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PETITIONER: KRISHI UTPADAN MANDI SAMITI,HALDWANI ETC.ETC.

       Vs.

RESPONDENT: M/S.INDIAN WOOD PRODUCTS LTD.AND ANOTHER

DATE OF JUDGMENT:       23/02/1996

BENCH: JEEVAN REDDY, B.P. (J) BENCH: JEEVAN REDDY, B.P. (J) PARIPOORNAN, K.S.(J)

CITATION:  1996 AIR 1251            1996 SCC  (3) 321  JT 1996 (4)     8        1996 SCALE  (2)694

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      Heard counsel for both the parties.      Leave granted.      The only question in this batch of appeals is where the transaction of  sale of  specified agricultural  produce  is between a trader and a trader, whether the purchasing trader is liable  to pay  the market fee in cases where the selling trader does not collect it from him. This question has to be answered  with   reference  to   the  language   of  Section 17(iii)(b) which reads as under:      "17. Powers  of the  Committee.-- A      Committee shall,  far the  purposes      of this Act, have the power to-      (iii) levy and collect:      (b)  market  fee,  which  shall  be      payable on  transactions of sale of      specified agricultural  produce  in      the  market  area  at  such  rates,      being not  less than  one percentum      and not  more than two percentum of      the  price   of  the   agricultural      produce  so   sold,  as  the  State      Government    may     specify    by      notification, and such fee shall be      realized in the following manner-      (1) if  the produce is sold through      a commission  agent may realise the      market fee  from the  purchaser and      shall be  liable to pay the same to      the Committee;      (2) if  the  produce  is  purchased      directly  by   a  trader   from   a      producer the trader shall be liable      to pay the same to the Committee;      (3) if  the produce is purchased by

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    a trader  from another  trader  the      trader  selling   the  produce  may      realise it  from the  purchaser and      shall be  liable to  pay the market      fee to the Committee; and      (4) in  any other  case of  sale of      such produce,  the purchaser  shall      be liable  to pay the market fee to      the Committee;      [Provisos omitted as unnecessary]" A  reading  of  the  aforesaid  provisions  shows  that  the liability to pay the market fee is placed primarily upon the purchaser. Sub-clauses (i) and (4) expressly say so. So does sub-clause (2).  [Sub-clause (2) is also consistent with the general policy  underlying such enactments that the producer of specified  agricultural produce  is not to be made liable to pay  the fee.]  Now, coming to sub-clause (3), with which we are  directly concerned  herein,  it  says  that  "trader selling the  produce may  realise it  from the purchaser and shall be  liable to pay the market fee to the committee". On the  basis  of  the  language  of  this  sub-clause,  it  is contended by  the purchasing dealers (who are respondents in these appeals)  that the  levy in  such a  case is  upon the selling trader and that it is for him to pay the market fee. It is submitted that such selling trader may collect the fee from the purchaser or he may not. Whether the selling trader collects it  from the  purchaser or  not, it  is he  who  is liable to  pay the market fee since the levy is upon him, it is submitted.  We are unable to agree with the submission. A reading of  the  several  sub-clauses  shows,  as  mentioned hereinbefore, that  the liability  to pay  the market fee is always upon  the purchaser. It is no different in sub-clause (3). If  the ultimate  liability was not upon the purchaser, there was  no meaning  in the  Legislature saying  that  the selling producer  may realise the fee from the purchaser and make it  over to  the Committee. The use of the word "shall" in the said use means that where the selling trader realises the fee  from the  purchasing trader, he is bound to make it over to the Committee. But where the selling trader does not realise it  from the purchaser, he is under no obligation to pay the  market fee  to the  Committee. In  such a case, the liability to  pay the  market fee  is  upon  the  purchasing trader. This  interpretation, in  our opinion,  accords with the scheme of clause (b) of Section 17(iii) of the Act.      Dr.Sankar Ghosh,  learned counsel  for the respondents, contended that  prior to the amendment of Section 17(iii)(b) by Uttar  Pradesh Act  7 of  1973 [with effect from June 12, 1973], clause  (b) was  clear and specific in the sense that it expressly  made the  purchaser liable  to pay  the market fee. Learned counsel says that by amendment the said concept was modified,  and in  certain cases, i.e., in the situation provided for  by sub-clause  (3) of  the amended clause (b), the levy  was shifted  to the  selling trader. The unamended clause (b) read as under:      "(b) market  fees, which  shall  be      payable    by     purchasers     on      transactions of  sale of  specified      agricultural produce  in the market      area at  such rates, being not less      than one  and a  half per centum of      the  price   of  the   agricultural      produce  so   sold  as   the  State      Government    may     specify    by      notification in the gazette." While it  is true that unamended clause (b) expressly placed

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the levy  upon the  purchaser, it  is not  possible to agree with Dr.Sankar  Ghosh that  the basic  concept that ultimate liability to  pay is  that of  the purchaser was given up in the amended  clauses (b).  The said  concept has  only  been eludicated with reference to specific situations.      In  this   connection,  the  learned  counsel  for  the appellant has  brought to  our notice  the decision  of this Court in  Upaj  Mandi  Samiti  &  Ors.  v.  Orient  Paper  & Industries  Limited   (1994  (7)  J.T.  414)  rendered  with reference to the Madhya Pradesh Krishi Upaj Mandi Adhiniyam, 1973. The relevant provision in the Madhya Pradesh Act is in Section 19(2), which read as under:      "The market  fees shall  be payable      by  the   buyer  in   the  notified      agricultural produce  and shall not      be deducted  from the price payable      to the seller.           Provided that  where the buyer      of a  notified agricultural produce      cannot be  identified, all the fees      shall be  payable by the person who      may  have   sold  or   brought  the      produce  for  sale  in  the  market      area;           Provided further  that in case      of a commercial transaction between      traders in  the  market  area,  the      market fees  shall be collected and      paid by the seller.           Provided further  also that no      fees  shall  be  levied  upto  31st      March  1990  on  such  agricultural      produce as  may be specified by the      State Government by notification in      this behalf  if  such  produce  has      been sold  outside the  market yard      or   sub-market    yard    by    an      agriculturist  to   a   Cooperative      Society of which he is a member."      This Court  held, construing  the above provision, that the primary  liability to  pay the  fee is  placed upon  the buyer and  that the  second proviso  to sub-section  (2)  of Section 19  does not detract from the said Rule. It was held that the  said proviso  merely enables the seller to collect the fee  from the  buyer and pass it on to the Committee. It is true  that there is a certain distinction in the language used in  the Madhya Pradesh Act and Uttar Pradesh Act but as explained above,  the central concept is same under both the enactments. Be  that as it may, on the language of the Uttar Pradesh Act,  we  have  come  to  the  conclusion  mentioned hereinbefore.      For the above reasons, we set aside the judgment of the High Court  and hold  that where the selling trader does not collect the fee from the purchasing trader, the liability to pay the  market fee  remains to be that of the purchaser and he cannot  refuse to  pay the said fee. Of course, where the selling trader  collects the  fee from the purchaser-trader, he is under an obligation to make over the fee to the Market Committee.      It is  brought to  our  notice  by  Sri  Garg,  learned counsel for  some of  the respondents  herein, that  certain individual factual  questions were raised by the respondents in the  writ petition. But these factual questions could not have been  gone into in the writ petition. The proper course for the concerned respondents is to raise the said questions

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in accordance with the procedure prescribed by law, i.e., by following the remedies provided under the Act.      The appeals  are accordingly  allowed  with  the  above observations.      No costs.