The provisions of the Bihar Agricultural Produce Markets Act (Bihar Act XVI of 1960) and Rule 61 framed thereunder were constitutionally valid and did not impose unreasonable restrictions on the petitioners' right to carry on business. However, Rule 71 was ultra vires of Section 18(ii) of the Act and, therefore, illegal.

Headnote:
CONSTITUTIONAL LAW - ARTICLE 19(1)(G) - AGRICULTURAL PRODUCE MARKETS ACT - VALIDITY - RESTRICTIONS ON TRADE AND COMMERCE - REASONABLENESS - MARKET FEES - LEVY AND COLLECTION - MARKET COMMITTEE'S POWER - RULE 71 - ULTRA VIRES.
Fact of the Case:

Petitioners, traders and commission agents for the sale and purchase of agricultural produce in Buxar, challenged the constitutional validity of the Bihar Agricultural Produce Markets Act (Bihar Act XVI of 1960) and the provisions of Rule 61 and 71 framed thereunder. They contended that the provisions imposed unreasonable restrictions on their right to carry on business, violating Article 19(1)(g) of the Constitution.
Finding of the Court:

The Court held that the provisions of the Act and Rule 61 were constitutionally valid and did not impose unreasonable restrictions on the petitioners' right to carry on business. However, the Court found Rule 71 to be ultra vires of Section 18(ii) of the Act and, therefore, illegal.
Issues: 1. Whether the provisions of the Bihar Agricultural Produce Markets Act (Bihar Act XVI of 1960) imposing restrictions on the petitioners' right to carry on business were constitutionally valid? 2. Whether the Market Committee had the power to levy and collect market fees under Section 27 of the Act and Rule 61? 3. Whether Rule 71, which required traders and commission agents to obtain licenses from the Market Committee, was ultra vires of Section 18(ii) of the Act?
Ratio Decidendi: 1. The Court relied on the Supreme Court decisions in M.C.V.S. Arunachala Nadar v. State of Madras and Mohammad Hussam Gulam Mohammad v. State of Bombay to hold that the provisions of the Act imposing restrictions on the petitioners' right to carry on business were constitutionally valid and did not impose unreasonable restrictions. 2. The Court held that the Market Committee had the power to levy and collect market fees under Section 27 of the Act and Rule 61, as the provisions were clear and unambiguous. 3. The Court found Rule 71 to be ultra vires of Section 18(ii) of the Act because the Market Committee could only issue licenses after a market had been established and the power to issue licenses was confined to traders and commission agents operating in the market, not the market area.
Final Decision: The Court allowed the petition in part and issued a writ of mandamus commanding the respondents not to enforce the provisions of Rule 71 against the petitioners until a market was properly established in law for the market area and until the rule was amended to bring it in conformity with Section 18(ii) of the Act. There was no order as to costs.

Judgment

Ramaswami, J.

1. The Impugned legislation in this case is the Bihar Agricultural Produce Markets Act (Bihar Act XVI of 1960), hereinafter referred to as the impugned Act. The Act received the assent of the Governor on the 6th of August 1960. By a notification made under Sec. 4 of the Act the State Government declared the entire area of Buxar as the "Market area" (Annexure B to the writ application, dated the 19th September, 1963). By another notification dated the 8thApril, 1964, the State Government notified the principal market yard and the Sub-market yard for the Buxar market area under Sec. 5 of the Act. The State Government also established a market committee by a notification under Sec. 6 of the Act on the 19th September, 1903, The petitioners are traders and commission agents for the sale and purchase of agricultural produce in Buxar in the Shahabad district. Their ease is that respondent No. 2 had issued a notice on the 29th March, 1964, requiring them to obtain a licence for trading In agricultural produce. It is contended on their behalf that the provisions of the Act imposed unreasonable restrictions on the right of the petitioners to carry on business and there is violation of the guarantee contained in Article 19 (1) (g) of the Constitution.

It was contended that the notification of the State Government declaring the market area under Sec. 4 of the Act and the action of the market committee in asking the petitioners to take out licences, (which are Annexures B and A to the Writ applications), are ultra vires and illegal and must be quashed by grant of a writ in the nature of certiorari under Article 226 of the Constitution, It is also the case of the petitioners that the market committee has no lawful authority to levy and collect the market fees on the agricultural produce bought in the market area and the provisions of Rule 61 empowering the market committee to do so ultra vires.

2. In order to appreciate the constitutional question raised it is necessary to set out the relevant provisions of the impugned Act. The Act Is described as "An Act to provide for the better regulation of buying and selling of agricultural produce and establishment of markets for agricultural produce in the State of Bihar and for matters connected therewith." Sec.2 (a) defines a

"agricultural produce" as Including "all produce whether processed or non-processed of agriculture, horticulture, animal husbandry and forest specified in the Schedule". Sec.2 (h) defines "market" as a market established under the Act for the market area and includes a market proper, a principal market yard and sub- market yard or yards, if any. Sec.2(i) defines "market area" as any area declared to be a market area under Sec. 4. Sec.2 (o) defines the "principal market yard" as "any enclosure, building or locality within the market proper declared to be a principal market yard under Section 5."

Sec.2 (t) defines a "Sub-market yard" as any enclosure, building or locality within the market proper declared to be a sub-market yard under Sec. 5. Sec.2 (k) defines "market proper" as "any area within the market area Including all lands, with the buildings thereon, within such distance of the principal or sub-market yard as the State Government may by notification, declare to be a market proper under Sec. 5". Sec.3 provides as follows : "3. (1) Notwithstanding anything to the contrary contained in any other Act for the time being In force, the State Government may, by notification, declare its intention of regulating the purchase and sale of such agricultural produce and in such area, as may be specified in the notification.

(2) A notification under Sub-section (1) shall state that any objection or suggestion which may be received by the State Government within a period of not less than two months* to be specified in the notification, shall be considered by the State Government."

section 4 CD states: -- "4. (1) After the expiry of the period specified in the not

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1964 Supreme(Pat) 164

PATNA HIGH COURTV.Ramaswami and N.L.Untwalia JJ.Thakur Prasad GuptaVersusState Of BiharMiscellaneous Judicial Case No. 1100 of 1964 ;Decided On : NOVEMBER 20, 1964

Cases Referred (2)

PATNA HIGH COURT
V.Ramaswami and N.L.Untwalia JJ.
Thakur Prasad Gupta
Versus
State Of Bihar
Miscellaneous Judicial Case No. 1100 of 1964 ;
Decided On : NOVEMBER 20, 1964