LexKRISHI UTPADAN MANDI SAMITI, GHAZIABAD AND ANR. versus M/S. METAL CRAFT & ORS.
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[2008] 10 S.C.R. 176 A KRISHI UTPADAN MANDI SAMIT!, GHAZIABAD B AND ANR. v. MIS. METAL CRAFT & ORS. (Civil Appeal No. 8690 of 2001) JULY 7, 2008 [DR. ARIJIT PASAYAT, P. SATHASIVAM AND AFTAB ALAM, JJ~] c Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 - s. 17(iii)(b), Explanation appended thereto - Market fee - Levy of - _Held: Physical presence of agricultural produce within market area is necessary for levy of mprket fee - On facts, transaction of sale of the rice exported by Respondent No. 1 ~ 'D · did not take place within the market area of Appellant-Mandi ~- r Samiti -: .Hence, Appellant-Mandi Samiti was not entitled to levy market fee. The question which arose for consideration in the present appeal is whether the transaction of sale of the E rice exported by· Respondent No.1 took place within the market area of the Appellant-Mandi Samiti and ther-efore the Appellant was entitled to levy market fee under s.17(iii)(b) of the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964. ..._. Dismissing the appeal, the Court HELD:1.1. A plain reading of s.17(iii)(b) of the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 (Act) shows that the Committee is empowered to levy and col- G lect market fee which shall be payable on transaction of sale of agricultural produce in the market area. The words "specified agricultural produce in the market area" have great relevance. The manner of realization of market fee has been enumerated in sub clauses (1 ), (2), (3) & (4) of H 176 KRISHI UTPADAN MANDI SAMIT!, GHAZIABAD v. 177 M/S. METAL CRAFT & ORS. ,A s.17(iii)(b). Reference is to "produce". This apparently A shows that physical presence of the agricultural produce within the market area is necessary for levy of market fee. The Explanation to s.17(iii)(b) appended at the end of the Section lays down that unless the contrary is proved any specified agricultural produce taken out or proposed to B be taken out of a market area by or on behalf of the Ii- cenced traders shall be presumed to have been sold within such area. The Explanation has application only if the agricultural produce is physically present within the market area. The explanation becomes redundant if the c stand of the appellant that s.17(iii)(b) is applicable even in cases where agricultural produce is neither physically brought nor is in existence within the market area. [Para 9] [184-H; 185-A,B,C & D] 1.2. Under s.17(iii)(b), the measure of levy of the fee D is on the price of the goods sold. It obviously means that there must be a complete transaction of sale or a con- eluded sale. If there is only an agreement and the agree- ment fails, the remedy for the aggrieved party is to file suit for damages. Obviously, no fee can be charged on E damages. The action for levy of fee can arise only on a concluded sale and as the sale has not taken place within the market area of Ghaziabad, no mandi fee can be lev-:- ied. [Para 13] [188-E,F & G] -.._ Ram Chander Kai/ash Kumar & Co. v. State of UP, AIR F (1980) SC 1124- relied on. PS.N.S. Ambalavana Chettiar and Company Ltd. v. Ex- press Newspapers Ltd. AIR (1968) SC 741 and Jute and Gunny brokers Ltd. & Ors. v. The Union of India and Ors. etc. G AIR (1961) SC 1214 - referred to. ,--J 2. The stand of the appellant is that the market fee is levied on "transaction of sale" and not on "sale" only and, therefore, what is to be seen is where the transaction took place and not the situs of the sale. If this argument is ac- H ' 178 SUPREME COURT REPORTS [2008] 10 S.C.R. A cepted then even an agreement to sale without the pres- ence or existence of the agricultural produce will come within the ambit of the charging provision. It would also mean that if the agreement takes place outside the bound- aries of State of Uttar Pradesh, the provisions would still B become applicable. [Para 14] [188-G,H; 189-A] 3. A bare perusal of the order passed by the revisional authority under the Act.shows that the Appel- lant-Samiti as well as the revisional authority proceeded on the basis that since the contract for goods was en- c tered into at Ghaziabad and then goods were sent through transport from Punjab, Haryana and Madhya Pradesh di- rectly through ports, therefore, the market fee was levi- able. The High Court rightly noted the admitted position ,y that the rice was never brought or was in existence within e: D the market area of Mandi Samiti, Gh
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