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Thursday, August 30, 2012

In view of the aforesaid judgments of the Constitution Benches, we hold that Article 254(2) of the Constitution is not available to the appellants for seeking a declaration that the Market Act would prevail over the Control Order and that transactions involving the purchase of sugarcane by the factories operating in the market areas would be governed by the provisions contained in the Market Act. As a corollary, we hold that the High Court did not commit any error by quashing the notices issued by appellant - Market Committees to the respondents requiring them to take licence under the Market Act and pay market fee on the purchase of sugarcane from Cane Growers/Cane Growers Cooperative Societies.


                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO.6186 OF 2012
                  (Arising out of SLP(C) No.19092 of 2006)

Krishi Upaj Mandi Samiti, Narsinghpur              … Appellant(s)
                                   versus
M/s. Shiv Shakti Khansari Udyog and others               … Respondents
                                    With
                        CIVIL APPEAL NO.6187 OF 2012
                   (Arising out of SLP(C) No.3414 of 2007)

                        CIVIL APPEAL NO.6188 OF 2012
                   (Arising out of SLP(C) No.3308 of 2007)

                        CIVIL APPEAL NO.6189 OF 2012
                   (Arising out of SLP(C) No.3792 of 2007)

                        CIVIL APPEAL NO.6190 OF 2012
                   (Arising out of SLP(C) No.4606 of 2007)

                        CIVIL APPEAL NO.6191 OF 2012
                   (Arising out of SLP(C) No.4607 of 2007)

                        CIVIL APPEAL NO.6192 OF 2012
                   (Arising out of SLP(C) No.4777 of 2007)

                        CIVIL APPEAL NO.6193 OF 2012
                   (Arising out of SLP(C) No.5625 of 2007)

                        CIVIL APPEAL NO.6194 OF 2012
                  (Arising out of SLP(C) No.15296 of 2007)
                        CIVIL APPEAL NO. 6195 OF 2012
                  (Arising out of SLP(C) No.15229 of 2007)

                        CIVIL APPEAL NO.6196 OF 2012
                  (Arising out of SLP(C) No.15315 of 2007)

                        CIVIL APPEAL NO.6197 OF 2012
                  (Arising out of SLP(C) No.15230 of 2007)

                        CIVIL APPEAL NO.6198 OF 2012
                  (Arising out of SLP(C) No.15297 of 2007)

                        CIVIL APPEAL NO.6199 OF 2012
                  (Arising out of SLP(C) No.15318 of 2007)

                        CIVIL APPEAL NO.6200  OF 2012
                   (Arising out of SLP(C) No.6961 of 2009)



                               J U D G M E N T
G. S. Singhvi, J.
1.    Leave granted.

2.    The questions which arise for consideration in these appeals filed  by
the State of Madhya Pradesh and the Market  Committees  against  the  orders
passed by the Division Benches of the Madhya Pradesh High Court are  whether
the provisions of the Madhya  Pradesh  Krishi  Upaj  Mandi  Adhiniyam,  1972
(hereinafter  described  as,  ‘the  Market  Act’)  are  applicable  to   the
transactions involving the purchase of sugarcane by the factories  operating
in the market areas of the State and whether market fee  can  be  levied  on
such transactions.

3.    The contesting respondents are operating sugar factories in  different
market areas of the State and  have  been  purchasing  sugarcane  from  Cane
Growers and Cane Growers’ Co-operative Societies.  Thus,  they  are  covered
by the general sweep of the Market  Act  because  sugarcane  is  a  notified
agricultural produce and by virtue of Section 19, the Market Committees  are
empowered to levy market fee  on  the  transactions  involving  purchase  of
sugarcane.

4.    The respondents filed writ petitions for quashing the  notices  issued
by the Market Committees requiring them to take  licence  under  the  Market
Act and to pay market fee on the purchase of sugarcane,  by  asserting  that
the provisions of the Market Act are  not  applicable  to  the  transactions
which are exclusively governed by the Madhya Pradesh  Sugarcane  (Regulation
of Supply and Purchase) Act, 1958 (for short, ‘the Sugarcane Act’)  and  the
Sugarcane (Control) Order (for short, ‘the Control  Order’)  issued  by  the
Central Government under Section 3 of the Essential  Commodities  Act,  1955
(for short, ‘the EC Act’).
5.    The appellants contested the writ petitions and pleaded that there  is
no conflict between the Market Act on the one hand  and  the  Sugarcane  Act
and the Control Order on the other because  the  two  sets  of  legislations
operate in different fields and in view of Section 19  of  the  Market  Act,
the respondents are bound to pay market fee on  the  purchase  of  sugarcane
within the market areas.

6.    The Division Bench of the High Court referred  to  the  provisions  of
the Market Act, the Sugarcane Act and the Control Order and  held  that  the
transactions involving the sale and purchase of sugarcane  are  governed  by
Sections 12, 15, 16, 19, 20, 21 and 22 of  the  Sugarcane  Act  and  Clauses
(3), (4), (5), (5A) and (6) of the Control Order, which are  in  the  nature
of special legislations vis-à-vis the Market Act and, as  such,  market  fee
cannot be levied by the Market Committees.   The  reasons  assigned  by  the
High Court for arriving at this conclusion are contained in paragraph 17  of
order dated 6.7.2006 passed in Writ Petition No. 391/1995 and  batch,  which
is extracted below:
      “17.  Sub-section (1) of Section 36 quoted above clearly provides that
      all notified agricultural produce brought into  the  market  for  sale
      shall be brought into market yard/yards specified for such produce and
      shall not, subject to the provisions of sub-section (2),  be  sold  at
      any other place outside such  yard.  Sub-section  (3)  of  Section  36
      further provides that the price of the notified  agricultural  produce
      brought into the market yard for sale shall be settled by  tender  bid
      or open auction system and no deduction shall be made from the  agreed
      price on any account whatsoever. Sub-section (4) of Section 36 of  the
      Market Act further provides that weighment or measurement of  all  the
      notified agricultural produce so purchased shall be done by a licensed
      weighman in the market yard or any other place specified by the market
      committee for the purpose. Sub section (1) of Section 37 of the Market
      Act states that any person who buys notified agricultural  produce  in
      the market area shall execute an agreement in triplicate in such  form
      as may be prescribed, in favour of  the  seller.  Sub-section  (2)  of
      Section 37 provides for  payment  of  price  of  agricultural  produce
      brought in the market yard on the same day to the seller at the market
      yard and additional payment at the rate of one percent, per day of the
      total price of the agricultural produce payable to the  seller  within
      five days. These provisions of Sections 36 and 37 of  the  Market  Act
      are in direct conflict with the provisions of Clauses (3),  (4),  (5),
      (5A) and (6) of the Control Order made by the Central Government under
      Section 3 of the Essential  Commodities  Act,  1955  discussed  above.
      Similarly these provisions of the Market Act are  in  direct  conflict
      with the provisions of Sections 12, 15, 16, 19, 20, 21 and 22  of  the
      Sugarcane Act  made  by  the  State  Legislature  of  Madhya  Pradesh,
      discussed above. In view  of  such  conflict,  either,  the  aforesaid
      provisions of the Market Act apply to the transactions of  buying  and
      selling of sugarcane  between  the  occupiers  of  factories  and  the
      sugarcane growers or sugarcane growers cooperative societies,  or  the
      provisions of the Control Order made by the Central Government and the
      aforesaid provisions of the Sugarcane Act made by the State Government
      apply to such transactions of buying and selling between the occupiers
      or owners of sugar factories and the sugarcane  growers  or  sugarcane
      growers cooperative societies. The Control Order made by  the  Central
      Government and the Sugarcane Act made by the State Legislature being a
      Special Order and Special Act  relating  to  supply  and  purchase  of
      sugarcane will apply to transactions of sale and purchase of sugarcane
      between the occupiers of the factory  and  the  sugarcane  growers  or
      sugarcane growers cooperative societies  and  the  provisions  of  the
      Market Act being a General Act with  regard  to  agricultural  produce
      will stand excluded and will not apply to such transactions of  buying
      and selling of sugarcane between the occupiers of  factories  and  the
      sugarcane growers or sugarcane growers cooperative societies.”

7.    Shri Vivek Tankha, learned senior counsel  appearing  for  the  Market
Committees and Shri B.S. Banthia, learned counsel appearing  for  the  State
argued that the object of the Sugarcane Act and  the  Control  Order  is  to
regulate the supply and purchase of  sugarcane  and  to  ensure  that  price
determined by the competent authority is paid to the  Cane  Growers  without
delay, but these enactments have nothing to do with the levy of  market  fee
on transactions involving the purchase of sugarcane by the factories  within
the market areas and the High Court committed  serious  error  by  declaring
that the provisions of  the  Sugarcane  Act  and  the  Control  Order  would
prevail vis-à-vis those contained in the Market  Act.  The  learned  counsel
further argued that the ratio of the judgment in Belsund Sugar Co.  Ltd.  v.
State of Bihar (1999) 9 SCC 620, on which reliance has been  placed  by  the
High Court, has no bearing on the interpretation of the  provisions  of  the
Sugarcane Act and the Market Act because  there  is  significant  difference
between the Bihar Acts and the Madhya Pradesh Acts. Shri  Tankha  emphasized
that the Market Act and the Sugarcane Act operate in  different  fields  and
even if  there  appears  some  conflict  between  the  two  enactments,  the
provisions contained in the Market Act would prevail because  the  Sugarcane
Act does not provide for levy of market fee on the purchase of sugarcane  by
the factories.   Learned senior counsel relied upon the judgment  in  Krishi
Upaj Mandi Samiti v. Orient Paper and Industries Ltd. (1995) 1 SCC  655  and
argued that the sugarcane factories are liable to  pay  market  fee  on  the
purchase of sugarcane which takes place  within  the  market  areas  because
they are benefitted by  the  development  works  undertaken  by  the  Market
Committees and the Madhya Pradesh Agricultural Marketing Board. Shri  Tankha
also relied upon Article 254  of  the  Constitution  and  argued  that  even
though the Control Order has been framed under a  Central  legislation,  the
provisions contained therein  cannot  override  the  Market  Act  which  was
enforced after receiving Presidential assent.  In support of this  argument,
Shri Tankha relied upon the judgments in Basantlal  Banarsilal  v.  Bansilal
Dagdulal AIR 1955 Bom. 35, Tika Ramji v. State of U.P. AIR  1956  SC  676  =
1956 SCR 393, Kailash Nath v. State of  U.P.  AIR  1957  SC  790,  Basantlal
Banarsilal v. Bansilal Dagdulal AIR 1961 SC 823, Janardan  Pillai  v.  Union
of India (1981) 2 SCC 45, M/s. Hoechst Pharmaceuticals Ltd.  and  others  v.
State of Bihar 1983 (4) SCC  45,  Gram  Panchayat  of  Village  Jamalpur  v.
Malwinder Singh and others 1985  (3)  SCC  661,  Bharat  Shivram  Singh  and
others v. State of Gujarat and others (1986) 4 SCC  51,  Krishi  Upaj  Mandi
Samiti and others v. Orient Paper and Industries  (supra),  P.N.  Krishnalal
v. Govt. of Kerala 1995 (Supp.) 2 SCC  187,   H.S.  Jayanna  and  others  v.
State of Karnataka (2002) 4  SCC  125,  Kaiser-I-Hind  Private  Limited  and
another v. National Textile Corporation (Maharashtra North) Ltd. and  others
(2002) 8 SCC 182, Subhash Ramkumar Bind Alias Vakil and another v. State  of
Maharashtra  (2003)  1  SCC  506,  Dharappa  v.  Bijapur  Co-operative  Milk
Producers Societies Union Limited  (2007)  9  SCC  109  and  Grand  Kakatiya
Sheraton Hotel and Towers Employees and Workers Union v.  Srinivasa  Resorts
Limited and others (2009) 5 SCC 342.

