A person entitled to act as if a licence has been granted to him is bound by the provisions of the Act, the rules, and the bye-laws. The rules and bye-laws are to be treated as subordinate to the Act. A deemed licensee under R.41(2) is also a licensee for all purposes under the Act, rules, and bye-laws.

1. The Malabar Market Committee, Kozhikode is the appellant in both these appeals; and the common respondent is a hill produce merchant. The questions involved in the cases are also the same.

The view expressed by a learned judge of this Court (Sadasivan J.) in The Secretary, Malabar Market Committee v. M. K. Thavutty, Crl. Appeal No. 294 of 1967 was doubted, and hence, these cases were referred to a Division Bench and ultimately, to a Full Bench. There are three questions to be decided in these cases; and I shall come to them one by one.

2. The respondent applied for licence from 1st January 1965 to 31st December 1966 as contemplated by S.5 of the Madras Commercial Crops Markets Act remitting the requisite fee and complying with the other formalities. He carried on his trade in arecanuts expecting the licence to be issued in due course. Subsequently, he was called upon to produce his account books as a licensee, and he did not even send a reply to the demand. Then he was prosecuted for breach of bye-law 25 (6) framed by the Market Committee, which is made punishable by bye-law 25 (18). The District Magistrate, Tellicherry acquitted the respondent, and the Market Committee has filed these appeals.

3. Though some evidence was adduced by the Market Committee that the licence was issued to the respondent, there is nothing on record to show that the latter received the licence. The District Magistrate proceeded on the basis that though the respondent applied for licence, the licence was not in fact issued to him. However, the Market Committee relies on R.41 (2) of the Madras Commercial Crops Markets Rules, which provides that an applicant who complied with the provisions of sub-rule (1) of R.41 who applied for the licence with the receipt for the payment of the prescribed fee shall, until orders are communicated to him, be entitled to act as if the licence applied for has been granted to him in accordance with R.42. And R.42 provides that every licence issued by the Collector or the Market Committee shall expire on the last day of the Market Committee's official year for which it is issued. The argument of the counsel of the Market Committee is that by virtue of this sub-rule the respondent is a licensee who is bound by the provisions of the Act, the rules and the bye-laws, and hence his failure to produce accounts is a breach of bye-law 25 (6) punishable under bye-law 25(18). The argument on the side of the respondent is that the deeming provision in R.41 (2) does not make the respondent a licensee, who alone is bound by the bye-laws, and hence, a breach of bye-law 25 (6) by a person like the respondent is not punishable This argument was accepted by the District Magistrate; and Sadasivan J. said in Thavutty's case that all that was enjoined by R.41 (2) was that a person who had applied for licence could carry on the business with immunity until orders issuing the licence were communicated to him, and during the interval between the date of application and the date of issue of the licence, if he carried on trade, he would not be liable to prosecution for not taking out a licence, and liability under bye-law 25 (6) could be fastened only on a holder of a licence. Whether this is correct is the first question in the cases.

4. A few provisions of the Commercial Crops Markets Act may be noted. Under S.4 the State Government may declare a notified area; and under S.4A the State Government shall establish a Market Committee for every such noti8ed area. S.5 (1) provides that no person shall, within a notified area, set up, establish or use, or continue or allow to be continued, any place for the purchase or sale of a notified commercial crop, except under and in accordance with the conditions of a licence granted by the Collector. Sub-section (3) of S.5 provides that no person shall, within a notified area, set up, establish or use, continue or allow to be continued, any place for the storage, weighment, pressing or processing o