^y Petitloners HIGH COURT OF CHHATTISGARH AT BILASPUR Writ Petition (c) No. 4395 of 2010 Association of Cold Storage of Chhattisgarh and another. Versus ResRondents : State of Chhattisgarh and others ORDER FOR CONSIDERATION HON'BLE SHRI R.N. CHANDRAKAR, J _°) <3t.q^--e-e- JUDGE --2-2011 Sd/- -• R.N. Chandrakar Judge ^ POST FOR ORDER ON )7 FEBRUARY, 2011 Sd/- DhirendraMishra Judge \ HIGH COURT OF CHHATTISGARH AT BILASPUR Writ Petition (c) No. 4395 of 2010 Petitioners 1. Association of Cold Storage of Chhattisgarh, a society duly registered under the relevant provisions of the CG Sooieties Registrikaran Adhiniyam, 1973, having registration No.2964 dated 3.7.2010, through its Secretary Shri Sudhir Maggoo, son of Shri Kashiram Maggoo, aged about 40 years, resident of B1, Shailendra Nagar, Near Bank of Baroda, Raipur. 2. Shri Sudhir Maggoo, son of Shri Kashiram Maggoo, aged about 40 years, Secretary, Association of Cold Storage of Chhattisgarh and carryingon the business in the name and style of 'Jeet Cold Storage' Ring Road No.2, Gondwara, Bhanpuri, resident of B1, Shailendra Nagar, Near Bank of Baroda, Raipur. Versus ResDondents 1. 2. 3. State of Chhattisgarh, through the Secretary, Department of Agriculture, DKS Bhawan, Mantralaya, Raipur. CG Krishi Vipnan (Mandi) Board, through its Managing Director, Ground Floor, Beej Bhawan, Telibandha, Raipur. Krishi Llpaj Mandi Samiti, through its Secretary, Pandri-tarai (Kapa), Raipur. Present: Shri BP Sharma, counsel for the petitioners. Shri AS Kachhawaha, Dy. Advocate General for the State. Shri YS Thakur, counsel for respondents No. 2 & 3. ORDER (Passed on \~f February, 2011) Per Dhirendra Nlishra, J By the instant petition, the petitioner-Association has prayed for the following substantial relief: :~.^ 'v^I ^ >1 "(i) A writ and/or an order in the nature of writ of certiorari do issue quashing the entire impugned bye-laws (Annexure P-5) or the act of inclusion of cold storages by defining the same in Clause 2(p) and making provisions of obtaining licence in the bye laws at different places as ultra vires to the Constitution of India and/or law made thereunder i.e. Act, 1972 and the Rules made thereunder. (ii) A writ and/or an order in the nature of writ of certiorari do issue quashing the notices dates 2.6.2010 & 11.6.2010 being arbitrary, illegal and de-hors the provisions of the Act, 1972 and the Rules made thereunder. (iii) A writ and/or an order in the nature of writ of mandamus or any other appropriate wriVorder do issue restraining the respondent authorities in giving effect to the impugned bye-laws, 2009 and taking any action under the Act, 1972 for alleged violation of not obtaining licence and paying licence fee." 2. The petitioners' case, in nutshell, is that its members are the owners of different Cold Storages. Initially, in the Bye-laws of Mandi Samiti (hereinafter referred to as "Market Committee") in order to bring the Cold Storages within their clutches, firstly an amendment was made in the Bye- laws by incorporating Clause 2(K), by which "Cold Storage" was included. However, vide order dated 6.2.2004 (Annexure P/4), the word "Cold Storage" has been omitted from the prevailing Bye-laws in the definition of "BhandagariK'. Respondent No.2 with a view to bring Cold Storage within the clutches of Krishi Upaj Mandi Samiti, in exercise of powers under Section 81(1) ofthe CG Krishi Upaj Mandi Adhiniyam, 1972 (in short "the Act, 1972"), has framed model Bye-laws, 2009 for Market Committees, and in which Clause 2(-ET) has been included. In Clause 2(^), the word "Bhandagarik" has been reincorporated, in which again "Cold Storage" has been included. The ^^ Bye-laws have been brought into force w.e.f. 15 February, 2010 (Annexure P/5) and notices dated 2.6.2010 and 11.6.2010 (Annexure P/6) have been issued to the members of the petitioner-Association by respondent No. 3 directing them to obtain Storage licences and to pay licence fee. 3. Shri BP Sharma, learned counsel for the petitioners, vehemently argued that Sections 79 to 81A of the Act, 1 972 deal with power of the State Market Committee and Mandi Board (in short "the Board") to make rules, bye-laws and regulations. Section 79(2)(vi) & (xii) specifically empower the State Govt. to deal with the persons required to take out licence and provisions for accommodation for storing any agricultural produce brought into the market, by making appropriate rules. Since the power has been specifically conferred upon the State Govt., the Board was not competent to notify and promulgate the model Bye-laws, 2009 for the Market Committees. hiowever, in the instant case, the power has been exercised by the Board and the procedure meant for the State Govt. of previous publication etc. has been adopted by the Board, which was otherwise exercisable by the State Govt. Under Section 81, the primary responsibility of the Board is to supervise the function of the Market Committees and the Board may direct for proper functioning of the Marketing Committees