Karnataka High Court

M/S Parisons Foods Private Limited vs State Of Karnataka on 8 September, 2025

      IN THE HIGH COURT OF KARNATAKA AT BENGALURU

      DATED THIS THE 08TH DAY OF SEPTEMBER, 2025

                        BEFORE

  THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE
        WRIT PETITION NO.2282 OF 2016 (APMC)
BETWEEN:

1. SUNIL AGRO FOODS LIMITED,
   NO.104, AHUJA CHAMBERS,
   KUMARA KRUPA ROAD,
   BANGALORE - 560001,
   BY ITS PARTNER S PARMOD KUMAR,
   AGED ABOUT 55 YEARS,
   S/O B SHANTHILAL,
   EXECUTIVE DIRECTOR.

2. VENUGOPAL FLOUR MILLS,
   NO.43, SULTANPET,
   BANGALORE BY ITS PARTNER - 560001,
   S P MADAN KUMAR,
   AGED ABOUT 60 YEARS.
                                        ...PETITIONERS
(BY SRI B R SATENAHALLI, ADVOCATE)

AND:

 1.    DIRECTOR OF AGRICULTURAL MARKETING.
       NO.16, RAJ BHAVAN ROAD.
       BANGALORE - 560001.

 2.    SECRETARY,
       AGRICULTURE PRODUCE MARKETING COMMITTEE
       MANGALORE - 575003,
       DAKSHINA KANNADA DISTRICT.

 3.    THE DEPUTY COMMISSIONER,
       BANGALORE DISTRICT,
       BANGALORE - 560001.
                               -2-




 4.   THE TAHSILDAR,
      BANGALORE NORTH TALUK,
      BANGALORE - 560001.
                                         ...RESPONDENTS

(BY SRI PRINCE ISAC, AGA FOR R1, R3 AND R4, DR NANDA KISHORE, ADVOCATE FOR R2, V/O/DT 20.03.2025 SHANTHI BHUSHAN, DSGI)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH RESOLUTION DTD.28.7.2015 AS PER ANNEX-D PASSED BY THE R-2 MARKET COMMITTEE. QUASH THE OFFICIAL MEMORANDUM DTD.29.9.2015 AS PER ANNEX-E IN RESPECT OF THE FIRST PETITIONER AND OFFICIAL MEMORANDUM DTD.24.11.2015 AS PER ANNEX-F ISSUED BY THE R-3 DEPUTY COMMISSIONER AND ETC.

THIS PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 30TH JUNE, 2025 AND COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:

CORAM: HON'BLE MR JUSTICE ANANT RAMANATH HEGDE

CAV ORDER

This Writ Petition is filed assailing the resolution dated

28.07.2015 passed by the Agricultural Produce Marketing

Committee, Mangalore (for short 'Committee') under the

Karnataka Agricultural Produce Marketing (Regulation and

Development) Act, 1996 ( for short 'Act of 1996').

2. Respondent No.2 is the Secretary of Agricultural

Produce Marketing Committee, Mangalore.

3. In addition to assailing the resolution dated

28.07.2015, petitioners have also assailed the communication

dated 29.09.2015, bearing No.MSC/CR/59/15-16, marked at

Annexure-E, and the communication dated 24.11.2015 bearing

No.MSC/CR/60/15-16 marked at Annexure - F.

4. The communication dated 29.09.2015 at Annexure

- E, is by the Additional Deputy Commissioner, Bengaluru to

the Tahsildar, Bengaluru North Taluk to proceed further against

petitioner No.1 to recover the alleged dues payable by

petitioner No.1, to the Committee. Annexure - F dated

24.11.2015 is the communication by the Deputy Commissioner,

Bengaluru to Tahsildar, Bengaluru North Taluk to recover the

alleged dues payable by petitioner No.2, to the Committee.

5. Further the petitioners have questioned the notice

bearing No.MSC/CR/104/15-16 dated 07.11.2015 marked at

Annexure - G and notice bearing No.MSC/CR/124/15-16 dated

14.12.2015 marked at Annexure - H.

6. Annexures-G and H are the notices under the

provisions of Karnataka Land Revenue Act and Rules issued by

the Tahsildar to petitioners No.1 and 2 respectively.

7. In terms of the impugned resolution dated

28.07.2015, the Committee resolved to recover Rs.6,83,416/-

from the petitioner No.1 as arrears of land revenue. The said

amount of Rs.6,83,416/- comprises two components namely,

(a) Rs.1,70,854/- towards market fee,

(b) Rs.5,12,562/- towards penalty.

8. In terms of the impugned resolution, the

Committee also resolved to recover Rs.13,66,833/- from

petitioner No.2 as arrears of land revenue. The said amount of

Rs.13,66,833/- comprises two components namely,

(a) Rs.3,41,708/- towards market fee,

(b) Rs.10,25,125/- towards penalty.

