Rajasthan High Court - Jodhpur

Arg Agritrade Pvt. Ltd vs The State Of Rajasthan on 17 May, 2022

Bench: Sandeep Mehta, Vinod Kumar Bharwani

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     HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
                      JODHPUR
                   D.B. Spl. Appl. Writ No. 157/2022

ARG Agritrade Pvt. Ltd., House No. 1114, Ward No. 13, Purani
Abadi Opposite Government School No. 4, Sri Ganganagar
Through Its Director Vijay Singh S/o Shri Aad Ram, By Caste Jat,
Aged About 44 Years,             Resident Of           Chak 3 Ptm, Tehsil-
Mohangarh-2, District Jaisalmer.
                                                                    ----Appellant
                                    Versus
1.     The State Of Rajasthan, Through The Principal Secretary,
       Agriculture And Horticulture Department, Government Of
       Rajasthan, Jaipur.
2.     The Director, Agriculture Marketing Department, Pant
       Krishi Bhawan, Jaipur-302005.
3.     Regional       Joint        Director,          Agriculture      Marketing
       Department, Division Jodhpur, Mandor Mandi Premises,
       Mandor Road, Jodhpur.
4.     Krishi   Upaj     Mandi        Samiti,       Jaisalmer,      Through   Its
       Secretary.
5.     M/s Pithewala Agro Products And Marketing Pvt. Ltd.,
       Chak 1 Ptm, Tehsil Mohangarh-2, District Jaisalmer,
       Through Its Managing Director.
                                                                 ----Respondents


For Appellant(s)          :     Dr. Sachin Acharya, Sr. Advocate-
                                cum-AAG assisted by Mr. Manvendra
                                Singh
                                Mr. B.S. Sandhu
For Respondent(s)         :     Mr. K.S. Rajpurohit, AAG
                                Mr. G.R. Punia, Sr. Advocate, assisted
                                by Mr. Jai Naveen
                                Mr. Rajat Arora
                                Mr. L.K. Purohit



          HON'BLE MR. JUSTICE SANDEEP MEHTA
     HON'BLE MR. JUSTICE VINOD KUMAR BHARWANI

                              JUDGMENT

Date of pronouncement                   :::             17/05/2022
Order reserved on                       :::             26/04/2022

                     (Downloaded on 17/05/2022 at 09:13:00 PM)
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BY THE COURT : PER HON'BLE MEHTA, J.

The instant writ appeal has been preferred by the writ

petitioner M/s ARG Agritrade Pvt. Ltd., through its Director for

assailing the order dated 07.02.2022 passed by the learned Single

Bench of this Court whereby, S.B. Civil Writ Petition

No.13282/2019 preferred by the appellant writ petitioner with the

following prayers, was dismissed :-

"1. By an appropriate writ, order or direction, the license issued to the respondent No.5 dated 11.7.19 (Annexure- ) may kindly be declared illegal and the same may kindly be quashed and set aside.

2. By an appropriate writ, order or directions, the respondents no.1 to 4 be restrained from issuing any license and establishing any sub market yard at chak 3 PTM, Tehsil Mohargarh-2, District Jaisalmer, in violation of the rules of Act of 1961 and Rules of 1987.

3. By an appropriate writ, order or directions, the respondents be restrained from further establishing sub market yard in District Jaisalmer without prior survey of its viability and having specific policy for establishing private sub market yard."

While entertaining the writ appeal, this Court passed an

interim stay order dated 15.03.2022, restraining the respondents

from establishing a new Sub-Market Yard (Private) in the area

concerned without following the procedure provided in Rule 3 and

4 of the Rajasthan Agricultural Produce Market (Establishment of

Sub-Market Yards) Rules, 1987 (hereinafter referred to as 'the

Rules of 1987').

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The matter comes up before this Court for passing orders on

the application preferred by the respondent State of Rajasthan

under Article 226(3) of the Constitution of India seeking vacation

of the ad interim stay order dated 15.03.2022. With the consent

of the learned counsel representing the parties, final arguments

have been heard on the appeal.

Dr. Sachin Acharya, learned Senior Counsel assisted by Mr.

