Market fee on castor seeds purchased by company in the market area of Agricultural
Produce Market Committee, Baroda (for short “APMC”) - Apex court held as the company bought the seeds , it is not entitled for any exemption for fee as it is agriculture product =
The
respondent-Company, manufacturing castor oil from out of the castor seeds
purchased by it comes under the jurisdiction of the market area of the APMC
and therefore, it is liable for paying the market fees/cess for the trading
activities carried out by it in the market area. APMC levied market fee on
the castor seeds bought by the Company on the basis that castor seeds were
brought within the market area of APMC. =
We
hold that the demand for the market fee made by the APMC for castor seeds is justified as per the reasoning given in our judgment in the connected Civil Appeal No. 3130 of 2008, that the castor seeds were bought in the market area and not brought into the market area.
It would suffice to say
that the order dated 10.02.2009 of the Division Bench of the High Court in
Letters Patent Appeal No. 1383 of 2008 setting aside the order dated
13.11.2008 of the learned single Judge in Special Civil Application No.
9705 of 2008 and affirming the order dated 30.06.2008 of the Revisional
Authority in Revision Application No.69 of 2008, without examining the
correctness of Rule 48(2) of the Rules and applying the Division Bench
Judgment rendered in Letters Patent Appeal No 139 of 2006 without
considering the factual matrix and therefore, the same is liable to be set
aside.
Accordingly, we set aside the same and remand the matter to the High
Court to place the matter before the roster of learned single Judge to
examine the validity of Rule 48(2) of the Rules, as questioned with
reference to Section 28A of the amended provision of Act No. 17 of 2007 and
the impugned order of the Revisional Authority. The appellant may also
approach the State Government to amend the Rules by deleting Rule 48(2) of
the Rules. It is open for the appellant to either press the Special Civil
Application to be decided on merits with regard to the validity of Rule
48(2) and also examine the impugned order of levying market fees on the
goods purchased by the respondent-Company on the basis of facts and
material evidence or to make revision application to the State Government
seeking for the deletion of Rule 48(2) by amending the Rules with the above
said observation.
7. This Civil Appeal is accordingly allowed in the above terms by setting
aside the impugned order of the Division Bench and remanding the matter to
the High Court to place the same before the roster of learned single Judge
with a request to him to examine the validity of the impugned Rule if the
APMC so desires and the impugned order passed by the Revisional Authority
and decide the same on merits. The interim directions given by the learned
single Judge by way of interim order dated 13.11.2008 directing to deposit
50% of the demanded amount towards the market fee is restored. If the
company has not complied with that interim order, it shall comply with the
same within two weeks from the date of receipt of the copy of this
judgment.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS.3130-3131 OF 2008
AGRICULTURAL PRODUCE MARKET COMMITTEE ……APPELLANT
Versus
BIOTOR INDUSTRIES LTD. & ANR. ….RESPONDENTS
J U D G M E N T
V. Gopala Gowda, J.
These appeals have been directed against the common judgment and order
dated 24.04.2007 passed by the High Court of Gujarat at Ahmedabad in
Letters Patent Appeal Nos. 139 of 2006 and 195 of 2006 in Special Civil
Application No. 13606 of 2005 with Civil Application No. 514 of 2006 and
Civil Application No. 1380 of 2006 filed by the appellant-Agricultural
Produce Market Committee, Baroda (for short “APMC”) as it is aggrieved by
the dismissal of its Letters Patent Appeal No.195 of 2006. The High Court
allowed Letters Patent Appeal No. 139 of 2006 preferred by the
respondent-Company. Both the Letters Patent Appeals were filed against the
order dated 22.12.2005 of learned single Judge passed in Special Civil
Application No.13606 of 2005 whereby the learned single Judge substantially
set aside the order dated 19.4.2005 of the Revisional Authority and partly
allowed the application filed by the APMC by framing questions of law.
2. The brief facts of the case are stated below to appreciate the rival
claims of the parties and to find out as to whether the appellant-APMC is
entitled for the relief sought for in these appeals:
The appellant-APMC was constituted pursuant to Notification issued on
14.1.1958 under the provisions of the Bombay Agricultural Produce Markets
Act, 1939 and the area of Baroda city and Baroda Taluk of Baroda District
was declared as the market area for the purpose of Gujarat Agricultural
Produce Markets Act, 1963 (hereinafter referred to as “the Act”).
The
respondent-Company, manufacturing castor oil from out of the castor seeds
purchased by it comes under the jurisdiction of the market area of the APMC
and therefore, it is liable for paying the market fees/cess for the trading
activities carried out by it in the market area. APMC levied market fee on
the castor seeds bought by the Company on the basis that castor seeds were
brought within the market area of APMC.
The respondent-Company contested
the said levy by filing Revision Application No. 2 of 2005 under Section 48
of the Act before the State Government contending that castor seeds were
brought into the market area of the APMC, Baroda as provided under sub-rule
(2) of Rule 48 of the Gujarat Agricultural Produce Market Rules, 1965 (for
short “the Rules”) and no fees are leviable on agricultural produce brought
from outside the market area into the market area for use therein by the
industrial concern situated in the market area. The State Government vide
its order dated 19.04.2005 decided the Revision Application No. 2 of 2005
in favour of the respondent-Company by setting aside the order dated
27.12.2004 issued by the APMC levying the market fee.
3. The APMC filed a Special Application No. 13606 of 2005 under Articles
226, 14 & 19 of the Constitution of India before the High Court against the
said order of the State Government. The learned single Judge of the High
Court after hearing the parties at length partly allowed the said
application holding that the sale of the castor seeds in question took
place within the market area of APMC, Baroda, therefore, APMC was right in
levying the market fee on the castor seeds purchased by the respondent
within the market area of APMC. The learned single Judge in respect to
exemption clause in sub-rule 2 of Rule 48 held that the said exemption was available to the agricultural produce brought by the industrial concern itself from outside the market area into the market area of APMC and the exemption was not available where the castor seeds were bought within the market area by the seller and sold to the industrial concern within the
market area.
As such the learned single Judge upheld the plea of APMC for
levy of market fee on the castor seeds purchased by the respondent-Company.
In respect to the levy of market fee on de-oiled cake by APMC the learned
single Judge accepted the contention urged on behalf of the respondent-
Company and held that de-oiled cake could not be treated as oil cake, and
therefore, it was not eligible for levy of market fee since it was not
mentioned in the Schedule. Both the respondent-Company as well as the APMC
being aggrieved by the judgment and order dated 22.12.2005 of the learned
single Judge preferred Letters Patent Appeal No.139 of 2006 and Letters
Patent Appeal No. 195 of 2006 respectively. The Division Bench of the High
Court allowed the appeal preferred by the respondent-Company and dismissed
the appeal preferred by the APMC and stated that as soon as the
agricultural produce, namely, castor seeds, bought by the representatives
of the Company, is brought from outside the market area into the market
area, after payment of octroi on such produce in their capacity as owner of
the goods, the same would be treated as completion of sale outside the
jurisdiction of the market area. The Division Bench of the High Court,
therefore, held that the collection of market fees from the respondent-
Company by APMC is contrary to the provisions of the Rules, namely, Rule
48, sub-rule (2) of the Rules, which grants exemption to agricultural
produce brought from outside into market area by the industrial unit for
its own use. On the second issue, the High Court held that the by-product,
namely, de-oiled cake contains less than 1% oil and is not notified in the
Schedule as per Section 2(i) of the Act and hence, the above product being
totally different from oil cake, there is no liability upon the respondent-
Company to pay the market fees. Hence, the present Civil Appeals.
4. It is the case of the APMC that on 31.3.2004, the Director of APMC,
Baroda and Rural Finance, Gujarat State, in exercise of the power vested in
him under the Act, issued Notification including castor seeds and castor
cake in the regulated agricultural produces of APMC, Baroda. On 19.4.2004
the Notification issued by the APMC, Baroda through its Director was
published in the daily newspaper intimating that the trading of those
produces is liable for paying of market fees/cess to the APMC, Baroda. On
28.6.2004 the APMC issued notices to the respondent-Company asking it to
produce the accounts for the period 19.4.2004 to 30.11.2004 in respect of
the goods being used in the mill and further asked to obtain license from
Market Committee for the year 2004-2005. The respondent-Company failed to
submit the accounts and further failed to obtain license within the
stipulated period as mentioned in an earlier letter dated 28.6.2004, and
therefore, the APMC sent the reminder to the respondent-Company and asked
to comply with the direction. Vide letter dated 7.12.2004 the respondent-
Company submitted monthly statement for the period 19.4.2004 to 30.11.2004
in respect of the purchases of castor seeds made by the Company. APMC on
the basis of the details provided by the respondent-Company prepared a
statement showing the names of the suppliers, weight, price, quantity and
amount paid by the company as per the weighment made by the Company which
clearly shows that as per bills, different parties were selling castor
seeds to the respondent-Company for which weighment was done at the mill
site in the market area Baroda and payment made to the parties as per the
weighment done by the respondent-Company. On 27.12.2004 on the basis of
statement submitted by the respondent-Company, the APMC assessed the market
cess for the purchases of the castor seeds in the market area in respect of
the same being used for processing and converting them into castor oil and
oil cake and on the basis of assessment the respondent-Company was directed
to pay the market cess of [pic] 1,27,46,349.38 within a period of
10 days.
5. Being aggrieved by the said assessment made by APMC on 27.12.2004,
the respondent-Company preferred Revision Application No. 2 of 2005 under
Section 48 of the Act before the State of Gujarat on 05.01.2005 challenging
the decision of the APMC directing it to pay the market cess as per its
letter dated 27.12.2004. To the said Revision Application, APMC filed its
reply on 23.01.2005. The respondent-Company filed rejoinder on 23.02.2005
to the reply filed by the APMC. The Deputy Secretary, (Appeal) allowed the
Revision Application No. 2 of 2005 by its cryptic order dated 19.04.2005
and set aside the order dated 27.12.2004 passed by APMC. It is the case of
the APMC that the Revisional Authority erroneously arrived at the
conclusion that Rule 48(1) is not applicable and wrongly held that Rule
48(2) was applicable to the fact situation and further wrongly held that no
market fee is to be paid by the respondent-Company on the de-oiled cake.
6. Being aggrieved by the order of the Revisional Authority dated
19.4.2005 in Revision Application No. 2 of 2005 of the Revisional
Authority, the APMC preferred Civil Application No. 13606 of 2005 before
the learned single Judge of the High Court of Gujarat. The learned single
Judge after hearing the parties vide its order dated 22.12.2005 set aside
the order of revision in so far as the levy of market fee on the castor
seeds is concerned holding that the sale did take place within the market
area and therefore APMC was authorized to charge fee from the respondent-
Company for such purchase and partly allowed the application. However, the
learned single Judge, with respect to the levy of fee on the de-oiled cake
which was sold by the respondent-Company held that it is the by-product in
the course of manufacturing of castor oil and therefore, it is not an
agricultural produce and not liable to levy of market fee.
7. Being aggrieved by the said judgment dated 22.12.2005, the respondent-
Company filed Letters Patent Appeal No. 139 of 2006 on 18.1.2006 before the
Division Bench of the Gujarat High Court challenging the findings of
learned single Judge that market fee is exigible on the purchase of castor
oil seeds by the industrial concern. The APMC also being aggrieved by the
said order dated 22.12.2005 of learned single Judge filed Letters Patent
Appeal No. 195 of 2006 for rejecting of claim of APMC, Baroda for market
fees/cess on de-oiled cake. The Division Bench of the High Court on
24.4.2007 after hearing the parties allowed the appeal of the respondent-
Company and dismissed the appeal of the APMC, Baroda after setting aside
the order of the learned single Judge holding that Rule 48(2) is applicable
and that the castor seeds were brought from outside the market area. The
Division Bench upheld the rejection of the Special Civil Application No.
13606 of 2005 filed by the APMC, Baroda not accepting the case pleaded by
it that market fee is levied on de-oiled cake which is a by-product sold by
it and is not exigible goods as it is not an agricultural produce.
Aggrieved by the common judgment, present appeals are filed.
8. On the basis of the legal grounds urged in these appeals questioning
the correctness of the findings and reasons recorded by the Division Bench
of the High Court on both the points which have been formulated by it, the
following points would arise for the consideration of this Court in these
appeals:-
1) Whether the APMC, Baroda is liable to claim the
market fee on the castor seeds purchased by the
respondent-Company on the plea that the same were
purchased within the market area of APMC, Baroda
which castor seeds are used by the said industrial
concern for manufacture of castor oil within the
market area of APMC, Baroda?
2) Whether purchase of the castor seeds for use of the
respondent industrial concern for manufacturing
castor oil falls within Rule 48(2) of the Rules to
get exemption from payment of market fee?
3) Whether the Division Bench was justified in setting
aside the finding of fact recorded by the learned
single Judge, holding that the castor seeds purchased
by the respondent-Company are within the market area
of APMC?
4) Whether the Division Bench is justified in recording
the finding on point No.2 in connection with LPA No.
