- Appeal against a judgment of the High Court of Gujarat involving Letters Patent Appeal Nos. 139 of 2006 and 195 of 2006.
No Acts & Articles mentioned in this case
Page 1 REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS.3130-3131 OF 2008
AGRICULTURAL PRODUCE MARKET COMMITTEE ……APPELLANT
Versus
BIOTOR INDUSTRIES LTD. & ANR. ….RESPONDENTS
J U D G M E N T
V. Gopala Gowda, J.
These appeals have been directed against the common
judgment and order dated 24.04.2007 passed by the High
Page 2 C.A.No.3130-3131 of 2008
Court of Gujarat at Ahmedabad in Letters Patent Appeal
Nos. 139 of 2006 and 195 of 2006 in Special Civil
Application No. 13606 of 2005 with Civil Application
No. 514 of 2006 and Civil Application No. 1380 of 2006
filed by the appellant-Agricultural Produce Market
Committee, Baroda (for short “APMC”) as it is aggrieved
by the dismissal of its Letters Patent Appeal No.195 of
2006. The High Court allowed Letters Patent Appeal
No. 139 of 2006 preferred by the respondent-Company.
Both the Letters Patent Appeals were filed against the
order dated 22.12.2005 of learned single Judge passed
in Special Civil Application No.13606 of 2005 whereby
the learned single Judge substantially set aside the
order dated 19.4.2005 of the Revisional Authority and
partly allowed the application filed by the APMC by
framing questions of law.
2.The brief facts of the case are stated below to
appreciate the rival claims of the parties and to find
out as to whether the appellant-APMC is entitled for
the relief sought for in these appeals:
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Page 3 C.A.No.3130-3131 of 2008
The appellant-APMC was constituted pursuant to
Notification issued on 14.1.1958 under the provisions
of the Bombay Agricultural Produce Markets Act, 1939
and the area of Baroda city and Baroda Taluk of Baroda
District was declared as the market area for the
purpose of Gujarat Agricultural Produce Markets Act,
1963 (hereinafter referred to as “the Act”). The
respondent-Company, manufacturing castor oil from out
of the castor seeds purchased by it comes under the
jurisdiction of the market area of the APMC and
therefore, it is liable for paying the market fees/cess
for the trading activities carried out by it in the
market area. APMC levied market fee on the castor seeds
bought by the Company on the basis that castor seeds
were brought within the market area of APMC. The
respondent-Company contested the said levy by filing
Revision Application No. 2 of 2005 under Section 48 of
the Act before the State Government contending that
castor seeds were brought into the market area of the
APMC, Baroda as provided under sub-rule (2) of Rule 48
3
Page 4 C.A.No.3130-3131 of 2008
of the Gujarat Agricultural Produce Market Rules, 1965
(for short “the Rules”) and no fees are leviable on
agricultural produce brought from outside the market
area into the market area for use therein by the
industrial concern situated in the market area. The
State Government vide its order dated 19.04.2005
decided the Revision Application No. 2 of 2005 in
favour of the respondent-Company by setting aside the
order dated 27.12.2004 issued by the APMC levying the
market fee.
3.The APMC filed a Special Application No. 13606 of
2005 under Articles 226, 14 & 19 of the Constitution of
India before the High Court against the said order of
the State Government. The learned single Judge of the
High Court after hearing the parties at length partly
allowed the said application holding that the sale of
the castor seeds in question took place within the
market area of APMC, Baroda, therefore, APMC was right
in levying the market fee on the castor seeds purchased
by the respondent within the market area of APMC. The
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Page 5 C.A.No.3130-3131 of 2008
learned single Judge in respect to exemption clause in
sub-rule 2 of Rule 48 held that the said exemption was
available to the agricultural produce brought by the
industrial concern itself from outside the market area
into the market area of APMC and the exemption was not
available where the castor seeds were bought within the
market area by the seller and sold to the industrial
concern within the market area. As such the learned
single Judge upheld the plea of APMC for levy of market
fee on the castor seeds purchased by the respondent-
Company. In respect to the levy of market fee on de-
oiled cake by APMC the learned single Judge accepted
the contention urged on behalf of the respondent-
Company and held that de-oiled cake could not be
treated as oil cake, and therefore, it was not eligible
for levy of market fee since it was not mentioned in
the Schedule. Both the respondent-Company as well as
the APMC being aggrieved by the judgment and order
dated 22.12.2005 of the learned single Judge preferred
Letters Patent Appeal No.139 of 2006 and Letters Patent
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Page 6 C.A.No.3130-3131 of 2008
Appeal No. 195 of 2006 respectively. The Division Bench
of the High Court allowed the appeal preferred by the
respondent-Company and dismissed the appeal preferred
by the APMC and stated that as soon as the agricultural
produce, namely, castor seeds, bought by the
representatives of the Company, is brought from outside
the market area into the market area, after payment of
octroi on such produce in their capacity as owner of
the goods, the same would be treated as completion of
sale outside the jurisdiction of the market area. The
Division Bench of the High Court, therefore, held that
the collection of market fees from the respondent-
Company by APMC is contrary to the provisions of the
Rules, namely, Rule 48, sub-rule (2) of the Rules,
which grants exemption to agricultural produce brought
from outside into market area by the industrial unit
for its own use. On the second issue, the High Court
held that the by-product, namely, de-oiled cake
contains less than 1% oil and is not notified in the
Schedule as per Section 2(i) of the Act and hence, the
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Page 7 C.A.No.3130-3131 of 2008
above product being totally different from oil cake,
there is no liability upon the respondent-Company to
pay the market fees. Hence, the present Civil Appeals.
4.It is the case of the APMC that on 31.3.2004, the
Director of APMC, Baroda and Rural Finance, Gujarat
State, in exercise of the power vested in him under the
Act, issued Notification including castor seeds and
castor cake in the regulated agricultural produces of
APMC, Baroda. On 19.4.2004 the Notification issued by
the APMC, Baroda through its Director was published in
the daily newspaper intimating that the trading of
those produces is liable for paying of market fees/cess
to the APMC, Baroda. On 28.6.2004 the APMC issued
notices to the respondent-Company asking it to produce
the accounts for the period 19.4.2004 to 30.11.2004 in
respect of the goods being used in the mill and further
asked to obtain license from Market Committee for the
year 2004-2005. The respondent-Company failed to submit
the accounts and further failed to obtain license
within the stipulated period as mentioned in an earlier
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Page 8 C.A.No.3130-3131 of 2008
letter dated 28.6.2004, and therefore, the APMC sent
the reminder to the respondent-Company and asked to
comply with the direction. Vide letter dated 7.12.2004
the respondent-Company submitted monthly statement for
the period 19.4.2004 to 30.11.2004 in respect of the
purchases of castor seeds made by the Company. APMC on
the basis of the details provided by the respondent-
Company prepared a statement showing the names of the
suppliers, weight, price, quantity and amount paid by
the company as per the weighment made by the Company
which clearly shows that as per bills, different
parties were selling castor seeds to the respondent-
Company for which weighment was done at the mill site
in the market area Baroda and payment made to the
parties as per the weighment done by the respondent-
Company. On 27.12.2004 on the basis of statement
submitted by the respondent-Company, the APMC assessed
the market cess for the purchases of the castor seeds
in the market area in respect of the same being used
for processing and converting them into castor oil and
8
Page 9 C.A.No.3130-3131 of 2008
oil cake and on the basis of assessment the respondent-
Company was directed to pay the market cess of
1,27,46,349.38 within a period of 10 days.
