Punjab State Agricultural Marketing Board (Sale and Transfer of Plots) (First Amendment) Rules, 2008 – Punjab State Agricultural Marketing Board (Sale and Transfer of Plots) Rules, 1999 – r. 3 (iii) and (iv) – Validity of Rules 1999 and 2008 – The old grain market was de-notified and a new market was set up – Dealers of the old market applied for allotment of plots/shops in the new grain market – Their applications were rejected – Writ Petitions – High Court did not grant relief in writ petitions decided in 2010 – However, in another set of writ petitions decided in 2015 & 2016 the High Court granted relief to the dealers – Appellants Contended that the Rules were against the Labha Ram’s Case – On appeal, held: When Labha Ram’s case was decided there was no provision for preferential allotment to the old dealers – After this judgment that the 1999 Rules were notified – Thereafter (First amendment) Rules 2008 come into existence, which were much more liberal – Now, 50 % of the shops were reserved for the existing licence holders and there were two important conditions; (i) that a person must have licence for 3 years and (ii) that the dealer must have an annual turnover of Rs. 5 lakhs in each of the three financial years – If there were no conditions like the one laid down in the Rules, any person would get a licence, not transact any business, and after a few months apply for a new shop at a concessional rate – That would defeat the purpose which was sought to be highlighted by Labha Ram and Prem Chand Case – Thus, these Rules did not violate any of the provisions of the Constitution including Art. 14 and are legally valid – Punjab Agricultural Produce Markets Act, 1961.
Punjab State Agricultural Marketing Board (Sale and Transfer of Plots) (First Amendment) Rules, 2008 – Punjab State Agricultural Marketing Board (Sale and Transfer of Plots) Rules, 1999 – r.3 (iii) – Allotment of Plots/ Shops in the new market set up – Dealers of the old market applied for allotment of plots/ shops in the new market – Applications were rejected – Writ Petitions – In the group of petitions which were decided in 2015 & 2016 the High Court granted some relief to the dealers – The High Court held that a person can furnish adequate proof of his working in the denotified market yard even if he did not hold a licence on the cut-off date – The market boards filed appeal before the Supreme Court – Held: r. 3 (iii), which provides that to prove the turnover, the dealer is required to produce form ‘M’ which is in the nature of a daily return to be filed by the licensed dealer with the Market Committee/ Board u/rr. 29(3) and 31(1) of the Punjab Agricultural Produce Markets (General) Rules, 1962 – In the absence of Form ‘M’ (daily return) the dealer can rely on form ‘H’ (auction register) and ‘J’ (sale voucher) to prove his turnover – These have to be read along with form ‘F’ which is the form of renewal of licence – However, High Court held that form ‘F’ (renewal of licence) was not the only document required for determination of eligibility of an old licensee for allotment of a plot, but the independent adequate proof of working in denotified market yard was required to be considered to determine the eligibility of the old licenses for allotment of plots – Reasoning of High Court cannot be accepted – Licence is mandatory and no person can carry on business in an agricultural market without having a licence – The Rules provide that the renewal of the licence should be applied one month before the expiry of the previous licence – Further, a person who has not renewed his licence without justifiable cause, cannot get any benefit – Punjab Agricultural Produce Markets (General) Rules, 1962.
Disposing of the appeals, the Court
HELD: 1. This Court is concerned with two sets of Rules, viz., the 1999 Rules and the 2008 Rules. The case of the appellants is that the Rules are against the judgment of this Court in Labha Ram and Sons and Others vs. State of Punjab and Others wherein while interpreting the provisions of the Punjab New Mandi Townships (Development and Regulation) Act, 1960 (hereinafter referred to as the Act of 1960), it was held that the Government has an obligation to provide sufficient accommodation to all the existing licenced dealers with regard to the handicaps they suffered due to the creation of new market area. This Court also held that the dealers who were already functioning in the de-notified markets should not be made to compete with new entrants. This Court, further directed that the Government should fix a reasonable rate above the reserve price for such old licenced dealers. It would be pertinent to mention that when Labha Ram’s case was decided there was no provision for preferential allotment to the old dealers. They had to take part in auctions and pay the market price. It was after this judgment that the 1999 Rules were notified. [Para 8] [760F-G; 761-A-B]
2. As far as the Constitutional validity of these Rules is concerned, this Court finds nothing in the Rules which is violative of any provisions of the Constitution including Article
14. The main contention is that the Rules violate the mandate laid down by this Court in Labha Ram’s case. Another three Judge Bench of this Court in Prem Chand Trilok Chand and Others vs. State of Haryana and Others also made similar observations. [Para 11] [764-C]
