Pressed cotton is included within the definition of "agricultural produce" under the Bombay Agricultural Produce Markets Act, 1939, and, therefore, a trader who does business in pressed cotton without a license contravenes R. 65(1) of the Bombay Agricultural Produce Markets Rules, 1941.

Judgment

SUBBA RAO, J. : This is an appeal by special leave against the judgment of the High Court of Judicature at Bombay setting aside that of the First Class Magistrate, Broach, and convicting the appellant for contravening the provisions of R. 65(1) of the Bombay Agricultural Produce Markets Rules, 1941, hereinafter called the Rules, and imposing on him a fine of Rs. 25.

2. The appellant was a trader carrying on business in cotton at Broach. On February 7 and 9, 1953, he purchased full pressed cotton bales from M/s. Ratanji Faranji & Sons in two instalments of 200 bales each through a licensed broker, Dahyabhai Acharatlal. He also purchased 100 bales from Halday Multi-Purposes Co-operative Society. All these purchases were made by the appellant as a trader in the market area of Broach without the requisite licence from the Market Committee. He was charged in the Court of the Joint Civil Judge (Junior Division) and Judicial Magistrate, First Class, Broach, for committing the breach of R. 65(1) of the Rules. The Judicial Magistrate held that pressed cotton was not cotton, ginned or unginned within the meaning of one of the items mentioned in the Schedule to the Bombay Agricultural Produce Markets Act (hereinafter called "the Act"), and, therefore, the appellant did not commit any offence under the Act or the Rules framed thereunder. The State of Bombay carried the matter by way of appeal to the High Court of Bombay, and a Division Bench of the said High Court, consisting of Chainani and Shah JJ., allowed the appeal and convicted the appellant for contravening the provisions of R. 65(1) of the Rules and imposed upon him a fine of Rs. 25. This appeal challenges the correctness of the judgment of the High Court.

3. Learned Counsel for the appellant raised before us the following three contentions: (i) the Act and the Rules framed thereunder did not apply to pressed cotton, and, therefore, the appellant did not contravene the provisions of R. 65(1) of the Rules; (ii) R. 65 is ultra vires inasmuch as its provisions are in excess of the rule-making power of the State Government; and (iii) the transactions in question were forward contracts for future delivery, and, as no delivery was intended or in fact made, the appellant cannot be said to have traded in cotton within the market area.

4. The answer to the first contention turns upon the interpretation of cl. (1) of sub-s. (1) of S. 2 of the Act read along with the relevant item or items in the Schedule. The relevant provisions read:

"S. 2(1): In this Act unless there is anything repugnant in the subject or context,-

(i) "Agricultural Produce" includes all produce of agriculture, horticulture and animal husbandry specified in the Schedule;

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(vi) "Market Area" means any area declared to be a market area under Section 4.

SCHEDULE E.

1. Fibres:-

(i) Cotton (ginned and unginned)

The Bombay Agricultural Produce Markets Rules, 1941:

Rule 65. (1): No person shall do business as a trader or a general commission agent in agricultural produce in any market area except under a licence granted by the market committee under this rule.

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7. Whoever does business as a trader or a general commission agent in agricultural produce in any market area without a licence granted under this rule or otherwise contravenes any of the provisions of this rule shall, on conviction, be punishable with a fine which may extend to Rs. 200 and in the case of a continued contravention with a further fine which may extend to Rs. 50 for every day during which the contravention continues after the date of the first conviction, subject to the maximum of Rs. 200."

The gist of the aforesaid provisions may be stated thus: Agricultural produce includes all produce of agriculture specified in the Schedule. Cotton, ginned and unginned, is specified in the Schedule as an agricultural produce. A trader cannot do business in the said produce in any market area without obtainin