- (1.) The petitioner, the British India Corporation Limited, is a company registered under the Companies Act with its head office at Kanpur. It owns two woollen mills, one at Dhariwal and the other at Kanpur. We are in this petition concerned with the unit of the company at Dhariwal which is known as the New Egerton Wollen Mills (hereinafter called the liensee). It holds a licence from the Market Committee, Dhariwal, respondent 1, under Section 10 of the Punjab Agricultural Produce Markets Act, 1961 (hereinafter referred to as the Act), as a person carrying on business within the notified market area of that Committee. The licensee receives wool as a raw material for its manufacturing business which is an agricultural product mentioned in the schedule to the Act. The Act came into force in 1961 but for the first time the notice was issued to the licensee by respondent 1 on June 21, 1968, calling upon it to pay the market fee on the purchase of raw wool from March 7, 1962, to the date of the notice by June 29, 1968, failing which assessment would be made and recovery effected with penalty. After some correspondence wherein the licensee denied its liability to pay any market fee, respondent 1 made an assessment order in pursuance of which demand notice in form 'P' dated March 15, 1971, was issued to the licensee calling upon it to pay the sum of Rs. 3,67,200/- on account of market fee (Rs. 2,44,800/-) and penalty (Rs. 1,22,400/) for the period from May 26, 1961, to December 31,1970, on or before March 27, 1971; failing which the amount would be recovered as arrears of land revenue. Against that order the licensee filed C.W. No. 4247 of 1971 in this Court challenging the levy of market fee and penalty. That petition came up for hearing before Sarkaria, J., (as his Lordship then was), on February 2, 1972, when he passed the following order :- "Mr. Kuldip Singh counsel for the respondent Committee says, that if the petitioner makes available all the records relating to purchase of wool, to the respondent Committee, they will withdraw these proceedings if on investigation of the relevant facts from the records it is found that the provisions of Section 23 of the Punjab Agricultural Produce Markets Act and Rule 29 are not attracted. In view of this offer, Mr. Bhagirath Dass has given an undertaking that the petitioner shall make available all the records which may be asked for by the Committee. He has pointed out that the demand has been raised for all the period commencing from 1962. Mr. Kuldip Singh says, the Committee will be reasonable. They will not ask for all the records indiscriminately so as to make, a roving and fishing enquiry with the affairs of the petitioner, but will specify only essential records. Mr. Kuldip Singh accepts this arrangement. Such specified records shall be made available on such date as may be mutually agreed upon. Meanwhile, the case shall remain pending and come up on 6th April. Meanwhile the Committee shall not effect the recovery." Thereafter, the writ petition came up for final hearing before the learned Judge on November 15, 1972, when the following order was passed : "Mr. Bhagirath Das, the learned counsel for the petitioner has made a statement at the bar that in compliance with this Court's order dated 2nd February, 1972, all the records which were asked for by the respondent Market Committee, were made available to them for inspection and that such inspection revealed that in 1969 and 1970 two purchases to the extent of Rs. 6000/- and Rs. 5000/- were made by the petitioner which were liable to be assessed to market fee. Mr. Kuldip Singh confirms that records were produced by the petitioner and the inspection of those records revealed that certain purchases were made by the petitioner-Corporation, which were liable to be-assessed to market fee. Mr. Bhagirath Das also gives an undertaking that if the Market Committee withdraws the impugned assessment, dated 15th March, 1971, the petitioner will have no objection to a fresh assessment with regard to those purchases which fall within the ambit of Section 23 of the Punjab Agricultural Produce Markets Act read with Rule 29 of the Rules framed under that Act. Mr. Kuldip Singh has accepted this offer and has withdrawn the impugned assessment, dated 15th March, 1971, on behalf of the Market Committee and has further stated that they will make a fresh assessment according to the Rules. In view of these undertakings, the writ petition becomes infructuous and is dismissed with no order as to costs.
