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PETITIONER: RAMESHCHANDRA KACHARDAS PORWAL & ORS.

       Vs.

RESPONDENT: STATE OF MAHARASHTRA & ORS. ETC.

DATE OF JUDGMENT17/02/1981

BENCH: REDDY, O. CHINNAPPA (J) BENCH: REDDY, O. CHINNAPPA (J) PATHAK, R.S. ISLAM, BAHARUL (J)

CITATION:  1981 AIR 1127            1981 SCR  (2) 866  1981 SCC  (2) 722        1981 SCALE  (1)334  CITATOR INFO :  R          1985 SC 679  (33)  RF         1986 SC 515  (76)  R          1987 SC1802  (10)

ACT:      Constitution   of   India   1950,   Article   91(1)(g)- Maharashtra Agricultural  Produce Marketing (Regulation) Act 1963,  SS   5  and  6  &  Maharashtra  Agricultural  Produce Marketing  (Regulation)   Rules   1963,   Rule   5-Karnataka Agricultural Produce Marketing (Regulation) Act 1966, SS. 8, 10 and  11 &  Bihar Agricultural  Produce Marketing Act 1960 Sections 5,  15-Trading in  specified agricultural  produce- State  Government-Setting  up  of  new  market  area-Whether valid.      Notification   declaring   that   traditional   trading activity in old market area be shifted to new market-Whether permissible-Infringement of  fundamental right  to carry  on trade-Whether arises.      Administrative law-Principles of natural justice-Market yard disestablished  at one place and established at another place-Duty to invite and hear objections-Whether arises.

HEADNOTE:      The   Maharashtra    Agricultural   Produce   Marketing (Regulation) Act  1963 provides  for the  regulation of  the marketing of  agricultural produce  in market  areas  to  be established therefor  in the  State, Market Committees to be constituted  for   purposes  connected  with  such  markets, establishment of  Market Fund  for purposes  of  the  Market Committees, and  for purposes  connected with these matters. Section 3  empowers the  Government by  a notification to be published in  the Official Gazette, to declare its intention of regulating  the marketing of such agricultural produce in such areas  as may  be specified and section 4 provides that the marketing of the agricultural produce shall be regulated under the  Act in  the area  specified in  the notification. Section(1) provides a principal market for every market area and  one  or  more  subsidiary  markets,  and  section  5(2) empowers the  Director to establish the principal market for the marketing  of specified  agricultural produce. Section 6 provides that  no person  shall use  any place in the market

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area for  the marketing of the declared agricultural produce or operate  in the market area or in any market therein as a trader,  commission   agent,  broker,  processor,  weighman, measurer, surveyor, warehouseman or in any other capacity in relation to  the  marketing  of  the  declared  agricultural produce, on  and after  the date  on which  the  declaration under section  4(1) is  made.  Section  6(2)  provides  that section 6(1) shall not apply to sales by retail, sales by an agriculturist who  sells his  own produce;  and sales  by  a person to another for the latter’s personal consumption.      The   Maharashtra    Agricultural   Produce   Marketing (Regulation) Rules,  1963 were  promulgated pursuant  to the power conferred  by section  60 of  the Act. Rule 5 provides that  no  person  shall  market  any  declared  agricultural produce in  any place  in  a  market  area  other  than  the principal market or subsidiary 867 market established  therein. The proviso to the rule enables the Director of Marketing to authorise a Market Committee to permit a  trader or  commission  agent  to  market  declared agricultural  produce   or  to   permit  any   other  market functionary to  operate at  any place within the market area as may  be mentioned  by the Market Committee in the licence granted to such trader.      The petitioners  who were  wholesale traders  in onions and potatoes  in their  writ petitions  to the Supreme Court assailed the  notices requiring them to carry on business in regulated agricultural  produce in  the market  yard at  the specified areas  of  the  State,  and  at  no  other  place, contending that:  (1) the  1963  Act,  did  not  invest  the Director of Marketing or the Market Committee with any power to  compel  a  trader  to  transfer  this  activity  from  a previously existing  market to  a  principal  or  subsidiary market established under section 5 of the Act (2) Rule 5 was inconsistent with  section 6  and therefore ultra vires. (3) The Bombay  Agricultural Produce  Markets Act,  1939 and the Agricultural Produce  Marketing Acts of other States such as Karnataka provided or indicated by an express provision that once a  market was  established it  was not  permissible  to market or  trade outside  the market and that the absence of such an  express provision  in the  1963 Act  showed that no such ban  was contemplated  by the Act. (4) The transactions between trader  and trader  and transactions  by  which  the agricultural produce  was imported into the market area from outside the market areas were outside the purview of the Act and if  section 5  and rule  5 were  intended to  cover such transactions also  they were  invalid. (5) The statue itself imposed and  provided for stringent supervision and control, sufficient to  regulate  transactions  between  traders  and traders,  that  it  was  superfluous  to  insist  that  such transactions do take place in the market only. (6) Section 6 of the  Act made  a distinction  between (a)  the use of any place in  the market  area for the marketing of the declared agricultural produce,  and (b)  the operation  in the market areas or  in any  market therein  as  a  trader,  commission agent,  broker   etc.  in   relation  to  the  marketing  of agricultural produce and that the distinction was in reality a distinction between a sale by a producer to a trader and a subsequent sale  by a  trader to  a trader, and consequently the ban  imposed by  Rule 5  applied only  to a  sale of the agricultural produce  by a producer to a trader. (7) Section 13(1A) which  declared the  area comprising greater Bombay a market area  for the  purposes of  the Act was invalid as it was wholly unreasonable to constitute such a large area into a  single   market  area.   (8)  when   a  market  yard  was

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disestablished at one place and established at another place it was  the duty  of the  concerned authority  to invite and hear objections and failing to do so, was a violation of the principles  of   natural  justice   and   the   notification establishing the market yard elsewhere was bad.      Dismissing the writ petitions and appeals:- ^      HELD: 1.  (i) The power conferred by S. 5 of the Act to establish a  principal market or a subsidiary market carries with it  the power to disestablish such market. Section 5 of the Act,  read with  sections 14  and 21  of the Maharashtra General Clauses  Act vest  enough power  in the  Director to close an  existing market  and establish  it elsewhere.  The repealed Act  of 1939 also empowered the State Government to declare any  market area  to be  a principal market yard for the area.  The power  to issue  notifications,  orders  etc. includes 868 the power  to exercise in like manner to add to, amend, vary or rescind  any notification,  order, rule  etc.  Any  other construction would  frustrate the object of the legislation. [880 A-C, 881 C, D]      Bapubhai Ratanchand  Shah v.  State of Bombay LVII 1955 Bom. L.R. p. 892, 903-904, approved.      (ii) Rule  5 is  not  ultra  vires.  If  for  the  more effective regulation  of marketing  it is  thought that  all marketing operations  in respect  of  declared  agricultural produce should  be carried  on only  in  the  principal  and subsidiary markets  established under  the Act, it cannot be said that  a rule  made  for  that  purpose  is  beyond  the competence of  the rule  making  authority  under  the  Act. [881G, 882C]      (iii)  The  submission  that  all  regulatory  measures contemplated by  the Act  and  the  Rules  may  be  enforced equally  effectively   wherever  business   in  agricultural produce is  carried  on  in  the  market  area  outside  the principal and subsidiary markets as within the principal and subsidiary markets  is without  force. If  that is done, the regulation will  very soon be reduced to a farce. The Market Committee will be forced to employ an unduly large number of officers. The  producer’s  interest  will  not  be  properly served because  a producer  will not be able to deal face to face with  several traders  and would  have little chance of obtaining the best price for his produce. This cannot happen if he  is persuaded  to take  his produce  to the  place  of business of  an individual  trader outside  the principal or subsidiary market.  There is  a greater possibility of abuse and greater  likelihood of  the  object  of  the  Act  being frustrated. Fair  price to  the agriculturist will soon be a mirage and  the evil  sought to  be prevented  will persist. [882 E-H]      Kewal Krishan  Puri &  Anr. v.  State of  Punjab & Ors. [1979] 3 S.C.R. p. 1217, 1247, referred to.      2. There  can  be  no  question  of  any  inconsistency between section  6 and  rule 5.  Section 6  is applicable to both the  situations before  and after  the establishment of markets, and  is expressly  declared to  be subject  to  the rules providing for regulating the marketing of agricultural produce in the market area by stipulating that the marketing shall be  carried on in the market established in the market area. [883F, D-E]      3. The  rule prescribing that no marketing operation in any  declared  agricultural  produce  shall  be  carried  on outside the  principal or  subsidiary markets  is consistent and in  consonance with  the scheme of the Act and is within

