COMMISSIONER AND SPL OFFICER ANAKAPALLI MUNICIPALITY Vs. DIRECTOR OF ANDHRA PRADESH AGRICULTURE MARKET COMMITTEES

JUDGEMENT

(1.) This letters patent appeal is preferred against the judgment of the learned single Judge dated 25-4-1988 dismissing the first appeal -- A.S. No. 1499 of 1981. The appellant before us is the plaintiff and was also the appellant before the learned single Judge. The suit, O.S. No. 85 of 1980, has been dismissed by the learned Additional District Judge on 6th January, 1981. The following are the material facts.

(2.) The suit was filed initially in the Sub Court on 17th August, 1978, for recovery of a sum of Rs. 5,63,364-83 towards compensation amount payable for the years 1971-72 to 1977-78 to the appellant by the defendants-respondents, at the rate of Rs. 80,480-69 per annum, being the estimated amount of fees lost to the municipality on account of taking over the market from 1-4-1971. Admittedly, the market was taken over under the Andhra Pradesh (Agricultural Produce and Live Stock) Markets Act, 1966 (hereinafter called 'the Act'), by virtue of a notification issued by the Government.

(3.) In the plaint, the plaintiff stated that it is a municipality governed by the provisions of the Andhra Pradesh Municipalities Act, 1965, that it has been maintaining markets in the municipal area and that previous to the Amendment Act it was maintaining the markets and had been collecting certain fee from the merchants in Gandhinagar Market. The plaintiff stated that it used to get an amount of Rs.80, per annum towards fee from Gandhinagar Market. By virtue of the notifications issued by the Government as also by the Director of Marketing, the defendant-market committee was constituted and the above said market which was under the control of the municipality was taken over by the market committee in 1971. Under Section 29(2) of the Act, the defendants are bound to pay every year to the plaintiff compensation in respect of the market fee which is lost to the municipality on account of the prohibition contained in Section 29(1) of the Act. The plaintiff claimed that it has been sustaining a loss of income of Rs. 80,480-69 due to the taking over of the market by the second defendant. The defendants have not been paying the loss from 1971-72 onwards. The plaintiff issued a notice to the second defendant but the latter denied its liability by way of a reply notice. The suit is, therefore, laid for recovery of Rs. 5,63,364-83 for the years 1971-72 to 1977-78. The suit was filed, as already stated, on 17th August, 1978. In the written statement, the market committee (the second defendant) admitted that the plaintiff was maintaining certain markets in the Anakapalli municipality prior to the constitution of the market committee. It is, however, stated that the allegation that the plaintiff was collecting fee from the merchants of the market in Gandhinagar and that it was getting an amount of Rs. 80,480-69 per annum is hot correct. Under Section 29(2) of the Act compensation is payable only if the municipality was collecting a licence fee. Even in the notice issued by the plaintiff on 3-3-1972 it was not stated that the licence fee was being collected. The letter dated 3-3-1972 of the plaintiff only shows that market fee was recovered from the contractor and the amount was realised on the sale of jaggery lumps at the rate of 3/4th paise per lump. Therefore, the amounts mentioned in the above said letter cannot be called licence fee. Reliance is also placed on a letter of the Chairman of the municipality dated 26th May, 1978, under which he admitted that no licence fee was collected by the municipality. Gandhinagar Market was taken over on 1-4-1971. Even so, no compensation is payable inasmuch as no licence fee was being collected. The liability has been rebutted in the reply notice dated 27-3-1978. In any view of the matter, the amount being a fee and not a tax, the suit is barred by time except for the compensation, if any, payable for the three years before the suit, Hence, the suit is liable to be dismissed.