THE BELSUND SUGA~ CO. LTD. ETC. ETC. v. THE STA TE OF BIHAR AND ORS. ETC.

"[J 5. Sale of agricultural pr.::>duce - (1) No agricultural produce A specified in notification under sub-section (I) of section 4, shall be made, bought or sold by any person at any place within the market area other than the relevant principal market yard or sub-market yard or yards established therein, except such quantity as may on this behalf be prescribed for retail sale or personal consumption. B (2) The sale and purchase of such agricultural produce in such areas shall not withstanding anything contained in any law be made by means of open auction or tender system except in cases of such class or description of produce as may be exempted by the Board.]"

It is this section which enables the market committee concerned to monitor and regulate the sale and purchase of the agricultural commodity which is covered by the protective umbrella of the Act. Once such an agricultural - produce is brought for sale in the market yard or sub-market yard, the sale is to be effected by auction or by inviting tenders. Such a scheme is in direct conflict with the scheme of the Sugarcane Act wherein there is no question of sugar factory being called upon to enter into a public auction for purchasing sugarcane which is specially earmarked for it out of the reserved area. In fact, provisions of the Sugarcane Act and the provisions of the Market Act, especially Section 15 read with Section 3(1 ), cannot harmoniously co-exist. It is precisely to avoid such a possible conflict and head-on collision between general Act, namely, the Market Act and the special Act, namely. the Sugarcane E Act which was later on enacted in 1981 by the very same Bihar Legislature, that the State Government in exercise of its exemption power under Section 42 of the Market Act issued a notification dated 22nd March, 1976 to the following effect:

"S.O. 550 the 22nd March, 1976 (Published in Bihar Gazette (ex- F order) dated 23-3-1976).-In exercise of the powers conferred under Section 42 of the Bihar Agricultural Produce Markets Act, 1960, the Governor of Bihar is pleased to exempt all sugar mills from the provisions of Section 15 of the Bihar Agricult~ral Produce Markets Act, 1960 with regard to their sale and purchase of agricultural produce G notified under sub-section (l) of Section 4 of the said Act)"

This very notification shows that the State Government had given up its erstwhile intention of regulating the sale and purchase of sugarcane as per Section 3(1) of the Market Act which cou(d not survive any further after the issuance of the aforesaid exemption notification. It is easy to visualise that H

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A the market committee can control purchase, sale, storage and processing of .... agricultural produce in the specified area under the Market Act only when the sale and purchase of agricultural produce can be effected as per Section 15 in the principal market yard or sub-market yard. Market is defined by Section 2(l)(h) of the Market Act which reads as under :

B " "market" means a market established under this Act for the market area and includes, a principal market yard and sub-market yard or yards, if any."

It is at such market yard that the regulation of sale and purchase of agricultural produce shall be effected as required by Section 15. Once Section 15 is out of picture, the mere declaration of market area as per Section 4 and the general declaration of intention to regulate purchase, sale, storage and processing of agricultural produce like sugarcane as per Section 3 of the Market Act or declaration of market yard or sub-market yards as per Section 5 would remain an empty formality or would represent an empty eggshell with its contents taken out. The entire machinery of the Market Act would be rendered redundant qua agricultural produce to which Section l 5 does not apply. Section 15 is the heart and soul of the Act. Due to its inapplicability to a given agricultural produce there would remain no occasion for the market committee concerned to exercise its regulatory functions for such a produce. This is the precise result which has ensued regarding regulation of purchase and sale of sugarcane by the market committee concerned in view of the combined operation of the relevant provisions of the Sugarcane Act and the exemption notification under Section 42 of the Market Act excluding the application of Section l 5 of the Market Act to the sale and purchase transactions of sugarcane in the market area. It is not possible to agree with learned senior counsel for the respondents that notification under Section 42 of the Act in substance excludes only the applicability of Section 15(2). On the express wordings of the said notification it is not possible to countenance this contention. Even if declaration under Section 5 treating the premises of the sugar factories and the purchase centres from which they have to purchase sugarcane as per the G Sugarcane Act is to be held to be operative, such a declaration would be devoid of any efficacy under the Market Act as the very purpose of the declaration of such market yard would not get fructified once sugarcane will not be required to be brought for purchase and sale in such declared market yard. It has to be kept in view that the relevant provisions of the Market Act laying down the machinery for effecting the regulation of purchase, sale, H storage and processing of agricultural· produce cannot be of any· avail once

p. 189 Copy page pinpoint

purchase and sale of such an agricultural produce are not required to be effected at the relevant market yard and have not to be subjected to open auction or tender for fixing proper prices for such agricultural produce to be paid to the growers of such produce.

It must, therefore, be held that the entire machinery of the Market Act cannot apply to the transactions of purchase of sugarcane by the appellant sugar factories as they are fully covered by the special provisions of the Sugarcane Act. lt is also necessary to note that if both these Acts are treated

- to be simultaneously applying to cover sale and purchase of sugarcane, the possibility of a clear conflict of decisions of Officers and Authorities acting under the Sugarcane Act on the one hand and the Market Act on the other would arise. These authorities acting under both the State Acts, dealing with the same subject-matter and covering the same transactions may come to independent diverse conclusions and none of them being subordinate to the other may create a situation wherein there may be head-on collision between the decisions and the orders of these authorities acting on their own in the hierarchy of the respective statutory provisions. For example, the Marketing D Inspector may find that weighment of sugarcane was not proper at a given point of time, while the Cane Officer may find to the contrary. In the hierarchy ,. of proceedings under the Market Act the market committee may take one decision with respect to the same subject matter, for which the Collector exercising appellate powers under the Sugarcane Act may take a contrary decision. This would create an irreconcilable conflict of decisions with consequential confusion. So far as the buyers and sellers of 'agricultural produce-sugarcane' are concerned, it is of no avail to contend as submitted by learned counsel for the respondents that for avoiding such conflicts, Section 15 is dispensed with by the State in exercise of its power under Section 42 of the Market Act, whether such an exemption can be granted by the State under Section 42 or not is not a relevant consideration for deciding the moot question whether the statutory scheme of the Market Act can harmoniously co-exist with the statutory scheme of the Sugarcane Act as enacted by the very same legislature. It is possible to visualise that the State Authorities may not exercise powers under Section 42 of the Act. In such an eventuality, the Sugarcane Act would not countenance a public auction of sugarcane to be supplied by cane grower to the earmarked factory for which sugarcane is grown in the reserved area. On the other hand, the Market Act would require the very same sugarcane to be brought to the market yard for being sold at the public auction to the highest bidder who may not be the sugar factory itself. Thus what is reserved for the sugar factory by way of H

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A raw material by the Sugarcane Act would get de-reserved by the sweep of Section 15 of the Market Act. To avoid such a head-on conflict, it has to be held that the Market Act is a general Act covering all types of agricultural produce listed in the Schedule to the Act, but out of the listed items if any of the agricultural produce like 'sugarcane' is made subject-matter ofa special enactment laying down an independent exclusive machinery for regulating sale, purchase and storage of such a commodity under a special Act, then the special Act would prevail over the general Act for that commodity and by necessary implication will take the said commodity out of the sweep of the general Act. Therefore, learned counsel for the appellants are right when they submit that because of the Sugarcane Act the regulation of sale and purchase of sugarcane has to be carried out exclusively under the Sugarcane Act and the said transactions would be out of the general sweep of the Market Act. None of its machinery would be available to regulate these transactions.

But even apart from the provisions of the Sugarcane Act, learned senior counsel for the appellants also placed reliance on the Sugarcane (Control) D Order, 1966 enacted under the provisions of Section 3 of the Essential Commodities Act, 1955 for submitting that purchase and sale of sugarcane is also controlled by the aforesaid Central Government Order issued under the Essential Commodities Act, and consequently the said provision would supersede the general provisions of the Market Act. We, therefore, now proceed to consider this submission. Sugarcane (Control) Order, 1966 is issued by the Central Government in exercise of powers conferred by Section 3 of the Essential Commodities Act, ...

1955. Clause 2 sub-clause (c) defines factory and reads as under: "factory" means any premises including the precincts thereto in any part of which sugar is manufactured by vacuum pan process." Price is defined by sub-clause (g) thereof which reads as under : "price" means the price or the minimum price fixed by the Central Government from time to time for sugarcane delivered" G Clause 3 of the Order deals with the fixation of minimum price by the Central Government for making it payable by purchaser of sugar to the sugarcane growers. Clause 3A deals with rebate that can be deducted by purchaser of sugar from the price to be paid to the sugarcane grower or the sugarcane growers' co-operative society. Rebate provided therein pertains to the minimum price of sugarcane fixed under Clause 3, or the price agreed to H between the producer or his agent and the sugarcane grower or the sugarcane

p. 191 Copy page pinpoint

growers' co-operative society. A There is a provision for additional price to be paid to the sugarcane grower by the purchaser of sugarcane as laid down in Clause 5. Clause 5-A deals with additional price for sugarcane purchased on or after I st October, 1974 by the producer of sugar. B Clause 6 deals with power of the Central Government by Order to regulate distribution and movement of sugarcane. As per this clause the Central Government can, by order, direct the sugarcane growers to supply the earmarked quantity of sugarcane grown by them in the reserved area fixed for sugar factories to ensure continuous supply of sugarcane as raw material to C such factories. This provision is parallel to the statutory provisions enacted by the Bihar Legislature in the Sugarcane Act referred to earlier by us.

Clause 9 refers to the power of the Central Government or any person authorised in this behalf to call for inform<:tion from various sources as enacted therein. D Clause 9-A deals with the power of entry, search and seizure of premises which obviously has to be exercised for fructifying the purposes of the Act.

