Case Note & Summary
The Supreme Court heard a batch of appeals and a special leave petition arising from a common judgment of the Patna High Court dated January 20, 1994. The litigation concerned the constitutional validity of amendments to the Bihar Agricultural Produce Markets Act, 1960, which affected the levy of market fees on sugar mills in Bihar. The appellants were several sugar mills, including Sasa Musa Sugar Works, and the respondents were the State of Bihar and others. The High Court had partly allowed writ petitions filed by the sugar mills, which challenged the validity of Sections 4A and 4B inserted by the Bihar Agricultural Produce Markets (Amendment) Act, 1993, Section 33M inserted by the 1992 Amendment, a notification dated August 31, 1992 issued under Section 4, and the imposition of market fee despite an exemption notification dated March 22, 1976 under Section 15. The factual background showed that sugar was initially a scheduled item under the 1960 Act. In 1976, sugar mills were exempted from Section 15. In 1977, sugar was deleted from the Schedule by a notification, but that deletion was cancelled by a subsequent notification. The Patna High Court in an earlier judgment (Delhi Cloth and General Mills Company v. Agricultural Produce Market Committee, AIR 1993 Patna 43) held that the cancellation did not automatically revive sugar in the Schedule, and fresh procedure under Sections 3 and 4 was necessary. Thereafter, the State attempted to add sugar to the Schedule through a memo and later enacted ordinances and amendments, including Sections 4A and 4B. Section 4A dispensed with the procedure under Sections 3 and 4 for Schedule amendments under Section 39, while Section 4B sought to validate market fee levies and collections. Section 33M was inserted by the 1992 amendment, and Rule 68(iii) was introduced to require transfer of 20% of receipts to the State Fund. The High Court formulated nine points for decision. It held that Section 4A prospectively and retrospectively violated Articles 14 and 19(1)(g) and was not saved by Article 19(6). Section 4B was partly valid and partly invalid, with the first part invalid and the second part valid. Section 33M was invalid for lack of legislative competence, and Rule 68(iii) was invalid as a consequence. The exemption under Section 15 did not affect other valid provisions. The lapsed Bihar Ordinance No. 8 of 1988 revived the pre-Ordinance market fee rate of Re. 1 under Section 27. The expression 'agricultural produce' could not be given a restricted meaning excluding industrial products. The High Court expressed no opinion on the validity of the notification dated June 31, 1992. The Supreme Court was seized of the appeals against this judgment, but the provided excerpt does not contain the Supreme Court's final decision or reasoning.
Headnote
A) Constitutional Law - Validity of Section 4A - Prospective Operation - Bihar Agricultural Produce Markets Act, 1960, Sections 4A, 3, 4, 39 - The High Court held that Section 4A(1) and (2), which dispensed with the procedure under Sections 3 and 4 for Schedule amendments under Section 39, violated Articles 14 and 19(1)(g) of the Constitution and was not saved by Article 19(6) - The provision allowed arbitrary inclusion of agricultural produce without procedural safeguards, thereby infringing trade rights - Held that Section 4A was ultra vires prospectively (Paras Not mentioned) B) Constitutional Law - Validity of Section 4A - Retrospective Operation - Bihar Agricultural Produce Markets Act, 1960, Sections 4A, 3, 4, 39 - Even if the prospective part of Section 4A were valid, the retrospective part was held to be ultra vires Articles 14 and 19(1)(g) of the Constitution - The retrospective application of the dispensing provision was found to be arbitrary and violative of fundamental rights - Held that the retrospective part of Section 4A was unconstitutional (Paras Not mentioned) C) Constitutional Law - Validity of Section 4B - Partial Invalidity - Bihar Agricultural Produce Markets Act, 1960, Section 4B - Section 4B was divided into four parts; the first part was held invalid, the second part valid, and the third and fourth parts merely ancillary and consequential to the first and second parts - The provision sought to validate market fee levies and collections notwithstanding any court judgment, but its first part was found to be unconstitutional - Held that Section 4B was partly valid and partly invalid (Paras Not mentioned) D) Constitutional Law - Legislative Competence - Section 33M - Bihar Agricultural Produce Markets Act, 1960, Section 33M - The High Court held that Section 33M, as inserted by the Amending Act of 1992 by replacing the amending Ordinances, was invalid and ultra vires the Constitution for lack of legislative competence - The provision was therefore struck down - Held that Section 33M was invalid (Paras Not mentioned) E) Constitutional Law - Validity of Rule 68(iii) - Bihar Agricultural Produce Markets Rules, Rule 68(iii) - Rule 68(iii), which required every market committee to transfer 20% of total receipts to the State Fund, was held invalid as a consequence of the invalidity of Section 33M - The rule was found to be unsustainable without the parent provision - Held that Rule 68(iii) was invalid (Paras Not mentioned) F) Statutory Interpretation - Effect of Exemption under Section 15 - Bihar Agricultural Produce Markets Act, 1960, Section 15 - The grant of exemption under Section 15, insofar as sugar was concerned, did not affect the applicability of other provisions of the Act, rules, and by-laws if they were otherwise valid and applicable - The exemption was limited to Section 15 and did not extend to other regulatory provisions - Held that exemption under Section 15 did not render other valid provisions inapplicable (Paras Not mentioned) G) Statutory Interpretation - Lapsed Ordinance and Revival of Fee Rate - Bihar Agricultural Produce Markets Act, 1960, Section 27; Bihar Ordinance No. 8 of 1988 - Since Bihar Ordinance No. 8 of 1988 lapsed, the rate of market fee provided under Section 27 before the Ordinance was promulgated revived at Re. 1 per unit - The rate would continue to apply until modified according to law - Held that the lapsed Ordinance revived the pre-Ordinance fee rate (Paras Not mentioned) H) Statutory Interpretation - Meaning of 'Agricultural Produce' - Bihar Agricultural Produce Markets Act, 1960 - No limited or restricted meaning could be given to the expression 'agricultural produce' by excluding industrial products from the ambit of the Act - The term was to be understood in its ordinary and comprehensive sense - Held that industrial products were not excluded from the definition of agricultural produce (Paras Not mentioned) I) Judicial Review - Validity of Notification dated June 31, 1992 - Bihar Agricultural Produce Markets Act, 1960, Section 4 - In view of the decisions on other points, the High Court expressed no opinion on the validity of the notification dated June 31, 1992 issued under Section 4 of the Act - The issue was left undecided as it was unnecessary for the final determination - Held that no opinion was expressed on the notification's validity (Paras Not mentioned)
Issue of Consideration
Validity of Sections 4A, 4B, 33M of Bihar Agricultural Produce Markets Act, 1960; validity of Rule 68(iii); effect of exemption under Section 15; effect of lapsed Ordinance; interpretation of agricultural produce; validity of notification dated June 31, 1992.
Law Points
- Section 4A of Markets Act violates Articles 14 and 19(1)(g)
- not protected by 19(6)
- Section 4B is partially invalid
- first part invalid
- second part valid
- Section 33M lacks legislative competence and is ultra vires Constitution
- Rule 68(iii) invalid as a consequence
- exemption under Section 15 does not affect other valid provisions
- lapsed Ordinance No.8 of 1988 revives pre-ordinance fee rate of Re.1 under Section 27
- 'agricultural produce' cannot be given restricted meaning excluding industrial products.
