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1975 Supreme(Pat) 197

PATNA HIGH COURT
S.N.P.Singh and S.K.Jha JJ.
Jadu Sah
Versus
District Supply Officer, Aurangabad
Civil Writ Jurisdiction Case No. 338 of 1975 ;
Decided On : NOVEMBER 6, 1975

Headnote:The Bihar Rice and Paddy Procurement Order, 1974, Clauses 2 (d) & 14 (2)-

       Whole Sale dealer-Meaning of-Arhatia or Commission agent when liable for levy Commission agent doing business on behalf of Principal-Liability of such commission agent or Arhatia.

       Held, that a commission agent or Arhatia engaged in business on behalf of another, namely his Principal, has been brought within the sweep of the term "Whole Sale dealer".

       Thus a commission agent or Arhatia is undoubtedly intended to be covered by the 1974 Order and is made liable for delivery of levy even with regard to business in which he is engaged on behalf of his Principal in pursuance of the provisions of clause 14 (2) of the 1974 Order. (Para 3)

       The Bihar Rice and Paddy Procurement, 1974, clause 14 (2) & Sec. 3 (2) (f) of Essential Commodities Act, 1955-Commission agent or Arhatia holding stock on behalf of Principal and not of his own-Whether liable for levy-Clause 14 (2) of the Order not consistent with Sec. 3 (2) (f) of the Act-Effect of-Clause 14 (2) is ultravires to that extent.

       Held, that the Essential Commodities Act confers power to issue an order requiring any person to sell the whole or a specified part of the stock. Sec. 3 (2) (f) is not sought for covering the persons who retains control of all essential commodity for the purpose of furthering the business of third persons who have ownership in the essential commodity concerned. The agent has therefore, none, and is not holding any stock of essential commodity as his own. Thus any Order in order to be sustained as valid must be in relation to the stock of any essential commodity held as his own by the person who is sought to be bound by the provisions of such order. In that view of the matter clause 14 (2) of the 1974 Procurement Order, in so far as the commission agents or Arhatias not holding any stock of essential food grains of their own are concerned, must be held to be beyond the power conferred on the Government by Section 3 (2) (f) of the Essential Commodities Act, 1955 and to that extent the provisions of clause 14 (2) must beheld to be ultravires. A person who is engaged in the business of a wholesale dealer and holds no stock of any essential food grains of his own, he will not be saved to the extent he is a whole sale dealer from the operation of the 1974 Procurement Order. (Paras 4 & 5)

       

Judgment

S.K.JHA, J.

1. In this application under Arts.226 and 227 of the Constitution the petitioner has prayed for the issuance of an appropriate writ quashing the demand notice issued against it by the District Supply Officer, Aurangabad, as contained in Annexures - 1 and 2 to the application. Annexure - 1 dated 9-12-1974 is a notice to the petitioner under the Bihar Rice and Paddy Procurement Order, 1974 (hereinafter referred to as the 1974 Order) demanding delivery of 750 quintals of rice as levy from the petitioner. By Annexure - 1 the petitioner had been directed to deliver it in an installments of 200 quintals out of the aforesaid quantity of 750 quintals by the 15th of December, 1974. Annexure - 2 dated 31-12-1974 was a notice from the District Magistrate and Collector, Aurangabad, to the petitioner intimating to it that it had failed to comply with the notice dated 9-12-1974 and that, therefore, it was again directed to deliver the quantity required under Annexure - 1, failing which the petitioner would be proceeded against under clause 22 of the 1974 Order, as also would be liable to prosecution under the Essential Commodities Act, 1955 . The petitioner challenged the validity of both Annexures - 1 and 2.

2. The relevant facts for the disposal of this application may be shortly stated thus. The petitioner is a licensee under the Bihar Foodgrains Dealers Licensing Order, 1967 (hereinafter referred to as the Licensing Order). Pursuant to the said licence, the petitioner acts as a commission agent in rice and paddy. According to the case of the petitioner which has not been controverted in any counter-affidavit, it does not hold any stock of its own. The stock of rice and paddy is brought by cultivators and other persons and kept in the Arhat of the petitioner. For assisting in the disposal of the said stock of rice and paddy of the persons to whom the stock belongs the petitioner gets a remuneration varying from Re. 1/-to Rs. 2/- per cent. cash on the sale proceeds of the commodity concerned. The petitioner does not carry on any business or trade in rice or paddy of its own. The petitioners Sales Tax and Income-tax assessment are also based on its earning commission simpliciter out of the transactions between third parties in his Arhat. It has been submitted in the petition as also argued at the Bar that since the petitioner had no stock of its own nor had it a right to retain others properties, it could not be held to be liable for delivery of any levy in respect of stocks of foodgrains belonging not to the petitioner itself but to its principal. It was contended that if it be held that a liability had been fastened on the cases of commission agents simpliciter, in which category the petitioner also came, then to that extent the 1974 Order must be held to be ultra vires the provisions of Sec.3 (2) (f) of the Essential Commodities Act. These being the only relevant and undisputed facts, only two questions fell for determination in this case; firstly, whether the case of commission agents can be held to be covered by the provisions of the 1974 Order, under which they are liable to deliver levy in respect of stocks held by them not of their own but only of a third person, cultivator or otherwise, for facilitating sale to others and thereby earning a commission by way of remuneration on the transaction of sale; secondly, whether, if on the plain language of the 1974 Order the case of such commission agents be held to be so covered by the 1974 Order, such a provision is ultra vires any provision of the Essential Commodities Act.

3. The first question falling for determination must, in my view, be answered in the affirmative for reasons hereinafter given. The relevant portion of clause 14 (2) of the 1974 Order reads as follows:

"Every licensed wholesale dealer shall deliver to the State Government or its agent at procurement price, for the Kharif year 1974-75, at his business premises a minimum of ............ and a maximum




















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