KRISHI UPAJ MANDI SAMITI Vs. REGIONAL PROVIDENT FUND COMMISSIONER INDORE

JUDGEMENT

(1.) BY this petition under Article 226 of the Constitution, the petitioner challenges the order dated 24th July 1979 passed by the Regional Provident Fund Commissioner, Indore, holding that the petitioner Mandi Samiti is a trading and commercial establishment falling within the description of "commodity and stock exchanges" and is covered by the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 Notice for admission of this petition was issued to the respondents. Return was filed on behalf of respondent No.1. With the consent of the learned counsel appearing for the parties, the petition was heard on merits.

(2.) THE petitioner is a Market Committee constituted under section 7 of the Madhya Pradesh Krishi Upaj Mandi Adhiniyam, 1972. The Adhiniyam provides for regulation of buying and selling of agricultural produce and the establishment and proper administration of markets of agricultural produce in the State of Madhya Pradesh. Sections 4 and 5 deal with establishments of market, market yard and market proper for notified agricultural produce. On the establishment of a market under section 4, no local authority is allowed to set up, establish, continue or use any place in the market area for the marketing of any notified agricultural produce. Similarly, no person is allowed to use any place in the market area for the marketing of the notified agricultural produce or to operate in the market area as a market functionary, except in accordance with the provisions of the Act and the rules and bye -laws made thereunder. A Market Committee established under section 7 is a body corporate. The powers and duties of the Committee are enumerated in section 17. The duties of the Committee are: (a) to implement the provisions of the Act and the rules and bye -laws made thereunder in the market area, (b) to provide such facilities for marketing of notified agricultural produce therein as the State Government may, from time to time, direct and (c) to do such other acts as may be necessary in relation to the superintendence, direction and control of Market or for regulating marketing of notified agricultural produce in any place in the market area. The Committee is empowered to maintain and manage the market yards; to provide the necessary facilities for the marketing of agricultural produce in the market yards; to grant or refuse licences to the market functionaries and renew suspend or cancel such licences; to supervise the conduct of the market functionaries and to do similar other acts which are enumerated in subsection (2) of section 17.

(3.) THE petitioner Committee is not itself engaged in the purchase, sale or storage of any goods. The activities of purchase, sale or storage of goods are carried on by the traders in the market and market yard established under the Krishi Upaj Mandi Adhiniyam which are maintained and managed by Committee. By maintaining and managing the market or the market yard in which other persons carryon trading activities of purchase, sale or storage of goods, it cannot be said that the petitioner is a trading and commercial establishment engaged in the purchase, sale or storage of goods. The Regional Provident Fund Commissioner in his order held the petitioner to be a trading and commercial establishment on the ground that it falls within the description of "commodity and stock exchanges" mentioned in the inclusive part of the notification. Now, the market or the market yard managed by the petitioner is certainly not a "stock exchange" which means an organized market for the sale and purchase of securities such as shares stocks and bonds. The trading activity in the petitioner's market or market yard is restricted to trading in agricultural produce. It is, therefore, clear that the market and market yard managed by the petitioner do not fall within the description of "stock exchange." The next question is whether the market and market yard can be described to be -"commodity exchange". "By commodity exchange" is meant an organized market for the purchase and sale of enforceable contracts to deliver a commodity such as wheat, coffee or cotton at some future date. "The seller of a contract on a commodity exchange does not normally intend to deliver the actual commodity. nor does the buyer intend to accept delivery, each will, at some time prior to the date of delivery specified in the contract, cancel out his obligation by an off setting purchase or sale. The parties merely wish to engage in the assumption or delegation of the risk involved in a change in price. Commodity exchanges are thus ancillary to the markets in which commodities are actually bought and sold; they complement them by providing insurance against the risk of price changes and also provide a basis for the determination of prices at which commodities are actually traded" (See Encyclopedia Britannica, 15th Edition, Micropaedia Volume III, Page 40). Now, in the market or market yard maintained and managed by the petitioner Committee the agricultural produce is actually bought and sold. The market or market yard is not established for purchase and sale of contracts to deliver a commodity to enable traders to enter into speculative transactions of forward delivery of goods without intending to give or accept delivery and intending all the time to resell the contract or settle the same by receiving or paying the difference. The petitioners market or market yard, therefore, does not fall within the description of 'commodity exchange'. In this view of the matter, it cannot be held that the petitioner can be brought within the description of 'trading and commercial establishments.' The impugned order of the Regional Provident Fund Commissioner proceeds upon a wrong construction of the words "commodity and stock exchanges" as used in the notification.