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HIGH COURT OF PATNA
Uday Singh and B.N. Agrawal, JJ.
M/s Raptakos, Brett & Company Limited - Petitioner
Vs.
The Bihar State Agricultural Marketing Board and three others - Respondents
And
Gujarat Co-operative Milk Marketing Federation Ltd. – Petitioner
Vs.
The Krishi Utpadan Bazar Samiti, Mussallahpur and others - Respondents
And
M/s Indodan Milk Product Limited through its Regional Sales Manager - Petitioner
Vs.
The Secretary, Musallahpur Agricultural Produce Market Committee, Patna and others -Respondents
And
M/s Patliputra Cands - Petitioner
Vs.
The State of Bihar through the Secretary Department of Agriculture, Government of Bihar, Patna and others – Respondents
Civil Writ Jurisdiction Case Nos. 1797 and 3215 of 1984 and 4096 and 4133 of 1986
Decided On : 15.12.1987
AGRICULTURAL PRODUCE MARKETS ACT - VALIDITY - LEVY OF MARKET FEE - BABY FOODS - WHETHER AGRICULTURAL PRODUCE - WHETHER ACT ULTRA VIRES - WHETHER REPEALED BY ESSENTIAL COMMODITIES ACT - WHETHER SERVICES RENDERED BY MARKET COMMITTEE - WHETHER ACT APPLIES TO INDUSTRIAL PRODUCTS - WHETHER NOTIFICATION UNDER SECTIONS 3 AND 4 NECESSARY.
Fact of the Case:
The petitioners, manufacturers and sellers of baby food, challenged the validity of the Bihar Agricultural Produce Markets Act, 1960 (the Act), and the levy of market fee on their products. They contended that their products were not agricultural produce, that the Act was ultra vires the powers of the State Legislature, that it was repealed by the Essential Commodities Act, 1955, that the Market Committee did not render any services to them, and that the Act did not apply to industrial products. The State Government and the Market Committees contended that the products were agricultural produce, that the Act was valid, that it was not repealed by the Essential Commodities Act, that the Market Committee did render services to the petitioners, and that the Act applied to industrial products.
Finding of the Court:
The Court held that: 1. The Act was not ultra vires the powers of the State Legislature, as the field of legislation was not occupied by the Industries Development and Regulation Act, 1951, or the Essential Commodities Act, 1955. 2. The products of the petitioners were agricultural produce within the meaning of the Act, as they were processed forms of milk and milk products. 3. The Act was not repealed by the Essential Commodities Act, as the two Acts operated in different fields and there was no repugnancy between them. 4. The Market Committee did render services to the petitioners, such as providing platforms for sale, weighment facilities, and supervisory staff. 5. The Act applied to industrial products, as the processing of agricultural produce did not change its essential character. 6. The notification issued by the State Government in 1974 in terms of sections 3 and 4 of the Act was valid and sufficient to authorize the levy of market fee.
Issues: 1. Whether the Act was ultra vires the powers of the State Legislature. 2. Whether the products of the petitioners were agricultural produce within the meaning of the Act. 3. Whether the Act was repealed by the Essential Commodities Act. 4. Whether the Market Committee rendered any services to the petitioners. 5. Whether the Act applied to industrial products. 6. Whether the notification issued by the State Government in 1974 in terms of sections 3 and 4 of the Act was valid and sufficient to authorize the levy of market fee.
Ratio Decidendi: The Court applied the following principles in reaching its decision: 1. The validity of a statute is to be tested on the basis of its pith and substance, and not on the basis of incidental encroachments. 2. Two statutes operating in different fields and having different objects do not repeal each other, even if there is some overlap in their provisions. 3. A fee is valid if there is a general relationship between the fee and the services rendered, even if the services are not rendered directly to the individual paying the fee. 4. The processing of agricultural produce does not change its essential character, and therefore processed agricultural products are subject to the same laws and regulations as unprocessed agricultural products.