5.Being aggrieved by the said assessment made by APMC
on 27.12.2004, the respondent-Company preferred
Revision Application No. 2 of 2005 under Section 48 of
the Act before the State of Gujarat on 05.01.2005
challenging the decision of the APMC directing it to
pay the market cess as per its letter dated 27.12.2004.
To the said Revision Application, APMC filed its reply
on 23.01.2005. The respondent-Company filed rejoinder
on 23.02.2005 to the reply filed by the APMC. The
Deputy Secretary, (Appeal) allowed the Revision
Application No. 2 of 2005 by its cryptic order dated
19.04.2005 and set aside the order dated 27.12.2004
passed by APMC. It is the case of the APMC that the
Revisional Authority erroneously arrived at the
conclusion that Rule 48(1) is not applicable and
wrongly held that Rule 48(2) was applicable to the fact
situation and further wrongly held that no market fee
9
Page 10 C.A.No.3130-3131 of 2008
is to be paid by the respondent-Company on the de-oiled
cake.
6.Being aggrieved by the order of the Revisional
Authority dated 19.4.2005 in Revision Application No. 2
of 2005 of the Revisional Authority, the APMC preferred
Civil Application No. 13606 of 2005 before the learned
single Judge of the High Court of Gujarat. The learned
single Judge after hearing the parties vide its order
dated 22.12.2005 set aside the order of revision in so
far as the levy of market fee on the castor seeds is
concerned holding that the sale did take place within
the market area and therefore APMC was authorized to
charge fee from the respondent-Company for such
purchase and partly allowed the application. However,
the learned single Judge, with respect to the levy of
fee on the de-oiled cake which was sold by the
respondent-Company held that it is the by-product in
the course of manufacturing of castor oil and
therefore, it is not an agricultural produce and not
liable to levy of market fee.
10
Page 11 C.A.No.3130-3131 of 2008
7.Being aggrieved by the said judgment dated
22.12.2005, the respondent-Company filed Letters Patent
Appeal No. 139 of 2006 on 18.1.2006 before the Division
Bench of the Gujarat High Court challenging the
findings of learned single Judge that market fee is
exigible on the purchase of castor oil seeds by the
industrial concern. The APMC also being aggrieved by
the said order dated 22.12.2005 of learned single Judge
filed Letters Patent Appeal No. 195 of 2006 for
rejecting of claim of APMC, Baroda for market fees/cess
on de-oiled cake. The Division Bench of the High Court
on 24.4.2007 after hearing the parties allowed the
appeal of the respondent-Company and dismissed the
appeal of the APMC, Baroda after setting aside the
order of the learned single Judge holding that Rule
48(2) is applicable and that the castor seeds were
brought from outside the market area. The Division
Bench upheld the rejection of the Special Civil
Application No. 13606 of 2005 filed by the APMC, Baroda
not accepting the case pleaded by it that market fee is
11
Page 12 C.A.No.3130-3131 of 2008
levied on de-oiled cake which is a by-product sold by
it and is not exigible goods as it is not an
agricultural produce. Aggrieved by the common judgment,
present appeals are filed.
8.On the basis of the legal grounds urged in these
appeals questioning the correctness of the findings and
reasons recorded by the Division Bench of the High
Court on both the points which have been formulated by
it, the following points would arise for the
consideration of this Court in these appeals:-
1)Whether the APMC, Baroda is liable to
claim the market fee on the castor
seeds purchased by the respondent-
Company on the plea that the same
were purchased within the market
area of APMC, Baroda which castor
seeds are used by the said
industrial concern for manufacture
of castor oil within the market area
of APMC, Baroda?
12
Page 13 C.A.No.3130-3131 of 2008
2)Whether purchase of the castor seeds for
use of the respondent industrial
concern for manufacturing castor oil
falls within Rule 48(2) of the Rules
to get exemption from payment of
market fee?
3)Whether the Division Bench was justified
in setting aside the finding of fact
recorded by the learned single
Judge, holding that the castor seeds
purchased by the respondent-Company
are within the market area of APMC?
4)Whether the Division Bench is justified
in recording the finding on point
No.2 in connection with LPA No. 195
of 2006 that the respondent concern
is not liable to pay any market fee
on the de-oiled cakes sold by it
which are stated to be the by-
product in the course of
13
Page 14 C.A.No.3130-3131 of 2008
manufacturing castor oil which is
not one of the items enumerated in
the Schedule to the Act and
notification issued by the
Directorate?
5)What order?
Answer to Point Nos. 1 to 3
9.The point Nos. 1 to 3 are answered together as they
are inter-related with each other by assigning the
following reasons:
It would be necessary for this Court to refer to
the definition of ‘Agricultural Produce’ under Sections
2(i) and provisions relating to levy of market fee
under Section 28 of the Act and under Rule 48(1) of the
Rules for the purpose of appreciating the factual
matrix with reference to the rival legal contentions
urged on behalf of the parties:-
“2(i)-“agricultural produce” means all
produce, whether processed or not, of
agriculture, horticulture and animal
husbandry, specified in the Schedule.
14
Page 15 C.A.No.3130-3131 of 2008
Section 28: The market committee shall,
subject to the provisions of the rules
and the maxima and minima from time to
time prescribed levy and collect fees on
the agricultural produce bought or sold
in the market area:
Provided that the fees so levied may be
collected by the Market Committee through
such agents as it may appoint.
Rule 48: Market fees :- (1) The market
committee shall levy and collect fees on
agricultural produce bought or sold in
the market area at such rate as may be
specified in the by-laws subject to the
following minima and maxima vis.,
(1)rates when levied ad valorem shall
not be less than 30 paise and shall
not exceed 2 (two) per hundred
rupees.
(2)Rates when levied in respect of
cattle, sheep or goat shall not be
less than 25 paise per animal and
shall not exceed 4 per anmimal.
Explanation- For the purposes of this
Rule a sale of agricultural produce shall
be deemed to have taken place in a market
area if it has been weighed or measured
or surveyed or delivered in case of
cattle in the market area for the purpose
of sale, notwithstanding the fact that
the property in the agricultural produce
has by reason of such sale passed to a
person in a place outside the market
area.
