Supreme Court of India
WALAITI RAM CHARAN DASS & ORS. ETC.versusSTATE OF PUNJAB & ORS. ETC.
- Citation
- 2019 INSC 1149
- Decided
- 16 October 2019
- Disposal
- Disposed off
- Bench
- DEEPAK GUPTA
Holding
The 1999 and 2008 Rules are constitutionally valid; the licence‑and‑turnover conditions are permissible, and proof of turnover must primarily be through Form M, otherwise Forms H and J, with licence being mandatory.
Summary
The petitioners, licensed dealers of the old grain market, sought allotment of plots in a newly created market after the old market was de‑notified. Their applications were rejected, leading to writ petitions. The Punjab High Court initially denied relief (2010) but later granted some relief (2015‑16). The appellants challenged the Punjab State Agricultural Marketing Board (Sale and Transfer of Plots) Rules, 1999 and the First Amendment Rules, 2008, alleging they violated the Labha Ram judgment and Article 14. The Supreme Court examined the constitutional validity of the rules, the requirement of a three‑year licence and a Rs 5 lakh annual turnover, and the evidentiary standards for proving turnover (Form M, otherwise Forms H and J). The Court held that the rules are valid, the conditions are reasonable, licence is mandatory, and the High Court’s liberal interpretation was erroneous. The appeals were dismissed and the rules affirmed.
Issues considered
- The constitutional validity of the Punjab State Agricultural Marketing Board (Sale and Transfer of Plots) Rules, 1999 and 2008, particularly under Article 14.
- Whether the conditions of a three‑year licence and a Rs 5 lakh annual turnover contravene the Labha Ram judgment.
- Whether a dealer who did not hold a licence on the cut‑off date can establish eligibility through Forms H and J in lieu of Form M.
- Whether a gap of more than three months between licence expiry and renewal disqualifies a dealer from plot allotment.
- Whether the Punjab High Court’s interpretation of Rule 3(iii) of the 1999 Rules was correct.
Legislation cited
- Punjab Agricultural Produce Markets Act, 1961
- Punjab Agricultural Produce Markets (General) Rules, 1962s. Rule 24(14), s. Rule 24(8), s. Rule 29(3), s. Rule 31(1)
- Punjab New Mandi Townships (Development and Regulation) Act, 1960
Subjects
constitutional validityArticle 14agricultural marketlicence renewalturnover proofpreferential allotmentPunjab State Agricultural Marketing Boardplot allotment
Judgment
754 [2019]
SUPREME COURT 13 S.C.R. 754
REPORTS [2019] 13 S.C.R.
A WALAITI RAM CHARAN DASS & ORS. ETC.
v.
STATE OF PUNJAB & ORS. ETC.
(Civil Appeal No. 8015-8016 of 2019)
B OCTOBER 16, 2019
[DEEPAK GUPTA AND ANIRUDDHA BOSE, JJ.]
Punjab State Agricultural Marketing Board (Sale and
Transfer of Plots) (First Amendment) Rules, 2008 – Punjab State
Agricultural Marketing Board (Sale and Transfer of Plots) Rules,
C
1999 – r. 3 (iii) and (iv) – Validity of Rules 1999 and 2008 – The
old grain market was de-notified and a new market was set up –
Dealers of the old market applied for allotment of plots/shops in
the new grain market – Their applications were rejected – Writ
Petitions – High Court did not grant relief in writ petitions decided
D in 2010 – However, in another set of writ petitions decided in 2015
& 2016 the High Court granted relief to the dealers – Appellants
Contended that the Rules were against the Labha Ram’s Case –
On appeal, held: When Labha Ram’s case was decided there was
no provision for preferential allotment to the old dealers – After
this judgment that the 1999 Rules were notified – Thereafter (First
E
amendment) Rules 2008 come into existence, which were much more
liberal – Now, 50 % of the shops were reserved for the existing
licence holders and there were two important conditions; (i) that
a person must have licence for 3 years and (ii) that the dealer must
have an annual turnover of Rs. 5 lakhs in each of the three
F financial years – If there were no conditions like the one laid down
in the Rules, any person would get a licence, not transact any
business, and after a few months apply for a new shop at a
concessional rate – That would defeat the purpose which was
sought to be highlighted by Labha Ram and Prem Chand Case –
Thus, these Rules did not violate any of the provisions of the
G
Constitution including Art. 14 and are legally valid – Punjab
Agricultural Produce Markets Act, 1961.