Clause 11 deals with delegation of powers by the Central Government to any officer or authority thereof or to any State Government or any officer/ E authority of a State Government.

The aforesaid relevant provisions of the Sugarcane (Control) Order show that it seeks to lay down the minimum guaranteed price of sugarcane to the sugarcane growers with a corresponding obligation on them to supply sugarcane to the earmarked factories for which the reserved areas can be F fixed. This Order also contemplates negotiated price between the sugarcane growers on the one hand and the sugarcane factories on the other, for whom fixed quota of sugarcane can be earmarked.

It has to be appreciated that the aforesaid provisions of the Sugarcane (Control) Order operate in the same field in which the Bihar Legislative G enactment, namely, the Sugarcane Act operates and both of them are complementary to each other. When taken together, they wholly occupy the field of regulation of price of sugarcane and also the mode and manner in which sugarcane has to be supplied and distributed to the earmarked sugar factories and thus lay down a comprehensive scheme of regulating purchase and sale of sugarcane to be supplied by sugarcane growers to the earmarked H

p. 192 Copy page pinpoint

A sugar factories. It is, however, true that comprehensive procedure or machinery for enforcing these provisions is found in greater detail in the Sugarcane Act of the Bihar Legislation. But on a combined operation of both these provisions, it becomes at once clear that the general provisions of the Market Act so far as the regulation of sale and purchase of sugarcane is concerned get obviously excluded and superseded by· these special provisions.

In this connection, we may refer to a decision of the Kamataka High Court in the case of Vasavi Traders v. State of Karnataka & Ors., (1982) 2 Kamataka Law Journal 357). In that case Venkatachaliah J., (as he then was) speaking for a Division Bench of the Karnataka High Court, considered the impact of Sugarcane (Control) Order on the general sweep of the Karnataka Agricultural Produce Market (Regulation) Act, 1966. Point no. 3 was framed in this connection, which reads as under :

"Whether the 'Act' as amended by Act 17of1980 in so far it provides for regulation of marketing of sugarcane is unconstitutional, as its marketing is regulated by the provisions of the Central Act, viz., The Essential Commodities Act, 1955, and the Sugarcane (Control) Order made thereunder?"

While answering point no.3 in affirmative, the learned Judge at para 39 of the report, made the following pertinent observations : E " .... It appears to us that the Sugarcane (Control) Order regulates every aspect of marketing of sugarcane and its provisions are irreconcilable with the provisions relating to the marketing under the 'Act'. For instance, the place of delivery, the price, the manner of its payments are all fixed by the statutory order. The same aspects of marketing are sought to be regulated by the Act. The two sets of provisions collide. S.6 of the Essential Commodities Act· gives overriding effect to the orders made under S.3 of that Act as against any other Law. The small portion of the sugarcane grown by the grower the sale of which is left regulated under the statutory Order is again a matter - and part - of the policy of the regulation itself."

Accordingly, point no.3 in that case was answered in affirmative apart from the question of repugnancy which strictly did not arise for their consideration. The aforesaid reasoning of the learned iudges of the Kamataka High Court ' clearly indicates that the entire field of regulation of purchase and sale of sugarcane in the market area is occupied by the Sugarcane Control Order.

BELSUND SUGAR CO. LTD. v. STATE_[S.B. MAJMUDAR, J.] 193 This reasoning was left untouched by this Court in appeal against the said decision and, therefore, got confirmed in the case of I. T.C. ltd. and Ors. v. State of Karnataka and Ors., [1985] (Suppl.) SCC 476.

Learned senior counsel for the respondents was right when he contended in the aforesaid decision before this Court that the merits of the reasoning which appealed to the High Court were not gone into as the appeal arising from the judgment on this point was not pressed. However, the fact remains that the aforesaid reasoning of the Karnataka High Court remained untouched by this Court, nor was it dissented from. The facts of the present case project even a stronger situation, so far as the appellants are concerned. Whatever shortfall is found in the Sugar (Control) Order has been supplemented by the C Sugarcane Act by the Bihar legislation itself. Reasoning which appealed to the Karnataka High Court in the above judgment rendered in absence of a separate complementary legislation by the Karnataka Legislature gets further strengthened in the light of the Sugarcane Act in the present case. Consequently on a conjoint reading of the Sugarcane Order as well as the Sugarcane Act, an inevitable conclusion has to be reached that the regulation of sale and purchase of sugarcane in the entire market area for which the general Act, namely, the Market Act is enacted, is fully governed and highlighted by these two special provisions harmoniously operating in the very same field. Therefore, there would remain no occasion for the State Authorities to rationalise and reasonably visualise any need for regulating the purchase, sale as well as storage of sugarcane in the market area concerned. The wide sweep of general notification of Section 3 of the Market Act, therefore, will have to be read down by excluding from its general sweep sugarcane and its products as the definition of 'agricultural produce' as noted earlier would otherwise include not only primary produce of agriculture but also any other commodity processed or manufactured out of such primary agricultural produce. That is precisely the reason why the State of Bihar having realised the futility of the need about controlling and regulating the sale and purchase of sugarcane in the market area by the sugar factories excluded the operation of Section 15 of the Act, which noted earlier, is the soul of the Act. It is easy to visualise that if transactions concerning an G 'agricultural produce' are excluded from the operation of Section 15 of the Act, the entire machinery available to the market committee to regulate such transactions would get out of picture and there would be no room for the market committee to supply any infrastructural facility or other benefits to the seller of such agricultural produce on the one hand and the purchaser thereof oo~m~ H

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A Before parting with the discussion on this point, it is necessary to note one submission of learned senior counsel Shri Rakesh Dwivedi for the respondents - State of Bihar. He submitted that the legal proposition regarding special Act excluding the operation of general Act can be invoked only when the general Act irreconciliably derogates or conflicts with the special Act while dealing with the same subject matter and cannot be harmonised. He B submitted that the broad objective of the two enactments is different. The Sugarcane Act purports to regulate production, supply and distribution of sugarcane whereas the Market Act lays emphasis on regulating the market. The subject matters are closely allied, but nevertheless distinct.

C He placed reliance on two decisions of this Court in support of his aforesaid contention. In the case of Jugal Kishore v. State of Maharashtra and Others, [1989] Suppl. 1 SCC 589, this Court was concerned with the question whether the provisions regarding 'Ceiling on Land as fixed by the Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961 could be reconciled and could harmoniously co-exist with 1958 Act. D In this connection, Sabyasachi Mukharji J., speaking for the Court made the folfowing pertinent observations :

"Unless the Acts, with the intention of implementing various socio- economic plans, are read in such complementary manner, the operation E of the different Acts in the same field would create contradiction and would become impossible. It is, therefore, necessary to take a constructive attitude in interpreting provisions of these types and detennine the main aim of the particular Act in question for adjudication before the court."

F The aforesaid observations cannot ~e of any assistance to learned senior counsel for the respondents as the schemes of the relevant Acts to which .we have made a detailed reference contra-indicate the possibility of harmonious operation of the Market Act on the one hand and the Sugarcane Act and the Sugar (Control) Order ,on the other. G Shri Dwivedi tried to get out of this situation by submitting that as there is already an exemption notification under Section 42 of the Market Act, Section 15 will not be applicable to such transactions and, therefore, it would remain governed by the provisions of the Sugarcane Order and the Sugarcane Act. \\:'.ith respect, as seen earlier, it is an over simplification of the situation. H As a qtiestion arises whether two legislations operating in the same field can

- BELSUND SUGAR CQ. LTD. v. STATE [S.B. MAJMUDAR, J.) 195 be reconciled or not, a mere possibility of the provisions of one of the inconsistent enactments being excluded by resorting to exemption power under another enactment cannot cure the basic inconsistency between them. It is obvious that such exemption power entrusted to its delegate by its Legislature may or may not be utilised. Consequently, a basic inconsistency between two legislative enactment would remain operative dehors such exemption, if any. Such conflicting statutory schemes in their operation in the same field would directly collide. It may be that the Market Act and the Sugarcane Act can both be treated as dealing with socio-economic balancing of interests of growers of agricultural produce and the purchasers thereof, but if it is impossible to reconcile them, the statute laying down the general scheme of operation has to make room for a special statute for which a C separate and exclusive field is carved out by the legislature itself.

