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AMICUS AI
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Advocates
  • V.V.Krishna Murthy
  • N.Subha Reddy
  • G.Chandrasekhara Sastry
  • B.V.Subrahmanyam
  • A.Kuppusvami
Judges
  • Mr. Justice Jaganmohan Reddy
Acts
  • sub - section (1) of section 4
  • sub - section (3) of section 5,
  • provisions in rule 28 (3)
  • rule 28 (3) (iii).
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Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
  • V.V.Krishna Murthy
  • N.Subha Reddy
  • G.Chandrasekhara Sastry
  • B.V.Subrahmanyam
  • A.Kuppusvami
Judges
  • Mr. Justice Jaganmohan Reddy
Acts
  • sub - section (1) of section 4
  • sub - section (3) of section 5,
  • provisions in rule 28 (3)
  • rule 28 (3) (iii).
See more information ...
Smart Summary

Structured Summary of the Opinion — Writ Petitions Relating to Market Committee By‑laws (Country Tobacco)

Factual and Procedural Background

Four writ petitions (Nos. 969 and 1101 of 1956 and 87 and 89 of 1957) challenged by‑laws made by the Krishna Market Committee and the West Godavari Market Committee (both established under the Madras Commercial Crops Markets Act, 1933). The petitions were brought primarily by registered and unregistered tobacco merchants' associations (named and represented by their respective presidents/secretaries). The petitions sought writs of mandamus or certiorari to declare the relevant by‑laws null and void insofar as they affected "country tobacco" known in trade as 'katta', 'vatru' or 'thadupu'.

Petitioners alleged that country tobacco (Indian air‑cured tobacco) is commercially distinct from Virginia tobacco (sun‑cured or flue‑cured) and that:

  • country tobacco is not mentioned in the schedule to the Act and therefore requires separate notification as a "commercial crop" to attract fees;
  • market committees were attempting to levy licence fees and cesses (under section 5(1) and section 5(3) of the Act) via by‑laws (Krishna by‑laws 12 & 22; West Godavari by‑laws 21 & 23) without providing requisite market amenities, and thus acted ultra vires;
  • some members faced criminal prosecution for non‑payment of the levies.

Respondents filed counters raising preliminary objections about the representative capacity of associations to sue, asserting that "tobacco" includes country tobacco and defending the validity and enforcement of the by‑laws and the committees' practices. The court heard all petitions together but treated differences in capacity (individual v. association) distinctly.

Legal Issues Presented

  1. Whether the term "tobacco" in the Madras Commercial Crops Markets Act, 1933 includes country tobacco (thadupu/vatru/katta) or whether each variety requires a separate notification as a "commercial crop" before market committees can levy fees on it.
  2. Whether a market committee may levy licence fees and cesses (under sections 5 and 11) in respect of country tobacco without first providing market amenities, or whether provision of amenities is a precondition for levy.
  3. Whether an association (registered or unregistered) may file writ petitions in a representative capacity to challenge by‑laws and levy actions by market committees, or whether only individually aggrieved persons may maintain such petitions.
  4. Whether rule 28(3) and the by‑laws permit or preclude the requirement to obtain more than one licence where purchase/sale and storage/processing facilities exist (i.e., interpretation of single‑licence exemption).

Arguments of the Parties

Petitioners' Arguments

  • Country tobacco (thadupu/vatru/katta) is commercially distinct from Virginia tobacco and is not expressly listed in the schedule to the Act; it therefore requires a separate notification as a "commercial crop" before any levy can be imposed on it.
  • The market committees are ultra vires in levying licence fees and cesses in respect of country tobacco and in prosecuting members for non‑payment.
  • The committees cannot lawfully charge fees for purchase/sale and also for storage/pressing/processing for the same crop where adequate market amenities are not provided; levy is conditional on provision of facilities.