9. The impugned resolution does not provide the

details as to why Rs.6,83,416/- is sought to be recovered as

arrears of land revenue. The impugned resolution refers to the

letter dated 20.07.2015 (appears to be the legal opinion of the

Advocate for the Committee). The Committee claims to have

discussed the subject and pursuant to legal opinion, has

proceeded to pass the impugned resolution.

10. The pleadings, both in the Writ Petition and the

Statement of Objection would reveal that the dispute is relating

to the alleged liability towards payment of market fee and

penalty on account of alleged evasion of market fee payable by

the petitioners, in connection with sale-purchase of certain

quantity of notified agricultural produce i.e., wheat.

11. The Committee contends that the notified

agricultural produce is found to be in the possession of the

petitioners, within the "market area" as defined under the Act

of 1966. Thus, according to the Committee, the person in

possession of notified agricultural produce, has to either pay

the market fee for having purchased the notified agricultural

produce within the market area, or has to establish that the

notified agricultural produce is purchased outside the "market

area" as such not liable to pay any market fee or in any case,

the transaction is not within the purview of the Act of 1966.

12. The petitioners have assailed the resolution on the

premise that the agricultural produce in question was imported

from Australia under a valid licence and sale transaction having

taken place in Australia i.e, beyond the "market area" as

defined under the Act of 1966, the petitioners are not liable to

pay any market fee on the aforementioned sale transaction.

13. Though the Act of 1966 provides for an appeal, the

Petitioners primarily contend that respondents No.1 and 2,

under the Act of 1966 have no jurisdiction to impose market

fee and penalty in respect of sale transaction that has allegedly

taken place in Australia.

14. Learned counsel for the petitioners urged that the

petitioners (along with others) had filed Writ Petition

No.1218/2007 challenging the demand notices issued by the

Committee, and to restrain respondents No.1 and 2 from

charging market fee on the goods imported by the petitioners.

The said writ petition was disposed of vide order dated

07.01.2015 and the Court directed the Committee to ascertain

as to whether any sale attracting "market fee" has taken place.

15. Petitioners allege that despite the order dated

07.01.2015 in W.P. No. 1218/2007, Committee has passed the

impugned resolution at Annexure - D.

16. Learned counsel for Petitioners urged that the

documents relating to sale of wheat in Australia, Bill of Lading

and Bills of Entry issued by the Customs Department are

conclusive proof of the sale transaction having taken place in

Australia and respondents have no authority to impose market

fee on the premise that the sale transaction has taken place

within the market area as defined under the Act of 1966.

17. The Committee opposed the petition raising a

preliminary objection that Writ Petition is not maintainable in

view of efficacious alternative remedy under Section 83A of the

Act of 1996.

18. Learned counsel for the Committee also contends

that though the impugned resolution at Annexure D is passed

on 28.07.2015, petitioners have not questioned the earlier

resolution dated 17.03.2015 and the notice dated 09.04.2015

communicating the earlier resolution dated 17.03.2015.

19. It is also urged that the petitioners have stocked

huge quantity of wheat "in the market area" for which no

market fee has been paid and no documents are produced to

show that the agricultural produce is purchased outside the

market area. It is submitted that despite the notices issued to

the petitioners on 24.01.2015 pursuant to the order dated

07.01.2015 passed by this Court which directed reconsideration

of the controversy between the petitioners and the Committee,

the petitioners have not produced the documents to

substantiate the sale transaction out side "market area".

20. Learned counsel for the Committee contends that

the burden is on the petitioners to establish that the transaction

has not taken place within the market area and has taken place

outside the limits of market area under the Act of 1966 and this

burden having not been discharged, the Committee has

imposed market fee and penalty as provided under the Act of

1966 and the Committee is entitled to presume that the

transaction has taken place within the market area.

21. The Committee also contends that the writ

petitioner has suppressed the notices dated 24.01.2015 issued

to the petitioners' to produce documents in support of the

petitioners claim. It is also urged that resolution dated

17.03.2015 and communication dated 09.04.2015 are also

suppressed.

22. In support of the contentions, learned counsel for

the petitioners has cited the following judgments and the

learned counsel for respondents No.1 and 2 have cited the

following judgments:

(1) J.V. Gokal & Co. (Private) Ltd. Vs. The Assistant Collector Sales - Tax (Inspection) and Others.1

(2) Shri Sajjan Mills Limited vs. Krishi Upaj Mandi Samiti and Others.2

(3) Ram Chandra Kailash Kumar & Co. vs. State of U.P.3

AIR 1960 SC 595

AIR 1981 MP 30

(4) M/s. S.K. Goyal Oil Mill and Another vs. Krishi Upaj Mandi Samiti, Indore and Another.4

(5) APMC Yashwanthapura through its Secretary vs. M/s. Selva Foods through its Managing Partner.5

(6) Orient Paper & Industries Ltd. Vs. State of M.P and others.6

(7) M/s. Gujarat Ambuja Exports Ltd. vs. State of Uttarakhand.7

(8) Krishi Utpadan Mandi Samiti Ghaziabad and Another vs. Metal Craft and Others.8

23. This Court has considered the contentions raised at

the bar and perused the records.