Punjab State Agricultural Marketing Board (Sale and
Transfer of Plots) (First Amendment) Rules, 2008 – Punjab State
Agricultural Marketing Board (Sale and Transfer of Plots) Rules,
H
754
WALAITI RAM CHARAN DASS & ORS. v. 755
STATE OF PUNJAB & ORS.
1999 – r.3 (iii) – Allotment of Plots/ Shops in the new market set A
up – Dealers of the old market applied for allotment of plots/ shops
in the new market – Applications were rejected – Writ Petitions –
In the group of petitions which were decided in 2015 & 2016 the
High Court granted some relief to the dealers – The High Court
held that a person can furnish adequate proof of his working in
B
the denotified market yard even if he did not hold a licence on
the cut-off date – The market boards filed appeal before the
Supreme Court – Held: r. 3 (iii), which provides that to prove the
turnover, the dealer is required to produce form ‘M’ which is in
the nature of a daily return to be filed by the licensed dealer with
the Market Committee/ Board u/rr. 29(3) and 31(1) of the Punjab C
Agricultural Produce Markets (General) Rules, 1962 – In the
absence of Form ‘M’ (daily return) the dealer can rely on form ‘H’
(auction register) and ‘J’ (sale voucher) to prove his turnover –
These have to be read along with form ‘F’ which is the form of
renewal of licence – However, High Court held that form ‘F’
D
(renewal of licence) was not the only document required for
determination of eligibility of an old licensee for allotment of a
plot, but the independent adequate proof of working in denotified
market yard was required to be considered to determine the
eligibility of the old licenses for allotment of plots – Reasoning of
High Court cannot be accepted – Licence is mandatory and no E
person can carry on business in an agricultural market without
having a licence – The Rules provide that the renewal of the licence
should be applied one month before the expiry of the previous
licence – Further, a person who has not renewed his licence without
justifiable cause, cannot get any benefit – Punjab Agricultural
F
Produce Markets (General) Rules, 1962.
Disposing of the appeals, the Court
HELD: 1. This Court is concerned with two sets of Rules,
viz., the 1999 Rules and the 2008 Rules. The case of the
appellants is that the Rules are against the judgment of this G
Court in Labha Ram and Sons and Others vs. State of Punjab and
Others wherein while interpreting the provisions of the Punjab
New Mandi Townships (Development and Regulation) Act,
1960 (hereinafter referred to as the Act of 1960), it was
held that the Government has an obligation to provide sufficient H
756 SUPREME COURT REPORTS [2019] 13 S.C.R.
A accommodation to all the existing licenced dealers with regard
to the handicaps they suffered due to the creation of new market
area. This Court also held that the dealers who were already
functioning in the de-notified markets should not be made to
compete with new entrants. This Court, further directed that
B the Government should fix a reasonable rate above the reserve
price for such old licenced dealers. It would be pertinent to
mention that when Labha Ram’s case was decided there was no
provision for preferential allotment to the old dealers. They had
to take part in auctions and pay the market price. It was after
this judgment that the 1999 Rules were notified. [Para 8] [760-
C
F-G; 761-A-B]
2. As far as the Constitutional validity of these Rules is
concerned, this Court finds nothing in the Rules which is
violative of any provisions of the Constitution including Article
14. The main contention is that the Rules violate the mandate
D laid down by this Court in Labha Ram’s case. Another three
Judge Bench of this Court in Prem Chand Trilok Chand and
Others vs. State of Haryana and Others also made similar
observations. [Para 11] [764-C]
3. The contention of the appellants is that as per the law
E laid down by this Court, all the old dealers should be provided
shops/plots in the new market at the concessional rate. This
Court is unable to accept this contention. The judgment relied
upon by the appellants were given in light of the Rules which
did not make any reservation whatsoever for existing licence
holders. Now, 50% of the shops are reserved for the existing
F licence holders but some conditions have been laid down. This
Court is concerned mainly with two conditions. The first
condition is that a person must be having a licence for 3 years;
and the second condition is that the dealer must have an annual
turnover of Rs.5 lakhs in each of the three financial years. This
G Court finds that these conditions are salutary in nature. These
are necessary to ensure that only those dealers who have been
in the trade for 3 years or more will be eligible for allotment of
plots/shops. Similarly, only those dealers who have a minimum
turnover of Rs. 5 lakhs in each financial year are eligible. On
the one hand the old dealers want that they should not be forced
H to compete with new people in the business and, on the other
WALAITI RAM CHARAN DASS & ORS. v. 757
STATE OF PUNJAB & ORS.
