ition No 766 of 1987
Under Article 32 of the Constitution of India
Soli J Sorabjee and Pramod Swarup for the Petitioners
Dr YS Chitale Mrs section Dikshit and Pradeep Mishra for the Respondents
The Judgment of the Court was delivered by 310 DUTT J
In this writ petition under Article 32 of the Constitution of India the petitioners have prayed for issuance of the writ in the nature of mandamus directing the respondents not to compel the petitioners to take out licences and to pay market fee under the UP Utpadan Mandi Adhiniyam 1964 hereinafter referred to as the Act 
The petitioners are the producers of khandsari sugar and are the owners of Khandsari Sugar Units which they operate with the aid of power crushers for the production of khandsari sugar
The petitioners claim that as they are only producers of khandsari sugar they are not liable to take out any licence or to pay the market fee under the Act as illegally demanded by the respondents Mandi Samitis
It appears from the Preamble that the Act provides for the regulation of sale and purchase of agricultural produce and for the establishment superintendence and control of market therefor in Uttar Pradesh
Section 5 of the Act provides for the declaration of intention of the State Government to regulate and control sale and purchase of agricultural produce in any area to be declared as a Market Area
Under section 6 the Market Area will be declared by the State Government by a notification in the Gazette after considering the objections received within the period referred to in section S of the Act 
Section 91 of the Act provides as follows section 91
As from the date of declaration of an area as Market Area no Local Body or other person shall within the Market Area set up establish or continue or allow to be set up established or continued any place for the sale purchase storage weighment or processing of the specified agricultural produce except under and in accordance with the condition of a licence granted by the Committee concerned anything to the contrary contained in any other law custom usage or agreement notwithstanding Provided that the provisions of this sub section shall not apply to a producer in respect of agricultural produce produced reared caught or processed by him or to any person who purchases or stores any agricultural produce for his domestic consumption
Section 17 lays down the powers of the Committee constituted under section 13 of the Act
Clause iiib1 of section 17 provides as follows 311 S17 A Committee shall for the purpose of this Act have the power to A            iii levy and collect            b market fee which shall be payable on transactions of sale of specified agricultural produce in the market area at such rates being not less than one percentum and not more than one and half percentum of the price of the agricultural produce so sold as the State Government may specify by notification and such fee shall be realised in the following manner 1 If the produce is sold through a commission agent the commission agent may realise the market fee from the purchaser and shall be liable to pay the same to the Committee  It is urged by Mr Sorabjee learned Counsel appearing on behalf of the petitioners that as the petitioners are only producers in respect of agricultural produce they are not required to take out any licence in view of the proviso to section 91 of the Act
Counsel submits that under the proviso sub section 1 of section 9 will not apply to two categories of persons namely 1 the producer in respect of agricultural produce and 2 any person who purchases or stores any agricultural produce for his domestic consumption
In other words according to the learned Counsel a producer who produces the agricultural produce in the Market Area and sells them will not have to take out a licence under sub section 1 of section 9
We are unable to accept the contention
In our view it is not the intention of the Legislature that a producer of an agricultural produce within the Market Area would be exempt from taking out any licence even though he sells his produce in the Market Area
We have already noticed that the Preamble of the Act shows that it is for the regulation of sale and purchase of agricultural produce and for establishment superintend 312 ence and control of market therefor
The very object of the Act as indicated in the Preamble will be defeated if a producer of an agricultural produce within the Market Area is exempted from taking out a licence merely because he is a producer of an agricultural produce
It is true that under the proviso sub section 1 of section 9 will not be applicable to a producer of agricultural produce
But such a producer must be a producer of agricultural produce processed reared caught or processed by him for his domestic consumption
If however the producer produces rears catches or processes the agricultural produce not for his domestic consumption but for the sale thereof in the Market Area such a producer will not come within the purview of the proviso and he will have to take out a licence under sub section 1 of section 9 of the Act
We are unable to accept the contention of the learned Counsel for the petitioners that the expression for his domestic consumption in the proviso does not refer to a producer of agricultural produce but to a person who purchases or stores any agricultural produce
As has been stated already if the proviso is interpreted to mean that a producer of agricultural produce is exempt from taking out a licence under sub section 1 of section 9 of the Act even though he produces rears catches or processes not for his domestic consumption but for selling them in the Market Area it would defeat the very object of the Act
The proviso in our opinion should be interpreted in a manner which would be in conformity with the intention of the Legislature and also the object of the Act
Therefore in our view there can be no doubt that a producer who produces rears catches or processes agricultural produce for his domestic consumption and also any person who purchases or stores any agricultural produce for his domestic consumption are exempt under the proviso from taking out any licence