Respondents' (Market Committees') Arguments / Counters

  • Preliminary: associations suing in a representative capacity are not the proper parties — rights under the Constitution are enjoyed by individual citizens; relief should be sought by individually aggrieved traders or in ordinary suit proceedings; pending suits and prosecutions render writ relief inappropriate or cumulative.
  • "Tobacco" in the Act includes country tobacco; the schedule (which lists six categories) relates to section 11 and does not limit the definition of "tobacco" for other purposes.
  • Country tobacco is properly described as sun‑cured leaf/strips and thus falls within categories in the schedule; supporting material from official reports and agricultural writing was cited to show country tobacco is sun‑cured.
  • The power to issue licences and levy fees under the Act is not conditional on the existence of market amenities; if amenities are lacking, the committee may nevertheless levy fees and use funds to create facilities.
  • Rule 28 and relevant by‑laws are not repugnant to the Act; the by‑laws set rates consistently and are subject to the rules.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Indian Sugar Mills Association v. Secretary to Government, Uttar Pradesh Labour Department, A.I.R. 1951 All 1 Authority for proposition that an association as such is not affected and cannot sue in a representative capacity for orders affecting individual members. Relied on to support dismissal of petitions filed in the name of associations (Nos. 969/56, 87/57 and 89/57) for lack of appropriate party‑petitioners.
Bangalore District Hotel Owners' Association v. The District Magistrate, Bangalore, A.I.R. 1951 Mys 14 Similar authority on the limits of representative writ petitions by associations. Used with other authorities to hold that unregistered associations and even registered societies are not the proper petitioners in representative capacity in these matters.
Radha Gobinda Paul v. Regional Transport Authority, Midnapore, A.T.R. 1955 Cal 59 Authority on standing/representative capacity of associations in writ proceedings. Referred to for the same proposition that associations not personally affected cannot maintain representative writs.
Atmakur Gopalakrishna Rao and others (1957) 1 An. W. R. 130 Case cited by petitioners' counsel to seek amendment/treatment of petitions as filed by individuals associated with associations. Court distinguished that authority on its facts and refused to treat the association petitions as amendable to cure the representative defect in the present cases.
S. M. Muhammad Ibrahim v. Deputy Commercial Tax Officer, Pudukottai, (1956) 2 M.L.J. 23 Authority referenced in connection with treatment of petitions and the parties before the court. Cited by counsel in argument; the court noted distinctions and used it in discussing the appropriateness of petitioners and procedural treatment.
United Motors (India) Ltd. v. State of Bombay Referenced regarding multiple petitioners and treatment of petitions. Noted in the course of discussing procedural authorities; court explained differences in factual matrix and application.
Kutti Keya v. The State of Madras and Others, (1954) 1 M.L.J. 117 Principle that levy under section 11(1) is to be treated effectively as a tax (fund‑raising for constructing markets) and not a fee strictly tied to immediate services. Court accepted the view and applied it to reject petitioners' contention that levies could not be made until amenities existed; held levy is for creation of amenities via the market committee fund.
Attorney‑General for British Columbia v. Esquimalt & Nanaimo Ry. Co., L.R. (1950) A.C. 87 Privy Council observations on the character of levies and funds (as considered in Kutti Keya). Court noted that the Madras High Court bench had considered these observations in Kutti Keya and adopted a similar view; used to support characterization of levies as fund‑raising rather than service‑tied fees.

Court's Reasoning and Analysis

The court proceeded in a stepwise fashion addressing jurisdiction/standing first and then the substantive statutory issues:

  1. Standing / Representative Capacity:
    • The court held that writ petitions filed by associations (Nos. 969/56, 87/57 and 89/57) could not be entertained because the association as such was not the aggrieved person; rights to seek writs arise where a person is affected by an order and the association had not been shown to be personally affected. The court relied on authorities to support the proposition that such representative petitions do not lie.
    • The court distinguished the authority cited by petitioners (Atmakur Gopalakrishna Rao) and found it inapplicable on the facts: in the present matters the petitions were filed in the name of the association and not by the individuals affected in their personal capacity.
    • Writ petitions 969/56, 87/57 and 89/57 were dismissed on this ground. Writ petition 969/56 was also dismissed on the additional ground that suits had been filed by members raising identical questions (an alternative remedy was being pursued and the court should not embarrass the lower court by opining on the merits).
  2. Treatment of W.P. No. 1101/56:
    • The secretary of the tobacco merchants association at Jangareddigudem also appeared personally and the court accepted the petition as filed in his individual capacity, allowing consideration on merits for that petition.
  3. Statutory interpretation — whether "tobacco" includes country tobacco:
    • The court examined the Act: definition of "commercial crop" (section 2(i‑a)), the notification procedure (sections 3 and 4), establishment and duty of market committees (section 4‑A), licensing provisions (section 5), fee‑levying power (section 11) and related rule‑making/by‑law powers (sections 18 and 19).
    • It found that tobacco had been validly notified as a commercial crop in the relevant districts by government orders (G.O. Ms. No. 1078 dated 2 June 1950 for Krishna district; G.O. No. 3196 dated 24 December 1939 for portions including Guntur and Bezawada taluk; and G.O. Ms. No. 221 dated 16 July 1955 for West Godavari). Once tobacco was notified, it was unnecessary to notify separately each variety.
    • The court concluded that the word "tobacco" was used in its widest connotation and included country tobacco (thadupu/vatru/katta); there was nothing in the schedule that limited "tobacco" to Virginia kinds only.
    • On factual/technical description, the court referred to government reports and agricultural writing showing that country tobacco is sun‑cured and thus may fall within the schedule categories like "sun‑cured leaf" or "sun‑cured strips".
    • By‑laws of the market committees (by‑law 22/23) expressly determined cess rates for "sun‑cured leaf" inclusive of "thadupu", so the committees were empowered to levy those fees under section 11.
  4. Licensing requirement and rule 28(3) (single licence question):
    • The court analyzed section 5 and the provisos and held that the requirement to obtain a licence for purchase/sale (s.5(1)) is independent of whether a market has been established. That proviso operates after a market is established and may limit grant/renewal within a specified distance, but it does not make the licence contingent on prior establishment of a market.
    • Rule 28(3) (quoted in the opinion) provided that it is not necessary for a person to obtain more than one licence for multiple places in the same notified area for purchase, sale, storage, weighment, pressing or processing of the same commercial crop. The court construed this exemption to mean that where the same person carries on both purchase/sale and storage/processing for the same commercial crop in the same notified area, only one licence is necessary.
    • The court rejected the petitioner's submission that rule 28(3) prevented the requirement of separate licences for the different purposes altogether; instead, it read the rule as a sensible single‑licence exemption in defined circumstances. By‑laws that set fees subject to rule 28(3)(iii) were not inconsistent with the rule.
    • On the facts, the petition did not provide sufficient detail (for example, whether the petitioner had paid any fees or whether multiple licences were demanded because of multiple premises or multiple purposes) to establish a contravention of the licensing provisions by the committee.
  5. Amenities / facilities and the nature of the levy (fee v. tax):
    • The petitioners argued that a levy under section 11 could not be imposed unless market amenities or facilities were provided; the committee's counter was that levies are not conditional on existing facilities and that funds raised are to be used to create amenities.
    • The court examined sections 11, 12 and 13. Section 11 authorizes levy of fees; section 12 constitutes a market committee fund; section 13 prescribes fund utilisation including acquiring a site and constructing markets. The statutory scheme thus contemplates levying fees to create and improve market amenities.
    • The court agreed with prior authority (Kutti Keya v. State of Madras) that the levy under section 11 is effectively a tax-like levy for raising funds to construct markets and is not dependent upon the immediate rendering of services; it is not a fee strictly conditioned on the provision of present amenities.
    • Accordingly, lack of existing amenities did not render the committee's levy invalid on that ground.
  6. Conclusion of analysis and relief:
    • Given the findings on standing, statutory interpretation and lack of factual particulars showing the petitioner had suffered an improper demand or payment, the court held that the petition(s) did not make out a case for writ relief.
    • All four petitions were dismissed with costs; the court imposed an advocate's fee of Rs. 50 in each petition.

