Bombay High Court
The Maharashtra State Market ... vs Union Of India Through Secretary ... on 8 June, 2021
Bench: R.D. Dhanuka, Virendrasingh Gyansingh Bisht
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 10289 OF 2019
1. The Maharashtra State Market Committee ]
Co-operative Federation Ltd., Pune, ]
A Co-operative Society Registered under ]
the provisions of Maharashtra Co-operative ]
Societies Act, 1960 ]
having its office At: 583, Plot-D, ]
Shri Chhatrapati Shivaji Market Yard, ]
Pune - 411 037 ]
Through Managing Director ]
Shri K.S.Kulkarni ]...Petitioner
Versus
1. Union of India, ]
Through Secretary, ]
Ministry of Agriculture, ]
Department of Agriculture and Cooperation, ]
Having office at Krishi Bhawan, ]
Dr. Rajendra Prasad Rd, ]
Opposite Rail Bawan, ]
Rajpath Area, Central Secretariat, ]
New Delhi- 110 001. ]
2. The State of Maharashtra, through its ]
Secretary, Department of Co-operation, ]
Marketing and Textile having its office ]
at Mantralaya, Mumbai - 400 032. ]
3. The Directorate of Marketing, ]
State of Maharashtra, ]
Having office at - 3rd Floor, ]
New Central Building, ]
Ambedkar Wellesly Road, ]
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Pune, Maharashtra 411 001 ]
4. National Agricultural Co-operative Marketing ]
Federation of India Ltd. (NAFED) ]
Having office at - NAFED House, ]
Siddhartha Enclave, Ring Road, ]
Ashram Chowk, New Delhi - 110 014 ]
Through Branch Manager, Western Region, ]
Naman Centre, 'A' Wing, Unit No. 803, ]
8th Floor, C-31, G Block, Opp. Dena Bank, ]
Bandra Kurla Complex, Mumbai 400 051 ]
5. The Maharashtra State Co-operative ]
Marketing Federation Limited ]
Having office at Kanmoor House, ]
Narsi Naatha Street, ]
Mumbai- 400 009. ]...Respondents
...
Mr.Girish S. Godbole a/w. Mr. Drupad S. Patil, Mr.B.G.Patil and Mr.
Dheeraj Patil for the Petitioner.
Mr. R.V.Govilkar for Respondent No.1- Union of India.
Mrs.Ashwini A. Purav, AGP for Respondent Nos.2 and 3.
Mr.Rajesh Choudhary i/b. RKC Legal for Respondent No.4- NAFED.
Mr. S.S.Lanke a/w. Mr. Jitendra Gautam for Respondent No.5.
...
CORAM : R. D. DHANUKA &
V. G. BISHT, JJ.
Reserved on : 29th April, 2021
Pronounced on : 8th June, 2021
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JUDGMENT (PER : V.G.BISHT, J.)
1. Rule. Rule made returnable forthwith. By consent of parties,
Petition is heard finally at the stage of admission.
2. By this Petition under Article 226 of Constitution of India, the
petitioner has approached this Court with following prayers :
(a) Writ of This Hon'ble Court may be pleased to
issue a Writ of Certiorari or any other writ, order or
direction in the nature of Writ of Certiorari thereby
quashing and setting aside the clause No. B (ii) of
Chapter II of Guidelines for Price Support Scheme
(PSS), being Exhibit B to this Petition.
b. The Hon'ble Court be pleased to declare that
the Market Committee constituted under the
provisions of Maharashtra Agricultural Produce
Marketing (Development and Regulation) Act, 1963
are entitled for market fees on purchases of
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agricultural commodities made under Price Support
Scheme (PSS) by Central and State Agencies in
procurement/ purchase centres managed by the
Marketing Committees in their respective Market
Areas.
c. This Hon'ble Court may be pleased to issue a
Writ of Mandamus or any other writ, order or
direction in the nature of Writ of Mandamus thereby
directing the Respondent No.4 to forthwith pay
Market Fees payable to the Marketing Committees
under provisions of the Maharashtra Agricultural
Produce Marketing (Development and Regulation )
Act, 1963.
d. Pending hearing and final disposal of petition,
the execution, implementation, operation and effect
of clause No. B (ii) of Chapter II of Guidelines for
Price Support Scheme (PSS), being Exhibit B to this
Petition be stayed.
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e. Any other just and equitable orders be passed in
the interest of justice.
3. The petitioner is a Federation of Agricultural Produce Market
Committees in Maharashtra registered under the provisions of
Maharashtra Co-operative Societies Act, 1960. More than 290
Market Committees are the members of the said Federation. The
respondent No.3 is a Directorate of Marketing constituted under
the provisions of Maharashtra Agricultural Produce Marketing
(Development and Regulation) Act, 1963 (for short, " APMC Act,
1963"). The respondent No.4- NAFED is one of the Central Nodal
Agencies for procurement of 16 notified agricultural commodities
of oilseeds, pulses and cotton under Price Support Scheme (PSS)
and continued to be the sole Central Nodal Outright Procurement
Agency of pulses and oilseeds under PSS of Government of India.
The respondent No.5 is an apex society for agricultural marketing
and processing co-operative societies. One of the function of the
respondent No.5 is procurement of food grains under Minimum
Support Scheme of Government of India. The respondents are
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thus "State" and/ or "other authorities" within the meaning of
Article 12 of the Constitution of India.