8.    Shri Jayant Bhushan and Shri A. K. Sanghi, Senior  Advocates  and  Ms.
Pragati Neekhra, learned counsel appearing  for  the  respondents  supported
the impugned orders and argued  that  being  a  special  legislation,  which
covers all aspects of the supply and purchase  of  sugarcane  including  the
payment of price to Cane Growers, the Sugarcane Act will  prevail  over  the
Market Act, which generally empowers the market committees  to  levy  market
fee on the sale and purchase of notified agricultural  produce.    More  so,
because the procedure prescribed under Section 36 of the Market Act for  the
purchase of agricultural produce within the market yard or market proper  is
in direct conflict with the provisions of the Sugarcane Act which  postulate
the purchase of sugarcane by the factories at an identified place or at  the
factory gate.  Learned senior counsel then argued that the  sugar  factories
cannot be burdened with the liability of paying market fee on  the  purchase
of sugarcane because the same is not taken into consideration  while  fixing
the price of sugar under Clause  3  of  the  Control  Order.   Shri  Bhushan
submitted that the Court should not entertain  the  argument  made  by  Shri
Tankha with reference to Article 254 of the  Constitution  because  no  such
argument was raised before the High Court and no document has been  produced
before this  Court  to  show  that  Presidential  assent  was  obtained  for
amendment in the Market Act with specific reference to the Sugarcane Act.

9.    For deciding whether there is any conflict between the  Sugarcane  Act
and the Control Order on the one hand and the Market Act on  the  other,  it
will be useful to notice the relevant statutory provisions:

The Sugarcane Act

10.   The Sugarcane  Act  was  enacted  by  the  State  legislature  in  the
backdrop of  inadequate  supply  of  sugarcane  to  the  factories  and  the
difficulties faced by the cultivators in selling their produce  and  getting
the price.  Section 2 of the Act  contains  definitions  of  various  terms.
Section 3 mandates the State Government to  establish  Sugarcane  Board  for
the State.  In terms of Section  4,  the  Sugarcane  Board  is  required  to
advise the State Government on  matters  pertaining  to  the  regulation  of
supply and purchase of cane for  sugar  factories;  the  varieties  of  cane
which are suitable for  use in sugar factories; the maintenance  of  healthy
relations  between  occupiers,  managers  of  factories,  Cane-growers’  Co-
operative Societies, Cane Development  Council  and  purchasing  agents  and
such  other  matters  as  may  be  prescribed.  Section   5   provides   for
establishment  of  a  Cane  Development  Council,  whose  functions  are  to
consider and approve the programme for development of the  zone;  to  advise
regarding the ways and means for the execution of the  development  plan  in
all its essentials such as  cane  varieties,  cane-seed,  sowing  programme,
fertilizers and manures; to undertake  the  development  of  irrigation  and
other agricultural facilities in the zone; etc.   Section 8 lays  down  that
there shall be a fund at the disposal of the Council to  meet  the  expenses
required to be incurred for the discharge of duties and performance  of  its
functions under the Act. The fund shall consist of the grants  made  by  the
Indian Central Sugarcane Committee and the State Government,  sums  received
by the Council by way of commission under  Section  21  and  any  other  sum
which may be credited to the fund under the general or special order of  the
State Government. Section 12 empowers the Cane  Commissioner  to  call  upon
the occupier to furnish an estimate of the quantity of cane  which  will  be
required by the factory during the crushing season.  The  Cane  Commissioner
is obliged to  examine  every  such  estimate  and  publish  the  same  with
modification, if any.  Section 13 casts a duty on the occupier  to  maintain
a  register  of  all  such  Cane  Growers  and  Cane-Growers’   Co-operative
Societies which are required to  sell  cane  to  the  factory.   Section  14
empowers the State Government to  make  provision  for  survey  of  an  area
proposed to be reserved or  assigned  for  supply  of  cane  to  a  factory.
Section 15 postulates declaration of reserved area and Section  16  provides
for  declaration  of  an  assigned  area.   Under  Section  19,  the   State
Government has the power to issue an order for regulating the  distribution,
sale or purchase of cane in any reserved or assigned area  and  purchase  of
cane in any area other than the  reserved  or  assigned  area.   Section  20
deals with the payment of price. Section 21 provides  for  payment,  by  the
occupier, of a commission for every one  maund  of  cane  purchased  by  the
factory.  Section  22  gives  power  to  the  State  Government  to  declare
varieties of cane which are unsuitable for use in the factories. Chapter  IV
contains miscellaneous provisions  including  Section  30  under  which  the
State Government is empowered  to  make  rules  for  giving  effect  to  the
provisions of the Act. For the sake of reference, Sections 5, 6, 8, 15,  16,
19, 20 and 21 of the Sugarcane Act are reproduced below:
      “5.  The Cane Development Council.— (1) There shall be established, by
      notification for the reserved area of a  factory  a  Cane  Development
      Council which shall be a body corporate by the name of  such  area  or
      such other name as the State Government  may  notify  in  this  behalf
      having perpetual succession,  and  subject  to  such  restrictions  or
      qualifications  as  may  be  imposed  under  this  Act  or  any  other
      enactment, vested with the capacity of suing and  being  sued  in  its
      corporate name, of acquiring, holding, administering and  transferring
      property both movable and immovable, and of entering into contracts :

      Provided that where the Cane Commissioner so directs, the Council  may
      be established for a larger or smaller area than the reserved area  of
      a factory.

      (2) The area for which a Council is established shall be called a
      zone.

      (3) to (6)  xxxx                  xxxx             xxxx



      6. Functions of the Council.— (1) Functions of the Council shall be—

   a) to consider and approve the programme of development for the zone;
   b) to devise ways and means for the execution of the development plan  in
      all  its  essentials  such  as  cane  varieties,   cane-seed,   sowing
      programme, fertilizers and manures;
   c) to undertake the development  of  irrigation  and  other  agricultural
      facilities in the zone;
   d) to take necessary steps for the prevention and control of diseases and
      pests and to render all possible help in the soil extension work;
   e) to impart technical training to cultivators in matters relating to the
      production of cane;

   f) to administer the funds at its  disposal  for  the  execution  of  the
      development scheme subject to such conditions as  may  be  prescribed;
      and
   g) to perform other prescribed functions pertaining and conducive to  the
      general development of the zone.

      (2) The State Government may at any time direct the Cane  Commissioner
      to convene a joint meeting of two or more councils. Every such meeting
      shall be presided over by such person as  may  be  nominated  in  that
      behalf by the State Government.


      8.  Council Fund.— (1) There shall be a fund at the  disposal  of  the
      Council to meet the charges in connection with the  discharge  of  its
      duties and performance of its functions under this Act.

      (2) The fund of the Council shall consist of—
      a) grants, if any, made by the Indian Central Sugarcane Committee;
      b) grants, if any, made by the State Government;
      c) sums received by the Council by way of commission under Section
         21; and
      d) any other sums which may be credited to it under the general or
         special orders of the State Government.


      15.   Declaration of reserved area. - Without prejudice to  any  order
      under  clause  (d)  of  sub-section  (2)  of  Section  19,  the   Cane
      Commissioner may, after  consulting  in  the  prescribed  manner,  the
      occupier and Cane-growers’ Co-operative Society, if any, in  any  area
      to be reserved for a factory reserve such area for  such  factory  and
      thereupon occupier thereof shall subject to provisions of  Section  22
      be liable to purchase all cane grown in such area which is offered for
      sale to the factory.


      16.   Declaration of assigned area.- Without prejudice  to  any  order
      under  clause  (d)  of  sub-section  (2)  of  Section  19,  the   Cane
      Commissioner may  after  consulting  in  the  manner  prescribed,  the
      occupier and Cane-growers' Co-operative Society, if any, in  any  area
      to be assigned, assign such area for the purpose of the supply of cane
      to a factory in accordance with the provisions of  Section  19  during
      any crushing season; and thereupon the occupier thereof  shall subject
      to the provisions of Section 22 be liable to purchase such quantity of
      cane grown in that area and offered for sale to the factory as may  be
      determined by the Cane Commissioner.


      19.   Regulation of purchase and supply of cane in the
      reserved and assigned  areas.-  (1)  The  State  Government  may,  for
      maintaining supplies, by order regulate—


      (a)   distribution, sale or  purchase  of  cane  in  any  reserved  or
      assigned area; and


      (b)   purchase of cane in any area other than a reserved or   assigned
      area.


      (2)   Without prejudice to the generality of the foregoing powers such
      order may provide for—


      (a)   the quantity of cane to be supplied by each Cane-grower       or
      Cane-growers' Co-operative Society in such area to        the  factory
      for which the area has been so reserved or   assigned;


      (b)   the manner in which cane grown in  the  reserved  area  or   the
      assigned area shall be purchased by the  factory  for       which  the
      area has been so reserved or assigned and  the       circumstances  in
      which the cane grown by a cane-grower   shall not be purchased  except
      through a Cane-growers'      Co-operative Society;


      (c)   the form and  terms  and  conditions  of  the  agreement  to  be
      executed by the occupier of the  factory  for  which  an  area      is
      reserved or assigned for the purchase of cane offered    for sale:


      (d)   the circumstances under which permission may be granted—


      (i)   for the purchase of cane grown in reserved or as-
            signed area by a purchasing agent or any person
            other than the factory for which area has been
            reserved or assigned; and
      (ii)  for the sale of cane grown in a reserved or assigned
            area to any other person or factory other than the
            factory for which the area is reserved or assigned;


      (e)   such incidental and consequential matters as may appear       to
      be necessary or desirable for this purpose.


      20.  Payment of cane price.- (1) The  occupier  shall  make   suitable
      provision to the satisfaction of the Collector for the payment of  the
      price of cane.


      (2) Upon the delivery of cane, the  occupier  shall,  subject  to  the
      deductions specified in sub-section (2-a) be liable to pay immediately
      the price of the cane  so  supplied,  together  with  all  other  sums
      connected therewith and where the supplies have been  made  through  a
      purchasing agent, the purchasing agent shall similarly  be  liable  in
      addition to the occupier.


      (2-a) Where a Cane-grower or a Cane-growers' Co-operative Society,  as
      the case may be, to whom price is payable under  sub-section  (1)  has
      borrowed a loan for cane development from any agency notified  by  the
      State Government in this behalf, the occupier or the purchasing agent,
      as the case may be, shall be, on being authorised by that agency so to
      do, entitled to deduct from the price so payable, such amount  as  may
      be prescribed, towards the recovery of such loan and pay the  same  to
      the agency concerned forthwith.


      (3)  Where the person liable under sub-section (2) is  in  default  in
      making the payment of the price for a period exceeding  fourteen  days
      from the date of delivery he shall also pay interest at the rate of 14-
      1/2 per cent, per annum from the said date of delivery upto  the  date
      of payment but the Cane Commissioner may, in any case, direct with the
      approval of the State Government that no interest shall be paid or  be
      paid at such reduced rate as he may fix.


      (4) The Cane Commissioner shall forward to the Collector a certificate
      under his signature specifying the amount of arrears on account of the
      price of cane plus interest, if any, due from  the  occupier  and  the
      Collector, on receipt of such certificate, shall  proceed  to  recover
      from such occupier the amount specified  therein  as  if  it  were  an
      arrear of land revenue together with further interest up to  the  date
      of recovery.”



