in  the old Mandi. However, it was pleaded that the old Mandi was not a planned Mandi and was grossly inadequate for the  needs  of  the  farmers  and  the  public  and  the formation of the new Mandi was on the request of the farmers and had  all modern  amenities and  facilities. Further  the business of  the Mandi  was being  carried out  in an  over- crowded area of the town within the municipal limits. It was also pleaded that the appellants do not have any prior claim to the  plots in the new Mandi which were being sold in open auction and  the appellants  were at  liberty to  compete in open auction  and purchase  the  plots  and  space  and  the appellants, as  old licensees,  had no legal or preferential right to get the plots by allotment. Nor there was any legal obligation  on  the  part  of  the  respondents  to  provide alternative sites  to the appellants. It was further pleaded that the  appellants had  no such fundamental right and none of  the  fundamental  rights  of  the  appellants  had  been violated and that nobody had interfered with their ownership

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in the  premises in  the old  Mandi. The State of Punjab and the Administrator. New Mandi Township in their joint written statement pleaded  that  the  plea  of  allotting  plots  on reserve price  had been thoroughly examined at all levels of the Government,  at different  times, and  it was considered more suitable to sell the plots in open auction only. It was denied that  the auctioning the plots in the new Mandi would result in  the appellants  being up-rooted  or that they had any legal right for allotment of plots Further the policy of the State  Government was  only to  sell the  plots in  open auction to  the public at large. It was further pleaded that there was  no policy  of the  State Government  to allot the plots in  the new  mandi: that  the appellants  could not be allotted plots  and they  could purchase  the same  in  open auction, which  in no  way was unconstitutional and that the demands of the appellants for allotment of plots was neither legal nor justifiable. It was also denied that the motive of the  State   Government  was   profit  earning.   Since  the Government was  determined not  to preserve  the monopoly of the existing  Commission Agents  and with  a  view  to  free farmers from  the exploitation/malpractices  fampart in  the trade, carried out in old Mandi where there was no space for unloading of  good-trains it  had been  decided to  sell the plots by public auction. In rainy season, water collected up to knee  level in  the old  Mandi which resulted in damaging the produce  of the  poor farmers.  It was also pleaded that the appellants  were not  entitled to get plots in new Mandi as they  would not  be removed  from their existing shops in the old  Mandi or  compelled to  shift their business in the new Mandi.  Further, the  existing sub-yard or the old Mandi would not be abolished. It was denied that the action of the respondents to sell the plots in public auction is violative of Articles  14, 19(1)(g)  and 31  of  the  constitution  of India.      By the  impugned judgment  dated 20.12.1994,  the  full Bench of  the High Court while dismissing the Writ Petitions and Letter Patent Appeals, came to the following conclusion:      "In view  of the  above discussion,      we are  of the considered view that      the ousters  of the  old Mandi  are      not entitled  to get plots/sites in      the new  Mandi as a matter of right      by virtue of their being earlier in      business for  sale and  purchase of      agricultural  produce  particularly      when there  was sufficient time gap      between the  denotification of  the      old Mandi notification of new Mandi      as a  principal market  yard on one      hand and Notification under Section      8 of  the Act  on the  other  hand,      where after notification of the new      Mandi all  the sale and purchase of      agricultural   produce   within   a      specified  distance  from  the  new      principal market yard is prohibited      and  the  State  of  the  competent      authority    had    already    made      provisions for  adequate number  of      plots/open sites  in the  new mandi      and the plots made available in the      new Mandi  are sold in open auction      giving  equal  opportunity  to  the      licensees and  other  persons  from      the public  who wanted  to enter in

