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SUPREME COURT OF INDIA
15th March, 1962
P.B. GAJENDRAGADKAR, A.K. SARKAR, K.N. WANCHOO, K.C. DAS GUPTA AND N. RAJAGOPALA AYYANGAR, JJ.
Muhammadbhai Khudabux Chhipa and another etc., Petitioners
Versus
The State of Gujarat and another etc. Respondents.
Petitions Nos. 226 to 229 and 233 of 1961.
Advocates appeared
Mr. A. S. R. Chart, Senior Advocate, (M/s. J. B. Dadachanji, O. C. Mathur and Ravinder Narain, Advocates of M/s. J. B. Dadachanji and Co., with him), for Petitioners (In Petns. Nos. 226 to 229 of 61); Mr. I. N. Shroff, Advocate, for Petitioners (In Petn. No. 233 of 61); M/s. A. V. Viswanatha Sastri and N. S. Bindra, Senior Advocates, (Mr. R. H. Dhebar, Advocate, with them), for Respondent No. 1 (in All the Petitions).
Bombay Agricultural Produce Markets Act, 1939 - Constitutionality - Amendment by Ordinance - Validity - Notification fixing maximum fee - Validity - Validation of acts done before Ordinance - Validity - Bye-laws regulating issue of licenses to traders - Validity - Control of retail trade - Market committee's power to require retail dealers to take out licenses - Validity of R. 64 - Main provisions of the Act after amendment - Constitutionality - Re-framing of Rr. 65, 66 and 67 - Necessity - Effect of not having been done - Refund of license-fee collected before Ordinance - Validity of S. 29-B.
Fact of the Case:
The petitioners challenged the constitutionality of the Bombay Agricultural Produce Markets Act, 1939, as amended by the Bombay and Saurashtra Agricultural Produce Markets (Gujarat Amendment and Validating Provisions) Ordinance, 1961, and the Rules and Bye-laws framed thereunder. The main contentions were that the notification fixing the maximum fee was discriminatory, the validation of acts done before the Ordinance was insufficient, the bye-laws regulating the issue of licenses to traders were discriminatory and unreasonable, the market committee could not require retail dealers to take out licenses, R. 64 was invalid, the main provisions of the Act after amendment were unconstitutional, the re-framing of Rr. 65, 66 and 67 was necessary, and S. 29-B was invalid.
Finding of the Court:
The Court held that the notification fixing the maximum fee was not discriminatory, the validation of acts done before the Ordinance was sufficient, the bye-laws regulating the issue of licenses to traders were not discriminatory or unreasonable, the market committee could require retail dealers to take out licenses, R. 64 was valid, the main provisions of the Act after amendment were constitutional, the re-framing of Rr. 65, 66 and 67 was not necessary, and S. 29-B was valid.
Issues: 1. Is the notification dated June 23, 1961 fixing the maximum fee to be charged hit by Art. 14 of the Constitution? 2. Does the insertion of S. 29-B in the Act suffice to validate acts or things done before the promulgation of the Ordinance? 3. Are the bye-laws by which the market committee issues licences to A class and B class dealers discriminatory and thus offend Art. 14, and do they amount to an unreasonable restriction on the fundamental right to carry on trade and business under Art. 19 (1) (g)? 4. Is the market committee acting beyond its power under the Act in requiring retail dealers to take out licenses and is R. 64 bad on account of the manner in which it is being enforced by the market Committee? 5. Are the main provisions of the Act after its amendment by the ordinance liable to be struck down as an unreasonable restriction on the fundamental right to carry on trade and business under Art. 19(1) (g)? 6. Was it necessary to re-frame Rr. 65, 66 and 67 under power conferred on the State Government under S. 26; if so, what is the effect of its not having been done? 7. Is S. 29-B bad in view of Art. 31 (1) of the Constitution in so far as it prevents refunded of licence-fee collected before the Ordinance came into force?