In other words sub section 1 of section 9 will not apply to these two categories of persons as mentioned in the proviso It is how ever urged on behalf of the petitioners that sub section 1 of section 9 would apply only to a producer who is a trader
Our attention has been drawn to the definition of the word trader  under section 2y of the Act as meaning a person who in the ordinary course of business is engaged in buying or selling agricultural produce as a principal or as a duly authorised agent of one or more principals and includes a person engaged in processing of agricultural produce
It is submitted that the petitioners are not traders  within the meaning of the said definition and also as contemplated by sub section 1 of section 9 of the Act
In support of this contention the learned Counsel for the petitioners has placed much reliance upon a decision of this 313 Court in Ramesh Chandra vs State of UP  which also relates to the Act with which we are concerned
In that case it has been observed that a producer trader will be required to take out a licence and the expression producer trader  has been explained to be a person who is both a producer of agricultural produce and himself trades in it
We do not think that the decision at all supports the contention of the petitioners
The petitioners in our opinion by producing khandsari sugar and selling it within the Market Area are also traders  within the meaning of section 2y and also as contemplated by sub section 1 of section 9
The petitioners are therefore producer traders  as explained in the above decision of this Court
The next question that falls for consideration is whether the petitioners are liable to pay market fee
We have already extracted above the provision of section 17iiib1 which has been relied upon by the learned Counsel for the petitioners in support of his contention that the petitioners are not liable to pay market fee
Section 17iii b1 inter alia provides that if the produce is sold through a commission agent the commission agent may realise the market fee from the purchaser and shall be liable to pay the same to the Committee
lt is argued on behalf of the petitioners that as they sell their produce through a commission agent it is only the commission agent who is liable to pay the market fee and not the petitioners
It has however been frankly conceded by Mr Sorabjee on behalf of the petitioners that there is no averment in the petition that the petitioners sell their produce through a commission agent
In the absence of any such averment we are afraid such a contention is not available to the petitioners
There is therefore no substance in the contention that the petitioners are not liable to pay market fee
No other point has been urged on behalf of the petitioners
For the reasons aforesaid the writ petition is dismissed
There will however be no order as to costs


Summary:
Section 91 of the UP Utpadan Mandi Adhiniyam 1964 prohibits local body or other person from setting up within the market area any place for the sale purchase of the specified agricultural produce except under a licence granted by the Committee concerned
A proviso thereto however exempts a producer in respect of agricultural produce produced reared caught or processed by him or any person who purchases or stores any agricultural produce for his domestic consumption
Clause b section 17iii empowers a Committee to levy and collect market fee payable on transactions of sale of specified agricultural produce
Where such produce is sold through a commission agent sub cl
1 of cl
b makes him liable to collect the market fee and pay the same to the Committee
The petitioners who are producers of Khandsari sugar claimed that as they were only producers  in respect of agricultural produce in the market area they were not required to take out any licence or to pay the market fee under the Act that the expression for his domestic consumption in the proviso to section 91 does not refer to a producer of agricultural produce but to a person who purchases or stores any agricultural produce and that sub sl of section 9 would apply
Only to a producer who was a trader and the petitioners were not traders  within the definition of the term under section 2y and also as contemplated by sub section
1 of section 9
Dismissing the writ petition  HELD 1
It is not the intention of the Legislature that a producer  of an agricultural produce within the Market Area should be exempted from taking out any licence even though he sells his produce in the Market Area
311G H 309 2
Sub section 1 of section 9 of the UP Utpadan Mandi Adhiniyam 1964 will not apply to the two categories of persons mentioned in the proviso thereto namely 1 a producer who produces rears catches or processes agricultural produce for his domestic consumption and 2 any person who purchases or stores any agricultural produce for his domestic consumption
If however the producer produces rears catches or processes agricultural produces not for his domestic consumption but for the sale thereof in the Market Area such a producer will not come within the purview of the proviso and he will have to take out a licence under section 91
312B C F Since the petitioners in the instant case are producing Khandsari for sale in the Market Area they will have to take out a licence under sub section
1 of section 9
They are thus also liable to pay market fee to the Committee on their transactions of sale under section 17iiib
313D 3
The expression for his domestic consumption in the proviso to section 91 refers to a producer of agricultural produce
The proviso should be interpreted in a manner which would be in conformity with the intention of the legislature and also the object of the Act ie the regulation of sale and purchase of agricultural produce and establishment superintendence and control of market therefor
If the proviso is interpreted to mean that the producer of agricultural produce is exempt from taking out a licence under section 91 even though he produces rears catches or processes not for his domestic consumption but for selling them in the Market Area it would defeat the very object of the Act
312C D 4
The petitioners by producing Khandsari sugar and selling it within the market area are also traders  within the meaning of section 2y and also as contemplated by sub section
1 of section 9
313B Ramesh Chandra vs State of UP 1980 3 SCR l04 referred to