4. According to petitioner, in order to develop and regulate
marketing of agricultural and other produce in market areas and
markets and in order to confer powers on Market Committees to
establish market fund for various purposes, the State of
Maharashtra enacted the APMC Act, 1963. The petitioner then
contends that although the PSS is in existence in India for more
than three decades, there were no Guidelines to regulate the PSS
operation. Taking into consideration the necessity to prepare
comprehensive Guidelines for effective implementation of the
scheme to ensure that the farmers are benefited and to put in place
a system of efficient marketing, development of non-traditional/
new markets, processing of agricultural produce for value addition
and the sales through network of retail points, the Government of
India, through Ministry of Agriculture Department of Agriculture &
Co-operation issued Guidelines (Exhibit -B) for PSS.
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5. The petitioner further contends that as per the said
Guidelines, the respondent No.4 i.e. NAFED is one of the Central
Nodal Agencies for procurement of 16 notified agricultural
commodities of oilseeds and pulses under PSS. It procures stocks
under PSS directly from the farmers through its co-operative
network at State level and primary level. In order to strengthen co-
operative marketing in the country, NAFED also undertakes
procurement and marketing of agricultural commodities in joint
venture with States Co-operative Marketing Federations/ Marketing
Co-operative Societies.
6. The petitioner further contends that as per clause (C) of
Chapter II of said PSS Guidelines, it is the responsibility of Central
Nodal Agencies to identify the purchase centres in consultation
with State Government. Furthermore, as per clause (XIV) of
Chapter III of said Guidelines, the service charges @ 2.5% for copra
and 1.5% for other commodities is paid on the Minimum Support
Price (MSP) to the Central Agencies. Additionally, a maximum of
2% service charge is paid to the procuring agencies at the State and
procurement level. Procurement by State Level Marketing
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Federation shall be made through the Primary Co-operative
Societies in which service charges @ 1% (out of total 2%) is to be
paid to Primary Societies. However, if there is no Primary Societies
functional in a particular area as certified by the State Government,
the State Agencies/ Federations would be paid 2% service charge
provided they open and manage the procurement centers as per the
Guidelines. Besides, the Department of Agriculture and Co-
operation (DAC) shall also provide 2% incentive to the central
agencies on the net profit earned for disposal of PSS stocks. Thus,
it is clear that the nodal agencies are entitled for service charges
and incentives for implementing the PSS Guidelines.
7. The petitioner further contends that clause (XIII) of Chapter
III of PSS Guidelines provides that the Central Government will
reimburse the loss, if any, caused to nodal agencies. Computation
of loss shall be total "Procured Cost". The said term "Procured
Cost" is explained to mean MSP + statutory taxes + commission of
agents + labour charges + service charges to procurement agencies
+ bank charges - (minus) realization on sale of stock. Thus,
according to petitioner, it is clear that the nodal agencies are
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responsible and liable to pay all statutory taxes and service charges.
8. It is the further case of the petitioner that if provisions of the
APMC Act, 1963 are read with PSS Guidelines, then it would be
clear that the Market Committees are entitled for fees and charges
payable to them under Section 31 for services provided to seller
and purchaser. Section 31 does not make any distinction between
the private purchaser and nodal agency who is purchasing the
goods.
9. It is the further case of the petitioner that at the request of
respondents and for effective implementation of PSS Guidelines,
the Market Committees provided basic facilities like space, shed,
storage godowns, weighing machines, electricity, water and
manpower for management of the procurement centres opened in
the respective market areas. Therefore, the Market Committees
requested the respondents to pay market fees payable under
Section 31 in addition to the fees payable under clause (XIV) of
Chapter III of PSS Guidelines. Accordingly, upto the year 2016-17,
the said market fee was duly paid. However, from 2017-18
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onwards the respondents have stopped payment of market fees.
On an inquiry and demand, the District Marketing Officers have
informed to the Market Committees that as per PSS Guidelines,
said market fees are not payable. Despite repeated demands
seeking payment of market fees and charges for purchase of
notified stocks made by the NAFED, no payments are made till
date. Therefore, present Petition.
10. The respondent No.5 - Maharashtra State Co-operative
Marketing Federation Ltd. by filing affidavit in reply contends that
the respondent No.4 - NAFED and respondent No.5 have rightly
denied the payment of market fees to Market Committee payable
under the provisions of Section 31 of the APMC Act, 1963.
According to it, clause - B (ii) of Chapter II of Guidelines for PSS
(Exhibit -B) is rightly constituted and needs no interference. The
respondent No. 5 denies that the said clause is ultra-vires and
prejudicial to the interest of the petitioner.
11. According to respondent No. 5, the Government of
Maharashtra in response to their Notification No. SAPAS-2019/ CR-
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143/ 24-C dated 9th September, 2019 addressed to Joint Secretary,
Government of India, New Delhi have requested the Government of
India to implement the Price Support Scheme in the season 2019-
20 for the purpose of pulses inclusive of moong. The Government
of Maharashtra by the said notification dated 9th September, 2019
have exempted all the State duties and taxes in respect of PSS
operation. Therefore, respondent No. 5 is not paying any duties/
taxes to the petitioner. This being so, the Petition is not
maintainable and deserves to be dismissed with costs.