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the  competence   of  the   rule  making  authority  and  is reasonable. Absence  of an  express provision  in the Act to the effect  that once  a market  is established  it was  not permissible to  market  or  trade  in  agricultural  produce outside the market itself merely means that greater latitude is  given   to  the   rule  making  authority  to  introduce regulation of  marketing by  stages and to ban all marketing activity  outside  the  market.  This  cannot  lead  to  the inference that  the rule  making authority  has no  power to make a rule banning marketing activity 869 outside the  market once the market is established even when such a ban is found to be necessary. [884 B, 883 H-884 A]      4. (i) The assumption that the Act was conceived in the interest of  the agriculturists  only and intended for their sole benefit  is not  well founded.  One  of  the  principal objects sought  to be achieved by the Act is the securing of a fair  price to  the agriculturist  for his  produce by the elimination of  middlemen and  other detracting factors. But that is not the only object. The Act is intended to regulate marketing of  agricultural and  certain other  produce.  The marketing of  agricultural produce  is not  confined to  the first transaction  of sale by the producer to the trader but must necessarily  include all subsequent transactions in the course of  the movement  of the  commodity into the ultimate hands of  the consumer  so long, of course, as the commodity retains its  original  character  as  agricultural  produce. While middlemen  are sought to be eliminated, it is wrong to view  the  Act  as  one  aimed  at  legitimate  and  genuine traders.[884D-F]      (ii)   Promotion   of   grading,   standardisation   of agricultural   produce,   weighment,   the   provision   for settlement of disputes arising out of transactions connected with the  marketing of  agricultural produce  and  ancillary matters are  as much  to the  benefit of the producer as the consumer. Clearly  therefore  the  regulation  of  marketing contemplated by the Act involves benefits to the traders too in a  large way.  Regulation of  marketing  of  agricultural produce, if  confined to  the sales  by producers within the marketing  area   to  traders,   will  very   soon  lead  to circumvention in the guise of sales by traders to traders or import of  agricultural produce from outside the market area to within the market area. [884G-885B]      5. (i) It is not correct to say that the statute itself imposed and  provided for  such stringent  supervision,  and control  sufficient   and  more,  to  regulate  transactions between traders  and traders,  that it  was  superfluous  to insist that  such transactions  do take  place in the market only. The  other supervisory  measures in  the Act cannot be said to be sufficient to make it unnecessary for the traders to move  their places of business into the market. No amount of  supervision   may  be  as  effective  as  when  all  the transactions take  place within the market. Nor is effective supervision at  all possible  if traders  are dispersed  all over the  market area.  The rendering  of  services  to  the traders also  will  be  far  easier.  Therefore,  localising marketing  is  helpful  and  necessary  for  regulation  and control and for providing facilities. [887E-888A]      (ii) The  requirement that the locus of transactions of sale and  purchase of  agricultural produce, including those between trade  and trader, should be in the market cannot be said  to  be  harsh  or  an  excessive  restriction  on  the Fundamental Right to carry on trade. [888B]      6. The  proviso to  rule 5  speaks of  operating at any place within  the market  area by a trader, commission agent

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or other  market functionary after obtaining a licence while the main  provision refers  to  the  marketing  of  declared agricultural produce  at any  place in  the market  area. It cannot be  contended that  the proviso  is unrelated  to the main provision. According 870 to ordinary  canons of construction the proper function of a proviso is  to accept  and deal  with  a  case  which  would otherwise fall  within the  general  language  of  the  main enactment. [888F-G]      7.  There   was  nothing  unreal  and  unreasonable  in establishing a single market for a large area. It had become imperative in the public interest that the markets should be shifted from their former place to the new area. The present village was  chosen because  it was  free  from  congestion, conveniently located near another trunk road. A railway line linking with  both  the  Western  Railway  and  the  Central Railway and so on. There is, therefore, nothing unreasonable in the  statutory declaration  of Greater  Bombay and Turbhe Village as  a market  area; nor  in the  establishment of  a single market  in Turbhe Village for the entire market area. [889B-E]      8. Where  a market yard was disestablished at one place and established  at another place, no exercise of a judicial or quasi-judicial function is involved. All that is involved is the  declaration by a notification of the Government that a certain  place shall  be a  principal market  yard  for  a market  area,   upon  which  declaration  certain  statutory provisions  at   once  spring   into  action   and   certain consequences prescribed  by statute  follow  forthwith.  The making  of  the  declaration  in  this  context  is  an  act legislative  in   character  and   does  not   obligate  the observance of the rules of natural justice. [891C-F]      Baits v.  Lord Hailsham  (1972) 1  WLR 1373  & Tulsipur Sugar Co.  v. Notified  Area Committee  [1980]  2  SCR  1111 referred to.      9.  The  seeming  confusion  in  the  large  number  of notifications issued by the Government from time to time was not the  result of  any arbitrary  or erratic  action on the part of  the Government  but was  the result  of a desire to accommodate the traders as much as possible. The old markets had existed from ancient days and it had become necessary to establish  modern   market  yards   with  conveniences   and facilities. When  this was  sought to  be  done  there  were representations by  the traders  and the  Government thought that it was advisable to give the traders sufficient time to enable them  to prepare  themselves to  move  into  the  new market yards.  The  notifications  establishing  new  market yards were  therefore, cancelled  and the  old markets  were allowed to  function for  sometime. Later  when the time was thought to  be ripe,  notifications establishing  new market yards were once again issued. [893 F, D-E]

JUDGMENT:      ORIGINAL JURISDICTION: Writ Petition Nos. 692,937-1063, 1111-1115, 1558/80, 5441-62, 6217/80 and 6529-6551/80.      (Under Article 32 of the Constitution.)                             AND      Civil Appeal Nos. 3297 & 2689 of 1979.      Appeals by  special leave  from the Judgment and Orders dated 25-5-1979  & 22-1-1979  of the Karnataka High Court in Regular Second  Appeal No.  551/77 &  W.P. Nos.  551/77  and 6555/78.

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871                             WITH      Civil Appeal No. 1895 of 1979.      Appeal by  special leave  from the  Judgment and  Order dated 22-1-1979  of the  Karnataka High  Court in  W.P.  No. 35/76.                             AND      Civil Appeal No. 1507 of 1980.      Appeal by  Special Leave  from the  Judgment and  Order dated 2-5-1980  of  the  Patna  High  Court  in  Civil  Writ Jurisdiction Case No. 394 of 1980.                             AND      Civil Appeal No. 1715-1716 of 1980.      Appeals by special from the Judgements and Orders dated 30-8-1979 and  2-5-1980 of  the Patna High Court in C.W.J.C. Nos. 5136/78 & 840/80.      S. V.  Gupte, V.  M. Tarkunde,  Soli J. Sorabjee, K. K. Venugopal,  K.   N.  Bhatt  and  T.  S.  Sundrajan  for  the Petitioners in WP Nos. 692, 937-1063 and 1111-1115/80.      Dr. Y.  S. Chitale,  R. P. Bhatt and A. K. Goel for the Petitioner in W. P. No. 1558/80.      S. G.  Sundraswamy, Ravindran, Vijay Kumar Verma and K. N. Bhat for the Appellant in CA Nos. 1895/79 & 2689/79.      V. M.  Tarkunde, K.  R. Nagaraja,  P. K.  Rao and Aloke Bhattacharya for the Appellant in CA No. 3297/79.      Soli J.  Sorabjee, B.  P. Maheshwari,  Suresh Sethi and Miss Asha Jain for the Appellant in CA No. 1507/80.      Lal Narain  Sinha, attorney  General, O. P. Rana and M. N. Shroff  for Respondent No. 1 in WP Nos. 692, 937-1063 and 1111-1115/80.      A. K. Goyal for the Petitioner in WP 5441-62 of 1980.      K. K.  Singhvi, A.  K. Gupta,  Brij Bhushan  and N.  P. Mahindru for  RR-3 in  WP 692, 937-1063, 1111-1115/80 and RR in WP No. 1558/80.      Lal Narain  Sinha, Attorney  General and  N. Nettar for RR-1 in CA 1895 and 2689/79.      B. Keshava  Iyengar, Advocate General and N. Nettar for State of Karnataka in CA 1895 & 2689/79. 872      H. B.  Datar, Miss  Madhu Moolchandani  and R. B. Datar for RR-2 in CA 1895 & 2689/79.      K. K.  Singhvi, N.  P. Mahindru  and A. K. Gupta for RR No. 3 in WP Nos. 5441-62/80.      S. S.  Javali, B.  P.  Singh,  Ranjit  Kumar  and  Ravi Prakash for Intervener in CA Nos. 1895/79.      Lal Narain  Sinha, Attorney General, R. B. Mehto, B. P. Sinha and  Naresh K.  Sharma for  the Intervener  in WP  No. 692/80.      Lal Narain  Sinha, Attorney General, R. B. Mehto, B. P. Singh Ravi Prakash, Ranjit Kumar and Naresh K. Sharma for RR 3-5 in CA 1507/80.      K. G.  Bhagat and D. Goburdhan for State of Bihar in CA 1507/80.      S. S.  Ray and  M. P. Jha for the Appellant in CA 1715- 1716/80.      Lal Narain  Sinha, Attorney General, R. B. Mehto, B. P. Singh. Ravi  Prakash, Ranjit  Kumar, Naresh K. Sharma and J. S. Rathore for RR 3-5 in CA Nos. 1715-1716/80.      V. M.  Tarkunde, K.  R. Nagaraja,  P. K.  Rao and Aloke Bhattacharya for Petitioner in WP 6217/80, 6529-6551/80.      H. B.  Datar, Miss  Madhu Moolchandani and R. B. Dattar for the Respondent (Market Committee).      H. B. Datar and N. Nettar for RR (State of Karnataka).      K. G. Bhagat and D. Goburdhan for the State of Bihar in CA 1715-1716/80.