(2.) It is evident from these two orders that the licensee agreed to pay the market fee in respect of the purchases which fell within the ambit of Section 23 of the Act read with Rule 29 of the Punjab Agricultural Produce Markets (General) Rules, 1962 (hereinafter referred to as the Rules). It was, therefore, incumbent on the Market Committee to find out the purchases made by the licensee which fell within the ambit of Section 23 of the Act read with Rule 29, but after prolonged correspondence the Market Committee passed the following resolution by way of order of assessment :- "The New Egerton Woollen Mills Ltd., Dhariwal, was served two notices in form 'O' as required u/r 31 of the Punjab Agricultural Produce Markets (General) Rules, 1962 . Failing to comply with the letter and spirit of the abovesaid notices, the said Mills was again served upon a detailed and final notice vide No. 473/73 dated 13.7.73 bearing the periodwise (26.5.61 to 1970) figures of the value of the transactions of wool, (an agricultural produce) which was delivered to the said Mills and weighed by it at Dhariwal which falls with the notified market area of Market Committee, Dhariwal. The said Mills has only availed the last opportunity and agreed to produce for inspection all the account books for the abovesaid period pertaining to the abovementioned transactions of wool, delivered and weighed at Dhariwal. The duly authorised representative of the said Mills, Shri Madan Lal, Commercial Assistant Grade 1, gave in writing that the record for the period 26.5.61 to 1963 had been destroyed, so he produced the concerned record only for the period 1964 to 1970 for inspection. During the said inspection it was confirmed from the record so produced that the payments of the value of all the transactions of wool, freight, local octroi and all other charges were made by the said Mills. In exercise of the powers conferred upon the Market Committee, Dhariwal, under the said Act and Rule 31, the amount and the value of the wool so transacted during the period 26.5.61 to 1970 is assessed as detailed below and a fee on the basis of that assessment and a prevailing from time to time, payable by the said Mills is worked out and levied to the tune of Rs. 4,26,000/- and a penalty of Rs. 4,26,000/- (equal to the amount of fee u/r 31(9) ) is also levied in addition to the said fee and shall be recovered. Therefore, the total amount of fee plus penalty so levied and recoverable comes to the tune of Rs. 8,52,000/-. If the said Mills fails to pay the assessed amount within 30 days on the receipt of the notice in form 'P', then the recovery of the amount of Rs. 8,52,000/- shall be effected in accordance with Section 41 of the said Act ... ... ... ...". It is apparent from this resolution that no finding has been given that the wool had been purchased by the licensee within the local limits of the Market Committee, Dhariwal, or that the delivery of wool to the licensee and its weightment were in pursuance of any agreement. Section 23 of the Act and Rule 29(7) of the Rules, read as under :- "23. A Committee may, subject to such Rules as may be made by the State Government in this behalf, levy on ad valorem basis fees on the agricultural produce bought or sold by licensees in the notified market area at a rate not exceeding forty naye paise for every one hundred rupees - Provided that - (a) no fee shall be leviable in respect of any transaction in which delivery of the agricultural produce bought or sold is not actually made; and (b) a fee shall be leviable only on the parties to a transaction in which delivery is actually made. 29(7) For the purpose of this Rule agricultural produce shall be deemed to have been bought or sold in a notified market area - (a) if the agreement of sale or purchase thereof is entered into in the said area; or (b) if in pursuance of the agreement of sale or purchase the agricultural produce is weighed in the said area; or (c) if in pursuance of the agreement of sale or purchase the agricultural produce is delivered in the said area to the purchaser or to some other person on behalf of the purchaser. "
(3.) As I read the three clauses of sub-Rule (7) of Rule 29, the existence of an agreement of sale or purchase is necessary. Mere weightment or delivery is not enough. The weightment or delivery must take place in pursuance of an agreement of sale or purchase. It is, therefore, necessary for the Market Committee to find that there was an agreement of sale or purchase in pursuance of which either the weightment or the delivery of goods took place within the notified area of the Market Committee. No such finding has been recorded in the assessment order.;