by making bye-laws and if such bye-laws are not made by them or amendment proposed by the Board is not made, then the Board may make such bye-laws or amendment for the Market Committees, which would be binding on them. For the exercise of power under Section 81 ofthe Act, 1972, there has to be a pripr direction to the Market Committees to frame bye-laws and on their failure, the Board may make bye-laws for them and make it binding on them. However, in the present case, the Board without complying with the above requirement, ^•; e; has circulated the model Bye-laws to Market Committees, which is not permissible under Section 81 ofthe Act. 4. It is further argued that Clause 77(1) of the impugned Bye-laws is against the provisions of law as it restricts a licensee under the Bye-laws from carrying out any other trade, which is in violation of the constitutional provisions. In the garb of powers under Sections 31 and 32, the activities of the members of the petitioner-Association cannot be regulated by provisions of the Bye-laws framed by the Board making it compulsory for the owners of Cold Storages to obtain licences, particularly when the Statute has conferred this power on the State Govt. to make rules. The Board has usurped the power of the State Legislature to frame bye-laws and has also taken away the power of the Market Committees to file appeal etc. for not following the instructions of the Board. 5. On the other hand, Shri YS Thakur, learned counsel appearing for the respondents No. 2 & 3, would argue that Section 31 of the Act, 1972 clearly provides that every warehouse man operating in the market area in respect of any notified agricultural produce will operate in accordance with the provisions of the Act. Whereas Section 32 provides that every person specified in Section 31, who desires to operate in the market area, shall apply to the Marketing Committee for grant of licence. Thus, it is the mandatory requirement for every Warehouse man, including Cold Storages, to obtain licence if he desires to operate in the market area in respect of any notified agricultural produce. Section 80(v) of the Act, 1972 empowers the Market Committees to make bye-laws in respect of market area under its management in regard to market functionaries, who shall be required to take licence, whereas Section 81 empowers the Director to direct making or amending of Byelaws. The Managing Director of the Board has framed Bye-laws for Market Committees <i. (Annexure P/5) for all Market Committees of the State of Chhattisgarh, so that there is uniformity in the management and functioning of the Market Committees operating in the State. However, it is open for the Market Committees to adopt or not to adopt the model Bye-laws or to adopt it with modifications to suit its purposes. 6. In the present case, the Board only framed the model Bye-laws, 2009, which have been duly adopted by the Market Committee, Raipur. The inclusion of "Cold Storage" within the definition of "Warehouse" is not in violation of the provisions of the principal Act i.e. the Act, 1972. "Cold Storage" also comes within the purview of wider definition of "Warehouse". If notified agricultural produce is stored in a Warehouse or a Cold Storage, depending upon the nature of produce, the same would be governed by the Act, 1972 and bye-laws framed under the Act, and it can be done only after obtaining licence. The inclusion of "Cold Storage" in Clause 2(^) of the model Bye-laws is in consonance with the Act, 1972 and the same does not suffer from unreasonability and there is no ground whatsoever to declare the inclusion of "Cold Storage" in Clause 2{^) unconstitutional and ultra vires. Section 79 of the Act, 1972 provides that the State Govt. may frame rules for the purposes of the Act and it is not mandatory for the State to frame rules on subjects covered under Section 79. Since the State Govt. has not framed any rules under Section 79 of the Act, 1972, covering the field under Section 79(2)(vi), the Market Committees are fully empowered under Section 80 to make bye-laws for market functionaries, who shall be required to take licence. 7. He further argued that there is no substance in challenge to Clause 77(1) of Chapter VIII, which provides that if any Warehouse man is in employment of any person or institution, he is disqualified for obtaining a licence. Barring a person from obtaining licence to run his own Warehouse, 6 who is in service/employment of some other person or institution or company/firm etc. cannot be termed as unreasonable restrictions and thus, Clause 77(1) does not impose prohibition on operation ofWarehouse or Cold Storage without licence. 8. Heard learned counsel for the parties. 9. The first question for our consideration is - whether framing of model Bye-laws, 2009 by the Board for agricultural Marketing Committees of the State is without jurisdiction? 