Reliance placed by Shri Dwivedi, senior counsel for the State of Bihar, on a decision of the two judge Bench of this Court in the case of S. Satyapal Reddy and Ors. v. Govt. of A.P. and Ors., [1994] 4 SCC 391 submitting that minimum qualifications prescribed by the rules framed under the Central Act D could co-exist with higher qualifications prescribed by the State rules also cannot be of real assistance to him for the simple reason that if minimum prices were fixed by the Sugarcane (Control) Order and the Sugarcane Act had stopped short by providing only minimum price and had not regulated the fixation of even higher contractual price by providing for a machinery for E the same and had not fixed and regulated 'the production, control, distribution, sale and purchase of sugarcane, it could have been urged by counsel for the respondents with some emphasis that both these statutory provisions could harmoniously coexist but as discussed earlier such a possibility is not only remote but incapable of visualisation. It is also not possible to agree with the contention of learned senior counsel Shri Dwivedi that the Sugarcane Act of F 1981 does not expressly purport to exclude the Market Act, especially when the Bihar Legislature that had enacted the former Act was aware of the Market Act, 1960 holding the field. That this circumstance shows that the legislature purposely did not exclude the applicability of the Market Act so far as the purchase and sale of sugarcane in market areas were concerned. However, G this contention by itself cannot clinch the issue. If the very same legislature had felt that existing general Act was sufficient to foot the bill, then there would have been remained no occasion for the very same legislature to enact a special Act for control, regulation, sale and purchase of sugarcane after passage of 2 \ years. Therefore, the latter Act clearly envisaged carving out of a special field for regulating the sale and purchase of sugarcane and to that H

196 SUPREME COURT REPORTS [1999] SUPP. I S.C.R.

A extent pro tanto it excluded the operation of the Market Act for that commodity. The intention of the legislature is thus very clear on this aspect. But apart from that, intention of its delegate-the State of Bihar itself is also clear when it excluded Section 15 of the Market Act in exercise of its exemption power under Section 42 of the Market Act. It is difficult to appreciate the contention I. of learned senior counsel that Section 15 of the Market Act is not the core of the Act. On a conjoint reading of Sections 3, 4, 15, 27 and 30 of the Act it has to be held that it is only because of the operation of Section 15 covering the sale and purchase transactions of agricultural produce that the market committee can effectively discharge its functions entrusted to it by the Act. But for Section 15 there would remain no occasion for the market committee to effectively regulate the sale and purchase transactions of the agricultural produce concerned. Section 15 mandates the sellers and producers of agricultural produce to operate in the notified market yard or sub-market yards and only at these places the market committee through its officers and servants ,... can discharge its functions effectively by regulating these transactions and for that purpose all the infrastructural facilities would be available. The entire machinery provisions enacted for the purpose would fulcrum round the vibrant operation of Section 15. Once Section 15 is excluded qua any agricultural produce the entire machinery of the Market Act would come to a grinding halt so far as such an excluded 'agricultural produce' is concerned. Sugarcane is one such produce as we have already seen earlier. Consequently, qua such E a produce the general sweep of the Market Act will be a total non-starter. Logically, therefore, there would remain no occasion for the market committee to justify levy of market fee under Section 27 of the Act read with Section 30 on these transactions. On a conjoint reading of Sections 27 and 30 of the Market Act, it becomes clear that a market committee which has to effectively control and regulate the sale and purchase of agricultural produce brought F for sale and purchase in the market area as enjoined by Section 15 can effectively discharge its functions and spend its funds for supplying the necessary infrastructure for this purpose as laid down by Section 30. ,,. At this stage, we may also refer to an additional submission of the G Addi. Solicitor General of India Shri RN Trivedi in support of the respondents. He submitted that Entry 28 of List II of the Seventh Schedule of the Constitution operates on its owli and cannot be affected by any legislation pertaining to industry as found in Entry 52 of List I of Seventh Schedule of the Constitution. To that extent the learned senior counsel is right. However, as we have seen earlier, Entry 28 of List II dealing with 'Markets and Fairs' has to be read jointly with Entries 26 and 27 dealing with 'Trade and Commerce' and once

BELSUND SUGAR CO. LTD. v. STATE [S.B. MAJMUDAR, J.) 197 the State Legislation deals with these topics then it also squarely invokes legislative powers under Entry 33 of List III. That is precisely the entry under which the Sugarcane Act, 1981 can be said to have been enacted.

It is, of course, true that the Union Parliament has not exercised its concurrent legislative powers under Entry 33 of List III for regulating the sale and purchase of sugarcane. But, as noted earlier, the Sugarcane (Control) B Order promulgated under the central legislation of the Essential Commodities Act when read harmoniously and in conjunction with the State Sugarcane Act carves out a special field for their operation and by the sweep of their combined operation the general provisions of the Market Act pro tanto get excluded so far as the transactions of purchase and sale of sugarcane in the market area are concerned.

2. SALE OF SUGAR AND MOLASSES:

So far as the sale transactions pertaining to these commodities are concerned, it has to be kept in view that they will have to be treated as agricultural produce in the light of the definition of Section 2(l)(a) of the Market Act. They get manufactured from the basic agricultural produce, namely, the sugarcane. However, the question remains whether their sales are also controlled by the relevant special statutory provisions. It will, therefore, be necessary for us to have a look at these relevant special statutory provisions. E

In this connection, our attention was invited to four Orders framed under Section 3 of the Essential Commodities Act pertaining to sugar: <)

I. Sugar (Control) Order, 1966; F

2. Sugar (Packing & Marking) Order, 1970;

3. Sugar (Restriction on Movement) Order, 1970;

4. Levy Sugar Supply (Control) Order, 1979. G Clause 3 of the Sugar (Control) Order, 1966 deals with regulation and production of sugar which enables the Central Government to direct that no sugar can be manufactured from sugarcane except and in accordance with the conditions specified in a licence issued in this behalf.

Clause 4 thereof deals with permissible directions to be issued by the H

198 SUPREME COURT REPORTS [1999] SUPP. 1 S.C.R.

A Central Government to the effect that no producer shall sell 9r agree to sell or otherwise dispose of or deliver or agree to deliver any kind of sugar or remove any kind of sugar from the bonded godowns of the factory in which it is produced.

Clause 5 enables the Central Gov~rnment to issue directions to producers B and dealers of sugar regarding the production, maintenance of stock, storage, sale grading, packing, marking, weighment, disposal, delivery and di~ibution of (any kind of sugar).

Clause 6 deals with the power of the Central Government to regulate movement of sugar. c Clause 7 deals with the power to regulate quality of sugar.

Clause I 0 deals with the power of the Central Government to call for requisite information from different sources enacted therein.

D Clause 11 deals with the power of any officer authorised by the Central Government to inspection, entry, search, sampling, seizure, etc. as enacted therein.

E The Sugar (Packing and Marking) Order, 1970 provides statutory directions as to the quality of sugar to be packed in each bag. - The Sugar (Restriction on Movement) Order, 1970 deals with restrictions on transport of certain types of sugar.

The Levy Sugar Supply (Control) Order, 1979 enables the Central Government to issue directions to any producer or recognised dealer to supply levy sugar of such type or grade to such persons or organisation as may be enacted in the Order.

The aforesajd provisions of the various Orders issued under Section 3 of the Essential Commodities Act clearly indicate that all sale transactions of sugar by factories manufacturing sugar out of the sugarcane, the basic 'agricultural produce' and raw material, are regulated by these provisions. As noted earlier, Section 15 of the Market Act is out of picture qua even these transactions. The sale of sugar manufactured out of sugarcane and fixation of price thereof would also, therefore, go out of the sweep of Section 15( I) & (2) of the Market Act and would be governed wholly by these special provisions of the Control Orders. On the parity of reasons governing the

BELSUND SUGAR CO. LTD. v. ST A TE [S.B. MAJMUDAR, J.] 199

transactions of sale and purchase of sugarcane, transactions of sale of sugar manufactured out of purchased sugarcane by the very same sugar factories functioning in the market area would also be governed by special provisions of the aforesaid special Sugar (Control) Orders and would pro tanto get excluded from the general sweep of the Market Act.

In this connection, we may also refer to the main contentions of Shri B Rakesh Dwivedi, learned Senior counsel for the State. He submitted that the aforesaid various Control Orders regulating sugar have been issued with the objective of maintaining supply of sugar and ensuring availability of the same. Not only the object is different, but in effect the Control Orders regulate production of sugar, impose levy, determine price of levy sugar, provide for packing in bags in quantities of I 00 kgs., provide for transport under a permit issued by the Central Government/State Government when sold under Section 3(2)(t) of Essential Commodities Act, 1955 (levy sugar) and specifications of dealer for supply of levy sugar. As far as free sugar is concerned, only monthly quotas are fixed (see pages 44-46 of additional documents). Thus, as far as free sale sugar is concerned, the Central Government does not fix the price and does not determine the person to whom it is to be sold or the manner in which it is to be transported. The various provisions of the Market Act for regulating sale, purchase and storage of free sugar would, therefore, be available and the capacity of market committee to regulate these transactions is not affected by these Orders and to that extent there is no repugnancy between them and the Market Act.

It is not possible to agree with this submission for the simple reason that the provisions of Sugar (Control) Orders have not to be read in isolation but will have to be read with the special provisions controlling the production, sale and purchase of sugarcane out of which sugar is manufactured by the very same sugar factories functioning in the market area. They are all integrated transactions and are subject to a well knit statutory scheme of control of these commodities. It is obvious that regulation of sugarcane supply and distribution is not in isolation. The main purpose of such regulation is for ensuring better quality and adequate quantity of sugar manufactured out of sugarcane supplied by sugarcane growers to earmarked sugar factories which manufacture sugar by crushing sugarcane in their factories by resorting to vacuum pan manufacturing process. Therefore, it is the ultimate sale of the manufactured article, namely, sugar by way oflevy sugar or in free market that is sought to be controlled by the Control Orders which cannot effectively operate save and except in harmony with the provisions enacted for the H

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A control of raw material, namely, the sugarcane as envi.>aged by the Sugarcane Orders as well as the Sugarcane Act. They together, therefore, provide a complete machinery for controlling the production, sale and purchase not only of the raw material - sugarcane but also finished product-sugar and in this background we have to visualise the legislative intent underlying the ..' I

enactment of the Sugarcane Act on the one hand and the exclusion of Section B 15 to such transactions by the delegate of the legislature, namely, the State of Bihar on the other. It is also necessary to visualise that once Section 15 is out of the way for governing the sale and purchase transactions by sugar factories not only the purchase of sugarcane as raw material by them but also the sale of their finished product, namely - sugar is also out of the sweep of C Section 15 of the Market Act. Consequently, the entire regulatory machinery and the infrastructural facilities to be made available by the market committees for regulating the sale and purchase of such an 'agricultural produce' would not give any signals and would get totally excluded.

