JUDGEMENT

B.C.Varma, J. - (1.)The petitioner is a company engaged in the business of sale and manufacture of textiles. It has textile mills at Dhamnod Road. Ratlam, within the market area of Krishi Upaj Mandi, Ratlam (respondent No. 1), established under the Madhya Pradesh Krishi Upaj Mandi Adhiniyam, 1972 (hereinafter called the Act), For the purpose of manufacture of textiles, the petitioner purchases unginned cotton from agriculturists. This cotton is then ginned, pressed and spinned and is then finally converted into finished product, viz., the cloth. All this process is undertaken by the petitioner in the Mills. The cloth is then marketed through dealers. 'Cotton' is one of the commodities included in the Schedule to the Act and is admittedly an 'agricultural produce' within the meaning of term as defined under Section 2 (1) (a) as meaning all produce whether processed or not, of agriculture, horticulture, animal husbandry, apiculture, pisciculture, or forest. The petitioner has obtained a licence under Section 32 of the Act. The respondent No. 1 has levied and charged market fee for purchase of cotton from the petitioner. The rate of market fee so charged is at 0.50 per one hundred rupees of the price except for a period between 1-41976 to Sl-7-1977 when market fee was charged at Re. 1/- per one hundred rupees of the price. The petitioner objected to levy and recovery of the market fee and also protested against its liability to take a licence under Section 32. By order dated 9-5-1977 (Annexure-C), the respondent-Samiti rejected the objection. Appeal/reference against the order of the Samiti (respondent No. 1) was also rejected by the Joint Director of Agriculture (respondent No. 2) by order, dated 14-11-1977 (Annexure-D). This petition was then filed on 30-11978 the respondent No. 1 cancelled the petitioner's licence.
(2.)According to the petitioner, it is not a market functionary within the meaning of Section 2 (1) (j) of the Act as the petitioner's undertaking only consumes the argicultural produce (i. e., cotton) as a raw material and is, therefore, not within the mischief of the Act. The petitioner, therefore, asserts that it is not required to take any licence under section 32 nor is required to pay any market fee on the purchase of cotton for use in the manufacture of textiles. Further challenge in this petition under Article 226 of the Constitution is to the levy and recovery of market fee at more than 0.50 p. on the ground that the increase from 0.50 p. to Re. 1/- is not correlated to the services rendered by the respondent No. 1 and that no fee at all can be charged on the agricultural produce purchased outside the market area. The petitioner prays for quashing of the orders, Annexures C and D, and for a further direction for refund of the fee paid. It is also prayed that the respondents be directed not to realise any market fee. The order, dated 30-1-1978, passed by the respondent No. 1 cancelling the petitioner's licence has also been questioned.
(3.)We may first take up the question of petitioner's liability to pay the market fee levied under Section 19 and also to take out a licence under Section 32 of the Act. The contention is that being a manufacturer, the petitioner cannot be said to be a market functionary. Even otherwise, if the purchase is made from the producers for its "own private consumption", it can use any place in the market area for marketing of cotton which is a notified agricultural produce. Further contention is that since the petitioner is neither a trader nor the owner or occupier of any processing or pressing factory or such other market functionary, it is not required to obtain a licence to operate in the market area of Krishi Upaj Mandi Samiti, Ratlam. In order to appreciate this contention, certain provisions of the Act have to be noted. Section 2 (1) (j) defines 'market functionary' to include a broker, a commission agent, an exporter, a ginner, an importer, a presser, a processor, a stockist, a trader, a weighman, warehouseman, hammal, surveyor and such other person as may be declared under the rules or the bye-laws to be a market functionary. According to Section 2 (1) (p), 'trader' means a person who in his normal course of business buys or sells any notified agricultural produce and includes a person engaged in processing of agricultural produce. Section 6 provides for control of marketing of notified agricultural produce. According to Sub-section (b) of Section 6, no person shall, except in accordance with the provisions of the Act and the rules and bye-laws made thereunder --(i) use any place in the market area for the marketing of the notified agricultural produce; or (ii) operate in the market area as a market functionary. To this sub-section is added a proviso which runs thus;
"Provided that nothing herein shall apply to - (a) the sale or purchase of such agricultural produce- (i) the producer whereof is himself its seller and such sale is made to a person who purchases it for his own private consumption; (ii) which is brought by head loads; (iii) which is sold through retail; (b) the transfer of such agricultural produce to a Co-operative Society for the purpose of securing an advance therefrom".
Chapter VI of the Act provides for regulation of trading. Section 31, which falls in that Chapter, is as follows:
"31. Regulation of persons operating in market area. No person shall, in respect of any notified agricultural produce, operate in the market area as commission agent, trader, broker, weighman, hammal, surveyor, warehouseman, owner or occupier of processing or pressing factories or such other market functionary except in accordance with the provisions of this Act and the rules and bye-laws made thereunder."
According to Sub-section (1) of Section 32, every person specified in Section 31, who desires to operate in the market area, shall apply to the market committee for grant of a licence or renewal thereof. Section 33 contains powers of a marketing committee to suspend or cancel a licence. In terms of that section, the market committee is required to record its reasons for suspending or cancelling a licence and, according to Sub-section (4), is required to give an opportunity to show cause against such suspension or cancellation.


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