      21.   Commission on purchase of cane.— (1) There shall be paid by  the
      occupier a commission for every one maund of  cane  purchased  by  the
      factory—


      (a)    where  the  purchase  is  made  through  a  Cane-growers'   Co-
      operative Society, the commission shall be payable  to  the      Cane-
      growers' Co-operative Society and the Council in   such proportion  as
      the State Government may declare;       and


      (b)   where the purchase is made directly from the Cane-  grower,  the
      commission shall be payable to the Council.


      (2)   The commission payable under clauses (a) and (b) of  sub-section
      (1) shall be at such rates as may  be  prescribed  provided,  however,
      that the rate fixed under clause (b) shall  not  exceed  the  rate  at
      which the commission may be payable to the Council under clause (a).


      (3)   The provisions  relating  to  payment,  interest  and  recovery,
      including recovery as arrears of land revenue, applicable to price  of
      cane  shall  mutatis  mutandis  apply  to  payment  and  recovery   of
      commission under sub-section (1).”



11.    In exercise of the power  vested  in  it  under  Section  30  of  the
Sugarcane Act, the State Government  framed  the  Madhya  Pradesh  Sugarcane
(Regulation of Supply and Purchase) Rules, 1959 (for  short,  ‘the  Rules’).
Rules 2(f), 35, 36, 40, 41 and 43, which  have  bearing  on  these  appeals,
read as under:
      “2(f) ‘Purchasing Center’ means any place at which cane is  purchased,
      delivered, weighed or paid  for  and  includes  such  portion  of  the
      premises of the factory as is used for any of these purposes.


      35.   At any purchasing centre adequate facilities for weighment shall
      be provided to the  satisfaction  of  the  Cane  Commissioner  by  the
      occupier  of  a  factory  to  avoid  congestion  and  undue  delay  in
      weighment.  Cane carts and trucks shall not be kept waiting  for  more
      than ten hours without adequate reasons.


      Explanation.- A cart shall not be deemed to  have  been  kept  waiting
      unduly if the  supplier  of  cane,  having  received  instructions  in
      writing to deliver cane on a certain day, ignores such instructions or
      where the practice of issuing written instructions is in force, brings
      cane without receiving such instructions.


      36.   The  occupier  of  a  factory  shall  —  (a)  provide,  metalled
      approaches from the public roads to the parking ground at the  factory
      premises, from the parking ground to the cane carrier of factory,  and
      metalled exits from the cane carrier  to  public  roads,  up  to  such
      distances as may be directed by the Cane  Commissioner  and  keep  the
      same in a proper state of repairs;


      (b)   provide to the satisfaction of the Cane Commissioner  reasonable
      space with metalled tracks separated by railings or walls and properly
      lighted, for parking of carts waiting for weighment and keep the  same
      in a proper state of hygienic cleanliness;


      (c) provide shelter and drinking water facilities for both cartmen and
      bullocks at the factory gate and  drinking  water  facilities  at  all
      purchasing centres as directed by the Cane Commissioner; and


      (d) provide such other facilities as may be   directed  by  the   Cane
      Commissioner from time to time.


      40.   Payments of the price of cane shall  be  made  on  the  recorded
      weight of the cane at  the  purchasing  centre.  The  price  shall  be
      calculated to the nearest Naya Paisa.


      41.   Payments for cane shall be made only to the Cane-grower  or  his
      representative duly authorised by him in writing to receive payment or
      to a Cane-Growers' Co-operative Society.


      43.   The occupier of a factory or a purchasing agent shall  not  make
      any deduction from the amount due for cane sold  to  him  by  a  Cane-
      grower or Cane-grower’s Co-operative Society:


      Provide that recovery of the  dues  of  a  Cane-growers’  Co-operative
      Society may be made by deduction form the price payable for cane.”



The Control Order

12.   In exercise of the power vested in it under Section 3 of the  EC  Act,
the Central Government framed the Control Order, the relevant provisions  of
which are reproduced below:
      “2(g) ‘price’ means the price  or  the  minimum  price  fixed  by  the
      Central Government, from time to time, for sugarcane delivered—


      (i) to a sugar factory at the gate of the factory or  at  a  sugarcane
      purchasing centre;


      (ii) to a khandsari unit;


      3.   Minimum price of sugarcane payable by producer of sugar.—(1)  The
      Central Government may,  after  consultation  with  such  authorities,
      bodies or associations as it may deem  fit,  by  notification  in  the
      Official Gazette,  from  time  to  time,  fix  the  minimum  price  of
      sugarcane to be paid by producers of sugar or  their  agents  for  the
      sugarcane purchased by them, having regard to—


      (a) the cost of production of sugarcane;


      (b) the return to the grower from alternative crops  and  the  general
      trend of prices of agricultural commodities;


      (c) the availability of sugar to the consumer at a fair price;


      (d) the price at which  sugar  produced  from  sugarcane  is  sold  by
      producers of sugar; and


      (e) the recovery of sugar from sugarcane:


      Provided that the Central Government or,  with  the  approval  of  the
      Central Government, the State Government, may, in  such  circumstances
      and subject to such conditions as specified in  Clause  3-A,  allow  a
      suitable rebate in the price so fixed.


      Explanation.—(1) Different prices may be fixed for different areas  or
      different qualities or varieties of sugarcane.


      (2) No person shall sell or agree to sell sugarcane to a  producer  of
      sugar or his agent, and no such producer or agent  shall  purchase  or
      agree to purchase sugarcane, at a price lower than  that  fixed  under
      sub-clause (1).


      (3) Where a producer of sugar purchases any sugarcane from a grower of
      sugarcane or from  a  sugarcane  growers'  co-operative  society,  the
      producer shall, unless  there  is  an  agreement  in  writing  to  the
      contrary between the parties, pay within fourteen days from  the  date
      of delivery of the sugarcane to the seller or tender to him the  price
      of the cane sold at the rate agreed to between the  producer  and  the
      sugarcane grower or sugarcane growers' co-operative  society  or  that
      fixed under sub-clause (1), as the case may be, either at the gate  of
      the factory or at the cane collection centre or  transfer  or  deposit
      the necessary amount in the bank account of  the  seller  or  the  co-
      operative society, as the case may be.


      (3-A) Where a producer of sugar or his agent fails to make payment for
      the sugarcane purchased within 14 days of the  date  of  delivery,  he
      shall pay interest on the amount due at the rate of 15  per  cent  per
      annum for the period of such delay beyond 14 days.  Where  payment  of
      interest on delayed payment is made to a cane  growers'  society,  the
      society shall pass on the interest to the cane growers concerned after
      deducting administrative charges, if any, permitted by  the  rules  of
      the said society.


      (4) to (6)  xxxx                  xxxx             xxxx


      (7) In case, the price of the sugarcane remains unpaid on the last day
      of the sugar year in which cane supply was  made  to  the  factory  on
      account of the suppliers of cane not coming forward with their  claims
      therefor or for any other reason it shall be deposited by the producer
      of sugar with the Collector of the district in which  the  factory  is
      situated, within three months of the close  of  the  sugar  year.  The
      Collector shall pay, out of  the  amount  so  deposited,  all  claims,
      considered payable by him and preferred before him within three  years
      of the close of the sugar year in which the cane was supplied  to  the
      factory. The amount still remaining undisbursed  with  the  Collector,
      after meeting the claims from the suppliers, shall be credited by  him
      to the Consolidated Fund of the State, immediately after the expiry of
      the time limit of 3  years  within  which  claims  therefor  could  be
      preferred by the suppliers. The State  Government  shall,  as  far  as
      possible, utilise such amounts, for development of  sugarcane  in  the
      State.”


The Market Act

13.   Initially, the  State  Legislature  had  enacted  the  Madhya  Pradesh
Agricultural Markets Act, 1960.   After  noticing  certain  defects  in  the
scheme of that Act and with a view to ensure efficient  functioning  of  the
Market  Committees  which  would  benefit  agriculturists  and  traders,   a
committee of the members of the State Legislature was formed  in  1965.  The
recommendation made by the Committee for enactment of a new legislation  was
accepted by the State Government.  Accordingly, the Market Act  was  enacted
for better regulation of buying and selling of agricultural produce and  for
the establishment and  proper  administration  of  markets  of  agricultural
produce in the State. The relevant provisions of  the  Market  Act  read  as
under:
      “2. Definitions.- (1)  In  this  Act,  unless  the  context  otherwise
      requires,


      (a)  “agricultural  produce”  means  all   produce   of   agriculture,
      horticulture, animal husbandry, apiculture, pisciculture, or forest as
      specified in the Schedule;


      (b) to (f)  xxxx                  xxxx             xxxx


      (g)   “Market” means a market established under Section 4;


      (h)   “market area” means the area for which a market is
      established under Section 4;


      (i)   “market committee” means a committee constituted  under  Section
      11;


      (j)         xxxx                  xxxx             xxxx


      (k)   “market proper” in relation to  a  market  yard  means  an  area
      declared to be a market proper under clause (b) of sub-section (2)  of
      Section 5;


      (l)   "market yard or sub-market yard" in relation to  a  market  area
      means a specified place declared to be a  market  yard  or  sub-market
      yard under clause (a) of sub-section (2) of Section 5;


      (m) to (p)  xxxx                  xxxx             xxxx


      3. Notification of  intention  of  regulating  marketing  of  notified
      agricultural produce in specified area.—(1) Upon a representation made
      by local authority or by  the  growers  of  any  agricultural  produce
      within the area for which a market is proposed to  be  established  or
      otherwise, the State Government may,  by  notification,  and  in  such
      other manner as may be prescribed, declare its intention to  establish
      a market for regulating the purchase and sale of agricultural  produce
      in such area as may be specified in the notification.

      (2)  A  notification  under  sub-section  (1)  shall  state  that  any
      objection or suggestion which may be received by the State  Government
      within a period of not less than one month  to  be  specified  in  the
      notification shall be considered by the State Government.


      4. Establishment of market and of regulation of marketing of  notified
      agricultural  produce  therein.-  After  the  expiry  of  the   period
      specified in  the  notification  issued  under  Section  3  and  after
      considering such objections and suggestions, as may be received before
      such expiry and making such inquiry, if any, as may be necessary,  the
      State Government may, by another notification, establish a market  for
      the area specified in the notification under Section 3 or any  portion
      thereof for the purpose of this Act in  respect  of  the  agricultural
      produce specified in the Schedule and the market so established  shall
      be known by the name as may be specified in that notification.


      5. Market yard and market proper.- (l)(a) In every
      market area,—
      (i) there shall be a market yard; and


      (ii)   there   may   be    more    than    one    sub-market    yards;


      (b) for every market yard or sub-market yard there shall be  a  market
      proper.


      (2) The State Government shall, as soon as may be, after the issue  of
      notification under Section 4, by notification,—


      (a) declare any specified place including  any  structure,  enclosure,
      open place, or locality in the market area to be a market yard or sub-
      market yard, as the case may be; and
      (b) declare in relation to such market yard or sub-market yard as  the
      case may be, any specified area in the market  area  to  be  a  market
      proper.


      7.  Establishment of Market Committee and its incorporation.-
      (1)  For every market area, there shall be a Market  Committee  having
      jurisdiction over the entire market area.


      (2) Every Market Committee shall be  a  body  corporate  by  the  name
      specified  in  the  notification  under  Section  4.   It  shall  have
      perpetual succession and a common seal and may sue and be sued in  its
      corporate name and shall subject to such restrictions as  are  imposed
      by or under this Act, be competent to contract and to  acquire,  hold,
      lease, sell or otherwise transfer any property and  to  do  all  other
      things necessary for the purposes of this Act:


      Provided that no immovable property  shall  be  acquired  without  the
      prior permission of the Managing Director in writing;


      Provided further that no immovable property shall  be  transferred  by
      way of sale, lease or otherwise in a  manner  other  than  the  manner
      prescribed in the rules made by the State Government for the purpose.