15
Page 16 C.A.No.3130-3131 of 2008
(2)No fee shall be levied on
agricultural produce brought from
outside the market area into the market
area for use therein by the industrial
concerns situated in the market area of
for export and, in respect of which
declaration has been made and a
certificate has been made and a
certificate has been obtained in Form
V:-
Provided that if such agricultural
produce brought into the market are for
export is not exported or removed
therefrom before the expiry of twenty
days from the date on which it was so
brought, the market committee shall levy
and collect fees on such agricultural
produce from the person bringing the
produce into the market area at such
rates as may be specified in the by-laws
subject to the maximum and minimum
specified in sub-rule (i):
Provided that no fee shall be payable on
a sale or purchase to which sub-section
(3) of Section 6 applies.”
10.It is an undisputed fact that the respondent-
Company is an industrial concern which has been
undertaking manufacture of castor oil out of the castor
seeds which are declared as agricultural produce in the
16
Page 17 C.A.No.3130-3131 of 2008
Schedule to the Act vide notification issued by the
Directorate of APMC, Baroda.
11.It is the case of the respondent-Company that the
demand and assessment made and levying the market fee
on the castor seeds for the period from 19.04.2004 to
30.11.2004 is erroneous as castor seeds were purchased
from outside the market area of APMC, Baroda and the
same were brought for the use of the industrial concern
which is situated within the market area of APMC,
Baroda for the purpose of using the same for
manufacturing of the oil. In this regard, the APMC has
called upon the respondent-Company to produce the
accounts for the period 19.04.2004 to 30.11.2004 in
respect of the goods being used in the mill and was
further asked to obtain license from the Market
Committee for the year 2004-2005. On 07.12.2004, the
respondent-Company submitted monthly statement for the
aforesaid period in respect of the purchases made of
castor seeds by the company. The APMC on the basis of
details provided by the respondent-Company prepared the
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Page 18 C.A.No.3130-3131 of 2008
statement showing the names of the suppliers,
weighment, quantity of the agricultural produce goods
purchased and amount paid by the company to its trader
as per the weighment made by the company. According to
the committee, the purchases made by the company
clearly show, as per the bills issued to different
parties for castor seeds sold to the respondent-
Company, that the weighment of castor seeds was made at
mill site in Baroda and payment was made to the parties
as per the weighment done by the respondent-Company.
Therefore, on the basis of the assessment, the
respondent-Company was directed to pay the market cess
of 1,27,46,349.38 vide its order dated 27.12.2004. The
respondent-Company aggrieved by the said assessment
order preferred Revision Application No. 2 of 2005
under Section 48 of the Act before the State of Gujarat
questioning the correctness of the assessment order
made by the APMC. The Deputy Secretary (Appeal) after
hearing the parties passed a cryptic order dated
19.04.2005 by allowing the Revision Application and
18
Page 19 C.A.No.3130-3131 of 2008
setting aside the order of assessment of the market
Committee dated 27.12.2004. While allowing the Revision
Application, the Revisional Authority arrived at the
conclusion that Rule 48(1) of the Rules is not
applicable and held that Rule 48(2) will be applicable
to the fact situation. The correctness of the same was
challenged before the learned single Judge of the High
Court of Gujarat by filing a petition under Article 226
of the Constitution i.e. Special Civil Application No.
13606 of 2005.
12.The learned single Judge after giving opportunity
to the respondent-Company and hearing both the learned
counsel appearing on behalf of the parties has held
that castor seeds have been bought within the market
area of APMC, therefore, sub-rule (1) of Rule 48 is
applicable to the fact situation and not sub-rule (2)
of Rule 48 upon which reliance was placed by the
respondent-Company’s counsel. In arriving at the said
conclusion the learned single Judge has referred to the
factual aspects with reference to certain documents
19
Page 20 C.A.No.3130-3131 of 2008
such as invoices, bill receipts etc. exchanged between
the respondent-company and its suppliers of castor
seeds. The bill issued by one Manish Trading Company of
Naroda, Ahmedabad dated 03.05.2004 for supply of 150
bags of castor seeds weighing 75 kilos each was
examined. The rate charged was 305/- per 100 kg. The
total quantity shown was 112.50 quintals and the total
amount claimed was 1,71,562/-. In the said bill dated
03.05.2004, it was indicated that payment was yet to be
made. At page 28 to the compilation, there is a
purchase voucher/remittance note issued by the
respondent-Company. It is not in dispute that the said
purchase voucher/remittance note pertains to the same
consignment transported by the Manish Trading Company
under the bill dated 03.05.2004. The purchase voucher
indicates that the quantity of the castor seeds
received was short by 37.50 kilos. Weight of bags of
150 kilos was also deducted from the quantity of castor
seeds. The agreed rate of 305/- for 100 kilos remained
constant and the respondent-Company therefore agreed to
20
Page 21 C.A.No.3130-3131 of 2008
remit a total amount of 1,70,991/- to the Manish
Trading Company referred to supra. To the query from
the court, the learned counsel appearing on behalf of
the company, on instructions, made submissions that
consignments were received from the sellers within the
market area for the purpose of finding out shortfall or
pilferage and the payment is made to the extent of
actual quantity received. The learned single Judge has
also referred to the total quantity of castor seeds
weighing 112.50 quintals which was transported to the
respondent-Company by Manish Trading Company and it had
made payment after weighing consignment and after
finding out the correct weight of the castor seeds
received by it.
13.On the basis of the said material facts the learned
single Judge arrived at the conclusion that the
respondent-Company placed order for purchase of castor
seeds from its suppliers from outside the market area
but no payment was immediately made for the same. On
the demand of the respondent-Company, the quantity of
21
Page 22 C.A.No.3130-3131 of 2008
castor seeds so requisitioned by it was transported by
the supplier which was received by it within the market
area. It is an undisputed fact that the consignment so
received was weighed by the Company within the market
area. Thereafter, on finding out the exact weight of
castor seeds received by it, the payment at the agreed
rate was made by the Company to the supplier.
