Kacharu Keshav Kurhe And Ors. vs Agricultural Produce Market ...
2004 Latest Caselaw 1279 Bom

JUDGMENT

A.P. Deshpande, J.

1. As a common question of fact and law is involved in these petitions, they are heard together and are being disposed of by this common judgment.

2. All the petitioners are agriculturists and are engaged in the production of agricultural produce. The agricultural produce is to be sold in the market area of the Agricultural Produce Market Committee constituted under the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963 (for short, hereinafter referred to as "the A.P.M.C. Act"), and the rules made thereunder. The Director of Marketing is the controlling authority of all the Market Committees for the entire State of Maharashtra. The State Government has made applicable the provisions of the Maharashtra Mathadi, Hamal and Other Manual Workers (Regulation of Employment and Welfare) Act, 1969 (for short, hereinafter referred to as "the Mathadi Act"), to the Markets established under the A.P.M.C. Act.

By issuing different notifications sometime in the year 1988, the State Government has also framed a scheme under the Mathadi Act. Under the said scheme, levy is being recovered under Clause 41 for meeting cost of operating the scheme and for providing different benefits, facilities and amenities to the registered workers, and the levy is made payable by the registered employers to the Board.

3. The grievance made in the present petitions is that though the agriculturists, though not employers, much less, registered employers, are being made to pay the cost of operation of the scheme and for providing different benefits of the registered workers. The question that falls for adjudication in these petitions is as to whether the agriculturists could be termed as employers under Clause 41 of the scheme framed under the Mathadi Act, and if not, can the agriculturists be forced to pay the cost/levy under Clause 41 of the scheme.

4. Before we proceed to deal with the question, we would like to point out that so far as Writ Petition No. 2268/1992 is concerned, the same has been filed by such of the agriculturists who are cotton growers and who sell the raw cotton to the Maharashtra State Co-operative Cotton Growers Marketing Federation Limited which has been appointed as the chief agent of the State Government for collection of raw cotton under the provisions of the Maharashtra Raw Cotton (Procurement, Process and Marketing) Act, 1971. The Maharashtra Raw Cotton (Procurement, Process and Marketing) Act came to be enacted with an object to pay growers of the cotton in the State, a fair share of price of their crop, as it was felt that they were denied a fair price for the raw cotton. Under the said Act, the State Government has taken over the entire trade in raw cotton and it is only the State acting through the Federation, acquires the cotton from the growers and other persons. So far as raw cotton as an agricultural produce is concerned, it is the monopoly of the State to collect all the cotton at the collection centre which is a place designated by the Market Committee or the Director of Marketing under Section 21A. Cotton growers have no choice but to sell the cotton to the State and in turn, are paid the price which is determined by the State.

5. Reverting back to the question involved in these petitions i.e. whose liability it is to pay the cost of operating the scheme and for making provision for benefits, facilities and amenities to the registered workers, we proceed to examine the relevant clause viz. Clause 41 contained in the scheme. It may be incidentally mentioned that for different districts, different schemes are framed by the State, but the main features therein remain the same. The relevant clauses are identical in all the schemes. We reproduce Clause 41 of the scheme herein-below :

(1) The cost of operating the scheme and for providing different benefits, facilities and amenities to the registered workers as provided in the Act and under this scheme, shall be defrayed by payments made by the registered employers to the Board. Every registered employer shall pay to the Board such amount by way of levy in respect of registered workers allotted to and engaged by him as the Board may, from time to time, specify by public notice or written order to the registered employers and in such manner and at such time as the Board may direct. The Board may require the registered employers to pay the levy retrospectively or prospectively as it may deem fit.

(2)     An employer to whom this scheme applies shall pay the levy as specified by the Board, from time to time, from the date from which the scheme applies to him irrespective whether he gets himself registered within the time limit laid down in Clause 14 of this scheme or any time thereafter.
 

(3)     In determining what payments are to be made by the registered employers under Sub-clause (1), the Board may fix different rates of levy for different categories of work of registered workers, provided that, the levy shall be so fixed that the same rate of levy will apply to all registered employers who are in like circumstances.
 

(4)     The Board shall not sanction any levy exceeding 50 per cent of the estimated total wage bill calculated on the basis of the daily time rate wage without the prior approval of the State Government.
 

(5)     A registered employer shall on demand make a payment to the Board by way of deposit or provide such other security for the due payment of the amount referred to in Sub-clause (1) as the Board may consider necessary.
 

(6)     The Secretary shall furnish, from time to time, to the Board such statistics and other information as may reasonably be required in connection with the operation and financing this scheme.
 

(7)     If a registered employer fails to make the payment due from him under Sub-clause (1) within the time specified by the Board, the Secretary shall serve a notice on the employer to the effect that, unless he pays his dues, within three days from the date of receipt of the notice, the supply of registered workers to him shall be suspended. On the expiry of the notice period the Secretary shall suspend the supply of registered workers to a defaulting registered employer until he pays his dues."
 