12. Respondent No.4- NAFED by filing affidavit in reply raised
preliminary objection as to the maintainability of the Petition by
contending that NAFED not being the "State" under Article 12 of
the Constitution of India is not amenable to the writ jurisdiction
and in support of its contention placed reliance in National
Agricultural Co-operative Marketing Federation of India Ltd.,
Versus Nafed Processed Food Cooperative Marketing Federation of
India Employees Union and others1
1 2001 (58) DRJ 799 (DB)
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13. Respondent No.4 -NAFED then contends that it is one of the
Central Nodal Agencies for the procurement of pulses, oilseeds and
copra with the role and responsibility under PSS. The procurement
under PSS is exempted from the Mandi tax/ levy etc., under
Chapter II clause B (ii) of the Guidelines for PSS which states that
"Exemption from and tax/ levy etc: State/ UT Government shall
exempt all state duties in respect to PSS operation in the interest of
its farmers and reduce the procurement cost. Further, these taxes,
if charged by the State/ UT Government, the same shall not be
admissible/ reimbursable to the State / UT Government and state/
procuring agency". Therefore, according to respondent No. 4-
NAFED, NAFED is not liable to pay any levy fee to the Marketing
Committee.
14. Respondent No.4-NAFED lastly contends that the petitioner is
not entitled to the relief prayed in the Petition against it as the
respondent-NAFED is acting on behalf of the Government and
under the said scheme, the State/ UT Government shall exempt all
state duties in respect of PSS operation in the interest of its farmers
and reduce the procurement cost.
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15. Respondent No.4- NAFED filed additional affidavit in reply
and contended that NAFED is one of the Central Nodal Agencies of
Government of India to implement PSS and Price Stabilization
Fund (PSF) Scheme of Government of India. As per PSS scheme,
the State Government has to submit the proposal to DAC & FW for
implementation of PSS Scheme in the State wherein State gives an
undertaking that they will exempt all the State duties/ taxes in
respect of PSS operation.
16. It is the further case of respondent No.4- NAFED that to
mitigate hardships to consumers, PSF Centre Scheme for providing
working capital and other incidental expenses for procurement and
distribution of commodities was approved by the Central
Government. In respect of the said fund, the Central Government
issued operational Guidelines for Price Stabilization Fund (PSF)
2015. PSF scheme was stayed in operation for two years, under
which mandi taxes/ fee was payable.
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17. Respondent No.4 then again reiterated that the procurement
under PSS is exempted from the Mandi tax/ levy etc., under
Chapter II clause B (ii) of the Guidelines for PSS.
18. Respondent No.2 -State of Maharashtra through its Deputy
Secretary (Marketing), Co-operation, Marketing and Textile
Department filed affidavit in reply. Respondent No.2 has broadly
reiterated the contentions raised by respondent No.5 in its affidavit
in reply and contends that the Petition being not maintainable,
deserves to be dismissed with costs.
19. In response to the above noted affidavit in reply of
respondent No.2-State of Maharashtra, the petitioner has filed
affidavit in rejoinder and contends that respondent No.4 was
paying the market fees to the respective Market Committees till
2018, however, thereafter they stopped the payment. The petitioner
has also enclosed a copy of the chart (Exhibit "B") showing details
of payment made by the NAFED and services provided by the
Market Committees.
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20. It is further contended and reiterated that if provisions of the
APMC Act, 1963 are read with PSS Guidelines, then it would be
clear that the Market Committees are entitled for fees and charges
payable to them under Section 31 for services provided to the seller
and purchaser. Rest of the contentions are the reiteration of the
facts narrated in the petition itself.
21. Mr. Godbole, learned Counsel for the petitioner, submits that
the respondents have withheld payment of market fees by relying
upon clause (B) (ii) of Chapter II of PSS Guidelines, which is
precisely under challenge. According to learned Counsel, however,
a bare perusal of the said clause would make it clear that the
exemption is granted only to the "State duties".
22. The learned Counsel then would invite our attention to
Section 29 of the APMC Act, 1963 which deals with the powers and
duties of the Market Committee and points out sub-sections 2 (v),
(vi), (vii), (ix), (xvii), (xx) and (xxi). The learned Counsel further
pointed out Section 31 of the APMC Act, 1963 and vehemently
submitted that the Market Committees are entitled for fees from
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every purchaser of agriculture produce marketed in the market area
and this being so, the respondents do not have any right to
withhold payment of said fees on purchases made by respondent
No.4- NAFED.
23. The learned Counsel would further submit that said Sections
do not make any distinction between the private purchaser and
respondent No.4- NAFED and therefore, respondent No.4 cannot
claim any exemption from payment of market fees to the Market
Committees.
24. Elaborating further, the provisions of APMC Act, 1963, the
learned Counsel would contend that under the provisions of the
APMC Act, 1963, the Market Committees recover market fees and
supervision charges. The said supervision charges are collected on
behalf of the Government. The market fees are collected to
generate market fund. The said market fee exclusively belong to
the particular Market Committee and this being so, it is more than
clear that the said clause (B) (ii) is not applicable for claiming
exemption in payment of market fees.
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25. According to learned Counsel, the respondents are relying on
clause (B) (ii) of PSS Guidelines and claim that they are not
entitled to pay market fees. Assuming that the said clause grants
exemption to NAFED from payment of market fees, then also the
said clause is illegal and bad in law as the same is contrary to the
provisions of the APMC Act, 1963.