195 of 2006 that the respondent concern is not liable
to pay any market fee on the de-oiled cakes sold by
it which are stated to be the by-product in the
course of manufacturing castor oil which is not one
of the items enumerated in the Schedule to the Act
and notification issued by the Directorate?
5) What order?
Answer to Point Nos. 1 to 3
9. The point Nos. 1 to 3 are answered together as they are inter-related
with each other by assigning the following reasons:
It would be necessary for this Court to refer to the definition of
‘Agricultural Produce’ under Sections 2(i) and provisions relating to levy
of market fee under Section 28 of the Act and under Rule 48(1) of the Rules
for the purpose of appreciating the factual matrix with reference to the
rival legal contentions urged on behalf of the parties:-
“2(i)-“agricultural produce” means all produce, whether
processed or not, of agriculture, horticulture and animal
husbandry, specified in the Schedule.
Section 28: The market committee shall, subject to the
provisions of the rules and the maxima and minima from time to
time prescribed levy and collect fees on the agricultural
produce bought or sold in the market area:
Provided that the fees so levied may be collected by the Market
Committee through such agents as it may appoint.
Rule 48: Market fees:- (1) The market committee shall levy and
collect fees on agricultural produce bought or sold in the
market area at such rate as may be specified in the by-laws
subject to the following minima and maxima vis.,
1) rates when levied ad valorem shall not be less than 30
paise and shall not exceed [pic]2 (two) per hundred
rupees.
2) Rates when levied in respect of cattle, sheep or goat
shall not be less than 25 paise per animal and shall not
exceed [pic]4 per anmimal.
Explanation- For the purposes of this Rule a sale of
agricultural produce shall be deemed to have taken place in a
market area if it has been weighed or measured or surveyed or
delivered in case of cattle in the market area for the purpose
of sale, notwithstanding the fact that the property in the
agricultural produce has by reason of such sale passed to a
person in a place outside the market area.
(2) No fee shall be levied on agricultural produce brought
from outside the market area into the market area for use
therein by the industrial concerns situated in the market area
of for export and, in respect of which declaration has been made
and a certificate has been made and a certificate has been
obtained in Form V:-
Provided that if such agricultural produce brought into the
market are for export is not exported or removed therefrom
before the expiry of twenty days from the date on which it was
so brought, the market committee shall levy and collect fees on
such agricultural produce from the person bringing the produce
into the market area at such rates as may be specified in the by-
laws subject to the maximum and minimum specified in sub-rule
(i):
Provided that no fee shall be payable on a sale or purchase to
which sub-section (3) of Section 6 applies.”
10. It is an undisputed fact that the respondent-Company is an industrial
concern which has been undertaking manufacture of castor oil out of the
castor seeds which are declared as agricultural produce in the Schedule to
the Act vide notification issued by the Directorate of APMC, Baroda.
11. It is the case of the respondent-Company that the demand and
assessment made and levying the market fee on the castor seeds for the
period from 19.04.2004 to 30.11.2004 is erroneous as castor seeds were
purchased from outside the market area of APMC, Baroda and the same were
brought for the use of the industrial concern which is situated within the
market area of APMC, Baroda for the purpose of using the same for
manufacturing of the oil. In this regard, the APMC has called upon the
respondent-Company to produce the accounts for the period 19.04.2004 to
30.11.2004 in respect of the goods being used in the mill and was further
asked to obtain license from the Market Committee for the year 2004-2005.
On 07.12.2004, the respondent-Company submitted monthly statement for the
aforesaid period in respect of the purchases made of castor seeds by the
company. The APMC on the basis of details provided by the respondent-
Company prepared the statement showing the names of the suppliers,
weighment, quantity of the agricultural produce goods purchased and amount
paid by the company to its trader as per the weighment made by the company.
According to the committee, the purchases made by the company clearly
show, as per the bills issued to different parties for castor seeds sold to
the respondent-Company, that the weighment of castor seeds was made at mill
site in Baroda and payment was made to the parties as per the weighment
done by the respondent-Company. Therefore, on the basis of the assessment,
the respondent-Company was directed to pay the market cess of
[pic]1,27,46,349.38 vide its order dated 27.12.2004. The respondent-Company
aggrieved by the said assessment order preferred Revision Application No. 2
of 2005 under Section 48 of the Act before the State of Gujarat questioning
the correctness of the assessment order made by the APMC. The Deputy
Secretary (Appeal) after hearing the parties passed a cryptic order dated
19.04.2005 by allowing the Revision Application and setting aside the order
of assessment of the market Committee dated 27.12.2004. While allowing the
Revision Application, the Revisional Authority arrived at the conclusion
that Rule 48(1) of the Rules is not applicable and held that Rule 48(2)
will be applicable to the fact situation. The correctness of the same was
challenged before the learned single Judge of the High Court of Gujarat by
filing a petition under Article 226 of the Constitution i.e. Special Civil
Application No. 13606 of 2005.
12. The learned single Judge after giving opportunity to the respondent-
Company and hearing both the learned counsel appearing on behalf of the
parties has held that castor seeds have been bought within the market area
of APMC, therefore, sub-rule (1) of Rule 48 is applicable to the fact
situation and not sub-rule (2) of Rule 48 upon which reliance was placed by
the respondent-Company’s counsel. In arriving at the said conclusion the
learned single Judge has referred to the factual aspects with reference to
certain documents such as invoices, bill receipts etc. exchanged between
the respondent-company and its suppliers of castor seeds. The bill issued
by one Manish Trading Company of Naroda, Ahmedabad dated 03.05.2004 for
supply of 150 bags of castor seeds weighing 75 kilos each was examined.
The rate charged was [pic]305/- per 100 kg. The total quantity shown was
112.50 quintals and the total amount claimed was [pic]1,71,562/-. In the
said bill dated 03.05.2004, it was indicated that payment was yet to be
made. At page 28 to the compilation, there is a purchase voucher/remittance
note issued by the respondent-Company. It is not in dispute that the said
purchase voucher/remittance note pertains to the same consignment
transported by the Manish Trading Company under the bill dated 03.05.2004.
The purchase voucher indicates that the quantity of the castor seeds
received was short by 37.50 kilos. Weight of bags of 150 kilos was also
deducted from the quantity of castor seeds. The agreed rate of [pic]305/-
for 100 kilos remained constant and the respondent-Company therefore agreed
to remit a total amount of [pic]1,70,991/- to the Manish Trading Company
referred to supra. To the query from the court, the learned counsel
appearing on behalf of the company, on instructions, made submissions that
consignments were received from the sellers within the market area for the
purpose of finding out shortfall or pilferage and the payment is made to
the extent of actual quantity received. The learned single Judge has also
referred to the total quantity of castor seeds weighing 112.50 quintals
which was transported to the respondent-Company by Manish Trading Company
and it had made payment after weighing consignment and after finding out
the correct weight of the castor seeds received by it.
13. On the basis of the said material facts the learned single Judge
arrived at the conclusion that the respondent-Company placed order for
purchase of castor seeds from its suppliers from outside the market area
but no payment was immediately made for the same. On the demand of the
respondent-Company, the quantity of castor seeds so requisitioned by it was
transported by the supplier which was received by it within the market
area. It is an undisputed fact that the consignment so received was
weighed by the Company within the market area. Thereafter, on finding out
the exact weight of castor seeds received by it, the payment at the agreed
rate was made by the Company to the supplier. Therefore, the learned
single Judge came to the conclusion on the basis of appreciation of the
aforesaid facts and held that the sale was not effected till the
consignment was received by the respondent-Company and the same was weighed
within the market area. The learned single Judge has rightly rejected the
assertion made by the learned counsel on behalf of the Company holding that
in case of shortfall or loss or damage during transport, the seller could
claim damage from the transporter and that would further demonstrate that
the respondent-Company did not become owner of the goods till it took the
physical delivery thereof, weighing the same and satisfying itself about
the quantity received by it. It was held that it was not a mere formality
to find out the quantity by it but it has the essential element of making
payment depending on the extent of quantity received and in case of any
drastic shortfall in the quantity, the issue would be between the supplier
and the transporter. Further finding was recorded that if against the
quantity of 100 quintals of castor seeds supplied by the trader, the
respondent-Company received only half of it on account of loss, damage or
pilferage, the company would make payment only for such quantity leaving it
for the trader to recover the damages from the transporter. There would
also be a case where on account of some untoward and unforeseen
circumstances, such as natural calamity or theft, the respondent-Company
did not receive the full quantity of castor seeds, the payment shall be
made only for the quantity received by it and not for the entire quantity
to be supplied by the trader. The learned single Judge has further rightly
recorded the finding of fact that when the castor seeds reach the market
area, it was weighed by the Company and payment thereof was agreed to be
made to the tune of quantity received and till then the castor seeds
continue to be in the ownership of the seller. The Company becomes the
owner of the property only once the exact weight of the castor seeds was
ascertained and purchase voucher was obtained. The learned single Judge
rightly held that APMC is justified in contending that the sale of castor
seeds did take place within the market area and the appellant was
authorized to charge fees from the respondent-Company for such purchase.
Therefore, the learned single Judge held that the castor seed was bought by
the respondent-Company within the market area of APMC, Baroda and therefore
Rule 48(1) of the Rules is applicable to the fact situation and not Rule
48(2) as contended by the counsel. The said conclusion was arrived at after
referring to the provisions of Sections 19, 20 and 21 of the Sale of Goods
Act, 1930 and the Privy Council judgment in Hoe Kim Seing v. Maung Ba
Chit[1]. Sections 19, 20 and 21 of Sale of Goods Act are extracted
hereunder :-
“19. Property passes when intended to pass.-
(1) Where there is a contract for the sale of specific or
ascertained goods the property in them is transferred to the
buyer at such time as the parties to the contract intend it to
be transferred.
(2) For the purpose of ascertaining the intention of the parties
regard shall be had to the terms of the contract, the conduct of
the parties and the circumstances of the case.
(3) Unless a different intention appears, the rules contained in
Section 20 to 24 are rules for ascertaining the intention of the
parties as to the time at which the property in the goods is to
pass to the buyer.
20. Specific goods in a deliverable state.- Where there is an
unconditional contract for the sale of specific goods in a
deliverable state, the property in the goods passes to the buyer
when the contract is made, and it is immaterial whether the time of
payment of the price or the time of delivery of the goods, or both,
is postponed.
21. Specific goods to be put into a deliverable state.- Where there
is a contract for the sale of specific goods and the seller is bound
to do something to the goods for the purpose of putting them into a
deliverable state, the property does not pass until such thing is
done and the buyer has notice thereof.”
The above judgment of the Privy Council is referred to by this Court in the
decision of Agricultural Market Committee v. Shalimar Chemical Works
Limited[2] wherein the learned single Judge rightly extracted the following
paragraph from the said judgment and it is worthwhile to extract the same
hereunder :-
“40. In order that Section 20 is attracted, two conditions have to
be fulfilled :
i) the contract of sale is for specific goods which are in
a deliverable state; and
ii) the contract is an unconditional contract. If these two
conditions are satisfied, Section 20 becomes applicable
immediately and it is at this stage that it has to be
seen whether there is anything either in the terms of
the contract or in the conduct of the parties or in the
circumstances of the case which indicates a contrary
intention. This exercise has to be done to give effect
to the opening words, namely, “Unless a different
intention appears” occurring in Section 19(3). In Hoe
Kim Seing v. Maung Ba Chit, it was held that intention
of the parties was the decisive factor as to when the
property in goods passes to the purchaser. If the
contract is silent, intention has to be gathered from
the conduct and circumstances of the case.”
14. Therefore, the learned single Judge on the basis of documents which are
all admitted documents came to the right conclusion and held that the
castor seeds were bought by the respondent-Company within the market area.
Therefore, APMC has rightly made assessment of market fee and levied the
same as per Section 28 of the Act, which assessment order has been
erroneously set aside by the Revisional Authority without proper
appreciation of facts and applying the relevant provisions namely, Section
28 and Rule 48(1) and came to the erroneous conclusion and held that the
goods bought were brought from outside the market area for the purpose of
manufacturing oil by the Company in its factory. Therefore, the contention
that these are not exigible, was rightly set aside by the learned single
Judge and it was held that the respondent-Company is liable to pay market
fee which is cess on the purchase of castor seeds, justifying the claim of
the APMC. The order dated 22.12.2005 was questioned by the Company filing
Letters Patent Appeal No.139 of 2006 and that order was erroneously set
aside by the Division Bench by answering the point No.1 in favour of the
Company after referring to Rule 48(2) and erroneously applying the
aforesaid judgments. The learned single Judge rightly placed strong
reliance on the said judgment referred to supra and came to the right
conclusion and held that the sale of goods of castor seeds is within the
market area of APMC. The learned Division Bench on the other hand, further
placed strong reliance upon Rule 48(2) by placing reliance upon Form No. V
of the Rules, which is the Form of declaration and certificate produced by
the Company which were found from pages 79 to 86 which are totally
irrelevant for the purpose of finding out whether the goods i.e. the castor
seeds were bought by the Company within the market area of APMC or not.