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    V. M. Tarkunde, P. K. Rao, Aloke Bhattacharya and K. R. Nagaraja for the Petitioner in WP 6529-51/80.      N. Nettar for the Respondent in WP No. 6529-51/80.      The Judgment of the Court was delivered by      CHINNAPPA REDDY,  J. Reluctant  traders,  unwilling  to move their  places of  business into  the markets  or market yards, as  they are  differently called  in  the  States  of Maharashtra, Bihar  and  Karnataka,  set  up  by  respective Market Committees  under various  State Agricultural Produce Marketing Acts,  offer their  resistance through  these Writ Petitions and  Civil Appeals. We will first recite the facts in one  of the  cases (Writ  Petition No.  692 of  1980) and thereafter consider  the questions raised in that as well as the other cases. The Petitioner in Writ Peti- 873 tion No.  692 of  1980 is  a trader  presently  carrying  on business in  ’Gur’ and  other commodities  at  1221  Bhavani Peth, Pune.  In exercise  of the  powers conferred  by  Sec. 4A(2) of  the Bombay Agricultural Produce Markets Act, 1939, by a  notification dated July 6, 1961, the locality known as Bhavanipeth and  Nanapeth of  the Pune  City was declared as one of  the principal  market  yards  for  the  market  area consisting of  Pune City and Haveli Talukas. The market area had been  so declared  by a  notification dated May 1, 1957, pursuant to  a declaration  that it was intended to regulate the purchase  and sale  of ’gur’  in the  market  area.  The Bombay Agricultural  Produce Markets Act, 1939, was repealed and  replaced   by  the   Maharashtra  Agricultural  Produce Marketing (Regulation)  Act, 1963. By Sec. 64 of the Act the notifications previously issued etc. under the provisions of the repealed Act were kept alive for the purposes of the new Act. On  March 23,  1971, the present Market Committee known as Krishi  Utpanna Bazar Samiti, Pune, was constituted under Sec. 4(1)  of the  1963 Act. On April 21, 1971, the Director of Agricultural Marketing published a notification declaring his intention  to regulate  marketing of  a large  number of commodities in  the market  area of  Haveli  and  Pune  City Taluks. On  October 4,  1975, the  Director of  Agricultural Marketing, Maharashtra  State, exercising  his powers  under Sec. 5(2)  of the Maharashtra Agricultural Produce Marketing (Regulation) Act,  1963,  declared  the  locality  known  as Market Yard Gultekadi as the principal market for the market area for  the marketing  of various commodities specified in the notification.  Thereafter on October 8, 1975, a Circular was issued  to all  Adatis, merchants,  and licence holders, particularly  wholesale   dealers  dealing  in  Gur,  Halad, Dhania,  etc.   in  the   vicinity  of  Bhavanipeth-Nanapeth informing them  that Bhavanipeth-Nanapeth will cease to be a market from  the midnight  of October  13, 1975 and that the market yard  Gultekadi had  been declared  as the  principal market for the market area. The circular went on to say that anyone carrying  on business  anywhere except  Gultekadi was liable to  be prosecuted.  The result  of  the  notification dated October  4, 1975,  and the  Circular dated  October 8, 1975 was  that it was not permissible for anyone to carry on trade  in  any  of  the  notified  agricultural  commodities outside the  Gultekadi market  yard on and after October 14, 1975. It  meant that traders like the petitioner who had for generations been  carrying on  business in these commodities in Bhavanipeth-Nanapeth  had perforce to move into Gultekadi market  yard  if  they  wanted  to  stay  in  the  business. Consequent upon  representations made  by the Pune Merchants Chamber and  the interim  order in  a Writ petition filed in the Bombay  High Court  by the Chamber the date notified for the commencement  of the functioning of the Principal Market

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in Gulekadi 874 was postponed from time to time, Finally, by a public notice dated March  6,  1980,  all  wholesale  traders,  commission agents  and   others  dealing  in  agricultural  produce  in Bhavanipeth-Nanapeth and  surrounding  areas  were  informed that with effect form March 17, 1980, wholesale trade in the regulated agricultural  produce could  be carried  on in the Gultekadi market  yard only.  The petitioner seeks to resist the  situation  thus  sought  to  be  forced  upon  him  and challenges the  notification dated  October 4, 1975, and the consequential notices  requiring him to carry on business in regulated agricultural  produce in the Gultekadi market yard and at  no other place. Similarly, in Writ Petition Nos. 937 to 1063 of 1980 and Writ Petition Nos. 1111 to 1115 of 1980, 132 other  traders who are presently carrying on business in the existing  market of  Bhavanipeth-Nanapeth  question  the notification and the notices following the notification.      In Writ  Petition Nos. 1558 of 1980 and 5441 to 5462 of 1980 the  petitioners are  wholesale traders  in onions  and potatoes who  carry on  their business  in the  Maulana Azad Road Market  in Bombay. They complain against a notification dated December  5, 1978  by which it was declared that after January 26,  1979, marketing of potatoes and onions shall be carried on at the Principal Market at Turbhe and at no other place. It  appears  that  initially,  for  the  market  area comprising  Greater  Bombay  and  Turbhe  Village  in  Thana Taluka, the  newly established market at Turbhe was declared as the  Principal Market and the existing markets at Maulana Azad Road  and Mahatma Phule Mandai were declared subsidiary markets. This  was by a notification dated January 15, 1977. Later by  the impugned  notification dated December 5, 1978, the subsidiary  markets were  abolished and  the  market  at Turbhe alone  was declared  as the  Principal Market for the area comprising Greater Bombay and Turbhe village.      It was  argued on  behalf of  the petitioners  that the Maharashtra Agricultural  Produce Marketing (Regulation) Act 1963 did  not invest the Director of Marketing or the Market Committee with  any power to compel a trader to transfer his activity from a previously existing market to a principal or subsidiary market established under Sec. 5 of the Act. There was no  provision in  the Act  by which  a trader  could  be compelled to  market declared  agricultural produce  in  the principal or  subsidiary market established under Sec. 5 and in no other place. This was a feature which distinguished it from the  Bombay Act  of 1939  and the  Agricultural Produce Marketing  Acts   of  some  other  States.  Rule  5  of  the Maharashtra  Agricultural   Produce  Marketing  (Regulation) Rules, 1967, which purported to provide that no person shall market any declared agricultural produce 875 in any  place in  a market  area other  than  the  Principal Market or  subsidiary market  established therein  was ultra vires. It  was also  submitted  that  once  a  principal  or subsidiary market  was established at one place there was no provision  in   the  Act  which  enabled  the  principal  or subsidiary market to be transferred to another place. In any event it was urged that the notification was an unreasonable restriction on  the right  of the  petitioners to  carry  on their trade.  It was also submitted. and this appeared to be the main  thrust of  the argument of most of the counsel for the  various   petitioners  that   the  Act  did  not  cover transactions between  trader and  trader and transactions by which the  agricultural produce was imported into the market area from outside the market area. Secs. 5 and 6 and Rules 5

