AGRICULTURAL PRODUCE MARKET COMMITTEEversusBIOTOR INDUSTRIES LTD. & ANR.

                  [2013] _16 S.C.R. 969


   AGRICULTURAL PRODUCE MARKET COMMITTEE                     A
                            v.
           BIOTOR INDUSTRIES LTD. & ANR.
             (Civil Appeal No. 4860 of 2009)
                  NOVEMBER 29, 2013
                                                             B
     [G.5. SINGHVI AND V. GOPALA GOWDA, JJ.]

      Gujarat Agricultural Produce Markets Act, 1963 - ss.28A
and 59 - Gujarat Agricultural Produce Markets Rules, 1965
- r. 48(2) - Gujarat Agricultural Produce Markets C
(Amendment) Act, 2007 - Entitlement to levy market fee on
the respondent-Company for purchase of castor seeds - Held:
On facts, demand for market fee by the APMC for castor
seeds was justified since the castor seeds were bought in the
market area and not brought into the market area - Order of D
the Division Bench of the High Court in LPA setting aside the
order of the single Judge and affirming the order of the
Revisional Authority, without examining the correctness of
r.48(2) and applying the Division Bench Judgment rendered
in another LPA in connected matters, without considering the E
factual matrix, is liable to be set aside - Matter remanded to
High Court to place the matter before the Single Judge to
examine the validity of r.48(2), as questioned with reference
to s. 28A of the amended provision of Act No. 17 of 2007 and
the impugned order of the Revisional Authority - Appellant F
may also approach the .State Government to amend the
Rules by deleting r.48(2) - Interim order of the single Judge
directing deposit of 50% of the demanded amount towards
the market fee, restored - Constitution of India, 1950 - Arts.
 14, 19, 21 and 226.
                                                             G
    The appellant-APMC filed Special Civil Application
under Articles 14, 19, 21 and 226 of the Constitution
before the High Court, seeking relief for the issue of a writ
of certiorari or any other appropriate writ, order or
                           969                                H
    970     SUPREME COURT REPORTS             [2013] 16 S.C.R.

A   direction, to set aside order passed in Revision
    Application by respondent No.2-the State (Revisional
    Authority) and further seeking declaratory relief to
    declare that the APMC is entitled to levy market fee on the
    respondent-Company for purchase of castor seeds as
B   per the demand notices given to the respondent-
    Company. Further, the appellant-APMC sought for
    declaratory relief to declare Rule 48(2) of the Gujarat
    Agricultural Produce Markets Rules, 1965 as ultra vires
    of Sections 28A and 59 of the Gujarat Agricultural
c   Produce Markets Act, 1963.

       The single Judge of the High Court passed interim
  order issuing Rule to examine the correctness of Rule
  48(2) in view of the amendment to the Act incorporating
  Section 2(a) to Section 28 of the Act and also granted
D interim relief directing respondent-Company to deposit
  50% of the demanded amount towards the market fee.

         The correctness of this interim order was challenged
    by the respondent-Company by filing LPA. The Division
E   Bench dismissed the Special Civil Application holding
    that the same lacks merit and also vacated interim relief
    granted by the single Judge of High Court. Aggrieved,
    the APMC filed the instant appeal.