SALE OF MOLASSES : ·- D This takes us to the consideration of the statutory control of sale of molasses by sugar factories functioning in the market area. It has to be kept

- in view that molasses is a by-product of the sugar industry and the sale of molasses by the sugar factories is wholly controlled by the statutory provisions contained in the Bihar Molasses (Control) Act, 194 7. The preamble to the Act E reads as under :

"An Act to provide for the control of the distribution, supply, storage and price of molasses produced by factories in the State of Bihar."

Section 2(c) of the Molasses Act defines Molasses as under : F "Molasses" means final residual by-product of factories manufacturing sugar from cane or by refining gur, by means of vacuum pans but does not include convertible molasses, which are the final residual by- product of sugar factories operating on the open pan system."

G Section 3 of the Act provides as under :

"Submission of returns by occupiers of factories and stockists.- Every owner, manager or occupier of a factory and every stockist shall furnish to the Controller within the time and in the manner specified by the Controller such returns relating to stocks of molasses as the .H Controller may, by order from time to time, direct."

BELSUND SUGAR CO. LTD. v. STATE [S.B. MAJMUDAR, J.] 201

Section 4 of the Act provides that : A "No molasses produced in the State nor any molasses held by the stockists in this State, shall, without the permission of the Controller, be moved by rail, road or river from any place in the State to any other place therein." B As per Section 5 of the Act, a sugar factory cannot even enter into an agreement or contract with any person other than the Government or person licensed by the controller for supply of molasses.

All molasses have to be sold by sugar factories in accordance with the directions of the Molasses Controller issued under Section 6 of the Molasses C Act.

The price of molasses is regulated by Section S of the Act.

Section SA provides that the State Government may impose administrative charges on the sale of released molasses for meeting the cost of establishment for supervision and control over such release.

It is thus clear that the sale of molasses is also regulated by the State Government and the cost of such regulation is recovered under the Molasses Act in the form of administrative charges.

Section SC requires every owner occupier and manager of sugar factory to place in a separate fund suitable amount for the purpose of construction and maintenance of adequate facilities for storage of molasses.

Section 9C makes detailed provisions relating to storage of molasses and construction of storage tanks by the sugar factories. F Section 11 gives overriding effect to the provisions of the: Molasses Act over any provision contained in any other Act.

Section 13 which is the section conferring the power to make Rules provides for the making of rules for carrying out the purposes of the Act and G empowers in particular -

(a) prescribe the specifications and tests in respect of the purity of molasses;

(b) regulate sale and price of molasses intended for use in distilleries or for other purposes; H

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A (c) prescribe conditions in respect of storage, loading and transport of molasses at factories;

(d) prescribe the forms and returns to be submitted, and the records and books to be maintained, by factories;

B (e) prescribe the manner in which. molasses produced in factories shall be graded, marketed, packed or stored for sale;

(f) regulate imposition and recovery of permit fee and administrative charges on released molasses;

c (g) prescribe the manner in which accounts of funds for regulation of adequate storage facilities in respect of molasses produced in (actories shall be maintained and operated;

(h) any other matter which is required to be or which may be prescribed under this Act." D The Bihar Molasses (Control) Rules, 1955 contain detailed provisions in Rule 3 relating to supply of molasses by sugar factories. Reference may be made to clause "h" of Ru1e (3), which is in the following terms :

"Every sugar factory and every stockist shall, on receipt of an order from the Controller and on intimation of the allotment of tank wagons for the transport of molasses, make all necessary arrangements promptly for the haulage and loading of molasses and where the owner, occupier or Manager of a sugar factory or the stockist fails to make such arrangements without sufficient reason, the Excise Officer shall have the power on his behalf, to enter upon the premises, make arrangement for the haulage and loading of molasses by manual labour, ifnecessary recover the cost incurred thereby from the said owner, occupier as manager of the sugar factory or the stockist."

Rule I 0 provides that no molasses can be moved from the premises of a sugar factory except under a pass in Form M.F.6. Rule I I provides that molasses cannot be moved from the premises of any sugar factory except under a movement order in Form M.F.7 issued by the Controller as provided in the Act and Rules.

The aforesaid provisions leave no room for doubt that the sale and purchase of molasses which would be an agricultural produce as defined by

BELSUND SUGAR CO. LTD. v. STATE [S.B. MAJMUDAR, J.] 203

It is, therefore, obvious that the Molasses Act laying down a detailed statutory scheme of control of sale and purchase of molasses produced by the sugar factories in the market area will remain within the statutory framework of the aforesaid special statute. The general provisions of the Market Act has, therefore, to give way to the aforesaid special provisions.

It was next submitted by learned senior counsel for the State of Bihar E that even though the market committee may not be in a position to regulate sale, purchase, storage or processing of molasses not released by the Controller atleast after they were decontrolled by the Central Government in June, 1993 and even when the State Governments have partially decontrolled transactions regarding molasses, such transactions could be regulated under the Market Act. This submission also cannot be countenanced. The reason is obvious. F Once the State of Bihar itself has exempted these sale transactions from the operation of Section 15 of the Act, they would be out of sweep of the general provisions of the Market Act and would not statutorily enjoin the market committees to provide any infrastructure for regulating sale of molasses to enable them to bring home the charge of market fee on the sale transactions G of molasses as per Section 27 of the Act.

As a result of this discussion, the first contention will have to be answered in negative by holding that the provisions of the Market Act cannot apply to the transactions of purchase of sugarcane and sale of sugar and molasses by the sugar mills situated and functioning within the market H

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A area of the concerned market committee constituted under the Market Act. CONTENTION NO. 2 :

This takes us to the consideration of the alternative contention canvassed by learned senior counsel for the appellants in support of the appeals. Strictly B speaking, this alternative contention does not survive for our consideration, in view of our answer to the first contention. However, as we have heard learned counsel for the parties on this alternative contention, we may deal with the same on merits. It has to be kept in view that market fee levied under the Market Act is a 'fee' and not a 'tax'. The Market Act in so far as it enacts C Section 27 levying market fee is referable to Entry 66 of the State List read with Entry 47 of the Concurrent List. Both of them deal with topics of legislation pertaining to fees in respect of the matters enumerated in the respective lists.

In the case of Kewal Krishan Puri and Anr. v. State of Punjab and D Anr. etc. etc., [ 1980] 1 SCC 416, a Constitution Bench of this Court, while upholding the levy of market fee under the Punjab Agricultural Produce Markets Act, 1961, has made the following pertinent observations in paragraph 23 of the report. Untwalia J., speaking for the Court observed :

"From a conspectus of the various authorities of this Court we deduce the following principles for satisfying the tests for a valid levy of market fees on the agricultural produce bought or sold by licensees in a notified market area :

( 1) That the amount of fee realised must be earmarked for rendering services to the licensees in the notified market area and a good and substantial portion of it must be shown to be expended for this purpose. (2) That the services rendered to the licensees must be in relation to the transaction of purchase or sale of the agricultural produce.

(3) That while rendering services in the market area for the purposes of facilitating the transactions of purchase and sale with a view to achieve the objects of the marketing legislation it is not necessary to confer the whole of the benefit on the licensees but some special benefits must be conferred on them which have a direct, close and reasonable correlation between the licensees and the transactions.

BELSUND SUGAR CO. LTD. v. STATE [S.B. MAJMUDAR, J.] 205

(4) That while conferring some special benefits on the licensees it is permissible to render such service in the market which may be in the general interest of all concerned with the transactions taking place in the market. (5) That spending the amount of market fees for the purpose of augmenting the agricultural produce, its facility of transport in villages and to provide other facilities meant mainly or exclusively for the benefit of the agriculturists is not permissible on the ground that such services in the long run go to increase the volume of transactions in the market ultimately benefiting the traders also. Such an indirect and remote benefit to the traders is in no sense a special benefit to them.

(6) That the element of quid pro quo may not be possible, or even necessary, to be established with arithmetical exactitude but even broadly and reasonably it must be established by the authorities who charge the fees that the amount is being spent for rendering services to those on whom falls the burden of the fee. (7) At least a good and substantial portion of the amount collected on account of fees, may be in the neighbourhood of two-thirds or three-fourths, must be shown with reasonable certainty as being spent for rendering services of the kind mentioned above." E

It becomes at once clear that before justifying levy of market fee on any transaction the services to be rendered by the market committee must be in connection with the sale and purchase transactions of agricultural produce falling for regulation under the Market Act, when the purchase and sale of agricultural produce like sugarcane, sugar or molasses are not governed by the Market Act, as we have seen while considering contention no. I, there would remain no occasion for the market committee to be statutorily under any obligation to provide any services or infrastructural facilities for covering such transactions so as to be entitled to charge market fee on such transactions. It was vehemently contended by learned senior counsel for the respondents that various types of infrastructural facilities are being made available to sugar factories who are purchasing sugarcane in the market area and selling manufactured sugar and molasses in the very same market area. The following are the various facilities and services highlighted in this connection :

I. Link road facilities by which market committees were to spend H

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A monies for connecting villages in the market area with the main roads for facilitating the movement of agricultural produce including the sugarcane from the farms to the purchase centres of the factories. 2 Spread of information regarding prices of agricultural produce B for information of growers of sugarcane.

3. Providing mediation facility to enable the growers of sugarcane to get higher price for sugarc~ne as compared to the minimum prices fixed under the control orders.

4. Supervision of weighment of sugarcane. c 5. Licensing of weighing inspectors.

6. Providing for drinking facility and park.

7Copy pinpoint7. Parking facilities at the purchase centres.

