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Fal Sabji Kreta Vikreta Vyapar Sangh v/s State

    Civil Spl. Appeal No. 533 of 2000 in Civil Writ Petn. No. 4217 of 1998

    Decided On, 17 July 2000

    At, High Court of Rajasthan Jaipur Bench

    By, THE HONOURABLE CHIEF JUSTICE DR. AR. LAKSHMANAN & THE HONOURABLE MR. JUSTICE ARUN MADAN

    For the Appellant: Prem Krishan Sharma, Advocate. For the Respondents: ----------



Judgment Text

Dr. AR. Lakshmanan, C.J.

1. This appeal is directed against the judgment of learned single Judge (G. L. Gupta, J.) dated 4-4-2000 dismissing the writ petition on the ground that amendment in the rules does not frustrate the object of the Rajasthan Agricultural Produce Market Act, 1961 (hereinafter, to be referred as 'the Act of 1961').

2. The writ petition was filed by the appellant, which is a registered body, praying as under :-

(i) by issuance of an appropriate writ, order or direction declare the notification dated 31-7-1998 as ultra vires and completely against the purpose;

(ii) by issuance of an appropriate writ, order or direction, direct the respondent that no such increase should be made by the State Government; and

(iii) by issuance of an appropriate writ, order or direction it may also be ordered that the State Government should recover the excess amount charged by the brokers after 31-7-98.

3. By notification dated 31-7-98, the State Government has increased the rate of commission to A-Class brokers from 4% to 6%. The increase in the rate of commission from 4% to 6% is under challenge in the writ petition on the following grounds :

(a) That there is no justification behind this increase and that the amount will go to the middle man.

(b) The action of the Government in increasing the commission is clearly against the spirit of the Agricultural Produce Market Act and by this increase, the purpose of the Act and the establishment of the markets has been frustrated.

(c) The purpose of the Act was to eliminate the rate of middle man but by this increase, the role has been made very lucrative instead.

(d) The object of the A

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ct was to benefit the producer as well as the consumer, but by this notification the Government has completely ignored the purpose and has benefited the middle man.

(e) There is no rationale behind the increase and there was no necessity for the increase.

4. Along with the writ petition certain Annexures were filed.

5. Reply was filed on behalf of the State of Rajasthan. According to the State, the Government has taken a policy-decision for increasing rate of commission from 4% to 6% and the notification has been issued after considering all the relevant factors and that the State has always a right to change its policy from time to time under the changing circumstances; and that the same cannot be questioned in a Court of law unless the said policy is arbitrary or violative of law.

6. G. L. Gupta, J. by his order dated 4-4-2000 dismissed the writ petition on a consideration of the entire materials placed before him. The learned Judge was considering the only question raised by the appellant/petitioner as to whether amendment in the rules frustrates the object of the Act of 1961 and after reproducing the preamble of the Act has held as follows :-

"The obvious purpose of the Act is to establish markets for agricultural produce for the State and also to regulate the buying and selling of the agricultural produce. The commission is given to the brokers for the help they render in the sale and purchase of the agricultural produce. Since the commission payable to 'A' Class broker was already payable, may be at 4 per cent which has now been increased at 6 per cent, it cannot be said that the amendment has frustrated the objectives of the Act.

The change in the rate of commission of the brokers is the policy matter for the consideration of the State Government. The State Government has taken decision of increasing the broker's commission after having the information from the other States of the country and also the other relevant factors. Since there was long standing demand of the brokers, the matter has been considered by the State Government and it has been thought proper to increase the commission. It may be that the increase is likely to benefit around Rs. 90,000/- p.m. to the brokers working in the market but that cannot be a ground to strike down the provision of increasing the rate of commission. This Court can be justified in interfering with the notification order only when it is shown that the amendment violates any of the provisions of the Constitution or of the Act of 1961. It is also not found that the amendment is arbitrary since the State Government has decided to increase the rate of commission after having information from other States."

7. Being aggrieved, the petitioner-Sangh has filed the above appeal and reiterated the very same grounds which have been raised in the writ petition.

8. We have heard Mr. Prem Kishan Sharma, learned Counsel for the appellant at the admission stage. The learned Counsel reiterated the same arguments advanced before the learned single Judge. We have carefully considered the points raised in the said appeal and urged by the counsel at the time of hearing. The learned Counsel has cited the judgment reported in M/s. Shiv Shanker Dal Mills v. State of Haryana, AIR 1980 SC 1037, in support of his contention.

