The restrictions imposed on the petitioners' right to carry on business were reasonable and in the interest of the producers, there was no deprivation of property within the meaning of Article 31, the Act did not impose unreasonable restrictions on trade and commerce under Article 304(b), and the notification issued by the State Government declaring a new market yard was not ultra vires of the Act.

Headnote:
AGRICULTURAL PRODUCE MARKETS ACT, BOMBAY ACT XXII OF 1939 - CONSTITUTION OF INDIA, ARTICLES 19(1)(F), 19(1)(G), 301, 304(B), 31 - BOMBAY AGRICULTURAL PRODUCE MARKETS (AMENDMENT) ACT, 1953 (ACT XXXVI OF 1953) - BOMBAY AGRICULTURAL PRODUCE MARKETS (AMENDMENT) ACT, 1954 (ACT XXIII OF 1954) - RULES AND BYE-LAWS FRAMED UNDER THE ACT - VALIDITY - RESTRICTIONS ON THE RIGHT TO CARRY ON BUSINESS - REASONABLENESS - COMPENSATION FOR DEPRIVATION OF PROPERTY - FREEDOM OF TRADE AND COMMERCE - UNREASONABLE RESTRICTIONS - INTERPRETATION OF STATUTES - PROVISO TO SECTION 4A(2) OF THE ACT - SCOPE AND EFFECT - POWER OF THE STATE GOVERNMENT TO DECLARE PRINCIPAL MARKET YARDS AND SUB-MARKET YARDS - DELEGATION OF AUTHORITY TO ISSUE LICENSES - FRAUD ON THE LAW - ARBITRARY AND CAPRICIOUS EXERCISE OF POWER.
Fact of the Case:

The petitioners, who were carrying on business in agricultural produce at Vakhar Baug, Sangli, challenged the validity of the Agricultural Produce Markets Act, Bombay Act XXII of 1939, as amended by Acts XXXVI of 1953 and XXIII of 1954, and the rules and bye-laws framed thereunder. They contended that the restrictions imposed on their right to carry on business under Articles 19(1)(f) and 19(1)(g) of the Constitution were unreasonable, that there was deprivation of property without compensation in violation of Article 31, that the Act imposed unreasonable restrictions on trade and commerce under Article 304(b), and that the notification issued by the State Government declaring a new market yard was ultra vires of the Act.
Finding of the Court:

The Court held that the restrictions imposed on the petitioners' right to carry on business were reasonable and in the interest of the producers, that there was no deprivation of property within the meaning of Article 31, that the Act did not impose unreasonable restrictions on trade and commerce under Article 304(b), and that the notification issued by the State Government was not ultra vires of the Act.
Issues: 1. Whether the restrictions imposed on the petitioners' right to carry on business under Articles 19(1)(f) and 19(1)(g) of the Constitution were reasonable? 2. Whether there was deprivation of property without compensation in violation of Article 31? 3. Whether the Act imposed unreasonable restrictions on trade and commerce under Article 304(b)? 4. Whether the notification issued by the State Government declaring a new market yard was ultra vires of the Act?
Ratio Decidendi: 1. The restrictions imposed on the petitioners' right to carry on business were reasonable and in the interest of the producers. The scheme of the Act was to protect the producers from exploitation by middlemen and to ensure that they got competitive rates for their produce. The restrictions on the petitioners' business operations were limited to the belt known as the market proper, which was set apart in order to prevent the producers from being inveigled into parting with their produce before they reached the market yard. 2. There was no deprivation of property within the meaning of Article 31. The petitioners' properties had not been acquired by the State Government, and the restrictions imposed on their business operations did not amount to a substantial abridgment of their ownership rights. 3. The Act did not impose unreasonable restrictions on trade and commerce under Article 304(b). The Act was intended to promote the free passage of goods and to protect the interests of the producers. The restrictions imposed on the petitioners' business operations were not unreasonable and were necessary to achieve the objectives of the Act. 4. The notification issued by the State Government declaring a new market yard was not ultra vires of the Act. The proviso to Section 4A(2) of the Act, which required the State Government to declare one of the existing market yards as the principal market yard, was intended to apply only to the situation that arose immediately after the passing of the Amending Act of 1954. The State Government had the power to alter the principal market yard from time to time under Section 4A(2) of the Act.
Final Decision: The petition was dismissed with costs.

JUDGMENT

1. The two petitioners have been carrying on business for many years at Vakhar Baug at Sangli. Their business is in agricultural produce. It appears that before Sangli was merged in the State of Bombay certain facilities wore given by the State of Sangli for erecting a market for sale and purchase of agricultural produce in this Vakhar Baug area and in view of these facilities the petitioners case is that merchants invested a large amount in putting up buildings and giving facilities for opening of shops in these buildings so that the business of sale and. purchase of agricultural produce should be carried on.

The Government then passed an Act which is the Agricuitural Produce Markets Act, Bombay, Act XXII of 1939, and the Act was made applicable to the Sangli State after its merger. The date on which the Act was made applicable is 20-7-1948, and the result of the application of this Act was that agricultural produce could only be bought and sold under certain conditions and under certain limitations.

Various notifications were issued under the Act to which we shall presently refer, and the ultimate result was that the petitioners were prevented from doing their business in his Vakhar Baug area and a market was set up under the Act at some distance from Vakhar Baug. The petitioners, therefore, chal-lenge this Act and also the rules and bye-laws framed under the Act.

The substantial challenge is under Article 19 (1) (f) and (g) on the ground that unreasonable restrictions have been placed upon the petitioners right to carry on business and to hold their property. A challenge is also made on the ground that the value of these properties has gone down by reason, of the market being shifted to a different place and that the petitioners have been deprived of the property under Article 31 without compensation, and a plea is also made that the Act is bad on the ground that it imposes unreasonable restrictions under Article 304 (b) upon commerce within the State.

2. Now, before we look at the relevant provisions and consider the challenge made, it would be perhaps better just to state briefly what the credentials of the petitioners are and what is the ground for tins petition. Petitioner No. 1 is an old man and he is a big landlord in the Vakhar Baug area and he at present is not doing any business at all, and the case of the respondents, the State of Bombay and the Agricultural Produce Market Committee at Sangli, is that exorbitant rents have been charged to the tenants who are traders and commission agents occupying buildings in this area, and in their affidavits they have pointed out that whereas the rent that was recovered in 1940 to 1942 was Rs. 10,829, this rent went up to Rs. 97,368 in the years 1952 to 1954.

An explanation has been attempted to be given by the petitioners in behalf of this increase in rents and rather a lame explanation is given that the rent was increased because some of the properties were used for cinemas and such other enterprise. Petitioner No. 2 undoubtedly is doing business and he applied for a license under the provisions of the Act and carried on business pursuant to the conditions of the license.

It was realised by the Market Committee which was set up and also by a large section of the pub-lie that the Vakhar Baug area was not suitable for the purpose of a market under the provisions of the Act and therefore as far back as 25-3-1951, the Market Committee passed a resolution, for securing hind situated on the Sangli-Miraj Road admeasuring 99. acres and 30 gunthas for the establishment of a new permanent market yard in this locality.

The Market Committee approached Government and requested it to initiate acquisition proceedings for acquiring this land. The Government acceded to this request and acquired this land. The Market Committee took a loan of Rs. 1,50,000 from the Government on 29-3-1954, with a view to develop this land and to have a proper market yard.

On 16-5-1954, the Agricultural Market Co

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