Judgment:
G. Yethirajulu, J.
1. All these appeals are preferred by the complainant-the Agricultural Market Committee, Tenali, against the acquittal orders in C.C. Nos. 120, 115, 119, 128, 131, 127, 117, 123, 129, 126, 125, 116, 124,118, 122 and 130 of 2001, dated 22-10-2001 respectively, on the file of I Additional Munsif Magistrate, Tenali, Guntur District, finding the accused not guilty for the contravention of the provisions of 7(1) of the Andhra Pradesh (Agricultural Produce & Livestock) Markets Act, 1966 (for short 'the Act') as amended in 1987. The complainant-Agricultural Marketing Committee, Tenali is constituted under the provisions of the Andhra Pradesh (Agricultural Produce & Livestock) Markets Act 1966.
2.1 The case of the prosecution is briefly as follows:
The accused was doing business in agricultural produce in Tenali without getting licence for the year 1999-2000 under Section 7(1) of the Markets Act, 1987. The accused has. done vegetable business in the premises situated in Gandhi Municipal Vegetable Market, Tenali, which is notified within the agricultural market area of Tenali, without obtaining licence from the Agricultural Market Committee in the year 1999-2000. The complainant issued notices to the accused on 14.2.2002 and the same was received by the accused. They gave reply stating that there is no necessity to get licence as they are doing business in the Municipal Market. Basing on the reply, a show cause notice was issued to the accused and the accused gave a reply with similar averments. Therefore, the Market Committee has decided to launch prosecution against the accused. Hence the complaints.
2.2 In order to prove the guilt of the accused, the complainant examined P.Ws. 1 and 2 and got marked Exs.Pl to PH. On defence side, D.W.1 was examined and no documents were marked.
2.3 The lower Court, while finding the accused not guilty of the offences, observed that the date of notification under Section 4(4) of the Andhra Pradesh Markets Act was not clearly mentioned in Ex.P5-notification. It has held that the prosecution has not explained how Section 4(4) notification was issued on 21.10.1971 when the Gazette was issued on 28.7.1994 to regulate the agricultural products and livestock in the Agricultural Market Committee notified area from 7.10.1994. Therefore, the contention of the prosecution that Section 4 (4) notification was issued in the year 1971 itself cannot be accepted. In Ex.P7, under column 5, it was mentioned that the market for vegetable or fruits has to be established at Tenali and other places. P.W.2 and Ex.P7 show that agricultural market is not yet established by the Agricultural Market Committee in the notified area. The market in respect of which, the accused were running the business, the municipality was conducting auctions for leasehold rights on the vegetable market. The market committee shall have to first establish markets in the notified area and shall declare by notification the limits of every market established by it to be known as market area. Mere notification under Section 3 of the Act notifying the area for the purpose of the Act would be of no consequence, unless the market committee establishes in the said notified area, the number of markets as the Government may from time to time direct by providing such facilities in the market as may be specified by the Government from time to time. The complainant has not produced any documents to prove that the Gandhi Municipal Vegetable Market established, maintained and controlled by the Tenali Municipality also included in the notified area. The lower Court further observed that the contention of the Agricultural Market Committee that as the entire Tenali taluk is notified area of the market committee, the Gandhi Municipal Vegetable Market also comes within the purview of the notified area of the Agricultural Market Committee, Tenali and as such the accused is liable to obtain licence under Section 7(1) of the Act cannot be accepted. The lower Court further observed that the accused need not obtain any licence under Section 7(1) of the Markets Act, unless, the Gandhi Municipal Vegetable Market is taken over by the Agricultural Market Committee, Tenali. Therefore, the accused is entitled to be given the benefit of doubt.
