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Rajasthan High Court
Dave C.J. & Kan Singh, J.
M/s Bhanwarlal Sohanlal - Appellant
Versus
State - Respondents
D.B. Civil Writ Petition No.468 of 1965
Decided On : December 22, 1965
The power given to the State Government by sec. 3 in the matter of selecting particular areas or particular agricultural produce is not arbitrary and unbridled. It was in order to enable the Government to introduce the scheme gradually that the discretion to select particular areas has been given to it. Similarly, the discretion to select particular agricultural produce had to be left to the Government because it could not be possible for the State Legislature to specify it for particular areas without necessary inquiry into details. The State Government is in the best position to select particular agricultural produce for a particular area. There is, therefore, no substance in the argument that sec. 3 gives unbridled powers to the State Government in the choice of the area of agricultural produce. (Para 13)
Keeping in view the scheme of the present Act, the kind of service that will be rendered in implementation of the Act, will be the provisions for better facilities of marketing. The objects enumerated in see. 19 are primary for advancement of the underlying purposes of the Act from which those using the market including the licensees are to benefit. It has not been pleaded that the probable income that would accrue will not have a reasonable relation with the expenditure incurred for the purposes of the Act. It cannot, by any means, be said that the Act is meant for raising the revenues primarily. Thus, we are unable to hold that the fee contemplated in sec. 17 of the Act will be anything but a fee properly so called Moreover, a clear direction has been laid down by the Legislature that the market committee has to prescribe the fee subject to a maximum to be prescribed by the Government under the rules and the Government will necessarily be keeping in view the purpose of the Act in laying down the maxima in the rules, because the rules making power could be exercised by the Government only for the purpose of carrying out the provisions of the Act. Therefore, in laying down the maxima the Government will have to see that the exaction retains the essential feature of a fee, that is, it must have a corelation with the service to be rendered by the market committee to those who participate in buying and selling of the commodities in the market regulated by the market committee. Fees that have to be prescribed by the rules are prima facie not to be execes-sive. Therefore, in our view sec. 17 does not suffer from the infirmity of excessive delegation of any essential legislative function and consequently, is not bad, (Para 16)
The words "otherwise as specified in the Schedule" no doubt widen the scope of the definition, but sec. 40 has to be utilised only in keeping with the underlying purposes of the Act. If anything which is wholly unconnected with agricultural produce is sought to be included, then it may be a ground for striking down the item to be so included, but thereby we cannot strike down the section itself. (Para 11)
So far as the commencement of the rules is concerned, they come into force as soon as they are mude and continue to be in force till they are modified or annulled by the house of the Legislature. Therefore, in the absence of any statutory provision to that effect there will be no sound basis for holding that the rules become null and void, merely because they are not placed before the house of the Legislature However the, law contains a clear mandate for the Government to place the rules before the house of the Legislature. While the authority to make the rules has been vested in the Government, the ultimate control has been kept with the house of the Legislature and this can only be effectively exercised when the rules are placed before the house. Therefore, though we do not hold the rules to be invalid, yet in the circumstances, we feel it will be our duty to direct the Government to place the rules before the house of the Legislature. The importance of placing the rules before the Assembly, where the statute so requires, cannot be underrated as it enables the elected representatives of the people to deal with the matter as they think best. In a case where we find that a clear mandate of the law has been dis-obeyed for a considerable period we could have thought of giving a direction not to enforce the rules till they are placed before the house. But as we are persuaded to hold some of the material rules to be null and void, we do not consider such a direction to be necessary in the present case, particularly when the rules have already been sent to the Assembly Office for being placed before the house at the next session which is likely to take place in a couple of months. (Para 24)
The short question is whether the cess could be levied by an administrative authority when it has not been empowered by the statute. Cess having not been authorised by sec. 17 of the Act, the same cannot be levied by the market committees. Sec. 14 of the Act enabled a market committee to issue licences only in a market as distinguished from an area. Rules 69 to 74, thus go beyond the powers of the rule making authority inasmuch as the powers of the market committee had been made exercisable in a market area. Consequently, Rules 69 to 74 are bad. (Paras 37 & 38)
Certainly. Based on the provided legal document, here are the key points summarized:
Delegation of Power: The law grants the State Government discretion in selecting specific areas and agricultural produce for regulation. This discretion is guided by the purpose of the Act and is not unbridled or arbitrary, as the Government is best positioned to make detailed inquiries and decisions [Para 13].
Purpose of the Act: The primary aim is to improve facilities for marketing agricultural produce, not to generate revenue. The fees or charges imposed are correlated with services rendered and are not intended as a source of revenue, thus qualifying them as proper fees rather than taxes [Paras 16, 21].
Power to Fix Fees and Cess: The Act authorizes the fixation of fees and cess, but these must be connected to specific services or purposes. Fees are to be prescribed within maxima set by the Government, ensuring they are not excessive and maintain the essential feature of a fee [Paras 16, 21].
