MOHAMMAD HUSSAIN GULAM MOHAMMAD Vs. STATE OF BOMBAY

JUDGEMENT

(1.) This petition raises a question as to the constitutionality of the Bombay Agricultural Produce Markets Act, No. XXII of 1989 (hereinafter referred to as the Act) and the Rules framed thereunder. The petitioners are businessmen of Ahmedabad. Their case is that by a notification under the Act the whole area within a radius of 12 miles of Ahmedabad city was declared to be a market area under S. 4 of the Act for the purposes of the Act in respect of certain agricultural produce from June 1, 1948. At the same time a market yard and a market proper were established for dealing in the commodities mentioned above and simultaneously a market committee was established under S. 5 of the Act for the Ahmedabad market area by the name of "The Agricultural Produce Market Committee, Ahmedabad." By later notifications certain other agricultural produce was declared to be regulated under the provisions of the Act in this market area. In 1959 a locality known as the "Kalupur market" in the Telia Mill compound near the railway station Ahmedabad was declared to be a sub-market yard for the purposes of the Act. The petitioners apparently were carrying on business in the Kalupur market and therefore after the declaration of that area as sub-market yard, the market committee required the petitioners to take out licences under the Act without which they were not to be allowed to carry on business. The petitioners contend that the various provisions of the Act and the Rules and byelaws framed thereunder place unreasonable restrictions on their right to carry on trade in agricultural produce and thus infringe their fundamental right guaranteed under Art. 19 (1) (g) of the Constitution. In particular the heavy fees payable to the market Committee for taking out licences in order, to trade in various markets impose a heavy burden on trade in the regulated commodities resulting in an unreasonable restriction on the right of the petitioners to carry on their trade. Further the declaration of the market area and the establishment of market yard and sub-market yards has resulted in compelling producers of agricultural commodities to carry their produce for long distances, thus imposing an unreasonable restriction on their right to carry on trade. The petitioners thus assail the main provisions of the Act and some of the provisions of the Rules and the bye-laws framed by the market committee, which we shall specify at their proper place later. The petitioners also contend that the State of Bombay has never required the market committee to establish a market as required by S. 5AA of the Act and no market has in law been established by the market committee and therefore the market committee has no power to issue licences and to exercise other powers conferred under the Act on market committees. They therefore pray that the Act and the Rules and the bye-laws framed thereunder may be, declared unconstitutional, ultra vires and void. In the alternative a direction should be issued to the respondents, in particular the market committee, not to enforce the provisions of the Act, the Rules and the bye-law, against, the petitioners so long as a market has not been established as required under the law.

(2.) The petition has been opposed on behalf of the respondents, and their contention is that the Act, the Rules and the bye-laws provide reasonable restrictions on the fundamental right to carry on trade under Art. 19 (1) (g). It is further contended that a market has been established as required by law, and therefore the market committee in particular has the right to enforce all the provisions of the Act the Rules and the bye-laws and to insist upon the petitioners taking out licences as provided therein.

(3.) Before we consider the attack made on the constitutionality of the Act, the Rules and the bye-laws framed thereunder, we should like to refer to the main provisions of the Act and the scheme of regulation provided in it. The Act deals with the regulation of purchase and sale of agricultural produce in the State of Bombay and establishment of markets for such produce. Section 2 of the Act is the definition section, Section 3 provides for the constitution of markets and market committees and gives power to the Commissioner by notification to declare his intention of regulating the purchase and sale of such agricultural produce and in such area as may be specified in the notification; and objections and suggestions are invited within a month of the publication of the notification. Thereafter the Commissioner after considering the objections and suggestions, if any, and after holding such inquiry as may be necessary, declares the area under S. 4 (1) to be a market area for the purposes of the Act. The consequence of the establishment of the market area is given in S. 4 (2) which lays down that after the market area is declared, no place in the said area shall, subject to the provisions of S. 5A be used for the purchase or sale of any agricultural produce specified in the notification. After the declaration of the market area, the State Government is given the power under S. 5 to establish a market committee for every market area. Thereafter under S. 5AA it becomes the duty of the market committee to enforce the provisions of the Act and also to establish a market therein on being required to do so by the State, Government, providing for such facilities as the State Government may from time to time direct, in connection with the purchase and sale of the agricultural produce with which the market committee is concerned. The Act however envisages that there may be a time lag between the declaration of a market area and the establishment of a market; therefore the proviso to S. 4 (2) lays down that pending the establishment of a market in a market area the Commissioner may grant a licence to any person to use any place in the said area for the purpose of purchase and sale of any such agricultural produce, and it is the duty of the market committee under S. 5AA also to enforce the conditions of a licence granted under S. 4 (2). Further under S. 5A, where a market has been established the market committee is given the power to issue licences in accordance with the Rules to traders, commission agents, brokers, weighmen, measurers, surveyors, warehousemen and other persons to operate in the market; provided that no such licence shall be necessary in the case of a person to whom a licence has been granted under the proviso to S. 4 (2). The effect therefore of these provisions of the Act read with the definition section is this. A market area is first declared under S. 4 (1). In the market area, a market may be established. The Rules make it clear that the market may, consist of what are called market proper and principal market yard and sub-market yards, if any. Under Section 4A for each market area there shall be one principal market yard and one or more sub-market yards as may be necessary and the Commissioner is given the power by notification to declare any enclosure, building or locality in any market area to be the principal market yard for that area and other enclosures, buildings or localities to be one or more sub-market yards for the area. As we have already said, the Act envisages that there may be a time lag between the declaration of a market area and the establishment of a market, and that is why there is a provision for licences under the proviso to S. 4 (2) pending the establishment of a market in a market area. The establishment of a market however, takes place only when the State Government requires the market committee under S. 5AA to establish a market in the market area. There does not seem to be any provision in the Act or the Rules as to how the market committee shall proceed, on being required to do so by the State Government, to establish a market; but reading the provisions of S, 4A and S. 5AA together it appears that after the State Government has required the market committee to establish a market, it has to approach the Commissioner with its recommendation to declare localities as the principal market yard and the sub-market yards if any, and the Commissioner makes a notification in regard thereto, and thereafter the market is established. Till however such action is taken by the committee and the Commissioner notifies a principal market yard and sub-market yards, if any, no market can in law be established; and other provisions of the Act which come into force after the establishment of a market cannot be enforced and the trade is till then regulated in the manner provided in the proviso to S.4 (2).