26. The learned Counsel then invited our attention to various
correspondence and impressed upon us that the petitioner's
services were availed by the respondents from time to time and
paid market fees till 2018. During the course of argument, the
learned Counsel invited our attention to the letter dated 9 th
September, 2019 addressed to the Joint Secretary (Co-op),
Department of Agriculture and Co-operation, Krishi Bhawan, New
Delhi by Principal Secretary (Marketing), Government of
Maharashtra requesting for implementation of PSS in season 2019-
20 for pulses (moong).
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27. Assailing this correspondence, learned Counsel would point
out Section 59 of the APMC Act, 1963 and would submit that no
notification till date under said Section 59 is issued by the
respondents. The respondents could not have given exemption to
the payment of the market fees and even if assuming for the sake
of argument that it had powers to do so, then the proviso to Section
59 was not complied with inasmuch as it provides that no order to
the prejudice to the Market Committee shall be passed without an
opportunity being given to such Market Committee to represent its
case. Admittedly, no such opportunity was given to the petitioner.
28. On the point of maintainability of the Petition, the learned
Counsel would submit that the respondent No.4- NAFED is actually
acting as an agent of the Central Government, which is an admitted
position and therefore, for all purposes, it is a "State" / "other
authority" within the meaning of Article 12 of the Constitution of
India.
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29. Per contra, Mr. Govilkar, learned Counsel for respondent
No.1- Union of India, invited our attention to the prayers in this
petition and would submit that since the petitioner has prayed for
setting aside a part of the Guidelines framed by the Central
Government for Price Support Scheme (PSS), the petitioner not
having issued a notice to the Attorney General of India, the petition
is liable to be dismissed on that ground itself.
30. It is submitted by learned Counsel that the scheme in
question has been framed for the benefit of farmers. The
respondent No.4- NAFED is a central level player whereas the
respondent No. 5- The Maharashtra State Co-operative Marketing
Federation Limited is a state level player. The actual working of
such benefits to be passed on to the farmers is worked out by
respondent Nos. 4 and 5. Neither the Central Government nor
State Government have paid any amount to the petitioner towards
market fees on franchise of agricultural commodities made under
Price Support Scheme (PSS) by the Central and State Agencies in
last several years. No case is thus made out by the petitioner for
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seeking any relief in this petition.
31. Insofar as submission of learned Counsel for respondent No.1
that no relief can be granted in favour of the petitioner for want of
notice to the Attorney General of India is concerned, a perusal of
the prayer clause (a) of the petition clearly indicates that the
petitioner has prayed for quashing and setting aside a part of the
Guidelines i.e. clause (B) (ii) of Chapter II of the Guidelines for
PSS. At the first instance, it is the case of the petitioner in the
petition that the payment of market fee is not excluded under the
said clause (B) (ii) of Chapter II of the Guidelines. The exemption
is granted under the said Guidelines only to the "State Duties".
32. It is the case of the petitioner in the petition that under the
provisions of the APMC Act, 1963, the supervision charges are
collected on behalf of the Government whereas the market fees are
collected to generate market fund. The said market fee exclusively
belong to the particular Market Committee and thus the said clause
(B) (ii) is not applicable for claiming exemption in payment of
market fee.
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33. Be that as it may, the petitioner has not impugned
constitutional validity of any statute and thus, there is no substance
in the submission of learned Counsel for respondent No.1.
34. Mr. Choudhary, learned Counsel for respondent No.4- NAFED,
took preliminary objection about maintainability of the Petition by
submitting that the respondent No. 4- NAFED not being the State
within the meaning of Article 12 of the Constitution of India, is not
amenable to the writ jurisdiction and consequently the Petition is
not maintainable. To buttress his submission, the learned Counsel
placed reliance in National Agricultural Co-operative Marketing
Federation of India Ltd., (supra) and more particularly relied on
paragraph Nos. 5, 6, 7, 22 and 23.
35. The learned Counsel, during the course of argument, invited
our attention to clause (B) (ii) of Chapter II of Guidelines for PSS
and would submit that the State/ UT Government shall exempt all
state duties in respect of PSS operation in the interest of its farmers
and reduce the procurement cost. The learned Counsel also
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invited our attention to the undertaking (given at page No. 56 of
the Petition) given by Principal Secretary Agriculture, State/ UT
Government thereby undertaking that the State/ UT Government is
willing to undertake the PSS operation in the State as per PSS
guidelines of the Government of India and agree to exempt all the
State duties/ taxes in respect of PSS operation.
36. The learned Counsel lastly contended that the NAFED is one
of the Central Nodal Agencies of Government of India to implement
PSS and PSF scheme of Government of India Department of
Agriculture, Cooperation and Farmers Welfare (DAC & FW),
Ministry of Agricultural & Farmers Welfare in Government of India
issued guidelines in respect of PSS scheme and Department of
Consumer Affairs, Ministry of Consumer Affairs, Food & Public
Distribution for PSF scheme. According to learned Counsel, as per
PSS scheme, the State Government has to submit the proposal to
DAC & FW for implementation of PSS scheme in the State wherein
State gives an undertaking that they will exempt all the State
duties/ taxes in respect of PSS operation. In view of the
undertaking given by respective Principal Secretary (Marketing)
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and as also in the light of guidelines for PSS, NAFED is not liable to
pay any levy fee to the Market Committee, argued learned Counsel.