      (3) Notwithstanding anything contained in any enactment for  the  time
      being in force, every Market Committee shall,  for  all  purposes,  be
      deemed to be a local authority.


      19. Power to levy market fee.- (1) Every Market Committee  shall  levy
      market fee,—
      (i)   on the sale of notified agricultural produce whether
            brought from within the State or from outside the State
            into the market area; and


      (ii)  on the notified agricultural produce whether brought
            from within the  State  or  from  outside  the  State  into  the
      market areas and used for processing;


      at such rates as may be fixed by the State  Government  from  time  to
      time  subject to a minimum rate of fifty paise and a  maximum  of  two
      rupees for every one hundred rupees  of  the  price    in  the  manner
      prescribed:


      Provided that no Market Committee other than the one in  whose  market
      area  the  notified  agricultural  produce  is  brought  for  sale  or
      processing by an agriculturist or trader, as the case may be, for  the
      first time shall levy such market fee.


      (2) The market fees shall be payable by  the  buyer  of  the  notified
      agricultural produce and shall not be deducted from the price  payable
      to the seller:


      Provided that where the  buyer  of  a  notified  agricultural  produce
      cannot be identified, all the fees shall be payable by the person  who
      may have sold or brought the produce for sale in the market area:


      Provided further  that  in  case  of  commercial  transaction  between
      traders in the market area, the market fees shall be
      collected and paid by the seller:


      Provided also that no fees shall be levied upto 31st  March,  1990  on
      such agricultural produce as may be specified by the State  Government
      by notification in this behalf if such produce has been  sold  outside
      the market yard or sub-market  yard  by  an  agriculturist  to  a  co-
      operative society of which he is a member:


      Provided also that for the agricultural produce brought in the  market
      area for commercial transaction or for processing the market fee shall
      be deposited by the buyer or processor as the  case  may  be,  in  the
      Market Committee office within fourteen days if the buyer or processor
      has not submitted the permit issued under sub-section (6)  of  Section
      19.


      (3) to (5)  xxxx                  xxxx             xxxx


      (6) No notified agricultural produce  shall  be  removed  out  of  the
      market yard, market proper or the market area  as  the  case  may  be,
      except in accordance with a permit issued by the Market Committee,  in
      such form and in such manner as may be prescribed by the bye-laws:


      Provided that if  any  person  removes  or  transports  the  processed
      product of notified agricultural produce from the market yard,  market
      proper or the market area, as the case may be, such person shall carry
      with him the bill or cash memorandum issued under Section  43  of  the
      Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 (No. 5 of 1995).


      (7)         xxxx                  xxxx             xxxx


      31. Regulation of persons operating in market area.- No person  shall,
      in respect of any notified agricultural produce, operate in the market
      area as commission agent, trader, broker, weighman, hammal,  surveyor,
      warehouseman, owner or occupier of processing or pressing factories or
      such other market functionary except in accordance with the provisions
      of this Act and the rules and bye-laws made thereunder.


      32. Power to grant licences.- (1) Every person specified in Section 31
      who desires to operate in the market area shall apply  to  the  Market
      Committee for grant of a licence or renewal thereof in such manner and
      within such period as may be prescribed by bye-laws.


      (2) to (5)  xxxx                  xxxx             xxxx


      36. Sale  of  notified  agricultural  produce  in  markets.-  (1)  All
      notified agricultural produce brought into the market proper for  sale
      shall, subject to the provisions of sub-section (2), be  sold  in  the
      market yard/yards specified for such produce or at such other place as
      provided in the bye-laws:


      Provided that it shall not be necessary to bring agricultural  produce
      under contract farming, in the market yard and it shall be sold at any
      other place to the person agreed to purchase the same under agreement.


      (2) Such notified agricultural produce as  may  be  purchased  by  the
      licensed traders from  outside  the  market  area  in  the  course  of
      commercial transaction may be brought and sold anywhere in market area
      in accordance with the provisions of the bye-laws.


      (3) The price of the notified agricultural produce  brought  into  the
      market yard for sale shall be settled by tender bid  or  open  auction
      system and no deduction shall be made from the  agreed  price  on  any
      account whatsoever:


      Provided  that  in  the  market  yard  the  price  of  such   notified
      agricultural produce of which support price has been declared  by  the
      State Government, shall not be settled below the price so declared and
      no bid shall be permitted to start, in the market yard, below the rate
      so fixed.


      (4)  Weighment or measurement of all the notified agricultural produce
      so purchased shall be done by such person and by such procedure as may
      be provided in the bye-laws or any other place specified by the Market
      Committee for the purpose:


      Provided that the weighment, measurement or counting as the  case  may
      be, of Plantain, Papaya or any other perishable  agricultural  produce
      as may be specified by the State Government, by notification, shall be
      done by a licensed weighman in the place where such produce  has  been
      grown.


      37. Conditions of  buying  and  selling.-  (1)  Any  person  who  buys
      notified agricultural produce in the  market  area  shall  execute  an
      agreement in triplicate in such form as may be prescribed,  in  favour
      of the seller. One copy of the agreement shall be kept by  the  buyer,
      one copy shall be supplied to the seller and the remaining copy  shall
      be kept in the record of the Market Committee.


      (2) (a) The price of the agricultural produce bought in the
      market yard shall be paid on the same day to the seller at the
      market yard;


      (b) In the case purchaser does not make payment under clause  (a),  he
      shall be liable to make additional payment at the rate of one  percent
      per day of the total price of the agricultural produce payable to  the
      seller within five days;


      (c) In case the  purchaser  does  not  make  payment  with  additional
      payment to the seller under clauses (a) and (b) above within five days
      from the day of such purchase, his licence shall  be  deemed  to  have
      been cancelled on the sixth day and he or his relative  shall  not  be
      granted any licence under this Act for a period of one year  from  the
      date of such cancellation.


      Explanation.- For the purpose of  this  clause  "relative"  means  the
      relative as specified in the explanation in clause (a)  of  subsection
      (1) of Section 11.


      (3) No wholesale transaction of notified agricultural produce shall be
      entered into directly by  licensed  traders  with  producers  of  such
      produce except in the market yards or such other place as provided  in
      the bye-laws.


      (4) to (5)  xxxx                  xxxx             xxxx




      38. Market Committee Fund.- (1) All moneys received by a
      Market Committee shall be paid into a fund to be called,  “The  Market
      Committee Fund” and all expenditure incurred by the  Market  Committee
      under or for the purposes of this Act shall be  defrayed  out  of  the
      said fund. Any surplus remaining with the Market Committee after  such
      expenditure has been met, shall be invested in such manner as  may  be
      prescribed:


      Provided that all such sums of money received by the Market  Committee
      as security deposit, contributions to Provident Fund or for payment in
      respect of any notified agricultural produce, or  charges  payable  to
      weighman, hammal and other functionaries shall not form part of Market
      Committee Fund but shall be accounted for separately.


      (2)         xxxx                  xxxx             xxxx


      39.   Application of Market Committee Fund.- Subject to
      the provisions of  Section  38,  the  Market  Committee  Fund  may  be
      expended for the following purposes only, namely,-


        i) the acquisition of a site or sites for the market yards;


       ii) the maintenance and improvement of the market
           yards;

      (iii) the construction and repairs of buildings necessary for
            the purposes of the market and for convenience or
            safety of the persons using the market yard;


      (iv)  the maintenance of standard weights and measures;


      (v)   xxxx             xxxx             xxxx


      (vi)  the payment of interest on the loans that may be raised
            for the purpose of the market and provisions of sinking
            fund in respect of such loans;


      (vii) the collection and dissemination or information relating      to
      crops statistics and marketing of agricultural
            produce;


      (viii) (a) xxxx              xxxx            xxxx


       (b)      xxxx               xxxx            xxxx


       (c)  contribution to State Marketing Development Fund;


      (d)   meeting any expenditure for carrying out order  of  the    State
      Government and any other work entrusted to    Market  Committee  under
      any other Act;


      (e)    contribution  to  any  scheme   for   increasing   agricultural
      production and scientific storage;


      (f)   for development of market area in the manner prescribed;


      (g)   to  educate  or  promote  and  undertake  sale  of  agricultural
      inputs, for increasing  production,  with  the  prior  sanction     of
      Managing Director;


      (gg)  to undertake development  of  Haat  Bazars  for  marketing    of
      agricultural produce;


      (h)   xxxx             xxxx             xxxx


       (ix)       any other purpose whereon the expenditure  of  the  Market
      Committee Fund is in the public interest, subject  to  the       prior
      sanction of the State Government.


      43. State Marketing Development Fund.-(l) Every Market Committee shall
      pay on the 10th day of every month to the Board at such percentage  of
      its gross receipts comprising of licence fees and market fees  as  the
      State Government may, by notification, declare from time to time.  The
      amount so paid and collected shall be  called  "Madhya  Pradesh  State
      Marketing Development Fund”.


      (2) to (7)  xxxx                  xxxx             xxxx


      44. Purposes for which Madhya Pradesh State Marketing Development Fund
      shall be expended.- The Madhya  Pradesh  State  Marketing  Development
      Fund shall be utilised  by  the  Board  for  the  following  purposes,
      namely,-


      (i)   market survey and research, grading and standardization       of
      agricultural produce and other allied subjects;


      (ii)  propaganda and publicity and extension services on the
            matters relating to general improvement of conditions
            of buying and selling of agricultural produces;


      (iii) (a)  construction  of   minimum  infrastructure  as   prescribed
       by the Board in the market yard or sub-market  yard       established
      for the first time and for giving grant to   the extent  of  two  lakh
      rupees to defray the establishment      expenses;


      (b)    giving  aid  to  financially   weak   Market   Committees   the
      State in the form of loans and or grants;


      (c)   loans to any Market Committee for development of    market  yard
      and/or sub-market yard, construction of cold       storage, godown  or
      warehouses, distribution  of  plant        protection  equipments  and
      other purpose as may be      considered desirable;


      (iv)   acquisition  or   constructions   or   hiring   by   lease   or
      otherwise of buildings or land for performing the duties       of  the
      Board;


      (v)   xxxx             xxxx             xxxx


      (vi)  xxxx             xxxx             xxxx


      (vii) better control of Market Committee;


      (viii)      xxxx                  xxxx             xxxx


       (ix) imparting  education  in  regulated  marketing  of  agricultural
      produce;


      (x) training the agriculturists, officers  and  staff  of  the  Market
      Committees;


      (x-a) provision of technical assistance to the  Market  Committees  in
      the preparation of site plans and estimates of construction and in the
      preparation of project reports or  master  plans  for  development  of
      market yard;


      (x-b)       xxxx                  xxxx             xxxx


      (x-c)  marketing  the  sale  of  agricultural  inputs  for  increasing
      agricultural production in the market areas;


      (x-d) development of Haat Bazars for marketing of agricultural produce
      and construction  of  infrastructure  for  facilitating  the  flow  of
      notified agricultural produce in the market area;


      (x-e)       xxxx                  xxxx             xxxx


       (x-f) xxxx                  xxxx            xxxx


      (x-g) development of testing and communication infrastructure relevant
      to agriculture and allied sectors.


      (xi) any other purposes of general interest to regulate
      marketing of agricultural produce.”