hand there is a self-defeating argument that the criteria of 3 years A
should not be there. If such a criteria was not there, then anybody
would become eligible to get a licence even if he started
business a day prior to the date of inviting applications. [Para
12] [764-D-G]
4. The next issue relates to the judgments, in the second B
batch of cases where the Market Board is in appeal. This Court
has made reference to Rule 3(iii), which provides that to prove
the turnover, the dealer is required to produce Form ‘M’ which
is in the nature of a daily return, to be filed by the licensed dealer
with the Market Committee/Board under Rules 29(3) and 31(1)
of the Punjab Agricultural Produce Markets (General) Rules, C
1962 (hereinafter referred to as 1962 Rules). In the absence of
Form ‘M’ the dealer can rely on Form ‘H’ and ‘J’. Form ‘H’ is
an auction register to be maintained by every dealer under Rule
24(8) of the 1962 Rules. Form ‘J’ is the sale voucher to be
maintained by the dealer under Rule 24(14) of the 1962 Rules.
D
The Rule is clear that if the dealer produces Form ‘M’ then that
will be taken into consideration. In case the dealer does not
produce Form ‘M’ then he can prove his turnover by producing
Forms ‘H and J’. These have to be read along with Form ‘F’,
which is the form of renewal for licence. [Para 16] [765-F-H; 766-
A] E
5. This Court is unable to accept the reasoning of the High
Court in this regard. Licence is mandatory and no person can
carry on business in an agricultural market without having a
licence. The Rules provide that renewal of the licence should
be applied for one month before the expiry of the previous F
licence. The Rules further provide that if the licence is granted
within one month of its expiry then its renewal will be from the
date of expiry of the earlier licence, meaning that it will relate
back to the date of original licence. [Para 17] [766-D-E]
6. Rule 3(iii-a) of the 2008 Rules provides an even bigger
G
window for allotment of plots and lands to those licence holders
whose licences have expired but were renewed or fresh license
obtained within 3 months of the expiry of the old license. A dealer
who gets his license renewed or obtains fresh license within 3
months of the expiry of the old license, is not considered a new
license, and for the purpose of allotment deemed to be eligible. H
758 SUPREME COURT REPORTS [2019] 13 S.C.R.
A The Rules provide that if a licence is not renewed within 1
month of its expiry, it shall be treated to be a fresh licence. The
High Court has gone wrong in holding that even if the gap
between the expiry of old licence and issuance of new licence
is more than 3 months, the dealer can still furnish adequate
proof of working in the de-notified market yard. This Court is
B clearly of the view that once the gap is more than 3 months the
same cannot be condoned unless the dealer gives an explanation
to the satisfaction of the Market Board, with which issue we
shall deal later on. [Para 18] [766-F-H]
7. Therefore, this Court disposes of the appeals with the
C following directions:-
(1) The Rules of 1999 and 2008 are legally valid;
(2) Any person who has obtained a license for the first time
must have a valid licence for a period of more than 3 years;
D (3) In case of renewal of license the Rules provide a
window of 3 months as discussed above. This Court further
directs that if any dealer had submitted a complete application
for renewal prior to the expiry of his licence but the licence was
not renewed for 3 months for no fault of the dealer, then he
E would be entitled to count that period as a period of licence.
(4) This Court makes it clear that other than this, a dealer
must have a license and a person who has not renewed his
license without justifiable cause, cannot get any benefit.
(5) As far as proof of turnover is concerned, the primary
F evidence is Form ‘M’ and in the absence of form ‘M’, Form ‘H’
and ‘J’. No other document can be taken into consideration for
proving the turnover. [Para 23] [768-E-G; 769-A-B]
Labha Ram and Sons and Others v. State of Punjab
and Others (1998) 5 SCC 207 : [1998] 3 SCR 112 ;
G Prem Chand Trilok Chand and Others v. State of
Haryana and Others (1989) Supp 1 SCC 286 –
referred to.