37. Mrs.Purav, learned AGP representing respondent Nos. 2 and
3-State, reiterated the contentions raised in affidavit in reply and
would support notification dated 9th September, 2019 which
exempt all the State duties/ taxes in respect of PSS operation
(procurement/ transportation/warehousing/ sale etc.)
38. Mr. Lanke, learned Counsel for respondent No.5, would
submit that his affidavit in reply be taken into consideration.
39. Mr.Godbole, learned Counsel for the petitioner, in his
rejoinder argument submits that the APMC Act is a State enactment
falling under 7 Schedule Part II of the Constitution of India.
Admittedly, there is no notification exempting the respondents from
payment of market fees. In this obtaining situation, the executive
order cannot supersede State legislation i.e. the provisions of the
APMC Act, 1963.
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40. The learned Counsel then pointed out paragraph Nos. 2 and 3
of the additional affidavit filed by respondent No.4- NAFED and
would submit that the petitioner is not concerned with Price
Stabilization Fund (PSF Scheme of Government of India) and
therefore, all the contentions raised in the additional affidavit
which are PSF centric are not applicable to the petitioner.
41. The learned Counsel reiterated that the real cause under
challenge is clause (B) (ii) of PSS and interpreting the said clause,
the learned Counsel strenuously emphasized that it does not
empower respondents to refuse fees as the said clause include taxes
which does not mean fees. In this regard, the learned Counsel
placed reliance on the judgment given in Kewal Krishan Puri and
Another Versus State of Punjab and Another2.
REASONS AND CONCLUSION
42. Before appreciating the grievance of the petitioner and setting
the controversy at rest, what at any rate, at the first instance, merit
our attention is the provisions of the APMC Act, 1963. The cause of
2 (1980) 1 SCC 416
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action staring at in the present Petition is gross denial on the part of
respondent No.4- NAFED and respondent No.5 in making payment
of market fee to Market Committee payable under relevant
provisions of the APMC Act, 1963. It is in this whining backdrop, a
quick and studied glance and glare becomes inevitable. We,
therefore, proceed to examine certain relevant provisions of the
APMC Act, 1963.
43. As per Section 11 of the said Act, for every market area, the
State Government shall establish a Market Committee for
regulating, processing and marketing the agricultural produce.
Section 12 (2) confers status upon APMC as local authority.
44. Section 29 contains provisions regarding the powers and
duties of the Market Committee. Under sub-section 2 (v) a duty is
cast on Market Committee to provide for necessary facilities for the
marketing of agricultural produce within the market in the market
area. Under clause (xvii) of sub-section (2), the Market Committee
may levy, take, recovery and receive charges, fees, rates and other
sums or money to which it is entitled.
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45. Section 30 A of the APMC Act, 1963 deals with the power of
the Market Committee to open collection centres for marketing of
notified produce; provision for receipt and payment by purchaser.
Section inter alia lays down that the dues to a Market Committee
shall consist of fees to be levied and collected from a purchaser by
or under the APMC Act, 1963.
46. We now come to important Section viz. Section 31 of the
APMC Act, 1963 which reads as follows:
"31. Power of Market Committee to levy fees
[and rates of commission (adat).
[(1)] It shall be competent to a Market
Committee to levy and collect fees in the
prescribed manner at such rates as may be
decided by it (but subject to the minimum and
maximum rates which may be fixed by the State
Government by notification in the Official Gazette
in that behalf), from every purchaser of
agriculture produce marketed in the market area :
Provided that, when any agricultural produce
brought in any market area for the purposes of
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processing only 3[------] is not processed 4[-----]
within thirty days from the date of its arrival
therein, it shall, until the contrary is proved, be
presumed to have been marketed in the market
area, and shall be liable for the levy of fees under
this section, as if it had been so marketed :
[Provided further that,
(a) any agricultural produce brought in any
market area for the exclusive purpose of export
shall be exempted for the payment of fees and
supervision cost, if such exporter or his duly
authorized agent present the letter of credit or
confirmed order of export or confirmed export
order consignment, whichever is relevant or
applicable, at the time of entry of such produce in
the market area, to the officer authorized in this
behalf by the market committee concerned along
with a declaration in that behalf, in such form as
the State Government may, by order from time to
time, direct ;
(b)......
[(2).......
(3) ........
(4) .......]".
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47. A plain reading of Section 31 would show that its empowers
the Market Committee to levy and collect fees, at such rates as may
be decided by it, but subject to minimum and maximum rates
which may be fixed by the State Government by notification from
every purchaser of agricultural produce marketed in the market
area. The only exemption contemplated by second proviso to
Section 31 is to the effect that any agricultural produce brought in
any market area for the exclusive purpose of export shall be
exempted for the payment of fees and supervision cost, if such
exporter or his duly authorized agent present the letter of credit or
confirmed order of export or confirmed order of export at the time
of entry of such produce in the market area.
48. Reading Section 29 along with Sections 30 A and 31 of the
APMC Act, 1963, it would be noticed that the power of the Market
Committee to levy fees in the prescribed manner at such rates as
may be fixed by the State Government by notification in the Official
Gazette in that behalf from every purchaser of agricultural produce
is vis-a-vis various facilities for the marketing of agricultural
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produce and duties to be performed by the Market Committee.