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and 6  had to  be so  read-the  language  permitted  such  a construction-as to  make a  distinction between  a  sale  of agricultural produce  by a producer to a trader which had to be within  a market  and a  subsequent sale by a trader to a trader which  could be  anywhere in  the market area. It was submitted that if Sections 5 and 6 and Rules 5 and 6 were to be construed  as compelling  transactions between trader and trader also to take place within a market they were invalid. In the  petitions of  the Bombay  merchants it  was  further urged  that  Sec.  13(1A)  which  was  a  special  provision declaring Greater  Bombay and  Turbhe village  a Market Area was unreasonable and invalid.      For a  proper appreciation  of the submissions made, it is necessary  to refer to some of the relevant provisions of the Maharashtra  Agricultural Produce Marketing (Regulation) Act 1963  and the Maharashtra Agricultural Produce Marketing (Regulation) Rules  1967. The  long title  of the Act is "An Act to  regulate the  marketing of  agricultural and certain other produce  in market areas and markets to be established therefor  in   the  State;  to  confer  powers  upon  Market Committees to  be constituted  in connection  with or acting for purposes  connected  with  such  markets;  to  establish Market Fund  for purposes  of the  Market Committees  and to provide for  purposes connected with the matters aforesaid". Sec. 2(1)(h)  defines "market"  as  meaning  "any  principal market established  for the  purposes of this Act and also a subsidiary market".  Sec. 2(1)(i)  defines "market  area" as meaning "an  area specified in a declaration made under Sec. 4". Sec.  2(1)(o)  defines  "retail  sale"  as  meaning  "in relation to  any agricultural  produce, sale of that produce not exceeding  such quantity  as a  Market Committee  may by bye-laws determine  to  be  a  retail  sale".  Sec.  2(1)(t) defines "trader"  as meaning  "a person  who buys  or  sells agricultural produce,  as a  principal or as duly authorised agent  of   one  or  more  persons".  Sec.  3  empowers  the Government  to  declare  its  intention  of  regulating  the marketing of  such agricultural produce, in such area as may be 876 specified in  a notification to be published in the official Gazette. Objections  or suggestions which may be received by the State  Government within  a specified  period are  to be considered by  the  State  Government.  Thereafter,  Sec.  4 provides, the  State  Government  may  declare,  by  another notification that  the marketing of the agricultural produce specified in  the notification.  The area specified shall be the market  area. Sec.  5(1) provides  that there shall be a principal market for every market area and there may also be one of  more  subsidiary  markets.  Sec  5(2)  empowers  the Director, by  notification, to  establish any  place in  any market area  to be  the principal  market for the marking of agricultural  produce   specified   in   the   notification. Subsidiary markets  may also be established likewise. Sec. 5 is important and it may, therefore, be extracted here:           "5(1)  For  every  market  area,  there  shall  be      established  a  principal  market,  and  there  may  be      established one or more subsidiary markets.           (2) The  Director shall, as soon as possible after      the issue  of a  notification under  sub-section (1) of      section 4,  by a  notification in  the Official Gazette      establish   any   place   (including   any   structure,      enclosure, open  place or  locality) in any market area      to be  the principal  market for  the marketing  of the      agricultural produce  specified in  that  notification;      and  may   by  the   same  notification,   or  by  like

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    notification, establish in any other like places in the      market area,  subsidiary markets  for the  marketing of      such agricultural produce". Sec. 6  provides that,  no person shall use any place in the market area  for the  marketing of the declared agricultural produce or  operate in  the market  area or  in  any  market therein as  a trader,  commission agent,  broker, processor, weighman, measurer,  surveyor, warehouseman  or in any other capacity in  relation  to  the  marketing  of  the  declared agricultural produce,  on and  after the  date on  which the declaration under  Sec. 4(1)  is made,  except in conformity with the  terms and  conditions of  a licence granted by the Market Committee  or by the Director when a Market Committee has not  yet started functioning. It is important to mention here that  Sec. 6(1)  is expressly made subject to the rules providing  for  regulating  the  marketing  of  agricultural produce in  any place  in the  market area.  Sec. 6(2)  also provides that  Sec. 6(1) shall not apply to sales by retail; sales by  an agriculturist  who sells  his own  produce; and sales 877 by  a   person  to   another  for   the  latter’s   personal consumption. Sec. 6 also may be extracted here:           "(6) (1) Subject to the provisions of this section      and of the rules providing for regulating the marketing      of agricultural  produce in  any place  in  the  market      area, no  person shall,  on and after the date on which      the  declaration  is  made  under  sub-section  (1)  of      section 4,  without, or  otherwise than  in  conformity      with the terms and conditions of, a licence (granted by      the Director  when  a  Market  Committee  has  not  yet      started functioning;  and in  any other  case,  by  the      Market Committee) in this behalf,-           (a) use  any place  in the  market  area  for  the      marketing of the declared agricultural produce, or           (b) operate  in the  market area  or in any market      therein  as   a  trader,   commission  agent,   broker,      processor, weighman,  measurer, surveyor,  warehouseman      or in  any other  capacity in relation to the marketing      of the declared agricultural produce.           (2) Nothing  in sub-section  (1)  shall  apply  to      sales by  retail; sales  by an  agriculturist who sells      his own  produce; nor  to sales  by a  person where  he      himself, sells  to another  who buys  for his  personal      consumption or  the consumption  of any  member of  his      family." Sec. 7  empowers the Market Committee, subject to rules made in that  behalf and  after making  such enquiry as it thinks fit to  grant or renew a licence for the use of any place in the market area for marketing of the agricultural produce or for operating  therein as a trader etc. The Market Committee may refuse  to grant  or renew any licence for reasons to be recorded in  writing. Sec. 8 enables the Market Committee to suspend or  cancel any  licence. Sec. 10 makes provision for the constitution  of a Board by the Market Committee for the settlement of  disputes between  buyers and sellers or their agents inclusive  of disputes  relating to  quality, weight, payment etc.  Sec. 11  provides for  the establishment  of a Market Committee by the State Government. Sections 12 and 13 deal with  the  incorporation  and  constitution  of  Market Committees. Sec.  13(1A) makes special provision for Greater Bombay and  Turbhe  village.  The  area  comprising  Greater Bombay and  Turbhe village is deemed to be a market area for the  purposes   of  the   Act  and  a  Market  Committee  is constituted with  a different  composition from other Market

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Committees. 878 Sec.  29   enumerates  the   powers  and  duties  of  Market Committees.  It  is  the  duty  of  a  Market  Committee  to implement the  provisions of the Act, the rules and bye-laws made  thereunder   in  the  market  area,  to  provide  such facilities for  marketing of agricultural produce therein as the Director  may from  time to  time direct  and to do such other  acts   as  may   be  required   in  relation  to  the superintendence, direction  and control  of markets  or  for regulating marketing of agricultural produce in any place in the market  area. The  Market Committee is also empowered to maintain and manage the market, including admissions to, and conditions for  use of,  markets; to  regulate marketing  of agricultural produce  in the  market area  of the market; to establish centres  for the  collection of  such agricultural produce in  the market  area as  the  State  Government  may notify from  time to time; to collect, maintain, disseminate and supply  information  in  respect  of  production,  sale, storage, processing,  prices and  movement  of  agricultural produce (including information relating to crops, statistics and marketing  intelligence); to  take all possible steps to prevent adulteration; to promote grading and standardization of agricultural  produce; and,  to enforce the provisions of the Act, rules and bye-laws and conditions of licences. Sec. 10A enables  the Market Committee to open Collection Centres for marketing  of notified  produce. Any  person wishing  to sell any  notified produce  in a market area may tender such produce at the collection centre. Sec. 31 makes it competent to a  Market Committee  to levy  and collect fees from every purchaser of  agricultural produce  marketed in  the  market area. Sec.  35  enables  a  Market  Committee  to  employ  a Secretary and  such other  officers and  servants as  may be necessary  for   the  management  of  the  market,  for  the collection,  maintenance,   dissemination  and   supply   of information relating  to  crops,  statistics  and  marketing intelligence and  for carrying out its duties under the Act. Sec. 36 provides for the creation of Market Fund and Sec. 37 enumerates the  purposes for  which the  Market Fund  may be expended. Among those purposes are the acquisition of a site or  sites  for  the  market,  maintenance,  development  and improvement of  the market,  construction of, and repairs to buildings necessary  for the purposes of such market and the health,  convenience   and  safety   of  persons  using  it, maintenance of standard weights and measures, collection and dissemination of  information, propaganda  for  agricultural improvement and orderly marketing etc. etc. Section 60 makes a  contravention   of  the   provisions  of   Section   6(1) punishable. Section 60 empowers the State Government to make rules for carrying into effect the purposes of the Act.      Pursuant to  the power  conferred by  Sec.  60  of  the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963, rules have 879 been made. Rule 5 prescribes that no person shall market any declared agricultural  produce in any place in a market area other than principal market or subsidiary market established therein. The  proviso  to  Rule  5  enables  the  Direct  of Marketing to authorise a Market Committee to permit a trader or Commission  Agent to market declared agricultural produce or to  permit any other market functionary to operate at any place within  the market  area as  may be  mentioned by  the Market Committee in the licence granted to such trader. This is obviously, a reserve power vested in the Market Committee to be exercised but in exceptional cases, and, on an express