Crawford’s Interpretation of Laws, by Earl T.Crawford,
Saint Louis Thomas Law book Company 1940 §271,
H pg. 539 – referred to.
WALAITI RAM CHARAN DASS & ORS. v. 759
STATE OF PUNJAB & ORS.
Case Law Reference A
[1998] 3 SCR 112 referred to Para 8
(1989) Supp 1 SCC 286 referred to Para 11
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 8015-
8016 of 2019. B
From the Judgment and Order dated 20.05.2009 of the High
Court of Punjab and Haryana at Chandigarh in C.W.P. Nos. 3542 of
2008 and 3383 of 2009
With
C
Civil Appeal Nos. 8017-8026, 8028, 8027, 8029 of 2019.
Neeraj Kumar Jain, Sr. Adv., Gurinder Singh Gill, P. P. Nayak,
Ms. Bhupinder, Ms. Vandhana Hooda, Ajay Pal, Siddharth Jain, Umang
Shankar, Aniket Jain, Ugra Shankar Prasad, Mrs. Amita Gupta,
Ms. Neha Tyagi, Aayush Gupta, Jagjit Singh Chhabra, S. Maheshwari,
D
Prem Sunder Jha, Ms. Manjula Gupta, Abhimanyu Tewari, Shree Pal
Singh, Viren Sibal, Advs. for the appearing parties.
The Judgment of the Court was delivered by
DEEPAK GUPTA, J.
1. Leave granted. E
2. Civil Appeal Nos.8015-8016/2019 @ SLP (C) Nos.24397-
24398 of 2010, arise out of judgment dated 20.05.2009 whereas Civil
Appeal No.8017-8026/2019 @ out of SLP(C) Nos. 28275-28284 of
2015, arise out of judgment dated 06.01.2015, Civil Appeal No.8028 of
2019 @ out of SLP (C) No.2034 of 2017, arise out of judgment dated F
18.05.2016, Civil Appeal No.8027 OF 2019 @ out of SLP (C) No.33899
of 2016, arise out of judgment dated 24.05.2016 and Civil Appeal
No.8029 OF 2019 @ out of SLP (C) No.15310 of 2017, arise out
judgment dated 18.05.2016, delivered by the Punjab and Haryana High
Court. G
3. The aforesaid appeals are being disposed of by a common
judgment since they involve common questions of law.
4. In the first case, challenge was laid to various provisions of
The Punjab State Agricultural Marketing Board (Sale and transfer of
Plots) (First Amendment) Rules, 2008 (hereinafter referred to as the H
760 SUPREME COURT REPORTS [2019] 13 S.C.R.
A 2008 Rules), and Rule 3(iii) and (iv) of The Punjab State Agricultural
Marketing Board (Sale and Transfer of Plots) Rules, 1999 (hereinafter
referred to as the 1999 Rules). The High Court held these Rules to
be valid.
5. In the second group of appeals, the High Court vide judgments
B dated 06.01.2015 and 18.05.2016 interpreted the Rules, holding that a
person can furnish adequate proof of his working in the de-notified
market yard even if he did not hold a licence on the cut-off date.
6. To appreciate the issues in hand it will be pertinent to mention
that the original writ petitioners before the High Court are licenced
C traders of agricultural produce and doing their business of sale and
purchase of agricultural produce in different Mandis in the State of
Punjab. In terms of the Punjab Agricultural Produce Markets Act, 1961
(hereinafter referred to as the Act of 1961), this work can only be
carried out in Mandis or Markets set up for this purpose. Most of the
petitioners were licenced dealers working in the old markets.
D
7. As a town or city grows the grain market has to be shifted.
The old market is de-notified and a new market is set up. The dealers
who were doing this work in the old market applied for allotment of
plots/shops in the new grain market. Their applications having been
rejected, hence the writ petitions. The High Court did not grant any
E relief in the writ petitions decided in 2010, and the dealers have filed
appeals before this Court. In the second group of petitions which were
decided in 2015 & 2016 the High Court granted some relief to the
dealers. Hence, the market boards are in appeal before us.
