1972 Supreme(AP) 185

Andhra Pradesh High Court
Judges : GOPALRAO EKBOLE, LAKSHMAIAH
A.Veera Reddy - Appellant
Versus
State OF A.P. - Respondent
Decided On : 10-31-72

Section 36(b) of the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966 did not devolve assets and liabilities in equal proportions on the successor committees.

Headnote:

ANDHRA PRADESH (AGRICULTURAL PRODUCE AND LIVESTOCK) MARKETS ACT, 1966 - SECTION 36(B) - APPORTIONMENT OF ASSETS AND LIABILITIES - SECTION 4(1-A) - POWER TO APPORTION - CONSTITUTIONALITY - ARTICLES 14 AND 31.

Fact of the Case:

The Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966 came into force on 29th November, 1966. Section 36(b) of the Act provided that any market committee constituted under any of the repealed acts and existing immediately before the commencement of this act shall be deemed to have been constituted under this Act until a market committee is constituted under this Act in its place and on such constitution all the assets and liabilities of the market committee so deemed to have been constituted shall devolve on the market committee so constituted under this Act. The State Government issued G. O. Ms. No. 2095, dated 29th October, 1968 whereby Guntur District has been divided into four notified areas for the purpose of constituting market committees. Under G. O. Ms. No. 665, the Government constituted four Agrcultural Market committees for the said four notified areas. The Guntur Market Committee, which was an existing market committee, was deemed under section 36 (b) to be a market committee constituted under the act. In its place, as stated above, four market committees of Guntur, Ongole, tenali and Narasaraopet were constituted. As a result of section 36 (b) on such constitution of four committees in place of Guntur Market Committee "all the assets and liabilities" of the Guntur market Committees devolved on the four market committees which were constituted under the Act. With a view to apportion assets and liabilities so devolved upon the four committees, the State Government issued g. O. Ms. No. 1865, dated 11th October, 1969 and Memo. No. 3820, dated 6th February, 1970. The Government declared that the sites and buildings would become the properties of the committees in whose notified area they are situated. It was further directed that all the fluid assets and the liabilities would be divided among the four committees according to the average income for three years, that is to say 1966-1968. In regard to Government loans, fixed deposits, securities, provident fund of employees, refundable deposits etc. they are to be apportioned in the same manner that is to say on the average income of three years. After the issue of the above Said g. O. and the Memo, by Amending Act i of 1971, in section 4 of the prinicipal act after sub-section (1), a proviso was inserted. After the proviso sub-section (1-A) was added. It reads : "any notification made under subsection (1) for the constitution of a new market committee in respect of any new notified area declared under clause (e) of sub-section (4) of section 3, may contain such supplemental, incidental and consequential provisions. including provisions as to the composition of the new market committee or" new and existing market committees and the apportionment of the assets and liabilities between the market committees affected thereby. " 12-A. The Agricultural Market Committee, Tenali filed W. P. No. 477 of 1970 in this Court challenging the validity of g. O. Ms. No. 1865 of llth October, 1969 and the Memo. No. 3820 of 6th february, 1970 and asked for a certiorari to quash them. The other three committees among whom under the impugned G. O. and the Memo, assets and liabilities were apportioned were hot made parties. The petition was filed only against the State Government.

Finding of the Court:

The Court held that section 36(b) of the Act did not devolve assets and liabilities in equal proportions on the successor committees. The word "devolve" did not have any such implication or meaning. The difference between devolution of property and the proportion which each committee would get after such devolution will have to be kept in view. The Court further held that section 4(1-A) was not retrospective in the sense in which that term is usually used. However, the power under section 4(1-A) can be exercised prospectively after section 4(1-A) came into force even in regard to such assets and liabilities which are already devolved under section 36(b) by the time section 4(1-A) came into force. The Court also held that section 4(1-A) was not violative of Article 31 of the Constitution inasmuch as any apportionment made under that section would amount to taking away the property of the Tenali Municipality which had already devolved under section 36(b) on it. The Court further held that section 4(1-A) was not violative of Article 14 of the Constitution inasmuch as it conferred powers on the Government and the exercise of the power cannot be said to be unguided because the common law principles discussed above provide sufficient guidance to the Government in apportioning the assets and liabilities.

Issues: 1. Whether section 36(b) of the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966 devolved assets and liabilities in equal proportions on the successor committees? 2. Whether section 4(1-A) of the Act was retrospective? 3. Whether section 4(1-A) was violative of Article 31 of the Constitution? 4. Whether section 4(1-A) was violative of Article 14 of the Constitution?

Ratio Decidendi: 1. The Court held that section 36(b) of the Act did not devolve assets and liabilities in equal proportions on the successor committees. The word "devolve" did not have any such implication or meaning. The difference between devolution of property and the proportion which each committee would get after such devolution will have to be kept in view. 2. The Court held that section 4(1-A) was not retrospective in the sense in which that term is usually used. However, the power under section 4(1-A) can be exercised prospectively after section 4(1-A) came into force even in regard to such assets and liabilities which are already devolved under section 36(b) by the time section 4(1-A) came into force. 3. The Court held that section 4(1-A) was not violative of Article 31 of the Constitution inasmuch as any apportionment made under that section would amount to taking away the property of the Tenali Municipality which had already devolved under section 36(b) on it. 4. The Court held that section 4(1-A) was not violative of Article 14 of the Constitution inasmuch as it conferred powers on the Government and the exercise of the power cannot be said to be unguided because the common law principles discussed above provide sufficient guidance to the Government in apportioning the assets and liabilities.

Final Decision: The Court allowed the writ petitions and quashed the impugned G. O. and the Memo, for the reasons given. The petitioners were awarded costs.