Ratio Decidendi: 1. The notification is not discriminatory as it allows fees to be collected by different modes, but the market committee must use one method of levying fee with respect to one kind of agricultural produce. If the rates are fixed in one of the modes, say according to cart load, it will be possible to calculate the fees to be levied where the produce is brought in any other manner, say in baskets, for then the proportional fee can be charged on each basket on the basis of so many basket-fuls being equal to one cart load. 2. S. 29-B is sufficient to cure the defects pointed out in the earlier judgment of the court and to validate actions taken and things done before the promulgation of the Ordinance which would otherwise have been invalid in view of the earlier judgment of this Court. 3. The classification of traders into A class and B class is reasonable. A class traders are wholesale traders who are permitted both to buy and sell in the market yard and are thus charged a higher licence-fee. B class traders are ordinary retailers who are permitted to buy in the market yard but they are not permitted to sell there. They are small traders and are therefore charged lower licence fees. 4. The market committee is not attempting to control retail trade and requires them also to take out licences, and this it is not authorised to do, as this Court has already held in the earlier judgment that retail trade is not within the ambit of the Act. The bye-laws by providing for A and B class licences are not really providing for control of retail trade. 5. There has been no radical departure from the main provisions of the Act as they stood before the amendment, and the control envisaged by the Act as amended is still type same, as it was before the amendment, the basis on which the earlier judgment of this Court upheld the main provisions of the Act would still apply and the Act as amended would be constitutional. 6. Rr. 65 and 67 were valid when they were originally framed and remained valid till S. 5A was enacted in 1953 and became bad on the insertion of S. 5A in the Act. Now that S. 5A has been amended by the Ordinance, rr. and 67 are obviously in conformity with it, r. 66 being merely consequential. Therefore they will revive by the application of the doctrine of eclipse as they are no longer overshadowed by S. 5A as it was before he Ordinance. 7. Sub-section (3) of S. 29-B is the law which retrospectively authorises the levy of licence. fees collected in this case. Retrospective power of the legislature to make a law being there even in the case of taxation, we fail to see how the provisions of sub-sec, (3) of S. 28-B which validate the levy and collection of licence-fees can be held to be invalid under Art. 31(l).
Final Decision: The petitions were dismissed with costs.
Judgment
WANCHOO, J. : . These five petitions under Art. 32 of the constitution, which are connected and will be dealt with together, raise questions as to the constitutionality of the Bombay Agricultural Produce Markets Act, Bombay Act No. XXII of 1939 (hereinafter referred to as the Act), as amended by the Bombay and Saurashtra Agricultural Produce - Markets (Gujarat Amendment and Validating Provisions) ordinance, No. 1 of 1961, (hereinafter referred to as the Ordinance), and the Rules and the Bye-laws framed thereunder. They are a sequel to the judgment of this Court in Mohammad Hussain Gulam Mohammad v. State of Bombay, AIR 1982 SC 97 1520 which was delivered on May 2, 1961. One of the petitioners before us in these petitions was also a party in that petition, which was with respect to a market established in Ahmedabad. In that petition the challenge to the constitutionality of the main provisions of the Act failed but the provisions of certain rules, namely Rr. 53, 65, 66 and 67 were held to be ultra vires the provisions of S. 11 and S. 5A of the Act. In consequence, a direction was issued prohibiting the respondents in that petition from enforcing the provisions of the Act, Rules and Bye-laws against the petitioners in that petition till a market was established in law for that area under S. 5AA and from levying any fee under S. 11 till the maximum was prescribed under the Rules. Consequent on that decision, the State of Gujarat amended R. 53 by notification dated June 23, 1961. Further the ordinance was promulgated on June 26, 1961 by which certain amendments were made in certain sections of the Act and a new S. 29-B was inserted in the Act validating certain acts or things done prior to the promulgation of the Ordinance. The present petitions were filed thereafter.
2. Four of the petitions (namely, Nos. 226 to 229) are wit respect to Ahmedabad while the fifth petition (No. 233) is with respect to Nadiad. Two of the petitioners of Ahmedabad are wholesale dealers while the other two claim to be retail dealers. The contentions on behalf of the Ahmedabad petitioners are that the notification amending R. 53 offends Art. 14 of the Constitution and is therefore bad. It is further contended that though S. 5AA has been amended, the amendment is prospective; therefore the infirmity noticed in the earlier judgment of this Court still remains and S. 29-B which has been inserted in the Act is insufficient to validate what had been done before the Ordinance came into force. It is further contended that the bye-law under which the market committee issues licences to A class and B class dealers is discriminatory and imposes unreasonable restrictions on the fundamental right to carry on trade and business and is therefore bad. Lastly it is contended that the market committee insists on issuing licences for retail trade and this it cannot do for control of retail trade is not within the provisions of the Act as held by this Court in the earlier judgment, and further in consequence the market committee is using R. 64 in a manner in which it was not intended to be used and therefore that rule though it was upheld in the earlier judgment should be declared ultra vires.
3. The majority of the petitioners in the Nadiad case are wholesale dealers but a few of them claim to be retail dealers. These petitioners further challenge the constitutionality of the Act after its amendment by the Ordinance, and their contention is that the Ordinance makes radical changes in the main provisions of the Act and the basis on which these main provisions were upheld by this Court earlier, no longer applies, and therefore the Act as it now stand after the amendment is violative of the fundamental right to carry on trade and business guaranteed under Art. 19(1)(g) of the Constitution as the restrictions placed by it on the said right are unreasonable. Further it is contended that Rr. 65, 66 and 67 were struck down by this Court in the earlier judgment as beyond th
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