15. The factual matrix is supported by the documents produced at Annexure
‘F’ to the Special Civil Application No. 13606 of 2005 which are the
documents of the respondent-Company which have been extensively referred to
by the learned single Judge in his judgment at para 11 to come to the
conclusion holding that the castor oil seeds were bought by the respondent-
Company within the market area of APMC and, therefore, he has rightly held
that Rule 48(2) is not applicable to the fact situation as claimed by the
respondent-Company and the reliance placed upon Form No. V which is the
Form of declaration and certificate obtained from the APMC seeking
exemption from payment of market fee on the castor seeds brought by it from
outside APMC area, is contrary to the material evidence on record and
therefore, the Division Bench has gravely erred in reversing the finding of
fact recorded by the learned single Judge on proper appreciation of
undisputed material evidence on record and recorded the finding of fact
with reference to Sections 19, 20 and 21 of the Sale of Goods Act and the
judgment of Privy Council referred to supra which has been referred to by
this Court in the Shalimar Works Ltd. case (supra) wherein the learned
single Judge rightly came to the conclusion that the castor seeds were
purchased by the Company in the market area for the relevant period in
question in respect of which the assessment order was passed levying the
market fee and directing the Company to pay the same was legal and valid.
The same came to be erroneously set aside by the Revisional Authority
without proper application of mind and law to the fact situation and the
same was then set aside by the learned single Judge of the High Court. The
said findings of the learned single Judge have been erroneously set aside
by the learned Division Bench at the instance of the respondent-Company in
LPA No.139 of 2006. Therefore, we have to hold that the said finding of
the Division Bench in reversing the legal and valid finding of fact
recorded by the learned single Judge on proper appreciation of facts and
undisputed evidence on record and rightly applying the provisions of the
Sale of Goods Act referred to supra and Rule 48(1) is erroneous. Therefore,
we have to set aside the said order passed in LPA No. 139 of 2006 and
restore the order of the learned single Judge passed in special civil
application No. 13606 of 2005 and allow the C.A. No. 3130 of 2008.
Answer to Point No. 4
16. The point No. 4 is answered against the APMC upholding the order of the
learned single Judge affirmed by the Division Bench of the High Court in
dismissing the Letters Patent Appeal No. 195 of 2006 of the appellant by
assigning the following reasons :-
It is an undisputed fact that oil cake is included in the Schedule as
an agricultural produce which is exigible agricultural produce in terms of
section 2(1)(i)of the Act. Sub-rule (iv) therein contains oil seeds. Item
No. 8 therein is castor seed and Item No. 11 therein is oil cakes.
The oil cake is the exigible agricultural produce for the purpose of
levying market fee upon such produce. On the basis of the factual and rival
contentions and on the basis of material evidence produced by the parties
the learned single Judge has arrived at the finding held at paragraph 23
with regard to the process undertaken by the respondent-Company for
extraction of castor oil from the castor seeds purchased by it. The by-
product which is produced by the respondent-Company is de-oiled cake which
contains less than 1% of castor oil and castor seeds have to undergo a
complex process so as to extract maximum possible oil out of it. At the
first stage, after cleaning and separating raw seeds from husk etc. the
castor seeds are crushed through mechanical devices to extract oil from the
same. After the mechanical process which is involved in extracting
substantial amount of oil in the oil cake, the residual product is the de-
oiled cake which is sold in the market. The same does not fall under the
head of oil cake. The process which is adopted for the purpose of getting
the said by-product of de-oiled cake has been extensively referred to in
the paragraph 23 of the order of the learned single Judge and it is
worthwhile to extract the same hereunder:-
“23.The process undertaken by respondent no.2 for extraction of
castor oil from the castor seeds purchased by it is not seriously in
dispute. The fact that ultimately by-product which respondent no.2
claims to be de-oiled cake which the respondent no.2 sells in the
market and on which the petitioner is seeking to levy market fee
contains less than 1% castor oil is also not seriously in dispute.
The respondent no.2 has explained the complex process through which
the castor seeds are made to undergo so as to extract maximum
possible oil out of it. At the first stage after cleaning and
separating raw seeds from husk etc., the castor seeds are crushed
through mechanical devices to extract oil from the same. This
mechanical process would obviously leave substantial amount of oil
in the oil cake which may come into existence after extraction of
oil. If this residual product was sold by respondent no.2 in the
market, same would squarely fall under the head of oil cake. To that
extent there is no serious dispute raised by the respondent no.2
also. However, respondent no.2 does not sale the oil cake which
comes into existence by extracting oil from castor seeds through the
above mentioned mechanical process. The oil cake so produced is made
to undergo further extensive sophisticated and complex process by
which instead of leaving 10% oil contents in the oil cake, the
percentage of residue of the oil is brought down to less than 1%. By
sophisticated means of operation, the wastage of oil is minimised
and the oil extraction percentage is improved. Ultimately therefore,
final by-product which comes into existence and which is sold by the
respondent no.2 in the market is de-oiled cake having less than 1%
oil contents. It can thus be seen that oil cake and de-oiled cake
are two separate products. By very nature of terminology used for
both products it would indicate that oil cake would contain the
residue of oil seeds which would also include some percentage of
oil. It is only when almost entirely the oil cake is devoid of oil
contents that it is labeled as de-oiled cake. Gujarat Sales Tax Act
also takes cognizance of two different products namely oil cake and
de-oiled cake. I am only drawing further support from these entries
contained in Gujarat Sales Tax Act and not for the purpose of
interpretation of the term so defined in the said Act. As noted said
Act does not define the term oil cake. From the available material
on record, such as difference in the contents of oil in oil cake and
de-oiled cake, cognizance of different terms namely oil cake and de-
oiled cake in the Gujarat Sales Tax Act, the difference in the
process of oil extraction which would lead to by-product of the oil
cake and de-oiled cake, the certificate produced on record by the
respondent no.2 indicating the difference of percentage of oil
contents in oil cake and de-oiled cake, it can be seen that two are
independent, separate and distinct products and so understood in
common parlance as well. The term “oil cake” contained in the
Schedule therefore, in my opinion would not include deoiled cake.
The attempt on the part of the petitioner- Agriculture Produce
Market Committee to levy market fees on sale and purchase of such de-
oiled cake in my opinion is not permissible. Schedule to the Act
specifies oil cake as one of the agricultural produces on which
market fee can be charged. In view of my conclusion, that term oil
cake does not include deoiled cake, I find that petitioner is not
authorised to charge market fees on the de-oiled cake sold by the
respondent no.2. The difference in process which would lead to
obtaining oil cake and de-oiled cake was also noticed by Hon'ble
Supreme Court in the case of State of A.P. and others v. M/s. Modern
Proteins ltd.[3] on which reliance was placed by the learned
advocate for the respondent no.2. It was noted that groundnut seeds
obtained after the process of decortication are of high grade
quality, rich in proteins but free from harmful materials processed
in the expeller and the outcome is groundnut oil and groundnut oil
cake. The groundnut oil cake again is pressed through the solvent in
which “food hexane” is sprayed resultantly groundnut oil and
groundnut de-oiled cakes are obtained.”
17. Further reference was made to the Gujarat Sales Tax Act wherein the
oil cake and de-oiled cake are considered to be two different products from
the entries contained in the said Act and the Schedule. The said entries
are referred to for the purpose of interpretation of the terms so defined
in the said Act. The term oil cake is not defined in the APMC Act and
further on the basis of the available material on record which elaborates
the difference in the contents of oil in oil cake and de-oiled cake,
cognizance of different terms namely, oil cake and de-oiled cake in the
Gujarat Sales Tax Act, difference in the process of oil extraction which
would lead to by-product of the oil cake and de-oiled cake, we have to hold
that de-oiled cake is a completely different product than oil cake. Also we
have to refer to the judgment of this Court in the case of State of A.P.
and Ors. v. Modern Proteins Ltd.[4] on which strong reliance was placed by
the respondent-Company wherein in the said case, it was noted that the
groundnut seeds obtained after the process of decortication are of high
grade quality, rich in proteins but free from harmful materials processed
in the expeller and the outcome is groundnut oil and groundnut oil cake.
The groundnut oil cake again is pressed through the solvent in which “food
hexane” is sprayed resultantly groundnut oil and groundnut de-oiled cakes
are obtained. On the basis of the said decision and applying it to the fact
situation on hand with regard to the process adopted for obtaining by-
product of de-oiled cake, it is clear that it is different from the oil
cake as it contains oil less than 1% and it is not included in the Schedule
for the purpose of charging market fee, therefore, the learned single Judge
accepting the case against levying the market fee on the de-oiled cake,
rejected the prayer in this regard in Special Civil Application No. 13606
of 2005. The same was questioned in the Letters Patent Appeal filed by the
APMC that has been examined by the Division Bench with reference to rival
legal contentions and it has answered the said point against the APMC by
extracting paragraph No. 23 from the judgment of the learned single Judge.
18. The by-product obtained out of the manufacturing process is not oil
cake but is de-oiled cake after undergoing the process which would lead to
obtaining de-oiled cake. After noticing the judgment of the Supreme Court
in the case of Modern Proteins Ltd. (supra), the learned single Judge came
to the conclusion that de-oiled cake containing less than 1% oil is not
mentioned in the Schedule as per Section 2(1)(i) of the APMC Act as
‘agricultural produce’ by the authority and further held that the above
produce is totally different from the oil cake. Therefore, no market fee
can be levied by the APMC to be paid by the respondent-Company. The said
finding of fact of the learned single Judge has been rightly concurred with
by the Division Bench of the High Court. The same was sought to be set
aside by the APMC. We have carefully examined the correctness of the
concurrent finding of fact arrived at by the Division Bench on this aspect
of the matter. We are in agreement with the view taken by the High Court of
Gujarat in holding that the by-product of the manufacture in producing the
oil from the castor seeds is only de-oiled cake and is not one of the
Schedule items in the Notification for the purpose of levying market fee.
Therefore, we do not find any good reason whatsoever to interfere with the
concrete finding of fact on this aspect of the matter. Hence, we have to
affirm the concrete finding of fact recorded by the learned single Judge
and of the Division Bench of the High Court. We do not find any valid and
cogent reasons to arrive at a different conclusion other than the view
taken by them as the said view is based on a proper appreciation of the
factual matrix and the statutory provisions as de-oiled cake is not
mentioned in the Schedule to the Act and the Notification. The item which
is mentioned is oil cake which is different and distinct from the de-oiled
cake as distinguished by this Court in the Modern Proteins Ltd. case
referred to supra. The High Court has rightly applied the said decision to
the fact situation. Therefore, we are of the view that the said finding of
fact recorded by the High Court is legal and valid. The same does not call
for interference. Accordingly, the appeal of the APMC on this aspect of the
matter must fail as we are affirming the order of the Division Bench of the
High Court on the levy of the market fee on de-oiled cake by directing that
the amount in relation to the market fee levied on de-oiled cake is to be
reduced.
19. For the reasons recorded by us on the point Nos. 1 to 3 in C.A. No.
3130 of 2008 the APMC must succeed. Accordingly, we allow the appeal and
set aside the order of the Division Bench of the High Court in Letters
Patent Appeal No. 139 of 2006 and uphold the levy of market fee on the
castor seeds purchased by the respondent-Company for the period in
question, and it is liable to pay the said market fee.
20. For the reasons recorded in answer to the point No. 4, we dismiss the
C.A. No. 3131 of 2008 filed by APMC, Baroda against order passed in Letters
Patent Appeal No. 195 of 2006, upholding the order of the learned single
Judge which was affirmed by the Division Bench of the High Court.
21. In view of the aforesaid reasons, Civil Appeal No.3130 of 2008 is
allowed and Civil Appeal No.3131 of 2008 is dismissed. There will be no
order as to costs.
…………………………………………………………J.
[G.S. SINGHVI]
………………………………………………………J. [V.
GOPALA GOWDA]
New Delhi,
November 29, 2013
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4860 OF 2009
AGRICULTURAL PRODUCE MARKET COMMITTEE ……APPELLANT
Versus
BIOTOR INDUSTRIES LTD. & ANR. ….RESPONDENTS
J U D G M E N T
V. Gopala Gowda, J.
This matter is connected to the Civil Appeal Nos. 3130-3131 of
2008 upon which we have pronounced the judgment today.
2. The appellant-APMC herein challenged the correctness of the judgment
dated 10.2.2009 passed by the Division Bench of Gujarat High Court in
Letters Patent Appeal No. 1383 of 2008 in Special Civil Application No.
9705 of 2008 with Civil Application No. 13651 of 2008 whereby it has
dismissed the Special Civil Application holding that the same lacks merit
and also vacated interim relief granted by the learned single Judge of High
Court. Being aggrieved, the APMC filed this Civil Appeal framing certain
questions of law and urging grounds in support of the same, praying to set
aside the impugned judgment and order and to pass such other order as may
be deemed fit and proper in the circumstances of the case.