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    the trade  of purchase  and sale of      agricultural  produce  in  the  new      Mandi. Apart  from  that  the  fact      that  aggrieved  persons  including      the petitioners  had been given two      months time  by the Single Bench to      shift their  business  to  the  new      Mandi would also be a most relevant      factor for determining the right of      the ousters  from the old Mandi for      getting plots  or sites  in the new      Mandi. We  are further  of the view      that the  sale of  plots in the new      Mandi by public auction is the best      method for  giving such  plots  and      would   be    preferable   to   the      allotment of  plots to such ousters      by pick  and choose method. Thus in      order to  get new sites or plots in      the new  Mandi, in  our  view,  the      ousters of the old Mandi shall have      to compete  with general  public in      open auction."      On behalf  of the  appellants, three  contentions  have been raised  by  Mr.  R.K.Jain  the  learned  counsel  while relying upon  the order  of this  Court  dated  9.5.1995  in Appeal arising  out S.L.P  (c) No. 20644 of 1993 Harbans Lal Subhash Chand  & Ors.  Vs. State of Punjab & Ors. and Appeal arising out of S.L.P (c) No. 5229 of 1994 Lachman Das Sunder Dass & Ors. Vs. State of Punjab & Ors, relating to allotment of plots in the new Mandies at Ferozepur and Rajpura, it was submitted that  in the  present case  also alternative sites should be  allotted at the concessional rates or on lease to the appellants. In the said order it was, inter alia, stated that the auction already held in the new Mandies will not be affected. A  person who  was an  existing licensee  would be allotted a plot in the new Mandi on payment of a lump sum of Rs. 1.65,000/- for Ferozepur and Rs. 2.50,000/- for Rajpura. The second  submission was  that the State was duty bound to provide to  the existing licensees a place to do business at the reasonable  prices in  the new  Mandi and  without  such provision being  made, the  old Mandi cannot be stopped from functioning. It was, lastly, submitted that the State cannot adopt a procedure of allotment in the new Mandi by which the existing  licensees  can  be  thrown  out  of  business  all together  by   forcing  them   to  compete  with  outsiders. including the properly dealers.      The  aforesaid  order  dated  9.5.1995  can  be  of  no assistance to  the appellants. Firstly, the order was passed with the  consent of  both the  parties,  which  consent  is lacking  in   the  present   case,   Secondly,   the   order specifically states  that the  same "shall not be treated as precedent". Faced  with this.  Mr. Jain  contended that even though the  said order  may not  be regarded  as a precedent nevertheless the  State which  had earlier  agreed to  allot plots to  the existing  licensees in  Ferozepur and  Fazilka cannot  take   a  different   stand  with   regard  to   the establishment of  new Mandies  in other  parts of the State. There  is   no  force  in  this  contention.  What  are  the circumstances, which  led the  State to agree to the passing of  the   consent  order  are  not  known.  Furthermore  the contention of  the appellant  is that  the alternative sites should be sold to them at the reserve price plus 25%. In the aforesaid order,  however, this  formula was not adopted and the court  had directed the proposed sites to be allotted on

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lump sum  payment of  Rs. 1,65,000/-  per plot  in Ferozepur Mandi  and   Rs.  2,50,000/-  per  plot  in  Rajpura  Mandi. According to  the Advocate  General, the State had agreed to the passing  of the consent order inasmuch as on 24.9.1995 a letter had been written by the Government to the effect that allotment of  plots in  the new  Mandies will be made at the reserve price  plus 25%  to all  Artias. By  another  letter dated 26.9.1985 the aforesaid decision of the Government was withdrawn Auction  at Ferozepur  was notified  for 4.12.1985 while in  Rajpura, auction was held on 10.11.1986. The State Government, it  was submitted  by the  Advocate General, had consented to  sell all the plots at fixed price in favour of the appellants  therein and  not be  auction because  of the aforesaid letter  dated 24.9.1985.  It was further contended that the  transfer was  to be  at price  which was above the reserved  price   and  the  figure  of  Rs.  1.65,000/-  and Rs.2.50,000/- in  respect of  Rajpura  was  stated  to  have arrived at by taking the average of the auction prices which had been  realist on  the auction  of the other plots in the said Mandies.  