DIRECTOR, KRISHI UTPADAN MANDI SAMITI AND ANR. v. M-S. RAM KISHAN DA YA RAM & CO

Citation: [2007] 10 S.C.R. 587

Court: Supreme Court of India

Bench: S.B. SINHA, H.S. BEDI

Case summary

DIRECTOR, KRISHI UTPADAN MANDI SAMITI AND ANR. v. M-S. RAM KISHAN DA YA RAM & CO.pdf

Judgment text

DIRECTOR, KRISHI UTPADAN MANDI SAMITI AND ANR. v. MIS. RAM KISHAN DAYA RAM & CO. SEPTEMBER 19, 2007 [S. B. SINHA AND H. S. BEDI, JJ. ) ,,,! Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964-ss. 2, ({), 17(iii) (3)-Market fee-On the trade oftendu leaves-Liability to pay-Held· The liability to pay the marketfee is on the trader and not on the purchaser-The corporation cannot be absolvedfrom such liability on the ground that it has not realized itfrom the purchaser. State ofU. P. appointed U. P. Forest Corporation as its agent to deal in business of 'tendu' leaves. In a litigation, challenging levy ofmarket fee on the Corporation by the appellant-committee, itwas agreed between parties that the Corporation would collect market fee from the purchasers and deposit the same with the appellant. Corporation did not collect the sam~. Appellant issued notices against the respondent-purchaser demanding the market fee u/s 17 (iii)(4) ofUttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964.

Respondent filed Writ Petition, whieh wa's allowed by High Court. Hence the present appeals. Dismissing the appeals, the Court "'!. \ HELD: 1. U. P. Forest Corporation was a trader and it could not have escaped its liability from payment ofthe market fee, only because the appellant as also the State ofU. P. Iost the Writ Petition filed by the U. P. Forest Corporation before the High Court, which by itself, does not entitle the appellant herein to fall back upon the ;.. respondent for the purpose of realization of market fee. [Paras 8 and 12] {590-C; 592-D] 2. The definition ofthe term 'trader' u/s 2(f) ofUttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 does not envisage that all y -- traders must be licensed traders for the purpose ofrealization ofthe ~ market fee. The proviso appended to clause (3) ofsub-section (iii) ofSection 17 ofthe Act, although was enacted by Act No. 4 of1999, the same had been given retrospective effect and retrospective operation.

In no uncertain terms it provides that the trader would be bound to pay the market fee and shall not be ~bsolved from such liability on the ground that he has not realized itfrom t_he purchaser. [Para 11] [592-B-C) ,. ,. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3732 of 2001. From the Judgment and final Order dated 3. 2. 2000 ofthe High Court ofJudicature at Allahabad in Civil Misc. Writ Petition No. 32828of1991. WITH C. A. No. 3079 of 2004. Shobha Dikshit, Sr. Adv. , Pradeep Misra and Daleep Kr. Dhayani \for the Appellants. M. Indrani (for Abhijit Sengupta) for the Respondent. The Judgment ofthe Court was delivered by S. B. SINHA; J. Appellant is aggrieved by and dissatisfied with the judgment and order dated 3. 2. 2000 passed by a Division Bench ofthe High Court of Judicature at Allahabad in Civil Misc. Writ Petition X p No. 32828/1991, whereby and whereunder the writ petition filed by the respondent herein was allowed dU:ecting: "The petition succeeds.

The contention ofthe petitioner that it is not liable to pay the market fee to the Market Committee on the purchases of tendu leaves made by it from the U. P. Forest Corporation, is accepted. The Market Committee concerned is directed to refund the deposit of Rs. 99,310. 00 against the market fee for the year 1991-92 to the petitioner and also· to pay 12 percent per annum interest thereon in accordance with·the interim order dated 11. 11. 1991 of this Court. " DIRECTOR, KRISHIUTPADANMANDI SAMITI v. 589 M/S~ RAM KISHAN DAYARAM & CO. [SINHA, J. ] :r 2. Basic fact ofthe matter is not in dispute. Business in tendu leaves is dealt in by the Government ofU. P. It has a monopoly in respect thereof. The State ofU. P. appointed the U. P. Forest Corporation as its agent.

Questioning the legality oflevy ofmarket fee upon the Corporation by · the appellant herein a writ petition was filed, inter alia, on the premise that no service having been rendered to the Corporation, the market fee was not leviable. ) 3. It is the admitted case of the parties that the said writ petition >"' was allowed by a judgment and order dated 20. 1. 1983. A special leave petition was filed thereagainst. Before this Court, the parties to the said SLP agreed that the U. P. Forest Corporation would collect market fee from the purchasers and deposit the same with the appelJant. However, the U. P. Forest Corporation did not collect any market fee from the purchasers for the assessment years 1991-92. Demand notices were issued against the purchasers by the appellant relying on and/or on the basis ofClause (4) ofsub-section (iii) of Section 17 ofthe Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 ("Act" for short).