Analysis
14.   The primary object of the Sugarcane Act is to ensure  adequate  supply
of cane to the factories and timely payment of  price  to  the  cultivators.
The Act contains comprehensive provisions for making available sugarcane  to
the factories and protection of the rights of Cane Growers to  get  adequate
remuneration for  their  labour.  Under  Section  15,  the  Commissioner  is
empowered to declare any area to be reserved for any particular factory  and
once such declaration is made, the occupier  of  the  factory  is  bound  to
purchase cane grown in that area which is offered for sale to  the  factory.
Likewise, under Section 16, the Commissioner can  make  a  declaration  that
any area shall be an assigned area for the purpose of supply of  cane  to  a
factory and, in  that  event,  the  factory  is  required  to  purchase  the
specified quantity of cane grown in that area. For achieving the  object  of
maintaining supplies, the State Government can pass an order  under  Section
19 for regulating distribution, sale or purchase of cane in any reserved  or
assigned area; and purchase of cane in any area other  than  a  reserved  or
assigned area. In such an  order,  the  State  Government  can  specify  the
quantity of cane to be supplied by each Cane  Grower  or  Cane-Growers’  Co-
operative Society to the factory for which  the  particular  area  has  been
reserved or assigned, the manner of purchase by the factory, details of  the
sale agreements and grant of permission for sale and purchase.   Section  20
mandates  that  payment  for  the  cane  shall  be  made  by  the   occupier
immediately upon delivery and only such deductions as authorised in lieu  of
loans can be made. The Development Council established  under  Section  5(1)
has been assigned various functions enumerated in  Section  6  for  ensuring
proper development of the zone.  The  Development  Council  is  required  to
devise ways and means for  the  execution  of  the  development  plan  which
includes  cane  varieties,  cane-seed,  sowing  programme,  fertilizer   and
manure;  development  of  irrigation  and  other  agricultural   facilities;
prevention and control of  diseases  and  pests,  soil  extension  work  and
training to cultivators in matters relating to the production of  sugarcane.
One of  the  components  of  the  fund  required  for  the  Council  is  the
commission received by it  under  Section  21  from  the  occupiers  of  the
factory for every maund of cane purchased. The rules  framed  under  Section
30 of the Sugarcane Act help in achieving the objectives of the  Act.   Rule
35 mandates  the  occupier  to  provide  facilities  for  weighment  at  the
purchasing centre so  that  there  is  no  congestion  and  undue  delay  in
weighment.  Rule 36 requires  that  the  occupier  should  provide  metalled
approaches and exits to the parking area in  the  factory  and  shelter  and
drinking water at the purchasing  centres.   Rules  40,  41  and  43  ensure
payment of the price  of  cane  by  the  occupier  to  the  factory  or  the
purchasing agent without any deduction.

15.   The Control  Order  deals  with  the  fixation  of  minimum  price  of
sugarcane to Cane Growers or Cane Growers’  Co-operative  Societies.  Clause
3(1) of the Control  Order  empowers  the  Central  Government  to  fix  the
minimum price of sugarcane to be paid by the producers  of  sugar  or  their
agents for the sugarcane purchased by them.  For this purpose,  the  Central
Government is required to take  into  account  the  cost  of  production  of
sugarcane; return to the grower from alternative crop and the general  trend
of prices of agricultural commodities; the  availability  of  sugar  to  the
consumers at a fair price; the price at which sugar is sold by producers  of
sugar; and the recovery of sugar from sugarcane.  Clause 3(2) mandates  that
no person shall sell or agree to sell  sugarcane  and  no  producer  or  his
agent shall purchase or agree to purchase sugarcane at a  price  lower  than
the minimum price.  Clauses 3(3) and (3-A) mandate payment of the  price  of
cane within 14 days from the date of delivery and levy interest at the  rate
of 15% per annum for the period of delay beyond 14 days.

16.   The Market Act was enacted to regulate the transactions involving  the
sale and purchase  of  agricultural  produce  with  the  aim  of  preventing
exploitation  of  the  agriculturists  and  the  establishment  and   proper
administration of markets of agricultural produce in the State.   Section  4
read with Section 3 provides for the establishment of a market for the  area
specified in the notification issued under  Section  3  for  regulating  the
purchase and sale of agricultural produce in such area.  Once  a  market  is
established for the particular area, the prohibition  contained  in  Section
6(a) and (b) against the setting up, establishment, continuance  or  use  of
any place in the market area for the marketing of any notified  agricultural
produce comes into play and no person can use any place in the  market  area
for the marketing of the notified agricultural produce  or  operate  in  the
market area as a market functionary. Proviso  to  this  section  carves  out
certain exceptions regarding the sale or purchase  of  agricultural  produce
not exceeding four  quintals  at  a  time  for  domestic  consumption,  etc.
Section 5(1)(a) read with Section 5(2) lays down that in every  market  area
there shall be a market yard and there  may  be  more  than  one  sub-market
yards. Section 5(1)(b) read  with  Section  5(2)  declares  that  for  every
market yard or sub-market yard there shall be a market proper. In  terms  of
Section 7(1), a Market Committee is required to  be  established  for  every
market area.  Section 7(2) declares that every Market Committee shall  be  a
body corporate.  Section 7(3) contains a deeming provision  by  which  every
Market Committee is treated as a local authority.  Section 17 specifies  the
powers and duties of a Market Committee.  Section 19(1) casts  a  duty  upon
every  Market  Committee  to  levy  market  fee  on  the  sale  of  notified
agricultural produce whether brought from within the State or  from  outside
the State into the market area and  on  the  notified  agricultural  produce
whether brought from within the State or from outside  the  State  into  the
market area and used for processing.  Under Section 19(2),  the  market  fee
is payable by the buyer of such produce and is not to be deducted  from  the
price payable to the seller.  It is only if the buyer of the produce  cannot
be identified that all fees are payable by the seller or by the  person  who
brought the produce for sale in the market area, provided  further  that  in
case of a commercial transaction between traders in  the  market  area,  the
market fees are to be collected and  paid  by  the  seller.   Section  19(6)
provides that no notified agricultural produce shall be removed out  of  the
market yard, market proper or the market area except in  accordance  with  a
permit issued by the  Market  Committee.  Section  32  empowers  the  Market
Committee to grant licence to any person  who  desires  to  operate  in  the
market area. Section 36(1) provides that all notified produce  brought  into
the market proper for sale shall be sold in the market yard/yards  specified
for such produce. Proviso to this Section, which was added by MP Act No.  15
of 2003, carves out an exception in respect of  agricultural  produce  under
contract farming and lays down that it shall not be necessary to bring  such
produce in the market yard and it can be sold at  any  other  place  to  the
person who has agreed to purchase  the  same  under  an  agreement.  Section
36(2) carves out another exception and lays down that the produce  purchased
from outside the market  area  by  licenced  traders  in  the  course  of  a
commercial transaction may be bought and sold anywhere in  the  market  area
in accordance with the bye-laws. Section 36(3) lays down that the  price  of
the notified agricultural produce brought into  the  market  yard  for  sale
shall be settled by tender bid or  open  auction  system  and  no  deduction
shall be made from the agreed price on any account  whatsoever.  Proviso  to
this sub-section  lays  down  that  where  support  price  of  any  notified
agricultural produce has been declared by the State  Government,  the  price
shall not be settled below the support price and no bid shall  be  permitted
below such price. Section 36(4) provides for  weighment  or  measurement  of
the notified agricultural produce  purchased  under  other  sub-sections  of
this section.  Section 37(1) mandates  execution  of  an  agreement  by  any
person who buys agricultural produce  in  the  market  area.   In  terms  of
Section 37(2)(a), the price  of  the  agricultural  produce  bought  in  the
market yard is required to be paid on the same day  to  the  seller  at  the
market yard.  If the purchaser fails to  make  payment  in  accordance  with
Section 37(2)(a), then he has to make additional payment at the rate  of  1%
per day of the total price of the agricultural produce.  In case of  further
delay of more than 5 days, his licence stands cancelled with a bar on  grant
of further licence to him or his relative.  Section 38(1) provides that  all
monies received by a Market Committee including market  fee  shall  be  paid
into “the Market Committee Fund”, which is to be utilized for  the  purposes
specified in Section 39 which include, the acquisition of a  site  or  sites
for the market yards; the maintenance and improvement of the  market  yards;
the construction and repairs of buildings of the market; the maintenance  of
standard weights and measures; contribution to  any  scheme  for  increasing
agricultural production and scientific storage; development of  market  area
in the manner prescribed and development of  Haat  Bazars  for  agricultural
produce.  In terms of Section 43(1), every Market Committee is  required  to
pay to the State Agricultural Marketing Board a specified percentage of  its
gross receipts comprising of licence fee or market fee, as may  be  notified
by the State  Government.   This  amount  is  called  Madhya  Pradesh  State
Marketing Development Fund and is to be used for the purposes  specified  in
Section  44,  which  include,  market  survey  and  research,  grading   and
standardization  of  agricultural  produce  and   other   allied   subjects;
construction of minimum infrastructure in  the  market  yard  or  sub-market
yard established for the first time; grant of loan to Market Committees  for
development of market yard/sub-market yard; construction  of  cold  storage,
godown  or  warehouses,  distribution  of   plant   protection   equipments;
acquisition or construction or hiring by lease or otherwise of buildings  or
land  for  the  Board;  imparting  education  in  regulated   marketing   of
agricultural produce; training the agriculturists,  officers  and  staff  of
the Market Committees; provision  of  technical  assistance  to  the  Market
Committees in the preparation of site plans and  estimates  of  construction
and in the preparation of project reports/master  plan  for  development  of
market yard; development  of  Haat  Bazars  for  marketing  of  agricultural
produce; construction  of  infrastructure   for  facilitating  the  flow  of
notified agricultural  produce  in  the  market  area;  and  development  of
testing  and  communication  infrastructure  relevant  to  agricultural  and
allied sectors.


17.   The above analysis of the provisions of  the  Sugarcane  Act  and  the
Control Order along with the Market Act brings to fore the conflict  between
the three statutes insofar as they  relate  to  the  transactions  involving
sale of sugarcane by Cane Growers / Cane Growers’ Co-operative Societies  to
the occupiers of factories. While the Sugarcane Act  and  the  Rules  framed
thereunder  constitute  a  complete  code  for  regulating  the  supply   of
sugarcane by Cane Growers and Cane Growers’ Co-operative  Societies  to  the
occupiers of  the  factories  at  the  purchasing  centres  established  and
maintained by them and payment  of  price  without  delay,  the  Market  Act
regulates sale and purchase of notified agricultural produce in  the  market
yards specified for the particular produce or at other  places  provided  in
the bye-laws and mandates  that  the  price  of  the  notified  agricultural
produce should be settled by tender bid or open auction  system.  (Sugarcane
was included in the Schedule w.e.f. 7.6.1979 by  M.P.Act  No.18/1997).   The
Control Order not only lays down the  mechanism  for  determination  of  the
minimum price of sugarcane payable  by  the  producers  of  sugar  or  their
agents for the sugarcane purchased by them, but also prescribes the mode  of
payment of the price. The Sugarcane Act  and  the  Rules  framed  thereunder
also prescribe the mode of payment of the  price  by  the  occupier  of  the
factory.  Likewise, the Market Act contains provisions for  payment  of  the
price of the notified agricultural produce brought into the market yard  for
sale.  It is thus evident that so far as sugarcane is  concerned,  there  is
direct conflict between the provisions of the Sugarcane Act and  the  Market
Act both, in matters relating  to  sale  and  purchase  of  sugarcane,  and,
payment of price. Likewise, there is conflict between the Control Order  and
the Market Act in the matter of determination of price of the sugarcane  and
mode of payment.