3. The brief necessary facts for the purpose of examining the legality
and validity of the impugned order are stated herein:-
The appellant-APMC had filed Special Civil Application No. 9705 of
2008 under Articles 14, 19, 21 and 226 of the Constitution of India before
the learned single Judge of the High Court impleading the respondent-
Company and the State of Gujarat as parties, seeking relief for the issue
of writ of certiorari or any other appropriate writ, order or direction, to
set aside order dated 30.6.2008 passed in Revision Application No. 69 of
2008 by respondent No.2–the State (Revisional Authority) and further
sought for declaratory relief to declare that the APMC is entitled to levy
market fee on the respondent-Company for purchase of castor seeds as per
the demand notices dated 5.3.2008 and 15.4.2008 given to the respondent-
Company. Further, by way of amendment to the prayer column, it has sought
for declaratory relief to declare Rule 48(2) of the Gujarat Agricultural
Produce Markets Rules, 1965 (for short “Rules”) as ultra vires of Sections
28A and 59 of the Gujarat Agricultural Produce Markets Act, 1963
(hereinafter referred to as “the Act”) urging various facts and legal
grounds. The amended Sections were added to the Act vide the Gujarat
Agricultural Produce Markets (Amendment) Act, 2007.
4. The learned single Judge of the High Court after hearing the learned
counsel for the parties passed an interim order on 13.11.2008 in Special
Civil Application No. 9705 of 2008 referring to Section 28(1) of the Act
and amended Section 28(2)(a),(b),(c),(d) & (e) of the Act and issued Rule
to examine the correctness of Rule 48(2) in view of the amendment to the
Act incorporating Section 2(a) to Section 28 of the Act and directed the
respondent-Company by giving directions, particularly direction Nos. 2 and
3 which are extracted hereunder :-
“(2) Respondent No.2 deposits 50% of the outstanding market fees
with this Court and furnishes an undertaking before this Court for
the remaining 50% of the amount to the effect that they shall pay
up the remaining market fees with interest as and when it is so
ordered by this Court. Such amount shall be invested, if
deposited, by the Registrar in the FDR initially for a period of
two years, renewable further with the State Bank of India, Gujarat
High Court Branch, Ahmedabad.
(3) Respondent No.2 shall be at liberty to comply with either of
the conditions within two months from the date of intimation and
calculation of the Market Fees recoverable by the Market Committee
from respondent No.2.”
Further, at paras 14 and 15 of the order dated 13.11.2008 of learned Single
Judge, certain observations were made, which read thus:-
“14. It is also observed and directed that it would be open to the
petitioner to make representation to the State Government, which
is Rule Making Authority, for amendment of the Rule 48 in light of
the amended provisions of Section 28 of the Agriculture Produce
Market Committee. If such representation is made, the pendency of
this petition, shall not operate as a bar to the Rule Making
Authority for bringing about amendment, as may be permissible in
law.
15. It would be open to either side to move this Court for final
hearing if the rules are amended or the matter before the Apex
Court is finally decided, whichever is earlier.”
The correctness of this interim order dated 13.11.2008 was challenged by
the respondent-Company by filing Letters Patent Appeal No. 1383 of 2008
urging various legal contentions. The Division Bench examined whether sub-
section (2)(a) added to Section 28 of the Act by amendment Act No. 17 of
2007 has the effect of taking away the substratum of the Division Bench
judgment dated 24.4.2007 passed in Letters Patent Appeal No. 139 of 2006 in
connected matters. The Division Bench after referring to certain relevant
facts and Rule 48(2) of the Rules, came to its conclusion on the basis of
the judgment rendered by the Division Bench of High Court in the Letters
Patent Appeal No. 139 of 2006 and connected matters for the interpretation
of Section 28 of the Act read with Rule 48(2) of the Rules. The relevant
paragraph 8 from the Division Bench judgment rendered in the aforesaid
Letters Patent Appeal filed by the respondent-Company is extracted
hereunder:-
“8. Section 28 of the Act empowers the Market Committee to levy and
collect fees on notified agricultural produce bought or sold in the
market area, subject to the provisions of the Rules and at the rate
maxima and minima, from time to time prescribed. Thus, the power of
the Market Committee to levy prescribed fees is envisaged in the
above section. In juxtaposition to the above section, it is
necessary to refer to Rule 48 of the Rules, and more particularly
Rules 48 and 49, placed in Part VI with heading 'Fees, Levy and
Collections', pertaining to market fees. Rule 48, sub-rule (1) and
the explanation is highlighted by the learned Single Judge and
discussion has taken place on the basis of certain material
available on record with regard to sale of castor seeds by one
Manish Trader of Ahmedabad to the Company and after relying upon
Sections 19 to 22 of the Sale of Goods Act, the learned Single
Judge found that sale does take place within the market area and,
therefore, the Company is liable to pay market fees. However, sub-
rule (2) of Rule 48 of Part VI of the Rules clearly prescribes
that no fee shall be levied on agricultural produce brought from
outside the market area into the market area for use therein by the
industrial concerns situated in the market area or for export and,
in respect of which declaration has been made and a certificate has
been obtained in Form V. Thus, the above sub-rule (2) of Rule 48
nowhere prescribes that agricultural produce brought from outside
the area of market committee has to be by the industrial concern
itself. The preceding word is 'brought' and not 'bought'. Even the
facts of the present case are examined, nowhere it is mentioned
that purchase took place within the area of the market committee.
In the affidavit in reply filed by the Company, it is clearly
mentioned that purchase of castor seeds did take place outside the
market area and no sale takes place within the market area. Even,
weighment, etc. is also done outside the market area and bills are
prepared accordingly and, that too, after selection by the
representative of the Company. Not only that, but, the Company has
produced bills of one Manish Traders at page 109 of Letters Patent
Appeal No.195 of 2006, having numbered as Bill No.93, dated 3rd May
2004, is clearly indicative of the fact that sale does not take
place within the area of Market Committee, Baroda. Besides, the
octroi paid to the Baroda Municipal Corporation on the goods,
namely, castor seeds imported and produced at page 107 is also
suggestive of the fact that sale does not take place within the
area of market committee. Even, the Company has produced number of
forms prescribed under Rule 48, sub rule (2) from page 79 to 86,
the fact not denied by the Market Committee, which also establishes
the case of the Company with sufficient declaration and a
certificate that the abovementioned agricultural produce, namely,
castor seeds, has been brought from outside the limits of the
market area and brought within the limits of market area for
industrial purpose, and for production of castor oil and other
byproducts. Thus, the Company fully complied with the requirement
of Rule 48 of the Rules and is entitled for exemption from payment
of market fees. Therefore, exercise undertaken by the learned
Single Judge to find out the place of sale, so as to bring the case
of the Company under Rule 48, subrule (1) of the Rules, is of no
help and the finding, on that basis, arrived at by the learned
Single Judge, will have to be quashed and set aside in the backdrop
of the above discussion and the fact situation.”
5. Thereafter the amended provisions of Sections 28A and 31D of the Act
are referred to by the Division Bench along with Section 28(1) of the Act
and Rule 48(2) of the Rules as well as sub-sections 2(a)and (b) of Section
28 of the amended provisions of the Act to come to the conclusion, that in
view of the factual legal situation, the Revisional Authority had rightly
interfered with the demand notices issued by the APMC and therefore held
that Civil Appeal filed by the APMC lacks merit and dismissed the same and
the interim relief granted was set aside and consequently Rule was also
discharged. The correctness of the same is challenged here by urging
various questions of law and grounds in support of the same. The same need
not be adverted to in this judgment for the reason that the learned
Division Bench of the Gujarat High Court while examining the directions in
interim order dated 13.11.2008 given in Special Civil Application No. 9705
of 2008 filed by the APMC has gone into the merits of the case.
Considerable reliance was placed upon the Division Bench Judgment in
Letters Patent Appeal No. 139 of 2006 by the counsel for the respondent-
Company, contending that the amendment Act has not brought any change to
Section 28 of the Act and further submitted that the Revisional Authority
has rightly held that the APMC has no legal right to levy market fee on the
respondent-Company. The appellant-APMC in this appeal has submitted that
the Division Bench of the High Court, instead of examining the correctness
of the discretionary powers exercised by the learned single Judge in
Special Civil Application No. 9705 of 2008 and passing the interim order
with certain observations, has passed the orders on merits of the civil
application without adverting and examining the grounds urged in the
petition, which approach of the Division Bench is not correct and it should
not have pronounced decision on the merits of the Special Civil Application
while examining the correctness of the interim order passed by the learned
single Judge. The APMC has also sought declaratory relief to declare Rule
48(2) as ultra vires to Section 28A of the amended provision of the Act and
submitted that the Division Bench of the High Court failed to appreciate
the same and also that Section 28 of the Act deals with levy of market fee
which is a mandatory provision that does not give any exemption to
respondent-Company and as such a Rule cannot override provisions of the
Act. The Division Bench of the High Court has simply affirmed the order of
the Revisional Authority by setting aside the assessment order passed by
the APMC vide notices dated 5.03.2008 and 15.4.2008 without awaiting the
decision to be rendered by the learned single Judge on the legality and
validity of the Rule 48(2) in the backdrop of Section 28, of the amended
provision.
6. After hearing learned counsel for the parties, we have pronounced the
judgment today in Civil Appeal No. 3130 of 2008 on similar demand
notices demanding the market fee from the respondent-Company on the castor
seeds bought in the market area for the purpose of manufacturing of oil.
We
hold that the demand for the market fee made by the APMC for castor seeds is justified as per the reasoning given in our judgment in the connected Civil Appeal No. 3130 of 2008, that the castor seeds were bought in the market area and not brought into the market area.
It would suffice to say
that the order dated 10.02.2009 of the Division Bench of the High Court in
Letters Patent Appeal No. 1383 of 2008 setting aside the order dated
13.11.2008 of the learned single Judge in Special Civil Application No.
9705 of 2008 and affirming the order dated 30.06.2008 of the Revisional
Authority in Revision Application No.69 of 2008, without examining the
correctness of Rule 48(2) of the Rules and applying the Division Bench
Judgment rendered in Letters Patent Appeal No 139 of 2006 without
considering the factual matrix and therefore, the same is liable to be set
aside.
Accordingly, we set aside the same and remand the matter to the High
Court to place the matter before the roster of learned single Judge to
examine the validity of Rule 48(2) of the Rules, as questioned with
reference to Section 28A of the amended provision of Act No. 17 of 2007 and
the impugned order of the Revisional Authority. The appellant may also
approach the State Government to amend the Rules by deleting Rule 48(2) of
the Rules. It is open for the appellant to either press the Special Civil
Application to be decided on merits with regard to the validity of Rule
48(2) and also examine the impugned order of levying market fees on the
goods purchased by the respondent-Company on the basis of facts and
material evidence or to make revision application to the State Government
seeking for the deletion of Rule 48(2) by amending the Rules with the above
said observation.
7. This Civil Appeal is accordingly allowed in the above terms by setting
aside the impugned order of the Division Bench and remanding the matter to
the High Court to place the same before the roster of learned single Judge
with a request to him to examine the validity of the impugned Rule if the
APMC so desires and the impugned order passed by the Revisional Authority
and decide the same on merits. The interim directions given by the learned
single Judge by way of interim order dated 13.11.2008 directing to deposit
50% of the demanded amount towards the market fee is restored. If the
company has not complied with that interim order, it shall comply with the
same within two weeks from the date of receipt of the copy of this
judgment.
…………………………………………………………J.
[G.S. SINGHVI]
………………………………………………………J.
[V. GOPALA GOWDA]
New Delhi,
November 29, 2013
ITEM NO.1A COURT NO.13 SECTION IX
(For Judgment)
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
CIVIL APPEAL NO(s). 3130-3131 OF 2008
AGRICULTURAL PRODUCE MARKET COMMITTEE Appellant (s)
VERSUS
BIOTOR INDUSTRIES LTD. & ANR. Respondent(s)
WITH Civil Appeal NO. 4860 of 2009
Date: 29/11/2013 These Appeals were called on for pronouncement
of judgments today.
For Appellant(s) Mr. B.K.Satija,Adv.
For Respondent(s) Mr. Rabin Majumder,Adv.
Ms. Parul Kumari, Adv.
Ms. Preeti Bhardwaj, Adv.
Ms. Hemantika Wahi ,Adv
Dr. (Mrs.) Vipin Gupta, Adv.
Hon'ble Mr. Justice V. Gopala Gowda pronounced reportable
judgments of the Bench comprising Hon'ble Mr. Justice G.S. Singhvi
and His Lordship.
C.A. No. 3130 of 2008 is allowed, C.A. No. 3131 of 2008 is
dismissed and C.A. No. 4860 of 2009 is allowed in terms of the
signed reportable judgments.
