Case: British India Corporation Limited Vs. Market Committee, Dhariwal and Another

to make a fresh assessment according to the rules.The appellant contended in the present Writ Petition out of which this appeal has arisen that although it made all efforts for associating itself with the fresh assessment proceedings by producing the necessary records, the Market Committee once again levied market fee of Rs. 4, 26, 000/- and penalty of a like sum and made a demand for the total sum of Rs. 8, 52, 000/- by notice dated 16.8.1973. The present Writ Petition was filed under Articles 226 and 227 of the Constitution for quashing that demand notice and restraining the Market Committee from recovering the amount. The learned Single Judge allow ed the Writ Petition on a legal point that the assessment order made is not accordance with the provisions of the aforesaid Act and the Rules, without expressing any opinion on the merits of the case. The Market Committee, therefore filed t he aforesaid Letters Patent Appeal.2. There is no dispute that the raw material received by the Dhariwal Mills is an agricultural produce as defined is s. 2A of the Act and that the said commodity after being received by the Dhariwal Mills is weighed within the notified area of the Market Committee. The contest between the parties is on the question whether in the circumstances of the case the provisions of s. 23 of the Act were attracted or not.Section 23 of the Act reads thus:"A Committee shall, subject to such rules as may be made by the State Government in this behalf, levy on ad valorem basis fees on the agricultural produce bought or sold by licensees in the notified market area at a rate not exceeding two rupees and twenty paise for every one hundred rupees.Provided that:-(a) no fee shall be leviable in respect of any transaction in which delivery of the agricultural produce bought or sold is not actually made; and(b) a fee shall be leviable only on the parties to a transaction in which delivery is actually made."3. A perusal of the records produced by the appellant reveals the existence of a number of original contracts entered into by the appellant at Kanpur with various suppliers of raw wool in India with a provision practically in all the transactions that 80 per cent of the goods was payable against the documents and the balance after receipt and examination of the goods which were to be despatched to Dhariwal Mills directly. There are certain terms and conditions on the back of the contract forms in regard to the procedure for scouring yield. It will be necessary to state only a few of those terms and conditions. Clause A relating to the procedure for scouring yield read thus:-(A) Two bales at random are taken and issued to Scouring Department. The weight recorded at the time of receipt of the consignment is taken. After scouring in three bowl Scouring Machine using warm water, the wool is dried in the dryer and spread in a covered place for about 12 hours to regain normal moisture. The wool is then weighed and yield calculated".Clauses 2 and 3 read thus:2. The Mills have every right to reject a portion or bulk if the quality is not up to the suppliers samples given at the time of offers.3. Weight received in the mills will be taken as final weight."Rule 29 of the Punjab Agricultural Produce Market (General) Rules 1962 framed under the Act provides for levy of the fees on agricultural produce bought or sold by licensees in the notified market area. Rule 29 (7) read thus:"29 (7) For the purposes of this rule agricultural produce shall be deemed to have been bought or sold in a notified market area:(a) if the agreement of sale or purchase thereof is entered into the said area;(b) if in pursuance of the agreement of sale or purchase the agricultural produce is weighed in the said area; or(c) if in pursuance of the agreement of sale or purchase the agricultural produce is delivered in the said area to the purchaser or to some other person on behalf of the purchaser."Clauses (b) and (c) would be attracted bringing the transaction within the term bought or sold if in pursuance of the agreement of sale or purchase, even if entered into at Kanpur, the agricultural produce is weighed in the market area or if in pursuance of the agreement of sale or purchase the agricultural produce is delivered in the said area to the purchaser or to some other person on behalf of the purchaser.4. The Division Bench of the High Court in the Letters Patent Appeal was of the opinion that both clauses (b) and (c) are applicable to the facts of the present case even on the admitted facts of this case as the transaction of sale is completed immediately on the delivery of the goods to the Dhariwal Mils. In that view the learned Judges allowed the appeal and set aside the judgment of the learned Single Judge and left it open to the appellant-company to satisfy the Market Committee in respect of any transaction which does not fall within the scope of their judgment.5. The question is as regards the sites of the sale. If the sale transaction took place within the Market Committee either by delivery of the goods or by weighment thereof, the transaction would fall within the ambit of Rule 29 (7). After having heard learned counsel for the parties we are of the opinion that no interference with the judgment under appeal is called for except that it is necessary to make it clear that the delivery and weighment to be taken into consideration by the market Committee in respect of the past transactions regarding which the demand has been made and also future transactions must be delivery an/or weighment without which there will be no sale at all in law. Subject to this clarification we dismiss the appeal and direct the parties to bear their own costs.6.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]A perusal of the records produced by the appellant reveals the existence of a number of original contracts entered into by the appellant at Kanpur with various suppliers of raw wool in India with a provision practically in all the transactions that 80 per cent of the goods was payable against the documents and the balance after receipt and examination of the goods which were to be despatched to Dhariwal Mills directly. There are certain terms and conditions on the back of the contract forms in regard to the procedure for scouring yield. It will be necessary to state only a few of those terms andDivision Bench of the High Court in the Letters Patent Appeal was of the opinion that both clauses (b) and (c) are applicable to the facts of the present case even on the admitted facts of this case as the transaction of sale is completed immediately on the delivery of the goods to the Dhariwal Mils. In that view the learned Judges allowed the appeal and set aside the judgment of the learned Single Judge and left it open to the appellant-company to satisfy the Market Committee in respect of any transaction which does not fall within the scope of theirquestion is as regards the sites of the sale. If the sale transaction took place within the Market Committee either by delivery of the goods or by weighment thereof, the transaction would fall within the ambit of Rule 29 (7). After having heard learned counsel for the parties we are of the opinion that no interference with the judgment under appeal is called for except that it is necessary to make it clear that the delivery and weighment to be taken into consideration by the market Committee in respect of the past transactions regarding which the demand has been made and also future transactions must be delivery an/or weighment without which there will be no sale at all in law. Subject to this clarification we dismiss the appeal and direct the parties to bear their own costs.