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authorisation from  the Director,  subject to  the terms and conditions imposed  by him.  Rule 6 prescribes the procedure by which  any person  desiring to  use any place in a market area for  marketing of  any declared agricultural produce or for operating  therein as  a  trader,  commission  agent  or broker may  obtain a  licence. He  is required  to  make  an application in  the prescribed  form  and  submit  with  the application a  solvency certificate,  cash security  or bank guarantee and  a character  certificate. The Director or the Market Committee  as the  case may  be, may grant or renew a licence,  after  satisfying  himself  or  itself  about  the solvency certificate,  cash security  or bank guarantee, the capacity of  the applicant  for providing adequate equipment for smooth  conduct of  the business  and the conduct of the applicant. If  the licence  is refused, reasons are required to be  recorded in  writing. Rule  7 deals with the grant of licences to  warehousemen, measurers, surveyors, processors, weighmen, etc.  Rule 8(2) bans the employment of a broker in relation to  marketing of  any declared agricultural produce except in  relation to marketing of such produce by a trader with another  trader. Rule 12 stipulates that every declared agricultural produce  shall be  sold by public auction. Rule 15  requires  every  declared  agricultural  produce  to  be weighed by licensed weighmen or measurer. Rule 16, 17 and 18 deal with  the preparation of records in connection with the transactions of  purchase of  declared agricultural produce. Rule 20  obliges every  purchaser of  declared  agricultural produce to  make payment  to the  seller or  his  commission agent immediately  after the  sale on  the same day. Rule 21 prohibits the  adulteration of declared agricultural produce in the  market area  or market. Rule 22 provides for grading and  standardization   of  agricultural   produce.  Rule  25 provides for  inspection of  weights and  measures. Rule  27 requires the  Market Committee  to publish  a daily  list of prices of  the different  varieties and  grades of  declared agricultural produce  marketed in the market area. There are several other rules providing for the constitution of Market Committees, preparation of their budgets, discharge of their other duties  etc., but  for  our  purpose  it  may  not  be necessary to refer to them. 880      We have  seen that  Sec. 5 authorises the establishment of a  principal market  and one  or more subsidiary markets. Quite obviously the power to establish a principal market or a  subsidiary   market  carries   with  it   the  power   to disestablish (if  such  an  expression  may  be  used)  such market. Quite  obviously again, the power given by Sec. 5 to establish a  principal or subsidiary market may be exercised from time  to time.  These follow from Sections 14 and 21 of the Maharashtra  General Clauses  Act. So,  Sec.  5  of  the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963, read  with Sections  14  and  21  of  the  Maharashtra General Clauses  Act vest  enough power  in the  Director to close an  existing market  and establish  it elsewhere. Sec. 4A(2) of  the Bombay Agricultural Produce Markets Act, 1939, (the Act which preceded the Maharashtra Agricultural Produce Marketing Regulation) Act, empowered the State Government to declare any  enclosure, building  or locality  in any market area to  be a  principal market  yard for the area and other enclosures, buildings  or localities  to be one or more sub- market yards for the area. There was a proviso to Sec. 4A(2) which provided  that out  of the  enclosures,  buildings  or localities  declared   to  be   market  yards   before   the commencement of  the  Bombay  Agricultural  Produce  Markets (Amendment) Act  1954, one  shall  be  declared  to  be  the

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principal market  yard for  the market  area and  others, if any, to  be one or more sub-market yards for the area Before the 1954 amendment Act Vakhar Bagh was the market yard for a certain market  area.  In  October  1954,  (after  the  1954 amendment came  into force)  Vakhar Bagh was declared as the principal market  yard for the market area under the proviso to  S.   4A(2)  of   the  Act.  A  few  days  later  another notification was  issued declaring  some other  place as the principal market  yard for  the market area. Vakhar Bagh was not even  declared as a sub-market yard. The effect was that Vakhar Bagh Market Yard ceased to be a market yard. This was questioned in  Bapubhai Ratanchand  Shah  v.  The  State  of Bombay. The argument was that Vakhar Bagh had necessarily to be declared  as a  Principal Market  Yard since there was no sub-market yard  under the  proviso to  Sec. 4A(2)  and that once having  been so  declared another market yard could not be substituted  in its  place. This argument was repelled by Chagla, C.  J. and Tendolkar, J. It was observed (at p. 903, 904):           "Now, s.  4A(2) confers  upon the  Government  the      power to declare any enclosure, building or locality in      any market  area to  be a principal market yard for the      area and  other enclosures,  buildings or localities to      be one or more sub- 881      market yards  for the  area. It is clear that by reason      of s.  14 of  the General Clauses Act any power that is      conferred on  Government can  be exercised from time to      time as  occasion  requires.  Therefore,  it  would  be      clearly competent  to the  State Government  to declare      from time  to time which should be the principal market      yard and  which should  be sub-market yards. It is also      clear under  s. 21 of the General Clauses Act that when      a power  to issue notifications, orders, rules, or bye-      laws is  conferred, then that power includes a power to      exercise in  the like  manner and  subject to  the like      sanction and conditions, if any, to add to, amend, vary      or rescind any notifications, orders, rules or bye-laws      so  issued".........................  "under  s.  4A(2)      Government can  by issuing  notifications from  time to      time after  the principal  market yards which have been      set up  and which  did not  exist before the passing of      the Amending Act". We agree.  Any other  construction may  frustrate  the  very object of the legislation. Nothing may be expected to remain static in  this changing  world of  ours. A  market which is suitably and  conveniently located  today may be found to be unsuitable and  Inconvenient  tomorrow  on  account  of  the development  of   the  area  in  another  direction  or  the congestion  which  may  have  reduced  the  market  into  an Impossible, squalid place or for a variety of other reasons. To so  interpret the  provisions of the Agricultural Produce Marketing Regulation  Act as  prohibit the  abolition  of  a market once  established and  bar the transfer of the market to another  place would,  as we  said, be to defeat the very object of  the Act.  Neither the text nor the context of the relevant provisions  of the  Act warrant  such a prohibition and bar  and there  is no  reason to  imply any such. On the other hand  Sections 14  and 21  of the  Maharashtra General Clauses Act warrant our reading into Sec. 5 a power to close a market and establish it elsewhere.      The  submission   that  Rule   5  of   the  Maharashtra Agricultural Produce  Marketing Regulation  Rules 1967 which provides  that   no  person   shall  market   any   declared agricultural produce  in any  place in  a market  area other

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than the  principal market  or subsidiary market established therein is  ultra vires, is, in our opinion, equally without force. Sec.  60 of  the Act empowers the State Government to make rules for carrying into effect the purposes of the Act. It cannot  but be said that the establishment of a principal and  subsidiary   markets  for  the  marketing  of  declared agricultural  produce   and  the   bar   against   marketing operations being carried on elsewhere than in the markets so 882 established is  only to  further and  to give  effect to the purposes of  the Act.  The scheme  of the Act shows that the agricultural produce  whose  marketing  is  proposed  to  be regulated should  first be notified, a market area has to be declared in  respect of the notified agricultural produce, a Market Committee  has to be constituted for the market area, a principal  market and  one or more subsidiary markets have to be  established for  every market area, traders etc. have to be  licensed and  the Market  Committee  is  required  to provide facilities for marketing of agricultural produce, to superintend, direct  and control  the markets  and  regulate marketing of  agricultural produce.  Regulation of marketing of notified  agricultural produce  and the  establishment of principal and subsidiary markets are among the prime objects of  the  Act.  If  for  the  more  effective  regulation  of marketing it  is thought  that all  marketing operations  in respect of  declared agricultural  produce should be carried on only  in the principal and subsidiary markets established under the  Act, we  do not  see how  it can possibly be said that a  rule made  for that purpose is beyond the competence of the  rule making  authority under  the  Act.  It  is  not difficult  to   visualise  the  impossibility  of  effective regulation if marketing operations are allowed to be carried on outside the principal and subsidiary markets, anywhere in the market  area. The submission was that all the regulatory measures contemplated  by the  Act  and  the  rules  may  be enforced   equally    effectively   wherever   business   in agricultural produce  is  carried  on  in  the  market  area outside the  principal and  subsidiary markets as within the principal and  subsidiary markets.  On the face of it, it is difficult to  accept this  submission. The  regulation  will become impossible  and will  soon be  reduced to  a farce if traders are  allowed to  carry on  marketing  operations  in every nook  and  corner  of  the  market  area.  The  Market Committee will be forced to employ an unduly large number of officers who  will have  to run hither and thither, all over the market area. The regulation and control will soon become unmanageable. Nor  will the producers’ interests be properly served. Where  a producer  brings his produce to the market, he will  deal face  to face  not with  one but  with several traders, with a greater chance of getting the best price for his produce.  This cannot  happen if he is persuaded to take his produce to the place of business of an individual trader outside the  principal or  subsidiary  market.  There  is  a greater possibility  of abuse  and greater likelihood of the object of  the Act  being  frustrated.  Fair  price  to  the agriculturist will  soon be  a mirage and the evil sought to be prevented  will persist.  In Kewal Krishan Puri & Anr. v. State of  Punjab  &  Ors.(1)  this  Court  had  occasion  to observe: 883           "No body  can be allowed to establish a purchasing      centre of  his own  at any place he likes in the market      area without there being such a permission or authority      from the  Market Committee.  After all the whole object      of the  Act is  the  supervision  and  control  of  the