D Shri Trivedi, Addi. Solicitor General, in his tum, tried to highlight the concept of link roa9s being other than approach roads. He submitted that near the factory gate or purchase centres provision of approach roads may be a statutory obligation of the sugar factories. Thus approach roads would connect the purchase centres with the nearby public roads. But so far as link roads are concerned, they are also public roads other than approach roads which E connect villages with main roads and all these facilities make possible quicker movement of sugarcane from farms to the purchase centres. This results in supplying better quality of sugarcane for being crushed in the factories so that before such sugarcane dries out it gets crushed resulting in better quality and larger quantity of sugar for the benefit of sugar factories. F Strong reliance was placed in this connection on various provisions of Section 30 of the Market Act and it was submitted by learned senior counsel for the respondents that all these benefits are being made available to sugar factories and there is no reason for them to oppose payment of small amounts of market fees after getting these benefits from the market committees. G The aforesaid contentions of learned senior counsel for the respondents for salvaging the situation for the market committees though appearing attractive at the first blush, do not survive on a closer scrutiny. The reason is obvious. Only because the sugarcane factories are located in the market area they can be said to be covered by the general sweep of Section 27 of H the Market Act as the agricultural produce, namely, 'sugarcane' as well as

BELSUND SUGAR CO. LTD. v. STATE [S.B. MAJMUDAR, J.) 207 'sugar and molasses' can be said to be bought and sold in the market area. A But by the fact only of sale and purchase of these commodities in the market area, it cannot be said that such agricultural produce belongs to the category of agricultural produce which is covered by the general sweep of the Act. In order to attract the charge under Section 27, the concerned agricultural produce on which the market fee is to be levied must be required to be bought and sold in the market area within the jurisdiction of the concerned market committee as per Section 15 of the Market Act which enjoins that no agricultural produce specified in the notification under sub-section ( 1) of Section 4 shall be bought or sold by any person within the market·area other than the relevant principal market yard or sub-market yards. Thus, on a conjoint reading of Sections 27 and 15 of the Market Act, it must be held that before any charge of market fee can settle regarding any purchase and sale

... transactions concerning the agricultural produce, such agricultural produce must have been required to be sold or purchased at the relevant principal market yard or sub-market yards. It is obvious that principal market yard or submarket yards would be situated within the market area, but if any agricultural produce is exempted from the provisions of Section 15( 1) of the Act as in the case of sugarcane, sugar and molasses there would remain no occasion for transactions of sale and purchase of these commodities to be carried on only in the principal market yard or sub-market yards and not elsewhere in any other part of market area. It is only those agricultural produce which are required to be bought and sold in the relevant principal market yard or sub- E market yards situated within the market area that attract charge of Section 27 of the Act. Once this charge is attracted, the further question whether it is backed by any quid pro quo would survive for consideration. On the facts of the present case, Section 15 as a whole is out of picture for controlling purchase and sale of sugarcane, sugar and molasses by sugar factories operating in the market area, as we have seen earlier, the charge of market fee as envisaged. by Section 27 would not get attracted at all for them. Hence the aforesaid list of the infrastructural facilities made available to sugar factories in general with other dealers in agricultural produce attracting Section 15 of the Act would pale into insignificance. Market Committees would not supply adequate quid pro quo for levying market fee as the charge itself does not settle on these transactions by the sugar factories. It may be, as submitted by learned senior counsel for the respondents, that some sugar factories may have taken benefit of electric lighting and preparation of approach roads by the market committees which might have spent sufficient funds for giving

-- these facilities. Still they would not be a part and parcel of the statutory obligations of the market committees qua such sugar factories and may remain H

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A in the domain of Section 72 of the Indian Contract Act and if such benefits are received by the factories they may be liable on the principle of quantum meruit to reimburse or compensate the market committees for the voluntary facilities given by them but they would not support any legal quid pro quo by way of statutory obligation of the market committees for giving facilities to the sugar mills for supporting the levy of market fees on their transactions.

Contention no. 2 is, therefore, answered in negative not on the ground that the services rendered by the market committee to the appellant sugar factories were not having any adequate quid pro quo but on the ground that they were not statutorily required to be made available to the sugar factories by way of statutory obligation of the market committee to regulate the sale and purchase transactions of sugarcane, sugar and molasses by these sugar factories and also on the ground that the charge under Section 27 by levying market fee on the aforesaid transactions was not attracted at all on the facts and circumstances of the case, as seen earlier.

D As a result of our conclusion on the findings of the aforesaid two contentions, the appeals and other Writ Petition in sugar group matters will be required to be allowed and the impugned judgment of the High Court in all these matters will have to be set aside. However, the further question that survives is as to what relief can be given to the appellants and the writ petitioners in this sugar group of matters. It is obvious that during the pendency of these proceedings no interim relief was given to the appellants and the writ petitioners. Therefore, they must have paid the.market fee on the concerned transaction all these years. In the common cours~ of events, they would have passed on the burden of market fee on purchasers and the ultimate consumers of sugar and molasses produced by the sugar factories by utilising sugarcane as raw material.

Shri Shanti Bhushan, learned senior counsel for the appellants, in this connection, submitted that accepting the principle of unjust enrichment we may reserve liberty to the appeliants to show before the authorities whether they have in fact passed on the burden of impugned market fee at the relevant time and if they could show to the satisfaction of the authorities that in fact they have not passed on the burden then they may be treated to be entitled to get refund of all the appropriate amounts of market fee not passed on. In our view it is not possible to accept this contention as years have rolled by since the impugned market fees have been levied by the different market committees in the State of Bihar. In the normal course of events, no prudent

BEL SUND SUGAR CO. LTD. v. ST ATE [S.B. MAJMUDAR, J.] 209

businessman/manufacturer would ever bear the burden of such compulsory fee or tax to be paid from his own pocket. Even otherwise reserving such liberty would create unnecessary complication and may give rise to spate of avoidable litigations in the hierarchy of proceedings. Under these circumstances, keeping in view the peculiar facts and circumstances of these cases, we deem it fit to direct in exercise our powers under Article 142 of the Constitution of India that the present decision will have only prospective effect. Meaning thereby that after the pronouncement of this judgment all future transactions of purchase of sugarcane by the sugar factories concerned in the market areas as well as the sale of manufactured sugar and molasses produced therefrom by utilising this purchased sugarcane by these factories will not be subjected to the levy of market fee under Section 27 of the Market C Act by the market committees concerned. All past transactions upto the date of this judgment which have suffered the levy of market fee will not be

- covered by this judgment and the collected market fees on these past transactions prior to the date of this judgment will not be required to be refunded to any of the sugar mills which might have paid these market fees. D However, one rider has to be added to this direction. If any of the market committees has been restrained from recovering market fee from the writ petitioners in the High Court or if any of the writ petitioners in the High Court has, as an appellant before this Court, obtained stay of the payment of market fee, then for the period during which such stay has operated and E consequently market fee was not paid on the transactions covered by such stay orders, there will remain no occasion for the market committee concerned to recover such market fee from the concerned sugar mill after the date of this judgment even for such past transactions. In other words, market fees paid in past shall not be refunded. Similarly market fees not collected in past also shall not be collected hereafter. The impugned judgments of the High Court · F in this group of sugar matters will stand set aside as aforesaid. The Writ Petition directly filed before this Court also will be required to be allowed in aforesaid tenns.

Before parting with this group of matters, it must be clarified that the G present judgment will be applicable in connection with the purchase of sugarcane by the sugar factories as well as the sale of manufactured sugar and molasses by these factories functioning in the areas of market committees concerned and whose transactions are governed by the provisions of the Sugarcane (Control) Order, 1966 as well as the Sugarcane Act of 19& I and also by the relevant provisions of the Sugar Orders and the provisions of Molasses H

210 SUPREME COURT REPORTS [1999] SUPP. 1 S.C.R.

A Control Act. Any other transactions of purchase and sale, in principal market yard or sub-market yards, of sugarcane, sugar or molasses by any other licensed dealers not governed by the aforesaid provisions will not be covered by the ratio of this judgment.

2. WHEAT PRODUCTS -ATTA, MAIDA, SUJI, BRAN ETC. B In this group of matters, six flour mills functioning in market areas within the jurisdiction of market committees concerned have brought in challenge the applicability of the Market Act to the transactions of purchase of wheat by these mills and manufacture out of the same different wheat products like C atta, maida, suji, bran, etc. The High Court of judicature at Patna repelled their contentions against the applicability of the Market Act. On grant of special leave to appeal they are before us in these proceedings.

Shri Ranjit Kumar, learned counsel appearing for the appellants raised two contentions for our consideration. - D I. Under the Industries (Development and Regulation) Act, 1951 (for short 'l.D.R. Act) in public interest the Union of India has taken over the control of the wheat industry as specified in the First Schedule to the Act arid consequently any transaction of purchase and sale of the products of that industry cannot be regulated by the State Act like the Market Act. As·a part of the very same contention, it was submitted that Wheat Rolling Flour Mills (Licensing and Control) Order, 1957 and the Bihar Trading Articles (Licenses Unification) Order, 1984 issued under Section 3 of the Essential Commodities Act, 1955 lay down a complete S\:heme for regulating purchase and sale of wheat products and hence these transactions cannot be covered by the general sweep of the Market Act.

2 Alternatively, it was contended that wheat may be an agricultural produce, but sale of atta, maida, suji cannot be treated· as agricultural produce. G We shall deal with the aforesaid contentions point wise.

Point No.I:

It is true that the Union Parliament in exercise of its legislative power under Entry 52 of List I of the Seventh Schedule has enacted the 1.D.R. Act.

