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M/S. Sree Bahariji Mills Ltd., And Others v. State Of Bihar And Others
Structured Summary of the Opinion (Lalit Mohan Sharma, J.)
Factual and Procedural Background
Four writ petitions challenged the authority of various Agricultural Produce Market Committees to demand and collect market fee on three items: Ata, Sujji and Maida, under the Bihar Agricultural Produce Markets Act, 1960 and the Rules made thereunder.
The principal factual dispute concerned whether Ata, Sujji and Maida were legally included in the schedule to the Act and whether notifications required by the Act had been issued in respect of those items for the relevant Market Committees. The petition in C.W.J.C. 1660 of 1981 was the lead matter; its paperbook was adopted in the other cases.
Relevant chronology included: an order dated 12-2-1972 purporting to add Ata, Sujji and Maida to the schedule (which was not published in the Bihar Gazette until 15-5-1980), and a notification dated 9-9-1974 that purported to notify all schedule commodities for the Patna City Market Committee by general reference. No separate notifications under Sections 3 and 4 of the Act were issued specifically in respect of Ata, Sujji and Maida for the Market Committee.
During the pendency of the petitions the Bihar Agricultural Produce Markets (Validation) Ordinance, 1982 (Bihar Ordinance No. 35 of 1982) was promulgated; it sought to validate orders and market-fees said to have been levied despite non-publication of certain notifications in time.
Legal Issues Presented
- Whether the Market Committees had jurisdiction to demand and collect market fee on Ata, Sujji and Maida where those items were not (until publication) included in the schedule to the Act and no specific notifications under Sections 3 and 4 had been issued for the relevant market area.
- If the schedule was amended by the 12-2-1972 order, when did that amendment take legal effect (in particular whether publication in the Bihar Gazette on 15-5-1980 was decisive)?
- Whether the Bihar Agricultural Produce Markets (Validation) Ordinance, 1982 could validate past levies and prevent the petitions from succeeding even if the requisite notifications and procedures under the Act had not been observed.
Arguments of the Parties
Petitioners' Arguments
- Ata, Sujji and Maida were not legally included in the schedule to the Act and therefore not within the definition of "agricultural produce" under S.2(1)(a); consequently, Market Committees had no jurisdiction to require collection of market fee on those items.
- The order of 12-2-1972 purportedly adding the items had not been published in the Bihar Gazette until 15-5-1980, so the schedule was not amended before that date.
- No notifications under Sections 3 and 4 of the Act were issued declaring those items as notified agricultural produce for the relevant Market Committee, and thus the petitioners could not be liable to collect fees on them.
Respondents' Arguments
- The State Government's order dated 12-2-1972 amended the schedule to include Ata, Sujji and Maida, and that amendment should be treated as effective such that fees were payable from the date of establishment of the Market Committee in 1974.
- The notification of 9-9-1974 (Annexure 2), which applied generally to "all commodities specified in the schedule," should be read as including Ata, Sujji and Maida once the schedule was amended, and thus the Market Committee could demand fees on those items.
- Alternatively, reliance was placed on the Bihar Agricultural Produce Markets (Validation) Ordinance, 1982, which sought to deem the specified orders and collections valid notwithstanding non-publication in the Gazette and to bar proceedings for refund of levies collected under those orders.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Govind Lal v. Agricultural Produce Market Committee, AIR 1976 SC 263 | Support for the proposition that statutory procedures which grant affected persons the right to object (and require consideration of objections) must be respected before final inclusion of items for market regulation. | The court relied on the Supreme Court's observation in this case to support its conclusion that the statutory right to be heard (objections and suggestions under Ss. 3 and 4 of the Act) could not be bypassed by treating an item as included for a Market Committee without following the required notification procedure. |
Court's Reasoning and Analysis
The court proceeded by applying the statutory scheme of the Bihar Agricultural Produce Markets Act, 1960 and relevant rules in a stepwise manner:
- Definition and dependency on the schedule: Section 2(1)(a) defines "agricultural produce" as the produce specified in the schedule to the Act. Since Ata, Sujji and Maida were not in the schedule as published prior to 15-5-1980, they were not legally "agricultural produce" for the purposes of the Act until the schedule was validly amended.
