1996 Supreme(SC) 1003

1996(5) Supreme 509
SUPREME COURT OF INDIA
G.N. Ray and B.L. Hansaria, JJ.
Sasa Musa Sugar Works etc. etc. -Appellants
versus
State of Bihar & Ors. etc. etc. -Respondents
Civil Appeal No. 7431 of 1994
with
Civil Appeal Nos. 9092/94, 9093/94, 9094/94, 9095/94, 7437/94, 7438/94, 7439/94, 7433/94, 7434/94, 7436/94, 8570/94, 9171/94, 9172/94, 9173/94, 9174/94, 1332/95, 1333/95, 6310-6322/95 and S.L.P. No. 9466/92.
All Decided on 6-7-1996

IMPORTANT POINTS
1. Sections 4A and 4B of the Bihar Agricultural Produce Markets Act, are held valid by declaring that Sections 4A and 4B are intra vires.
2. Section 33M of the Bihar Agricultural Produce Markets Act is held valid.

Headnote:(i) Bihar Agricultural Produce Markets Act, 1960-Sections 4A and 4B inserted by Bihar Agricultural Produce Markets (Amendment) Act, 1993-Validity of-Challenged-Amendment of schedule by addition of any item of agricultural produce not specified therein-Section 4A(1) makes Sections 3 and 4 of Act now applicable in matter of exercise of powers under Section 39-A chance of hearing to parties to be effected if deletion of an item already included in Schedule is to be effected-No hearing contemplated for addition in the Schedule-Both sub-sections (1) and (2) of Section 4A are within legislative competence and are also informed by reasons-Section 4A does not suffer from encroachment of judicial power of State-Section 4A does not offend Art. 14-Sections 3 and 4 stand modified on account of Section 39 r/ws 4A-Sugar must be deemed to be always in the schedule.

       Held : Sub-section (1) of Section 4A makes Sections 3 and 4 of the Act non-applicable in the matter of exercise of the powers by the State Government under Section 39 of the Act to amend the Schedule by addition of any item of agricultural produce not specified therein. Sub-section (2) of Section 4A provides that the State shall not order the deletion of any of the item without giving an opportunity for hearing to the affected parties. It is apparent that the legislature has given a chance of hearing to the parties to be effected if deletion of an item already included in the Schedule is to be effected. But for additon of an item of agricultural produce in the Schedule in the exercise of power under Section 39, no hearing has been contemplated. (Para 38)

       Further held : Sub-section (2) of Section 4A has for the first time circumscribed the power of deletion of a scheduled item in exercise of power under Section 39 of the Act without affording any hearing to the party aggrieved. It has already been indicated that Section 39 is the only provision in the Markets Act which has delegated the authority to the State Government to modify the Schedule either by adding or by deleting any agricultural produce. Before the introduction of Section 4A by the amending Act, even for deletion in exercise of power under Section 39, no hearing was necessary. (Para 39)

       The Legislature is quite competent to make provision for hearing only in case of deletion of a scheduled item without making such provision for inclusion of an item in the Schedule. Whether an item deserves to be included in the Schedule so that control under the Act may be brought in respect of such item, is a matter of decision of the State Government according to its perception to the felt need for such inclusion. But when the State Government has felt the need of inclusion in the Schedule but later on intends to change its mind by deleting the item from the Schedule, the Legislature in its wisdom has thought it fit that before deletion, a second thought is desirable by noting the objections that might be given by a party aggrieved. In our view, both the sub sections of Section 4A are within the legislative competence and are also informed by reasons. In the aforesaid facts, there is no occasion to hold that Section 4A is ultlra vires. In our view, the High Court has laboured under an erroneous view that power under Section 39 can not be exercised without the aid of Sections 3 and 4 of the Act and in view of such misconception about the power and authority under Section 39, the impugned decision has been made by holding Section 4A as ultra vires. (Para 40)

       Consequently held : The requirement of following the procedures under Sections 3 and 4 of the Act in the matter of inclusion of deletion of an agricultural produce as held in DCM s case by the High Court , has been expressly removed by introducing Section 4A. In our view, the amending/validation Act does not intend to overrule or annul any decision of the Court, but the amending Act has brought in a change in the requirement of following the procedure under Sections 3 and 4 of the Act while amending the Schedule under Section 39 of the Act. Hence, the basis of the decision in DCM s case has undergone a legislative change. Therefore, Section 4A does not suffer from encroachment of judicial power of the State. (Para 41)