          Allowing the appeal, the Court
F
      HELD: The demand for the market fee made by the
  APMC for castor seeds is justified as per the reasoning
  given by this Court in its judgment in the connected Civil
  Appeal No. 3130 of 2008, that the castor seeds were
G bought in the market area and not brought into the market
  area. The order of the Division Bench of the High Court
  in LPA setting aside the order of the single Judge in
  Special Civil Application and affirming the order of the
  Revisional Authority, without examining the correctness
H of Rule 48(2) of the Rules and applying the Division
AGRICULTURAL PRODUCE MARKET COMMITTEE v. 971
          BIOTOR INDUSTRIES LTD.
Bench Judgment rendered in another LPA in connected           A
matters without considering the factual matrix and
therefore, the same is liable to be set aside. Accordingly,
the same is set aside and the matter is remanded to the
High Court to place the matter before the roster of single
Judge to examine the validity of Rule 48(2) ot the Rules,     B
as questioned with reference to. Section 28A of the
amended provision of Act No. 17 of 2007 and the
impugned order of the Revisional Authority. The
appellant may also approach the State Government to
amend the Rules by deleting Rule 48(2) of the Rules. It is    c
open for the appellant to either press the Special Civil
Application to be decided on merits with regard to the
Validity of Rule 48(2) and also examine the impugned
order of levying market fees on the goods purchased by
the respondent-Company on the basis of facts and              D
material evidence or to make revision application to the
State Government seeking for the deletion of Rule 48(2)
by amending the Rules. The interim directions given by
the single Judge by way of interim order directing to
deposit 50% of the demanded amount towards the
market fee is restored. If the company has not complied       E
with that interim order, it shall comply with the same
within two weeks from the date of receipt of the copy of
this judgment. [Paras 6, 7] [977-G-H; 978-A-H]

    CIVIL APPELLATE JURISDICTION : Civil Appeal No.           F
4860 of 2009.

    From the Judgment and Order dated 10.02.2009 of the
High Court of Gujarat at Ahmedabad in LPA No. 1383 of 2008.
    B. K. Satija for the Appellant.                           G

    Sanjay Bhatt, Hemantika Wahi for the Respondents.

    The Judgment of the Court was delivered by
                                                              H
    972      SUPREME COURT REPORTS                 [2013] 16 S.C.R.


A       V. GOPALA GOWDA, J. 1. This matter is connected to
    the Civil Appeal Nos. 3130-3131of2008 upon which we have
    pronounced the judgment today.

       2. The appellant-APMC herein challenged the correctness
  of the judgment dated 10.2.2009 passed by the Division Bench
8
  of Gujarat High Court in Letters Patent Appeal No. 1383 of
  2008 in Special Civil Application No. 9705 of 2008 with Civil
  Application No. 13651 of 2008 whereby it has dismissed the
  Special Civil Application holding that the same lacks merit and
C also vacated interim relief granted by the learned single Judge
  of High Court. Being aggrieved, the APMC filed this Civil
  Appeal framing certain questions of law and urging grounds in
  support of the same, praying to set aside the impugned
  judgment and order and to pass such other order as may be
  deemed fit and proper in the circumstances of the case.
D
        3. The brief necessary facts for the purpose of examining
  the legality and validity of the impugned order are stated herein:-

       The appellant-APMC had filed Special Civil Application
E No. 9705 of 2008 under Articles 14, 19, 21 and 226 of the
  Constitution of India before the learned single Judge of the High
  Court impleading the respondent-Company and the State of
  Gujarat as parties, seeking relief for the issue of writ of
  certiorari or any other appropriate writ, order or direction, to set
F aside order dated 30.6.2008 passed in Revision Application
  No. 69 of 2008 by respondent No.2-the State (Revisional
  Authority) and further sought for declaratory relief to declare that
  the APMC is entitled to levy market fee on the respondent-
  Company for purchase of castor seeds as per the demand
  notices dated 5.3.2008 and 15.4.2008 given to the respondent-
G Company. Further, by way of amendment to the prayer column,
  it has s·ought for declaratory relief to declare Rule 48(2) of the
  Gujarat Agricultural Produce Markets Rules, 1965 (for short
  "Rules") as ultra vires of Sections 28A and 59 of the Gujarat
  Agricultural Produce Markets Act, 1963 (hereinafter referred to
H as "the Act") urging various facts and legal grounds. The
AGRICULTURAL PRODUCE MARKET COMMITTEE v. 973
BIOTOR INDUSTRIES LTD. [V. GOPALA GOWDA; J.]
amended Sections were added to the Act vide the Gujarat             A
Agricul.tural Produce Markets (Amendment) Ac( 2007.