3. The learned Counsel for the appellant submitted that the limits of market area has been declared under Section 3(3) of the Act, and the Market Committee was constituted under Section 4(1) of the Act and that Section 4(4) notification was also issued specifying the area, which comes within the limits of the marketing committee. As per Section 7(1) of the Act, the persons, who do not obtain licence for sale of the agricultural produce is liable for prosecution. Therefore, Section 7 of the Act obligates on the traders to obtain licence from the Agricultural Market Committee. The Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966 was brought into force for regulation of purchase of sale of agricultural produce livestock and products of livestock and to establish the markets in connection therewith. It was also intended to bring within the scope of the legislation all agricultural commodities, both processed and unprocessed, livestock and products of livestock, to empower the market committee to issue licences to traders in a notified area; to fix the minimum and maximum strength of the members of a market committee at twelve and sixteen respectively so as to accommodate various interests in proper proportions; to nominate representatives of growers of agricultural produce and owners of livestock and products of livestock up to 50% of the total strength of a market committee with a view to give adequate representation to the interests concerned and to pay to the municipalities or other local authorities compensation for loss of income of the local authority on account of the establishment of markets in the notified area by the market committees under the Act.
As per Section 2 (vi), 'markef' means a market established under Sub-section (3) of Section 4 and includes market yard and any building therein. As per Section 2 (xi) 'notified area' means any area notified under Section 3 of the Act. Section 2 (xii) 'notified market area' means any area declared to be a market area by notification under Section 4 of the Act. Section 2 (xiii) defines that a 'person' means an individual or a company or an association of individuals whether incorporated or not, and includes in the joint Hindu family. Section 2 (xvi), which was introduced through amendment of the year 1987, a 'trader' means the person licensed under Sub-section (1) of Section 7 and includes the person in whose management the collection of fee is placed whether it is called a commission agent, ginner, presser, warehouseman, importer, exporter, stockiest or by whatever local name he is called.
Section 3 of the Act reads as follows:
Declaration of notified area: (1) The Government may publish in such manner as may be prescribed a draft notification declaring their intention of regulating the purchase and sale of such agricultural produce, livestock or products of livestock in such area as may be specified in such notification.
(2) Such notification shall state that any objections or suggestions, which may be received by the Government from any person within a period to be specified therein, will be considered by them.
(3) After the expiration of the period specified in the draft notification and after considering such objections and suggestions as may be received before such expiration, the Government may publish in such manner as may be prescribed a final notification declaring the area specified in the draft notification or any portion thereof, to be a notified area for the purposes of this Act in respect of any agricultural produce, livestock and products of livestock specified in the draft notification.
(4) Subject to the provisions of Sub-sections (1), (2) and (3), the Government, may, by notification:
(a) exclude from a notified area, any area comprised therein; or
(b) include in any notified area, any area specified in such notification;
(b) declare a new notified area by separation of area from any notified area or by uniting two or more notified areas or parts thereof or by uniting any area to a part of any notified are:Provided that where, as a result of declaration of a new notified area under this clause, the entire area comprised in an existing notified area is united to one or more notified areas, the said existing notified area shall stand abolished.
Section 4 (3) reads as follows:
(a) Every market committee shall establish in the notified area excluding the scheduled areas such number of markets as the Government may, from time to time, direct from the purchase and sale of any notified agricultural produce, livestock or products of livestock and shall provide such facilities in the market as may be specified by the Government from time to time, by a general or special order.
(b) Every market committee shall also establish in the notified area such number of markets as the Government may, from time to time, direct for the purchase and sale, solely of vegetables or fruits and shall provide such facilities in the market as may be specified by the Government from time by general or special order.
(c) The market committee shall declare, by notification, the limits of every market established by it under Clauses (a) and (b) (hereinafter referred to as the market area).
Section 4 (4) of the Act reads as follows:
As soon as may be after the establishment of a market under Sub-section (3), the Government shall declare by notification the market area and such other area adjoining thereto as may be specified in the notification, to be a notified market area for the purposes of this Act in respect of any notified agricultural produce, livestock or products of livestock.
Section 7 of the Act reads as follows:
Trading etc., in notified agricultural produce, livestock and products of livestock in the notified area: (1) No person shall, within a notified area, set up, establish or use, or continue or allow to be continued, any place for the purchase, sale, storage, weighment, curing, dressing or processing of any notified agricultural produce or products of livestock or for the purchase or sale of livestock except under and in accordance with the conditions of a licence granted to him by the market committee:
Provided that the market committee may exempt from the provisions of this sub-section any person who carries on the business of purchasing or selling any notified agricultural produce, livestock or products of livestock not exceeding such value as may be prescribed;
Provided further that a person selling notified agricultural produce, livestock or products of livestock grown, reared or produced by him, shall be exempt from the provisions of this sub-section, but the Government may for special reasons to be recorded in writing, withdraw such exemption in respect of any such person;
(Proviso added by Act 4 of 1987)[Provided also that the market committee shall not renew the licence granted under this section, unless the licensee pays all the arrears of amounts due to it under provisions of this Act.]