       Section 4A does not offend Article 14 of the Constitution. In view of Section 4A of the Act, any exercise of power under Section 39 of the Act is to be uniformaly exercised in accordance with Section 4A of the Markets Act. In our view, no objection as to the validity of Section 4A can be raised on the ground that different procedures for inclusion and deletion of an item for the purpose of exercising power under Section 39 and powers under Sections 3 and 4 of the Act have been provided for in the Act. Exercise of power under Section 39 is altogether adifferent exercise from the exercise of power under Sections 3 and 4. Evem if it is assumed that the exercise of power under Section 39 in the matter of inclusion and deletion of an agricultural produce overlapse or comes in conflict with the exercise of power under Sections 3 and 4, the Legislature by incorporating Section 4A has given overriding power to Section 39, subject to the limitation under Section 4A(2). Viewed from this perspective, Sections 3 and 4 stand modified on account of Section 39 read with Section 4A of the Markets Act. First part of Section 4B contemplates validation of Market fee levied and collected by treating such levy and collection under the Act as amended. Second part of Section 4B legislatively annuls the notification dated May 2, 1977. The other parts relate to consequential actions flowing from the first two parts. Levy of market fee was held invalid for item like sugar which was excluded from the Schedule by notification dated May 2, 1977 on the ground that once deleted from the Schedule, its reintroduction can take effect only after complying with Sections 3 and 4 of the Act. It should be noted that in view of Section 4A, which has been inserted in the Market Act by specifically indicating in Section 2 of Amending Act that the said Section "shall always be deemed to have been inserted", deletion of an item and subsequent inclusion of the same under Section 39 is to be made in accordance with Section 39 read with Section 4A. Sub-section (2) of Section 4A makes it imperative that deletion can be made after hearing objection. Hence, even if notification dated May 21, 1977 purporting to rescind the notification dated May 2, 1977, by which sugar was deleted from the schedule, is held invalid for the reasons indicated by the High Court, such deletion stands invalidated under Sub-section (2) of Section 4A. Hence, declaration of annulment of notification dated May 2, 1977 flows from Section 4A (2). The result is that sugar must be deemed to be always in the Schedule in respect of which controls have been operative. Both the parts of Section 4B therefore, do not suffer from any infirmity, even otherwise. If deletion is non-est, annulment of notification dated May 2, 1977 is a matter of course. Similarly, levy and realisation of market fee on the items which were included in the Schedule, but exclusion of which was of no consequence, cannot be held invalid. In a sense, first two parts of Section 4B are declaration of the consequence of invalidation of deletion notification. We, therefore, find no difficulty in upholding the vires of both Sections 4A and 4B of the Markets Act. (Paras 42 & 43)

       (ii) Bihar Agricultural Produce Markets Act, 1960-Section 33M as inserted by Bihar Agricultural Produce Markets (Amendment) Act, 1992-Validity of-Challenged-Whether introduction of Section 33M is valid and constitutional ?-(Yes).

       Held : Section 33M cannot also be held ultra vires inspite of the fact that the object for inclusion of Section 33M in the Act is not happily worded. It has been categorically stated by the State Government that the collecltion to be made by the State Government under Section 33M of the Markets Act are not to be utilised for general purposes but entire collection are to be ploughed back for achieving the purposes under the Act. In that view of the matter, it cannot be reasonably contended that the imposition has lost the character of fee and it partakes the character of tax. (Para 44)

       (iii) Bihar Agricultural Produce Markets Act, 1960-Section 15-Exemption of all sugar mills in Bihar from provisions of Section 15 under notification dated March 22, 1976- Notification dated May 2, 1977 by which sugar deleted from Schedule-Notification dated May 21, 1977 cancelling earlier notification dated May 2, 1977-Effect-Judgment in DCM s case held not sustainable.

       Held that the invalidity of the deletion of sugar on the basis of the said notification dated 2.5.1977 is not alleged by the sugar mills. As a matrter of fact, they accept that by the said notification sugar stood deleted from the Schedule. But when such deletion is sougtht to be negatived by issuing notification dated May 21, 1977 rescinding the earlier notification dated May 2, 1977 challenge as to the validity of the later notification was made by filing writ petitions before the High Court. In the judgment in D.C.M. s case, AIR 1993 Pat. 43, such notification dated May 21, 1977 rescinding earlier notification has been held invalid by the High Court on the ground that once control has been effected in respect of a scheduled goods by following provision under Sections 3 and 4, reintroduction of an item in the Schedule is not permissible without following the provisions of Sections 3 and 4. In our view, such decision can not be sustained for the reasons indicated hereafter. Inclusion or deletion of an item in selecting the field of control is to be made in exercise of power under Section 39 of the Markets Act and State Government is clothed with such power which can be exercised without any aid of the provisions of Sections 3 and 4 of the Act. It should also be noted that since deletion of sugar from the Schedule was made in exercise of power under Section 39, and such deletion was not a deletion under Section 4(1) of the Act, the procedure prescribed in Sections 3 and 4 of the Act, was not required to be followed. Section 4(3) does not contemplate inclusion or exclusion of produce under Section 39 of the Act but is applicable only to the inclusion or exclusion of any area from the area of market or any produce specified therein as have been notified for control in a specified market already by notification issued under Sections 3 and 4 of the Act. (Para 36)

       Since the decision in DCM s case that by the notification of May 21, 1977 rescinding the earlier notification of May 2, 1977 was invalid and the said subsequent notification had not the effect of introducing sugar in the schedule for want of compliance of Sections 3 and 4 was binding on the State Government, although appeal before this Court against the judgment was pending, the State Government intended to remove the hurdles or fetters in deleting or including items under Section 39 without following the provisions of Sections 3 and 4 by introducing Section 4A and 4B by the validating/amending Act of 1993. (Para 37)