     4. The learned single Judge of the High Court after hearing
the learned counsel for the parties passed an interim order on
13.11.2008 in Special Civil Application No. 9705 of 2008            B
referring to Section 28(1) of the Act and amended Section
28(2)(a),(b),(c),(d) & (e) of the Act and issued Rule to examine
the correctness of Rule 48(2) in view of the amendment to the
Act incorporating Section 2(a) to Section 28 of the Act and
directed the respondent-Company by giving directions,               C
particularly direction Nos. 2 and 3 which are extracted
hereunder :-

    "(2) Respondent No.2 deposits 50% of the outstanding
    market fees with this Court and furnishe~ an undertaking
    before this Court for the remaining 50% of the amount to        D
    the effect that they shall pay up the remaining market fees
    with interest as and when it is so ordered by this Court.
    Such amount shall be invested, if deposited, by the
    Registrar in the FDR initially for a period of two years,
    renewable further with the State Bank of India, Gujarat         E
    High Court Branch, Ahmedabad.

    (3) Respondent No.2 shall be at liberty to comply with either
    of the conditions within two months from the date of
    intimation and calculation of the Market Fees recoverable
    l::iy the Market Committee from respondent No.2."               F

     Further, at paras 14 and 15 of the order dated 13.11.2008
of learned Single Judge, certain observations were made,
which read thus:-
                                                                    G
    "14. It is also observed and directed that it would be open
    to the petitioner to make representation to the State
    Government, which is Rule Making Authority, for
    amendment of the Rule 48 in light of the amended
    provisions of Section 28 of the Agriculture Produce Market      H
    974      SUPREME COURT REPORTS                [2013] 16 S.C.R.


A         Committee. If such representation is made, the pendency
          of this petition, shall not operate as a bar to the Rule
          Making Authority for bringing about amendment, as may
          be permissible in law.

          15. It would be open to either side to move this Court for
B
          final hearing if the rules are amended or the matter before
          the Apex Court is finally decided, whichever is earlier."

       The correctness of this interim order dated 13.11.2008 was
  challenged by the respondent-Company by filing Letters Patent
C Appeal No. 1383 of 2008 urging various legal contentions. The
  Division Bench examined whether sub-section (2)(a) added to
  Section 28 of the Act by amendment Act No. 17 of 2007 has
  the effect of taking away the substratum of the Division Bench
  judgment dated 24.4.2007 passed in Letters Patent Appeal No.
D 139 of 2006 in connected matters. The Division Bench after
  referring to certain relevant facts and Rule 48(2) of the Rules,
  came to its conclusion on the basis of the judgment rendered
  by the Division Bench of High Court in the Letters Patent
  Appeal No. 139 of 2006 and connected matters for the
E interpretation of Section 28 of the Act read with Rule 48(2) of
  the Rules. The relevant paragraph 8 from the Division Bench
  judgment rendered in the aforesaid Letters Patent Appeal filed
  by the respondent-Company is extracted hereunder:-