[RAJNI MUKHI] [USHA SHARMA]
SR. P.A. COURT MASTER
[Two separate signed reportable Judgments are placed on the file]
-----------------------
[1] AIR 1935 PC 182
[2] AIR 1997 SC page 2502
[3] 1994 Supp (2) SCC 496
[4] (1994) Supp (2) SCC 496
-----------------------
57
Produce Market Committee, Baroda (for short “APMC”) - Apex court held as the company bought the seeds , it is not entitled for any exemption for fee as it is agriculture product =
The
respondent-Company, manufacturing castor oil from out of the castor seeds
purchased by it comes under the jurisdiction of the market area of the APMC
and therefore, it is liable for paying the market fees/cess for the trading
activities carried out by it in the market area. APMC levied market fee on
the castor seeds bought by the Company on the basis that castor seeds were
brought within the market area of APMC. =
We
hold that the demand for the market fee made by the APMC for castor seeds is justified as per the reasoning given in our judgment in the connected Civil Appeal No. 3130 of 2008, that the castor seeds were bought in the market area and not brought into the market area.
It would suffice to say
that the order dated 10.02.2009 of the Division Bench of the High Court in
Letters Patent Appeal No. 1383 of 2008 setting aside the order dated
13.11.2008 of the learned single Judge in Special Civil Application No.
9705 of 2008 and affirming the order dated 30.06.2008 of the Revisional
Authority in Revision Application No.69 of 2008, without examining the
correctness of Rule 48(2) of the Rules and applying the Division Bench
Judgment rendered in Letters Patent Appeal No 139 of 2006 without
considering the factual matrix and therefore, the same is liable to be set
aside.
Accordingly, we set aside the same and remand the matter to the High
Court to place the matter before the roster of learned single Judge to
examine the validity of Rule 48(2) of the Rules, as questioned with
reference to Section 28A of the amended provision of Act No. 17 of 2007 and
the impugned order of the Revisional Authority. The appellant may also
approach the State Government to amend the Rules by deleting Rule 48(2) of
the Rules. It is open for the appellant to either press the Special Civil
Application to be decided on merits with regard to the validity of Rule
48(2) and also examine the impugned order of levying market fees on the
goods purchased by the respondent-Company on the basis of facts and
material evidence or to make revision application to the State Government
seeking for the deletion of Rule 48(2) by amending the Rules with the above
said observation.
7. This Civil Appeal is accordingly allowed in the above terms by setting
aside the impugned order of the Division Bench and remanding the matter to
the High Court to place the same before the roster of learned single Judge
with a request to him to examine the validity of the impugned Rule if the
APMC so desires and the impugned order passed by the Revisional Authority
and decide the same on merits. The interim directions given by the learned
single Judge by way of interim order dated 13.11.2008 directing to deposit
50% of the demanded amount towards the market fee is restored. If the
company has not complied with that interim order, it shall comply with the
same within two weeks from the date of receipt of the copy of this
judgment.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS.3130-3131 OF 2008
AGRICULTURAL PRODUCE MARKET COMMITTEE ……APPELLANT
Versus
BIOTOR INDUSTRIES LTD. & ANR. ….RESPONDENTS
J U D G M E N T
V. Gopala Gowda, J.
These appeals have been directed against the common judgment and order
dated 24.04.2007 passed by the High Court of Gujarat at Ahmedabad in
Letters Patent Appeal Nos. 139 of 2006 and 195 of 2006 in Special Civil
Application No. 13606 of 2005 with Civil Application No. 514 of 2006 and
Civil Application No. 1380 of 2006 filed by the appellant-Agricultural
Produce Market Committee, Baroda (for short “APMC”) as it is aggrieved by
the dismissal of its Letters Patent Appeal No.195 of 2006. The High Court
allowed Letters Patent Appeal No. 139 of 2006 preferred by the
respondent-Company. Both the Letters Patent Appeals were filed against the
order dated 22.12.2005 of learned single Judge passed in Special Civil
Application No.13606 of 2005 whereby the learned single Judge substantially
set aside the order dated 19.4.2005 of the Revisional Authority and partly
allowed the application filed by the APMC by framing questions of law.
2. The brief facts of the case are stated below to appreciate the rival
claims of the parties and to find out as to whether the appellant-APMC is
entitled for the relief sought for in these appeals:
The appellant-APMC was constituted pursuant to Notification issued on
14.1.1958 under the provisions of the Bombay Agricultural Produce Markets
Act, 1939 and the area of Baroda city and Baroda Taluk of Baroda District
was declared as the market area for the purpose of Gujarat Agricultural
Produce Markets Act, 1963 (hereinafter referred to as “the Act”).
The
respondent-Company, manufacturing castor oil from out of the castor seeds
purchased by it comes under the jurisdiction of the market area of the APMC
and therefore, it is liable for paying the market fees/cess for the trading
activities carried out by it in the market area. APMC levied market fee on
the castor seeds bought by the Company on the basis that castor seeds were
brought within the market area of APMC.
The respondent-Company contested
the said levy by filing Revision Application No. 2 of 2005 under Section 48
of the Act before the State Government contending that castor seeds were
brought into the market area of the APMC, Baroda as provided under sub-rule
(2) of Rule 48 of the Gujarat Agricultural Produce Market Rules, 1965 (for
short “the Rules”) and no fees are leviable on agricultural produce brought
from outside the market area into the market area for use therein by the
industrial concern situated in the market area. The State Government vide
its order dated 19.04.2005 decided the Revision Application No. 2 of 2005
in favour of the respondent-Company by setting aside the order dated
27.12.2004 issued by the APMC levying the market fee.
3. The APMC filed a Special Application No. 13606 of 2005 under Articles
226, 14 & 19 of the Constitution of India before the High Court against the
said order of the State Government. The learned single Judge of the High
Court after hearing the parties at length partly allowed the said
application holding that the sale of the castor seeds in question took
place within the market area of APMC, Baroda, therefore, APMC was right in
levying the market fee on the castor seeds purchased by the respondent
within the market area of APMC. The learned single Judge in respect to
exemption clause in sub-rule 2 of Rule 48 held that the said exemption was available to the agricultural produce brought by the industrial concern itself from outside the market area into the market area of APMC and the exemption was not available where the castor seeds were bought within the market area by the seller and sold to the industrial concern within the
market area.
As such the learned single Judge upheld the plea of APMC for
levy of market fee on the castor seeds purchased by the respondent-Company.
In respect to the levy of market fee on de-oiled cake by APMC the learned
single Judge accepted the contention urged on behalf of the respondent-
Company and held that de-oiled cake could not be treated as oil cake, and
therefore, it was not eligible for levy of market fee since it was not
mentioned in the Schedule. Both the respondent-Company as well as the APMC
being aggrieved by the judgment and order dated 22.12.2005 of the learned
single Judge preferred Letters Patent Appeal No.139 of 2006 and Letters
Patent Appeal No. 195 of 2006 respectively. The Division Bench of the High
Court allowed the appeal preferred by the respondent-Company and dismissed
the appeal preferred by the APMC and stated that as soon as the
agricultural produce, namely, castor seeds, bought by the representatives
of the Company, is brought from outside the market area into the market
area, after payment of octroi on such produce in their capacity as owner of
the goods, the same would be treated as completion of sale outside the
jurisdiction of the market area. The Division Bench of the High Court,
therefore, held that the collection of market fees from the respondent-
Company by APMC is contrary to the provisions of the Rules, namely, Rule
48, sub-rule (2) of the Rules, which grants exemption to agricultural
produce brought from outside into market area by the industrial unit for
its own use. On the second issue, the High Court held that the by-product,
namely, de-oiled cake contains less than 1% oil and is not notified in the
Schedule as per Section 2(i) of the Act and hence, the above product being
totally different from oil cake, there is no liability upon the respondent-
Company to pay the market fees. Hence, the present Civil Appeals.
4. It is the case of the APMC that on 31.3.2004, the Director of APMC,
Baroda and Rural Finance, Gujarat State, in exercise of the power vested in
him under the Act, issued Notification including castor seeds and castor
cake in the regulated agricultural produces of APMC, Baroda. On 19.4.2004
the Notification issued by the APMC, Baroda through its Director was
published in the daily newspaper intimating that the trading of those
produces is liable for paying of market fees/cess to the APMC, Baroda. On
28.6.2004 the APMC issued notices to the respondent-Company asking it to
produce the accounts for the period 19.4.2004 to 30.11.2004 in respect of
the goods being used in the mill and further asked to obtain license from
Market Committee for the year 2004-2005. The respondent-Company failed to
submit the accounts and further failed to obtain license within the
stipulated period as mentioned in an earlier letter dated 28.6.2004, and
therefore, the APMC sent the reminder to the respondent-Company and asked
to comply with the direction. Vide letter dated 7.12.2004 the respondent-
Company submitted monthly statement for the period 19.4.2004 to 30.11.2004
in respect of the purchases of castor seeds made by the Company. APMC on
the basis of the details provided by the respondent-Company prepared a
statement showing the names of the suppliers, weight, price, quantity and
amount paid by the company as per the weighment made by the Company which
clearly shows that as per bills, different parties were selling castor
seeds to the respondent-Company for which weighment was done at the mill
site in the market area Baroda and payment made to the parties as per the
weighment done by the respondent-Company. On 27.12.2004 on the basis of
statement submitted by the respondent-Company, the APMC assessed the market
cess for the purchases of the castor seeds in the market area in respect of
the same being used for processing and converting them into castor oil and
oil cake and on the basis of assessment the respondent-Company was directed
to pay the market cess of [pic] 1,27,46,349.38 within a period of
10 days.
5. Being aggrieved by the said assessment made by APMC on 27.12.2004,
the respondent-Company preferred Revision Application No. 2 of 2005 under
Section 48 of the Act before the State of Gujarat on 05.01.2005 challenging
the decision of the APMC directing it to pay the market cess as per its
letter dated 27.12.2004. To the said Revision Application, APMC filed its
reply on 23.01.2005. The respondent-Company filed rejoinder on 23.02.2005
to the reply filed by the APMC. The Deputy Secretary, (Appeal) allowed the
Revision Application No. 2 of 2005 by its cryptic order dated 19.04.2005
and set aside the order dated 27.12.2004 passed by APMC. It is the case of
the APMC that the Revisional Authority erroneously arrived at the
conclusion that Rule 48(1) is not applicable and wrongly held that Rule
48(2) was applicable to the fact situation and further wrongly held that no
market fee is to be paid by the respondent-Company on the de-oiled cake.
6. Being aggrieved by the order of the Revisional Authority dated
19.4.2005 in Revision Application No. 2 of 2005 of the Revisional
Authority, the APMC preferred Civil Application No. 13606 of 2005 before
the learned single Judge of the High Court of Gujarat. The learned single
Judge after hearing the parties vide its order dated 22.12.2005 set aside
the order of revision in so far as the levy of market fee on the castor
seeds is concerned holding that the sale did take place within the market
area and therefore APMC was authorized to charge fee from the respondent-
Company for such purchase and partly allowed the application. However, the
learned single Judge, with respect to the levy of fee on the de-oiled cake
which was sold by the respondent-Company held that it is the by-product in
the course of manufacturing of castor oil and therefore, it is not an
agricultural produce and not liable to levy of market fee.
7. Being aggrieved by the said judgment dated 22.12.2005, the respondent-
Company filed Letters Patent Appeal No. 139 of 2006 on 18.1.2006 before the
Division Bench of the Gujarat High Court challenging the findings of
learned single Judge that market fee is exigible on the purchase of castor
oil seeds by the industrial concern. The APMC also being aggrieved by the
said order dated 22.12.2005 of learned single Judge filed Letters Patent
Appeal No. 195 of 2006 for rejecting of claim of APMC, Baroda for market
fees/cess on de-oiled cake. The Division Bench of the High Court on
24.4.2007 after hearing the parties allowed the appeal of the respondent-
Company and dismissed the appeal of the APMC, Baroda after setting aside
the order of the learned single Judge holding that Rule 48(2) is applicable
and that the castor seeds were brought from outside the market area. The
Division Bench upheld the rejection of the Special Civil Application No.
13606 of 2005 filed by the APMC, Baroda not accepting the case pleaded by
it that market fee is levied on de-oiled cake which is a by-product sold by
it and is not exigible goods as it is not an agricultural produce.
Aggrieved by the common judgment, present appeals are filed.
8. On the basis of the legal grounds urged in these appeals questioning
the correctness of the findings and reasons recorded by the Division Bench
of the High Court on both the points which have been formulated by it, the
following points would arise for the consideration of this Court in these
appeals:-
1) Whether the APMC, Baroda is liable to claim the
market fee on the castor seeds purchased by the
respondent-Company on the plea that the same were
purchased within the market area of APMC, Baroda
which castor seeds are used by the said industrial
concern for manufacture of castor oil within the
market area of APMC, Baroda?
2) Whether purchase of the castor seeds for use of the
respondent industrial concern for manufacturing
castor oil falls within Rule 48(2) of the Rules to
get exemption from payment of market fee?
3) Whether the Division Bench was justified in setting
aside the finding of fact recorded by the learned
single Judge, holding that the castor seeds purchased
by the respondent-Company are within the market area
of APMC?
4) Whether the Division Bench is justified in recording
the finding on point No.2 in connection with LPA No.