- Amendment of the schedule requires notification: Section 39 empowers amendment of the schedule "by notification." The court interpreted "notification" by reference to S.4(36) of the Bihar and Orissa General Clauses Act, 1917 (meaning a notification in the Gazette) and Section 28 of the General Clauses Act (publication in the Gazette is the deemed mode unless otherwise provided). Because Section 39 did not provide an alternative mode, the court held that publication in the Bihar Gazette was required for the amendment to take legal effect.
- Effective date of amendment: The 12-2-1972 order purporting to add the items was not published until 15-5-1980. Therefore, the court held that the schedule stood amended only on 15-5-1980 and not earlier.
- Notifications specific to market areas are required: Sections 3 and 4 require the State Government to issue notifications declaring intention to regulate purchase and sale of specified agricultural produce in a specified area, invite objections and suggestions (Sec.3(2) makes such an invitation obligatory), consider objections (Sec.4) and possibly hold enquiry. Section 4(3) permits inclusion or exclusion of items in a market area by notification but is subject to the procedure under Section 3. The court emphasized that these provisions confer a valuable right to affected persons (traders, agriculturists) to object and that that right cannot be forfeited by treating an item as included absent the statutory process.
- Effect of the 9-9-1974 notification: The 9-9-1974 notification applied generally to all items of the schedule then in force. Because Ata, Sujji and Maida were not in the schedule in law in 1974 (per the court's earlier conclusion), they could not be treated as having been included for the Market Committee by that notification.
- On the respondents' argument that inclusion for the Market Committee occurs automatically when the schedule is amended: the court rejected that argument. It stressed that Section 4(3) is subject to Section 3's requirement of notice and opportunity to object; hence inclusion for a market area cannot be deemed to have occurred without following that procedure.
- On the Ordinance (Bihar Ordinance No. 35 of 1982): the Ordinance sought to validate non-publication of certain notifications and to deem the schedule valid and market-fees properly realised. The court held that the Ordinance did not amend Sections 3, 4, or 39 or the schedule in a manner that removed the requirement that the statutory notifications and objection procedure be followed in respect of a particular market committee. Therefore the Ordinance did not validate inclusion of those items for the market committees without the required notifications and consideration of objections. The court did not finally decide whether the Ordinance remained in force after re-assembly of the Legislature because it was unnecessary in view of the primary conclusions reached.
Holding and Implications
HOLDING: The writ applications were allowed. The impugned annexures were quashed and the respondents (the Market Committees) were directed not to demand or collect any fee on Ata, Sujji or Maida. The parties were directed to bear their own costs.
Implications:
- The direct legal effect is that, on the facts of these cases, the Market Committees are not entitled to levy or collect market fee on Ata, Sujji and Maida because (a) the schedule was not legally amended until its publication in the Gazette on 15-5-1980 and (b) no requisite notifications under Sections 3 and 4 were issued for the relevant Market Committee which would have provided affected persons the statutory opportunity to object.
- The court explicitly relied on statutory prescription (publication requirement) and the statutory right to object; it did not purport to create a new precedent beyond applying established principles and an existing Supreme Court observation (Govind Lal v. Agricultural Produce Market Committee) that supports protecting the procedural right to be heard under the Act.
- No broader alterations to the Act's provisions were made; the decision operates as a factual application of the Act and rules to the circumstances before the court and limits fee-collection in these matters to cases where the statutory notification and objection processes have been lawfully completed.
Note: This summary is based exclusively on the content of the provided opinion and does not add or infer facts beyond the text of that opinion.
Lalit Mohan Sharma, J.:— The petitioners in these four cases have challenged the right of the different Agricultural Produce Market Committees, the respondents to the cases, to demand and collect market fee on Ata, Sujji and Maida under the provisions of the Bihar Agricultural Produce Markets Act, 1960 and the Rules framed thereunder. The main argument has been addressed on behalf of the petitioners in C.W.J.C 1660 of 1981 with reference to the paperbook of that case, which has been adopted in the other cases.
2. It has been contended that since Ata, Sujji and Maida have not been legally included in the schedule to the Act and in the list of items notified in accordance with law with reference to the Market Committees, the Market Committees have no jurisdiction to direct the petitioners to collect and pay market fee thereon. The petitioners have also taken several other points in support of their case which, in view of my opinion on the above question, are not necessary to be dealt with.