Holding and Implications

Holding: The writ petitions were dismissed. Specifically:

  • DISMISSED (969/56, 87/57 and 89/57) — dismissed on the ground that the petitions were filed by associations in a representative capacity and the associations were not the aggrieved persons entitled to maintain the writs; one of these (969/56) was also dismissed because suits were already pending raising the same questions.
  • DISMISSED (1101/56) — the court treated this petition as filed by the individual secretary in his personal capacity; after substantive consideration the court declined to grant relief for reasons explained (statutory interpretation, rule 28 construction, and absence of necessary factual specifics). All petitions were dismissed with costs and advocate's fee Rs. 50 each.

Implications (direct consequences stated in the opinion):

  • The court held that the statutory term "tobacco" as notified under the Act includes country tobacco (thadupu/vatru/katta); no separate notification of each variety was required to attract the Act's licensing and fee provisions.
  • Market committees were held to be empowered to levy fees under section 11 on country tobacco where the by‑laws and rules covered the relevant categories (e.g., "sun‑cured leaf" inclusive of "thadupu").
  • The requirement to obtain licences under section 5 is not contingent on the prior provision of market amenities; the statutory fund mechanism contemplates levying to create those amenities. The court treated the levy as effectively a tax‑like measure to raise funds for market construction and improvement (following Kutti Keya).
  • Rule 28(3) was construed to permit a single licence in respect of multiple premises or combined purchase/sale and storage/processing carried on by the same person for the same commercial crop in the same notified area; no repugnancy between rule and by‑law was found on the present facts.
  • No broader or novel precedent was announced by the court beyond its application of existing authorities and statutory construction to the present facts; the immediate practical effect was to deny the petitioners the writ relief sought and to uphold the committees' powers as applied in these circumstances.

Costs: Writ petitions dismissed; advocate's fee fixed at Rs. 50 in each petition.

Show full summary ...

    Country Tobacco Merchants' Association, Vijayawada v. Krishna Market Committee, Vijayawada

    (1) These are four writ petitions nos. 969 and 1101 of 1956 and 87 and 89 of 1957 for the issue of a writ of mandamus or writ of certiorari for declaring the appropriate by - law made by the respective market committees null and void at least so far as the country tobacco, 'katta', vatru' or 'tadupu' types are concerned. Writ petition no. 969/56 relates to the by - laws made by the krishna market committee while the other three petitions relate to the by - laws made by the west godavari market committee. Both these market committees have been established under the madras commercial crops markets act of 1933 (act xx of 1933). The writ petition no. 969/56 was filed by the country tobacco merchants' association (registered) , vijayawada, represented by its president, juluru venkatanarayana ; w. P. No. 1101/56 by the tobacco merchants' association, jangareddigudem, represented by its secretary, thadikamalla veerabhadra appalaramaiah; w. P. 87/57 by the palakol tobacco merchants' association, palakol, represented by its secretary, s. V. Ramarao, and w. P. No. 89/57 by the eluru wholesale tobacco merchants' association, eluru, represented by its secretary jupalli ramachandra rao. The allegations in all these petitions are more or less similar and consequently they have been heard together. They allege that the members of the association of whom the president and the secretary are one, deal only in country tocbacco which is known in trade circles and in the concerned departments of the government as indian air - cured tobacco as distinct from sun - cured or flue - cured virginia tobacco in its various forms like leaf, dust, primings, gulla scrap or strips. These forms are unknown in the trade relating to country tobacco or in'dian air - cured tobacco. It is said country tobacco differs in several respects from virginia tobacco. While virginia tobacco for its commercial user is either sun - cured or flue - cured and its gulla scrap or dust or primings have a commercial value; country tobacco on the other hand is only air - cured and there is no such thing as gulla scrap or dust or primings in respect of it; that the curing of the two types proceeds on two different lines - virginia tobacco by a process of sheer dehydration and the country tobacco by a process of comparative hydration ; that the leaf of virginia tobacco has to be completely dried up, and made into scrap or dust for the sake of manufacturing cigarettes or beedies, while the leaf of country tobacco has to be kept in shape with comparative moistening to be able to be rolled into country cigars; that while virginia tobacco is never exposed to dew in the nights country tobacco was so exposed; and for these reasons in commercial circles (i) sun - cured leaf, (ii) flue - cured leaf; (iii) dust and primings ; (iv) jutty flue - cured gulla scrap, (v) sun - cured strips and (vi) flue - cured strips, all pertain to the virginia variety tobacco. Country tobacco, it is said is known in commercial circles either as 'katta' or 'vatru' or 'thadupu', vatru as it comes from the agriculturist and thadupu as it comes after wet - processing. It is further alleged that while all the varieties of virginia tobacco have been mentioned in the schedule to the act there is no mention about thadupu and yet the respective market committees of krishna and west godavari are demanding from the members of the petitioner's association to pay to them a licence fee under section 5 (1) and a cess under section 5 (3) of the act under by - laws 12 and 22 of the krishna market committee which more or less correspond to by - laws 21 and 23 of the west godavari market committee.

