The Punjab Mandi Board lacked the authority to issue a circular fixing composition fees for licensees who default in paying market fees, and the Market Committees could only charge additional fees and penalty for breach of provisions under Rule 31(1).

G.S.Singhvi, J.

1. These petitions have been filed to quash the circular No. 106 dated 10.5.1995 issued by the Punjab Mandi Board (hereinafter referred to as the Board) fixing the composition fees equivalent to five times of the normal market fees and by which the Market Committees have been required to charge fees from the licensees who commit default in the payment of market fee.

2. In order to decide the legality of the impugned circular, it will be useful to take notice of the facts of Civil Writ Petition No. 7916/96. Petitioners are engaged in the business of commission agents. All of them have been given licenses under the Punjab Agricultural Produce markets Act, 1961 (hereinafter referred to as the Act) and the rules framed thereunder. Petitioners have stated that they are regularly paying the market fee and rural development fund and have been filing returns in the prescribed proforma. Their grievance is that in the purported exercise of its power under Section 46 of the Act the respondent-Board has issued instructions in the form of circular dated 10.5.1995 for charging composition fees equivalent to five times the amount of fees payable by the licensees and on the basis of impugned circular, the Market Committees have initiated action for recovery of the composition fees in terms of this circular and in this manner their business has been seriously jeopardised. Petitioners have questioned the authority of the Board to issue the impugned circular by contending that composition fees can be charged only for specified offences and not in the case of failure of licensee to deposit the market fee.

3. The respondents have justified the impugned circular by stating that this step has been taken in order to check the constant evasion of market fee.

4. For the purpose of deciding the legality of impugned circular, we may refer to the provisions contained in Sections 6(3), 8, 13(2), 13(4), 23, 30, 37 and 46 of the Act and Rules 31(1) to (9) and 36 of the Punjab Agricultural Produce Markets (General) Rules, 1962. These provisions are reproduced below for ready reference:-

"Section 6(3) : After the date of issue of such notification or from such later date as may be specified therein, no person, unless exempted by rules made under this Act, shall either for himself or on behalf of another person, or of the State Government within the notified market area, set up, establish or continue or allow to be continued any place for the purchase, sale, storage and processing of the agricultural produce so notified; or purchase, sale, store or process such agricultural produce except under a licence granted in accordance with the provisions of this Act, the rules and bye-laws made thereunder and the conditions specified in the licence: Provided that a licence shall not be required by a producer who sells himself or through a bona fide agent not being a commission agent, his own agricultural produce or the agricultural produce of his tenants on their behalf or by a person who purchases any agricultural produce for his private use.

8. No private market to be opened in or near places declared to be markets - on and after the date on which the State Government have by a notification under section 7 declared any place to be a principal or sub-market yard, no person or Municipal Committee, District Board, Panchayat or any Local Authority notwithstanding anything contained in any enactment relating to such Municipal Committee, District Board, Panchayat or Local Authority shall be competent to set up, establish or continue or allow to be continued any place within the limits of such market or within a distance thereof to be notified in the official gazette in this behalf, in each case by the State Government for the purchase, sale storage and processing of any agricultural produce. Provided that a producer shall not be deemed to set up, establish to continue or allow to be continued a place as a market for the purposes of the purchase, sale