3. For the better regulation of buying and selling agricultural produce and the establishment of markets therefor, the Bihar Agricultural Produce Markets Act (hereinafter referred to as ‘the Act’) was enacted in 1960. By S. 2(1)(a), the term ‘agricultural produce’ was defined as the produce specified in the schedule to the Act. Ata, Sujji and Maida were not included in the schedule. S. 3(1) empowers the State Government to declare its intention by notification of regulating the purchase and sale of such agricultural produce and in such area as may be specified, inviting objections and suggestions within a period of two months. Section 4 provides for consideration of the objections and suggestions so received and consequent appropriate reduction in area and exclusion of any item in terms of produce by another notification. It is also enjoined that for such market area, there shall be a principal market yard (one or more sub market yards are also permitted). Sub-sec. (3) of S. 4 deals with the modification of the market area and the list of the agricultural produce applicable to any market area in the following terms:—
“(3) Subject to the provisions of S. 3, the State Government may at any time, by notification exclude from a market area any area or any agricultural produce specified therein or include in any market area any area or agricultural produce included in a notification issued under sub-sec. (1)”.
By a further notification under S. 5, the details of the principal market yard and the sub market yards are to be declared. By still another notification under S. 6 a Market Committee is to be established for every market area. S. 27 places a duty on the Market Committee to levy and collect fees on the agricultural produce bought or sold in the market area at a given rate. The fee has been made payable by the buyer and the procedure with respect to the levy and collection is laid down in Rr. 82 and 83.
4. Coming to the circumstances leading to the filing of C.W.J.C 1660 of 1981 the respondent No. 2, Patna City Market Committee was constituted, under a notification dated 11-11-1970, with only a few commodities out of the schedule. By another notification dated 9-9-1974, as contained in Annexure 2, all the commodities specified in the schedule were notified by a general reference to that effect and without actually detailing the items. S. 39 of the Act authorises the State Government to add to amend or cancel any of the items in the schedule by a notification. By an order dated the 12th Feb., 1972, the State Government purported to add inter alia Ata, Sujji and Maida in the schedule. This order, however, was not notified before 1980. It was published in the extraordinary issue of the Bihar Gazette on the 15th May, 1980. However, no notifications were issued under Secs. 3 and 4 for the purpose of declaring the added items as notified agricultural produce for the respondent-Market Committee.
5. According to the respondents, the schedule stood amended in 1972 by virtue of the aforesaid order dt. 12-2-72 and the fee on the disputed items was payable with effect from the establishment of the Market Committee in 1974. Several letters in this regard were exchanged which have been detailed in the writ application. According to the petitioners case, the schedule was not amended before 15-5-1980. It is further contended that since the notifications under Secs. 3 and 4 with respect to these items have not ever been issued, the petitioners cannot be liable to collect and pay fees thereon.
6. During the pendency of these cases, an Ordinance being. The Bihar Agricultural Produce Markets (Validation) Ordinance 1982 (Bihar Ordinance No. 35 of 1982) was passed. The main provision in the Ordinance is quoted below:—
“2. Notwithstanding the non-publication of the notification Nos. 14841 dt. 27th Oct., 1967 in the Bihar Gazette and 2028 dt. 12th Feb., 1972 in the Bihar Gazette in time, the orders made for regulating the market with respect to such items, and market-fees levied, collected or to be levied and collected shall not be illegal and invalid merely on that ground and notwithstanding anything contained to the contrary in any judgment, decree or order of any court, the schedule of the notifications Nos. 14841 dt. 27th Oct., 1967 and 2028 dt. 12th Feb., 1972 shall always be deemed to be valid and effective and all levies made or market-fees collected shall be deemed to have been validly realised, taken, done and issued as if the provisions of this Ordinance were in force at all material times when such realisation was made, action taken, things done and orders issued and no suit or proceeding shall be maintainable for the refund of the levies made or fee collected or action taken under those notifications.” The notification No. 14841 dt. 27-10-67 is not relevant in the present cases. The learned counsel for the respondents also relied on the provisions of the Ordinance mentioned above in support of their case that even if the stand of the respondents mentioned above be not acceptable, the writ applications must fail by reason of the Ordinance.