Noticesof demand having been issued to the respondent, a writ petition was filed before the High Court which, as noticed hereinbefore, has been allowed by reason ofthe impugned judgment dated 3. 2. 2000. It is not in dispute that the total amount sought to be collected by reason ofmarket fees was ' Rs. 99,310/-. Respondent deposited the said amount before the High Court but after delivery ofthe impugned judgment the said amount has been returned to it. ~ 4. The short question which arises for our consideration is as to whether clause (3) of sub-section (iii) of Section 17 is attracted in. the instant case or not. 5. Mrs. Shobha Dikshit, learned senior counsel appearing on behalf of the appellant, in support of the appeal, would submit that as the respondent was not a licenced trader, clause (3) of sub-section (iii) of >.. Section 17 would not be applicable in the instant case.

According to the learned senior counsel, a statutory liability having been fixed upon the purchaser in terms ofaforesaid clause the High Court committed a manifest error in passing the impugned judgment. 6. Learned counsel appearing on behalfofthe respondent, however, would support the impugned judgment. 7. Uttar PradeshKrishi Utpadan Mandi Adhiniyam, 1964 (Act) was enacted to provide for regulation of sale and purchase of agricultural produce and for the establishment, superintendence and control ofmarkets therefor in the Sate ofUttar Pradesh. 8. Section 2(f) ofthe Act defines "Committee" to mean a Committee constituted there. "Trader" has been defined in Section 2(y) ofthe Act to \-..... , mean person who in the ordinary course ofbusiness is engaged in b~ying or selling agricultural produce as a principal or as a duly authorised agent ofone or more principals and includes a person engaged in processing ofagricultural produce. Indisputably, U. P. Forest Corporation was a trader. 9.

Section 9 of the Act provides for the effects ofdeclaration of market area; sub-section (2) whereofreads as under: "No person shall, in a Principal Market Yard or any Sub-Market Yard, carry on business or work as a trader, broker, commission . agent, warehouseman, weighman, Palledar or in such other capacity as may be prescribed, in respect of any specified agricultural produce except under and in accordance with the conditions of a licence obtained therefor from the Committee concerned. " I0. Section 17 delineates the powers ofthe Committee.

Sub-section (iii) of Section 17 empowers a Committee to levy and collect fees, the mode and manner whereof are as under: "(1) If the produce is sold through a commission agent, the commission agent may raise the market fee and the development cess from the purchasers and shall be liable to pay the same to the Committee; (2) ifthe produce is purchased directly by a trader frorμ a producer, the trader shall be liable to pay the market fee and development cess to the Committee; ~ -~); DIRECTOR, KRISHI UTPADAN MANDI SAMIT! v. 591 MIS. RAMKISHANDAYARAM&CO. [SINHA,J. ] (3) ifthe produce is purchased by a trader from another trader, the trader selling the produce may realise it from the purchaser and shall be liable to pay the market fee and development cess to the Committee; Provided that notwithstanding anything to the contrary contained in any judgment, decree or order ofany court, the trader selling the produce shall be liable and be deemed always to have been .

>' liable with effect from June 12, 1973 to pay the market fee to )/I"" the Committee and shall not be absolved from such liability on the ground that he has not realised it from the purchaser; Provided further the trader selling the produce shall not be absolved from the liability to pay the development cess on the ground that he has not realised it from the purchaser; (4) in any other case ofsale ofsuch produce, the purchaser shall be liable to pay the market fee and development cess to the -. / Committee; Provided that no market fee or development cess shall be levied or collected on the retail sale of any specified agricultural produce where such sale is made to the consumer for his . E domestic consumption only.

" Provided further that notwithstanding anything contained in this Act, the Committee may at the option of, as the case may be, the commission agent, trader or purchaser, who has obtained the licence, accept a lump sum in lieu ofthe amount ofmarket fee or development cess that may be payable by him for an agricultural year in respect ofsuch specified agricultural produce, for such period, or such terms and in such-manner as the:state- Government may, by notified order specify; _.... sf ~ Provided also that no market fee or development cess shall be levied on transaction ofsale ofspecified agricultural produce on which market fee or development cess has been levied in any market area if the trader furnishes in the form and manner prescribed, a declaration or certificate that on such specified agricultural produce marker fee or development cess has already ·been levied in any other market area. " 11. Relying on and/or on the basis ofthe various decisions rendered by this Court Mrs.

Dikshit submitted before us that a trader should have licence. A bare perusal ofthe definition ofthe said term, in our opinion, does not envisage that all traders must be licensed traders for the purpose ofrealisation of the market fee. The proviso appended to clause (3) of sub-section (iii) of Section 17 ofthe Act, although was enacted by Act No. 4 of 1999, the same had been given retrospective effect and retroactive operation. In no uncertain terms it provides that the trader would be bound to pay the market fee and shall not be absolved from such liability on the ground that he has not realised it from the purchaser. 12. In that view of the matter, we are ofthe opinion that the U. P. Forest Corporation could not have escaped its liability from payment of the market fee, only because the appellant as also the State ofU. P. lost the writ petition filed by theU. P.

Forest Cori)oration before the High Court, which by itself, in our opinion, does not entitle the appellant herein to fall back upon the respondent for the purpose ofrealisation ofmarket fee.. 13. For the reasons aforementioned, we are ofthe opinion that tl1ere is no infirmity in the impugned judgment. The appeals are dismissed accordingly. No costs.. K. K. T. Appeals dismissed. ~··