    (2) These by - laws made by the respondent market committee seeking to levy cess in respect of the country tobacco are said to be beyond the powers and competence of the said market committees and that they should therefore be declared null and void in so far as they seek to affect the rights of growers and traders of country tobacco of the 'katta' or 'vatru' or 'thadupu' type. It is further alleged that without providing sufficient amenities for a market place, storage or weighment or pressing or processing, they are levying and collecting two separate fees; one in respect of purchase and sale, and the other for storage, weighment, pressing and processing for the self - same crop and that in any case it is not entitled to levy or collect any licence fee or any fee for purchase, sale, processing or pressing and weighment unless it provides the necessary amonities. In so far as w. P. 969/56 is concerned, it is alleged that some of the petitioner's members have been prosecuted because of default in the payment of the consolidated double payment and criminal cases are pending against some of them. The main contentions raised in these writ petitions, therefore, are (1) the market committee has no authority to collect any licence fee or registration fee or cess for the country tobacco without a notification notifying it as a, commercial crop ; and (2) that the market committee owes a duty to afford certain facilities without which it cannot levy any fees or cess. The respondents in their counter, apart from the preliminary objections that these applications on behalf of an association do not lie as the rights conferred by the constitution are only on citizens and therefore independent applications should have been filed by a dealer citizen who is aggrieved by an act of the committee and that an adequate remedy in such cases is by way of a suit or by way of urging the objections in the criminal prosecutions launched against the members, stated that the expression 'tobacco' cannot be merely confined to virginia tobacco but includes country tobacco also, that even in the case of country tobacco there is considerable dehydration when it is dried in the sun and the expression sun - cured leaf is more appropriate to the case of country tobacco as sun curing is seldom effected for virginia tobacco. Similarly the expressions dust, primings and strips apply equally to country tobacco and it is, therefore, not correct to assume that the six categories referred to above relate only to virginia tobacco nor can the schedule which is only applicable in relation to the provisions of section 11 control the other provisions of the act, in particular, section 5, nor is rule 28 repugnant to the act. In so far as the allegation that no amenities are provided is concerned, the counter in c. M. P. No. 6762/56 in w. P. No. 969/56 denies that the committee is not providing any facilities or amenities, but that grading sheds were constructed in the gollapudi market yard at a cost of rs. 50,000. 'a market yard is also established in jaggayapeta for ground - nut and it is functioning very successfully. Further it is alleged that if more amenities could not be provided in this regard it is due to the fact that the petitioners and others are not willing to cooperate with the committee in paying the licence fees and other fees leviable under the act. It is further alleged that the power to issue licences and levy fees in respect thereof is conferred by the act and it is not conditional upon providing any facilities or amenities. Regarding this allegation and other allegations the counter in c. M. P. No. 1503/57 in w. P. Np. 1101/56 states that the market committee was established only on 9th april, 1956 and because that society was started only recently and the petitioners and their associates are not willing to cooperate with the committee in paying licence fees and other fees leviable under the act,, it could not provide certain amenities, but that the power to issue licences and levy fees conferred by the act is not conditional upon providing any facilities or amenities. It is further submitted that the court has no jurisdiction to grant a declaration that the by - laws - are invalid under article 226 of the constitution; that the affidavit does not disclose under what provisions and how a writ of mandamus can be issued; that suits have already been filed by the members of the petitioner - association and the same questions are being agitated in those very suits; and that the applicants have no locus standi to file these applications.