10. The Act of 1972 has been enacted to provide for the better regulation of buying and selling of agricultural produce and the establishment and proper administration of markets of agricultural produce in the State of Chhattisgarh. Chapter II deals with establishment of markets, whereas under Section 4 ofthis Chapter, the State Govt. is empowered to establish a market for the area specified in the notification under Section 3 or any portion thereof for the purposes of the Act. Section 6 deals with control of marketing of notified agricultural produce in the market area established under Section 4. Chapter III deals with the constitution of Market Committees, whereas Chapter IV deals with the conduct of business and powers and duties of Market Committee, and Chapter VI deals with regulation of trading. 11. Section 31 provides for regulation of persons operating in the market area, whereas Section 32 empowers the Market Committee to grant licence or renewal thereof to every person specified in Section 31, who desires to operate in the market area. Sections 31 and 32(1) are being reproduced hereunder for ready reference: "31. Regulation of persons operating in market area. - No person shall, in respect of any notified agricultural produce, operate in the market area as commission agent, trader, broker, weighman, / 7 hammal, surveyor, warehouse-man, owner or occupier of processing or pressing factories or such other market functionary except in accordance with the provision of this Act and the rules and bye-laws made thereunder. 32. Power to grant licences. - (1) Every person specified in section 31 who desires to operate in the market area shall apply to the market committee for grant of a licenoe or renewal thereof in such manner and within such period as may be prescribed by bye- laws." Section 33 empowers the Marketing Committee to cancel or suspend licences. 12. Chapter VIII deals with the Chhattisgarh State Agricultural Marketing Board and under Section 40 ofthis Chapter, the State Govt. is empowered to establish Chhattisgarh State Agricultural Marketing Board by notification. Chapter XIII deals with Rules and Bye-laws. Section 79 under this Chapter empowers the State Govt. to make rules for carrying out purposes of this Act. The portions of Sections 79, 80, 81, relevant for the present purposes, are being reproduced hereunder: "79. Power to make rules. - (1) The State Government may, after previous publication, make rules for carrying out the purposes of this Act. (2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for - xxxx xxxxxx xxxxxx xxxxx xxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxx (i) (ii) (iii) (iv) (V) (vi) classification of market functionaries for grant of licences, regulation of licences under this Act, the persons required to take out licence, the forms in which and terms and conditions subject to which such licences shall be issued or renewed. 8 (vii) xxxxxx (viii) xxxxx (ix) xxxxx (x) xxxxx (xi) xxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx (xii) the provisions of accommodation for storing any agricultural produce brought into the market. 80. Power to make bye-laws. - (1) Subject to the provisions of this Act and the rules made thereunder, a market committee may, in respect of a market area under its management, make bye-laws for - (i) (ii) (iii) (iv) xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx (v) market functionaries who shall be required to take licence. (vi) any other matter for which bye-laws are to be made under this Act, or it may be necessary to frame bye-laws for effectively implementing the provisions of this Act and the rules made thereunder in the market area. (2) No bye-law made undersub-section (1) shall take effect until it has been confirmed by the Managing Managing Director. 81. Power of director to direct making or amendment of bye-laws. - (1) If it appears to the Managing Managing Director that it is necessary or desirable in the interests of a market or market committee to make any bye-law or to amend any bye- law, he may, by order, require the market committee concerned to make the bye-laws or the amendment of the bye-law within such time as he may specify in such order. (2) lf the market committee fails to make such bye- laws or such amendment of the bye-laws within the time specified, the opportunity of being heard by an order make such bye-law or such amendment of the bye-law and thereupon subject to any order under /C2 9 sub-section (3), such bye-law or such amendment of the bye-law shall be deemed to have been made or amended by the market committee in accordance with the provision of this Act or the rules made thereunder and thereupon such bye-law or amendment shall be binding on the market committee. (3) An appeal shall lie to the State Government from any order of the Managing Managing Director under sub-section (2) within thirty days from the date of such order and the order of the State Government on such appeal shall be final." 