Explanation: Nothing in the second proviso to this sub-section shall be construed as exempting a cross-objections-operative marketing society registered or deemed to be registered under the Andhra Pradesh Co-operative societies Act, 1964, selling notified agricultural produce, livestock or products of livestock grown, reared or produced by any of its members.
(2) Nothing in Sub-section (1) shall apply to a person purchasing notified agricultural produce, livestock or products of livestock for his own domestic consumption.
(3) A licence granted under Sub-section (1) shall be in such form and subject to the payment of such fees, as may be prescribed:
Provided that no fees shall be charged for the grant of a licence:
(i) to the Khadi and Village Industries Commission:
(ii) to a cross-objections-operative marketing society referred to in explanation to Sub-section (1);
(iii) to a person merely for curing, pressing or processing any notified agricultural produce or products of livestock.
(4)(a) A licence under Sub-section (1) may be refused to a person:
(i) whose licence was cancelled and one year has not elapsed since the date of cancellation:
(ii) who has been convicted for an offence or been guilty of misconduct which, in the opinion of the market committee affects the said person's integrity as man of business;
(iii) in regard to whom the market committee is satisfied, after such inquiry as it considers adequate, that he is a benamidar for, or a partner with, any other person to whom a licence may be refused under Sub-clause (i) or Sub-clause (ii);
(iv) if, in the opinion of the market committee, the grant of a licence is likely to affect the transaction of purchase or sale in the market or the levy of market fees therefore.
(b) The Market Committee may, in accordance with such rules as may be made by the Government and after such inquiry as it deems fit, cancel or suspend any licence granted under Sub-section (1):
Provided that in the case of refusal to grant a licence or of suspension or cancellation of a licence, the applicant or licensee, as the case may be, shall be entitled to appeal to such officer and in such manner as may be prescribed.(5) A person to whom a licence is granted under Sub-section (1) shall comply with the provisions of this Act, the rules and the bye-laws made thereunder and the conditions specified in the licence.
(6) Notwithstanding anything in Sub-section (1), no person shall purchase or sell any notified agricultural produce, livestock and products of livestock in a notified market area, outside the market in that area.
As per Section 7 (1) no person is entitled to do any transactions like purchase, sale and storage etc., without licence from the market committee.
Section 29 provides for compensation to the local bodies, which reads as follows:
Payment of compensation in respect of markets in municipalities and in areas within jurisdiction of other local authorities : (1) Where in pursuance of Section 3, the Government notify any area comprised within the local limits of the jurisdiction of a municipality or other local authority, no such municipality or other local authority shall levy fees on any notified agricultural produce, livestock or products of livestock purchased or sold in the notified area.
(2) The market committee of the notified area shall, out of its. funds, pay every year to the municipality or other local authority, which was levying such fees immediately before the notification of the area, a sum equivalent to the licence fees levied by such municipality or other local authority during the period of one year immediately before the notification of the area, for a period of ten years as compensation for the loss of income of the municipality or the local authority on account of the establishment of markets in the area by the market committee.
So the scheme of the Act indicates that a notification will be issued prescribing the limits for establishment of marketing committee and also there is a notification regarding the committees, which come within the purview of the Act. As per Ex.P5 -notification, 16 Km radius was prescribed as market area of the committee of Tenali and whoever, does any of the activities covered under the above provisions, is required to obtain licence and he is prohibited from doing any such activities within the local area of the Market Committee without licence.