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    transactions  of  purchase  by  the  traders  from  the      agriculturists in  order to prevent exploitation of the      latter by  the former.  The supervision and control can      be effective  only in  specified localities  and places      and not throughout the extensive market area."      One of  the submissions of the learned Counsel was that Section 6  of the  Act contemplated  the use of any place in the  market   area  for   the  marketing   of  the  declared agricultural produce  on obtaining a licence from the Market Committee and,  therefore, Rule  5 which banned marketing at any place  outside  the  principal  and  subsidiary  markets though  such   place  was   within  the   market  area   was inconsistent with  Section 6  and  hence  ultra  vires.  The submission  ignores  the  circumstance  that  Section  6  is applicable to  both the  situations  before  and  after  the establishments of  markets. Where a market area is specified under Sec.  4 of the Act but no markets are yet established, marketing is  regulated by  licensing the traders etc. under Sec. 6.  After markets are established also, traders have to be licensed  under Sec.  6. But Sec. 6 is expressly declared to be  subject to  the rules  providing for  regulating  the marketing of agricultural produce in any place in the market area.  Rule  5  is  a  rule  providing  for  regulating  the marketing of  agricultural produce  in the  market  area  by stipulating that  the marketing  shall  be  carried  in  the market established in the market area.      Section 6  is, therefore,  subject to Rule 5. There can be no  question of  any inconsistency  between Section 6 and Rule 5.      Yet another  submission of the learned counsel was that the Bombay  Agricultural Produce  Markets Act  1939 and  the Agricultural Produce  Marketing Acts of other States such as Karnataka provided  or indicated  by express  provision that once a  market was  established it  was not  permissible  to market or  trade in agricultural produce outside the market, and that  the absence  of such  an express  provision in the Maharashtra Act  showed that no such ban was contemplated by the Act. We are unable to agree with the submission. Absence of an  express provision in the Act itself merely means that greater latitude  is given  to the  rule making authority to introduce regulation  of marketing  by stages and to ban all marketing activity outside the market. The latitude given to the rule making authority cannot lead to the 884 inference that  the rule  making authority  has no  power to make a  rule banning marketing activities outside the market once the  market is  established, even  when such  a ban  is found to be necessary.      We therefore,  hold that  the rule  prescribing that no marketing operation  in any  declared  agricultural  produce shall be  carried on  outside the  principal  or  subsidiary markets is  consistent and  in consonance with the scheme of the Act  and is  within the  competence of  the rule  making authority and  that it is reasonable. Next we pass on to the main submission  made on  behalf of the petitioners that the transactions between  trader and  trader and transactions by which the  agricultural produce was imported into the market area from  outside the  market area were outside the purview of the  Act and  that if  Sec. 5 and Rule 5 were intended to cover such  transactions also  they were  invalid. The basic assumption  of  the  submission  was  that  the  Maharashtra Agricultural Produce  Marketing Regulation Act was conceived in the interests of the agriculturists only and intended for their sole  benefit.  This  basic  assumption  is  not  well founded. It is true that one of the principal objects sought

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to be achieved by the Act is the securing of a fair price to the agriculturist. As the long title of the Act itself says, the  Act   is  intended   to  regulate   the  marketing   of agricultural and  certain other  produce. The  marketing  of agricultural  produce   is  not   confined  to   the   first transaction of  sale by  the producer to the trader but must necessarily  include  all  subsequent  transactions  in  the course of  the movement  of the  commodity into the ultimate hands of  the consumer, so long, of course, as the commodity retains its  original  character  as  agricultural  produce. While middlemen  are sought to be eliminated, it is wrong to view the Act as one aimed at legitimate and genuine traders. Far from it. The regulation and control is as much for their benefit as  it is  for the  benefit of  the producer and the ultimate consumer.  The elimination  of middlemen is as much in the  interest of  the trader  as it is in the interest of the producer.  Promotion of  grading and  standardization of agricultural produce  is as  much to  his benefit  as to the benefit  of   the  producer  or  consumer.  So  also  proper weighment. The  provision for settlement of disputes arising out  of   transactions  connected   with  the  marketing  of agricultural produce  and ancillary  matters is also for the benefit of  the trader.  It is  because of these and various other services  performed by  the Market  Committee for  the benefit of  the trader  that the trader is required to pay a fee. It is, therefore, clear 885 that the  regulation of  marketing contemplated  by the  Act involves benefits  to traders too in a large way. It is also clear to  our mind  that  the  regulation  of  marketing  of agricultural produce,  if confined to the sales by producers within the  market area  to traders,  will very soon lead to its circumvention  in the  guise  of  sales  by  traders  to traders or  import of  agricultural produce from outside the market  area   to  within  the  market  area.  The  Shirname Committee which  was appointed by the Maharashtra Government to review  the working  of the  Bombay Agricultural  Produce Marketing Act,  1939 considered  the matter  and reported as follows: (para 86):           "They (the  traders)  have  argued  that  imported      produce has nothing to do with the legislation meant to      confer benefits  on the  agriculturist. We  are  afraid      that this  view  is  untenable.  In  our  opinion,  the      benefits sought  to be  conferred by  the Act  are  not      compartmental inasmuch  as a  regulated market seeks to      benefit the  agriculturist within  its area  only.  The      problem of  regulation is  to be  viewed in  the  wider      context.  This   was  well   emphasised  by  the  Royal      Commission  on   Agriculture  which  stated  that  ’the      establishment of  properly regulated markets can act as      a powerful  agent in  bringing about  a reform which is      much  needed,   primarily  in   the  interest   of  the      cultivator, and  secondly, in  that of  all engaged  in      trade and  commerce in  India’. It  is in  this  larger      perspective that  an answer  to the  question is  to be      found. Moreover,  no agricultural  produce  goes  by  a      particular brand  with  the  result  that  the  produce      brought   from    a   particular   source   cannot   be      distinguished from  the one  secured from the other. If      the produce  imported from outside the market area were      to be exempted from the scope of the market regulation,      it would only provide an additional opportunity for the      traders to  circumvent the  provisions of  the Act  and      Rules even  in respect  of the agricultural commodities      produced  within   the  market   area.  We,  therefore,

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    recommend that  once a  commodity  is  regulated  in  a      market,  it   should   be   subjected   to   regulation      irrespective of its source or final destination." Again they said in paragraph 95 as follows:           "We wish to record here that there appears to be a      doubt  among   the  traders   as  well  as  the  Market      Committees about  the  precise  position  of  sales  of      commodities after  they are brought from agriculturists      by traders  vis-a-vis the provisions of the Act and the      Rules. It has been the belief of 886      the  traders  that  the  law  is  for  the  benefit  of      agriculturists and  on this  ground they  have  pleaded      that  its  scope  should  be  restricted  only  to  the      dealings with them. We are afraid that this plea is not      tenable. The  benefit of  a regulated  market  will  no      doubt  primarily   accrue  to  the  agriculturists  but      traders also  will be  profited by  it. Furthermore, no      market can  be regulated  effectively unless  and until      the regulation  covers  all  the  stages  of  marketing      within a particular area. Above all, it is not possible      to  distinguish   between  the   agricultural   produce      subjected to  resale  or  changing  hands  between  the      traders  themselves   and   the   one   sold   by   the      agriculturists through  the commission  agents  to  the      traders. We, therefore, recommend that all transactions      including the  resales between  the traders and traders      in respect  of the  agricultural commodities, which are      regulated should  be covered  by the Act and the Rules.      Thus in  a regulated  market, trading  in  agricultural      commodities irrespective of the fact as to whether they      are  produced  in  the  market  area  or  sold  by  the      agriculturists or not, will be brought within the scope      of the legislation." Nor are  we without  any guidance  from this Court itself in answering  the  question  posed.  In  Mohammadbhai  Khudabux Chhippa &  Anr. v.  The State  of Gujarat  &  Anr.,  it  was pointed out  while dealing with the provisions of the Bombay Agricultural Produce  Markets Act,  1939, as  follows (at p. 899):           "Next it  is urged  that the provisions in the Act      also affect  transaction between  traders and  traders,      and also  affect produce  not grown  within the  market      area if  it  is  sold  in  the  market  area.  That  is      undoubtedly so.  But if  control has to be effective in      the  interest   of  the   agricultural  producer   such      incidental control  of produce grown outside the market      area and  brought into  the market  yard  for  sale  is      necessary as  otherwise the provisions of the Act would      be evaded  by alleging that the particular produce sold      in the  market yard  was not  grown in the market area.      For the  same reasons  transactions between traders and      traders have  to be  controlled, if  the control in the      interest of  agricultural  producers  and  the  general      public has to be effective. We are therefore of opinion      that the  Act and  the Rules  and  Bye-laws  thereunder      cannot be struck down 887      on  this   ground.  The   contention  under  this  head      therefore must fail". Again in  Ram Chandra Kailash Kumar & Co. & Ors. v. State of U.P. &  Anr.,(1) dealing  with the contention that fee could be charged  only on  those transactions  in which the seller was the producer and not on any other transaction this Court disapproved the  view taken  by the  Mysore High  Court  and