It is  clear, therefore  that  the  aforesaid order of  this court  can give no right to the appellants to the allotment of land at a concessional rate.      In support  of this contention that the State was bound to provide alternative sites at the reasonable prices in the new Mandi  to the existing licensees. Mr.Jain relied upon an order dated  7.8.1991 passed in civil Appeal Nos. 3194-95 of 1991. Prem  Chand Tarlok  Chand & Ors. Vs. State of Haryana. In that  case the  State of Haryana had a policy whereby 45% of the  available accommodation at the new site was reserved for the  existing licensees  which was to be allotted on the basis of lots to be cast. In this connection if was observed that normally  once the  Government  starts  regulating  the place of sale of agricultural produce covered by the Act and does not  permit any other place to be used for the purpose, there is an inherent obligation on the Government to provide at the  new site  for all  the licensed  dealers  sufficient accommodation for  carrying on their trade and until that is done it  would not  be possible for the Government to direct closure of  the old  site". The Advocate General is right in contending that  the aforesaid  observation did  not require the allotment  of  alternative  sites  to  be  made  at  the concessional rates.  In fact  this was not the issue in that case.  All   that   was   observed   was   that   sufficient accommodation was to be provided to all the licensed dealers to carry on their trade. Moreover the policy of allotment of sites of the State of Punjab is different from the policy of the State  of Haryana with regard to which the order in Prem Chand’s case (supra) was passed. In the State of Punjab, all the sites  are allotted  by public  auction. This  gives  an opportunity to  all the  existing licensed dealers, and also to the  new entrants, to compete and obtain sites in the new Mandi. Therefore,  all the existing licensed dealers who may be having  a place  of business  in the  old Mandi do have a right to  acquire by  auction sites  at  the  new  place  of business in  the new  Mandi. This  Court never  directed  in Premchand’s case  (supra) that  alternative sites  should be allotted at a reasonable price or be given on lease. Putting new sites  to auction and allowing everyone to compete would tantamount to  the Government  providing an  opportunity  to enable the  existing  licensees  to  shift  their  place  of business to  the new  Mandi if they so desire. Therefore the observations in  Premchand’s case (supra) to the effect that there was  an  obligation  to  provide  new  sites  for  all licensed dealers  would only mean that an opportunity should be granted  to the  licensed dealers to acquire sites in the

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new Mandi.      It was  submitted by Mr. Jain that if alternative sites are not provided to the existing licensed dealers in the new Mandi, they  would be  deprived of their livelihood and this will result  in violation  of their fundamental rights under Articles 14, 19(1)(g) & 21 of the constitution of India.      The scheme  of the  Act and the Rules framed thereunder show that  shifting of  the Mandi  from one place to another without providing  for an  alternative site  or a  shop to a licensed dealer, cannot violate any statutory or fundamental right of any of the licensees.      It is  not in  dispute  that  after  declaration  of  a notified market  area under  Section 6 of the Act, the State Government may  notify one  principal market yard and one or more sub-market  yards under  Section 7  of the  Act.  These market  yards   are  established   so  as   to  enable   the agriculturists to  bring their  agricultural produce  to the market for  sale. The  sale is to take place, in the markets established in  Punjab, in the manner provided by Rule 24 of the Punjab  Agricultural Produce  Markets  (General)  Rules, 1962 (hereinafter referred to as ’the Rules’) which reads as under:      "SALE OF AGRICULTURAL PRODUCE      (1)  All    agricultural    produce      brought into  the market  for  sale      shall be  sold by  open auction  in      the principal or sub market yard.      (2)  Nothing in  sub-rule (1) shall      apply to  a retail  sale as  may be      specified in  the bye-laws  of  the      Committee.      (3)  A committee  may, and on being      directed by  the [chairman  of  the      Board or  an officer  authorized by      him]  shall  fix  timings  for  the      starting and closing of the auction      in  respect   of  any  agricultural      produce,  other   than  fruits  and      vegetables.      (4)  The  price   of   agricultural      produce shall  not  be  settled  by      secret signs  or secret  bid and no      deduction shall  be made  from  the      agreed price of the consignment.      (5)  The  auction   shall  not   be      conducted by  any person other than      the   person    engaged   by    the      Committee:.           Provided  that  under  special      circumstances the  [chairman of the      Board or  an officer  authorized by      him] may  allow a committee to make      or    permit     any    alternative      arrangement:.           Provided further  that nothing      in this sub-rule shall apply to the      auction of vegetables and fruits.      (6)  The highest  bid offered  by a      buyer at  an auction  and at  which      the seller of the produce gives his      consent to  sell his produce, shall      be the sale price of the produce.      (7)  The buyer  shall be considered      to have  thoroughly  inspected  the      produce for which he has made a bid

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    and  he  shall  have  no  right  to      retract it.      (8)  As soon  as the  auction for a      lot is  over the  auctioneer  shall      fill in  the particulars  in a book      to be  maintained  in  Form  H  and      shall secure both the buyer and the      seller    or    their    respective      representatives,  whoever   may  be      present at the spot.      [ (8-A) A register in form HH shall      be maintained by the Committee. The      agricultural produce which remained      unsold during the course of auction      be  entered   and   it   shall   be      obligatory  for   every  dealer  or      kacha Arhtiya  or commission agent,      as the case may be, to report about      the unsold produce to the committee      as soon as his agricultural produce      is sold]      (9)  The buyer shall be responsible      to  get  the  agricultural  produce      weighed   immediately   after   the      auction or  on  the  same  day  the      produce is  purchased by  him  Land      the seller  or the  buyer shall  be      liable for any damage to or loss of      or deterioration  in,  the  produce      after the  auction according to the      local usage  or custom  for as  per      provisions of rule 13].      (10) A person engaged by a producer      to sell agricultural produce on his      behalf shall  not. act  as a  buyer      either for  himself or on behalf of      another person  in respect  of such      produce [without  the prior consent      of the producer:].      (11) The kacha  Arhtiya shall  make      payment to  the seller  immediately      after the weighment is over.      (12) Every kacha  Arhtiya shall  on      delivery of agricultural produce to      a buyer  execute  a  memorandum  in      Form I  and deliver the same to the      buyer  on   the  same  day  or  the      following  day,   mentioning   sale      proceeds   plus    market   charges      admissible  under  rules  and  bye-      laws.  The   counterfoil  shall  be      retained by the kacha Arhtiya:.           [Provided that nothing in this      sub   rule    shall   apply   where      agricultural     produce,     being      vegetable or  fruit, not  exceeding      one   quintal    in    weight    is      delivered.]      (13) In the  absence of any written      agreement to  the contrary the sale      price   of   agricultural   produce      purchased under  these rules  shall      be paid  by the  buyer to the kacha      Arhtiya on delivery of Form I.      (14) Delivery    of    agricultural

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    produce after  sale  shall  not  be      made or  taken unless and until the      kacha Arhtiya  or,  if  the  seller      does not  employ a  kacha  Arhtiya,      the buyer has given to the seller a      sale  voucher   in  form   J,   the      counterfoil   whereof    shall   be      retained by  the kacha  Arhtiya  or      the buyer, as the case may be."      It is  apparent that the aforesaid Rule stipulates that all agricultural  produce brought  into the  market for sale shall be  sold by  open auction in the principal or the sub- market yard.  In order to enable the sale by auction to take place, platforms  are constructed  for the producers to come and place  their produce. Establishment of a Mandi in effect means the  erection  of  the  platforms  where  agricultural produce is  brought and placed for sale by auction. In order to further  facilitate  the  purchase  and  sale  shops  are constructed which  are acquired  by  the  licensed  dealers. Neither the  Act, nor  the Rules, makes is obligatory on the State Government  to construct such shops before notifying a market yard.  