Manvendra Singh Advocate, representing the appellant,

vehemently and fervently contended that the procedure for setting

up of a private sub-market yard is provided under Section 5-A of

the Rajasthan Agricultural Produce Markets Act, 1961 (hereinafter

referred to as 'the Act of 1961') and Rule 56-A of Rajasthan

Agriculture Produce Market Rules, 1963 (hereinafter referred to as

'the Rules of 1963'). Dr. Acharya urged that the only

procedure/guidelines governing the establishment of the sub-

market yards, be it by the Marketing Committee or by the private

operators, is stipulated in Rajasthan Agricultural Produce Market

(Establishment of Sub-Market Yards) Rules, 1987. He urged that

as per clause 3(d) of the Rules of 1987, a minimum distance of 20

Kilometers is mandatory between two market yards, be it a

principal market yard or a sub-market yard. He urged that the

State Government has prescribed this minimum distance criterion

so as to provide incentive to the private players like the

petitioners, desirous of setting up private sub-market yards. As

per Dr. Acharya, if more than one sub-market yard is permitted to

be set up within the distance of 20 Kilometers, the viability of

running such yard will be compromised, which would be

detrimental to the concept of encouraging private sub-market

yards. On these grounds, Dr. Acharya implored the Court to accept

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the appeal, set aside the impugned judgment dated 07.02.2022

and the decision of the State Government dated 11.07.2019,

permitting the private respondent No.5-M/s Pithewala Agro

Products and Marketing Pvt. Ltd. to set up a private sub-market

yard within a short distance from the market yard set up by the

appellant-petitioner.

Per contra, Shri Rajat Arora, learned counsel appearing for

respondents Nos.1, 2 and 3 vehemently and fervently opposed the

submissions advanced by the petitioner's counsel. He urged that

the Rules of 1987 stipulate the procedure for sub-market yards

established by the "Market Committee" and do not in any manner,

govern setting up or operation of private sub-market yards. He

urged that as per Rule 56-A of the Rules of 1963, the application

for setting up the private sub-market yard has to be filed to the

Director whereas, Rule 4 of the Rules of 1987, clearly stipulates

that for establishment of sub-market yard, the market committee

shall submit a proposal with reason to the Director who would

prepare a report and forward the same to the State Government

with his recommendation. The State Government is the authority

empowered to approve establishment of sub-market yard under

these rules. Shri Rajat Arora submits that the power to approve

the setting up of private sub-market yard is exclusively within the

domain of the director or other authority empowered by the State

Government and hence, it is clear that the Rules of 1987 do not

apply to private sub-market yards. He urged that the very concept

of setting up of private sub-market yard has been introduced to

bring about healthy business competition. The aspirants who

desire to establish private sub-market yards would have to provide

up to date facilities so as to attract business. The appellant's

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endeavor in questioning the permission granted to the respondent

amounts to avoiding healthy competition. The petitioner desires to

monopolize in the trade which is not permissible under the Act and

the Rules. He thus implored the Court to vacate the ad interim

stay order and to dismiss the appeal.

Shri G.R. Punia, learned Senior Counsel assisted by Shri Jai

Naveen, Advocate representing the private respondent No.5 and

Shri L.K. Purohit, Advocate representing respondent No.4 Krishi

Upaj Mandi Samiti adopted the arguments advanced by Learned

counsel Shri Rajat Arora.

We have given our thoughtful consideration to the

submissions advanced at bar and have gone through the material

available on record.

The thrust of arguments advanced by the appellant writ

petitioner's counsel was founded on Sections 5 and 5-A of the Act

of 1961 and Rule 56-A of the Rules of 1963 which are reproduced

hereinbelow for the sake of ready reference :-

"5. Division of market into yards. - (1) In every market area, there may be-

(a) one principal market yard managed by the market committee;

(b) one or more than one sub-market yards managed by the market committee;

(c) one or more than one private sub-market yards managed by a person other than the market committee;

(d) one or more than one consumer farmer markets managed by a market committee or by a person other than the market committee.

(6 of 10) [SAW-157/2022]

(2) The State Government may, by notification in the Official Gazette, declare any specified place including any structure, enclosure, open place or locality in the market area to be a market yard or, as the case may be, sub-market yard.

"5-A. Establishment of private sub-market yards.- The Director or any other authority empowered by the State Government in this behalf may grant license to establish private sub-market yards in a market area for-

(i) processing of agricultural produce;

(ii) export of agricultural produce;

(iii) trade of agricultural produce of particular specification; and

(iv) grading, packing and transaction in other way by value addition of agricultural produce."