Therefore, the learned single Judge came to the
conclusion on the basis of appreciation of the
aforesaid facts and held that the sale was not effected
till the consignment was received by the respondent-
Company and the same was weighed within the market
area. The learned single Judge has rightly rejected
the assertion made by the learned counsel on behalf of
the Company holding that in case of shortfall or loss
or damage during transport, the seller could claim
damage from the transporter and that would further
demonstrate that the respondent-Company did not become
owner of the goods till it took the physical delivery
thereof, weighing the same and satisfying itself about
22
Page 23 C.A.No.3130-3131 of 2008
the quantity received by it. It was held that it was
not a mere formality to find out the quantity by it but
it has the essential element of making payment
depending on the extent of quantity received and in
case of any drastic shortfall in the quantity, the
issue would be between the supplier and the
transporter. Further finding was recorded that if
against the quantity of 100 quintals of castor seeds
supplied by the trader, the respondent-Company received
only half of it on account of loss, damage or
pilferage, the company would make payment only for such
quantity leaving it for the trader to recover the
damages from the transporter. There would also be a
case where on account of some untoward and unforeseen
circumstances, such as natural calamity or theft, the
respondent-Company did not receive the full quantity of
castor seeds, the payment shall be made only for the
quantity received by it and not for the entire quantity
to be supplied by the trader. The learned single Judge
has further rightly recorded the finding of fact that
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Page 24 C.A.No.3130-3131 of 2008
when the castor seeds reach the market area, it was
weighed by the Company and payment thereof was agreed
to be made to the tune of quantity received and till
then the castor seeds continue to be in the ownership
of the seller. The Company becomes the owner of the
property only once the exact weight of the castor seeds
was ascertained and purchase voucher was obtained. The
learned single Judge rightly held that APMC is
justified in contending that the sale of castor seeds
did take place within the market area and the appellant
was authorized to charge fees from the respondent-
Company for such purchase. Therefore, the learned
single Judge held that the castor seed was bought by
the respondent-Company within the market area of APMC,
Baroda and therefore Rule 48(1) of the Rules is
applicable to the fact situation and not Rule 48(2) as
contended by the counsel. The said conclusion was
arrived at after referring to the provisions of
Sections 19, 20 and 21 of the Sale of Goods Act, 1930
and the Privy Council judgment in Hoe Kim Seing v.
24
Page 25 C.A.No.3130-3131 of 2008
Maung Ba Chit
1
. Sections 19, 20 and 21 of Sale of Goods
Act are extracted hereunder :-
“19. Property passes when intended to pass.-
(1) Where there is a contract for the
sale of specific or ascertained goods
the property in them is transferred to
the buyer at such time as the parties
to the contract intend it to be
transferred.
(2) For the purpose of ascertaining the
intention of the parties regard shall
be had to the terms of the contract,
the conduct of the parties and the
circumstances of the case.
(3) Unless a different intention
appears, the rules contained in Section
20 to 24 are rules for ascertaining the
intention of the parties as to the time
at which the property in the goods is
to pass to the buyer.
20. Specific goods in a deliverable state.-
Where there is an unconditional contract for
the sale of specific goods in a deliverable
state, the property in the goods passes to the
buyer when the contract is made, and it is
immaterial whether the time of payment of the
price or the time of delivery of the goods,
or both, is postponed.
21. Specific goods to be put into a
deliverable state.- Where there is a contract
for the sale of specific goods and the seller
is bound to do something to the goods for the
1
AIR 1935 PC 182
25
Page 26 C.A.No.3130-3131 of 2008
purpose of putting them into a deliverable
state, the property does not pass until such
thing is done and the buyer has notice
thereof.”
The above judgment of the Privy Council is referred to
by this Court in the decision of Agricultural Market
Committee v. Shalimar Chemical Works Limited
2
wherein
the learned single Judge rightly extracted the
following paragraph from the said judgment and it is
worthwhile to extract the same hereunder :-
“40. In order that Section 20 is attracted, two
conditions have to be fulfilled :
(i) the contract of sale is for
specific goods which are in a
deliverable state; and
(ii)the contract is an unconditional
contract. If these two conditions
are satisfied, Section 20 becomes
applicable immediately and it is at
this stage that it has to be seen
whether there is anything either in
the terms of the contract or in the
conduct of the parties or in the
circumstances of the case which
indicates a contrary intention.
This exercise has to be done to
give effect to the opening words,
namely, “Unless a different
intention appears” occurring in
Section 19(3). In Hoe Kim Seing v.
2
AIR 1997 SC page 2502
26
Page 27 C.A.No.3130-3131 of 2008
Maung Ba Chit, it was held that
intention of the parties was the
decisive factor as to when the
property in goods passes to the
purchaser. If the contract is
silent, intention has to be
gathered from the conduct and
circumstances of the case.”
14. Therefore, the learned single Judge on the basis of
documents which are all admitted documents came to the
right conclusion and held that the castor seeds were
bought by the respondent-Company within the market
area. Therefore, APMC has rightly made assessment of
market fee and levied the same as per Section 28 of the
Act, which assessment order has been erroneously set
aside by the Revisional Authority without proper
appreciation of facts and applying the relevant
provisions namely, Section 28 and Rule 48(1) and came
to the erroneous conclusion and held that the goods
bought were brought from outside the market area for
the purpose of manufacturing oil by the Company in its
factory. Therefore, the contention that these are not
exigible, was rightly set aside by the learned single
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Page 28 C.A.No.3130-3131 of 2008
Judge and it was held that the respondent-Company is
liable to pay market fee which is cess on the purchase
of castor seeds, justifying the claim of the APMC.
The order dated 22.12.2005 was questioned by the
Company filing Letters Patent Appeal No.139 of 2006 and
that order was erroneously set aside by the Division
Bench by answering the point No.1 in favour of the
Company after referring to Rule 48(2) and erroneously
applying the aforesaid judgments. The learned single
Judge rightly placed strong reliance on the said
judgment referred to supra and came to the right
conclusion and held that the sale of goods of castor
seeds is within the market area of APMC. The learned
Division Bench on the other hand, further placed strong
reliance upon Rule 48(2) by placing reliance upon Form
No. V of the Rules, which is the Form of declaration
and certificate produced by the Company which were
found from pages 79 to 86 which are totally irrelevant
for the purpose of finding out whether the goods i.e.
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Page 29 C.A.No.3130-3131 of 2008
the castor seeds were bought by the Company within the
market area of APMC or not.
15. The factual matrix is supported by the documents
produced at Annexure ‘F’ to the Special Civil
Application No. 13606 of 2005 which are the documents
of the respondent-Company which have been extensively
referred to by the learned single Judge in his judgment
at para 11 to come to the conclusion holding that the
castor oil seeds were bought by the respondent-Company
within the market area of APMC and, therefore, he has
rightly held that Rule 48(2) is not applicable to the
fact situation as claimed by the respondent-Company and
the reliance placed upon Form No. V which is the Form
of declaration and certificate obtained from the APMC
seeking exemption from payment of market fee on the
castor seeds brought by it from outside APMC area, is
contrary to the material evidence on record and
therefore, the Division Bench has gravely erred in
reversing the finding of fact recorded by the learned
single Judge on proper appreciation of undisputed
29
Page 30 C.A.No.3130-3131 of 2008
material evidence on record and recorded the finding of
fact with reference to Sections 19, 20 and 21 of the
Sale of Goods Act and the judgment of Privy Council
referred to supra which has been referred to by this
Court in the Shalimar Works Ltd. case (supra) wherein
the learned single Judge rightly came to the conclusion
that the castor seeds were purchased by the Company in
the market area for the relevant period in question in
respect of which the assessment order was passed
levying the market fee and directing the Company to pay
the same was legal and valid. The same came to be
erroneously set aside by the Revisional Authority
without proper application of mind and law to the fact
situation and the same was then set aside by the
learned single Judge of the High Court. The said
findings of the learned single Judge have been
erroneously set aside by the learned Division Bench at
the instance of the respondent-Company in LPA No.139 of
2006. Therefore, we have to hold that the said finding
of the Division Bench in reversing the legal and valid
30
Page 31 C.A.No.3130-3131 of 2008
finding of fact recorded by the learned single Judge on
proper appreciation of facts and undisputed evidence on
record and rightly applying the provisions of the Sale
of Goods Act referred to supra and Rule 48(1) is
erroneous. Therefore, we have to set aside the said
order passed in LPA No. 139 of 2006 and restore the
order of the learned single Judge passed in special
civil application No. 13606 of 2005 and allow the C.A.