The existence  of  such  shops  only  make  it convenient  for   the  licensed  dealers  to  conduct  their business. but  is not  essential that  they must  have shops within the  Mandi to  enable them to carry on their business activities.      A dealer  is granted  a licence under Section 10 of the Act which  allows him  to carry  on business  in a  notified market area.  According  to  Rule  17(5)  of  the  Rules,  a separate licence  is required  by a  person for  "setting up establishing or  continuing or allowing to be continued more than  one   place  for   the  purchase,  sale,  storage  and processing of  agricultural produce  in  the  same  notified market area"  In other  words, a  dealer having one place of business in  a notified  area is  required to  have only one licence which would entitled him to carry on business in any of the Mandies situated in that notified area but, if he has more than  one places of business, then for each place he is obliged under  Rule 17(5)  of the  Rules to  have a separate licence. Neither  the Act  nor the  Rules requires  that the place of  business of  a licensed  dealer must be within the precincts of  the Mandi.  All that  he  Act  and  the  Rules require is  that the  auction, for  the sale and purchase of agricultural produce,  shall be  within the  notified market yard or  sub-yard The appellants and other licensees who are already having  shops or  plots in  the old Mandies have not been deprived of the same and nor are they prevented, in any manner, from  carrying on  in their  shops  their  trade  or business  other   than  that   of  purchase   and  sale   of agricultural  produce   in  public   auction.  The  sale  of agricultural produce  by auction, as contemplated by the Act and the  Rules, does not take place in the business premises or shops  of the  licensed dealers  even if they are located within the Mandi. It can only take place on the platforms in the said  market yards.  Once the  purchase  and  sale  take place, then  bye-law 11  of the  Bye-laws framed  under  the Rules  makes  it  obligatory  for  the  buyer  to  lift  the agricultural produce  bought  by  him  within  48  hours  of auction or purchase. The agricultural produce brought to the Mandi by  the agriculturist  has thus to be removed from the auction platforms  by the buyers and there is no requirement of law that the produce so purchased has to be stored within the Mandi  itself. Therefore as long as the licensed dealers continue to  hold valid  licences for  a notified  area then irrespective of  the locations  of their  shops or  offices,

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they are  entitled to  do their business even if they do not have shops  within the Mandi. This being so, the question of appellants fundamental rights under Articles 14, 19(1)(g) or 21 of the constitution of India being violated do not arise.      The decision  to sell  the sites  in the  new Mandi  by auction would  mean that  the existing licensees may have to compete with the non-licensees or newcomers for the purchase of the  sites within the Mandi. It is not possible to accept the contention  that adoption  of a  procedure  to  sell  by auction is  in any  way bad in law. If the contention of the appellants  in  accepted,  the  result  would  be  that  the business of  commission agents  would continue  to be in the hands of the old and established licensed dealers and no new person would  have any chance of entering the said business. The Act  and the  Rules framed thereunder do not contain any provision which  provides for  or makes it obligatory on the State to construct shops or to provide for sites and to give preferences to  the existing  licensed dealers  It  is  well recognized that  one of the fairest means, which a State can adopt  without  showing  any  favour  in  disposing  of  the property is  to sell  it  by  auction  specially  where  the property in question is business premises. The sale of plots by public  auction  is  a  judicious  method  for  providing sites/plots and  givens an equal opportunity to all sections of public  who may  be interested  in carrying out trade for the purchase  and sale of agricultural produce including the appellants or  other licensees who had already been carrying on such trade or business in the old Mandies.      