13. The Board in exercise of powers under Section 81(1) of the Act, 1972 circulated model Bye-laws, 2009 for all Krishi Upaj Mandi Samitees of the State vide Annexure P/5. The Bye-laws were to come into force from such date notified by general or specific order of the Managing Director or Market Committee. From bare reading of Section 81 (1), it is evident that if it appears to the Managing Director that it is necessary or desirable in the interests of a market or Market Committee to make any bye-law or to amend any bye-law, he may, by order, require the Market Committee concerned to make the bye- laws or the amendment of the bye-laws within such time as he may specify in such order. Sub-section (2) further empowers that where the Market Committee fails to make such bye-laws or such amendment of the bye-laws within the time specified, such bye-laws or such amendment of the bye-laws shall be deemed to have been made or amended by the Market Committee in accordance with the provisions of this Act or the rules made thereunder. Sub-section (3) provides for appeal to the State Govt. against any order of the Managing Director under sub-section (2). Whereas sub-section (5) of Section 80 empowers the Market Committee to make bye-laws for the market functionaries, who shall be required to take licence, and to make bye- laws on any other matters for effectively implementing the provisions of this Act and the rules made thereunder in the market area. 10 14. In the instant case, from perusal ofthe Return ofthe respondents, that of particulariy respondent No.3, it is manifestly clear that the model Bye-laws amending the earlier bye-laws proposed by the Board under Section 81 has been adopted by respondent No.3 and other Market Committees. The respondents have also averred in their counter affidavit that the State Govt. has not made any rules under Section 79 of the Act, 1972. After careful examining Sections 79, 80 and 81 of the Act, we are of the considered opinion that the Board was legally competent to frame model Bye-laws by amending the earlier existing bye-laws and circulating the same to Market Committees with a direction to adopt it. Since the Committees have already adopted the model Bye-laws circulated by the Board, the power ofthe Board to propose model Bye-laws under Section 81(1) ofthe Act, 1972 cannot be challenged by the petitioners. We find no substance in the arguments of learned counsel for the petitioners that under Section 79(2)(vi) & (xii), only the State Govt. is competent to make rules classifying market functionaries for grant of licences, regulation of licences, the persons required to take out licences, the terms and conditions subject to which such licences shall be issued or renewed and the matters relating to provisions of accommodation for storing any agricultural produce brought into the market. 15. Thus, in view of the admitted position that the State Govt. has not framed any rules under Section 79, particularly 79(2)(vi) & (xii), and Section 80(v) & (vi) empowers the Market Committee to make bye-laws in conformity with the provisions of the Act and rules made thereunder for market functionaries, who shall be required to take licences and for the purposes of effectively implementing the provisions of this Act and the rules made thereunder in their respective market areas; framing of model bye-laws under Section 81(1) by the Board and its adoption by the Market Committees cannot be termed to be without jurisdiction. 11 16. So far as inclusion of "Cold Storage" in the definition of "Bhandagarik" in Clause 2 (^) of the model Bye-laws is concerned, only those Cold Storages, who store notified agricultural produce in their Cold Storages, come within the purview of the definition as no distinction can be made between Warehouse and the Cold Storage, which is also used as Warehouse for storing the notified agricultural produce. The only difference between the two i.e. Cold Storage and Warehouse is that in Cold Storages the notified agricultural produce is kept in certain physical condition, so as to preserve the perishable notified agricultural produce. 17. So far as the other ground of challenge to Clause 77(2) of the model Bye-laws that it imposes unreasonable restrictions on the owners of the Cold Storages, is concerned, the restriction is only with respect to Bhandagarik (Incharge Warehouse), which is defined in Clause 2 (^f) as such person, who in his own or others Warehouse situated in market area, works for wages and who does not trade in any notified agricultural produce. Thus, the restriction contained in Clause 77(2) is only with respect to the person, who is in exclusive charge of the Warehouse, and the same cannot be termed to be unreasonable restriction on the owners of the Warehouses. • 18. For the aforesaid reasons, we are of the considered opinion that there is no ground available to the petitioners to challenge the constitutional validity of model Bye-laws, 2009 of Annexure P/5. The petition is without any substance; the same deserves to be and is, accordingly, dismissed. Sd/- Dhirendra Mishra Judge Sd/- ^ R.N. Chandrakar Judge