    (3) With respect to the preliminary objection that these writ petitions having been filed in a representative capacity by an association which as such is not aggrieved, they cannot be entertained and that the persons aggrieved should have filed separate petitions,it may be observed that in so far as writ petitions no. 969/56,87/57 and 89/ 57 are concerned they are filed in the name of the association of which the petitioner in the former case is registered under the societies registration act xxi of 1860. The remedy by way of writ arises where a person is affected by any order the legality of which is challenged and such person is entitled to apply for an appropriate writ. The fact that similar orders are passed in the case of other individuals by the same officer or authority does not entitle all of them to join together in seeking an appropriate writ. The provisions of order i, rule 8'do not apply to the petitions. There is authority for this proposition. Vide indian sugar mills association v. Secretary to government, uttar pradesh labour department, a. I. R. 1951 all 1 the bangalore district hotel olivers' association v. The district magistrate, bangalore, a. I. R. 1951 mys. 14 and radha gobinda paul v. Regional transport authority, midnapore, a. T. R. 1955 gal. 59 the association as such has not been affected in any way and in so far as the associations in writ petitions nos. 87 and 89 of 1957 are concerned being unregistered, the individual applying is not authorised to take any action on behalf of the members. Even where the society is registered, as i have stated, it is not the society which is affected and therefore it cannot ask for any writ or order seeking relief in a representative capacity on behalf of its members. The individuals concerned can file the petitions. Learned advocate for the petitioners contends on the authority of atmakur gopalakrishna rao and others, (1957) 1 an. W. R. 130 that i should consider the petitions as being filed not only by the person who signed the petition as president and secretary of the association but also by the association and direct the petition to be amended by striking off the association. The case cited by the learned advocate was one where two or more persons affected by the order had joined in a single petition for a writ of mandamus to enforce their separate claims. Kumarayya, j. Following the cases of s. M, muhammad ibrahim v. The deputy commercial tax officer, pudukottai, (1956) 2 m. Lj. 23 and united motors (india) ltd. V. State of bomaby, directed that the petition be treated as one application about one impugned order against one particular petitioner according to the selection of the applicant. As i have shown that case is different several people having joined in those petitions. In all the three writ petitions it is the association that is the petitioner and not the individuals and therefore the case cited by the learned advocate does not afford him any assistance. No doubt in these petitions the person signing on behalf of the association also is a member of the association and said that he was affected by the order but this does not make him a party as such. Therefore writ petitions nos. 969/56 and 87 and 89 of 1957 cannot be entertained and must be dismissed on this ground. W. P. No. 969 of 1956 can be dismissed on another ground also namely that suits have been filed by the members of the associations agitating the same questions and not only any opinion expressed by this court on merits would embarrass the lower court but an alternative remedy has been pursued.

    (4) However, in w. P. No. 1101/54 the secretary of the tobacco merchants association of jagareddigudem also appeared as the and petitioner in his individual capacity. As such accepting the prayer of the petitioner, i treat this petition as one filed by him in his individual capacity.

    (5) In order to consider the contentions on merit, it is necessary to examine the several provisions of the madras commercial crops markets act (xx of 1933). The long title of it shows that it is an act to provide for the better regulation of buying and selling of commercial crops and the establishment of markets for commercial crops in the presidency of madras. This act is now applicable to the andhra state. The following relevant provisions may be noticed :

    "2. (i - a) ' commercial crop' means cotton, groundnut or tobacco (and includes any other crop or product, notified by the (state) government in the fort st. George gazette as a commercial crop for the purposes of this act). 3. The state government may, by notification in the official gazette, declare their intention of exercising control over the purchase and sale of such commercial crop or crops and in such area as may be specified in the notification. Such notification shall state that any objections or suggestions which may be received by the state government within a period to be specified in the notification, will be considered by them. A copy of the notification shall be published in the prescribed manner. 4. (i) after the expiry of the period specified in the notification under section 3 and after considering such objections and suggestions as may be received before such expiry, the state government may, by notification published in the official gazette, declare the area specified in the notification under section 3 or any portion thereof to be notified area for the purposes of this act in respect of the commercial crop or crops specified in the notification under that section or any of them. A copy of the notification shall be pub lished in the prescribed manner, (2) 4 - a. (1) the state government shall establish a market committee for every notified area. It shall be the duty of the market committee to enforce the provisions of this act and the rules and by laws made thereunder in such notified area. (2) every market committee shall establish in the notified area such number of markets pimiding for such facilities, as the state government may from time to time direct, for the purchase and sale of the commercial crop or crops concerned. 5. (1) no person shall, within a notified area, set up, establish or use, or continue or allow to be continued, any place for the purchase or sale of a notified commercial crop, except under and in accordance with the conditions of a licence granted to him by the collector : provided that after the establishment in such area of a market for the purchase and sale of a notified commercial crop, no licence for the purchase or sale of such commercial crop shall be granted or renewed in respect of any place situated within such distance of the market as may from time to tune be fixed by the state government: provided further that the market committee may exempt from the provisions of this sub - section any person who carries on the business of purchasing or selling any commercial crop in quantities not exceeding those prescribed by rules made under this act : provided also that a person selling a commercial crop which has been grown by him or a cooperative society registered or deemed to be registered under the madras co - operative societies act, 1982, selling a commercial crop which has been grown by any of its members shall be exempt from the provisions of this sub - section but the state government may withdraw such exemption in respect of any such person or co - operative society or all of them. (2) nothing contained in sub - section (1) shall apply to a person purchasing for his private use a commercial crop in quantities not exceeding those prescribed by rules made under this act. (3) no person shall within a notified area, set up, establish or use, continue or allow to be continued, any place for the storage, weighment, pressing or processing of any notified commercial crop except under and in accordance with the conditions of a licence granted to him by the collector : provided that nothing contained in this sub - section shall apply to a person in respect of any notified commercial crop grown by him. (4). (5) every person to whom a licence is granted under this section shall comply with the provisions of this act, the rules and by - laws made thereunder and the conditions specified in the licence. Ii (1) the market committee shall, subject to such rules as may be made in this behalf, levy ft es on the notified commercial crop or crops bought and sold in the notified area at such rates as it may determine : provided that until the market committee has determined the rates of such fees, it shall levy fees at the rates specified in the schedule to this act or in the case of any crop or product notified by the state government as commercial crop for the purposes of this act, at the rates specified in this behalf in such notification. Explanation. - for the purposes of this suo - section, all notified commercial crops leaving a notified area shall, unless the contrary is proved, be presumed to be bought and sold within such area. (2) the fees referred to in sub - section (1) shall be paid by the purchaser of the commercial crop concerned : provided that where the purchaser of a commercial crop cannot be identified, the fee shall be paid by the seller. (3). 18. (1) the state government may, either generally or specially for any notified area or areas make rules consistent with this act for carrying out all or any of the purposes thereof, (2) in particular and without prejudice to the generality of the foregoing power such rules may provide for or regulate - (i). (ii). (iii). (iv) the maximum annual fees which may be levied by the market committee in respect of licences granted under section 5 and on the commercial crop or crops bought and sold in the notified area, and the recovery of such fees ; (iv - a). (v) the issue by a market committee of licence to brokers, weighmen, measurers and surveyors" the form in which, and the conditions under which, such licences shall be issued or renewed, and the fees to be charged therefor ; (v - a) the registration of buyers, sellers and buyers and sellers, in the notified area ; the form in which and the conditions subject to which such registration may be renewed ; and the fees to be charged for. 19. (1) subject to any rules made by the state government under section 18 and with the previous sanction of the director of agriculture, madras, a market committee may in respect of the notified area for which it was established make by - laws for the regulation of the business and the conditions of trading therein : provided that where a market committee fails to make by - laws under this sub - section within one month from the date of its establishment, the director of agriculture, madras, may make such by - laws as he thinks fit and the by - laws so made shall remain in operation until the market committee has made by - laws under this sub - section. (2) any by - law made under this section may provide that contravention thereof shall be punishable with fine which may extend to fifty rupees ".