Mr. R.L.  Batta, learned  Senior Counsel  appearing for some other  dealers of  Jagraon, submitted  that in  the old Mandi, which was spread over an area of 25 acres, there were 109 grain  shops measuring  57" x  14". The  total number of licensees working  therein were stated to be 250. In the new Mandi, there  are 139  grain shops  measuring 125" x 20". By providing for  bigger shops,  it was  submitted, the smaller traders have  not been able to get shops in the new Mandi in public  auction.  Referring  to  Circular  dated  14.11.1994 issued  by   the  Director,  colonization,  Punjab,  it  was submitted that  more grain  shops of  smaller sizes  can  be constructed in the new Mandi.      In the  aforesaid  Circular  dated  14.11.1994,  it  is stated that  five grain  shops in  the new  Mandi in Jagraon remained to  be auctioned.  The Circular recognized the need for more  grain shops  and provision  being made  for future expansion of  the Mandi.  It was stated in the circular that an  area  measuring  6.33  acres  "has  been  earmarked  for additional auction  platforms in the north-west of the Mandi site some  smaller or  bigger size grain shops can be carved out in  this area.  Divisionl Town  planner, Mandi  Board is being requested  to send the requirement of additional grain shops. Some  grain shops  of suitable size be planned in the reserve area  mentioned above  in such a way that there is a parking in  the front of these shops and service lane on the sides keeping  in view the immediate requirement of plots in Mandi".      The area  of the  grain shops  of the new Mandi is much larger than  that of  the area  of the  shops of  old Mandi. Though, the  new Mandi  is spread  over an  area  of  75.125 acres, the number of shops which are earmarked for grain are only 139. The Advocate General, however submitted that apart from 139  shops which  are earmarked for grain, large number of booths  have been  constructed which  can also be used by the licensed  dealers dealing  in  grain.  Apart  from  that considering the  nature of  the  business  of  the  licensed dealers, it  is possible  for them to conduct their business

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in smaller  shops.  Therefore,  even  if  shops  are  to  be allotted by  auction the  smaller size shops would be within easy reach  of the  smaller traders.  Keeping  in  view  the aforesaid Circular dated 14.11.1994, but without issuing any formal directions, it is hoped that some more grain shops or booths of  smaller sizes will be constructed or earmarked in the aforesaid  area measuring  6.33 acres  and when  this is done, the  smaller traders,  who are  still out  of the  new Mandi, would  be in  a position to acquire business premises within the  new Mandi.  The scheme envisaged in the circular dated 14.11.1994  should be  considered,  and  if  possible, implemented at an early date.      Before the  High Court,  provision of  Section 8 of the Act was  challenged by  contending that  the same  infringes upon the freedom to carry on trade and business enshrined in Article 19(1)(g)  of the  constitution because  the power is given to  the State  Government to  notify a  place  as  sub market yard  under Section  7 and  to prohibit any person to set up  or establish  any other  market within the limits of such notified  market or  within a  distance thereof  to  be notified in  the official  gazette. The  said Act  has  been enacted  for   the  purpose  of  better  regulation  of  the purchase/sale/storage and processing of agricultural produce and establishment of markets for agricultural produce in the State of  Punjab .  It is  quite obvious that for the proper regulation or  monitoring of such sale, unauthorized markets within the  notified  area  should  not  be  allowed  to  be established. It  cannot be  doubted that Section 8 does give the power  to place  8 restriction  on the  establishment of unauthorized markets,  but such  a restriction  is in public interest and bears a reasonable nexus to the object which is sought to  be achieved by the Act. The new Mandies have been established with  a view  to remove the old Mandies from the congested areas  and with the object of providing better and more modern  facilities to  the farmers and others connected with the  purchase and sale of agricultural produce. The new Mandies have  been located  at such  places so as to provide suitable and  convenient location  to  all  concerned  after taking into  consideration the  development of  the town and city as a whole. In fact no argument was addressed impugning the locations which have been selected for the establishment of new  Mandies. The  High Court  was. therefore,  right  in concluding that neither the provisions of Sections 7 or 8 of the  Act  nor  the  restrictions  imposed  by  the  impugned Notification violated  the fundamental  rights contained  in Article  19(1)(g)   of  the   Constitution  and   that   the restrictions imposed were reasonable.      