What is immediately obvious from the provisions discussed so far
and more particularly Section 31 is that Section does not make any
distinction between the private purchaser and respondent No.4 -
NAFED and therefore, we are in agreement with the contentions of
learned Counsel for the petitioner when he argues so.
49. The respondents, on the other hand, appear to be drawing
strength from clause (B) (ii) of the Chapter II of guidelines for Price
Support Scheme (PSS) (Exhibit B). It reads as follows :
"(B) (ii) Exemption from mandi tax/ levy etc.: State/ UT
Govt. shall exempt all state duties in respect to PSS
operations in the interest of its farmers and reduce the
procurement cost. Further, these taxes, if charged by the
State/ UT Government, the same shall not be
admissible/ reimbursable by the DAC to the State/ UT
Government and state/procuring agency".
50. Taking recourse to the above clause, learned Counsel for
respondent No.4- NAFED submitted that NAFED is acting on behalf
of the Government and under the Price Support Scheme (PSS)/
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guidelines, the State/UT Government shall exempt all State duties
in respect of PSS operation in the interest of its farmers and reduce
the procurement cost.
51. Refusing to by the submission so advanced by the learned
Counsel for respondents, learned Counsel for the petitioner
canvassed his point of view by submitting that the exemption is
granted only to the "State duties/ taxes". "Taxes" do not mean fees,
according to learned Counsel. The learned Counsel for petitioner
immediately and promptly drew our attention to the
pronouncement given in the case of Kewal Krishan Puri and
Another (supra) in order to strengthen his interpretation.
52. We have perused the decision given in the case of Kewal
Krishan Puri and Another (supra). It has been held by the Hon'ble
Apex Court that the Constitution recognizes a different and distinct
connotation between taxes and fees.
53. We are inclined to quote with advantage following paragraphs
from the said judgment of the Hon'ble Apex Court. They are as
follows :
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9. We may now extract some very useful and
leading principles from the decision of this Court in
Shirur Mutt's (1954 S.C.R., 1005, supra) pointing
out the difference between tax and fee. At pages
1040-41 says Mukherjea J., as he then was:
"The second characteristic of tax is that it is an
imposition made for public purpose without
reference to any special benefit to be conferred on
the payer of the tax. This is expressed by saying
that the levy of tax is for the purposes of general
revenue, which when collected forms part of the
public revenues of the State. As the object of a tax
is not to confer any special benefit upon any
particular individual, there is, as it is said, no
element of quid pro quo between the tax-payer and
the public authority...."
A 'fee' is generally defined to be a charge for a
special service rendered to individuals by some
governmental agency."
At page 1042 the learned Judge. Enunciates:
"The distinction between a tax and a fee lies
primarily in the fact that a tax is levied as a part of a
common burden, while a fee is a payment for a
special benefit or privilege Public interest seems to
be at the basis of all impositions, but in a fee it is
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some special benefit which the individual receives.
After pointing out the ordinarily there are two
classes of cases where Government imposes 'fee'
upon persons, the first being the type of cases of the
licence fees for Motor Vehicles or the like and in the
other class of cases "the Government does some
positive work for the benefit of persons and the
money is taken as the return for the work done or
services rendered" (vide page 1043), it is said
further:
If the money thus paid is set apart and appropriated
specifically for the performance of such work and is
not merged in the public revenues for the benefit of
the general public, it could be counted as fees and
not a tax. There is really no generic difference
between the tax and fees and as said by Seligman,
the taxing power of a State may manifest itself in
three different forms known respectively as special
assessments, fees and taxes".
"23. From a conspectus of the various authorities
of this Court we deduce the following principles for
satisfying the tests for a valid levy of market fees on
the agricultural produce bought or sold by licensees
in a notified market area:-
(1) That the amount of fee realised must be
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earmarked for rendering services to the licensees in
the notified market area and a good and
substantial portion of it must be shown to be
expanded for this purpose.
(2) That the services rendered to the licensees must
be in relation to the transaction of purchase or sale
of the agricultural produce.
(3) That while rendering services in the market area
for the purpose of facilitating the transactions of
purchase and sale with a view to achieve the objects
of the marketing legislation it is not necessary to
confer the whole of the benefit on the licensees but
some special benefits must be conferred on them
which have a direct, close and reasonable correlation
between the licensees and the transactions.
(4) That while conferring some special benefits on
the licensees it is permissible to render such service
in the market which may be in the general interest of
all concerned with the transactions taking place in
the market.
(5) That spending the amount of market fees for the
purpose of augmenting the agricultural produce, its
facility of transport in villages and to provide other
facilities meant mainly or exclusively for the benefit
of the agriculturists is not permissible on the ground
that such service in the long run go to increase the
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volume of transactions in the market ultimately
benefiting the traders also. Such an indirect and
remote benefit to the traders is in no sense a special
benefit to them.
(6) That the element of quid pro quo may not be
possible, or even necessary, to be established with
arithmetical exactitude but even broadly and
reasonably it must be established by the authorities
who charge the fees that the amount is being spent
for rendering services to those on whom falls the
burden of the fee.
(7) At least a good and substantial portion of the
amount collected on account of fees, may be in the
neighbourhood of two-thirds or three-fourths, must
be shown with reasonable certainty as being spent
for rendering services of the kind mentioned above".