    (6) The above fascicule of sections shows that provision was being made for buying and selling of commercial crops and for that purpose to establish markets and provide for their proper administration. A commercial crop according to the definition means cotton, groundnut or tobacco and includes any other crop or product which the state government may notify. The question is whether country tobacco or 'thadupu' or 'vatru' comes within the ambit of the word 'tobacco' or it has to be specially notified as contended in the petition. Under section 3 the state has first to notify its intention to control the purchase and sale in a specified area and after considering objections which it may receive, after the expiry of the period, it may under section 4 declare the area specified in the notification under section 3 or any portion thereof to be the notified area for the purposes of the act in respect of the commercial crop or crops specified in the notified area. Thereafter under section 4 - a it shall establish a market commitee for every such notified area. It is thereafter the duty of the market committee to enforce rules and by - laws made thereunder. The market committee has to esablish in the notified area such number of markets and provide for such facilities as the state government may from time to time direct for the purchase and sale of commercial crop or crops concerned. Learned advocate for the petitioner mainly contended that there should be a separate notification for the 'thadupu' or 'vatru' tobacco declaring it to be a commercial crop. But subsequently, however he was unable to support this contention and had to admit that country tobacco was not a product of tobacco but was a variety of tobacco included in the term tobacco. Tobacco was notified both in the krishna district and west godavari district in the manner provided for by the act. In the krishna district by notification g. O. Ms. No. 1078 dated 2nd june, 1950. The whole of the area situated within the limits of the krishna district inclusive of the area within the limits of the vijayawada taluk already notified under the act was notified to be the notified area for the purposes of the said act in respect of tobacco and groundnut, the intention to make such declaration having been prcvisoulsy published unde section 3 of the said act. By g. O. No. 3196, dated 24th december, 1939, the government of madras had also notified that on and from 1st april, 1939, no person shall set up, establish or continue, or allow to be continued any place for any of the purposes mentioned in sub - section (1) of section 4 in respect of (a) groundnut within the area notified in sub - paragraph (1) above and (b) tobacco within the area notified in sub - paragraph (ii) that is, within the limits of guntur district and the bezwada taluk of the krishna district, which was a notified area for the purposes of the said act in respect of tobacco. Similarly with respect to west godavari also tobacco was notified as a commercial crop, in g. O. Ms. No. 221, dated 16th july, 1955, published at page 1318 of part i of the andhra gazette. It is, therefore, clear that for purposes of sections 3 and 4 there was no necessity for further declaring or notifying country tobacco or 'thadupu' or 'vatru' as the case may be, so as to bring it within the definition of a commercial crop. Tobacco has been used in its widest connotation and includes virginia or country tobacco. There is nothing to warrant its limitation to virginia tobacco, merely because the schedule to the act enumerated six types of tobacco. That was done for the purposes of section 11 and 1 shall examine it while considering the contention relating to that section. Once country tobacco is deemed to be a commercial crop within the meaning of section 2 (i - a) and the areas within which the sale and purchase of such commercial crop is to be controlled has been notified under sections 3 and 4, it is incumbent on the market committee which has been established under section 3 (a) to enforce the rules and by - laws madr - under the act and to provide for such facilities as the state government may from time to time direct. Once these requirements as to notifications aic fulfilled, no person within the notified a ea can purchase or sell the notified commercial crops except under and in accordance with the licence granted to him by the collector under section 5 (1) , nor can he set up, establish, or use or continue or allow to be continued any place for storage, weighment, pressing or processing except and in accordance with the conditions of the licence granted to him by the collector under sub - section (3) of section 5. It is, therefore, obligatory on a person who intends to purchase or sell a notified commercial crop to obtain a licence from the collector and also if he intends to establish any place for storage, weighment, pressing or processing of the commercial crop to obtain another licence. Where however a market is established for the purchase and sale of a notified crop, no such licence will be granted or renewed in respect of any place situated within such distance of the market as may from time to time be fixed by the state government. Further, under section n, the market committee is empowered to levy fees subject to such rules as may be made in this behalf on the notified commercial crop or crops bought and sold in the notified area at such rates as it may determine, but until it determines these rates, the fee leviable would be the fee specified in the schedule to the act or in the case of any crop or product, notified by the government for the purposes of the act at the rate specified in this behalf in such notification. It is with respect to this proviso to section 11 that the learned advocate for the petitioner contends that country tobacco ought to have been notified since it is stated there that any crop or product notified by the state government as a commercial crop for the purposes of the act should be charged according to the rates specified in the notification and since there is no notification with respect to the country tobacco known as' thadupu ' or ' vatru ', the market committee cannot levy any fees. This, as i have already said, is based on a misconception that country tobacco is not included in the definition of the word tobacco and that it has to be notified. Once tobacco has been notified there is no question of notifying every variety of tobacco. Learned advocate however submits that country tobacco does not come within any of the varieties specified in these schedule. This was countered by the learned advocate for the respondent by saying that country tobacco is nothing special and is included in the category of sun - cured leaf or sun - cured strips. In support of this contention, he cites the report on the marketing of tobacco in the madras presidency published by the government. At page 103 under the heading " curing country tobacco " the following appears : - "the above process is the one extensively used for virginia curing at present. A small amount is sun - cured in the ordinary way. The process of sun - curing is used extensively for country tobacco and is as follows " : thereafter it sets out the manner of curing country tobacco for cigarettes and of curing it dark brown. It states that unlike in the case of virginia or light country harvesting is done throughout the day under the sun. The leaves are struck thick and tied closely to racks in the open fields. Due to this slow drying leaves develop a dark red colour and the complete drying is effected in about 1 months. They are then bulked in a dewy morning but the shifting is done at long intervals of from a fortnight to a month. When the bulks are changed, weak solutions of jaggery and myrobalan are sometimes sprayed layer by layer to develop aroma and give red colour. Repeated shiftings of the bulks complete the curing packing is done as in the case of country - light. Dark tobacco is used in the cigar trade. Similarly, venkateswara ayyar, deputy director of agriculture, writing in 1953 on tobacco, states at page 14, that harvesting of the country tobacco is done throughout the day in the sun, unlike in the case of virginia or light country tobacco and that these are strung to the ropes which are about seven yards long and cured in the sun for about two months. It is clear from these reports and the various observations that country tobacco of the ' thadupu ' or ' vatru ' variety is included in sun - cured leaf, and as such unless the market committee determines any rate, the rates specified in the schedule would apply. The matter, however, is not left there, because under by - law 23 of the by - laws of the west godavari market committee as well as under by - law 22 of the krishna market committee, the rate of cess under section n has been determined for "sun - cured leaf" inclusive of " thadupu " tobacco. In these circumstances, it cannot be said thai the market committees are not empowered to levy fees specified under section 11 on country tobacco.