8. We are concerned with two sets of Rules, viz., the 1999 Rules
F and the 2008 Rules. The case of the appellants is that the Rules are
against the judgment of this Court in Labha Ram and Sons and Others
vs. State of Punjab and Others 1 wherein while interpreting the
provisions of the Punjab New Mandi Townships (Development and
Regulation) Act, 1960 (hereinafter referred to as the Act of 1960), it
G was held that the Government has an obligation to provide sufficient
accommodation to all the existing licence dealers with regard to the
handicaps they suffered due to the creation of new market area. This
Court also held that the dealers who were already functioning in the
de-notified markets should not be made to compete with new entrants.
1
H (1998) 5 SCC 207
WALAITI RAM CHARAN DASS & ORS. v. 761
STATE OF PUNJAB & ORS. [DEEPAK GUPTA, J.]
This Court, further directed that the Government should fix a reasonable A
rate above the reserve price for such old licenced dealers. It would be
pertinent to mention that when Labha Ram’s case (supra) was decided
there was no provision for preferential allotment to the old dealers.
They had to take part in auctions and pay the market price. It was
after this judgment that the 1999 Rules were notified. Relevant portion
B
of Rule 3 of the 1999 Rules reads as follows:-
“3. Sale of plots - All plots in the markets developed by the Board
or Committees shall be disposed of by way of open auction or
allotment in accordance with the provisions of these rules:
Provided that the plots will be allotted to the licenced dealers of C
old market which are denotified resulting in displacement of such
licenced dealers on free hold basis for conducting business of
purchase or sale of agricultural produce in the new markets on
the following terms and conditions, namely:-
(i) xxx xxx xxx D
(ii) the allotment price shall be fixed at thirty five percent above
the reserve price in the markets where no auction has so
far been held;
(iii) only those licencees shall be eligible for allotment of plots
on the price specified in clauses (i) and (ii) who have been E
granted licenses in the old denotified markets for a minimum
period of five years before the date of allotment. Such
licencees must have submitted returns in Form M appended
to the Punjab Agricultural Produce Markets (General) Rules
1962 for the last four years out of these five years. The
eligibility in respect of five years continuity shall be taken F
with effect from the date of notice inviting applications for
allotment;
(iv) xxx xxx xxx
(v) the licence should have been in possession of an independent G
premises either as a owner or a tenant in the old market;
(vi) To (xiii) xxx xxx xxx
9. The 1999 Rules were further amended by the 2008 Rules by
which various amendments have been made in Rule 3 of the 1999
Rules. The relevant amendments are extracted as under:- H
762 SUPREME COURT REPORTS [2019] 13 S.C.R.
A “4 In the said rules, in rule 3–
(a) before the existing proviso, the following proviso shall be
added, namely:-
Provided that not more than fifty per cent of the available plots
shall be disposed of by way of allotment and the process of
B allotment shall be completed before conducting the sale by
auction.
(b) at the existing proviso, which has been re-numbered as the
second proviso:-
i for the word “provided”, the “provided further” shall be
C substituted; and
ii for condition Nos.(ii) and (iii), the following conditions
shall be substituted, namely–
(ii) the allotment price shall be fixed at the five per cent,
above the reserve price in the markets, where no
D auction has so far been held;
Provided that no corner plot shall be allotted by way
of allotment. The corner plot shall be allotted by way
of auction only, by adding ten per cent extra cost to the
reserved price, fixed for plots, other than the corner
E plots.
(iii) only those licencees shall be eligible for allotment of
plots on the price, specified in clauses (i) and (ii), who
have been granted licences in the old denotified markets
for a minimum period of three years before the date
of allotment. Such licences must have submitted returns
F
in Form M appended to the Punjab Agricultural Produce
Markets (General) Rules, 1962 for all three years or
such licencee shall have to furnish adequate proof of
working in the denotified old markets. In accordance
with the provisions of Form ‘H’ and Form ‘J’, as
G specified in the Punjab Agricultural Produce Markets
(General) Rules, 1962 read with the provisions of Form
‘F’, as specified in the bye-laws of the Market
Committee for the aforesaid period of three years. The
period of three years referred to above shall be counted
with effect from the date of notice inviting applications
H for allotment;
WALAITI RAM CHARAN DASS & ORS. v. 763
STATE OF PUNJAB & ORS. [DEEPAK GUPTA, J.]
Provided that only those licensees shall be eligible for A
allotment of plots, who have transacted the business of
sale and purchase of agricultural produce for an amount,
not less than five lacs rupees per annum during last three
years.