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approved the  view taken  by the  Patna High  Court that fee could be  levied on  a transaction  of  buying  and  selling between a  dealer and  a dealer. Dealing with the contention that the  agricultural produce  not produced  in the  market area was outside the purview of the Act, it was observed (at p. 1134):           "It  is   also  not   correct  to   say  that  the      agricultural produce  must have  been produced  in  the      market area  in which  the first levy is made. It might      have been  produced in  another  market  area  or  even      outside the State of Uttar Pradesh but if a transaction      of sale  and purchase  takes place  of an  agricultural      produce as  defined in  the  Act  and  covered  by  the      notification within  a particular  market area then fee      can be charged in relation to the said transaction".      One of  the submissions  strenuously pressed  before us was that  the statute  itself imposed  and provided for such stringent supervision,  and control, sufficient and more, to regulate transactions  between traders  and traders, that it was superfluous  to insist  that such  transactions do  take place in  the market  only. We do not agree. Human ingenuity is such  that vents  and escapes will always be found in any system of  controls. We  are unable  to say  that the  other supervisory measures for which there is provision in the Act are sufficient  to make  it unnecessary  for the  traders to move their  places of business into the market. No amount of supervision may be as effective as when all the transactions take place  within the  market. Nor is effective supervision at all possible if traders are dispersed all over the market area. Every  Market Committee  will  then  require  a  large contingent of  officers for the purpose of supervision only. The rendering  of services  to the  traders also will be far easier and,  in the  ultimate analysis,  it will  be in  the interests of  the traders  themselves, at  any rate  in  the interests  of   the  vast  majority  of  the  traders,  that transactions between traders and traders also are carried on in the market only. There cannot be any doubt 888 that localising  marketing  is  helpful  and  necessary  for regulation and  control and for providing facilities. If all transactions are carried on in the market under the watchful and at  the same time, helpful vigil of the Market Committee and its  officers, there  is surely  a greater chance of the success of  the objectives of the statute. We are therefore, not prepared  to hold that the requirement that the locus of all  transactions  of  sale  and  purchase  of  agricultural produce, including  those between  trader and trader, should be in  the market  is harsh  and an excessive restriction on the Fundamental Right to carry on trade.      It was  the submission of the learned counsel that Sec. 6 of  the Maharashtra Act made a distinction between (a) the use of any place in the market area for the marketing of the declared agricultural  produce and  (b) the operation in the market area or in any market therein as a trader, commission agent,  broker,   etc.  in  relation  to  the  marketing  of agricultural produce and that the distinction was in reality a distinction between a sale by a producer to a trader and a subsequent sale  by a  trader to  a trader. The argument was that Rule  5 which  banned marketing  of any declared market agricultural produce  in any  place in  a market  area other than the  principal market  or subsidiary market established therein applied  only to  a sale of the agricultural produce by a  producer to  trade. We  do not see any warrant for the submission of  the learned  counsel in the language employed in Sec.  6 or  Rule 5. If the legislature or the rule making

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authority wanted  to make  a distinction  between a  sale of agricultural produce  by  a  producer  to  a  trader  and  a subsequent sale  by a trader to a trader, nothing would have been  simpler  than  to  say  so  instead  of  adopting  the circumlocutous way  in which  the learned  counsel claims it has been  said. The proviso to Rule 5 speaks of operating at any place  within the  market area  by a  trader, commission agent, or other market functionary after obtaining a licence while the main provision refers to the marketing of declared agricultural produce at any place in the market area. Surely it cannot  be contended that the proviso is unrelated to the main   provision.   According   to   ordinary   cannons   of construction the  proper function  of a proviso is to except and deal  with a  case which would otherwise full within the general language of the main enactment. It, therefore, shows that no such distinction as suggested by the learned counsel for the  petitioners was  in the  mind of the legislature or the rule making authority.      The onion  and potato  merchants of  Bombay advanced  a special plea  that  Sec.  13(1A)  which  declared  the  area comprising Greater 889 Bombay and  Turbhe village a market area for the purposes of the Act  was  invalid  as  it  was  wholly  unreasonable  to constitute such  a large area into a single market area. The validity of the notification establishing a market at Turbhe was attacked as unreasonable. It was said that it was unreal and unreasonable  to establish  a single market for so large an area  and that,  at such  an inconvenient place as Turbhe village. It  has been  explained in  the  counter  affidavit filed on  behalf of the respondent that the existing markets in Maulana  Azad Road  and Mahatma  Phule Mandal were highly congested and  located in areas which were over-crowded with the result  that it took several hours to even unload onions and potatoes  from the  trucks which  carried them.  It  has become imperative  in the  public interest  that the markets should be  shifted from  Maulana Azad Road and Mahatma Phule Mandai. Turbhe  village was  chosen as  an  area  free  from congestion and  conveniently located  as it  was on the main trunk road  from Pune. It was also very near the other trunk Road going towards the East. A Railway linking the area with both the  Western Railway  and the Central Railway net works was fast  coming up. It was also pointed out that 60% of the population of Greater Bombay resided in the Northern suburbs and the  new market  was much  nearer to the majority of the residents and  traders of  Greater Bombay.  We are unable to see anything  unreasonable in  the statutory  declaration of Greater Bombay and Turbhe village as a market area; nor, are we able  to  see  anything  unreasonable,  in  view  of  the circumstances  mentioned   by  the   respondents,   in   the establishment of  a single  market in Turbhe village for the entire market area.      It was  also said  that neither the Gultekdi market nor the Turbhe  market had  any convenience  or facility  or was ready for  use on  the date  on which it was notified as the Principal Market  for the  concerned  market  area.  On  the material  placed   before  us  we  are  satisfied  that  all reasonable conveniences  and facilities are now available in both the  markets, whatever night have been the situation on the  respective   dates  of  notification.  We  refrain  for embarking into  an enquiry  as to the situation obtaining on the dates  of notification. We do say that a place ought not to be  notified as  a market unless it is ready for use as a market with  all reasonable  facilities and conveniences but we do not conceive it to be our duty to pursue the matter to