As already  mentioned the proposal to shift the Mandies to new  sites has  given rise  to a  spate of Writ Petitions being filed before the Punjab & Haryana High Court. This has resulted in  inordinate delay  in the  establishment of  the Mandies and  the closure  of the old ones. Even though a new grain Mandi  was declared  to be  established in  Jagraon in March, 1978,  it is  only recently according to the Advocate General, that the old Mandi has been closed and business has started in  the new  Mandi. The  litigation  has  presumably resulted in  the escalation  of the cost of constructing new shops, besides  resulting in  the old Mandies to continue in the  congested   areas  perhaps   causing  great   deal   of inconvenience to  the general public living in the vicinity. Though, all  the plots  in the  new Mandies  at Jagraon  and Fazilka have  been auctioned  but in  Ludhiana the old Mandi has not  yet been  denotified and  not a  single auction  of plots has  taken place.  It is  clear  that  this  dealy  in shifting to new sites has occurred due to the actions of the

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existing licensed dealers of the old Mandies. Different Writ Petitions  have   been  filed  in  the  High  Court  without disclosing the  pendency of earlier petitions and the orders passed thereon.  The conduct  of some  of the  appellants of withholding this relevant fact from the court and misleading it to  pass interim  orders, despite  the fact  that similar stay  orders  passed  earlier  had  been  vacated  has  been adversely commented  upon in Civil Writ Petition No. 7211 of 1994 by  G.J. Singhvi  J. of the Punjab & Haryana High Court in his  judgement dated  4.9.1995. That  Writ  Petition  was dismissed  on   the  ground  of  the  said  conduct  of  the appellants  and   heavy  costs  were  imposed  some  of  the petitioners (appellants  herein) in  the said  Writ Petition No.7211 of  1994 before the High Court are the appellants in Appeal arising  out of  Special Leave Petition (C) No. 10997 of 1995.  These are appellant Nos. 3,7,9,21,24,32,37,and 41. Appellant Nos.1,2,16,19,20,23,28, 34.35.36.37.39 & 45 in the Appeal arising  out of  Special Leave Petition (C) No. 11139 of 1995  are persons  who were  also petitioners in the said Writ Petition No. 7211 of 1994.      Apart from  the fact that these appellants were parties to the latter Writ petition and had not disclosed the filing of the  earlier  writ  petition  in  the  High  Court  these appellants in  Appeal arising  out of Special Leave Petition (C) No.  11139 of 1995 have also not disclosed the filing of Writ Petition No. 15883 of 1993 in the Punjab & Haryana High Court. That  petition was filed by persons who had purchased sites in the new Mandi at Jagraon and had wanted a direction for the  establishment of  the said Mandi and the closure of the old one. 149 of the appellants in Special Leave Petition (C) No.  11139 of  1995 moved an application before the High Court and  were impleaded as parties. The said Writ Petition No. 15831  of 1993  was allowed  and  the  validity  of  the Notification issued  under Sections  7 &  8 of  the Act  was upheld. The  filing of said civil Writ Petition No. 15831 of 1993 and  its being  allowed by  the punjab  & Haryana  High Court by  its Judgment dated 8.4.1994 has not been disclosed in Special  Leave Petition (C) No. 11139 of 1995 even though there were  some common petitioners. There is a merit in the contention of  the Advocate General that even in this Court, an attempt  has been  made on the part of the appellants not to disclose full facts and to secure a favorable order. Such a practice  cannot be  encouraged and  has to be deprecated. Accordingly, while  dismissing these  appeals, we  impose  a cost  of   Rs  5,000/-   on  each   of  the  appellant  Nos. 3,7,9.21.24.32.37 and  41 in the Appeal arising out of S.L.P (c)   No.    10997    of    1995    and    appellant    Nos. 1,2,16,19,20,22,23,28,34,35,36,37,39 and  45 in  the  Appeal arising out  of S.L.P. (C) No. 11139 of 1995. The cost to be paid to the State of Punjab.