B
(iii-a) to (xiii) xxx xxx xxx”
It would be appropriate to make a comparative chart of both the
Rules with regard to allotment of shops which is as follows:-
1999 Rules 2008 Rules C
Price of plot was reserve rate Price of plot was reserve price +
+35%. 5%.
Submission of ‘M’ return was In case record of ‘M’ return is not
mandatory. available, proof of work by
producing Heap Register ‘J’ Form
and Auction Register can be D
produced.
Business for 5 years was Business for 3 years is required
required for allotment of a plot. for allotment of a plot.
If there was new issuance of In case new licence is issued
licence during the last 5 years, within 3 months in the same name E
firm was not eligible for and title of the firm, the case can
allotment of plot. be considered for allotment of
plot.
Only one shop could be allotted Allotment of plots of two firms
against one independent shop. working in the same premises
could be considered. F
There was no provision for On dissolution of firm and on
allotment of plot in case of issuance of new licence in the
dissolution of the firm during same name and title of the
the last five years. previous firm, case for allotment
of plot can be considered.
No discount was given for There is a cash discount of 2% on G
depositing the amount in lump depositing the lump sum amount.
sum.
Plot after allotment could not Period for transferring the plot has
be transferred for a period of 7 been reduced to 5 years.
years. H
764 SUPREME COURT REPORTS [2019] 13 S.C.R.
A 10. An analysis of the Rules of 1999 and 2008 makes it clear
that 50% of the respective plots in any market are to be auctioned and
remaining 50% are to be given at a premium above the reserved price.
In the 1999 Rules the premium was 35% and under the 2008 Rules
the premium is 5%. The period of business vide the 1999 Rules was 5
B years and was reduced to 3 years under the 2008 Rules. It is more
than obvious that 2008 Rules are much more liberal.
11. As far as the Constitutional validity of these Rules is
concerned, we find nothing in the Rules which is violative of any
provisions of the Constitution including Article 14. The main contention
C is that the Rules violate the mandate laid down by this Court in Labha
Ram’s case (supra). Another three Judge Bench of this Court in Prem
Chand Trilok Chand and Others vs. State of Haryana and Others2
also made similar observations.
12. The contention of the appellants is that as per the law laid
D down by this Court, all the old dealers should be provided shops/plots
in the new market at the concessional rate. We are unable to accept
this contention. The judgment relied upon by the appellants were given
in light of the Rules which did not make any reservation whatsoever
for existing licence holders. Now, 50% of the shops are reserved for
E the existing licence holders but some conditions have been laid down.
We are concerned mainly with two conditions. The first condition is
that a person must be having a licence for 3 years; and the second
condition is that the dealer must have an annual turnover of Rs.5 lakhs
in each of the three financial years. We find that these conditions are
F salutary in nature. These are necessary to ensure that only those dealers
who have been in the trade for 3 years or more will be eligible for
allotment of plots/shops. Similarly, only those dealers who have a
minimum turnover of Rs. 5 lakhs in each financial year are eligible.
On the one hand the old dealers want that they should not be forced to
compete with new people in the business and, on the other hand there
G
is a self-defeating argument that the criteria of 3 years should not be
there. If such a criteria was not there, then anybody would become
eligible to get a licence even if he started business a day prior to the
date of inviting applications.
2
H 1989 Supp(1) SCC 286
WALAITI RAM CHARAN DASS & ORS. v. 765
STATE OF PUNJAB & ORS. [DEEPAK GUPTA, J.]
13. Similarly, the requirement of having Rs.5 lakhs as annual A
turnover is to ensure that only those dealers get shops/plots who are
actually engaged in the business. The High Court has noted that the
Government has fixed the price of wheat at Rs.1080/- per bag/quintal
and the annual turnover would be achieved by sale or purchase of only
500 bags. A person who does not do business of even 500 bags in a
B
year cannot claim that he is entitled to a shop at a concessional rate.
The allotment of shop cannot be made a bounty or lottery for those
who are transacting no or very little business but want to get shops/
plots at concessional rate.
14. We may also point that a new market does not come into
being overnight. First, land has to be acquired, then plans have to be C
approved and only thereafter process of setting up a new market begins.