4. The learned Counsel for the respondent-accused submitted that the marketing committee fail to establish separate markets for agricultural produce within the municipal limits and as the Municipalities Act continued to be in force in the market area, the traders cannot be penalized twice by way of licence fee by the municipalities and the market fee by the marketing committees. When there is a right for the market committee to insist on obtaining licence from it, there is an obligation also on the committee to see that the compensation is paid to the municipality or the local body or there must be an establishment of separate markets of its own to enable the traders to do business in that premises. Therefore, it cannot insist on obtaining licenses for doing business in the municipal market without complying its obligations.
5. On the other hand, the learned Counsel for the appellant-Market Committee represented that the Supreme Court as well as this Court made the position very clear regarding the powers of the market committee in prosecuting such persons if they fail to obtain licence from the Market Committee. In support of his contention, he relied on the following decisions:
In Mamidi Satyanarayana Murty and Ors. v. State of Andhra Pradesh AIR 1997 A.P. 147, a Full Bench of this High Court held as follows:
There may be a single market or more than one market for each notified area. There is to be a marketing committee, which a body corporate and it operates over the entire notified area. The market committee has to set up one or more markets within the area of its operation as may be . directed by the Government.. Under Section 4 Clause (4), the Market area and such other area adjoining thereto as may be specified by the Government in the notification issued under that Section becomes the notified market area. Thus, the highest physical unit is the notified area and within the notified area is the notified market area pertaining to each market established by the marketing committee.
In Sreenivasa General Traders and Ors. v. State of Andhra Pradesh and Ors. AIR 1983 SC 1286, while considering the scope of Section 7 (6), the Supreme Court held that prohibition envisaged in Section 7 (6) against the purchase or sale of notified agricultural produce, livestock and products of livestock in notified market area outside market in that area is not violative of Article 19(1)(g) of the Constitution of India. It is further observed that having regard to the purpose and object of the legislation, it-must be said that the registration imposed by Sub-section (6) of Section 7 is a reasonable registration within the meaning of Clause (6) of Article 19 on the fundamental right of a citizen to carry on trade or business under Article 19(1)(g) of the Constitution of India.
In the Agricultural Market Committee, Bapatla v. Sri Laxmi Satyanarayana Rice Mill, Bapatla and Ors. 1989 (2) ALT 429 (D.B.), while considering the scope of Sections 4(4), 7 and 12 and Rule 47 of the Act, a Division Bench of this High Court held as follows:
This decision was followed by this Court in Malta Papa Rao v. State of A.P. 1978 (1) ALT page 257, Chennakesav Reddy, J., as he then was, held that on issuance of the notification under Section 4(4) of the Act, the Market Committee is entitled to regulate the purchase and sale of the notified agricultural produce within the notified are of the notified market area for the purpose of the Act and the trader is bound by the regulations and the market committee is entitled to collect licence fee under Section 7(1) of the Act read with Rule 47 of the Rules and the market fee under Section 12 of the Act.
In view of the law thus laid down the question is whether the Market Committee has been providing any service to the traders. As seen earlier, the object of the Act is to regulate the sale and purchase of the notified agricultural produce within the notified market areas enjoined under Sub-section (6) of Section 7 of the Act to eliminate exploitation by middle men, to bring growers and traders face to face, sale by open auction under the supervision of the Market Committee and to make prompt payment on the same date. The constitutional validity of Section 7 (6) is upheld in Sreenivasa General Traders v. State of A.P (Supra). The services rendered need not directly be in correlation to the levy of the fee. The prime object of the Act is only to regulate the purchase and sale of the agricultural produce within the notified areas and within the notified market area. The entire benefit goes to the traders and also the growers in the notified are and the fee collected goes into the market fund. It is subjected to audit and control by the Government. The licence is regulated under the provisions of Section 7 (1) read with the Rules. Rules 26 to 37 regulate the powers and trade services. The market fund shall be expended for all or any of the purposes enumerated under Section 15 of the Act. The expending money is subject to control by the Government and audit. The members of traders representing the Market Committee also get the power of control over the expenditure and the purpose for which the fund is to be expended in respect of the regulation of the notified agricultural produce within the notified area or the notified market area. What is collected is a fee and not a tax. In the written statement, it is specially stated as to what are the steps taken, expenditure incurred and how the fund is being expended. The Secretary of the Market Committee, who is examined as D.W.1 has also stated in his evidence about these facts.. We do not see any reason to disregard his evidence. In these circumstances we hold that the market is at an initial stage and is being developed from time to time and it is unreasonable to compel the Committee to provide all the facilities at a stretch and then collect the market fee. As seen earlier, the Supreme Court in Lakhan Lal v. State of Bihar : [1983]3SCR843 has held that when the notification has been issued constituting the notified market area, the market Committee is entitled to collect the market fee. Same is the view of this Court as referred to earlier in Malla Papa Rao v. Government of A.P. 1998 (1) ALT Page 257. In this view, we must hold that what is collected is only a fee and not a tax and there is correlation between the fee collected and the services rendered and thereby the reasonable relation of quid pro quo has been established. No doubt there is no express special service rendered to the traders, but it is not necessary, that every payer of the fee should be a recipient of the services rendered. General service to the body of traders and growers is sufficient. In this view, it must be held that both the Courts have committed a grave error of law in decreeing the suit.