18.  The argument of Shri Tankha and Shri Banthia  that  the  Sugarcane  Act
and the Control Order are silent on the issue  of  levy  of  market  fee  on
transactions involving the purchase of sugarcane  by  the  factories  within
the market areas and, therefore, the provisions  contained  in  Sections  19
and 36 of the Market Act would prevail  and  the  High  Court  committed  an
error by applying the ratio of the judgment in Belsund  Sugar  Co.  Ltd.  v.
State of Bihar (supra) sounds attractive, but we have not felt persuaded  to
agree with them because the Sugarcane Act is a special statute  enacted  for
regulating the supply and purchase of sugarcane to the factories and  covers
the entire spectrum of the  transactions  involving  sale  and  purchase  of
sugarcane. The Sugarcane Act and the Rules framed thereunder cast a duty  on
the occupier of the factory to provide amenities and facilities  for  supply
of cane at the purchasing centres from factory premises and  pay  the  price
of cane without any tangible delay. The occupier  is  also  obliged  to  pay
commission under Section 21 which becomes part of the Council  Fund  and  is
utilised  for  overall  development  of  the  production  of  sugarcane   by
providing better varieties  of  seeds,  fertilizers  and  manures,  devising
appropriate sowing programme, improving irrigation and other facilities  and
taking steps for prevention and control of  diseases  and  pesticides.   The
Council Fund is also to be invested  for  imparting  technical  training  to
cultivators in matters relating to the production of  cane.   The  mechanism
for fixing the minimum price of  cane  is  contained  in  Clause  3  of  the
Control Order and the mode of payment of the price is contained both in  the
Sugarcane  Act  and  the  Control  Order.  The   Market   Act   contains   a
comprehensive  mechanism  for  establishment  of  market  area  and   Market
Committee having jurisdiction over such area,  market  yard/sub-market  yard
and market proper.  Section 19 which obligates  every  Market  Committee  to
levy market fee, which is payable by the producer on the  sale  of  notified
agricultural produce finds place in Chapter  IV  (Conduct  of  Business  and
Powers and Duties of Market Committee).  Proviso to sub-section (2)  thereof
also postulates payment / collection  of  market  fee  from  the  seller  in
certain contingencies.  The sale of notified  agricultural  produce  in  the
markets is governed by Section 36 which finds place in  Chapter  VI  of  the
Market  Act  (Regulation  of  Trading).   That  section  mandates  that  all
notified agricultural produce brought into the market proper for sale  shall
be sold in the market yard/yards specified  for  such  produce  or  at  such
other places as provided in the bye-laws.  Sub-section  (3)  of  Section  36
contains the mechanism for determination of price on  notified  agricultural
produce brought for sale  into  the  market  yard  by  tender  bid  or  open
auction. Section 37(2) provides for payment of  price  of  the  agricultural
produce on the same day but only in relation to the produce  bought  in  the
market yard.  These provisions are irreconcilable with  those  contained  in
Section 19 read with Sections 15 and 16 of the Sugarcane Act  and  Clause  3
of the Control Order. Sections 38 and 43 of the Market Act talk  of  ‘Market
Committee Fund’ and ‘State Marketing Development Fund’ which are to be  used
for overall development of market  areas.  The  benefit  of  development  of
market areas and other activities undertaken by the  Market  Committees  and
the State Marketing Board is available to all the  agriculturists  who  sell
their produce in the  market  yards/sub-market  yards  and  buyers  of  such
produce in accordance with Section 36 of  the  Market  Act  and  no  special
facility is provided to the Cane Growers and the occupiers of the  factories
who purchase sugarcane at the  purchasing  centres  or  within  the  factory
premises. Rather, the Development Council constituted  under  Section  5  of
the Sugarcane Act is required to spend funds, which include  the  commission
paid by the occupier for every maund of cane purchased  by  the  factory  on
overall development of the zone and take measures  for  improvement  of  the
production of sugarcane by ensuring supply of quality seeds, fertilizer  and
manure to the Cane Growers and improving the  soil  quality  and  irrigation
facilities.  Therefore,  even  though  the  Market  Act  is   a   subsequent
legislation and one of its objectives is to regulate buying and  selling  of
agricultural produce including sugarcane, the general  provisions  contained
therein cannot prevail over the Sugarcane Act and the Control  Order,  which
are  special  legislations  exclusively  dealing  with  issues  relating  to
increase in the  production  of  sugarcane,  supply  of  sugarcane  by  Cane
Growers/Cane  Growers  Cooperative  Societies  to  the  factories  from  any
reserved or assigned area or otherwise and payment of the price of  cane  by
the occupier of the factory.

19.   Though, there is no significant difference in the  Control  Order  and
the Market Act insofar as the mode of payment of the price of  sugarcane  is
concerned,  but  the  mechanism  enshrined   in   the   two   statutes   for
determination of price is vastly different.   The  Control  Order  envisages
fixation of the minimum price of sugarcane by the Central  Government  after
considering  the  factors  enumerated  in  Clause  3  and  consulting   such
authorities, bodies or associations as it may think fit and the producer  of
sugar is bound to pay at least  that  price  to  Cane  Growers/Cane  Growers
Cooperative  Societies.   As  against  this,  the  Market   Act   postulates
determination of the price of the notified agricultural  produce  (sugarcane
is only one of such produce) brought into the market  yard  for  sale  under
Section 36(3) by tender bid or open auction.  In that  exercise,  the  State
Government/the concerned Market Committee does not have any  role  to  play.
Of course, such price cannot be less than the support price declared by  the
State Government.  This difference also indicates that the Control Order  is
a special legislation vis-à-vis the Market Act.

20.   We shall now deal with two of the many judgments relied  upon  by  the
learned counsel for the parties.  In Belsund  Sugar  Co.  Ltd  v.  State  of
Bihar (supra), the Constitution Bench considered the  legality  of  levy  of
market fee under the Bihar Agricultural Produce Markets  Act,  1960  on  the
transactions relating to  sale  and  purchase  of  sugarcane  by  the  sugar
factories.  The Constitution Bench first considered Entries 26, 27,  28  and
33 of List II of the Seventh Schedule of the Constitution and observed:

      “In the first  instance,  we  shall  deal  with  the  transactions  of
      purchase of sugarcane by the sugar factories functioning in the market
      areas falling within the jurisdiction of respective Market  Committees
      constituted under the Market Act. The Market Act has been  enacted  by
      the Bihar Legislature as per the legislative power  vested  in  it  by
      Entries 26, 27 and 28 of List  II  of  the  Seventh  Schedule  of  the
      Constitution. These entries read as under:


      “26. Trade and commerce within the State subject to the provisions  of
      Entry 33 of List III.
      27. Production, supply  and  distribution  of  goods  subject  to  the
      provisions of Entry 33 of List III.
      28. Markets and fairs.”


      It becomes at once  clear  that  if  location  of  markets  and  fairs
      simpliciter and  the  management  and  maintenance  thereof  are  only
      contemplated by the Market Act, then they would fall  squarely  within
      the topic of legislative power envisaged  by  Entry  28  of  List  II.
      However, the Market Act, as we will presently show, deals with  supply
      and distribution of goods as well as trade and commerce therein as  it
      seeks to regulate the sale and purchase of agricultural produce to  be
      carried on in the specified markets under the Act. To that extent  the
      provisions of Entry 33 of List III override the legislative powers  of
      the State Legislature in connection  with  legislations  dealing  with
      trade and commerce in, and the production, supply and distribution of,
      goods. Once we turn to Entry 33 of the Concurrent List, we  find  that
      on the topic of trade and commerce in, and the production, supply  and
      distribution of, goods enumerated therein at sub-clause (b),  we  find
      listed items of foodstuffs, including edible oilseeds and  oils.  Thus
      to  the  extent  to  which  the  Market  Act  seeks  to  regulate  the
      transactions of sale and purchase of sugarcane  and  sugar  which  are
      foodstuffs and trade and commerce therein, it has to be held that  the
      Market Act being enacted under the topics of legislative powers  under
      Entries 26, 27 and 28  of  List  II  will  be  subject  to  any  other
      legislation under Entry 33 of the Concurrent List. As it will be  seen
      hereinafter, the Bihar Legislature itself has  enacted  the  Sugarcane
      Act in exercise of its  legislative  powers  under  Entry  33  of  the
      Concurrent List and, therefore, the field covered by the Sugarcane Act
      would obviously remain exclusively governed by the Sugarcane  Act  and
      to the extent the latter Act carves out an independent field  for  its
      operation, the sweep of the general field covered by  the  Market  Act
      which covers all types of agricultural produce, would  pro  tanto  get
      excluded qua sugarcane and the products prepared out of it.”



      The Constitution Bench then took congnizance  of  the  fact  that  the
Bihar Sugarcane Act, 1981 was a later enactment, referred to the  provisions
of that Act and proceeded to observe:
      “The aforesaid provisions of the Sugarcane Act leave no room for doubt
      that the Bihar  Legislature  in  its  wisdom  has  enacted  a  special
      machinery for regulating the purchase and  sale  of  sugarcane  to  be
      supplied to  sugar  factories  for  manufacturing  sugar  out  of  the
      sugarcane produced  for  them  in  the  reserved  area.  The  relevant
      provisions of the Act project a well-knit and exhaustive machinery for
      regulating the production, purchase and sale of  sugarcane  for  being
      supplied as appropriate raw material to  the  factories  manufacturing
      sugar and molasses out of them.


      The aforesaid provisions, therefore, clearly indicate  that  the  need
      for  regulating  the  purchase,  sale,  storage  and   processing   of
      sugarcane, being an “agricultural produce”, is completely met  by  the
      comprehensive machinery provided by the Sugarcane Act enacted  by  the
      very same legislature which enacted the general Act being  the  Market
      Act.


      Once that conclusion is reached, it becomes obvious  that  the  Market
      Act which is an enabling  Act  empowering  the  State  authorities  to
      extend the regulatory net of the said  Act  to  notified  agricultural
      produce as per Section 3(1) will get its general  sweep  curtailed  to
      the extent the special Act being the Sugarcane Act enacted by the very
      same legislature carves out  a  special  field  and  provides  special
      machinery for regulating  the  purchase  and  sale  of  the  specified
      “agricultural produce”, namely, sugarcane. It has also to be  kept  in
      view that the very heart of the Market Act is Section 15  of  the  Act
      which reads as under:


        “15. Sale of  agricultural  produce.—(1)  No  agricultural  produce
      specified in notification under sub-section (1) 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.


        (2) The sale and purchase of  such  agricultural  produce  in  such
      areas shall notwithstanding 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 a  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,
      the provisions of the Sugarcane Act and the provisions of  the  Market
      Act, especially Section 15 read with Section 3(1), cannot harmoniously
      coexist.”



      After further discussion, the Court observed:
      “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. It 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  a  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  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 coexist 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 the 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  raw
      material by the Sugarcane Act would get dereserved  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  the  subject-matter  of  a  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.”



      The Constitution Bench also considered the provisions of  the  Control
Order and observed:
      “It has to  be  appreciated  that  the  aforesaid  provisions  of  the
      Sugarcane (Control) Order operate in the same field in which the Bihar
      legislative 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 sugar factories.  It  is,  however,
      true that a comprehensive procedure or machinery for  enforcing  these
      provisions is found in greater detail in  the  Sugarcane  Act  of  the
      Bihar  Legislature.  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.”