No. 3130 of 2008.
Answer to Point No. 4
16. The point No. 4 is answered against the APMC
upholding the order of the learned single Judge
affirmed by the Division Bench of the High Court in
dismissing the Letters Patent Appeal No. 195 of 2006 of
the appellant by assigning the following reasons :-
It is an undisputed fact that oil cake is included
in the Schedule as an agricultural produce which is
exigible agricultural produce in terms of section 2(1)
(i)of the Act. Sub-rule (iv) therein contains oil
31
Page 32 C.A.No.3130-3131 of 2008
seeds. Item No. 8 therein is castor seed and Item No.
11 therein is oil cakes.
The oil cake is the exigible agricultural produce
for the purpose of levying market fee upon such
produce. On the basis of the factual and rival
contentions and on the basis of material evidence
produced by the parties the learned single Judge has
arrived at the finding held at paragraph 23 with regard
to the process undertaken by the respondent-Company for
extraction of castor oil from the castor seeds
purchased by it. The by-product which is produced by
the respondent-Company is de-oiled cake which contains
less than 1% of castor oil and castor seeds have to
undergo a complex process so as to extract maximum
possible oil out of it. At the first stage, after
cleaning and separating raw seeds from husk etc. the
castor seeds are crushed through mechanical devices to
extract oil from the same. After the mechanical process
which is involved in extracting substantial amount of
oil in the oil cake, the residual product is the de-
32
Page 33 C.A.No.3130-3131 of 2008
oiled cake which is sold in the market. The same does
not fall under the head of oil cake. The process which
is adopted for the purpose of getting the said by-
product of de-oiled cake has been extensively referred
to in the paragraph 23 of the order of the learned
single Judge and it is worthwhile to extract the same
hereunder:-
“23.The process undertaken by respondent
no.2 for extraction of castor oil from the
castor seeds purchased by it is not
seriously in dispute. The fact that
ultimately by-product which respondent no.2
claims to be de-oiled cake which the
respondent no.2 sells in the market and on
which the petitioner is seeking to levy
market fee contains less than 1% castor oil
is also not seriously in dispute. The
respondent no.2 has explained the complex
process through which the castor seeds are
made to undergo so as to extract maximum
possible oil out of it. At the first stage
after cleaning and separating raw seeds
from husk etc., the castor seeds are
crushed through mechanical devices to
extract oil from the same. This mechanical
process would obviously leave substantial
amount of oil in the oil cake which may
come into existence after extraction of
oil. If this residual product was sold by
respondent no.2 in the market, same would
squarely fall under the head of oil cake.
To that extent there is no serious dispute
raised by the respondent no.2 also.
33
Page 34 C.A.No.3130-3131 of 2008
However, respondent no.2 does not sale the
oil cake which comes into existence by
extracting oil from castor seeds through
the above mentioned mechanical process. The
oil cake so produced is made to undergo
further extensive sophisticated and complex
process by which instead of leaving 10% oil
contents in the oil cake, the percentage of
residue of the oil is brought down to less
than 1%. By sophisticated means of
operation, the wastage of oil is minimised
and the oil extraction percentage is
improved. Ultimately therefore, final by-
product which comes into existence and
which is sold by the respondent no.2 in the
market is de-oiled cake having less than 1%
oil contents. It can thus be seen that oil
cake and de-oiled cake are two separate
products. By very nature of terminology
used for both products it would indicate
that oil cake would contain the residue of
oil seeds which would also include some
percentage of oil. It is only when almost
entirely the oil cake is devoid of oil
contents that it is labeled as de-oiled
cake. Gujarat Sales Tax Act also takes
cognizance of two different products namely
oil cake and de-oiled cake. I am only
drawing further support from these entries
contained in Gujarat Sales Tax Act and not
for the purpose of interpretation of the
term so defined in the said Act. As noted
said Act does not define the term oil cake.
From the available material on record, such
as difference in the contents of oil in oil
cake and de-oiled cake, cognizance of
different terms namely oil cake and de-
oiled cake in the Gujarat Sales Tax Act,
the difference in the process of oil
extraction which would lead to by-product
34
Page 35 C.A.No.3130-3131 of 2008
of the oil cake and de-oiled cake, the
certificate produced on record by the
respondent no.2 indicating the difference
of percentage of oil contents in oil cake
and de-oiled cake, it can be seen that two
are independent, separate and distinct
products and so understood in common
parlance as well. The term “oil cake”
contained in the Schedule therefore, in my
opinion would not include deoiled cake. The
attempt on the part of the petitioner-
Agriculture Produce Market Committee to
levy market fees on sale and purchase of
such de-oiled cake in my opinion is not
permissible. Schedule to the Act specifies
oil cake as one of the agricultural
produces on which market fee can be
charged. In view of my conclusion, that
term oil cake does not include deoiled
cake, I find that petitioner is not
authorised to charge market fees on the de-
oiled cake sold by the respondent no.2. The
difference in process which would lead to
obtaining oil cake and de-oiled cake was
also noticed by Hon'ble Supreme Court in
the case of State of A.P. and others v.
M/s. Modern Proteins ltd.
3
on which reliance
was placed by the learned advocate for the
respondent no.2. It was noted that
groundnut seeds obtained after the process
of decortication are of high grade quality,
rich in proteins but free from harmful
materials processed in the expeller and the
outcome is groundnut oil and groundnut oil
cake. The groundnut oil cake again is
pressed through the solvent in which “food
hexane” is sprayed resultantly groundnut
oil and groundnut de-oiled cakes are
obtained.”
3
1994 Supp (2) SCC 496
35
Page 36 C.A.No.3130-3131 of 2008
17. Further reference was made to the Gujarat Sales
Tax Act wherein the oil cake and de-oiled cake are
considered to be two different products from the
entries contained in the said Act and the Schedule. The
said entries are referred to for the purpose of
interpretation of the terms so defined in the said Act.
