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PETITIONER: STATE OF MADHYA PRADESH & ORS.

       Vs.

RESPONDENT: GALLA TILHAN VYAPARI SANGH & ORS.

DATE OF JUDGMENT17/01/1977

BENCH: FAZALALI, SYED MURTAZA BENCH: FAZALALI, SYED MURTAZA KAILASAM, P.S.

CITATION:  1977 AIR 2208            1977 SCR  (2) 619  1977 SCC  (1) 657

ACT:             Madhya  Pradesh Krishi Upaj Mandi  Adhiniyam,  1972,  S.         37(5)(a),  constitutional validity of--Whether  unreasonable         to commission agents.

HEADNOTE:             The  respondents challenged the constitutional  validity         of  s.  37(5)(a)  of the Madhya Pradesh  Krishi  Upaj  Mandi         Adhiniyam, 1972, before the High Court on the ground that it         places unreasonable restriction on the commission agent  and         puts  a great burden on him for storing the goods  given  to         him  by  his principal, without charging the commission  for         its safe custody.  The plea was accepted and the High  Court         struck down the impugned provision as unconstitutional.         Allowing the appeal by Special Leave, the Court,             HELD:  Section  37(5)(a) is constitutionally  valid  and         there is no hardship or unreasonableness in it.  The  provi-         sion  prevents the commission agent from levying  any  addi-         tional  charges  from the farmer or the principal  for  safe         custody  of the goods. but s. 37(4) of the  Act  compensates         him  by  authorising him to charge not only  his  commission         from  the, principal trader, but also the expenses  incurred         by  him for the purpose of storing  the  produce,  and   the         services rendered by him.   [620 D, E, G]

JUDGMENT:             CIVIL  APPELLATE JURISDICTION: Civil Appeals Nos.  1912-         1914 of 1976.             (Appeal by special  Leave from  the Judgment  and  order         dated  7-2-1975  of the Madhya Pradesh High Court  in  Misc.         Petition No. 231/74 and 685 and 732/73 respectively.)         I.N. Shroff and H.S. Parihar, for the appellants.         S.K. Gambhir, for respondents Nos. 1 and 2.         The Judgment of the Court was delivered by             FAZAL  ALI, J.  In this appeal by special leave,  on  an         application  filed by the respondents before the High  Court         of Madhya Pradesh, the High Court struck down the  constitu-         tional  validity  of sub-s. (5) (a) of s. 37 of  the  Madhya         Pradesh  Krishi  Upaj Mandi  Adhiniyam,  1972  --hereinafter         referred  to as ’the Act’--(No. 24 of 1973).   The  impugned

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       sub-section runs as follows:                       "(5) Every commission agent shall be liable--                       (a) to keep the goods of his principal in safe                       custody  without  any charge  other  than  the                       commission payable to him; and"         620         The High Court thought that this statutory provision  places         unreasonable  restriction on the commission agent  and  puts         great  burden on him for storing the goods given to  him  by         the  principal without charging the commission for its  safe         custody.   The  Act  is a social piece  Of  legislation  and         should  have been liberally construed so as to  advance  the         object of the Act and fulfil the aims to be achieved  there-         by.   The main purpose of the Act is to secure a  scientific         method  of  storage,  sale, distribution  and  marketing  of         agricultural produce and cut out as far as possible  middle-         man’s profit.  The Act, therefore, contains provisions of  a         beneficial nature preventing profiteering tendencies. It  is         not,  however, the hardship that can be termed  unreasonable         so  as  to make a statute unconstitutional.   Moreover,  the         High Court does not appear to have looked to. the scheme  of         the Act and has in fact completely overlooked the provisions         of s.  37(4)  which runs  as follows:                           "(4)  The commission agent  shall  recover                       his commission only from his principal  trader                       at such rates as may be specified in the  bye-                       laws  including  all such expenses as  may  be                       incurred by him in storage of the produce  and                       other services rendered by him."         This section clearly empowers the commission agent to charge         such rates as may be specified by the bye-laws even for  the         storage  of the Produce and other services rendered by  him.         This  provision  also does not prevent the commission  agent         from  levying  reasonable charges for the storage  over  and         above his commission.  All that the Act prevents is that the         commission agent is prohibited from levying any charges  for         safe custody from the farmer or the principal.  This is done         in  order  to attract and lure the farmers  to  place  their         goods  with commission agents without additional payment  of         charges for safe custody.   Section 37 (4), however, compen-         sates the commission agent by authorising him to charge  his         commission  and  all expenses which may be incurred  by  the         commission  agent  in  connection with the  storage  of  the         produce  and  the services rendered by him.   This  section,         therefore, clearly authorises the commission agent not  only         to charge his commission from the principal trader but  also         expenses  incurred  by him for the purpose of  the  storage.         That  apart s. 2(e) of the Act whiCh defines  a  "Commission         agent" empowers him to charge any commission o.r  percentage         upon the amount involved in such transaction.             For these reasons, therefore, we do not see any hardship         or unreasonableness in the provisions Of s. 37(5)(a) of  the         Act.   The High Court, therefore, committed an error of  law         in striking down this provision as unconstitutional.  In our         opinion,  therefore, s. 37 (5) (a) of the Act  is  constitu-         tionally valid.  In the view we take, it is not necessary to         go  into the question whether the law violates Art.   19  of         the Constitution which stands suspended during the  emergen-         cy.             The  appeal  is accordingly allowed.  The order  of  the         High  Court is quashed. In the circumstances, there will  be         no order as to. costs.         M.R.                                            Appeal   al-         lowed.         621

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