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the extreme  limit of quashing the notification when we find that all  reasonable facilities  and  conveniences  are  now available. While  a notification  may be  quashed if nothing has been  done beyond  publishing the notification, in cases where some facilities and conveniences 890 have been  provided but  not some others which are necessary the Court  may instead  of quashing  the  notification  give appropriate time-bound  directions for  providing  necessary facilities and  conveniences. On  the facts  of the  present case, we  are satisfied  that all  reasonable facilities and conveniences are  now provided.  We are  also satisfied that the traders  have been  making one  desperate attempt  after another to  avoid moving  into the new markets and they have been successful  in stalling the notifications from becoming effective for quite a number of years.      In the  Writ Petitions and Civil Appeals from Karnataka State, similar  questions have been raised. Though the broad scheme of  the Karnataka  Act is the same as the Maharashtra Act, there are some differences which however are not basic. Instead of  a two  tier scheme,  Market Area and Markets, as under the  Maharashtra Act,  the Karnataka  Act has a three- tier scheme,  Market Area, Market and sub-market and market- yard, sub-market  yard and sub-yard. Market Area is a larger area within which smaller areas are declared as a Market and sub-markets. Within  a market  are located a market yard and market sub-yards  and within  a sub-market  is located a sub market yard.  The ’market yard’ in the Karnataka Act is what corresponds to a ’market’ in the Maharashtra Act. Unlike the Maharashtra Act, the Karnatka Act itself [S. 8(2)] expressly provides that  no place  in the  Market or  the  sub-market, except the  market-yard, sub-yard  or the sub-market yard as the case  may be,  shall be used for the purchase or sale of notified agricultural  produce. Originally,  after the words "purchase or  sale of  notified agricultural words" occurred the words  "belonging to  a producer"  in Section  8(2). The words "belonging  to a  producer" were  omitted  by  a  1976 amendment  and   this  makes   the  provisions  of  S.  8(2) applicable to  transactions between  trader and  trader too. The shifting  of market  yard from  one place to another and the application  of the  Act to transactions between traders and traders  are what  were principally  questioned  in  the Karnataka cases.  Substantially the  same submissions  as in the Maharashtra  cases were  made and  we have already dealt with them.      We  my   now  turn   to  the  Bihar  cases.  The  Bihar Agricultural Produce  Markets Act, 1960, follows roughly the same pattern  as the  other Acts.  A market  area has  to be first declared  within  which  the  marketing  of  specified agricultural produce  is proposed to be regulated. For every market area  there is  to be a principal market yard and one or more sub market yards. In between the market area and the market yard there is to be a market but market does not seem to play  any part  in the scheme of the Act as it now stands after the  1974 amendments.  However it  should be mentioned here that Rule 80 891 which is  still on  the Statute Book, provides that a market shall be  established for  a market  area and that after the establishment of  a market,  a  notification  under  Sec.  5 (declaring market yards) shall be issued. Sec. 15 of the Act provides that  no specified  agricultural produce  shall  be bought or  sold at  any place  within the  market area other than  the   principal  market   yard  or   sub-market   yard established  therein   except  such   quantity  as   may  be

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prescribed for  retail sale  or  personal  consumption.  The arguments advanced  in the  Maharashtra and  Karnataka cases were advanced  in the  Bihar cases  also.  For  the  reasons already mentioned  we reject  the submission.  In one of the Bihar cases it was further submitted that when a market yard was disestablished  at one  place and established at another place, it  was the duty of the concerned authority to invite and hear objections. Failure to do so was a violation of the principles  of   natural  justice   and   the   notification disestablishing  the   market  yard   at   one   place   and establishing it  elsewhere was  therefore, bad.  It was said that even  as there  was express  provision for inviting and hearing objections before a "market area" was declared under the Act,  so should objections be invited and heard before a ’market yard’  was established  at any particular place. The principles of  nature justice  demanded it. We are unable to agree. We  are here  not concerned  with the  exercise of  a judicial or quasi-judicial function where the very nature of the function  involves  the  application  of  the  rules  of natural justice,  or of an administrative function affecting the rights  of persons,  wherefore, a duty to act fairly. We are concerned  with legislative  activity; we  are concerned with the making of a legislative instrument, the declaration by notification of the Government that a certain place shall be a  principal market  yard for  a market  area, upon which declaration certain statutory provisions at once spring into action and certain consequences prescribed by statute follow forthwith. The making of the declaration, in the context, is certainly an  act legislative  in  character  and  does  not oblige the  observance of  the rules  of natural justice. In Bates v.  Lord Hailsham,  Megarry J.,  pointed out  that the rules of  natural justice  do  not  run  in  the  sphere  of legislation, primary or delegated, and in Tulsipur Sugar Co. v.  Notified   Area  Committee,   our  brothers   Desai  and Venkataramaiah JJ  approved what was said by Megarry J., and applied it  to the  field of conditional legislation too. In Paul Jackson’s  Natural Justice  (Second Edn.),  it has been pointed out (at p.169):           "There is  no doubt  that a Minister, or any other      body, in  making legislation, for example, by statutory      instrument 892      or by-law,  is not  subject to  the  rules  of  natural      justice- Bates  v.  Lord  Hailsham  of  St.  Mayleborne      (1972)  1  W.L.R.  1373-any  more  than  is  Parliament      itself; Edinburgh and Dalkeith Ry. v. Wauchope (1842) 8      Cl. &  F. 710,  720 per Lord Brougham; British Railways      Board v. Pickin (1974) A.C. 765".      Prof. H.  W. R.  Wade  has  similarly  pointed  in  his Administrative Law  (4th Edn.):  "There is  no right  to  be heard before  the making  of legislation, whether primary or delegated, unless  it is  provided by  statutes". There  is, therefore, no  substance in  the invocation  of the rules of natural justice.      One of  the submissions in the Bihar cases was that the declaration of  places as  market yards  was made in such an erratic fashion that the exercise of the power could only be termed as  an arbitrary  misuse of power. The facts in Civil Appeal No.  1507 of  1980 were that on September 16, 1964, a certain area  was declared  as a  principal market  yard and Amgola,  Chandwara,   Sarai  Said  Ali  and  Brahmpura  were declared as  Sub market  yards. On February 23, 1978 instead of the principal market yard declared by the notification of September 16, 1964, Muradpur Dulla was declared as principal market yard. The sub-market yards were abolished. By another

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notification dated  April 9,  1979,  all  the  market  yards notified on  September 16,  1964 were allowed to continue as before, but  it was also simultaneously made known that such market  yards   would  be  closed  on  specified  dates  and merchants were  advised to  move  their  business  into  the Muradpur Dulla  principal market  yard as early as possible. Finally by  a notification  dated July 3, 1979, the previous notification dated  April 9, 1979 was cancelled and Muradpur Dulla market yard was alone notified as the principal market yard. The  facts in  the other  two  appeals  were  that  on September 19, 1963, Gaya town was declared as a market area. On April  6, 1964,  Chandauti was  declared  as  the  market proper  under   Sec.5(2)(ii)  of   the  Bihar   Act.  By   a notification dated  April 7, 1964, Mohalla Purani Godown was declared as  principal market  yard and Kedarnath Market was declared as  the sub-market  yard for  the market  area.  On October 19,  1973, Mohalla  Purani  Godown  was  once  again declared as  the  Principal  Market  Yard.  Subsequently  on February 28,  1978, Chandauti  was declared as the Principal Market Yard. This meant that Mohalla Purani Godown ceased to be a  market yard  and Kedarnath  Market ceased to be a sub- market  yard.   But,  again   on  April   9,  1979,  another notification was  issued, to  the effect that Mohalla Purani Godown would  continue as the market yard as before. Finally on June 27, 1979, Chandauti was 893 declared as  the Principal  Market yard  once more. This was questioned in  Writ Petitions filed in the Patna High Court. The Patna High Court rejected all but one of the contentions raised. The  only contention which was accepted was that the procedure prescribed  by Rule  80 was  not  followed  before Chandauti was  declared as  the principal market yard by the notification dated  February 28,  1978. Rule  80, as already mentioned by  us provides that a market shall be established for a  market area  and that  after the  establishment of  a market a  notification declaring  the market  yard shall  be issued. The  contention which was accepted was that a market had not  been established before a market yard was declared. Against the  judgment of  the High  Court the merchants have filed Civil  Appeal No.  1715 of 1980 and the State of Bihar has filed  Civil Appeal No. 36 of 1980. Not-withstanding the filing of  the appeal,  the State  of Bihar chose to issue a fresh notification  after observing the procedure prescribed by Rule 80. This was again questioned in the High Court. The High Court  upheld  the  notification.  The  merchants  have preferred Civil Appeal No. 1716 of 1980 against the judgment of the  High Court. From the history of events it may appear as if  declarations regarding market yards have been made in a most  erratic fashion  but as  pointed out  by the learned Attorney General  who appeared for the State of Bihar it was not madness. There was a method. The old markets had existed from ancient  days and  it had become necessary to establish modern market  yards with  conveniences and facilities. When this was sought to be done there were representations by the traders and  the Government  appears to have thought that it was advisable  to give the traders sufficient time to enable them to  prepare themselves  to move  into  the  new  market yards. The  notifications establishing new market yards were therefore, cancelled  and the  old markets  were allowed  to function for  some time.  Later when the time was thought to be ripe,  notifications establishing  new market  yards were once again  issued. It  is, therefore  seen that the seeming confusion was  not the  result of  any arbitrary  or erratic action on the part of the Government but was the result of a desire to  accommodate the  traders as much as possible. We,

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therefore, see  no force  in any  of the submissions made on behalf of  the petitioners. All the Writ Petitions and Civil Appeals are therefore, dismissed with costs. N.V.K.                     Petitions and Appeals dismissed. 894