Perusal of Sub-clause 1 reveals that the cost of operating the scheme and for providing different benefits, facilities and amenities to the registered workers, shall be defrayed by payments made by the registered employers to the Board. Every registered employer is under an obligation to pay to the Board such amount by way of levy in respect of registered workers allotted to and engaged by him as the Board may, from time to time, specify.

Sub-clause 2 again obliges the employer to whom the scheme applies to pay the levy as specified by the Board, from time to time, irrespective of whether he gets himself registered within the time limit or at any time thereafter.

Reading of Sub-clauses 1 and 2 leaves no room of doubt that it is the employer who is to make good and pay the cost of operation of the scheme by paying levy under the Mathadi Act. Wages payable by the employer to the workers are to be paid to the Board and the Board, in turn, makes the payment of the wages to the workers.

6. The Mathadi Act defines the term employer and the same reads thus :

employer" in relation to any unprotected workers engaged by or through contractor, means the principal employer and in relation to any other unprotected worker, the person who has ultimate control over the affairs of the establishment, and includes any other person to whom the affairs of such establishment are entrusted, whether such person is called an agent, manager or is called by any other name prevailing in the scheduled employment."

Perusal of the said definition reveal that where unprotected workers are engaged by or through contractor, then principal employer would be the employer and when the unprotected workers are not engaged by a contractor, the person who has ultimate control over the affairs of the establishment, would be the employer by whatever name he is called. The catchwords in the definition are, "who has ultimate control over the affairs of the establishment".

The term establishment is defined in Sub-section 4 which reads thus :

"Establishment" means any place or premises, including the precincts thereof, in which or in any part of which any scheduled employment is being or is ordinarily carried on."

It is, as such, clear that the place or premises in which any scheduled employment is ordinarily carried on, would constitute establishment. A conjoint reading of Sub-sections 3 and 4 would make such person an employer who ordinarily carries on business in a given premises or place and who has ultimate control over the affairs of the establishment.

Could an agriculturist be said to be a person who carries on business in the market area of the Market Committee having ultimate control over the affairs of the establishment? It is obvious that an agriculturist does not satisfy the test laid down under Sub-sections 3 and 4 to be termed as an 'employer'.

7. It is relevant to note that the Mathadi Act has been made applicable to the market area of the Market Committee and, as such, the provisions of the A.P.M.C. Act can provide a good guide to understand the nature of the business carried on in the market area. The definition of 'agriculturist' and other definitions given in the A.P.M.C. Act can also throw light, to understand what respective role is performed by agriculturist, broker, buyer, commission agent, Hamal, etc. It is a matter of common knowledge that the agriculturist do not carry on any business whatsoever in the market area but only brings the agricultural produce on few occasions to the market for its sale. He has no control over the establishment. The commission agents, the brokers, the traders (buyers) are the persons who are permanently stationed in the market and those are the persons who carry on their business in the market throughout the year.

8. The definition of 'agriculturist' contained in Section 2(1)(b) of the A.P.M.C. Act, reads thus :

"agriculturist" means a person who ordinarily by himself or by hired labour or otherwise is engaged in the production or growth of agricultural produce which has not been processed, but does not include a trader, commission agent, processor or broker, an employee of Government or of any co-operative society or of a Market Committee, or a partner in trading firm or an industrial concern in or in relation to agricultural produce although such trader, commission agent, processor, broker, an employee of Government or of any co-operative society or of any Market Committee or a partner in trading firm or an industrial concern; may also be engaged in the production or growth of agricultural produce."

'Agriculturists' for the purposes of the A.P.M.C. Act means a person who is engaged in production of agricultural produce which has not been processed, but does not include a trader, commission agent, processor or a broker, although the said persons may also engage in production or growth of agricultural produce. An agriculturist is different from the other persons who are engaged in business in the market.

9. The Mathadi Act came to be enacted to regulate the employment of unprotected manual workers such as, Mathadi, Hamal, etc., engaged in certain employments, to make better provision for their terms and conditions of employment, to provide for their welfare, and for health and safety measures. It aims at making provision for ensuring an adequate supply to, and full and proper utilization of, such workers in such employments to prevent avoidable unemployment. No doubt, the said Act is a welfare piece of legislation intended to protect the unprotected manual workers; whereas, the A.P.M.C. Act aims at providing protection to the agriculturists.

10. Section 3(1) of the Mathadi Act provides that the State Government may by means of a scheme provide for the registration of employers and unprotected workers in any scheduled employment or employments, and provide for the terms and conditions of work of registered unprotected workers, and make provision for the general welfare in such employments. The scheme referred to hereinabove, which contains Clause 41, is framed under Section 3 of the Mathadi Act.