The term oil cake is not defined in the APMC Act and
further on the basis of the available material on
record which elaborates the difference in the contents
of oil in oil cake and de-oiled cake, cognizance of
different terms namely, oil cake and de-oiled cake in
the Gujarat Sales Tax Act, difference in the process of
oil extraction which would lead to by-product of the
oil cake and de-oiled cake, we have to hold that de-
oiled cake is a completely different product than oil
cake. Also we have to refer to the judgment of this
Court in the case of State of A.P. and Ors. v. Modern
Proteins Ltd.
4
on which strong reliance was placed by
the respondent-Company wherein in the said case, it was
4
(1994) Supp (2) SCC 496
36
Page 37 C.A.No.3130-3131 of 2008
noted that the groundnut seeds obtained after the
process of decortication are of high grade quality,
rich in proteins but free from harmful materials
processed in the expeller and the outcome is groundnut
oil and groundnut oil cake. The groundnut oil cake
again is pressed through the solvent in which “food
hexane” is sprayed resultantly groundnut oil and
groundnut de-oiled cakes are obtained. On the basis of
the said decision and applying it to the fact situation
on hand with regard to the process adopted for
obtaining by-product of de-oiled cake, it is clear that
it is different from the oil cake as it contains oil
less than 1% and it is not included in the Schedule for
the purpose of charging market fee, therefore, the
learned single Judge accepting the case against levying
the market fee on the de-oiled cake, rejected the
prayer in this regard in Special Civil Application No.
13606 of 2005. The same was questioned in the Letters
Patent Appeal filed by the APMC that has been examined
by the Division Bench with reference to rival legal
37
Page 38 C.A.No.3130-3131 of 2008
contentions and it has answered the said point against
the APMC by extracting paragraph No. 23 from the
judgment of the learned single Judge.
18.The by-product obtained out of the manufacturing
process is not oil cake but is de-oiled cake after
undergoing the process which would lead to obtaining
de-oiled cake. After noticing the judgment of the
Supreme Court in the case of Modern Proteins Ltd.
(supra), the learned single Judge came to the
conclusion that de-oiled cake containing less than 1%
oil is not mentioned in the Schedule as per Section
2(1)(i) of the APMC Act as ‘agricultural produce’ by
the authority and further held that the above produce
is totally different from the oil cake. Therefore, no
market fee can be levied by the APMC to be paid by the
respondent-Company. The said finding of fact of the
learned single Judge has been rightly concurred with by
the Division Bench of the High Court. The same was
sought to be set aside by the APMC. We have carefully
examined the correctness of the concurrent finding of
38
Page 39 C.A.No.3130-3131 of 2008
fact arrived at by the Division Bench on this aspect of
the matter. We are in agreement with the view taken by
the High Court of Gujarat in holding that the by-
product of the manufacture in producing the oil from
the castor seeds is only de-oiled cake and is not one
of the Schedule items in the Notification for the
purpose of levying market fee. Therefore, we do not
find any good reason whatsoever to interfere with the
concrete finding of fact on this aspect of the matter.
Hence, we have to affirm the concrete finding of fact
recorded by the learned single Judge and of the
Division Bench of the High Court. We do not find any
valid and cogent reasons to arrive at a different
conclusion other than the view taken by them as the
said view is based on a proper appreciation of the
factual matrix and the statutory provisions as de-oiled
cake is not mentioned in the Schedule to the Act and
the Notification. The item which is mentioned is oil
cake which is different and distinct from the de-oiled
cake as distinguished by this Court in the Modern
39
Page 40 C.A.No.3130-3131 of 2008
Proteins Ltd. case referred to supra. The High Court
has rightly applied the said decision to the fact
situation. Therefore, we are of the view that the said
finding of fact recorded by the High Court is legal and
valid. The same does not call for interference.
Accordingly, the appeal of the APMC on this aspect of
the matter must fail as we are affirming the order of
the Division Bench of the High Court on the levy of the
market fee on de-oiled cake by directing that the
amount in relation to the market fee levied on de-oiled
cake is to be reduced.
19.For the reasons recorded by us on the point Nos. 1
to 3 in C.A. No. 3130 of 2008 the APMC must succeed.
Accordingly, we allow the appeal and set aside the
order of the Division Bench of the High Court in
Letters Patent Appeal No. 139 of 2006 and uphold the
levy of market fee on the castor seeds purchased by the
respondent-Company for the period in question, and it
is liable to pay the said market fee.
40
Page 41 C.A.No.3130-3131 of 2008
20.For the reasons recorded in answer to the point No.
4, we dismiss the C.A. No. 3131 of 2008 filed by APMC,
Baroda against order passed in Letters Patent Appeal
No. 195 of 2006, upholding the order of the learned
single Judge which was affirmed by the Division Bench
of the High Court.
21.In view of the aforesaid reasons, Civil Appeal
No.3130 of 2008 is allowed and Civil Appeal No.3131 of
2008 is dismissed. There will be no order as to costs.
…………………………………………………………J.
[G.S. SINGHVI]
……………………………………………………… J.
[V. GOPALA GOWDA]
New Delhi,
November 29, 2013
41
Page 42 C.A.No.3130-3131 of 2008
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4860 OF 2009
AGRICULTURAL PRODUCE MARKET COMMITTEE ……APPELLANT
Versus
BIOTOR INDUSTRIES LTD. & ANR. ….RESPONDENTS
J U D G M E N T
V. Gopala Gowda, J.
This matter is connected to the Civil Appeal
Nos. 3130-3131 of 2008 upon which we have pronounced the
judgment today.
2.The appellant-APMC herein challenged the
correctness of the judgment dated 10.2.2009 passed by
42
Page 43 C.A.No.3130-3131 of 2008
the Division Bench of Gujarat High Court in Letters
Patent Appeal No. 1383 of 2008 in Special Civil
Application No. 9705 of 2008 with Civil Application No.
13651 of 2008 whereby it has dismissed the Special
Civil Application holding that the same lacks merit and
also vacated interim relief granted by the learned
single Judge of High Court. Being aggrieved, the APMC
filed this Civil Appeal framing certain questions of
law and urging grounds in support of the same, praying
to set aside the impugned judgment and order and to
pass such other order as may be deemed fit and proper
in the circumstances of the case.
