O. Chinnappa Reddy, J. - (1.) The appellants, who are traders engaged in the purchase and sale of agricultural produce, appear to be a determined lot. For over a decade, they or those similarly placed have been litigating and impeding the levy and collection of market fee by the Market Committees constituted under the Punjab Agricultural Produce Markets Act. Some times they have been successful, sometimes they have not. One of the occasions when they appeared to be successful was when this Court in Kewal Kirshnan Puri. v. State of Punjab, AIR 1980 SC 1008 declared that the enhancement of the fee from 2% to 3% was illegal. The Court while striking down the enhancement of the fee laid down no new principle but made certain general observations which, we regret to say, have been so misunderstood and misinterpreted as to lead to some confusion and public mischief. The misunderstanding and confusion have also naturally led to more litigation. Fortunately, in Sreenivasa General Traders v. State of Andhra Pradesh AIR 1983 SC 1246, this Court has removed much of the misunderstanding, cleared many of the cobwebs and retrieved the situation.
(2.) Before we proceed to consider the question at issue in the present case, it will be fair to recall the object and purpose of the Punjab Agricultural Produce Markets Act and similar enactments in force in other States. Far back in 1953. Rajamannar, C.J and T. L. Venkatarama Aiyar, J, in Kutti Keya v. State of Madras AIR 1954 Mad 621, considered the provisions of the Madras Commercial Crops Markets Act, 1933, one of the forerunners of the Punjab Agricultural Produce Markets Act and other similar enactments elsewhere. The general nature of the legislation was explained by Venkatarama Aiyar, J., as follows:- ".................the subject-matter of the impugned Act is marketing and legislation on marketing is now a well-recognised feature of all commercial countries. The need for such a legislation arises whenever society passed on from the state of self-supporting economic unit, producing only articles for its own consumption to that of a commercial community producing articles for sale in outside areas for profit. While in the former stage, transactions would be generally settled directly between the seller and the purchaser, the price being paid and delivery of the commodity taken at the time of the deal, the conditions would be different when commercial crops are begun to be raised. The ultimate purchasers of these commodities would generally be persons outside the area of production, a merchant residing in another State and even in a foreign country. "To bring about a deal between the local producers and the outside purchasers, there emerged a class of middlemen. Even in well-organised and economically advanced countries like England, it was found that the agriculturist producer had not facilities for disposing of the goods to his best advantage (vide the statement of Dr. Addison, Minister for Agriculture, quoted at page 80 of the Indian Central Banking Enquiry Committee Report, Vol. 1, Part II). It is these conditions that have led up to the enactment of, marketing laws in all countries having a large volume of. trade in commercial crops. The object of this legislation is to protect the producers of commercial crops from being exploited by middlemen and profiteers and to enable them to secure a fair return for their produce. "The need for such legislation is even greater in India as the producers are as a class illiterate and economically dependent and unstable. The question had engaged the attention of several committees which had been constituted to report on various economic matters. Indian Cotton was a commodity greatly in demand in England and other countries and in the Central Provinces and Berar open markets for cotton were established through legislation. In 1919, the Indian Cotton Committee observed in their report that the marketing system afforded great protection to the producers and that special legislation should be undertaken to establish such markets in every cotton growing area. "The Royal Commission on Agriculture in India recorded a considerable body of evidence on the state of the trade in food crops and it showed the need for legislative action for safeguarding the interests of the producers (vide report dated 1928). In 1981 the Indian Central Banking Enquiry Committee considered in Chapter VII of its report the conditions with reference to marketing. It is therein pointed out that the village producer was seldom able to get a proper price because he was chronically indebted to the middlemen who advanced loans on the security of the crops to be grown and were thus in a position to dictate their own terms and that the bargains were seldom fair to the seller. "It was also observed that for want of facilities for warehousing the produce, the grower was not in a position to wait and sell the commodities for proper price (vide pages 78 and 79). In 1933 the Act now under consideration was passed with the object of providing for "the better regulation of buying and selling of commercial crops". It must be mentioned that at that time the only products which bad become commercial crops having an international market were cotton, groundnuts and tobacco; and the definition of commercial 'crops as enacted originally comprised only these three crops. ............................... "Various suggestions were made for improving the market conditions (vide pp. 92 and 93). In the report of the Planning Commission published in 1951 Chapter XVII, Vol. 1, deals with agricultural marketing and after referring to the working of the regulated markets in Bombay. Madras, Hyderabad and Madhya Pradesh it throws out several suggestions for future improvements. It must be added that there has been legislation on lines similar to those of the Madras Act in several of the States in India. "It will be clear from the above survey of the marketing legislation that its object is to enable producers to get a fair price for their commodities and that it has been generally adopted in all commercial States. Such laws have been held in America to be within the Police Power of the State as tending to promote general welfare (vide Parker v. Brown, (1942) 87 Law ED 315). Under the Indian Constitution, they must be upheld under Art. 19(6) as reasonable and enacted in the interests of the general public."
(3.) The decision of the Madras High Court in Kutti Keya v. The State was affirmed by a Constitution Bench of the Supreme Court in Arunachala Nadar v. State of Madras AIR 1959 SC 300. Subba Rao, J. referring to the background of the Act. observed: "There is a historial background for this Act. Marketing legislation is now a well-settled feature of all commercial countries. The object of such legislation is to protect the producers of commercial crops from being exploited by the middlemen and profiteers and to enable them to secure a fair return foe their produce. In Madras State. as in other parts of the country. various Commissions and Committees have been appointed to investigate the problem, to suggest ways and, means of providing a fair deal to the growers of crops, particularly commercial crops and find a market for selling their produce at proper rates. Several Committees, in their reports, considered this question and suggested that a satisfactory system of agricultural marketing should be introduced to achieve the object of helping the agriculturists to secure a proper return for the produce grown by them.;