Rule 56-A "56-A. Establishment of Private sub-market yard or private Consumer Farmer Market.-

(1) Any person including a co-operative society may apply to the Director or the authority empowered by the State Government in this behalf for establishment of a private sub-market yard or a private consumer- farmer market in Form XII.

(2) The minimum land required for establishment of private sub-market yard shall be five hectares and establishment of private consumer-farmer market shall be two hectares. The land should be in the name of the applicant.

[Provided that on the recommendation of the director, the State Government may, it it is satisfied that the establishment of a private mandi yard in a particular location will promote the effective and better regulation of sale and purchase of agricultural produce, relax the requirement of minimum area of land.]

(7 of 10) [SAW-157/2022]

(3) The applicant shall pay a licence fee as may be specified by the Government from time to time. (4) The Director or the empowered authority may grant a licence for establishment of a private sub-market yard or for a private consumer-farmer market in Form XIII. The licence shall abide by all the terms and conditions mentioned in the licence.

(5) The Market Committee shall collect market fee from the licensees/Traders of a private sub market as per the provisions of the Act and shall pay such part of the market fee to the licensee of the private sub-market yard, as may be specified by the Government, from time to time.

(6) Subject to sub-section (2) of section 5, the licensee of private consumer-farmer market shall collect service charges from the sellers at such rate as may be specified by the Government, from time to time. (7) The sellers of the private consumer-farmer market shall not sell more than such quantities of their produce to a consumer at one time, as may be specified by the Government from time to time.

(8) The producer shall sale his produce in the private consumer farmer market directly to the consumer at mutually agreed price."

Ex-facie, on a perusal of Section 5 and 5-A of the Act of 1961

and Rule 56-A of the Rules of 1963, it becomes clear that the

exclusive domain of granting permission to set up a private sub-

market yard is conferred upon the director or any other authority

as may be empowered in this behalf by the State Government.

The restriction of maintaining minimum distance of 20 Kilometers

between two market yards is provided under Rule 3(d) of the

Rules of 1987 which reads as below :-

(8 of 10) [SAW-157/2022]

"3. Criteria for declaration of sub-market yard. - The following shall be the criteria for declaration of sub-market yard:-

(a) ...........................;

(b) ...........................;

(d) Distance from the principal market yard or sub-market yard variable either on the basis of density to population or geographical location. The distance from nearest principal market yard or sub-market yard in the market area of the market committee should normally be 20 kilometers and more;"

The only argument which was put forth by counsel Dr.

Acharya in support of the contention that the Rules of 1987 would

also govern the private sub-market yards was that no distinction is

provided is Section 5 regarding the criterion to be adopted for

setting up the sub-market yard managed by the Market

Committee or a private sub-market yard managed by a person

other than the market committee. This argument is fallacious on

the face of the record.

We are of the firm view that the Rules of 1987 would not

apply to a private sub-market yard and are meant for the sub-

market yards to be set up upon the request of the Market

Committee. The language of Rule 4 of the Rules of 1987 is very

clear and reads as below:-

"4. Procedure for declaration of sub-market yard.- (1) Wherever a sub-market yard is to be established, the concerned market committee shall submit the proposal together with reason to the Director.

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(2) The Director shall examine such proposal on the basis of the criteria under Rule 3 and shall submit his report to the State Government with his recommendation.

(3) The State Government on being satisfied on the basis of the reports received from the Director, or suo moto of the need for a sub-market yard as per Rule 3, may establish sub-market yard as it deems proper under section 5(2) of the Act and issue notification accordingly."

Under these rules, it is within the exclusive domain of the

Marketing Committee to submit the proposal for establishment of

a sub-market yard which would be required to be presented with

reasons to the Director. The Director is empowered to examine the

proposal on the basis of the criterion laid down under Rule 3 and

then would be required to forward his report with

recommendations to the State Government. The jurisdiction to

grant approval for setting up of a sub-market yard under these

rules is with the State Government.

E-converso, the power of sanctioning a private sub-market

yard is conferred upon the Director or the Authority empowered in

this behalf by the State Government as per Rule 56-A of the Rules