IMPORTANT POINT
Applicability of Agricultural Produce Marketing Act to sugarcane.

Judgment :-

G. S. Singhvi, J.

1. Leave granted.

2. The questions which arise for consideration in these appeals filed by the State of Madhya Pradesh and the Market Committees against the orders passed by the Division Benches of the Madhya Pradesh High Court are whether the provisions of the Madhya Pradesh Krishi Upaj Mandi Adhiniyam, 1972 (hereinafter described as, ‘the Market Act’) are applicable to the transactions involving the purchase of sugarcane by the factories operating in the market areas of the State and whether market fee can be levied on such transactions.

3. The contesting respondents are operating sugar factories in different market areas of the State and have been purchasing sugarcane from Cane Growers and Cane Growers’ Co-operative Societies. Thus, they are covered by the general sweep of the Market Act because sugarcane is a notified agricultural produce and by virtue of Section 19, the Market Committees are empowered to levy market fee on the transactions involving purchase of sugarcane.

4. The respondents filed writ petitions for quashing the notices issued by the Market Committees requiring them to take licence under the Market Act and to pay market fee on the purchase of sugarcane, by asserting that the provisions of the Market Act are not applicable to the transactions which are exclusively governed by the Madhya Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1958 (for short, ‘the Sugarcane Act’) and the Sugarcane (Control) Order (for short, ‘the Control Order’) issued by the Central Government under Section 3 of the Essential Commodities Act, 1955 (for short, ‘the EC Act’).

5. The appellants contested the writ petitions and pleaded that there is no conflict between the Market Act on the one hand and the Sugarcane Act and the Control Order on the other because the two sets of legislations operate in different fields and in view of Section 19 of the Market Act, the respondents are bound to pay market fee on the purchase of sugarcane within the market areas.

6. The Division Bench of the High Court referred to the provisions of the Market Act, the Sugarcane Act and the Control Order and held that the transactions involving the sale and purchase of sugarcane are governed by Sections 12, 15, 16, 19, 20, 21 and 22 of the Sugarcane Act and Clauses (3), (4), (5), (5A) and (6) of the Control Order, which are in the nature of special legislations vis-à-vis the Market Act and, as such, market fee cannot be levied by the Market Committees. The reasons assigned by the High Court for arriving at this conclusion are contained in paragraph 17 of order dated 6.7.2006 passed in Writ Petition No. 391/1995 and batch, which is extracted below:

“17. Sub-section (1) of Section 36 quoted above clearly provides that all notified agricultural produce brought into the market for sale shall be brought into market yard/yards specified for such produce and shall not, subject to the provisions of sub-section (2), be sold at any other place outside such yard. Sub-section (3) of Section 36 further provides that the price of the notified agricultural produce brought into the market yard for sale shall be settled by tender bid or open auction system and no deduction shall be made from the agreed price on any account whatsoever. Sub-section (4) of Section 36 of the Market Act further provides that weighment or measurement of all the notified agricultural produce so purchased shall be done by a licensed weighman in the market yard or any other place specified by the market committee for the purpose. Sub section (1) of Section 37 of the Market Act states that any person who buys notified agricultural produce in the market area shall execute an agreement in triplicate in such form as may be prescribed, in favour of the seller. Sub-section (2) of Section 37 provides for payment of price of agricultural produce brought in the market yard on the same day to the seller at the market yard and additional payment at the rate of o