9. The Rajasthan Agricultural Produce Markets Act, 1961 which received the assent of the President on 3rd November, 1961 was enacted 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 legislation of the subject has already been enacted by the States of Bombay, Madras, Andhra Pradesh, Punjab, Madhya Pradesh, Hyderabad and other States. The State of Rajasthan has from its very inception attached great importance to the regulation and improvement of primary marketing in agricultural produce. With the above object, the Act of 1961 was enacted. That providing to establish and regulate markets for sale or purchase of agricultural produce is to protect farm producers from being exploited by the middlemen and profiteers and also to secure fair return of their produce. That does not restrict freedom of trade and commerce. The Act restrains chances of further exploitations of the agriculturist and farm producers. On the contrary the Courts have held that similar enactment is beneficial to both agriculturist as well as traders dealing in farm produces. There is a definite public purpose behind the Act, namely establishment of regulated markets for purchase and sale of agricultural produce to protect the agriculturist from being exploited by the middlemen and profiteers. The Act is also intended to enact for the better regulation of buying and selling of agricultural produce and for the establishment of markets therefor in the State. The whole object of the Act is the supervision and control of the transactions of purchase by the traders from the agriculturist in order to prevent exploitation of the later by the former.

10. We have perused the reply filed by the State in the writ petition. It is stated that in big cities like Jaipur, Jodhpur, Bikaner, Ajmer and Sri Ganganagar, the separate fruit and vegetable market committees are situated to manage only fruit and vegetable markets and in other places where there are separate fruit and vegetable markets are not situated their sale and purchase of fruit and vegetables are managed by the local market committees in the notified area. It is further submitted that for each market committee there are bye-laws of each and every market committee framed under guidance of the State Government. As already noticed, the aims and objects of the Rajasthan Agricultural Produce Markets Act are to regulate the sale and purchase of the agricultural produce to protect farmers from the exploitation by middlemen and to make available good quality products in fair price to the consumers. It is stated that the brokerage to the brokers was fixed at the rate of 4 per cent after the commencement of the Act of 1961 and that there are 300 commission agents registered and in the year 1998-99 a sum of Rs. 5,13,98,680/- has been collected as mandi fee by the Lal Kothi Fruit and Vegetable Market Committee at the rate of 1.6%. Vide notification dated 31-7-1998, the State has increased the rate of commission to 'A' Class brokers from 4 per cent to 6 per cent which would be charged from the purchasers by the commission agents. It is also not in dispute and has been specifically stated in the reply since the commencement of the Act of 1961 the rate of commission to the 'A' class brokers on fruit and vegetables was 4 per cent and due to increase of prices in every commodity and also increase in the mandi fee charged from the brokers by the State Government from time to time, the 'A' class brokers made demand for enhancement of the rate of commission. It is further submitted that the State received number of representations on different times from 'A' class brokers for enhancement in the rate of commission and the State after a detailed examination and after receiving the comparative rate of commission charged by the brokers in the neighbouring States have taken a policy-decision for increasing the rate of commission from 4% to 6% vide notification dated 31-7-1998. Thus, it is submitted by the State that the notification had been issued after considering all the relevant factors.

11. We are of the opinion that since this is a policy-decision of the Government, it is empowered to make amendment in the rules after considering all the relevant factors. The Government after considering all the relevant factors has thought it proper to increase the rate of commission of the brokers which was only 4% since 1963 and has increased the rate of commission from 4% to 6% only in the year 1998.

12. The Rajasthan Agricultural Produce Markets Rules, 1963 have been framed by the State Government u/S. 36 of the Act of 1961. Clause (g) of sub-section (2) of Section 36 of the Act stipulates that the State Government may provide for the trade allowance which may be made or received by any person in any transaction in the agricultural produce in the market area. Under clause (ii) of Rule 75 of the Rules, it was provided that the commission payable to 'A' class broker shall be 4.00 per cent in case of fruits and vegetables and 1.75 per cent for other commodities and other charges shall be such as may be specified in the bye-laws of the Market Committees. The rate of commission had been increased by the notification. Thus, it is very clear that the State Government was well within its legislative powers to amend clause (ii) of Rule 75 of the Rules and the rate of per cent of the brokers' commission could also be increased. It is thus seen that the commission which was fixed at 4% in 1963 has not been increased till the impugned notification was issued in 1998 and the same has been increased after due consideration of all the relevant factors and the various representations made by 'A' class brokers demanding increase. In our opinion, the State Government is well within its jurisdiction to increase the commission and for that purpose is entitled to take a policy-decision.