21.   In H.S. Jayanna v. State of  Karnataka  (supra),  the  appellants  had
challenged the levy of market  fee  on  rice  by  the  Marketing  Committees
constituted under the Karnataka Agricultural Produce Marketing  (Regulation)
Act, 1966 on the ground that the provisions of  the  Act  are  repugnant  to
those contained in the Karnataka Rice Procurement (Levy) Order, 1984  framed
under the Essential Commodities Act. The learned Single  Judge  allowed  the
writ petitions filed by the appellants but his order  was  reversed  by  the
Division Bench. Before this Court, reliance was placed on  the  judgment  in
Belsund Sugar Co. Ltd. v. State of Bihar (supra) in support of the  argument
that the provisions of the State Act were inconsistent with those  contained
in the Control Order. The  two  Judge  Bench  extensively  referred  to  the
findings and conclusions recorded in Belsund Sugar  Co.  Ltd.  case  (supra)
and proceeded to observe:

      “We have  no  hesitation  in  concluding  that  the  entire  field  of
      regulating the purchase and sale of paddy or the rice produced out  of
      paddy is not covered under the Control Order. The  provisions  of  the
      Marketing Act do not trench up the field covered by the Control Order.
      There is no inconsistency between the Control Order and the  Marketing
      Act. They do not cover the same field and therefore  the  question  of
      any inconsistency, repugnancy or the Marketing Act  being  ineffectual
      in terms of Section 6 of the Essential Commodities Act in view of  the
      Control Order issued under Section 3 of the Essential Commodities  Act
      would  not  arise.  The  Control  Order  deals  with  the   compulsory
      acquisition of 1/3rd of rice of each variety produced by a miller at a
      purchase price fixed by the Government.  It  requires  the  miller  to
      supply to the  Government  or  its  purchase  agent  and  deliver  the
      procured rice at a notified place. It does not deal with the sale  and
      purchase of the remaining 2/3rd rice except that  the  miller  is  not
      permitted to remove the stock of rice from the mill  premises  without
      delivery of rice to the Government or its purchase agent  and  without
      obtaining a release certificate required to be taken under clause 8 of
      the said Order. It does not deal with the marketing or the  facilities
      to be provided to the grower, seller and purchaser  of  paddy  in  the
      market area or to the seller or purchaser of rice. The  Control  Order
      is thus limited in operation.  The  Marketing  Act  provides  for  the
      regulation of marketing of agricultural produce (which  rice  is)  and
      the establishment  and  administration  of  markets  for  agricultural
      produce and matters connected therewith in the State of Karnataka. The
      Marketing Act deals with the entire gamut of marketing of agricultural
      produce starting from the  establishment  of  the  Market  Committees,
      markets, declaration of market area,  market  yard,  market  sub-yard,
      regulation of marketing of specified agricultural produce therein  and
      for  obtaining   a   licence   under   the   Act,   the   process   of
      appointing/electing the Market Committees, the powers  and  duties  of
      the Market Committee [Section 63(1)], the facilities to be provided by
      the Market Committee [Section  63(2)]  and  the  levy  of  market  fee
      (Section 65). The  Marketing  Act  does  not  deal  with  any  of  the
      provisions made in the  Control  Order.  The  Control  Order  and  the
      Marketing Act do deal with the same subject but do not cover the  same
      field. There is no conflict between them. They do not occupy the  same
      field.”


                                                         (emphasis supplied)



22.   In our  view,  the  above  extracted  observations  do  not  help  the
appellants.  Rather, they support the conclusion recorded  by  us  that  the
entire field of the sale  and  purchase  of  sugarcane  is  covered  by  the
Sugarcane Act and the Control Order, which are special legislations and  the
provisions contained in the Market Act, which generally deal with  sale  and
purchase of  agricultural  produce  specified  in  the  Schedule  cannot  be
invoked for compelling the occupier of a factory engaged in the  manufacture
of sugar to take licence under Section 31  read  with  Section  32  and  pay
market fee in terms of Section 19 thereof because the  same  are  in  direct
conflict with the provisions contained in the Sugarcane Act and the  Control
Order.

23.    The  argument  of  the  learned  senior  counsel  appearing  for  the
appellants that the provisions of the Control Order cannot prevail over  the
Market Act because  the  same  was  enforced  after  receiving  Presidential
assent merits rejection. The reasons for this conclusion of ours are:

(i)  In the counter filed before the High Court, no  such  plea  was  raised
and no document was produced to show that the Market Act  was  reserved  for
Presidential Assent on the ground that the provisions contained therein  are
in conflict with those contained in the Control Order.

(ii)  It was not argued before the High Court that the  President  had  been
apprised of the conflict between the Control Order and the  Market  Act  and
he accorded assent after considering this fact.

(iii)  It also deserves to be mentioned that during the course  of  hearing,
this  Court   had   after  taking  cognizance  of  the  aforesaid  argument,
directed Shri B. S.  Banthia,  learned  counsel  for  the  State  of  Madhya
Pradesh to produce the record to show as to in what context the  Market  Act
was reserved for Presidential assent. After the judgment was reserved,  Shri
Banthia handed over an envelope containing File No.17/62/73-Judicial of  the
Ministry of Home Affairs, perusal of which reveals that the request  of  the
State Government for Presidential assent was processed by  the  Ministry  of
Home Affairs.  In the first instance, the Departments of  Agriculture,  Food
and Internal Trade as also the  Planning  Commission  were  asked  to  offer
their comments.  The Department of  Agriculture  conveyed  no-objection  but
wanted its suggestions to be incorporated in the Bill.  The others  did  not
offer any comment.  Thereafter, the Joint Secretary (Home) recorded  a  note
that the suggestions given by the Agriculture Department  will  be  sent  to
the State Government for consideration.   He  also  prepared  the  following
summary for consideration of the President:
                               “S U M M A R Y


      The Madhya Pradesh Krishi Upaj Mandi Vidheyak, 1972.


      The Madhya Pradesh Agricultural Produce Markets Act, 1960 has been  in
      force in the State since October, 1960.  During the operation  of  the
      Act for the last twelve  years,  the  number  of  agricultural  market
      committees has risen from 87 to  230.  The  working  of  the  Act  has
      revealed certain shortcomings and it was considered desirable  by  the
      State Government to review  the  Act  in  order  to  ensure  efficient
      working of  the  market  committees  to  the  best  advantage  of  the
      agriculturists as well as traders. A committee was constituted by  the
      State  Government  for  the  purpose  and  the  committee  recommended
      revision of the Act of 1960.  Hence  the  State  Government  have  got
      passed the present Bill.


      2.    The salient feature of the Bill are as follows:
            (i)   Establishment of markets for the specified  areas  and  of
           regulation  of  marketing  of  notified   agricultural   produce
           therein.
            (ii)  Establishment of market committee for  every  market  area
           and constitution of State Marketing Service to secure  efficient
           administration of market committees.
            (iii) Constitution of  the  Madhya  Pradesh  State  Agricultural
           Marketing Board at the State level to  coordinate  the  work  of
           market  committees  in  the  State  and  to  advise  the   State
           Government.
            (iv)  Election of Chairman of market committee from amongst  the
           representatives of agriculturists.
            (v)   Provision for deterrent punishment for resorting to  trade
           malpractices by market functionaries in the market area.


      3.    Having regard to the provisions of article 31(3), 254(2) and 304
      of the Constitution of India,  the  Governor  of  Madhya  Pradesh  has
      reserved the Bill for the consideration and assent of the President.


      4.    The Department of  Agriculture,  Department  of  Food,  Planning
      Commission and the Department of Internal  Trade  who  were  consulted
      have no objection to the assent of the President being  given  to  the
      Bill. The Department of Agriculture have, however, suggested that  the
      details of the composition of the State Marketing  Board,  which  have
      not been given in the Bill, should be  specified  in  the  Bill.  This
      suggestion will be communicated to the State Government. The  Ministry
      of Law who were consulted do not see any objection to  the  assent  of
      the  President  being  given  to  the  Bill   from   the   legal   and
      constitutional point of view. Accordingly, if the  Minister  approves,
      the Bill may be recommended to the President for his assent.
                                                                      (Sd/-)
                                                               (P.P. Nayyar)
                                                           Joint Secretary.”



24.    From the summary reproduced hereinabove, it is clear that  the  State
Government had not reserved the Market Act for Presidential  assent  on  the
ground of any repugnancy between the provisions of that Act and the  Control
Order.  As a matter of fact,  the  State  Government  could  not  have  even
thought of any repugnancy between these statutes  because  at  the  relevant
time, sugarcane was not treated as  an  agricultural  produce  and  was  not
included in the Schedule appended to the Market Act.

25.   The nature and scope of Presidential assent under  Article  254(2)  of
the Constitution was considered by the Constitution Bench in Gram  Panchayat
of Village Jamalpur v. Malwinder  Singh  (supra).   In  that  case,  it  was
argued that the President’s assent to Section 3(a)  of  the  Punjab  Village
Common Lands (Regulation) Act,  1953  would  give  it  precedence  over  the
Administration  of  Evacuee  Property  Act,  1950,  which  was  enacted   by
Parliament.  The Constitution Bench held that the assent  of  the  President
under Article 254(2) of the Constitution is not an empty formality  and  the
President has to be apprised of the reason why his assent was being  sought.
 The Constitution Bench further held that if the  assent  is  sought  for  a
specific purpose, the efficacy of assent would be limited  to  that  purpose
and cannot be extended beyond it. The relevant  observations  made  on  this
issue are contained in Para 12, which is extracted below:


      “12. The Punjab Act of 1953 was  reserved  for  consideration  of  the
      President and received his assent on December 26, 1953.  Prima  facie,
      by reason of the assent of the President, the Punjab Act would prevail
      in the State of  Punjab  over  the  Act  of  the  Parliament  and  the
      Panchayats would be at liberty to  deal  with  the  Shamlat-deh  lands
      according to the relevant Rules  or  bye-laws  governing  the  matter,
      including the evacuee interest therein. But, there is  a  complication
      of some nicety arising out  of  the  fact  that  the  Punjab  Act  was
      reserved for the assent of the President, though for the specific  and
      limited purpose of Articles 31 and 31-A of the  Constitution.  Article
      31, which was deleted by  the  Constitution  (Forty-fourth  Amendment)
      Act, 1978 provided for compulsory acquisition of property. Clause  (3)
      of that article provided that, no law referred to in clause (2),  made
      by the Legislature of a State  shall  have  effect  unless  such  law,
      having been reserved for  the  consideration  of  the  President,  has
      received his assent. Article 31-A confers protection upon laws falling
      within clauses (a) to (e) of that article, provided that such laws, if
      made  by  a  State  Legislature,  have  received  the  assent  of  the
      President. Clause (a) of Article 31-A  comprehends  laws  of  agrarian
      reform.  Since  the  Punjab  Act  of  1953  extinguished  all  private
      interests in Shamlat-deh lands and vested those lands in  the  Village
      Panchayats and since, the Act was a measure of agrarian reform, it was
      reserved for the consideration of the President. The judgment  of  the
      High Court shows that the hearing of the writ petitions was  adjourned
      to enable the State Government to  place  material  before  the  Court
      showing the purpose for which the Punjab Act of 1953 was forwarded  to
      the President for his  assent.  The  record  shows,  and  it  was  not
      disputed either before us or in the High Court, that the Act  was  not
      reserved for the assent of the President on the  ground  that  it  was
      repugnant to an earlier Act passed  by  the  Parliament,  namely,  the
      Central Act of 1950. In these circumstances, we agree  with  the  High
      Court that the Punjab Act of 1953 cannot be said to have been reserved
      for the assent of the President within the meaning of  clause  (2)  of
      Article 254 of the Constitution insofar as  its  repugnancy  with  the
      Central Act of 1950 is concerned. The assent of  the  President  under
      Article 254(2) of the Constitution is not a matter of idle  formality.
      The President has, at least, to be apprised  of  the  reason  why  his
      assent is sought if, there is any special reason for doing so. If  the
      assent is sought and given in general terms so as to be effective  for
      all purposes, different considerations may legitimately arise. But if,
      as in the instant case, the assent of the President is sought  to  the
      Law for a specific purpose,  the  efficacy  of  the  assent  would  be
      limited to that purpose and cannot be extended beyond it. Not only was
      the President not apprised in the instant case  that  his  assent  was
      sought because of the repugnancy between the State Act  and  the  pre-
      existing Central Act on the vesting of  evacuee  properties  but,  his
      assent was  sought  for  a  different,  specific  purpose  altogether.
      Therefore, that assent cannot  avail  the  State  Government  for  the
      purpose  of  according  precedence  to  the  law  made  by  the  State
      Legislature, namely, the Punjab Act of 1953, over the law made by  the
      Parliament, even within the jurisdiction of the State.”