3.The brief necessary facts for the purpose of
examining the legality and validity of the impugned
order are stated herein:-
The appellant-APMC had filed Special Civil
Application No. 9705 of 2008 under Articles 14, 19, 21
and 226 of the Constitution of India before the learned
single Judge of the High Court impleading the
43
Page 44 C.A.No.3130-3131 of 2008
respondent-Company and the State of Gujarat as parties,
seeking relief for the issue of writ of certiorari or
any other appropriate writ, order or direction, to set
aside order dated 30.6.2008 passed in Revision
Application No. 69 of 2008 by respondent No.2–the State
(Revisional Authority) and further sought for
declaratory relief to declare that the APMC is entitled
to levy market fee on the respondent-Company for
purchase of castor seeds as per the demand notices
dated 5.3.2008 and 15.4.2008 given to the respondent-
Company. Further, by way of amendment to the prayer
column, it has sought for declaratory relief to declare
Rule 48(2) of the Gujarat Agricultural Produce Markets
Rules, 1965 (for short “Rules”) as ultra vires of
Sections 28A and 59 of the Gujarat Agricultural Produce
Markets Act, 1963 (hereinafter referred to as “the
Act”) urging various facts and legal grounds. The
amended Sections were added to the Act vide the Gujarat
Agricultural Produce Markets (Amendment) Act, 2007.
44
Page 45 C.A.No.3130-3131 of 2008
4.The learned single Judge of the High Court after
hearing the learned counsel for the parties passed an
interim order on 13.11.2008 in Special Civil
Application No. 9705 of 2008 referring to Section
28(1) of the Act and amended Section 28(2)(a),(b),(c),
(d) & (e) of the Act and issued Rule to examine the
correctness of Rule 48(2) in view of the amendment to
the Act incorporating Section 2(a) to Section 28 of the
Act and directed the respondent-Company by giving
directions, particularly direction Nos. 2 and 3 which
are extracted hereunder :-
“(2) Respondent No.2 deposits 50% of the
outstanding market fees with this Court and
furnishes an undertaking before this Court
for the remaining 50% of the amount to the
effect that they shall pay up the remaining
market fees with interest as and when it is
so ordered by this Court. Such amount shall
be invested, if deposited, by the Registrar
in the FDR initially for a period of two
years, renewable further with the State
Bank of India, Gujarat High Court Branch,
Ahmedabad.
(3) Respondent No.2 shall be at liberty to
comply with either of the conditions within
two months from the date of intimation and
calculation of the Market Fees recoverable
45
Page 46 C.A.No.3130-3131 of 2008
by the Market Committee from respondent
No.2.”
Further, at paras 14 and 15 of the order dated
13.11.2008 of learned Single Judge, certain
observations were made, which read thus:-
“14. It is also observed and directed that
it would be open to the petitioner to make
representation to the State Government,
which is Rule Making Authority, for
amendment of the Rule 48 in light of the
amended provisions of Section 28 of the
Agriculture Produce Market Committee. If
such representation is made, the pendency
of this petition, shall not operate as a
bar to the Rule Making Authority for
bringing about amendment, as may be
permissible in law.
15. It would be open to either side to move
this Court for final hearing if the rules
are amended or the matter before the Apex
Court is finally decided, whichever is
earlier.”
The correctness of this interim order dated 13.11.2008
was challenged by the respondent-Company by filing
Letters Patent Appeal No. 1383 of 2008 urging various
legal contentions. The Division Bench examined whether
sub-section (2)(a) added to Section 28 of the Act by
46
Page 47 C.A.No.3130-3131 of 2008
amendment Act No. 17 of 2007 has the effect of taking
away the substratum of the Division Bench judgment dated
24.4.2007 passed in Letters Patent Appeal No. 139 of
2006 in connected matters. The Division Bench after
referring to certain relevant facts and Rule 48(2) of
the Rules, came to its conclusion on the basis of the
judgment rendered by the Division Bench of High Court in
the Letters Patent Appeal No. 139 of 2006 and connected
matters for the interpretation of Section 28 of the Act
read with Rule 48(2) of the Rules. The relevant
paragraph 8 from the Division Bench judgment rendered in
the aforesaid Letters Patent Appeal filed by the
respondent-Company is extracted hereunder:-
“8. Section 28 of the Act empowers the
Market Committee to levy and collect fees
on notified agricultural produce bought
or sold in the market area, subject to
the provisions of the Rules and at the
rate maxima and minima, from time to time
prescribed. Thus, the power of the Market
Committee to levy prescribed fees is
envisaged in the above section. In
juxtaposition to the above section, it is
necessary to refer to Rule 48 of the
Rules, and more particularly Rules 48 and
47
Page 48 C.A.No.3130-3131 of 2008
49, placed in Part VI with heading 'Fees,
Levy and Collections', pertaining to
market fees. Rule 48, sub-rule (1) and
the explanation is highlighted by the
learned Single Judge and discussion has
taken place on the basis of certain
material available on record with regard
to sale of castor seeds by one Manish
Trader of Ahmedabad to the Company and
after relying upon Sections 19 to 22 of
the Sale of Goods Act, the learned Single
Judge found that sale does take place
within the market area and, therefore,
the Company is liable to pay market fees.
However, sub-rule (2) of Rule 48 of Part
VI of the Rules clearly prescribes that
no fee shall be levied on agricultural
produce brought from outside the market
area into the market area for use therein
by the industrial concerns situated in
the market area or for export and, in
respect of which declaration has been
made and a certificate has been obtained
in Form V. Thus, the above sub-rule (2)
of Rule 48 nowhere prescribes that
agricultural produce brought from outside
the area of market committee has to be by
the industrial concern itself. The
preceding word is 'brought' and not
'bought'. Even the facts of the present
case are examined, nowhere it is
mentioned that purchase took place within
the area of the market committee. In the
affidavit in reply filed by the Company,
it is clearly mentioned that purchase of
castor seeds did take place outside the
market area and no sale takes place
within the market area. Even, weighment,
etc. is also done outside the market area
and bills are prepared accordingly and,
48
Page 49 C.A.No.3130-3131 of 2008
that too, after selection by the
representative of the Company. Not only
that, but, the Company has produced bills
of one Manish Traders at page 109 of
Letters Patent Appeal No.195 of 2006,
having numbered as Bill No.93, dated 3rd
May 2004, is clearly indicative of the
fact that sale does not take place within
the area of Market Committee, Baroda.
Besides, the octroi paid to the Baroda
Municipal Corporation on the goods,
namely, castor seeds imported and
produced at page 107 is also suggestive
of the fact that sale does not take place
within the area of market committee.
Even, the Company has produced number of
forms prescribed under Rule 48, sub rule
(2) from page 79 to 86, the fact not
denied by the Market Committee, which
also establishes the case of the Company
with sufficient declaration and a
certificate that the abovementioned
agricultural produce, namely, castor
seeds, has been brought from outside the
limits of the market area and brought
within the limits of market area for
industrial purpose, and for production of
castor oil and other byproducts. Thus,
the Company fully complied with the
requirement of Rule 48 of the Rules and
is entitled for exemption from payment of
market fees. Therefore, exercise
undertaken by the learned Single Judge to
find out the place of sale, so as to
bring the case of the Company under Rule
48, subrule (1) of the Rules, is of no
help and the finding, on that basis,
arrived at by the learned Single Judge,
will have to be quashed and set aside in
49
Page 50 C.A.No.3130-3131 of 2008
the backdrop of the above discussion and
the fact situation.”