3. The contention of the appellants is that as per the law laid down by this Court, all the old dealers should be provided shops/plots in the new market at the concessional rate. This Court is unable to accept this contention. The judgment relied upon by the appellants were given in light of the Rules which did not make any reservation whatsoever for existing licence holders. Now, 50% of the shops are reserved for the existing licence holders but some conditions have been laid down. This Court is concerned mainly with two conditions. The first condition is that a person must be having a licence for 3 years; and the second condition is that the dealer must have an annual turnover of Rs.5 lakhs in each of the three financial years. This Court finds that these conditions are salutary in nature. These are necessary to ensure that only those dealers who have been in the trade for 3 years or more will be eligible for allotment of plots/shops. Similarly, only those dealers who have a minimum turnover of Rs. 5 lakhs in each financial year are eligible. On the one hand the old dealers want that they should not be forced to compete with new people in the business and, on the other hand there is a self-defeating argument that the criteria of 3 years should not be there. If such a criteria was not there, then anybody would become eligible to get a licence even if he started business a day prior to the date of inviting applications. [Para 12] [764-D-G]
4. The next issue relates to the judgments, in the second batch of cases where the Market Board is in appeal. This Court has made reference to Rule 3(iii), which provides that to prove the turnover, the dealer is required to produce Form ‘M’ which is in the nature of a daily return, to be filed by the licensed dealer with the Market Committee/Board under Rules 29(3) and 31(1) of the Punjab Agricultural Produce Markets (General) Rules, 1962 (hereinafter referred to as 1962 Rules). In the absence of Form ‘M’ the dealer can rely on Form ‘H’ and ‘J’. Form ‘H’ is an auction register to be maintained by every dealer under Rule 24(8) of the 1962 Rules. Form ‘J’ is the sale voucher to be maintained by the dealer under Rule 24(14) of the 1962 Rules. The Rule is clear that if the dealer produces Form ‘M’ then that will be taken into consideration. In case the dealer does not produce Form ‘M’ then he can prove his turnover by producing Forms ‘H and J’. These have to be read along with Form ‘F’, which is the form of renewal for licence. [Para 16] [765-F-H; 766A]
5. This Court is unable to accept the reasoning of the High Court in this regard. Licence is mandatory and no person can carry on business in an agricultural market without having a licence. The Rules provide that renewal of the licence should be applied for one month before the expiry of the previous licence. The Rules further provide that if the licence is granted within one month of its expiry then its renewal will be from the date of expiry of the earlier licence, meaning that it will relate back to the date of original licence. [Para 17] [766-D-E]
6. Rule 3(iii-a) of the 2008 Rules provides an even bigger window for allotment of plots and lands to those licence holders whose licences have expired but were renewed or fresh license obtained within 3 months of the expiry of the old license. A dealer who gets his license renewed or obtains fresh license within 3 months of the expiry of the old license, is not considered a new license, and for the purpose of allotment deemed to be eligible. The Rules provide that if a licence is not renewed within 1 month of its expiry, it shall be treated to be a fresh licence. The High Court has gone wrong in holding that even if the gap between the expiry of old licence and issuance of new licence is more than 3 months, the dealer can still furnish adequate proof of working in the de-notified market yard. This Court is clearly of the view that once the gap is more than 3 months the same cannot be condoned unless the dealer gives an explanation to the satisfaction of the Market Board, with which issue we shall deal later on. [Para 18] [766-F-H]
7. Therefore, this Court disposes of the appeals with the following directions:(1) The Rules of 1999 and 2008 are legally valid;
(2) Any person who has obtained a license for the first time must have a valid licence for a period of more than 3 years;
(3) In case of renewal of license the Rules provide a window of 3 months as discussed above. This Court further directs that if any dealer had submitted a complete application for renewal prior to the expiry of his licence but the licence was not renewed for 3 months for no fault of the dealer, then he would be entitled to count that period as a period of licence.
(4) This Court makes it clear that other than this, a dealer must have a license and a person who has not renewed his license without justifiable cause, cannot get any benefit.
(5) As far as proof of turnover is concerned, the primary evidence is Form ‘M’ and in the absence of form ‘M’, Form ‘H’ and ‘J’. No other document can be taken into consideration for proving the turnover. [Para 23] [768-E-G; 769-A-B] Labha Ram and Sons and Others v. State of Punjab and Others (1998) 5 SCC 207 : [1998] 3 SCR 112 ; Prem Chand Trilok Chand and Others v. State of Haryana and Others (1989) Supp 1 SCC 286 –
referred to.
Crawford’s Interpretation of Laws, by Earl T.Crawford, Saint Louis Thomas Law book Company 1940 §271, pg. 539 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.