The public, especially those in the trade of agricultural produce know
years in advance that a new market is being set up. If there are no
conditions like the ones laid down in the Rules, any person would get a
licence, not transact any business, and after a few months apply for a D
new shop at a concessional rate. This would defeat the purpose which
was sought to be highlighted by this Court in Labha Ram and Prem
Chand’s case (supra). Therefore, according to us, both the conditions
of 3 years and having Rs. 5 lakhs turnover per financial year are
reasonable and not violative of Article 14 of the Constitution.
E
15. Therefore, we find no merit in the appeals challenging the
Constitutional validity of the provisions.
16. The next issue relates to the judgments, in the second batch
of cases where the Market Board is in appeal before us. We have
made reference to Rule 3(iii) above, which provides that to prove the F
turnover, the dealer is required to produce Form ‘M’ which is in the
nature of a daily return, to be filed by the licensed dealer with the
Market Committee/Board under Rules 29(3) and 31(1) of the Punjab
Agricultural Produce Markets (General) Rules, 1962 (hereinafter
referred to as 1962 Rules). In the absence of Form ‘M’ the dealer can
rely on Form ‘H’ and ‘J’. Form ‘H’ is an auction register to be G
maintained by every dealer under Rule 24(8) of the 1962 Rules. Form
‘J’ is the sale voucher to be maintained by the dealer under Rule 24(14)
of the 1962 Rules. The Rule is clear that if the dealer produces Form
‘M’ then that will be taken into consideration. In case the dealer does
not produce Form ‘M’ then he can prove his turnover by producing H
766 SUPREME COURT REPORTS [2019] 13 S.C.R.
A Forms ‘H and J’. These have to be read along with Form ‘F’, which
is the form of renewal for licence. The High Court held as follows:-
“...Therefore, Form ‘F’ is not the only document required for
determination of eligibility of an old licensee for allotment of a
plot, but the independent adequate proof of working in the de-
B notified market yard is required to be considered to determine
the eligibility of the old licensees for allotment of plots.
Rule 3(iii-a) of the Rules deals with a situation where after the
expiry of the licence, a fresh licence is issued in the name of
the same firm or even after the splitting of firm, but when the
C licence is issued in the name of same firm, as an entity eligible
for allotment of a plot on concessional basis. Such provision
provides the period prior to issuance of new licensee to be taken
into consideration for allotment of plot.”
17. We are unable to accept the reasoning of the High Court in
D this regard. Licence is mandatory and no person can carry on business
in an agricultural market without having a licence. The Rules provide
that renewal of the licence should be applied for one month before the
expiry of the previous licence. The Rules further provide that if the
licence is granted within one month of its expiry then its renewal will
be from the date of expiry of the earlier licence, meaning that it will
E
relate back to the date of original licence.
18. Rule 3(iii-a) of the 2008 Rules provides an even bigger
window for allotment of plots and lands to those licence holders whose
licences have expired but were renewed or fresh license obtained within
3 months of the expiry of the old license. A dealer who gets his license
F
renewed or obtains fresh license within 3 months of the expiry of the
old license, is not considered a new license, and for the purpose of
allotment deemed to be eligible. The Rules provide that if a licence is
not renewed within 1 month of its expiry, it shall be treated to be a
fresh licence. The High Court has gone wrong in holding that even if
G the gap between the expiry of old licence and issuance of new licence
is more than 3 months, the dealer can still furnish adequate proof of
working in the de-notified market yard. We are clearly of the view that
once the gap is more than 3 months the same cannot be condoned unless
the dealer gives an explanation to the satisfaction of the Market Board,
H with which issue we shall deal later on.
WALAITI RAM CHARAN DASS & ORS. v. 767
STATE OF PUNJAB & ORS. [DEEPAK GUPTA, J.]
19. We may point out that the learned counsel appearing for A
dealers has been at pains to point out that in some cases the licence
could not be renewed within 1 month or even within 3 months because
of reasons beyond the control of licensee. One example given is where
the original dealer died leaving a minor as his heir. It has also been
contended that there are some dealers who have been working for a
long period of time, may be 20 years but in the last 3 years, in one B
year, there is a slight short-fall to meet the target of Rs.5 lakhs turnover.
It is contended that if these dealers could satisfy the Market Committee/
Board for the reasons of gap in licence or short-fall in trade they should
not be denied shops in the new markets on allotment basis.
