KAN SINGH, J. - (1.) WE have before us a group of nine writ petitions whereby the several petitioners, who are carrying on business in agricultural commodities in what were recently constituted as Market Areas, under the Rajasthan Agricultural Produce Markets Act, 1961, (No. 38 of 1961) hereinafter to be referred as the "act" seek writs in the nature of prohibition against the State and other respondents restraining them from making any interference with their right to carry on their business unhampered as before. They also ask for a writ or an appropriate direction for quashing the various provisions of the Act, Rules and Bye-laws framed thereunder on the ground that they were null and void. As the writ petitions present some common features, they can conveniently be disposed of together.
(2.) BEFORE we come to enumerate the several grounds of attack taken in the various writ petitions we think it convenient to refer to the salient features of the Act. The Act which was passed by the State Assembly received the assent of the President on 3-11-61, and is designed to provide for the better regulation of buying and selling of agricultural produce and the establishment of markets for agricultural produce in the State of Rajasthan. The Act is divided in five Chapters. Chapter I is the preliminary Chapter and sec. 2 thereof contains the various definitions. The following definitions may be noted: "sec. 2 (1) (i) - "agricultural produce" includes all produce whether of agriculture, horticulture, animal husbandry or otherwise as specified in the Schedule. " "sec. 2 (1) (iv) - "bye-laws" means bye-laws made under sec. 37 or sec. 38. " "sec. 2 (1) (vii) - "market" means a regulated market established under and for the purposes of this Act for a market area and includes a market proper as well as a principal market yard or a sub-market yard. " Sec. 2 (1) (viii) - "market area" means any area declared to be a market area under sec. 4. " "sec. 2 (1) (ix) - "market committee" means a market committee established under sec. 6. " "sec. 2 (1) (x) - "market proper" means the area, including all lands with the building thereon, within such distance of a principal market yard or a sub-market yard as the State Government may declare to be a market proper. " Sec. 2 (1) (xiii) - "principal market yard" means an enclosure, building or locality declared to be a principal market yard under sec. 5. " sec. 2 (1) (xvii) - "sub-market yard" means an enclosure, building or locality declared to be a sub-market yard under sec. 5. " Chapter II provides for constitution of markets. For this two necessary steps are required to be taken. Sec. 3 provides for the issuing of a notification of the intention of the State Government of regulating purchase and sale of agricultural produce in an area as may be specified in the notification, and it also provides for inviting objections which when received are required to be considered by the Government. This section runs as under: Sec. 3. Notification of intention of exercising control over purchase and sale of agricultural produce in specified area - (1) The State Government may, by notification in the official Gazette, declare its intention of regulating the purchase and sale of such agricultural produce and in such area as may be specified in the notification: Provided that no area within the limits of a municipality shall be included in the area specified in such notification except after consultation with the Municipal Board or Municipal Council concerned, as the case may be. (2) A notification under sub-sec. (1) shall state that any objection or suggestion which may be received by the State Government within a period of not less than one month, to be specified in the notification, shall be considered by the State Government. " Sec. 4 provides for declaration of a market area and this has to be done in accordance with the provisions of that section which runs as follows: - "sec. 4. Declaration of market area - (1) After the expiry of the period specified in the notification issued under sec. 3 and after considering such objections and suggestions as may be received before such Expiry and after holding such inquiry as may be necessary the State Govt. may, by notification in the official Gazette, declare the area specified in the notification under sec. 3 or any portion thereof to be a market area for the purposes of this Act in respect of all or any of the kinds of agricultural produce specified in the said notification. (2) On and after the date on which any area is declared to be a market area under sub-sec. (1), no place in the said area shall, subject to the provisions of sep. 14, be used for the purchase or sale of any agricultural produce specified in the notification issued thereunder : Provided that, pending the establishment of a market in such area under sec. 9, the State Government may grant, subject to such terms and conditions as may be prescribed, a licence to any person to Use any place in the said area for the purcahse or sale of any such agricultural produce. (3) On and after the date of the notification issued under sub-sec. (1) or such later date as may