BELSUND SUGAR CO LTD Vs. STATE OF BIHAR

JUDGEMENT

(1.) In these two writ applications the petitioners are two sugar factories. They challenge the authority of the respondent-Agricultural Produce Market Committees to issue directions to the petitioner-Companies to obtain licences in accordance with the provisions of the Bihar Agricultural Produce Markets Act, 1960 (hereinafter referred to as the 'Act') and the Bihar Agricultural Produce Markets Rules, 1975 (hereinafter referred to as the 'Rules'), on the ground that the provisions of the Act and the Rules are not applicable to sugar factories, and, if they are applicable, they are ultra vires.

(2.) According to the Belsund Sugar Company Ltd., (petitioner in C.W.J.C. No. 3296 of 1975), it has its factory at Riga in the district of Sitamarhi, within the State of Bihar, and its registered office at Calcutta in the State of West Bengal, at Riga, the factory is engaged in the manufacture of sugar; but, as neither any purchase of sugarcane nor sale of sugar takes place within the market area established by the respondent Marke Committee, the provisions of the Act and the Rules are not attracted. According to the petitioner, the purchase of sugarcane for manufacture of sugar is completely regulated by Ordinances passed by the State Government from time to time known as the Bihar Sugarcane (Regulation of Supply and Purchase) Ordinance, in terms whereof the petitioner has to purchase sugarcane from a particular area at a fixed price, which cannot amount to 'sale'. So far as the sale of "free sugar" is concerned, according to the petitioner, it takes place at Calcutta and only despatch of sugar is made from the factory site. So far as sale of "levy sugar" is concerned, according to the petitioner, it has to supply it to the persons nominated, by the Central Government under the provisions of Levy Sugar Supply (Control) Order, 1972; and, in such transactions there is complete absence of free volition on the part of the petitioner; and, as such it cannot amount to 'sale' in the eye of law. In the aforesaid circumstances, according to the petitioner, even though no sale or purchase takes place within the area of the respondent Market Committees, respondent No. 2 issued a notice, dated the 5th November, 1974, calling upon the petitioner to take a licence from the Committee in accordance with the provisions of the Act and to pay the requisite licence fee. A copy of the said letter is Annexure "2" to the writ application. A reminder was sent by a letter, dated the 11th December, 1974, from respondent No. 2 threatening legal action against the petitioner. A copy of the said letter is Annexure "3" to the writ application. The petitioner, by its Letter, dated the 13th December, 1974, informed the Market Committee that the matter had been taken up for discussion with the State Government. A copy of the said letter is Annexure "4" to the writ application. The respondent Market Committee, by its letter, dated the 13th January, 1975, again insisted that the petitioner should obtain a licence, failing which legal action would be taken against it. A copy of the said letter is Annexure "5" to the writ application. The petitioner prayed for further time till the matter was finally decided by the State Government. But, by letter, dated the 20th November; 1975, the respondent Market Committee directed the petitioner not to purchase sugarcane from the growers in the Market Committee area till the licence was obtained. A copy of the said letter is Annexure "9" to the writ application. According to the petitioner, the aforesaid communications have been issued by the respondent Market Committee without any authority of law and amount to arbitrary invasion on the right of the petitioner to carry on trade and business.

(3.) Messrs. Motihari Sugar Factory (petitioner in C. W. J. C. No. 111 of 1976) is also a company which manufactures sugar at Motihari in Bihar and its registered office is at Calcutta in the State of West Bengal. This petitioner also has challenged, on more or less similar grounds, the authority of the respondent Market Committee to ask the petitioner to take a licence, and has also questioned the right of the respondent Market Committee to realise the market fee from the petitioner.