          "8. Section 28 of the Act empowers the Market Committ~e
F         to levy and collect fees on notified agricultural produce
          bought or sold in the market area, subject to the provisions
          of the Rules and at the rate maxima and minima, from time
          to time prescribed. Thus, the power of the Market
          Committee to levy prescribed fees is envisaged in the
G         above section. In juxtaposition to the above section, it is
          necessary to refer to Rule 48 of the Rules, and more
          particularly Rules 48 and 49, placed in Part VI with heading
          'Fees, Levy and Collections', pertaining to market fees.
          Rule 48, sub-rule (1) and the explanation is highlighted by
H         the learned Single Judge and discussion has taken place
AGRICULTURAL PRODUCE MARKET COMMITTEE v. 975
BIOTOR INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
   on the basis of certain material available on record with      A
   regard to sale of castor seeds by one Manish Trader of
   Ahmedabad to the Company and after relying upon
   Sections 19 to 22 of the Sale of Goods Act, the learned
   Single Judge found that sale does take place within the
   market area and, therefore, the Company is liable to pay       8
   market fees. However, sub-rule (2) of Rule 48 of Part VI
   of the Rules clearly prescribes that no fee shall be levied
   on agricultural produce brought from outside the market
   area into the market area for use therein by the industrial
   concerns situated in the market area or for export and, in     C
   respect of which declaration has been r:nade and a
   certificate has been obtained in Form V. Thus, the above
   sub-rule (2) of Rule 48 nowhere prescribes that agricultural
   produce brought from outside the area of market
   committee has to be by the industrial concern itself. The      D
   preceding word is 'brought' and not 'bought'. Even the
   facts of the present case are examined, nowhere it is
   mentioned that purchase took place within the area of the
   market committee. In the affidavit in reply filed by the
   Company, it is clearly mentioned that purchase of castor
   seeds did take place outside the market area and no sale       E
   takes place within the market area. Even, weighment, etc.
   is also done outside the market area and bills are
   prepared accordingly and, that too, after selection by the
   representative of the Company. Not only that, but, the
   Company has produced bills of one Manish Traders at            F
   page 109 of Letters Patent Appeal No.195 of 2006, having
   numbered as Bill No.93, dated 3rd May 2004, is clearly
   indicative of the fact that sale does not take place within
   the area of Market Committee, Baroda. Besides, the octroi
   paid to the Baroda Municipal Corporation on the goods,         G
   namely, castor seeds imported and produced at page 107
   is also suggestive of the fact that sale does not take place
   within the area of market committee. Even, the Company
   has produced number of forms prescribed under Rule 48,
   sub rule (2) from page 79 to 86, the fact not denied by the    H
    976        SUPREME COURT REPORTS                 [2013] 16 S.C.R.


A         Market Committee, which also establishes the case of the
          Company with sufficient declaration and a certificate that
          the abovementioned agricultural produce, namely, castor
          seeds, has been brought from outside the limits of the
          market area and brought within the limits of market area
B         for industrial purpose, and for production of castor oil and
          other byproducts. Thus, the Company fully complied with
          the requirement of Rule 48 of the Rules and is entitled for
          exemption from payment of market fees. Therefore,
          exercise undertaken by the learned Single Judge to find
          out the place of sale, so as to bring the case of the
c         Company under Rule 48, subrule (1) of the Rules, is of no
          help and the finding, on that basis, arrived at by the learned
          Single Judge, will have to be quashed and set aside in the
          backdrop of the above discussion and the fact situation."
D       5. Thereafter the amended provisions of Sections 28A and
  31 D of the Act are referred to by the Division Bench along with
  Section 28(1) of the Act and Rule 48(2) of the Rules as well as
  sub-sections 2(a)and (b) of Section 28 of the amended
  provisions of the Act to come to the conclusion, that in view of
E the factual legal situation, the Revisional Authority had rightly
  interfered with the demand notices issued by the APMC and
  therefore held that Civil Appeal filed by the APMC lacks merit
  and dismissed the same and the interim relief granted was set
  aside and consequently Rule was also discharged. The
F correctness of the same is challenged here by urging various
  questions of law and grounds in support of the same. The same
  need not be adverted to in this judgment for the reason that the
  learned Division Bench of the Gujarat High Court while
  examining the directions in interim order dated 13.11.2008
G given in Special Civil Application No. 9705 of 2008 filed by the
  APMC has gone into the merits of the case. Considerable
  reliance was placed upon the Division Bench Judgment in
  Letters Patent Appeal No. 139 of 2006 by the counsel for the
  respondent-Company, contending that the amendment Act has
  not brought any change to Section 28 of the Act and further
H
AGRICULTURAL PRODUCE MARKET COMMITTEE v. 977
BIOTOR INDUSTRIES LTD. [V. G6PALA GOWDA, J.]
submitted that the Revisional Authority has rightly held that the A
APMC has no legal right to levy market fee on the respondent-
Company. The appellant-APMC in this appeal has _submitted
that the Division Bench of the High Court, instead of examining
the correctness of the discretionary powers exercised by the
learned single Judge in Special Civil Application No. 9705 of B
2008 and passing the interim order with certain observations,
has passed the orders on merits of the civil application without
adverting and examining the grounds urged in the petition, which
approach of the Division Bench is not correct and it should not
have pronounced decision on the merits -of the Special Civil     c
Application while examining the correctness of the interim order
passed by the learned single Judge. The APMC has also sought
declaratory relief to declare Rule 48(2) as ultra vires to Section
28A of the amended provision of the Act and submitted that
the Division Bench of the High Court failed to appreciate the D
same and also that Section 28 of the Act deals with levy of
market fee which is a mandatory provision that does not give
any exemption to respondent-Company and as such a Rule
cannot override provisions of the Act. The Division Bench of
the High Court has simply affirmed the order of the Revisional E
Authority by setting aside the assessment order passed by the
APMC vide notices dated 5.03.2008 and 15.4.2008 without
awaiting the decision to be rendered by the learned single
Judge on the legality and validity of the Rule 48(2) in the
backdrop of Section 28, of the amended provision.
                                                                 F
    6. After hearing learned counsel for the parties, we have
pronounced the judgment today in Civil Appeal No. 3130 of
2008 on similar demand notices demanding the market fee
from the respondent-Company on the castor seeds bought in
the market area for the purpose of manufacturing of oil. We hold G
that the demand for the market fee made by the APMC for
castor seeds is justified as per the reasoning given in our
juagment in the connected Civil Appeal No. 3130 of 2008, that
the castor seeds were bought in the market area and not
brought into the market area. It would suffice to say that the
order dated 10.02.2009 of the Division Bench of the High Court H
    978      SUPREME COURT REPORTS              [2013] 16 S.C.R.