Section 3(2)(j) of the Mathadi Act reads thus :

In particular, a scheme may provide for all or any of the following matters that is to say --

...................................................

(j)      for the manner in which, the day from which (either prospective or retrospective) and the persons by whom, the cost of operating the scheme is to be defrayed."
 

The source of authority of the Board to charge the cost of operation of the scheme is contained in Section 3(2)(j) of the Mathadi Act read with Clause 41 of the scheme.
 

The constitution of the Board is regulated by Section 6 and the composition of the Board is provided in Sub-section (4) which reads thus :
 The members representing employers and unprotected workers shall be equal in number, and the members, representing the State Government shall not exceed one-third of the total number of members representing employers and unprotected workers." 
 

11. With a view to find out as to who are treated as employers while constituting the Boards, we pointedly asked the learned Assistant Government Pleader, during the course of hearing, as to who are the persons who are manning the Board as representatives of the employers. The learned Assistant Government Pleader after seeking instructions in writing, categorically stated that the agriculturists are not representing the employers as members of the Board and the employers are being represented by traders, agents, etc. Perusal of the provisions of the Mathadi Act do not even remotely suggest that the cost of the scheme should be recovered from the agriculturists and/or that the agriculturists need to be treated as employers. The said position would further crystallize having regard to the nature of the business carried on in the market area regulated by the Agricultural Produce Market Committee.

12. These petitions came to be filed in view of the communications issued by the Director of Marketing dated 17th February, 1992 and 1st May, 1992. The communication dated 17th February, 1992 which is addressed to the District Deputy Registrar, Co-operative Societies, Ahmednagar, informs that the levy payable to the Board has to be paid by those persons who avail of the services of the workers. It further says that the said amount has to be recovered in the same manner in which Aadate/commission agent deduct the amount of wages from the amount payable to the agriculturist. It further directs that in the same fashion the levy be deducted from the bills payable to the agriculturists and paid to the Board. In other words, the Director of Marketing informed the concerned authorities that the amount be deducted from the money payable to the agriculturist and remitted to the Board. The impugned communications are issued by the Director of Marketing as there was a confusion in regard to the person who is supposed to pay the amount of levy (cost of operation of the scheme) and perusal of the impugned communication does reveal that the Director suggested that the amount should be deducted from the payments to be made to the agriculturists.

13. The State Government has not filed any return nor any return has been filed by the Director of Marketing. The Mathadi Board, which is responsible to operate the scheme, and which is further responsible to collect the cost under Clause 41, has filed a return. It may not be out of place to state that the Board is manned by the representatives of the traders, commission agents, etc., as employer's representative, besides the representatives of the workers and the nominees of the State Government. It is very interesting to note the stand of the Board. It is undisputed that everywhere in the State the amount of levy payable under Clause 41 is being recovered from the agriculturists. Perusal of paragraph 16 of the return reveals that the traders, commission agents and Adatias refused to register themselves as employers with the respondent No. 4 / Board.

The affidavit further reveals that from 5th May, 1991, all the commission agents operating, in the principal market of the marketing area were registered as employers by the respondent No. 4/Board and these registered commission agents (employers) are allotted the registered Mathadi Workers registered with the Board. If this be the position, then it is really absurd to recover the amount of levy from the agriculturists. The amount of levy under Clause 41 is mandated to be paid by the registered employers and if the commission agents are registered employers, the levy has to be paid by the registered employer and no one else. We choose to reproduce the relevant portion from para 16 of the affidavit filed by the Board :

................ However, the Traders/Commission Agents/Adatias refused to get themselves registered as registered employers with the Respondent No. 4 Board. I say that under the provisions of Section 2(3) of the Mathadi Act, read with provisions of Clause 14 of the said Scheme, Traders /Commission Agents/Adatias are required to be registered as registered employers with Respondent No. 44 Board. I say that pursuant to the Clause 14 of the said Scheme, it was given effect to from 5th May 1991 all the Commission Agents operating in the Principal Market of the Market Area were registered as Registered Employers by the Respondent No. 4 Board and they were allotted the Registered Mathadi Workers, registered with the Respondent No. 4 Board as per their requirements."