Definition and Scope of "Agricultural Produce": The term includes all relevant produce, and any inclusion beyond this scope must be connected to the purpose of the Act. The law’s provisions are to be applied in accordance with the underlying objectives, and unconnected items may be struck down [Paras 11, 17].
Rules and Regulations: Rules made under the Act come into force immediately but must be laid before the Legislative Assembly for a specified period. Non-compliance with this requirement does not automatically invalidate the rules, but the Government is directed to place them before the Assembly to uphold democratic accountability [Paras 24-25, 17019660710018-17019660710024].
Validity of Licensing and Licensing Rules: The rules concerning licensing of traders, brokers, weighmen, and other operators are generally within the authority of the law. However, rules that go beyond the powers conferred—such as those regulating licenses in areas rather than markets, or those imposing restrictions based on participation in strikes—are invalid [Paras 70-74, 17019660710070-17019660710077].
Discrimination and Fairness: The law provides for reasonable distinctions, such as consultation requirements for municipalities but not for other local bodies, which are justified by the different contexts and existing market structures. Such distinctions are not deemed unconstitutional [Paras 131-132].
Prohibition of Unauthorized Levy: The law restricts the levying of cess or fees to those authorized by the Act. Any levy beyond what is prescribed—such as unauthorized cess—is invalid and cannot be enforced [Paras 37-38, 17019660710036].
Effect of Non-Compliance: Rules that are not laid before the Legislature as mandated do not automatically become invalid but are considered bad in law. The Court emphasizes the importance of transparency and legislative oversight, directing the Government to place the rules before the Assembly in future sessions [Paras 24-25, 17019660710018-17019660710024].
Overall Conclusion: The Court upheld the validity of most provisions but struck down certain rules that exceeded the powers conferred by the Act, such as those related to licensing in areas and the levy of cess without statutory authority. The Court also restrained authorities from enforcing rules that were invalid or not properly laid before the Legislature [Paras 138-139].
Please let me know if you need further elaboration or specific legal advice based on these points.
2. The Act was passed by the Rajasthan State Legislature and came into force on 24.11.61, when it was first published in the Rajasthan Gazette. In exercise of its powers under sec. 36 of the Act, the State Government made the Rajasthan Agricultural Produce Markets Rules, 1963, hereinafter to be referred as the Rules which came into force on 6.2.64, on being published in the Gazette. The bye-laws were made by the various market committees in exercise of their powers under sec. 37 of the Act. In 1964, one Bhikamchand and other traders questioned the validity of the Act, the rules and the bye-laws by 9 writ petitions various grounds, such as, that the Act was unconstitutional being in contravention of the fundamental rights of the traders under Art.19 (1) (g) of the Constitution, that the notifications that were issued by the Government under sec. 3 of the Act for the establishment of the market areas were bad and that the bye-laws made by the market committees were invalid as they were not made with the previous sanction of the Director of Agriculture as required by sec. 37 of the Act. We came to the conclusion that the Act did not infringe the fundamental rights of the petitioners under Art. 19(1) (g) of the Constitution, and was, therefore, not unconstitutional on that account, but we found that the bye-laws framed by the various market committees, in the cases before us, were invalid as the requisite previous sanction for making them had not been obtained as required by sec. 37 of the Act. In the result we allowed the writ petitions and restrained the State and other respondents from giving effect to the bye-laws as framed. Our judgment is reported as Bhikam Chand vs. State of Rajasthan (1). We will advert to the relevant observations from that judgment at appropriate place in this judgment.
3. In order to rectify the defects in the law that came to light as a result of our judgment the Governor promulgated the Rajasthan Agricultural Produce Markets (Amending and Validating Provisions) Ordinance, 1965, (Ordinance No. 4 of 1965), on 26.8.65. This Ordinance was later on replaced by an Act of the same caption (Act No. 16 of 1965), which came into force on 29.10.65. By this Act certain amendments were also made in the Act, besides validating the defects therein. We will be reproducing the relevant provisions of the Act, as well as those of Act No. 16 of 1965, at the appropriate place in dealing with the points raised by the petitioners. This time the attack is based on fresh grounds which we will notice hereinafter. Shri M B.L. Bhargava, appearing for Messrs Chandan Mal Beharilal of Padampur, led the arguments on the side of the petitioners and to start with we propose to deal with the points argued by him and then we will be dealing with the points raised by other learned counsel in respect of other writ petitions argued by them.
4. Shri Bhargava directed attention in his address to three sections in the Act, namely, secs.3, 17 and 40. He argued that sec. 3 of the Act was bad as it suffered from the vice of excessive delegation of its functions by the Legislature thereby making the Government free to pick and choose either the commodities or the areas for which it may like to declare market areas. According to Shri Bhargava, the discretion with which the Government was vested in the matter of establishment of market areas was unfettered and unguided. He points out that it was the duty of the Legislature to lay down some principle or policy for the exercise of its discretion by the Government. As regards the validity of sec. 17 of the Act, Shri Bhargava submitted that here also the Legislature h
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