Case Note & Summary
The appeal arose from a judgment of the Mysore High Court dismissing a writ petition that challenged a notification issued by the Government of Mysore under the Bombay Agricultural Produce Markets Act, 1939. The appellants were commission agents and dealers in areca, cardamom, and pepper carrying on business in three localities in Sirsi town, which had been declared a market yard in 1951 and subsequently a principal market yard in 1954. The impugned notification dated 5 January 1965 declared a new area, granted to the Market Committee, as the principal market yard with effect from 15 January 1965, thereby prohibiting purchase and sale of the notified agricultural produce in the old yard. The appellants contended that the notification was ultra vires, illegal, arbitrary, capricious, and discriminatory, and that it violated their fundamental rights under Articles 14, 19(1)(g) and 31 of the Constitution. They alleged that the new site was selected to favour a cooperative society and that the ten-day transition period was impossible for shifting their business. The respondent Market Committee and the State denied malafides, stating that the old yard was insufficient for expanding business, the new site was more spacious and convenient, and the Market Committee had requested the government to declare the new area as principal market yard while permitting traders to continue at the old place for one or two years. The High Court held that the government had power under Section 4 to alter the declaration and that the notification was issued in public interest. On appeal, the Supreme Court examined the scheme of the Act and found that its provisions do not inherently affect freedom of trade or business and are not discriminatory. However, the Court held that the notification, while issued in public interest, imposed an unreasonable prohibition because it gave only ten days for the appellants to shift their business, which was impossible, and thus violated Article 19(1)(g). The Court declined to direct the government to declare the old area as a sub-market yard, stating that it could not assume governmental functions. Since the Market Committee had agreed to grant one and a half years for the appellants to shift and to permit continuation of business in the old yard during that period, the Court concluded that the notification need not be struck down. Accordingly, the appeal was disposed of in terms of the Market Committee's assurance.
Headnote
A) Constitutional Law - Freedom of Trade and Commerce - Reasonable Restrictions - Constitution of India, Article 19(1)(g) - The notification changing the principal market yard prohibited purchase or sale in the old yard and gave traders only ten days to shift - The Supreme Court held that while government had power to issue the notification in public interest, the implicit prohibition was unreasonable because it was impossible for the appellants to shift their business to the new principal market yard within ten days, thus violating their fundamental right to carry on business - Held that a restriction on trade must be reasonable and not arbitrary (Paras 376-377). B) Administrative Law - Exercise of Statutory Power - Alteration of Principal Market Yard - Bombay Agricultural Produce Markets Act, 1939, Sections 4 and 4A - The government is empowered to declare and alter the principal market yard; the market area was first declared under Section 4(1), and a principal market yard under Section 4A - The Court examined the provisions of the Act and held that the Act deals with regulation of purchase and sale of agricultural produce and does not inherently affect freedom to carry on trade or business nor is discriminatory - Held that the government has the power to issue the notification in public interest (Paras 376-377). C) Constitutional Law - Judicial Review - Moulding Relief - Constitution of India, Article 19(1)(g) - The Court refused to assume the functions of the government and direct it to declare the old area as a sub-market yard - Since the Market Committee had agreed to grant a reasonable period of one and a half years to the appellants to shift to the principal market yard and to permit them to continue their business in the old market yard during that period, the notification need not be struck down - Held that where a reasonable accommodation is provided by the authorities, striking down the notification is unnecessary (Paras 376-377).
Issue of Consideration
Whether the notification dated 5 January 1965 changing the principal market yard was ultra vires, illegal, arbitrary, capricious, discriminatory and violated Articles 14, 19(1)(g) and 31 of the Constitution.
Final Decision
The Supreme Court held that the government had the power to issue the notification in public interest, but the implicit prohibition was unreasonable as ten days was insufficient to shift, violating Article 19(1)(g). However, because the Market Committee agreed to grant one and a half years to shift and permit continuation in the old yard, the notification need not be struck down. The appeal was disposed of accordingly.
Law Points
- Government has power to issue notification in public interest
- restriction on right to trade must be reasonable
- ten days to shift business unreasonable and violates Article 19(1)(g)
- court cannot direct government to declare sub-market yard
- market committee's agreement to grant one and a half years prevents notification from being struck down