24. In the statement of objections filed by the

Committee, the respondent-Committee has taken a plea that

the Committee has passed a resolution on 17.03.2015 imposing

market fee and penalty on the petitioners vide Annexure-R7.

25. The respondent-Committee has also produced the

notices addressed to the counsel for the petitioners at

Annexures - R8 and 9 respectively. These notices are issued

AIR 1980 SCC 1124

AIR 2000 MP 212

AIR 2022 SC 109

(2006) 12 SCC 468

AIR 2016 SC 394

(2008) 7 SCC 780

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pursuant to the resolution/decision by the Committee taken on

17.03.2015.

26. It is the contention of the respondent-Committee

that the petition is not maintainable without assailing the order

dated 17.03.2015. The respondent-Committee has also taken

a contention that the petitioners have suppressed the fact that

the resolution was passed on 17.03.2015 and notices were

issued vide Annexures R8 and 9 on 09.04.2015. To this,

statement of objection filed by the respondents, there is no

counter by the petitioners disputing the communication of the

resolution dated 17.03.2015 and the notices dated 09.04.2015.

27. It is also noticed that even after production of those

documents by the respondent-Committee, the petitioners have

not chosen to amend the petition. However, the petitioners

have filed a synopsis dated 15.02.2023 providing the dates

and events and have produced certain documents viz., at

documents No.1 to 20 along with the synopsis. This synopsis

apparently appears to have been filed to assist the Court by

narrating the events that have taken place, as per petitioners'

version. However, it is relevant to notice that none of the

documents referred to in the synopsis dated 15.02.2023 is

pleaded in the Writ Petition. As already noticed, petitioners

- 11 -

have not filed the rejoinder to the contentions urged by the

respondent -Committee.

28. Petitioner No.1 - M/s Sunil Agro Foods Private

Limited claims to have purchased the wheat in Australia,

however, the documents produced by the petitioners along with

the synopsis are not the documents relating to M/s Sunil Agro

Foods Private Limited. Thus, this Court cannot come to the

conclusion that petitioner No.1 has imported the agricultural

produce from Australia without there being any proper pleading

and supporting documents.

29. As far as petitioner No.2 - Venogopal Flour Mills is

concerned, it is noticed that records produced along with the

synopsis dated 15.02.2023 are the records relating to M/s

Brindavan Roller Flour Mills Pvt. Ltd.

30. It is not pleaded in the petition that the petitioners

are assignees of the entities like M/s Brindavan Roller Flour

Mills Private Limited, Vivek Agro Foods referred in the

documents produced along with the synopsis dated

15.02.2023.

31. As already noticed, despite the Committee

producing the resolution dated 17.03.2015 wherein the market

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fee and penalty is imposed on the petitioners, the petitioners

have not chosen to assail the said resolution.

32. This being the position, this Court is of the view

that the impugned orders cannot be quashed or set-aside by

recording a finding that the transaction has taken place outside

the "market area" as claimed by the petitioners, when

necessary facts are not pleaded and the documents are not

placed as required.

33. Moreover, there is no challenge to the resolution

dated 17.03.2015. Even if plea that resolution dated

17.03.2015 is not questioned is overlooked, and the petitioners

contention in the oral arguments, that the sale transaction has

taken place outside the market area is considered, then also

this Court does not find any materials to accept the contention,

based on the averments made in the Writ Petition.

34. Again if the documents referred to in the synopsis

dated 15.02.2023 are taken into consideration, there is nothing

to indicate that the petitioners viz., M/s Sunil Agro Foods

Private Limited and Venugopal Flour Mills purchased the

notified agricultural produce outside the market area.

- 13 -

35. It is urged in the Writ Petition that the order passed

by the Co-ordinate Bench of this Court in W.P.No.1218/2007 is

not complied.

36. The Court has considered the order dated

07.01.2015 passed in W.P.No.1218/2007. The said petition is

filed by present petitioners as well as three others viz.,

Brindavan Roller Flour Mills Private Limited, Nandi Roller Flour

Mills Private Limited, and Vivek Agro Foods, challenging the

demand notices dated 02.01.2007.

37. Paragraph No.3 of the order in the said petition

reads as under:

"It appears, petitioners have deposited amount towards market fee and the same has been forfeited by the market committee. The amount so deposited by the petitioner is towards advance market fee and that could only be forfeited or adjusted if any sale transaction is there. In the present case, the raw material is brought from Australia and the same will be shifted to concerned destinations for the purpose of processing. In this process, there will be no sale effected. However, the amount so deposited by the petitioners is said to have been forfeited by the 3rd respondent- market committee which appears to be without

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giving an opportunity to the petitioners or without holding any enquiry.

In the circumstances, it is for the respondent

- authorities to either deposit the amount or extend bank guarantee and after holding enquiry, to pass appropriate orders in accordance with law with regard to whether there is any liability on the part of the petitioners in the event the sale is effected in transit from ship yard to manufacturing unit.