Final Decision: The Court dismissed the petitions, holding that the Act was valid, that the products of the petitioners were agricultural produce, that the Act was not repealed by the Essential Commodities Act, that the Market Committee did render services to the petitioners, that the Act applied to industrial products, and that the notification issued by the State Government in 1974 in terms of sections 3 and 4 of the Act was valid and sufficient to authorize the levy of market fee.
Uday Sinha, J.
These are four writ applications under Articles 226 and 227 of the Constitution. They will all be disposed of by this common judgment. In a nut shell the contention of the petitioners in each of these applications is that they are not liable to pay the market fee on their goods in terms of the Bihar Agricultural Produce Markets Act, 1960 (hereinafter called 'the Act'). Since the widest sweep of the submissions was advanced in C.W.J.C. No. 1797 of 1984, I shall first consider the submissions advanced in that application.
2. C.W.J.C. No. 1797 of 1984 :
The petitioner in this application is an incorporated Company with its Registered Office at Bombay. It produces Baby food under trade name "Lactodex" and "Raptakos S.I.F. (Special Infant Food)". The factory is at Bombay. Its products are sold all over the country including this State. It has its Central Office at Patna. Being located outside Bihar, it naturally purchases its raw materials from outside Bihar and no purchase whatsoever of any commodity is made in this State. According to the petitioner, the ingredient or constituent of "Lactodex" and "Raptakos S.I.F." are as follows:
LACTODEX
Per 100 ml. when reconstituted.
6 g. : 45 ml.
Protein 1.9 g.
Carbohydrate 9.6 g.
Milk fat 9.6 g.
Minerals 0.5 g.
Vitamin A 265 I. U.
Vitamin B6 40 mcg. Including that
derived from milk powder.
Vitamin D 40 I. U.
Calories 54
RAPTAKOS S.I.F. Per 100 Ml. when reconstituted.
Protein 1.8 g.
Fats 3.0 g.
Carbohydrates 9.6 g.
Minerals (Ash) 0.4 g.
Per 100 ml. when reconstituted.
4.5.g. : 30 ml.
Iron 0.6 g.
Vitamin A 225 I. U.
Vitamin D 60 I. U.
Vitamin E 1.3 I. U.
Vitamin B1 0.07 mg.
Vitamin B2 0.11 mg.
Nicotinamide 0.9 mg.
Vitamin B6 0.04 mg.
Vitamin B 12 0.15 mg.
Vitamin C 0.5 mg.
Calories 73 ”
The products of the Company are received in this State packed in sealed tins. One branch of the Company is at Patna and another at Muzaffarpur, the two branches falling within the sphere of the Agricultural Produce Market Committees at Patna and Muzaffarpur. The averment of the petitioner is that although the petitioner did not fall within the mischief of the Act, under coercion and with great reluctance it obtained a licence under the Act for both the places separately. The factual stand of the petitioner is that its products are not agriculture produce not being milked. It appears that in 1982 the petitioner was asked by respective Market Committees to shift its branch offices within the Principal Market Yards. The petitioner filed appeal against the order to the Board of Directors of the Bihar State Agricultural Marketing Board. The Board dismissed the appeal holding that the goods of the petitioner were agriculture produce which had been duly notified under sections 3 and 4 of the Act and that the petitioner was a trader for the purposes of the Act. Being aggrieved by the order of the appellate authority (Annexure-1) the petitioner has moved this Court for quashing Annexure-1.
3. C.W.J.C. No. 3215 of 1984 :
The petitioner in this application is a Co-operative Society registered in Gujarat under the Co-operative Society Act of that State. The petitioner is a Federation of Co-operative Societies in that State. The petitioner is engaged in marketing various products which are predominantly milk products and are marketed under the brand name of "Amul" and Sagar". The manufacturing process involves the use of sophisticated and high developed modern technology. The six federating co-operative Societies used modern and sophisticated plant and machinery for manufacturing milk products in a large scale. The Head Office is at Anand in Gujarat. The Branch offices are situate at Calcutta, Delhi, Madras, Bombay and Ahmedabad. These branches work through authorized Depots. At Patna also they have a Depot which is responsible for marketing of its products in
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