JUDGMENT

SAWANT, J.-

The respondent-Orient Paper Mills (for short Mills) purchases bamboos as raw material under a contract with the State Government which holds monopoly in regard to bamboos as a forest produce in view of the provisions of the M.P. Van Upaj (Vyapar Viniyaman) Adhiniyam, 1969 (No. 9 of 1969). The bamboos are supplied to the respondent-Mills by the Forest Department of the State Government at various forest depots established for the purpose. After taking delivery from the forest depots, the Mills transports the same to its factory situated in Amlai in the district of Shahdol (M.P.). It is not disputed that forest depots from which the Mills purchases the bamboos fall within the market area of the appellant-Krishi Upaj Mandi Samitis (for short Committees) and the factory of the Mills also falls within the market area of Krishi Upaj Mandi Samiti, Budhar (M.P.).

2. Under Section 3 of the M.P. Krishi Upaj Mandi Adhiniyam, 1973 (for short the Act), the State Government is empowered to declare by a notification its intention to establish a market for regulating the purchase and sale of such agricultural produce and in such area as may be specified in the notification, and invite objections for the same. Under Section 4 thereof, after the expiry of the period specified in the notification and after considering the objections and suggestions as may be necessary, the State Government is authorised to establish by another notification a market, for the areas specified in the notification issued under Section 3 or in any portion thereof. Under Section 5, in every market area, there has to be a market yard and there may be more than one sub-market yards. For every market yard or sub-market yard, there has to be a market proper. On the establishment of market under Section 4, Section 6 prohibits local authorities from setting up or establishing or continuing or using or allowing to be set up, established, continued or used, any place in the market area for the marketing of any notified agricultural produce. Likewise, no person is permitted to use any place in the market area for the marketing of the notified agricultural produce or operate in the market area any market function otherwise than in accordance with the provisions of the Act. The exception to this prohibition is in favour of (a) a person who himself is a seller of the product concerned, and whose sale does not exceed four quintals at a time to a person who purchases it for his own domestic consumption, (b) produce which is brought by head loads, (c) produce which is purchased or sold by petty traders, (d) produce which is imported from outside India, (e) produce which is purchased by various fair price shop dealers from the Food Corporation of India, the Madhya Pradesh State Commodities Trading Corporation or any other agency or institution authorised by the State Government for distribution of essential commodities through the public distribution system, and (f) the transfer of the agricultural produce to a cooperative society for the purpose of securing an advance there from.

3. The Samitis or Market Committees are established under Section 7 of the Act. Under Section 19(1) of the Act, the Committees have been given power to levy market fees on notified agricultural produce brought for sale or sold in the market area under their jurisdiction at such rate as may be fixed by the State Government from time to time subject to the minimum rate of fifty paise and a maximum rate of two rupees for every one hundred rupees of the price in the manner prescribed. Under Section 19(2), the market fees are payable by the buyer of such produce and is not to be deducted from the price payable to the seller. It is only if the buyer of the produce cannot be identified that all fees are payable by the seller or by the person who brought the produce for sale in the market area. Provided further that in case of a commercial transaction between the traders in the market area, the mar