    (7) It is then contended that as no market has been established, the petitioner cannot be compelled to take out a licence, nor can he be forced to take out a licence under sub - section (3) of section 5, firstly, because no amenities have been provided or if they are provided they are not commensurate and secondly, having regard to rule 28 (3) it shall not be necessary for a person to obtain more than one licence under section 5. A reading of section 5 would show that the requirement of obtaining a licence by a person who intends to set up, establish or use any place for the purchase and sale of a notified commercial crop is not dependent upon the establishment of a market as urged by the learned advocate for the petitioner. The proviso to section 5 makes this clear, because it provides for a contingency arising after the establishment of the market. The requirement for obtaining a licence under sub - section (3) has nothing to do with the establishment of a market it provides for the obtaining of a licence in case a person wishes to set up, establish or use, continue or allowed to be continued any place for storage, weighment, pressing or processing of a notified commercial crop in a notified area. These two licences are for totally different purposes; ' one is for establishing a place for the purchase or sale of the notified commodity while the other is for establishing a place for storage, weighment, pressing or processing of a commercial crop in a notified area. The relevant provisions in rule 28 (3) with respect to the exemption from holding two licences reads thus : -

    "it shall not be necessary for a person to obtain more than one licence for setting up, establishing or continuing or allowing to be continued more than one place in the same notified area for the purchase, sale, storage, weighment, pressing or processing of the same commercial crop"
    .