A in Letters Patent Appeal No. 1383 of 2008 setting aside the
  order dated 13.11.2008 of the leaq;ied single Judge in Special
  Civil Application No. 9705 of 2008 and affirming the order
  dated 30.06.2008 of the Revisional Authority in Revision
  Application No.69 of 2008, without examining the correctness
B of Rule 48(2) of the Rules and applying the Division Bench
  Judgment rendered in Letters Patent Appeal No 139 of 2006
  without considering the factual matrix and therefore, the same
  is liable to be set aside. Accordingly, we set aside the same
  and remand the matter to the High Court to place the matter
c before the roster of learned single Judge to examine the validity
  of Rule 48(2) of the Rules, as questioned with reference to
  Section 28A of the amended provision of Act No. 17 of 2007
  and the impugned order of the Revisional Authority. The
  appellant may also approach the State Government to amend
D the Rules by deleting Rule 48(2) of the Rules. It is open for the
  appellant to either press the Special Civil Application to be
  decided on merits with regard to the validity of Rule 48(2) and
  also examine the impugned order of levying market fees on the
  goods purchased by the respondent-Company on the basis of
E facts and material evidence or to make revision application to
  the State Government seeking for the deletion of Rule 48(2) by
  amending the Rules with the above said observation.
       7. This Civil Appeal is accordingly allowed in the above
  terms by setting aside the impugned order of the Division
F Bench and remanding the matter to the High Court to place the
  same before the roster of learned single Judge with a request
  to him to examine the validity of the impugned Rule if the APMC
  so desires and the impugned order passed by the Revisional
  Authority and decide the same on merits. The interim directions
G given by the learned single Judge by way of interim order dated
  13.11.2008 directing to deposit 50% of the demanded amount
  towards the market fee is restored. If the company has not
  complied with that interim order, it shall comply with the same
  within two weeks from the date of receipt of the copy of this
  judgment.
H
    Bibhuti Bhushan Bose                             Appeals allowed