195 of 2006 that the respondent concern is not liable
to pay any market fee on the de-oiled cakes sold by
it which are stated to be the by-product in the
course of manufacturing castor oil which is not one
of the items enumerated in the Schedule to the Act
and notification issued by the Directorate?
5) What order?
Answer to Point Nos. 1 to 3
9. The point Nos. 1 to 3 are answered together as they are inter-related
with each other by assigning the following reasons:
It would be necessary for this Court to refer to the definition of
‘Agricultural Produce’ under Sections 2(i) and provisions relating to levy
of market fee under Section 28 of the Act and under Rule 48(1) of the Rules
for the purpose of appreciating the factual matrix with reference to the
rival legal contentions urged on behalf of the parties:-
“2(i)-“agricultural produce” means all produce, whether
processed or not, of agriculture, horticulture and animal
husbandry, specified in the Schedule.
Section 28: The market committee shall, subject to the
provisions of the rules and the maxima and minima from time to
time prescribed levy and collect fees on the agricultural
produce bought or sold in the market area:
Provided that the fees so levied may be collected by the Market
Committee through such agents as it may appoint.
Rule 48: Market fees:- (1) The market committee shall levy and
collect fees on agricultural produce bought or sold in the
market area at such rate as may be specified in the by-laws
subject to the following minima and maxima vis.,
1) rates when levied ad valorem shall not be less than 30
paise and shall not exceed [pic]2 (two) per hundred
rupees.
2) Rates when levied in respect of cattle, sheep or goat
shall not be less than 25 paise per animal and shall not
exceed [pic]4 per anmimal.
Explanation- For the purposes of this Rule a sale of
agricultural produce shall be deemed to have taken place in a
market area if it has been weighed or measured or surveyed or
delivered in case of cattle in the market area for the purpose
of sale, notwithstanding the fact that the property in the
agricultural produce has by reason of such sale passed to a
person in a place outside the market area.
(2) No fee shall be levied on agricultural produce brought
from outside the market area into the market area for use
therein by the industrial concerns situated in the market area
of for export and, in respect of which declaration has been made
and a certificate has been made and a certificate has been
obtained in Form V:-
Provided that if such agricultural produce brought into the
market are for export is not exported or removed therefrom
before the expiry of twenty days from the date on which it was
so brought, the market committee shall levy and collect fees on
such agricultural produce from the person bringing the produce
into the market area at such rates as may be specified in the by-
laws subject to the maximum and minimum specified in sub-rule
(i):
Provided that no fee shall be payable on a sale or purchase to
which sub-section (3) of Section 6 applies.”
10. It is an undisputed fact that the respondent-Company is an industrial
concern which has been undertaking manufacture of castor oil out of the
castor seeds which are declared as agricultural produce in the Schedule to
the Act vide notification issued by the Directorate of APMC, Baroda.
11. It is the case of the respondent-Company that the demand and
assessment made and levying the market fee on the castor seeds for the
period from 19.04.2004 to 30.11.2004 is erroneous as castor seeds were
purchased from outside the market area of APMC, Baroda and the same were
brought for the use of the industrial concern which is situated within the
market area of APMC, Baroda for the purpose of using the same for
manufacturing of the oil. In this regard, the APMC has called upon the
respondent-Company to produce the accounts for the period 19.04.2004 to
30.11.2004 in respect of the goods being used in the mill and was further
asked to obtain license from the Market Committee for the year 2004-2005.
On 07.12.2004, the respondent-Company submitted monthly statement for the
aforesaid period in respect of the purchases made of castor seeds by the
company. The APMC on the basis of details provided by the respondent-
Company prepared the statement showing the names of the suppliers,
weighment, quantity of the agricultural produce goods purchased and amount
paid by the company to its trader as per the weighment made by the company.
According to the committee, the purchases made by the company clearly
show, as per the bills issued to different parties for castor seeds sold to
the respondent-Company, that the weighment of castor seeds was made at mill
site in Baroda and payment was made to the parties as per the weighment
done by the respondent-Company. Therefore, on the basis of the assessment,
the respondent-Company was directed to pay the market cess of
[pic]1,27,46,349.38 vide its order dated 27.12.2004. The respondent-Company
aggrieved by the said assessment order preferred Revision Application No. 2
of 2005 under Section 48 of the Act before the State of Gujarat questioning
the correctness of the assessment order made by the APMC. The Deputy
Secretary (Appeal) after hearing the parties passed a cryptic order dated
19.04.2005 by allowing the Revision Application and setting aside the order
of assessment of the market Committee dated 27.12.2004. While allowing the
Revision Application, the Revisional Authority arrived at the conclusion
that Rule 48(1) of the Rules is not applicable and held that Rule 48(2)
will be applicable to the fact situation. The correctness of the same was
challenged before the learned single Judge of the High Court of Gujarat by
filing a petition under Article 226 of the Constitution i.e. Special Civil
Application No. 13606 of 2005.
12. The learned single Judge after giving opportunity to the respondent-
Company and hearing both the learned counsel appearing on behalf of the
parties has held that castor seeds have been bought within the market area
of APMC, therefore, sub-rule (1) of Rule 48 is applicable to the fact
situation and not sub-rule (2) of Rule 48 upon which reliance was placed by
the respondent-Company’s counsel. In arriving at the said conclusion the
learned single Judge has referred to the factual aspects with reference to
certain documents such as invoices, bill receipts etc. exchanged between
the respondent-company and its suppliers of castor seeds. The bill issued
by one Manish Trading Company of Naroda, Ahmedabad dated 03.05.2004 for
supply of 150 bags of castor seeds weighing 75 kilos each was examined.
The rate charged was [pic]305/- per 100 kg. The total quantity shown was
112.50 quintals and the total amount claimed was [pic]1,71,562/-. In the
said bill dated 03.05.2004, it was indicated that payment was yet to be
made. At page 28 to the compilation, there is a purchase voucher/remittance
note issued by the respondent-Company. It is not in dispute that the said
purchase voucher/remittance note pertains to the same consignment
transported by the Manish Trading Company under the bill dated 03.05.2004.
The purchase voucher indicates that the quantity of the castor seeds
received was short by 37.50 kilos. Weight of bags of 150 kilos was also
deducted from the quantity of castor seeds. The agreed rate of [pic]305/-
for 100 kilos remained constant and the respondent-Company therefore agreed
to remit a total amount of [pic]1,70,991/- to the Manish Trading Company
referred to supra. To the query from the court, the learned counsel
appearing on behalf of the company, on instructions, made submissions that
consignments were received from the sellers within the market area for the
purpose of finding out shortfall or pilferage and the payment is made to
the extent of actual quantity received. The learned single Judge has also
referred to the total quantity of castor seeds weighing 112.50 quintals
which was transported to the respondent-Company by Manish Trading Company
and it had made payment after weighing consignment and after finding out
the correct weight of the castor seeds received by it.
13. On the basis of the said material facts the learned single Judge
arrived at the conclusion that the respondent-Company placed order for
purchase of castor seeds from its suppliers from outside the market area
but no payment was immediately made for the same. On the demand of the
respondent-Company, the quantity of castor seeds so requisitioned by it was
transported by the supplier which was received by it within the market
area. It is an undisputed fact that the consignment so received was
weighed by the Company within the market area. Thereafter, on finding out
the exact weight of castor seeds received by it, the payment at the agreed
rate was made by the Company to the supplier. Therefore, the learned
single Judge came to the conclusion on the basis of appreciation of the
aforesaid facts and held that the sale was not effected till the
consignment was received by the respondent-Company and the same was weighed
within the market area. The learned single Judge has rightly rejected the
assertion made by the learned counsel on behalf of the Company holding that
in case of shortfall or loss or damage during transport, the seller could
claim damage from the transporter and that would further demonstrate that
the respondent-Company did not become owner of the goods till it took the
physical delivery thereof, weighing the same and satisfying itself about
the quantity received by it. It was held that it was not a mere formality
to find out the quantity by it but it has the essential element of making
payment depending on the extent of quantity received and in case of any
drastic shortfall in the quantity, the issue would be between the supplier
and the transporter. Further finding was recorded that if against the
quantity of 100 quintals of castor seeds supplied by the trader, the
respondent-Company received only half of it on account of loss, damage or
pilferage, the company would make payment only for such quantity leaving it
for the trader to recover the damages from the transporter. There would
also be a case where on account of some untoward and unforeseen
circumstances, such as natural calamity or theft, the respondent-Company
did not receive the full quantity of castor seeds, the payment shall be
made only for the quantity received by it and not for the entire quantity
to be supplied by the trader. The learned single Judge has further rightly
recorded the finding of fact that when the castor seeds reach the market
area, it was weighed by the Company and payment thereof was agreed to be
made to the tune of quantity received and till then the castor seeds
continue to be in the ownership of the seller. The Company becomes the
owner of the property only once the exact weight of the castor seeds was
ascertained and purchase voucher was obtained. The learned single Judge
rightly held that APMC is justified in contending that the sale of castor
seeds did take place within the market area and the appellant was
authorized to charge fees from the respondent-Company for such purchase.
Therefore, the learned single Judge held that the castor seed was bought by
the respondent-Company within the market area of APMC, Baroda and therefore
Rule 48(1) of the Rules is applicable to the fact situation and not Rule
48(2) as contended by the counsel. The said conclusion was arrived at after
referring to the provisions of Sections 19, 20 and 21 of the Sale of Goods
Act, 1930 and the Privy Council judgment in Hoe Kim Seing v. Maung Ba
Chit[1]. Sections 19, 20 and 21 of Sale of Goods Act are extracted
hereunder :-
“19. Property passes when intended to pass.-
(1) Where there is a contract for the sale of specific or
ascertained goods the property in them is transferred to the
buyer at such time as the parties to the contract intend it to
be transferred.
(2) For the purpose of ascertaining the intention of the parties
regard shall be had to the terms of the contract, the conduct of
the parties and the circumstances of the case.
(3) Unless a different intention appears, the rules contained in
Section 20 to 24 are rules for ascertaining the intention of the
parties as to the time at which the property in the goods is to
pass to the buyer.
20. Specific goods in a deliverable state.- Where there is an
unconditional contract for the sale of specific goods in a
deliverable state, the property in the goods passes to the buyer
when the contract is made, and it is immaterial whether the time of
payment of the price or the time of delivery of the goods, or both,
is postponed.
21. Specific goods to be put into a deliverable state.- Where there
is a contract for the sale of specific goods and the seller is bound
to do something to the goods for the purpose of putting them into a
deliverable state, the property does not pass until such thing is
done and the buyer has notice thereof.”
The above judgment of the Privy Council is referred to by this Court in the
decision of Agricultural Market Committee v. Shalimar Chemical Works
Limited[2] wherein the learned single Judge rightly extracted the following
paragraph from the said judgment and it is worthwhile to extract the same
hereunder :-
“40. In order that Section 20 is attracted, two conditions have to
be fulfilled :
i) the contract of sale is for specific goods which are in
a deliverable state; and
ii) the contract is an unconditional contract. If these two
conditions are satisfied, Section 20 becomes applicable
immediately and it is at this stage that it has to be
seen whether there is anything either in the terms of
the contract or in the conduct of the parties or in the
circumstances of the case which indicates a contrary
intention. This exercise has to be done to give effect
to the opening words, namely, “Unless a different
intention appears” occurring in Section 19(3). In Hoe
Kim Seing v. Maung Ba Chit, it was held that intention
of the parties was the decisive factor as to when the
property in goods passes to the purchaser. If the
contract is silent, intention has to be gathered from
the conduct and circumstances of the case.”
14. Therefore, the learned single Judge on the basis of documents which are
all admitted documents came to the right conclusion and held that the
castor seeds were bought by the respondent-Company within the market area.
Therefore, APMC has rightly made assessment of market fee and levied the
same as per Section 28 of the Act, which assessment order has been
erroneously set aside by the Revisional Authority without proper
appreciation of facts and applying the relevant provisions namely, Section
28 and Rule 48(1) and came to the erroneous conclusion and held that the
goods bought were brought from outside the market area for the purpose of
manufacturing oil by the Company in its factory. Therefore, the contention
that these are not exigible, was rightly set aside by the learned single
Judge and it was held that the respondent-Company is liable to pay market
fee which is cess on the purchase of castor seeds, justifying the claim of
the APMC. The order dated 22.12.2005 was questioned by the Company filing
Letters Patent Appeal No.139 of 2006 and that order was erroneously set
aside by the Division Bench by answering the point No.1 in favour of the
Company after referring to Rule 48(2) and erroneously applying the
aforesaid judgments. The learned single Judge rightly placed strong
reliance on the said judgment referred to supra and came to the right
conclusion and held that the sale of goods of castor seeds is within the
market area of APMC. The learned Division Bench on the other hand, further
placed strong reliance upon Rule 48(2) by placing reliance upon Form No. V
of the Rules, which is the Form of declaration and certificate produced by
the Company which were found from pages 79 to 86 which are totally
irrelevant for the purpose of finding out whether the goods i.e. the castor
seeds were bought by the Company within the market area of APMC or not.