BEL SUND SUGAR CO. LTD. v. ST A rE [S.B. MAJMUDAR, J.] 211 It is also true that flour industry is listed as one of the scheduled industries as item no.27(4) under the caption 'food processing industries'. However, production of wheat as raw material or its sale is not covered by the said Act. Consequently, so far as wheat as 'agricultural produce' is concerned, it is outside the sweep of the l.D.R. Act. However, when flour industry is covered by the said Act, question remains whether sale. of flour or any other products out of wheat can be said to be covered· by the sweep of the I.D.R. Act. B Regulation of sale and purchase of flour as a controlled industry was sought to be emphasised by Shri Ranjit Kumar by inviting our attention to Section l8G of the I.D.R. Act. Section l8G sub-section {l) reads as follows :

'J8G. Power to control, supply, distribution, price, etc., of certain C articles. - (I) The Central Government, so far as it appears to it to be necessary or expedient for securing the equitable distribution and availability at fair prices of any article or class of articles relatable to any scheduled industry, may, notwithstanding anything contained in any other provision of this Act, by notified order, provide for regulating the supply and distribution thereof and trade and commerce therein.' D

It is obvious that unless the Central Government in exercise of its statutory power under Section l 8G promulgates any statutory order covering this field, it cannot be said that mere existence of a statutory provision for entrustment of such power by itself would result into regulation of purchase and sale of flour evl:n if it is a scheduled industry.

Shri Ranjit Kumar fairly stated that no such order has been promulgated by the Central Government for regu.lating the purchase and sale of flour in the market area. According to him, however, the mere existence of such a statutory provision in the Act enabling the Central Government to issue such orders would be sufficient to occupy the field contemplated by this provision. In support of this contention, he invited our attention to a decision of this Court in the case of The Hingir-Rampur Coal Co., Ltd. and Ors. v. The State ofOrissa and Ors., (1961] 2 SCR 537. At page 558 of the report Gajendragadkar J., speaking for the Court, made the following pertinent observations : G " .... Entry 54 in List I dealing with "Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest". The effect ofreading the two Entries together is clear. The jurisdiction of the State Legislature under Entry H

212 S·l,.JPREME COURT REPORTS [1999] SUPP. I S.C.R.

A 23 is subject to the limitation imposed by the latter part of the said Entry. If Parliament by its law has declared that regulation and development of mines should in public interest be under the control of the Union, to the extent of such declaration the jurisdiction of the State Legislature is excluded .... "

B It was contended by Shri Ranjit Kumar relying on these observations that mere declaration under the I.D.R. Act is enough to exclude the jurisdiction of the State Legislature in connection with such a declared industry. It is difficult to appreciate this contention. It has to be kept in view that any legislation in exercise of legislative power under Entry 54 of List I would C enable the Parliament to regulate mines and mineral development by taking them under the control of the Union in public interest. Thus all aspects of mining industry would be covered by the general sweep of such a declaration.

However, so far as thel.D.R. Act is concerned, it is enacted under Entry 52 of the First Schedule which deals with industries in general. Simultaneously D in the State List itself there is Entry 24 which deals with industries subject to the provisions of Entries 7 and 52 of List I. Consequently, the products of such controlled industries would necessarily not be governed by the sweep of the general legislation pertaining to such industries as per Entry 52 of the Union List. The aforesaid Constitution Bench judgment was not E concerned with any State Legislation enacted under Entry 24. On the contrary, it dealt with legislation of the Union Parliament under Entry 54 of the Union List read with Entry 23 of the State List. The scheme of the aforesaid legislative entries is entirely different from the scheme of Entry 52 of List I read with Entry 24 of List II with which we are concerned. On a conjoint reading of the aforesaid two entries, therefore, the ratio of the decision of the Constitution F Bench in the aforesaid case cannot be effectively pressed in service by Shri Ranjit Kumar for supporting his contention. In this connection, we may usefully refer to a decision of this Court in SIEL Ltd and Others, (supra) wherein one of us, Sujata V. Manohar, J. was a member. It has rightly distinguished the ratio of the Constitution Bench decision in the case of The G Hingir-Rampur Coal Co., Ltd and Others (supra) and taken the view that merely because an industry is controlled by a declaration under Section 2 of the l.D.R. Act enacted by Entry 52 of the Union List, the State Legislature would not be denied of its powers to regulate the products of such an industry by exercise of its legislative powers under Entry 24 of the State List. In that case the question was whether U.P. Sheera Niyantran Adhiniyam, 1964 H could be said to be repugnant to the Molasses Control Order issued by the

!JELSUND SUGAR CO. LTD. v. STATE [S.B. MAJMUDAR, J.] 213 Central Government under Section 18-G of the I.D.R. Act imposing restrictions on the sale of molasses and fixing the maximum price of molasses. Answering the question in negative, it was held that the term 'industry' in Entry 24 would not take within its ambit trade and commerce or production, supply and distribution of goods which are within the province of Entries 26 and 27 of List II. Similarly, Entry 52 in List I which deals with industry also would not cover trade and commerce in, or production, supply and distribution of, the products of those industries which fall under Entry 52 of List I. For the industries falling in Entry 52 of List I, these subjects are carved out and expressly put in Entry 33 of List III. It was also held that since the Molasses (Control) Order of 1961 passed by the Central Government in exercise of powers conferred by Section 18-G was not extended at any point of time to the State of U.P. or the State of Bihar, the question of repugnancy between the Molasses Control Order, 1961 and the U.P. Sheera Niyantran Adhiniyam, 1964 does not arise. Consequently, it must be held that in the absence of statutory order promulgated under Section 18G of the I.D.R. Act, it cannot be said that the field for regulation of sale and purchase of products of flour industry like atta, maida, suji, bran etc. would remain outside the domain of the State Legislature.

Shri Ranjit Kumar then placed reliance on the statutory orders framed under Section 3 of the Essential Commodities Act, 1955. So far as the Wheat Rolling Flour Mills (Licensing and Control) Order, 1957 is concerned, reliance was placed by him on Clauses 2 and I 0 of the definition clause. These clauses clearly indicated that the said order was not concerned with agriculturists nor was the order concerned with the pricing, purchase and sale of wheat or wheat products. Consequently, the said order cannot be said to have occupied the field so far as these topics are concerned. He then invited our attention to the Bihar Trading Articles (Licenses Unification) Order, f9S.4. Clauses 2 (c) F (g) (h) and U) as well as Clauses 15 and 18 on which reliance was placed were found not to be of any assistance to him for the simple reason that under that Order dealers of foodgrains like wheat had to be licensed and their activities had to be supervised. This order had also nothing to do with fixation of prices and regulating the purchase and sale of wheat and wheat products. G Consequently, the first contention canvassed by Shri Ranjit Kumar cannot be sustained and is accordingly rejected.

POINT NO. 2:

So far as the alternative contention is concerned, he submitted that H

214 SUPREME COURT REPORTS (1999] SUPP. I S.C.R.

3. VEGETABLE OILS:

E Civil Appeal No.1427 of 1979 moved by Mis Rohtas Industries Ltd., which is now under liquidation represented through its liquidator raises similar contention as canvassed by Shri Ranjit Kumar in support of the appeals moved by flour mills. All vegetable oils are treated to be 'agricultural produce' as per serial no.4 of the schedule framed under Section 2(l)(a) of the F Market Act. In view of the general sweep of the said definition, oil manufactured by the oil mills functioning within the areas of the Market Committees concerned by crushing oil-seeds which are undisputedly agricultural produce and subjecting them to manufacturing process cannot be said to be outside the sweep of the regulatory provisions of the Market Act.

G Reliance placed in support of this appeal on the Vegetable Oil Products Control Order, 1947 the Pulses, Edible Oilseeds and Edible Oils (Storage Control) Order, 1977, the Vegetable Oil Product Producers (Regulation of Refined Oil Manufacture) Order, 1973, all framed .under Section 3 of the Essential Commodities Act, 1955, also cannot be of any avail to the appellant industries for the simple reason that none of these orders deals with the topic of regulation of prices and sale and purchase of vegetable oil products.

BEL SUND SUGAR CO. LTD. v. ST ATE (S.B. MAJMUDAR, J.] 215 Consequently, the field is wide open for the legislation of the State, namely, the Market Act for its applicability to the transactions of sale and purchase of vegetable oil products in the market areas concerned. This civil appeal, therefore, also is liable to fail, falling in line with the appeals concerning wheat and wheat products.

Civil Appeal Nos. 4500-05 of 1992 and Civil Appeal arising out of SLP B (C) No.9684 of 1992 raise similar contentions in connection with vegetable edible oils on the very same reasoning, as aforesaid. These appeals are liable to fail.

4. RICE MILLING INDUSTRIES c The appeals arising from SLP (Civil) Nos.3159-60 of 1994 are moved by Rice Milling Industries operating in the market area of the concerned market committees. Learned senior counsel for the appellant mills challenged notices issued to them by the Agricultur~l Produce Market Committees concerned requiring them to shift their trade to principal market yards. It was contended D that on account of the Rice Milling Industry (Regulation) Act, 1958 which is a Central Act, the field for regulation of purchase and sale of products of rice milling industries would be fully occupied by the Central Act and ifthe State Act like the Market Act seeks to encroach upon the said field, it would become repugnant to the Central Act. E A close look at the relevant provisions of the said Act shows that it does not seek to cover the aforesaid field. Sub-section (I) of Section 6 of the said Act reads as follows :

"Any owner of an existing rice mill or of a rice mill in respect of which a permit has been granted under section 5 may make an application to the licensing officer for the grant of a licence for carrying on rice- milling operation in that rice mill."

"Section 8 deals with restrictions statutorily imposed on rice mills.

Section 9 empowers the licensing officer or any person authorised by the Central Government to inspect the working of the rice mill.