C
20. On the other hand, learned counsel appearing for the Board
submits that the dealers must comply with the Rules and if they fail to
comply with the Rules and the conditions laid therein, and if the dealers
are unable to fulfil all the conditions, they cannot be allotted shops.
21. Ҥ271. Miscellaneous Implied Exceptions from the
D
Requirements of Mandatory Statutes, In General.—
Even where a statute is clearly mandatory or prohibitory,
yet, in many instances, the courts will regard certain conduct
beyond the prohibition of the statute through the use of
various devices or principles. Most, if not all of these devices
find their justification in considerations of justice. It is a well E
known fact that often to enforce the law to its letter
produces manifest injustice, for frequently equitable and
humane considerations, and other considerations of a
closely related nature, would seem to be of a sufficient
calibre to excuse or justify a technical violation of the law.”3
F
We are in agreement and approve the aforesaid passage because
the Rules must be read in a reasonable manner. In cases like the
present, where the old dealers are to be allotted shops if they can satisfy
the concerned authority, be it the market committee or the board that
a particular condition could not be met for a short period due to reasons G
beyond the control of the dealer, then even though he may not be in
strict compliance of the rules, the power of relaxation must be read
into the Rules. We may refer to two instances from the cases before
3
Crawford’s Interpretation of Laws, by Earl T.Crawford, Saint Louis Thomas Law
book Company 1940 §271, pg. 539 H
768 SUPREME COURT REPORTS [2019] 13 S.C.R.
A us. In the case of appellant M/s Lachhman Dass Krishan Baldev, the
dates of renewal of licence was 06.09.2005, and the turnover for three
years was Rs. 13,53,241, in 2005-06, Rs.21,19,272/- in 2006-07 and
Rs.23,65,574/-in 2007-08. It is stated that there was a delay of few
months in obtaining the renewal because a minor was involved. We
B are not going into the merits, but if that be so, then a case would be
made out for condonation of such minor variation. Similarly, in the case
of Walaiti Ram Charan Dass & Ors., the licence was held for more
than 13 years and there is a shortfall of Rs. 1,28,000/- and odd in the
year 2005-06, whereas the turnover in the next two years is much above
Rs.5 lakhs. His case may have to be considered sympathetically.
C
22. We make it clear that since we are upholding the validity of
the Rules, deviation from the Rules can only be done if it has occurred
due to reasons beyond the control of the dealer. One example of such
reason can be if the dealer being the sole proprietor is admitted in
D hospital, or is otherwise incapacitated, which may either affect the
turnover or the renewal of the licence. This is done only to avoid
injustice by following letter of the law and not the spirit thereof. Every
law must be read in an equitable and humane manner. Only technical
violations can be condoned and not violations which go to the root of
E the matter.
23. We, therefore, dispose of the appeals with the following
directions:-
(1) The Rules of 1999 and 2008 are legally valid;
F
(2) Any person who has obtained a license for the first time
must have a valid licence for a period of more than 3
years;
(3) In case of renewal of license the Rules provide a
G window of 3 months as discussed above. We further
direct that if any dealer had submitted a complete
application for renewal prior to the expiry of his licence
but the licence was not renewed for 3 months for no
fault of the dealer, then he would be entitled to count
H that period as a period of licence.
WALAITI RAM CHARAN DASS & ORS. v. 769
STATE OF PUNJAB & ORS. [DEEPAK GUPTA, J.]
(4) We make it clear that other than this, a dealer must have A
a license and a person who has not renewed his license
without justifiable cause, cannot get any benefit.
(5) As far as proof of turnover is concerned, the primary
evidence is Form ‘M’ and in the absence of form ‘M’,
Form ‘H’ and ‘J’. No other document can be taken into B
consideration for proving the turnover.
24. We had asked the counsel for the Board to give us a list of
the position regarding availability of plots and shops in various Mandis.
The list has been filed which shows that even now a large number of C
plots are available in the State of Punjab in different Mandis for
allotment. As such the Board/Committee should reconsider the case
of those where there are marginal deficiencies, which deficiency
occurred due to reasons beyond the control of the dealer. This
reconsideration be done within 3 months.
D
25. With the above observations all the appeals stand disposed
of. Pending application(s) if any shall also stand disposed of.
Ankit Gyan Appeals disposed of.
E
F
G
H
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