15. The factual matrix is supported by the documents produced at Annexure
‘F’ to the Special Civil Application No. 13606 of 2005 which are the
documents of the respondent-Company which have been extensively referred to
by the learned single Judge in his judgment at para 11 to come to the
conclusion holding that the castor oil seeds were bought by the respondent-
Company within the market area of APMC and, therefore, he has rightly held
that Rule 48(2) is not applicable to the fact situation as claimed by the
respondent-Company and the reliance placed upon Form No. V which is the
Form of declaration and certificate obtained from the APMC seeking
exemption from payment of market fee on the castor seeds brought by it from
outside APMC area, is contrary to the material evidence on record and
therefore, the Division Bench has gravely erred in reversing the finding of
fact recorded by the learned single Judge on proper appreciation of
undisputed material evidence on record and recorded the finding of fact
with reference to Sections 19, 20 and 21 of the Sale of Goods Act and the
judgment of Privy Council referred to supra which has been referred to by
this Court in the Shalimar Works Ltd. case (supra) wherein the learned
single Judge rightly came to the conclusion that the castor seeds were
purchased by the Company in the market area for the relevant period in
question in respect of which the assessment order was passed levying the
market fee and directing the Company to pay the same was legal and valid.
The same came to be erroneously set aside by the Revisional Authority
without proper application of mind and law to the fact situation and the
same was then set aside by the learned single Judge of the High Court. The
said findings of the learned single Judge have been erroneously set aside
by the learned Division Bench at the instance of the respondent-Company in
LPA No.139 of 2006. Therefore, we have to hold that the said finding of
the Division Bench in reversing the legal and valid finding of fact
recorded by the learned single Judge on proper appreciation of facts and
undisputed evidence on record and rightly applying the provisions of the
Sale of Goods Act referred to supra and Rule 48(1) is erroneous. Therefore,
we have to set aside the said order passed in LPA No. 139 of 2006 and
restore the order of the learned single Judge passed in special civil
application No. 13606 of 2005 and allow the C.A. No. 3130 of 2008.
Answer to Point No. 4
16. The point No. 4 is answered against the APMC upholding the order of the
learned single Judge affirmed by the Division Bench of the High Court in
dismissing the Letters Patent Appeal No. 195 of 2006 of the appellant by
assigning the following reasons :-
It is an undisputed fact that oil cake is included in the Schedule as
an agricultural produce which is exigible agricultural produce in terms of
section 2(1)(i)of the Act. Sub-rule (iv) therein contains oil seeds. Item
No. 8 therein is castor seed and Item No. 11 therein is oil cakes.
The oil cake is the exigible agricultural produce for the purpose of
levying market fee upon such produce. On the basis of the factual and rival
contentions and on the basis of material evidence produced by the parties
the learned single Judge has arrived at the finding held at paragraph 23
with regard to the process undertaken by the respondent-Company for
extraction of castor oil from the castor seeds purchased by it. The by-
product which is produced by the respondent-Company is de-oiled cake which
contains less than 1% of castor oil and castor seeds have to undergo a
complex process so as to extract maximum possible oil out of it. At the
first stage, after cleaning and separating raw seeds from husk etc. the
castor seeds are crushed through mechanical devices to extract oil from the
same. After the mechanical process which is involved in extracting
substantial amount of oil in the oil cake, the residual product is the de-
oiled cake which is sold in the market. The same does not fall under the
head of oil cake. The process which is adopted for the purpose of getting
the said by-product of de-oiled cake has been extensively referred to in
the paragraph 23 of the order of the learned single Judge and it is
worthwhile to extract the same hereunder:-
“23.The process undertaken by respondent no.2 for extraction of
castor oil from the castor seeds purchased by it is not seriously in
dispute. The fact that ultimately by-product which respondent no.2
claims to be de-oiled cake which the respondent no.2 sells in the
market and on which the petitioner is seeking to levy market fee
contains less than 1% castor oil is also not seriously in dispute.
The respondent no.2 has explained the complex process through which
the castor seeds are made to undergo so as to extract maximum
possible oil out of it. At the first stage after cleaning and
separating raw seeds from husk etc., the castor seeds are crushed
through mechanical devices to extract oil from the same. This
mechanical process would obviously leave substantial amount of oil
in the oil cake which may come into existence after extraction of
oil. If this residual product was sold by respondent no.2 in the
market, same would squarely fall under the head of oil cake. To that
extent there is no serious dispute raised by the respondent no.2
also. However, respondent no.2 does not sale the oil cake which
comes into existence by extracting oil from castor seeds through the
above mentioned mechanical process. The oil cake so produced is made
to undergo further extensive sophisticated and complex process by
which instead of leaving 10% oil contents in the oil cake, the
percentage of residue of the oil is brought down to less than 1%. By
sophisticated means of operation, the wastage of oil is minimised
and the oil extraction percentage is improved. Ultimately therefore,
final by-product which comes into existence and which is sold by the
respondent no.2 in the market is de-oiled cake having less than 1%
oil contents. It can thus be seen that oil cake and de-oiled cake
are two separate products. By very nature of terminology used for
both products it would indicate that oil cake would contain the
residue of oil seeds which would also include some percentage of
oil. It is only when almost entirely the oil cake is devoid of oil
contents that it is labeled as de-oiled cake. Gujarat Sales Tax Act
also takes cognizance of two different products namely oil cake and
de-oiled cake. I am only drawing further support from these entries
contained in Gujarat Sales Tax Act and not for the purpose of
interpretation of the term so defined in the said Act. As noted said
Act does not define the term oil cake. From the available material
on record, such as difference in the contents of oil in oil cake and
de-oiled cake, cognizance of different terms namely oil cake and de-
oiled cake in the Gujarat Sales Tax Act, the difference in the
process of oil extraction which would lead to by-product of the oil
cake and de-oiled cake, the certificate produced on record by the
respondent no.2 indicating the difference of percentage of oil
contents in oil cake and de-oiled cake, it can be seen that two are
independent, separate and distinct products and so understood in
common parlance as well. The term “oil cake” contained in the
Schedule therefore, in my opinion would not include deoiled cake.
The attempt on the part of the petitioner- Agriculture Produce
Market Committee to levy market fees on sale and purchase of such de-
oiled cake in my opinion is not permissible. Schedule to the Act
specifies oil cake as one of the agricultural produces on which
market fee can be charged. In view of my conclusion, that term oil
cake does not include deoiled cake, I find that petitioner is not
authorised to charge market fees on the de-oiled cake sold by the
respondent no.2. The difference in process which would lead to
obtaining oil cake and de-oiled cake was also noticed by Hon'ble
Supreme Court in the case of State of A.P. and others v. M/s. Modern
Proteins ltd.[3] on which reliance was placed by the learned
advocate for the respondent no.2. It was noted that groundnut seeds
obtained after the process of decortication are of high grade
quality, rich in proteins but free from harmful materials processed
in the expeller and the outcome is groundnut oil and groundnut oil
cake. The groundnut oil cake again is pressed through the solvent in
which “food hexane” is sprayed resultantly groundnut oil and
groundnut de-oiled cakes are obtained.”
17. Further reference was made to the Gujarat Sales Tax Act wherein the
oil cake and de-oiled cake are considered to be two different products from
the entries contained in the said Act and the Schedule. The said entries
are referred to for the purpose of interpretation of the terms so defined
in the said Act. The term oil cake is not defined in the APMC Act and
further on the basis of the available material on record which elaborates
the difference in the contents of oil in oil cake and de-oiled cake,
cognizance of different terms namely, oil cake and de-oiled cake in the
Gujarat Sales Tax Act, difference in the process of oil extraction which
would lead to by-product of the oil cake and de-oiled cake, we have to hold
that de-oiled cake is a completely different product than oil cake. Also we
have to refer to the judgment of this Court in the case of State of A.P.
and Ors. v. Modern Proteins Ltd.[4] on which strong reliance was placed by
the respondent-Company wherein in the said case, it was noted that the
groundnut seeds obtained after the process of decortication are of high
grade quality, rich in proteins but free from harmful materials processed
in the expeller and the outcome is groundnut oil and groundnut oil cake.
The groundnut oil cake again is pressed through the solvent in which “food
hexane” is sprayed resultantly groundnut oil and groundnut de-oiled cakes
are obtained. On the basis of the said decision and applying it to the fact
situation on hand with regard to the process adopted for obtaining by-
product of de-oiled cake, it is clear that it is different from the oil
cake as it contains oil less than 1% and it is not included in the Schedule
for the purpose of charging market fee, therefore, the learned single Judge
accepting the case against levying the market fee on the de-oiled cake,
rejected the prayer in this regard in Special Civil Application No. 13606
of 2005. The same was questioned in the Letters Patent Appeal filed by the
APMC that has been examined by the Division Bench with reference to rival
legal contentions and it has answered the said point against the APMC by
extracting paragraph No. 23 from the judgment of the learned single Judge.
18. The by-product obtained out of the manufacturing process is not oil
cake but is de-oiled cake after undergoing the process which would lead to
obtaining de-oiled cake. After noticing the judgment of the Supreme Court
in the case of Modern Proteins Ltd. (supra), the learned single Judge came
to the conclusion that de-oiled cake containing less than 1% oil is not
mentioned in the Schedule as per Section 2(1)(i) of the APMC Act as
‘agricultural produce’ by the authority and further held that the above
produce is totally different from the oil cake. Therefore, no market fee
can be levied by the APMC to be paid by the respondent-Company. The said
finding of fact of the learned single Judge has been rightly concurred with
by the Division Bench of the High Court. The same was sought to be set
aside by the APMC. We have carefully examined the correctness of the
concurrent finding of fact arrived at by the Division Bench on this aspect
of the matter. We are in agreement with the view taken by the High Court of
Gujarat in holding that the by-product of the manufacture in producing the
oil from the castor seeds is only de-oiled cake and is not one of the
Schedule items in the Notification for the purpose of levying market fee.
Therefore, we do not find any good reason whatsoever to interfere with the
concrete finding of fact on this aspect of the matter. Hence, we have to
affirm the concrete finding of fact recorded by the learned single Judge
and of the Division Bench of the High Court. We do not find any valid and
cogent reasons to arrive at a different conclusion other than the view
taken by them as the said view is based on a proper appreciation of the
factual matrix and the statutory provisions as de-oiled cake is not
mentioned in the Schedule to the Act and the Notification. The item which
is mentioned is oil cake which is different and distinct from the de-oiled
cake as distinguished by this Court in the Modern Proteins Ltd. case
referred to supra. The High Court has rightly applied the said decision to
the fact situation. Therefore, we are of the view that the said finding of
fact recorded by the High Court is legal and valid. The same does not call
for interference. Accordingly, the appeal of the APMC on this aspect of the
matter must fail as we are affirming the order of the Division Bench of the
High Court on the levy of the market fee on de-oiled cake by directing that
the amount in relation to the market fee levied on de-oiled cake is to be
reduced.
19. For the reasons recorded by us on the point Nos. 1 to 3 in C.A. No.
3130 of 2008 the APMC must succeed. Accordingly, we allow the appeal and
set aside the order of the Division Bench of the High Court in Letters
Patent Appeal No. 139 of 2006 and uphold the levy of market fee on the
castor seeds purchased by the respondent-Company for the period in
question, and it is liable to pay the said market fee.
20. For the reasons recorded in answer to the point No. 4, we dismiss the
C.A. No. 3131 of 2008 filed by APMC, Baroda against order passed in Letters
Patent Appeal No. 195 of 2006, upholding the order of the learned single
Judge which was affirmed by the Division Bench of the High Court.
21. In view of the aforesaid reasons, Civil Appeal No.3130 of 2008 is
allowed and Civil Appeal No.3131 of 2008 is dismissed. There will be no
order as to costs.
…………………………………………………………J.
[G.S. SINGHVI]
………………………………………………………J. [V.
GOPALA GOWDA]
New Delhi,
November 29, 2013
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4860 OF 2009
AGRICULTURAL PRODUCE MARKET COMMITTEE ……APPELLANT
Versus
BIOTOR INDUSTRIES LTD. & ANR. ….RESPONDENTS
J U D G M E N T
V. Gopala Gowda, J.
This matter is connected to the Civil Appeal Nos. 3130-3131 of
2008 upon which we have pronounced the judgment today.
2. The appellant-APMC herein challenged the correctness of the judgment
dated 10.2.2009 passed by the Division Bench of Gujarat High Court in
Letters Patent Appeal No. 1383 of 2008 in Special Civil Application No.
9705 of 2008 with Civil Application No. 13651 of 2008 whereby it has
dismissed the Special Civil Application holding that the same lacks merit
and also vacated interim relief granted by the learned single Judge of High
Court. Being aggrieved, the APMC filed this Civil Appeal framing certain
questions of law and urging grounds in support of the same, praying to set
aside the impugned judgment and order and to pass such other order as may
be deemed fit and proper in the circumstances of the case.