be specified therein, no local authority, notwithstanding anything contained in any law, and no other person, shall within the market area or within a distance thereof to be notified in the official Gazette in this behalf in each case by the State Government, set up, establish or continue or allow to be set up, established or continued any place for the purchase or sale of any agricultural produce so notified. (4) The State Government may, on the report of the Collector or of the Director or of the Market Committee or an officer appointed in this behalf and after such inquiry as it deems to make, suspend or cancel any licence granted under sub-sec. (2 ). (5) The State Government may, at any time by notification in the official Gazettee, exclude from a market area any area or include in any market area any other area. " Sec. 5 makes provision for dividing a market into yards and it runs as under - "sec. 5. Division of market into yards - (1) For each market area there shall be one principal market yard and one or more sub-market yards as may be necessary. (2) The State Government may, by notification in the official Gazette, declare any enclosure, building or locality in any market area to be a principal maker yard for the area and other enclosures, buildings or localities to be one or more sub-market yards. " Chapter III of the Act provides for constitution of market committees (Krishi Upaj Mandi Samities) which are the principal administrative instruments for giving effect to the scheme of marketing as adumbrated in the Act. Sec. 6 runs as under- - "sec. 6. Establishment of market committees - The State Government shall establish a market committee for every market area in respect of the agricultural produce for which it is declared to be a market area under sec. 4. " Sec. 7 provides for the manner of constituting market committees and the material portions thereof run as follows - "sec. 7. Constitution of the market committees - (1) Every market committee shall be constituted as prescribed and shall consist of the following 15 members, namely: - (i) Seven shall be persons elected by such recognised organisation of agriculturists in the market area for which it is established as the State Government may prescribe and where no such organisations exist, by the agriculturists paying not less than ten rupees per year by way of rent or revenue and residing in the market area, in the manner prescribed; (ii) two shall be persons elected by the traders licensed by the market committee in the prescribed manner; (iii) two shall be representative of the Co-operative Marketing Societies and Cooperative Central Financing Agency in the market area for which it is established as the State Government may prescribe; (iv) elected by local authorities as follows: (a) one person shall be elected from amongst its own members by the Panchayat Samiti having jurisdiction over the largest portion of the market area; (b) if in a market area the principal market yard is wholly situated within the limits of a municipal council or a municipal board or a panchayat, one person shall be elected by the councillors of such municipal council or by the members of such municipal board or by the panchas (including the sarpanch) of such panchayat, as the case may be; (c) if in a market area the principal market yard and the sub-market yard or yards are situated within the limits of more than one municipal council board or of more than one panchayat, one person shall be elected by the councillors of the municipal council or members of the municipal board or panchas (including the sarpanch) of the panchayat, as the case may be, within the local limits of which the major portion of the principal market yard is situated and one person shall be elected in the prescribed manner by the other municipal councils or boards or by the other panchayats, as the case may be, within the local limits of which the remaining portion of the principal market yard and sub-market yard is situated; Provided that a person to whom a licence has been granted under sub-sec. (2) of sec. 4 or under sec. 14 shall not be eligible to become a member of the market committee under Cl. (iii) or Cl. (iv) (v) nominated as follows: (a) where in the circumstances mentioned in Cl. (iv) the number of persons to be elected by local authorities is two, two persons shall be nominated by the State Government ; (b) where in the circumstances mentioned in Cl. (iv) the number of persons to be so elected is three, one person shall be nominated by the State Government : Provided that the State Government may, at any time, reduce the number of nominated members for any market committee and in their place increase the number of members to be elected under Cl. (i) or Cl. (ii), as it thinks fit. " (2) to (b ). . . . . . . . . . . . . . . . . . . . . (9) No act done by a market committee shall be questioned on the ground merely of the existence of any vacancy in, or any defect in the constitution of, the committee. " The market committee is a body corporate and has a perpetual succession and a common seal and may sue and may be sued in its corporate name and is competent