The aforesaid relevant provisions of the Act leaves no room for doubt that the working of the rice milling industries was sought to be regulated by the said Act and it has nothing to do with the regulation of purchase and sale of products of such mills. H

216 SUPREME COURT REPORTS [1999] SUPP. I S.C.R.

A It was then submitted that the appellant rice mills import paddy from other State territories which are outside the notified market area falling under the Market Act and such imported paddy is processed and after manufacturing activities qua them, rice is manufactured, hence such activity cannot be governed by the Market Act. It is obvious that if the appellant rice mills import paddy already purchased from outside the market area then on such B transactions of outside purchase and import of paddy in the market area, there would remain no occasion for the market committees concerned to subject such transactions to the regulating machinery of the Market Act or to demand any market fee thereof. This was fairly conceded by learned senior counsel for the respondents. He, however, added that if these rice milling industries ( C located and functioning in the market area purchase within the market area, raw material paddy, whether grown in the market area concerned or outside, then such purchases within the market area will attract the regulatory provisions of the Market Act. There cannot be any dispute on this aspect as paddy obviously is an 'agricultural produce' being item no. l in the category of 'Cereals' as found in Schedule to the Act. D So far as the manufactured rice out of such paddy is concerned, once manufacturing takes place within the market area, it would get squarely covered by the wide sweep of definition of Section 2(l)(a), as we have seen earlier. Even apart from that, rice is mentioned as a separate item no.2 in the category of 'Cereals' in the Schedule of the Market Act. It cannot be disputed that rice manufactured out of basic agricultural produce 'paddy' would also remain agricultural produce falling within the sweep of the Act. So far as the regulation of sale and purchase of rice within the market area is concerned, Section 15 of the Act applies to the transactions of licensed dealers dealing with such agricultural produce in the market area. Hence the entire machinery of the Market Act will be applicable to regulate transactions of sale and purchase of paddy by the rice mills within the market area as well as sale of rice by them within that area as all these transactions will have to take place in the market yard or sub-market yards as per Section 15 of the Act. However, one grievance voiced by learned senior counsel for the appellants deserved to be noted before parting with the discussion in these appeals. He submitted that there is no power and authority in the market committee to insist that the location of the rice milling industries also should be changed and must be shifted to the market yard. In this connection, our attention was invited to the notice (page 156 of the paper book) as a specimen notice. In the said notice addressed to Janta Rice & Flour Mills issued by the advocate acting on behalf of the Secretary, Agricultural Produce Market Committee, Chakulia,

BELSUND SUGAR CO. LTD. v. ST ATE [S.B. MAJ MU DAR, J.] 217

in the last but one paragraph, the addressee was requested to shift the establishment of business in the main market yard at Dighi of the Agricultural Produce Market Committee, Chakulia within 7 days.

It was submitted that this part of the direction is totally without jurisdiction as no market committee can compel the shifting of the business premises of the rice milling industries to any particular market yard as Section B 15 of the Act only requires the sale and purchase transactions regarding the agricultural produce to be carried on in the market yard or sub-market yards. To that extent, learned senior counsel for the appellant is right. The statutory mandate of Section 15 does not go beyond the regulation of transactions regarding purchase and sale of agricultural produce and that can be required to be effected only at the relevant principal market yard or sub-market yard or yards. None of the provisions of the Market Act would entitle the market committee to insist on shifting of the business premises of any milling company or factory processing agricultural produce located within the market area to any particular market yard or sub-market yards. Learned senior counsel for the respondents Shri Dwivedi fairly conceded that the aforesaid direction contained in the impugned notice as worded is not correct and can be read down to mean only the shifting of the sale and purchase transactions concerning

- paddy and rice to the relevant market yard or sub-market yards. These directions are accordingly read down. The said notice when so read down would remain well sustained. In other words, the appellants will not be required to shift the location of the rice mills to principal market yard or sub- market yards if otherwise they are not already so located but are functioning E

at any place within the market area.

However, their sale and purchase transactions of paddy and rice will, of course, be required to be carried on only in market yard or sub-market F yards concerned as mandated by Section 15 of the Market Act.

Subject to these clarifications and modifications in the directions contained in the impugned notice, these appeals are liable to fail.

5. MILK AND MILK PRODUCTS G This takes us to the consideration of Civil Appeal No. l 880 of 1988. The appellant in this appeal is an incorporated company with its Registered Office and factory at Bombay. It claims to produce baby food under the trade names "LACTODEX" and "RAPTAKOS" S.I.F. (Special infant food). Its products are sold all over the country including Bihar State. It has its Central Office at H

218 SUPREME COURT REPORTS (1999] SUPP. l S.C.R.

A Patna. Being located outside Bihar it purchases its raw materials from the territories outside Bihar. Out of the raw materials procured from outside, the aforesaid two types of infant food are manufactured outside Bihar but some of the products of the company are received in Bihar State packed in sealed tins. The appellant company earlier had two branches being sales offices, one at Patna and other at Muzaffarpur. The latter branch is since closed. Both B these branches fall within the jurisdiction of the Agricultural Produce Market Committees at Patna and Muzaffarpur. According to the appellant though its activities were not covered by the sweep of the Market Act, it was required to obtain licences under the Act for operating at both these places in the market areas. The appellant contended in the Writ Petition before the High C Court that the direction of the marketing authorities requiring the appellant to take licences under the Market Act was clearly ultra vires and illegal for the simple reason that the products sold by it within the market area were not agricultural produce at all. Therefore, they were not governed by the sweep of the Act.

D The High Court in the impugned judgment negated this contention and held that both these articles sold in packed tins were in substance milk products and, therefore, 'agricultural produce' as defined by Section 2(l)(a).

Learned counsel appearing for the appellant vehemently submitted that before the aforesaid two products can be subjected to the regulatory procedure E of the Market Act. it must be shown by the respondents that they are 'agricultural produce'. He invited our attention to Section 3 of the Act and submitted that the very first step of the applicability of the Act is the declaration of intention by the State Government for regulating the purchase, sale, storage and processing of 'agricultural produce' as mentioned in the notification. That the said term 'agricultural produce' as defined by Section F 2(1 )(a) clearly indicates that the agricultural produce which is to be covered by the sweep of the Act has to be one which should be specified in the Schedule. When we turn to the Schedule of the Act framed as per Section 2(l)(a), we find one of the animal husbandry products at item VIII, sub-item 20 as milk except liquid milk. Thus any product consisting of solidified milk, G like milk powder, is contemplated by the said item. It was submitted that in the entire Schedule no where we find any mention of baby food which may be a substitute for milk or solidified milk. It was, therefore, contended that the appellant which manufactures and sells special infant foods like 'Lactodex' and 'Raptakos' cannot be required to take any licence under the Market Act.

H Refuting this contention, learned senior counsel for the respondents

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submitted that as noted by the High Court the aforesaid two products A manufactured and sold by the appellant do contain as base material "milk" in solidified form. He invited our attention to the details submitted by the appellant before the High Court and as noted by the High Court in its judgment in connection with the ingredients and constituents of these two products. B "LACTODEX" Per I 00 ml. When reconstituted. 6 g. : 45 ml. Protein 1.9 g. c Carbohydrate 9.6 g.

Milk fat 0.9 g.

Minerals 0.5 g. D Vitamin A 265 I.U.

VitaminB6 40 mcg. Including that derived from milk powder Vitamin D 40 LU. E

- Calories

"RAPTAKOS S.1.F." 54

Per I 00 ml. When reconstituted F 4.5 g. : 30 ml.

Protein 1.8 g. Fats 3.0 g. Carbohydrates 9.6 g. G Minerals( Ash) 0.4 g. Iron 0.6 g. Vitamin A 2251.U. .... 1- Vitamin D 60 I.U . H

220 SUPREME COURT REPORTS [1999] SUPP. l S.C.R.

A VitaminE 1.3 LU. Vitamin Bl 0.07 mg. VitaminB2 0.11 mg. Nicotinamide 0.9mg. B VitaminB6 0.04mg. VitaminB12 0.15 mg. VitaminC 0.5mg. Calories 73mg.

C Placing reliance on these ingredients, it was submitted that per l 00 milligrams ofLactodex milk fat content is 0.9 gms and that other minerals and vitamins may also include milk powder. Similarly, Raptakos (Special infant food) also contains proteins and fats. He also contended that even milk which is a complete food may contain vitamins, therefore, it cannot be said that these two products are not milk products or products containing some ingredients of milk. It is difficult to accept this contention for the simple reason that the aforesaid Schedule at sub-item no.20 captioned under the title "Animal Husbandry Products" refers to milk except liquid milk. By no stretch of imagination, tinned baby food containing various ingredients which may include some milk fats or proteins though in powder form can be said to be milk powder simpliciter or whole milk not in liquid form. It is also pertinent to note that there is no item of milk products in the Schedule to the Act under the caption "Animal Husbandry Products". In this connection, it is profitable to contradistinguish this entry in the Schedule with items 14,15 and 16 under the caption 'Cereals' in the very same Schedule. In the listed items under the caption 'Cereals', we find 'Wheat' separately mentioned at item no.3 as compared to Wheat Atta, Suji and Maida separately mentioned at items 14,15 and 16. This shows that basic agricultural produce - 'wheat' is treated as a separate agricultural produce as compared to its own products manufactured out of wheat, namely, atta, suji and maida. Those products of the concerned basic agricultural produce are separately mentioned as 'agricultural produce' G in the Schedule so far as 'cereals' are concerned. But similar is not the scheme in connection with milk. Milk products like baby foods are not separately mentioned. Under the very caption 'Animal Husbandry Products', Butter and Ghee are separately mentioned as items 7 & 8 which are wholly manufactured out of milk. It, therefore, becomes clear that save and except butter and ghee no other milk product is sought to be covered by the sweep of the Act as H 'Animal Husbandry Products' and the basic Animal Husbandry Produce like

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'milk' only in solid form is sought to be covered by a separate solitary item no.20 as one of the 'Animal Husbandry Products'. Therefore, any other manufactured product like the present ones, utilising same ingredients of milk powder as one of the ingredients but which are processed by addition of all . other extra items with the result that finished products like baby foods emerge as manufactured items for serving as substitute for milk to be fed to infants who cannot digest liquid milk or solidified milk as such, cannot be treated to be 'agricultural produce' as part and parcel of listed 'Animal Husbandry Products' mentioned in the Schedule to the Act. Learned senior counsel for the appellant in support of his contentions tried to rely upon specimen copies of printed material affixed to the sealed tins of these manufactured commodities, 'Lactodex' and 'Raptakos', which, according to him, are substitutes for mother's C milk and are to be used to feed infant babies who cannot take milk in its natural form. Learned senior counsel for the respondents tried to repel this submission by contending that this type of printed material was not produced before the High Court. Be that as it may, the undisputed fact remains that these two special infant foods are meant for infant babies who are to be fed by mixing this baby food powder with water to make it a paste as a substitute for mother's milk.