13. In this context the judgment rendered by Sen, J. (as he then was) and reported in M/s. Narayan Hari Shanker v. State of Rajasthan, 1977 Raj LW 485, can be beneficially looked into. In the said case the question of enhancement of levy was questioned. The learned Judge held that whether the levy is a fee or a tax, should primarily be seen from the legislative provisions authorising such levy. It is always necessary in such cases to enquire what was the essential purpose which it intends to achieve. The learned Judge has further held that the levy of market fee at the rate of Re. 1/- per Rs. 100/- worth of agricultural produce is not excessive as to be a pretext of a fee and not fee in reality nor can it be said that the levy from the fee leaves a large surplus which is utilised by the Government for general purpose of the administration and that the receipts of the Mandi Committee do not go into the consolidated funds of the State; it is set apart and earmarked into the Mandi Committee Fund for the fulfilment of the various objects and performance of the functions of the Mandi Committee for the carrying out the various purposes of the Act.

14. In Bapubhai Ratanchand Shah v. State of Bombay, AIR 1956 Bom 21, Chagla, C.J. speaking for the Bench has observed that it is perfectly competent to the State Legislature to prohibit business being done in a particular place and also permit a business being done under certain conditions if public interest demands that a particular business should only be carried on under restrictions and limitations.

15. It is argued by the learned Counsel for the appellant that there is no justification behind the increase and that the amount does not go to the State and it will go to the middleman who is already earning manifold; and frustrates the purpose of the Act as to eliminate the rate of middleman. We are unable to give our seal of approval to the said contention. As already noted, it is the policy-decision of the State Government to increase the commission to 'A' class brokers from 4% to 6% considering all the attendant circumstances. If the contention of the appellant is accepted, it would be impossible for the State or the Legislature to put on the Statute Book any legislation if their Association have been affected by the increase. The contention of the appellant comes to this that the State Legislature cannot make proper provision for brokers. As already noticed the payment of commission is in existence from the commencement of the Act and the rate of commission had been fixed at 4% in 1963 and the brokers are the integral part of the purchase and sale of the agricultural produce from the producers/traders and the consumers. As already seen from the reply to the writ petition that more than 300 commission agents had been registered and in the year 1998-99 the amount of Rs. 5,13,98,680/- has been collected as mandi fee by the Lal Kothi Fruit and Vegetable Market Committee at 1.6%. Under such circumstances, no Court can countenance such argument advanced by the appellant. The judgment cited by the learned Counsel for the appellant reported in M/s. Shiv Shanker Dal Mill's case (AIR 1980 SC 1037) (supra), has no relevance to the question at issue in this case. The said case relates to refund of illegal recovery of market fee to the dealers. While considering the said question the Supreme Court held that Article 226 grants an extraordinary remedy which is essentially discretionary, although founded on legal injury and it is perfectly open for the Court exercising this flexible power to pass such order as public interest dictates and equity projects. In the said case the refund was ordered since it was discovered later that the collection to be erroneous and that there is no law of limitation especially for public bodies, on the virtue of returning what was wrongly recovered to whom it belongs. This judgment, in our opinion, will be of no assistance to the question raised in this appeal and the same is distinguishable on facts and law.

16. In a very recent judgment, reported in State of Punjab v. Ram Lubhaya Bagga, (1998) 4 SCC 117 : (AIR 1998 SC 1703), the Supreme Court has said that the right of the State to change its policy from time to time under the changing circumstances cannot be questioned and that the wisdom of the policy cannot be judicially scrutinised though the Court can consider whether the policy is arbitrary or violative of law. In that case, the Supreme Court was considering the change in policy in regard to reimbursement of medical expenses to its serving and retired employees. According to the previous policy promulgated in 1991 reimbursement in medical expenses charged by certain designated hospitals were admissible. However, according to the new policy, treatment could be had from any hospital but reimbursement of medical expenses was to be restricted to the level of expenditure as per the rate fixed by the Director, Health and Family Welfare, Punjab for a similar treatment package or actual expenditure whichever is less. The new policy further laid down certain other terms and conditions. The respondent before the Supreme Court contended that it would not be permissible for the State of Punjab to change its policy. The Supreme Court declaring the new policy as constitutionally valid held that the right of the State to change its policy from time to time under the changed circumstances is neither challenged nor could it be and that it is not normally within the domain of any Court to weigh pros and cons of the policy or to scrutinise it and test the degree of its beneficial or equitable disposition for the purpose of varying, modifying or annulling it, based on howsoever sound and good reasoning, except where it is arbitrary or violative of any constitutional, statutory or any other provision of law.

17. The above recent ruling of the Supreme Court is directly on the point at issue. In the instant case the State Government changed its policy based on a number of circumstances and factors as already noticed from the reply filed by the State in writ petition. As pointed out by the Supreme Court in the above judgment it would be dangerous if the Court is asked to test the utility beneficial effect of the policy or its appraisal based on facts set out on affidavits and Court would dissuade itself from entering into this realm which belong to the executive.

18. For the foregoing reasons, we dismiss this appeal.
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