to acquire and hold property. Sec. 9 enumerates the several functions and duties of a market committee and it runs as follows: Sec. 9 Functions and duties of a market committee - (1) A market committee shall - (a) manage the market proper, the principal market yard and sub-market yards in the market area for which it is constituted; (b) control and regulate - (i) the running of the market in the interest of agriculturists and traders operating in the market; (ii) the making of transactions in the market; (iii) the admission and entry of persons to the market and the use thereof, and (iv) the behaviour of those who enter the market for transacting business ; (c) take steps for the prevention of adulteration of agricultural produce; (d) provide for the grading and standardisation of agricultural produce; (e) act as a mediator or arbitrator in all matters of differences and disputes between licensees inter se or between them and agriculturists making use of the market as sellers of agricultural produce ; (f) bring, prosecute or defend, or aid in bringing, prosecuting of defending, any suit, action, proceeding, application or arbitration on behalf of the market committee or otherwise, when so directed by the State Government or the Director; and (g) do such other things as might be required for the purpose of achieving the objects and requirements of this Act and the rules and bye-laws made thereunder and facilitating the working of the market committee. (2) It shall be the duty of a market committee.- (a) to enforce the provisions of this Act, the rules and bye-laws made thereunder and the terms and conditions of a licence granted under sub-sec. (2) of sec. 4 in the market area for which such committee is constituted and within the distance thereof notified under sub-sec. (3) of sec. 4, and (b) when so required by the State Government to establish a market in such market area providing for such facilities as the State Government may direct from time to time in connection with the purchase and sale of the agricultural produce concerned : Provided that the State Government may, on the application of a co-operative marketing society made through the Registrar of Co-operative Societies for the State, permit such society to establish such a market in any market area. " Sec. 14 makes provision for issuing of licences by a market committee and it originally stood as follows: - "sec. 14. Power of market committee to issue licences - Where a market is established under sec. 6 the market committee may issue and renew licences, in accordance with rules and bye-laws, to traders, brokers, weighmen, measurers, surveyors, warehousemen and other persons to operate in the market on payment of the prescribed fees: Provided that no such licence shall be necessary in the case of a person to whom a licence has-been been granted under sub-sec. (2) of sec. 4. " This provision was, however, amended by the Rajasthan Laws Repealing and Amending Act, 1962, published in the Rajasthan Gazette dated 15-12-62, and in the above sec. for the word and figure "sec. 6", the words, letters, figures and brackets "clauses (b) of sub-sec. (2) of sec. 9" were substituted. Then, there are provisions about suspension or cancellation of licences granted under sec. 14 and with them we are not concerned at the moment.
(3.) SEC. 17 empowers a market committee to levy cess and it runs as under - SEC. 17 Power to levy cess - The market committee may, subject to the provisions of rules and subject to such maxima as may be pres cribed, levy a cess on the agricultural produce bought and sold by the licsncess in the market. " Sec. 18 provides that all moneys received by a market committee shall be paid into a fund to be called "market committee fund" and all expenditure incurred by the market committee under or for the purposes of this Act shall be defrayed out of the said fund. It is authorised to invest the surplus in such manner as may be prescribed. Sec. 19 provides for the several purposes for which the fund is to be expended and it runs as under: - "sec. 19 Purposes for which the fund shall be expended - Subject to the provisions of sec. 18, the market committee fund shall be expended for the following purposes, namely: - (1) the acquisition of a site or sites for the market; (2) maintenance and improvement of the market; (3) the construction and repair of buildings necessary lor the purposes of such market and for the health, convenience and safety of the persons using it; (4) the provision and maintenance of standard weights and measures; (5) the pay, pensions, leave allowances, gratuities, compensation for injuries resulting from accident, compassinate allowance and contributions towards leave allowances, pensions or provident funds of the officers and servants employed by it; (6) the expenses of and incidental to elections; (7) the payment of interest on the loans that may be raised for the purposes of the market committee and provision of sinking fund in respect of such loans; (8) the collection and dissemination of information regarding matters relating to crop statistics and marketing in respect of the agricultural produce