6. In the present case, Ex.P5 is the notification under Section 4(4) of the Act issued by the Government on 30.7.1971 prescribing the limits of the Marketing Committee as 16 Km radius around the Office of the Agricultural Market Committee, Tenali. Earlier to that Ex.P6- notification, dated 4A.1969 was issued constituting the market committee but Ex.P7 is the notification authorizing the market committee to establish markets at some other places also. Ex.PIO is the G.O.Ms. No. 286, dated 5.7.1994 leasing out the commodities, which come within the purview of the market committee. So the above notifications indicate that the marketing committee exercised its powers under the Act to comply the provisions and to achieve the objects of the Act. Though the marketing committee is not in a position to establish separate markets for marketing of agricultural produce, it is not prohibited from insisting on licence on the traders. Unless they get funds, it may not be possible for the marketing committee to provide facilities to the public who come to the market.
Section 29 (2) indicates that if the markets created by the municipality or local body are utilised by the marketing committee, it has to pay compensation to such bodies, which it considers reasonable or the proportionate loss of income to the local bodies. No doubt it is the obligation on the part of the market committee to compensate the local bodies, provided the persons who are running the business in those markets, take licence from the Market Committee and pay market fee for the marketing of the commodities in those markets.
Section 29 (1) prohibits municipality or local body to levy fee on any notified agricultural produce, livestock or products of livestock purchased or sold in the notified area and the traders need not pay any fee for purchase or sale of agricultural produce livestock or products of livestock and it is for the municipality to claim compensation from the agricultural market committee and it is obligation on the part of the marketing committee to pay the compensation to compensate the loss suffered by the local body or the municipality as the case may be, when the facility provided by such local bodies are utilized by the traders who obtained licence under the Agricultural Markets Act. But on that count, the traders are not exempted from obtaining licence under the Act and failure on the part of the accused in obtaining licences is an offence. Since they pleaded before the lower Court that they intend to obtain licence from the marketing committee and in view of the evidence adduced by the prosecution both oral and documentary, I am convinced that an offence is made out against the accused in all the appeals and they are liable to be convicted for the offence under Section 7(1) read with Section 23 of the Act.
7. In the result, the appeals are allowed. The acquittals recorded by the lower Court through the judgments dated 22.10.2003 are set aside. Regarding the quantum of sentence, since the minimum sentence is prescribed under the Act and as I am inclined to impose lesser sentence than the minimum prescribed under the Act by recording special reasons, there is no necessity to give an opportunity to the accused for hearing on the quantum of sentence under Section 23 of the Act as the sentence of imprisonment' shall not be less than six months and fine of Rs. 5,000/-.
8. In the present case, it is an undisputed fact that the Agricultural Market Committee did not provide separate markets for transacting the business but since the business in agricultural produce was done within the notified area of the market committee, the accused cannot escape from the liability. But in the light of the failure on the part of the Agricultural Committee in creating the facilities to the traders, a lenient view is taken and as it is represented that they are paying licence fee to the municipality, I am of the view that the sentence of imprisonment for one day would meet the ends of justice and also to pay a fine of Rs. 5,000/- for each accused, in default to suffer Simple Imprisonment for one month.
In the result, the Criminal Appeals are allowed.