                                                         (emphasis supplied)



26.   The proposition laid down in Gram Panchayat  of  Village  Jamalpur  v.
Malwinder Singh (supra) was considered  by  another  Constitution  Bench  in
Kaiser-I-Hind Pvt. Ltd. v. National Textile Corporation (Maharashtra  North)
Ltd. (supra).  Speaking for the majority of the Court, Shah, J. observed:


      “In view of the aforesaid requirements, before obtaining the assent of
      the President, the State Government has to point out that the law made
      by the  State  Legislature  is  in  respect  of  one  of  the  matters
      enumerated in the Concurrent List by mentioning entry/entries  of  the
      Concurrent List and that it contains provision or provisions repugnant
      to the law made by Parliament or  existing  law.  Further,  the  words
      “reserved for consideration”  would  definitely  indicate  that  there
      should  be  active  application  of  mind  by  the  President  to  the
      repugnancy pointed out between the proposed State law and the  earlier
      law made by Parliament and the necessity of having such a law, in  the
      facts and circumstances of the matter, which is  repugnant  to  a  law
      enacted by Parliament prevailing in a State. The word  “consideration”
      would manifest that after careful thinking over and due application of
      mind regarding the necessity of having State law which is repugnant to
      the law made by Parliament,  the  President  may  grant  assent.  This
      aspect is further reaffirmed by use of the  word  “assent”  in  clause
      (2), which implies  knowledge  of  the  President  to  the  repugnancy
      between the State law and the earlier law made by  Parliament  on  the
      same subject-matter and the reasons for grant of such assent. The word
      “assent” would mean in the context as an expressed agreement  of  mind
      to what is proposed by the State.”


                                                         (emphasis supplied)



Shah, J. then  referred  to  various  meanings  of  the  word  “assent”  and
observed:
      “Applying the aforesaid meaning of the  word  “assent”  and  from  the
      phraseology used in clause (2), the object of Article  254(2)  appears
      that even though the law made  by  Parliament  would  have  supremacy,
      after considering the situation prevailing  in  the  State  and  after
      considering the repugnancy  between  the  State  legislation  and  the
      earlier law made by Parliament, the President may give his  assent  to
      the law made by the State Legislature. This would require  application
      of mind to both the laws and the repugnancy as well  as  the  peculiar
      requirement of the State to have such a law, which is repugnant to the
      law made  by  Parliament.  The  word  “assent”  is  used  purposefully
      indicating affirmative action of the proposal made by  the  State  for
      having law repugnant to the earlier law made by Parliament.  It  would
      amount to accepting or conceding and concurring to the demand made  by
      the State for such law. This cannot be done without  consideration  of
      the relevant  material.  Hence,  the  phrase  used  is  “reserved  for
      consideration”,  which  under  the  Constitution  cannot  be  an  idle
      formality but would require  serious  consideration  on  the  material
      placed before the President. The “consideration” could only be to  the
      proposal made by the State.


      It is true that the President's assent as notified in the Act  nowhere
      mentions that assent was obtained qua  repugnancy  between  the  State
      legislation and specified certain law or laws of Parliament. But  from
      this, it also cannot be inferred  that  as  the  President  has  given
      assent, all earlier law/laws on the subject would not prevail  in  the
      State. As discussed above before grant of the assent, consideration of
      the reasons for having such law is  necessary  and  the  consideration
      would mean consideration of the proposal made by the State for the law
      enacted despite  it  being  repugnant  to  the  earlier  law  made  by
      Parliament on the same subject. If the proposal made by the  State  is
      limited qua the repugnancy of the State law and law or laws  specified
      in the said proposal, then it cannot  be  said  that  the  assent  was
      granted qua the repugnancy between the State law and  other  laws  for
      which no assent was  sought  for.  Take  for  illustration  —  that  a
      particular provision, namely, Section 3 of the State law is  repugnant
      to enactment A made by Parliament; other provision, namely, Section  4
      is repugnant to some provisions of enactment B made by Parliament  and
      Sections 5 and 6 are repugnant to some provisions of enactment  C  and
      the State submits  proposal  seeking  “assent”  mentioning  repugnancy
      between the State law and provisions of enactments  A  and  B  without
      mentioning anything with  regard  to  enactment  C.  In  this  set  of
      circumstances, if the assent of the President is obtained,  the  State
      law with regard to enactments A and B would prevail but with regard to
      C, there is no proposal and  hence  there  is  no  “consideration”  or
      “assent”. Proposal by the State pointing out  repugnancy  between  the
      State law and of the law enacted by Parliament is a sine qua  non  for
      “consideration” and “assent”. If there is no proposal, no question  of
      “consideration” or “assent” arises. For finding out  whether  “assent”
      given by the President  is  restricted  or  unrestricted,  the  letter
      written or the proposal made by the  State  Government  for  obtaining
      “assent” is required to be looked into.”



27.   In his concurring judgment, Doraiswamy Raju,  J.  made  the  following
observations:


      “The assent of the President envisaged under Article 254(2) is neither
      an idle or empty formality, nor an automatic event, necessitated or to
      be given for the mere asking, in whatever form or manner  and  whether
      specific, vague, general or indefinite — in the terms  sought  for  to
      claim that once sought and obtained as well as published, a curtain or
      veil is drawn, to preclude any probe or contention  for  consideration
      that what was sought and obtained was not really what should and ought
      to have been, to claim the protection envisaged under  clause  (2)  in
      respect of a particular State law vis-à-vis or with reference  to  any
      particular or specified law on the same subject made by Parliament  or
      an existing law, in force. The repugnancy envisaged under  clause  (1)
      or enabled under clause (2) to get excepted from under the  protective
      coverage of the assent obtained from the President, is such that there
      is a legislation or legislative provision(s), covering  and  operating
      on the same field or identical subject-matter made by both  the  Union
      and the State, both of them being competent to enact in respect of the
      same subject-matter or  legislative  field,  but  the  legislation  by
      Parliament has come to occupy the entire field.  Necessarily,  in  the
      quasi-federal structure adopted for the nation, predominance is  given
      to the law made by Parliament and in such circumstances only the State
      law which secured the assent of the  President  under  clause  (2)  of
      Article 254 comes to be protected, subject of course to the powers  of
      Parliament under the  proviso  to  the  said  clause.  Therefore,  the
      President has to be apprised of the reasons at least  as  to  why  his
      assent is being sought, the need or necessity and the justification or
      otherwise for claiming predominance for the State law concerned.  This
      itself  would  postulate  an  obligation,  inherent  in   the   scheme
      underlying as well as the very  purpose  and  object  of  seeking  the
      assent under clause (2) of Article 254, to enumerate  or  specify  and
      illustrate the particular Central law or provision with  reference  to
      which the predominance is desired. The absence of any standardized  or
      stipulated form in which it is to be sought for,  should  not  detract
      the State concerned, to  disown  its  obligation  to  be  precise  and
      specific in the extent of  protection  sought  having  regard  to  the
      serious  consequences  which  thereby  inevitably  follow   i.e.   the
      substitution of the Union law in  force  by  the  State  law,  in  the
      territorial limits of the State concerned, with drastic alteration  or
      change in the rights of citizen, which it may, thereby bring about.


      The mere forwarding of a copy of the Bill may obviate, if at all, only
      the need to refer to each one of the provisions therein in  detail  in
      the requisition sent or the letter forwarding it, but  not  obliterate
      the necessity to point out specifically the particular Central law  or
      provisions with reference to which, the  predominance  is  claimed  or
      purported  to  be  claimed.   The   deliberate   use   of   the   word
      “consideration” in clause (2) of Article 254, in  my  view,  not  only
      connotes that there should be an active application of mind, but  also
      postulates a deliberate and careful thought process  before  taking  a
      decision to accord or not to accord the  assent  sought  for.  If  the
      object of referring the State law for consideration  is  to  have  the
      repugnancy resolved by securing predominance to  the  State  law,  the
      President has  to  necessarily  consider  the  nature  and  extent  of
      repugnancy,  the  feasibility,   practicalities   and   desirabilities
      involved therein, though may not be obliged to write a judgment in the
      same manner, the courts of law do, before arriving at a conclusion  to
      grant or refuse to grant or even grant partially, if the repugnancy is
      with reference to more than one  law  in  force  made  by  Parliament.
      Protection cannot be claimed for the State law, when questioned before
      courts, taking cover under the assent, merely asserting that it was in
      general form, irrespective  of  the  actual  fact  whether  the  State
      claimed for such protection against a specific law or the attention of
      the President was invited to at least an apprehended repugnancy vis-à-
      vis the particular Central law. In the teeth  of  innumerable  Central
      laws enacted and in force on concurrent subjects  enumerated  in  List
      III of the Seventh Schedule to the  Constitution,  and  the  hoard  of
      provisions contained therein, artificial  assumptions  based  on  some
      supposed knowledge of all those provisions and the presumed regularity
      of official acts, cannot be blown out of proportion, to do  away  with
      an essential exercise, to make the “assent” meaningful, as if they are
      empty formalities, except at the risk of rendering Article 254  itself
      a dead letter or merely otiose. The significant and serious alteration
      in or modification of the  rights  of  parties,  both  individuals  or
      institutions resulting from  the  “assent”  cannot  be  overlooked  or
      lightly brushed aside as of no significance, whatsoever. In a  federal
      structure, peculiar to the one adopted by our  Constitution  it  would
      become necessary for the President to be apprised of the reason as  to
      why and for what special reason or object  and  purpose,  predominance
      for the State law over the Central law is sought, deviating  from  the
      law in force made by Parliament for the entire country, including that
      part of the State.”


                                                         (emphasis supplied)



28.   In view of the aforesaid judgments of  the  Constitution  Benches,  we
hold that Article 254(2)  of  the  Constitution  is  not  available  to  the
appellants for seeking a declaration that the Market Act would prevail  over
the Control Order and that transactions involving the purchase of  sugarcane
by the factories operating in the market areas  would  be  governed  by  the
provisions contained in the Market Act.  As a corollary, we  hold  that  the
High Court did not commit any  error  by  quashing  the  notices  issued  by
appellant - Market Committees to the  respondents  requiring  them  to  take
licence under the  Market  Act  and  pay  market  fee  on  the  purchase  of
sugarcane from Cane Growers/Cane Growers Cooperative Societies.

29.   In the result, the appeals are dismissed.  The  parties  are  left  to
bear their own costs.


                                                        …..…..…….………………….…J.
                                       [G.S. Singhvi]



                                                     …..…..……..…..………………..J.
                                                  [H.L. Dattu]
New Delhi,
August 30, 2012.
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