5.Thereafter the amended provisions of Sections 28A
and 31D of the Act are referred to by the Division Bench
along with Section 28(1) of the Act and Rule 48(2) of
the Rules as well as sub-sections 2(a)and (b) of Section
28 of the amended provisions of the Act to come to the
conclusion, that in view of the factual legal
situation, the Revisional Authority had rightly
interfered with the demand notices issued by the APMC
and therefore held that Civil Appeal filed by the APMC
lacks merit and dismissed the same and the interim
relief granted was set aside and consequently Rule was
also discharged. The correctness of the same is
challenged here by urging various questions of law and
grounds in support of the same. The same need not be
adverted to in this judgment for the reason that the
learned Division Bench of the Gujarat High Court while
examining the directions in interim order dated
13.11.2008 given in Special Civil Application No. 9705
50
Page 51 C.A.No.3130-3131 of 2008
of 2008 filed by the APMC has gone into the merits of
the case. Considerable reliance was placed upon the
Division Bench Judgment in Letters Patent Appeal No. 139
of 2006 by the counsel for the respondent-Company,
contending that the amendment Act has not brought any
change to Section 28 of the Act and further submitted
that the Revisional Authority has rightly held that the
APMC has no legal right to levy market fee on the
respondent-Company. The appellant-APMC in this appeal
has submitted that the Division Bench of the High Court,
instead of examining the correctness of the
discretionary powers exercised by the learned single
Judge in Special Civil Application No. 9705 of 2008 and
passing the interim order with certain observations,
has passed the orders on merits of the civil application
without adverting and examining the grounds urged in the
petition, which approach of the Division Bench is not
correct and it should not have pronounced decision on
the merits of the Special Civil Application while
examining the correctness of the interim order passed by
51
Page 52 C.A.No.3130-3131 of 2008
the learned single Judge. The APMC has also sought
declaratory relief to declare Rule 48(2) as ultra vires
to Section 28A of the amended provision of the Act and
submitted that the Division Bench of the High Court
failed to appreciate the same and also that Section 28
of the Act deals with levy of market fee which is a
mandatory provision that does not give any exemption to
respondent-Company and as such a Rule cannot override
provisions of the Act. The Division Bench of the High
Court has simply affirmed the order of the Revisional
Authority by setting aside the assessment order passed
by the APMC vide notices dated 5.03.2008 and 15.4.2008
without awaiting the decision to be rendered by the
learned single Judge on the legality and validity of the
Rule 48(2) in the backdrop of Section 28, of the amended
provision.
6.After hearing learned counsel for the parties, we
have pronounced the judgment today in Civil Appeal
No. 3130 of 2008 on similar demand notices demanding the
market fee from the respondent-Company on the castor
52
Page 53 C.A.No.3130-3131 of 2008
seeds bought in the market area for the purpose of
manufacturing of oil. We hold that the demand for the
market fee made by the APMC for castor seeds is
justified as per the reasoning given in our judgment in
the connected Civil Appeal No. 3130 of 2008, that the
castor seeds were bought in the market area and not
brought into the market area. It would suffice to say
that the order dated 10.02.2009 of the Division Bench of
the High Court in Letters Patent Appeal No. 1383 of 2008
setting aside the order dated 13.11.2008 of the learned
single Judge in Special Civil Application No. 9705 of
2008 and affirming the order dated 30.06.2008 of the
Revisional Authority in Revision Application No.69 of
2008, without examining the correctness of Rule 48(2)
of the Rules and applying the Division Bench Judgment
rendered in Letters Patent Appeal No 139 of 2006 without
considering the factual matrix and therefore, the same
is liable to be set aside. Accordingly, we set aside the
same and remand the matter to the High Court to place
the matter before the roster of learned single Judge to
53
Page 54 C.A.No.3130-3131 of 2008
examine the validity of Rule 48(2) of the Rules, as
questioned with reference to Section 28A of the amended
provision of Act No. 17 of 2007 and the impugned order
of the Revisional Authority. The appellant may also
approach the State Government to amend the Rules by
deleting Rule 48(2) of the Rules. It is open for the
appellant to either press the Special Civil Application
to be decided on merits with regard to the validity of
Rule 48(2) and also examine the impugned order of
levying market fees on the goods purchased by the
respondent-Company on the basis of facts and material
evidence or to make revision application to the State
Government seeking for the deletion of Rule 48(2) by
amending the Rules with the above said observation.
7. This Civil Appeal is accordingly allowed in the
above terms by setting aside the impugned order of the
Division Bench and remanding the matter to the High
Court to place the same before the roster of learned
single Judge with a request to him to examine the
validity of the impugned Rule if the APMC so desires and
54
Page 55 C.A.No.3130-3131 of 2008
the impugned order passed by the Revisional Authority
and decide the same on merits. The interim directions
given by the learned single Judge by way of interim
order dated 13.11.2008 directing to deposit 50% of the
demanded amount towards the market fee is restored. If
the company has not complied with that interim order, it
shall comply with the same within two weeks from the
date of receipt of the copy of this judgment.
………………………………………………………… J.
[G.S. SINGHVI]
……………………………………………………… J.
[V. GOPALA GOWDA]
New Delhi,
November 29, 2013
55
Page 56 C.A.No.3130-3131 of 2008
ITEM NO.1A COURT NO.13 SECTION IX
(For Judgment)
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
CIVIL APPEAL NO(s). 3130-3131 OF 2008
AGRICULTURAL PRODUCE MARKET COMMITTEE Appellant (s)
VERSUS
BIOTOR INDUSTRIES LTD. & ANR. Respondent(s)
WITH Civil Appeal NO. 4860 of 2009
Date: 29/11/2013 These Appeals were called on for pronouncement
of judgments today.
For Appellant(s) Mr. B.K.Satija,Adv.
For Respondent(s) Mr. Rabin Majumder,Adv.
Ms. Parul Kumari, Adv.
Ms. Preeti Bhardwaj, Adv.
Ms. Hemantika Wahi ,Adv
Dr. (Mrs.) Vipin Gupta, Adv.
Hon'ble Mr. Justice V. Gopala Gowda pronounced
reportable judgments of the Bench comprising
Hon'ble Mr. Justice G.S. Singhvi and His
Lordship.
C.A. No. 3130 of 2008 is allowed, C.A. No. 3131
of 2008 is dismissed and C.A. No. 4860 of 2009 is
allowed in terms of the signed reportable
judgments.
[RAJNI MUKHI] [USHA SHARMA]
SR. P.A. COURT MASTER
[Two separate signed reportable Judgments are placed
on the file]
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