7. The question as to when the schedule to the Act got amended appears to be simple. The power in this regard has to be exercised under Sec. 39 only by a notification. The expression ‘notification’ has been defined by S. 4(36) of the Bihar and Orissa General Clauses Act, 1917 to mean “a notification in the Gazette.” Section 28 of the General Clauses Act provides that where in any Bihar Act, it is directed that any notification shall be issued, such notification shall be deemed to be duly made if it is published in the Gazette unless the Act, otherwise provides. Sec. 39 is not suggesting any alternative method and, therefore, it must be held that until the order was published in the Bihar Gazette, the schedule was not amended. The language of Section 39 does not suggest that the schedule could be amended with retrospective effect by a later notification. I, therefore, hold that the schedule stood amended on 15th May, 1980 when the order in this regard dt. 12th Feb. 1972 was published in the Bihar Gazette and not earlier.
8. A further question arises as to what was the effect of the notification dt. 9-9-1974 as contained in Anmexure 2 as far as the Agricultural Produce Market Committee is concerned. This notification was issued under Sec. 4(1) of the Act. It purported to apply to all items in the schedule to the Act. Since in 1974. Ata, Sujji and Maida were not included in the eye of law in the schedule in respect of the 1972 Order, in absence of a notification, these items cannot be held to have been included in the agricultural produce with reference to the Market Committee.
9. It was contended on behalf of the respondents that items applicable to the Market Committee automatically stood amended by inclusion of Ata, Sujji and Maida with effect from the date on which the schedule of the Act stood amended. There does not appear to be any merit in this argument either. Sec. 4(3) of the Act permitting the amendment in the list of schedule of agricultural produce has been subjected to the provisions of Sec. 3 which enjoins a notification to be issued declaring the intention of the State Government in this regard. Sub-sec. (2) of Section 3 makes it obligatory for the notification to state that any objection or suggestion to the proposed step would be considered by the Government. Section 4 reiterates the duty of considering the objections and suggestions received from public. Holding of an enquiry in this connection is also contemplated by the section. A valuable right has, therefore, been granted by the statute to the traders, agriculturists and other affected persons to offer objections and suggestions which have to be decided on merits before taking final decision. Admittedly, no notification under S. 3 was issued with reference to Ata, Sujji and Maida. By holding that the list of agricultural produce in regard to the Market Committee stood amended without resorting to the aforesaid procedure, the right of raising objection by concerned persons bestowed by the Act would stand forfeited and this cannot be allowed. The observation of the Supreme Court in Govind Lal v. Agricultural Produce Market Committee (AIR 1976 SC 263) relied on by Mr. Shreenath Singh, learned counsel for the petitioners supports this view.
10. The learned counsel for the respondents alternatively contended that in view of the Bihar Ordinance No. 35 of 1982, referred to earlier, the petitioner's case must be rejected and the writ application dismissed. The relevant portion of the Ordinance has been quoted in paragraph 6 above. It may be noted that Ss. 3, 4 and 39 or any other provision including the schedule of the Act has not been amended and the right of objection of the concerned members of the public to addition of items of produce has not been disturbed. It must, therefore, be held that unless the necessary notifications mentioned and discussed above are issued, the objections filed to the proposed modification of the schedule are considered and a final decision in this regard is taken thereafter, the lists of agricultural produce in regard to the particular market committee cannot be deemed to have been amended by reason of the Ordinance. The Market Committees are, therefore, not entitled to the fee on the disputed items. The demands in this respect cannot be upheld.
11. It was also urged on behalf of the petitioners that the Ordinance was not kept alive after re-assembly of the Bihar Legislature and must, therefore, be held to have ceased to exist, and it is now not available to the respondents for placing any reliance thereon. Prima facie, the position appears to be so. But in view of my conclusion mentioned above, it is not necessary to decide this question finally.
12. In the result, the writ applications are allowed, the impugned annexures are quashed and the respondents are directed not to demand or collect any fee on Ata, Sujji or Maida. The parties, however, are directed to bear their own costs.
S. Sarwar Ali, C.J:— I agree.
Petitions allowed.
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