54. We note here again the relevant provision of the APMC Act,
1963 which we have said about a bit earlier. The principles so
culled out and enunciated above by the Hon'ble Apex Court are
clearly characterized and reflected by Section 29 of the APMC Act,
1963.
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55. From the above discussion, it is more than clear that before
any levy can be upheld as a fee, it must be shown that the levy has
reasonable co-relationship with the services rendered by the
Government. In other words, the levy must be proved a quid pro
quo for the services rendered.
56. We further would like to point out that the fee levied is not
on the agricultural produce in the sense of imposing any kind of tax
or duty on the agricultural produce. Nor it is a tax on the
transaction of produce or sale. The fee is an impost on the
respondent No.4- NAFED buyer of the agricultural produce in the
market in relation to transaction of its purchase. The
agriculturalists are necessarily not required to part with or share
any portion of the burden of the fee. Therefore, it would be myopic
to draw any self-serving interest from clause (B) (ii) of Chapter II
of guidelines for PSS.
57. Even the very guidelines for PSS requires notification if any
exemption from Mandi tax/ levy is to be given. Herein comes
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Section 59 of the APMC Act. It reads as follows :
"59. Power to exempt Market Committees, etc.,
provisions of Act -
The State Government may, by a general or special order,
in the Official Gazette, exempt any Market Committee or
any class of persons from any of the provisions of this Act
or any rules made thereunder, or may direct that such
provision shall apply to such Market Committee or to
such class of persons with such modifications not affecting
the substance thereof as may be specified in that order :
Provided that, no order to the prejudice of any Market
Committee shall be passed without an opportunity being
given to such Market Committee to represent its case".
58. A bare reading of Section 59 would show that the State
Government is empowered, by a general or special order in the
Official Gazette to exempt any Market Committee or any class of
persons from any of the provisions of the APMC Act or any rules
made thereunder, or may direct that such provision shall apply to
such Market Committee or to such class of persons with such
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modifications not affecting the substance thereof as may be
specified in that order. The proviso to Section 59 puts a rider and
clarifies that no order to the prejudice of any Market Committee
shall be passed without an opportunity being given to such Market
Committee to represent its case.
59. In the instant case, admittedly, no notification has been
published in the Official Gazette as per the mandate of Section 59
of the APMC Act, 1963. Assuming for the sake of argument that any
such notification does exist, then the respondents have not brought
on record anything to show that before passing of such notification
in the Official Gazette, the petitioner was afforded an opportunity
to represent its case. This clearly demonstrates the failure on the
part of respondents to fulfill the guidelines for PSS.
60. In the light of above discussion, we now would like to spare a
thought whether the respondent No.4- NAFED in the present case
is an instrumentality or agency of the Government so that it can be
squared up to writ jurisdiction. The answer must obviously be in
the affirmative if we have regard to the Guidelines for PSS (Exhibit
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"B"). We offer our reasons.
61. The Guidelines for PSS issued by the Government of India
seek to ensure remunerative prices to the growers for their produce
with a view to encourage higher investment and production and to
safeguard interest of consumers by making supplies at reasonable
prices with low cost of intermediation. The price policy also seeks
to evolve a balanced and integrated price structure in the
perspective of the overall needs of the economy. This is apparent
from Chapter I of the guidelines for Price Support Scheme (PSS).
62. The Guidelines for PSS seek to achieve the above visualized
targeted objectives as conceived and formulated in tandem with
State/ UT Government. The State/ UT Government in pursuing the
realization of these said objectives is required to make all necessary
logistic and working capital arrangements. These Guidelines also
make provision for reimbursement from DAC to respective State/
UT Government. In short, there is strong semblance of financial,
functional and administrative powers to be exercised by Central
Government through the Guidelines.
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63. Similarly, respondent No.4- NAFED and others are made
Central Nodal Agencies for the procurement of notified agricultural
commodities of oilseeds and pulses under PSS. There is no dispute
on this count from the side of respondent No.4-NAFED. Since the
basic function of respondent No.4- NAFED, being a Central Nodal
Agency, is not only to ensure the implementation of PSS Guidelines
but also to fulfill the cherished objectives, it is as good as
Government functionary albeit having character of Central Nodal
Agency.
64. The Central Government through its Nodal Agencies, like
NAFED, is performing public and statutory duty in the light of PSS
Guidelines. In consonance with the same, NAFED is also
performing these duties and carry out its transaction for the benefit
of growers and consumers and not for private profit. We are,
therefore, more than clear in our mind that since the respondent
No.4 -NAFED is discharging public functions, it is amenable to writ
jurisdiction under Article 226 of the Constitution of India.
Consequently, we reject the preliminary objection as to
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maintainability of petition against the respondent No.4- NAFED.
65. The ratio laid down in National Agricultural Co-operative
Marketing Federation of India Ltd., (supra) does not advance the
case of respondent No.4- NAFED inasmuch as in that case
Employees Union (respondents) had challenged the decision of
NAFED introducing voluntary retirement scheme and the orders of
termination issued under clause 17 (iv) (d) of the Staff Regulations
providing for compulsory retirement. Since the dispute was
between the employees of NAFED, the Delhi High Court found,
after consideration of constitution of NAFED, NAFED not to be
"State" or other authority or instrumentality or agency of the
"State" within the meaning of Article 12 of the Constitution of
India.