    (8) A person may carry on any one of these without the other or carry on both purchase and sale and storage, etc. , in the same place or at different places. The question is whether in the latter case he need only take one licence. Learned advocate for the respondent says that this provision does not envisage the exemption from obtaining a licence under section 5 (1) if a licence under section 5 (3) is obtained. What he contends is that there shall be only one licence for any one of the purposes specified in section 5 (1) and (3) with respect to the same notified area, i. E. , if a person has several places for purchase and sale of the notified commodity in the notified area, one licence would be sufficient and similarly only one licence - is necessary if a person has several places for weighment, storage, pressing, etc. , in the notified area. This argument may appear to be plausible, but on a closer reading, a reasonable construction is that where a person has a place for purchase and sale as well as for storage, weighment, etc. , only one licence would be necessary. The exemption in rule 28 (3) clearly lays down that only one licence is necessary for setting up, etc. , of more than one place in the same notified area with respect to "purchase, sale, storage, weighment, pressing or processing of the same commercial crop". The words in quotation qualify the words "one licence" and those are intended to convey that for both the purposes of sections (i) and (3) , viz. , where a person establishes a place of purchase and sale as well as a place of storage, weighment, etc. , or several places in the same notified area with respect to the same commercial crop he need only take one licence. The emphasis is on the words "same commercial crop". By - law 21 of the west godavari market committee which prescribes fees for single premises, etc. , is intended to replace the rates given in rule 28 (3) (i) which says that until the market committee has determined the iees, it shall levy fees at the rates specified above. By - law 21 of the west godavari market committee or by - law 12 of the krishna market committee prescribes the rates in detail, but specially make them subject to rule 28 (3) (iii). There is, therefore, no inconsistency between the by - law and the rule as contended by the learned advocate for the petitioner. If any person is required to take more than one licence, the circumstances under which the authority required them to take the licence must be set out, i. E. , whether he has one place for purchasing, selling, storage, weighment, etc. , of the same commodity or different commodities and other sundry details which may be necessary to determine the specific question. There are no such details given in the petition, nor is it evident that the petitioner has paid any fees contrary to the provisions. All that is stated in para. 11 of the petition is as follows : -

    "from 23rd october, 1956 onwards demands are being made of the member of the 1st petitioner - association to pay the respondent - committee rs. 50 as license fees under section 5 (1) of the act, and rs. 50 as registration fee under section 5 (3) of the act. In reply to a communication, dated 29th october, 1956 from the president of the 1st petitioner - association, the secretary of the committee sent a copy of by - laws nos. 21 and 23. The by - laws of the said committee which seek to make the members of the 1st petitioner - association liable to pay license fees, etc. , in so far as they seek to affect the trade in country tobacco or indian air - cured tobacco of the' kattu' or 'vatru' or 'thadupu ' type require to be quashed as, for reasons already stated, the by - laws to that extent are ultra vires and null and void"
    .

    From this it is not evident whether the petitioner has paid any fee and if so whether he had to pay a fee for more than one licence, whether he has established a place both for purchase and sale as well as storage, weighment, etc. , or he has different places with respect to the same commodity.

    (9) There remains the other question that no facilities have been provided for and therefore no fees under section 11 can be charged without providing such. Facilities. In the counter the market committee has stated that if amenities or facilities are not provided it is for the reason that the society was started very recently and the petitioners and their associates are not willing to co - operate with, the committee in paying licence fees and fees leviable under the act, nor is the levy of fees conditional upon the establishment of a market. A perusal of sections 11, 12 and 13 leaves no doubt that the levy of the fees is independent of the establishment of a market. Section 11 (1) authorised the levy of fees by the market committee within the notified area. Section 12 states that the amounts collected by the market committee shall be constituted into a fund called market committee fund while section 13 lays down that the fund shall be utilised for acquiring' a site for the market, maintenance and improvement of the market, the construction and repair of buildings and meeting all the pay, pensions, leave allowances, gratuities, etc. , of the officers and servants employed by the market committee and so forth. It is, therefore, clear from these provisions that from the fund so collected by the levy of fees under section 11, the market committee is enjoined ta build a market and provide facilities. That apart, the basis of the contention by the learned advocate for the petitioner is that the fees specified in section 11 is a fee and pot a tax and since it is a fee it is a sine qua non of the collection of the fees that there should be amenities. With this contention i am unable to agree. Levy of fee mentioned in section 11 is not dependent upon any services to be rendered. On the other hand section 13 makes it clear that it is for providing for future amenities that the levy has been authorised. In kutti keya v. The state of madras and others, (1954) 1 m. L. J. 117 a bench of the madras high court consisting of rajamannaiy c. J. , and venkatarama ayyar, j. , on a consideration of the observations of their lordships of the privy council in attorney - general for british columbia v. Esquimalt and nanaimo ry. Co, l. R. (1950) a. C. 87 took the same view. They held that the levy authorised under section 11 (1) is really a tax for raising funds for constructing markets notwithstanding that they are not brought into the consolidated fund of the state under article 226 (1) , but constituted into a separate fund and that tke levy is only on a section of the public. In these circumstances the petitioner has not made out a case for the issue of any writ or an appropriate direction. All the four petitions fail for the reasons stated above and are dismissed with costs. Advocate's fee rs. 50 in each of the petitions. Writ petitions dismissed.

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    Country Tobacco Merchants' Association, Vijayawada v. Krishna Market Committee, Vijayawada
    (Jun 28, 1957)