notified under sec. 4; (9) the payment of the cost referred to in sub-secs. (3) and (4) of sec. 18; (10) any propaganda in favour of agricultural improvement; and (11) the carrying out of the purposes and provisions of this Act and the rules and bye-laws made thereunder. " Sec. 36 provides for making of rules by the Government and the relevant portions thereof run as under: - "sec. 36 Rules - (1) The State Government may, either generally or specially for any market area or market areas make rules for the purpose of carrying out the provisions of this Act. (2) In particular and without prejudice to the generality of the foregoing provision such rules may provide for or regulate. . . . . . . . . . . . . . . . . . (f) the issue of licences to traders, bro-kers, weighmen, measurers, surveyors, warehousemen and other persons operating in the market, the form in which and the conditions subject to which such licences shall be issued or renewed and the fee to be charged therefor. Sec. 37 enacts how bye-laws are to be framed by the market committee and sec. 38 contains the power of the Director to make the bye-laws. Secs. 37 and 38 run as under: - "sec. 37. Bye-laws - (1) Subject to any rules made by the State Government under sec. 36 and with the previous sanction of the Director or any other officer specially empowered in this behalf by the State Government, the market committee may, in respect of the market area under its management, make bye-laws for the regulation of business and conditions of trading therein. (2) Any bye-law made under this section may provide that any contravention thereof shall, on conviction, be punishable with fine which may extend to fifty rupees. " "sec. 38. Power of Director to make bye-laws - (I) If a market committee fails to make, in respect of the market area under its management, the necessary bye-laws under sec. 37 within a period of six months from the date of its constitution, the Director may make such bye-laws and may also provide punishment for the contravention thereof in accordance with sub-sec. (2) of sec. 37. (2) Such bye-laws shall remain in force until superseded by fresh bye-laws made by the market committee under sec. 37. " In exercise of the powers conferred on the Government, the Government framed the Rajasthan Agricultural Produce Markets Rules, 1963, hereinafter to be referred as the "rules". These rules provide for various matters. Rule 58 provides for market cess and runs as under: - "rule58. Market Cess- (1) A market committee shall levy and collect cess on agricultural produce bought and sold in the market at such rates as may be specified in the bye-laws of the committee so however that the amount of cess levied as aforesaid does not exceed two rupees per head of cattle, sheep or goat and 00. 50 np. at the maximum for every Rs. 100/- worth of any other agricultural produce. Explanation - (a) For the purpose of this rule a sale of agricultural produce shall be deemed to have taken place in a market if it has been weighed or measured or surveyed by a licensed weighman, measurer' or surveyor in the market for the purpose of sale, notwithstanding the fact that the property in the agricultural produce has by reason of such sale, passed to a person in a place outside the market. (b) Further for the purpose of this rule, and notified agricultural produce taken out or proposed to be taken out of the market shall, unless the contrary is proved, be presumed to be bought and sold within such market. (2) The cess levied as per sub-rule (1) shall not be levied more than once oh agricultural produce bought or sold in the market. (3) The market committee shall also levy and collect licence fee from traders, brokers, weigh-men, measurers, surveyors, warehousemen and other persons operating in the market as provided in the bye-laws. (4) No cess shall be levied on agricultural produce brought from outside the market into the market for use therein by the industrial concerns situated in the market or for export and in respect of which a declaration has been made and a certificate has been obtained in Form - V: Provided that if such agricultural produce brought into the market for export is not exported or removed therefrom before the expiry of twenty days from the date on which it was so brought, the market committee shall levy and collect cess on such agricultural produce from the person bringing the produce into the market at such rates as may be specified in the bye-laws: Provided further that if the industrial concerns that brought the agricultural produce from outside the market into the market for the purpose of use by them, and who do not make any declaration and do not obtain a certificate in Form-V as prescribed above, shall be deemed to be responsible for the contravention of this rule, and shall, on conviction be punished under sub-sec. (3) of sec. 36 of the Act with a fine which may extend to rupees two hundred. (5) The seller who is himself the producer of the Agricultural produce offered for sale and the buyer who buys such produce for his own private and/or household use, shall be exempted from payment of any cess under this rule. " ;