In the light of the express provisions concerning the relevant items of the Schedule to the Act to which we have referred, it has to be held that on the material before the High Court in connection with the ingredients of the aforesaid two products of the appellant, it could not be effectively shown by the respondents beyond any doubt that these two products also were 'agricultural produce' being Animal Husbandry Products of 'milk' in a non- liquid form. Consequently, there was no occasion for the respondent authorities to insist that the appellant for the sale of the aforesaid two products within the market area governed by the Market Act in the State of Bihar was required to take any licence under that Act. It is not the case of the appellant that any market fee was required to be charged from him by the market committee. The only grievance made was that the appellant was required to take licence under the Market Act. Hence the question of refund of any market fee would not survive for consideration in the present case. This appeal will have to be

_, allowed and the Writ Petition filed by the appellant in the High Court also consequently will have to be allowed by quashing the impugned notice G

calling upon the appellant to take licences under the Market Act.

6. TEA MA1TERS

In the appeal filed by M/s. Lipton Tea (India) Ltd., the appellant company H

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A has brought in challenge the order of th.! High Court of judicature at Patna in Writ Petition No. I 027 of 1977 which was disposed of along with other cognate matters by a common judgment. The appellant had contended before the High Court that the Market Act cannot apply to the transaction of manufactured blended tea sold in packed tins and packets by it in the State B of Bihar, consisting of areas of different market committees. According to the appellant, the object of the Market Act was to provide for better regulation of buying and selling of agricultural produce. It was for the benefit of the agriculturists by providing them a market assuring a reasonable price of their products and also eliminating unhealthy· competition and loss due to malpractices prevailing in the market. c That the appellant was neither an agriculturist nor did it purchase any article from any agriculturist in the Bihar State. That it purchased tea in auction under the Tea Act held at various notified centres in other States ~ outside the Bihar territory. That the purchased tea was blended at appellant's factories which were also situated outside Bihar. Only after the purchased tea D had undergone manufacturing process in appellant's tea factories, after blending and preparation of appropriate final product packed in tins and other receptacles, this marketable commodity 'tea' consisting of red label, green label tea etc. was being brought for sale within the territories of the State of Bihar. Hence, there was no occasion for the market committees to regulate the sale and purchase of such tea by the appellant manufactured outside the E State of Bihar. 1t was also contended that the Tea Act, which is the Central Act, fully occupied the field of regulation of sale of such tea by the appellant. /' In view of the special machinery provided under the Tea Act, the general sweep of the Market Act could not be made applicable to the appellant's sale transactions of manufactured tea within the State of Bihar. It was lastly contended that when the appellant was selling its manufactured tea in packed condition in the market area through its stockists, no benefits of infrastructural facilities were required to be furnished by the market committee concerned and, therefore, insistence on the part of the market committee, that the appellant's stockists should sell packed tea only in the market yard or sub- market yards was totally unauthorised and in fact amounted to imposition of sales tax on the sale transactions of tea and could not remain in the realm of genuine market fee. These contentions were repelled by the High Cou'l and ... _ it was also held that any manufactured product out of the basic agricultural produce, namely, tea leaves, would be covered by the Act and as the manufactured items in packed conditions out of the basic agricultural produce- / H 'tea' were being sold in the market area, the machinery of the Act was ....

BELSUND SUGAR CO. LTD. v. STATE [S.B. MAJMUDAR, J.] 223

applicable to cover these transactions. Accordingly, the Writ Petition was dismissed. Hence this appeal by special leave.

The learned senior counsel for the appellant Shri Shanti Bhushan vehemently submitted that the very purpose of the Market Act is not to regulate the sale of tea manufactured by big tea manufacturing companies like the appellant whose factories are situated outside the State of Bihar. They purchase tea leaves in auction under the Tea Act held at different centres outside the State of Bihar and manufacture after proper blending tea by packing it in suitable packings having labels showing different qualities of tea like green label tea, red label tea etc. That because the appellant imports manufactured tea only for the purpose of sale in Bihar markets, it cannot be said that the machinery of the Market Act which is essentially meant to regulate the sale and purchase of agricultural produce, gets attracted. That the Market Act is, in substance, meant to cover agricultural produce which are first grown in the market area and then sold within the same area. It was also contended that tea was not one of the scheduled items earlier covered by the Act enacted as early as in 1960. That only after 16 years in 1976, tea was added as one of the items in the Schedule to the Act under the caption "Miscellaneous item No. XII" as sub item 30 being Tea (leaf and dust). It was submitted that this addition to the Schedule was made by the State of Bihar in exercise of its power under Section 39 of the Act which confers power on the State Government by notification to add any of the items to be treated as "agricultural produce" for being specified in the Schedule. That this addition was made after the basic notification under Section 3 of the Act was issued declaring the intention of the State to regulate the purchase, sale, storage and process of agricultural produce in such areas as may be specified in the notification. This basic notification which was followed by the procedure of F .. inviting objections and suggestions had culminated into declaration of market area under Section 4. That initially as the item of tea was not in the Schedule, it was obviously not sought to be subjected to the regulation under the Act. Consequently, its purchase, sale, storage and process were obviously not intended to be covered by the Act. But when tea was added as an item in G the Schedule in 1976 the procedure contemplated by Section 3 was obviously not undergone and no objections were invited. Section 4 (a) of the Act which was inserted by way of clarification in 1993 also made it clear that the provisions of Sections 3 and 4 shall not apply to the exercise of power by the State Government under Section 39 to amend the Schedule by addition / of any item of agricultural produce not specified therein. H

224 SUPREME COURT REPORTS [1999) SUPP. 1 S.C.R.

A In the light of the aforesaid statutory scheme, it was vehemently submitted by Shri Shanti Bhushan, learned senior counsel appearing for the appellant, that this insertion of tea as an added item in the Schedule was ex- facie unauthorised and a result of total non-application of mind on the part of the State and it is this exercise under Section 39 of the Act by the State B authorities that was challenged in the Writ Petition. Jn support of this challenge,. Shri Shanti Bhushan pressed in service the following three contentions :

CONTENTION NO. I:

The very scheme and purpose underlying the enactment of the Market C Act shows that only those agricultural produce which are grown within the market area and whose sale in the first instance is to be regulated and also the subsequent sale of any manufactured item out of such basic agricultural produce raw material taking place within the market area are required to be regulated by the Act so that illiterate and ignorant agriculturists who would, otherwise, suffer at the hands of middlemen and may not get adequate price for their product and due compensation for the toil undertaken by them in producing these agricultural commodities, may get adequate return for their products. The benevolent provisions of the regulatory scheme of the Act are essential to protect the agriculturists from exploitation of middlemen. In this connection, our attention was drawn to the salient observations highlighting the basic purpose for enactment of such Market Acts as laid down by the Constitution Bench of this Court in MC. V.S. Arunachala Nadar case (supra). Shri Shanti Bhushan submitted that the large scale manufacturers like Lipton Tea (India) Ltd. who manufacture tea outside the State in their sophisticated factories having latest machineiy are not illiterate agriculturist producers of agriculture goods and commodities in their fields and do not require protection under the Act. That as these salient features of the Act are not kept in view by the State Authorities while inserting entry of tea in the Schedule, the said Act on the part of the State authorities was clearly ultra vires and incompetent.

CONTENTION NO. 2:

G In any case, as the purchase and sale of tea were governed by the comprehensive provisions of the Central Act, namely, the Tea Act, 1953, the said Act would wholly govern transactions of purchase and sale of tea by the appellant and to that extent the Market Act would stand superseded or at least the statutory intention of regulating the purchase, sale, storage and processing of tea as per the provisions of Section 3 of the Market Act would

BELSUND SUGAR CO. LTD. v. STATE [S.B. MAJMUDAR, J.] 225

stand completely negated. Hence, on that ground also the insertion of this item in the Schedule would remain unauthorised and consequently the insistence on the part of the authorities that the sale transactions should be carried on only within the market yard or sub-market yard was clearly illegal and violative of Article 19 of the Constitution of India.

CONTENTION NO. 3: B

It was lastly contended by Shri Shanti Bhushan that no quid pro quo existed between the demand for market fee by the market committees and the sale transactions effected by appellant's selling agents so far as tea in packed tins was concerned. No infrastructural facilities were available for or required C to be supplied to the sellers of such tea.