14. Though in para 16 of the affidavit the Board indirectly admits the liability of the commission agents (registered employers) to pay the levy, the averments made in next paragraph would reveal the tilt of the Board in favour of the commission agents and against the agriculturists. In para 17 of the affidavit, the Board claims that as per the prevailing practice, the commission agents registered with the Board used to unload the goods of the agriculturists for its sale to the prospective purchasers. It further states that since the goods are not vested with the commission agents prior to its sale to the purchasers, the goods are unloaded on behalf of the agriculturists by the commission agents though the agriculturists are not registered with the respondent No. 4 Board, it being practically not possible since they come from distinct villages and do not have place of business. The affidavit further states that whereas the Traders/ Commission Agents operating in principal market holding licences from the respondent No. 4 could be registered as registered employers in view of their specific place of business in the principal market. We reproduce the relevant portion from the affidavit in reply filed by the Board :

I say that since the goods are not vested with the Commission Agents prior to its sale to the Purchaser, the goods are unloaded on behalf of the Agriculturist by the said Commission Agents, though the Agriculturists are not registered with the Respondent No. 4 Board as Registered Employers, it being practically not possible, since they come from distinct villages and do not have place of business. Whereas the Traders/Commission Agents operating in Principal Market holding Licences from the Respondent No. 1 hereinabove could be registered as Registered Employers in view of their specific place of business in the Principal market of the said Market area. I say that pursuant to the provisions of the aforesaid Scheme, the Respondent Board is entitled to fix levy on the wages paid to the Mathadi Workers from the Registered Employers to provide for Provident Fund, Gratuity, Compensation in case of accident. Bonus, administrative expenses and 1% for general expenses. I say that the levy so collected from the Registered Employers is nothing but a deferred wages of the poor Mathadi Workers and as such that the Traders/Commission Agents/Adatias are recovering from the Agriculturist is deferred wages of the poor Mathadi Workers. I say that prior to constitution of Respondent. No. 4 also Traders/ Commission Agents/Adatias were recovering the wages paid to Mathadi Workers from the agriculturists. However to avoid exploitation of the Mathadi Workers, the said Commission Agents/Traders/Adatias started depositing the said wages along with deferred wages in the form of levy fixed by the Respondent No. 4 Board, with the Respondent No. 4 Board. I say that as aforesaid the Traders/ Commission Agents/Adatias as per the prevailing practice are recovering the wages deposited by them with the Board along with deferred wages from the Agriculturist and as such there is no conflict between the provisions of the A.P.M.C. and the Mathadi Act and Scheme framed thereunder."

Perusal of the statements made by the Board in paragraphs 16 and 17 of the affidavit reveals that though it is not the liability of the petitioners/agriculturists to pay the levy under Clause 41, to meet the cost of the scheme, they are made to pay the same. The agriculturists who are illiterate and unorganized, individually visit the market area few times in a season, have been made the scapegoat and are forced to pay the contribution which ought to be paid by the registered employers. It is obvious that the Boards which are dominated by the registered employers is acting as a tool in their hands and instead of recovering the amounts from the registered employers, are recovering or are permitting and allowing the registered employers to recover the said sum from the agriculturists.

15. In Writ Petition No. 2268 of 1992, the Maharashtra State Co-operative Cotton Growers Marketing Federation Limited, Aurangabad, has filed an affidavit stating therein that it is a Society registered under the provisions of the Maharashtra Co-operative Societies Act, 1960, and that the Government has appointed it as the chief agent for implementation of the Cotton Monopoly Procurement Scheme. In the return, it is explained how the Cotton Monopoly Scheme is operated. The stand of the Federation is that it is not the 'principal employer' in view of the fact that it is appointed by the Government only to implement, the scheme. The affidavit further states that either the levy will have to be deducted from the payment of price of the raw cotton from the agriculturist or the State Government will have to bear the amount payable towards levy, inasmuch as, the Federation has no funds to meet the expenses of levy.

As indicated in the preceding paragraphs, as we have held that the Petitioners / agriculturists do not satisfy the test of employer, the levy cannot be made payable by them. We need not decide in these petitions, as to who would be liable to pay the levy. Suffice it to state that only a 'registered employer' would be liable for payment of levy.

16. The position that emerges from the discussion made hereinabove is that the agriculturists/petitioners do not carry on any business in the market of the Agricultural Produce Market Committee. The petitioner cannot be termed as employer as they have no control, much less, ultimate control over the affairs of the establishment. The levy under Clause 41 of the scheme has to be paid by registered employer and not by the agriculturist. The Board cannot recover the levy from the agriculturist either directly or indirectly. It cannot permit the registered employer to recover the levy from the agriculturist. We hold that it is the obligation of the Board to recover the levy from the registered employers. The grievance made by the petitioners is well merited and the petitions deserve to be allowed.

17. In the result, the Writ Petitions are allowed.

We declare that the 'agriculturists', who sell the agricultural produce in the market area of the Market Committee, cannot be termed as 'employers' under the Mathadi Act and, hence, they cannot be registered as 'employers', and those who are registered employers alone are obliged to pay the levy under Clause 41 of the scheme framed under Section 3 of the Mathadi Act.

The impugned communications are quashed and set aside as per prayer Clause (B) in these petitions.

We further restrain the respondents from recovering the levy from the petitioners/agriculturists.

18. Rule made absolute in the above terms. In the circumstances of the case, there shall be no order as to posts.