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

The appellant who filed the Writ Petition, has its head office at Kanpur and is running two woollen mills, one at Dhariwal, in the name and style of New Egerton Woollen Mills (hereinafter referred to as Dhariwal Mills) and another at Kanpur in the name and style of Lal-Imli Cawnpore Woollen Mills (hereinafter referred to as Kanpur Mills). The case of the appellant-company was that after the purchase of raw material made by its head office at Kanpur the raw material is sent from various centres in India as well as from abroad to both the mills in accordance with their requirements and no raw material used in the Dhariwal Mills is purchased locally or within the area of the Market Committee, Dhariwal excepting that during the years 1969 and 1970 two contracts for the purchase of raw wool of the value of Rs. 6, 000/- and Rs. 5, 000/- were entered into within the area of the said Market Committee. The appellants case was that no purchase or sale of the raw material received by the Dhariwal Mills takes place within the area of the Market Committee and that, however, the Market Committee made a demand for payment of market fee on all raw wool purchased by the appellant from 7.3.1962 to 29.6.1968 by a letter dated 21.6.1968 on pain of recovery of t hat amount and penalty as arrears of land revenue, if not paid within the specified time. After a series of correspondence between the appellant and the Market Committee-first respondent, the latter made an assessment of market fee due from the appellant and demanded a sum of Rs. 3, 67, 200/- made up for Rs. 2, 44, 800/- being fee payable for the period from 26.5.1961 to 31.12.1970 and Rs. 1, 22, 400/- being penalty. As the amount was not paid the Market Committee took steps under s. 41 (2) ofthe Punjab Agricultural Produce Markets Act, 1961 for the recovery of the amount as arrears of land revenue. It is in these circumstances that the appellant filed a Writ Petition No. 4247 of 1971 which was dismissed as infructuous on 15.11.1972 as the Market Committee agreed to withdraw the assessment and 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.

Reasoning:
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.