3. The brief necessary facts for the purpose of examining the legality
and validity of the impugned order are stated herein:-
The appellant-APMC had filed Special Civil Application No. 9705 of
2008 under Articles 14, 19, 21 and 226 of the Constitution of India before
the learned single Judge of the High Court impleading the respondent-
Company and the State of Gujarat as parties, seeking relief for the issue
of writ of certiorari or any other appropriate writ, order or direction, to
set aside order dated 30.6.2008 passed in Revision Application No. 69 of
2008 by respondent No.2–the State (Revisional Authority) and further
sought for declaratory relief to declare that the APMC is entitled to levy
market fee on the respondent-Company for purchase of castor seeds as per
the demand notices dated 5.3.2008 and 15.4.2008 given to the respondent-
Company. Further, by way of amendment to the prayer column, it has sought
for declaratory relief to declare Rule 48(2) of the Gujarat Agricultural
Produce Markets Rules, 1965 (for short “Rules”) as ultra vires of Sections
28A and 59 of the Gujarat Agricultural Produce Markets Act, 1963
(hereinafter referred to as “the Act”) urging various facts and legal
grounds. The amended Sections were added to the Act vide the Gujarat
Agricultural Produce Markets (Amendment) Act, 2007.
4. The learned single Judge of the High Court after hearing the learned
counsel for the parties passed an interim order on 13.11.2008 in Special
Civil Application No. 9705 of 2008 referring to Section 28(1) of the Act
and amended Section 28(2)(a),(b),(c),(d) & (e) of the Act and issued Rule
to examine the correctness of Rule 48(2) in view of the amendment to the
Act incorporating Section 2(a) to Section 28 of the Act and directed the
respondent-Company by giving directions, particularly direction Nos. 2 and
3 which are extracted hereunder :-
“(2) Respondent No.2 deposits 50% of the outstanding market fees
with this Court and furnishes an undertaking before this Court for
the remaining 50% of the amount to the effect that they shall pay
up the remaining market fees with interest as and when it is so
ordered by this Court. Such amount shall be invested, if
deposited, by the Registrar in the FDR initially for a period of
two years, renewable further with the State Bank of India, Gujarat
High Court Branch, Ahmedabad.
(3) Respondent No.2 shall be at liberty to comply with either of
the conditions within two months from the date of intimation and
calculation of the Market Fees recoverable by the Market Committee
from respondent No.2.”
Further, at paras 14 and 15 of the order dated 13.11.2008 of learned Single
Judge, certain observations were made, which read thus:-
“14. It is also observed and directed that it would be open to the
petitioner to make representation to the State Government, which
is Rule Making Authority, for amendment of the Rule 48 in light of
the amended provisions of Section 28 of the Agriculture Produce
Market Committee. If such representation is made, the pendency of
this petition, shall not operate as a bar to the Rule Making
Authority for bringing about amendment, as may be permissible in
law.
15. It would be open to either side to move this Court for final
hearing if the rules are amended or the matter before the Apex
Court is finally decided, whichever is earlier.”
The correctness of this interim order dated 13.11.2008 was challenged by
the respondent-Company by filing Letters Patent Appeal No. 1383 of 2008
urging various legal contentions. The Division Bench examined whether sub-
section (2)(a) added to Section 28 of the Act by amendment Act No. 17 of
2007 has the effect of taking away the substratum of the Division Bench
judgment dated 24.4.2007 passed in Letters Patent Appeal No. 139 of 2006 in
connected matters. The Division Bench after referring to certain relevant
facts and Rule 48(2) of the Rules, came to its conclusion on the basis of
the judgment rendered by the Division Bench of High Court in the Letters
Patent Appeal No. 139 of 2006 and connected matters for the interpretation
of Section 28 of the Act read with Rule 48(2) of the Rules. The relevant
paragraph 8 from the Division Bench judgment rendered in the aforesaid
Letters Patent Appeal filed by the respondent-Company is extracted
hereunder:-
“8. Section 28 of the Act empowers the Market Committee to levy and
collect fees on notified agricultural produce bought or sold in the
market area, subject to the provisions of the Rules and at the rate
maxima and minima, from time to time prescribed. Thus, the power of
the Market Committee to levy prescribed fees is envisaged in the
above section. In juxtaposition to the above section, it is
necessary to refer to Rule 48 of the Rules, and more particularly
Rules 48 and 49, placed in Part VI with heading 'Fees, Levy and
Collections', pertaining to market fees. Rule 48, sub-rule (1) and
the explanation is highlighted by the learned Single Judge and
discussion has taken place on the basis of certain material
available on record with regard to sale of castor seeds by one
Manish Trader of Ahmedabad to the Company and after relying upon
Sections 19 to 22 of the Sale of Goods Act, the learned Single
Judge found that sale does take place within the market area and,
therefore, the Company is liable to pay market fees. However, sub-
rule (2) of Rule 48 of Part VI of the Rules clearly prescribes
that no fee shall be levied on agricultural produce brought from
outside the market area into the market area for use therein by the
industrial concerns situated in the market area or for export and,
in respect of which declaration has been made and a certificate has
been obtained in Form V. Thus, the above sub-rule (2) of Rule 48
nowhere prescribes that agricultural produce brought from outside
the area of market committee has to be by the industrial concern
itself. The preceding word is 'brought' and not 'bought'. Even the
facts of the present case are examined, nowhere it is mentioned
that purchase took place within the area of the market committee.
In the affidavit in reply filed by the Company, it is clearly
mentioned that purchase of castor seeds did take place outside the
market area and no sale takes place within the market area. Even,
weighment, etc. is also done outside the market area and bills are
prepared accordingly and, that too, after selection by the
representative of the Company. Not only that, but, the Company has
produced bills of one Manish Traders at page 109 of Letters Patent
Appeal No.195 of 2006, having numbered as Bill No.93, dated 3rd May
2004, is clearly indicative of the fact that sale does not take
place within the area of Market Committee, Baroda. Besides, the
octroi paid to the Baroda Municipal Corporation on the goods,
namely, castor seeds imported and produced at page 107 is also
suggestive of the fact that sale does not take place within the
area of market committee. Even, the Company has produced number of
forms prescribed under Rule 48, sub rule (2) from page 79 to 86,
the fact not denied by the Market Committee, which also establishes
the case of the Company with sufficient declaration and a
certificate that the abovementioned agricultural produce, namely,
castor seeds, has been brought from outside the limits of the
market area and brought within the limits of market area for
industrial purpose, and for production of castor oil and other
byproducts. Thus, the Company fully complied with the requirement
of Rule 48 of the Rules and is entitled for exemption from payment
of market fees. Therefore, exercise undertaken by the learned
Single Judge to find out the place of sale, so as to bring the case
of the Company under Rule 48, subrule (1) of the Rules, is of no
help and the finding, on that basis, arrived at by the learned
Single Judge, will have to be quashed and set aside in the backdrop
of the above discussion and the fact situation.”
5. Thereafter the amended provisions of Sections 28A and 31D of the Act
are referred to by the Division Bench along with Section 28(1) of the Act
and Rule 48(2) of the Rules as well as sub-sections 2(a)and (b) of Section
28 of the amended provisions of the Act to come to the conclusion, that in
view of the factual legal situation, the Revisional Authority had rightly
interfered with the demand notices issued by the APMC and therefore held
that Civil Appeal filed by the APMC lacks merit and dismissed the same and
the interim relief granted was set aside and consequently Rule was also
discharged. The correctness of the same is challenged here by urging
various questions of law and grounds in support of the same. The same need
not be adverted to in this judgment for the reason that the learned
Division Bench of the Gujarat High Court while examining the directions in
interim order dated 13.11.2008 given in Special Civil Application No. 9705
of 2008 filed by the APMC has gone into the merits of the case.
Considerable reliance was placed upon the Division Bench Judgment in
Letters Patent Appeal No. 139 of 2006 by the counsel for the respondent-
Company, contending that the amendment Act has not brought any change to
Section 28 of the Act and further submitted that the Revisional Authority
has rightly held that the APMC has no legal right to levy market fee on the
respondent-Company. The appellant-APMC in this appeal has submitted that
the Division Bench of the High Court, instead of examining the correctness
of the discretionary powers exercised by the learned single Judge in
Special Civil Application No. 9705 of 2008 and passing the interim order
with certain observations, has passed the orders on merits of the civil
application without adverting and examining the grounds urged in the
petition, which approach of the Division Bench is not correct and it should
not have pronounced decision on the merits of the Special Civil Application
while examining the correctness of the interim order passed by the learned
single Judge. The APMC has also sought declaratory relief to declare Rule
48(2) as ultra vires to Section 28A of the amended provision of the Act and
submitted that the Division Bench of the High Court failed to appreciate
the same and also that Section 28 of the Act deals with levy of market fee
which is a mandatory provision that does not give any exemption to
respondent-Company and as such a Rule cannot override provisions of the
Act. The Division Bench of the High Court has simply affirmed the order of
the Revisional Authority by setting aside the assessment order passed by
the APMC vide notices dated 5.03.2008 and 15.4.2008 without awaiting the
decision to be rendered by the learned single Judge on the legality and
validity of the Rule 48(2) in the backdrop of Section 28, of the amended
provision.
6. After hearing learned counsel for the parties, we have pronounced the
judgment today in Civil Appeal No. 3130 of 2008 on similar demand
notices demanding the market fee from the respondent-Company on the castor
seeds bought in the market area for the purpose of manufacturing of oil.
We
hold that the demand for the market fee made by the APMC for castor seeds is justified as per the reasoning given in our judgment in the connected Civil Appeal No. 3130 of 2008, that the castor seeds were bought in the market area and not brought into the market area.
It would suffice to say
that the order dated 10.02.2009 of the Division Bench of the High Court in
Letters Patent Appeal No. 1383 of 2008 setting aside the order dated
13.11.2008 of the learned single Judge in Special Civil Application No.
9705 of 2008 and affirming the order dated 30.06.2008 of the Revisional
Authority in Revision Application No.69 of 2008, without examining the
correctness of Rule 48(2) of the Rules and applying the Division Bench
Judgment rendered in Letters Patent Appeal No 139 of 2006 without
considering the factual matrix and therefore, the same is liable to be set
aside.
Accordingly, we set aside the same and remand the matter to the High
Court to place the matter before the roster of learned single Judge to
examine the validity of Rule 48(2) of the Rules, as questioned with
reference to Section 28A of the amended provision of Act No. 17 of 2007 and
the impugned order of the Revisional Authority. The appellant may also
approach the State Government to amend the Rules by deleting Rule 48(2) of
the Rules. It is open for the appellant to either press the Special Civil
Application to be decided on merits with regard to the validity of Rule
48(2) and also examine the impugned order of levying market fees on the
goods purchased by the respondent-Company on the basis of facts and
material evidence or to make revision application to the State Government
seeking for the deletion of Rule 48(2) by amending the Rules with the above
said observation.
7. This Civil Appeal is accordingly allowed in the above terms by setting
aside the impugned order of the Division Bench and remanding the matter to
the High Court to place the same before the roster of learned single Judge
with a request to him to examine the validity of the impugned Rule if the
APMC so desires and the impugned order passed by the Revisional Authority
and decide the same on merits. The interim directions given by the learned
single Judge by way of interim order dated 13.11.2008 directing to deposit
50% of the demanded amount towards the market fee is restored. If the
company has not complied with that interim order, it shall comply with the
same within two weeks from the date of receipt of the copy of this
judgment.
…………………………………………………………J.
[G.S. SINGHVI]
………………………………………………………J.
[V. GOPALA GOWDA]
New Delhi,
November 29, 2013
ITEM NO.1A COURT NO.13 SECTION IX
(For Judgment)
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
CIVIL APPEAL NO(s). 3130-3131 OF 2008
AGRICULTURAL PRODUCE MARKET COMMITTEE Appellant (s)
VERSUS
BIOTOR INDUSTRIES LTD. & ANR. Respondent(s)
WITH Civil Appeal NO. 4860 of 2009
Date: 29/11/2013 These Appeals were called on for pronouncement
of judgments today.
For Appellant(s) Mr. B.K.Satija,Adv.
For Respondent(s) Mr. Rabin Majumder,Adv.
Ms. Parul Kumari, Adv.
Ms. Preeti Bhardwaj, Adv.
Ms. Hemantika Wahi ,Adv
Dr. (Mrs.) Vipin Gupta, Adv.
Hon'ble Mr. Justice V. Gopala Gowda pronounced reportable
judgments of the Bench comprising Hon'ble Mr. Justice G.S. Singhvi
and His Lordship.
C.A. No. 3130 of 2008 is allowed, C.A. No. 3131 of 2008 is
dismissed and C.A. No. 4860 of 2009 is allowed in terms of the
signed reportable judgments.
[RAJNI MUKHI] [USHA SHARMA]
SR. P.A. COURT MASTER
[Two separate signed reportable Judgments are placed on the file]
-----------------------
[1] AIR 1935 PC 182
[2] AIR 1997 SC page 2502
[3] 1994 Supp (2) SCC 496
[4] (1994) Supp (2) SCC 496
-----------------------
57