66. In the case in hand, we are not called upon to go into
constitution of NAFED independent of Central Government vis-a-vis
PSS. On the contrary, the facts and circumstances of the present
case unequivocally establish NAFED to be one of the Central Nodal
Agency and thus essentially one of the components, amongst
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others, of very Central Government thereby making it amenable to
writ jurisdiction.
67. Insofar as the contention of learned Counsel for respondent
No.1 that the scheme has been formulated for the purpose of giving
maximum benefit to the farmers is concerned, in our view, for the
purpose of giving maximum benefit to the farmers, the market fee
which the petitioner is entitled to under the provisions of the APMC
Act, 1963 cannot be deprived of.
68. We have gone through the averments made by the petitioner
and more particularly paragraph No. 8 of the affidavit in rejoinder
dated 28th January, 2021 filed by the petitioner and also annexure -
B showing the amount paid by NAFED from time to time for the
services rendered by the Market Committees.
69. In our view, there is no merit in the submission made by
learned Counsel for respondent No.1. No affidavit in reply is filed
by respondent No.1 in this petition. We, however, have dealt with
the over all submission advanced by learned Counsel in this
judgment.
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70. In so far as the prayer clause (a) of the writ petition is
concerned, in our view, clause no.B(ii) of Chapter II of the
Guidelines for Price Support Scheme (PSS) (Oilseeds, Pulses &
Cotton) issued in the Month of May 2014 by the Government of
India grants exemption from mandi tax/levy etc. The said clause
clearly provides that State/UT Government shall exempt all state
duties in respect to PSS operations in the interest of its farmers
and reduce the procurement cost. However if these taxes if
charged by State/UT Government, the same shall not be
admissible/reimbursable by the Department of Agriculture &
Cooperation to the State/UT Government and state/procuring
agency.
71. In our view, the said clause does not exempt from payment
of fees being paid to the Market Committees constituted under
the provisions of the APMC Act, 1963 on purchase of agricultural
commodities made under Price Support Scheme by Central and
State Agencies in procurement/purchase centres managed by
the Marketing Committees in their respective Market Areas. The
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said guidelines heavily relied upon by the respondents thus does
not apply to the exemption of the market fees. We are thus not
required to grant relief in terms of prayer clause (a).
72. Be that as it may, even if it is considered that the said
guidelines are applicable and thereby exempt the payment of
market fees payable to the Market Committees constituted under
the provisions of the APMC Act, 1963, the Central Government is
not empowered to give any such exemption in respect of
payment of market fees. The petitioner is entitled to payment of
the said market fees under the said APMC Act, 1963 which is a
State Act. No notification has been issued under Section 59 of the
said Act exempting the payment of market fees. In our view,
even otherwise no order to the prejudice to the Market Committees
could be passed without an opportunity being given to such
Market Committees to represent its case. No such opportunity is
given to the respondents by the Central Government before
framing such guidelines. In our view, the respondents thus could
not press in service any part of the said guidelines to refuse the
payment of market fees to the petitioner payable under the
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provisions of the said MPMC Act.
73. None of the respondents has disputed that the petitioner had
been paid market fees as reflected in the statement annexed at
Exhibit 'B' to the affidavit-in-rejoinder filed by the petitioner on
28th January 2021. The Government has issued from time to time
circulars for fixing the prescribed rates of agriculture market
produce. The respondents though had made payment of market
fees to the petitioner from time to time as reflected in the said
chart annexed at Exhibit 'B' to the rejoinder has not paid the
balance amount for the period 1 st January, 2019 onwards. The
petitioner has thus made out a case for declaration as sought in
prayer clause (b) and for writ of mandamus as prayed in prayer
clause (c).
74. In our view, there is no substance in the submission made by
Mr.Govilkar, learned counsel for the respondent no.1 that since
prayer clause (a) is pressed by the petitioner, the same cannot be
considered without any notice to the Attorney General of India.
Since we are of the view that the said guidelines do not apply to
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the exemption from payment of market fees, no such notice is
required to be issued to the Attorney General of India. Be that as
it may, the Central Government has only issued the guidelines
annexed at Exhibit "B" to the petition which are not statutory in
nature and on this ground also, notice to the Attorney General of
India is not required to be issued.
75. In so far as the contentions raised by the respondent no.5 in
the affidavit-in-reply dated 6th December 2019 are concerned,
reliance placed on Notification dated 9th September 2019 in
paragraph 4 of the said affidavit is totally misplaced. Even the
said notification does not exempt the payment of market fees.
76. The respondent No.4 has only relied upon the said guidelines
issued by the Government of India to refuse to comply with its
obligation to pay the market fees to the petitioner. In our view,
since the said guidelines are not at all applicable to the petitioner
for seeking exemption from payment of market fees, no reliance
thereon can be placed by the respondent no.4 on such guidelines
to avoid its statutory liabilities.
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77. We therefore pass the following order :-
ORDER
(i) Rule is made absolute in terms of prayer
clauses (b) and (c);
(ii) The respondent no.4 is directed to make
payment of market fees payable to the Market
Committees from 1st June 2019 onwards till
date within four weeks from today to the
Market Committees;
(iii) There shall be no order as to costs;
(iv) Parties to act on the authenticated copy of
this order.
(V.G. BISHT, J.) (R.D. DHANUKA, J.)
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