M/S. MAHALUXMI RICE MILLS AND ORS. versus STATE OF U.P. AND ORS.

Citation: [1998] SUPP. 1 S.C.R. 8 · Decided: 19-08-1998 · Supreme Court of India · Bench: M.M. PUNCHHI · Disposal: Dismissed

cites 1 · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
M/S. MAHALUXMI RICE MILLS AND ORS. 
v. 
STATE OF U.P. AND ORS. 
AUGUST 19, 1998 
[J.S. VERMA, en, K.T. THOMAS AND 
SYED SHAH MOHAMMED QUADRI, JJ.] 
U.P. Krishi Utpadan Mandi Adhiniyam, 
1964-Section 
17(iii)(b)(3)-Market fee payable to Market Committee--W11etl1er it shall be 
C paid by seller or purchaser when agiicultura/ produce is sold by a trader to 
the Govemment-Held, Market Committee is entitled to collect the fee from 
selle1~Seller can recover the same from purchaser-Govemment. 
Appellants, traders carrying on business in rice milling within cer-
D lain areas notified as market areas u/S 6 of the U.P. Krishi Utpadan Mandi 
Adhiniyam, 1964, were under a duty to sell rice to the State Government 
as levy by virtue of Clause (3) of the U.P. Rice and Paddy (Levy and 
Regulation of Trade) Order, 1985, which was issued under the Essential 
Commodities Act. The Market Committee concerned made demands on 
the appellants to remit the· market fee u/S 17(iii)(b)(3) of the Act. Appd-
E lants challenged the demand alleging that when a rice miller gives rice to 
the Government as levy under the Levy Order it does not amount to a 
'transaction or sale' and hence no market fee can be collected thereon; that 
the State Government is not a 'trader' as contemplated in the sub-clause 
and hence there is no liability to pay market fee and that even if it was a 
F sale to a trader the liability to pay market fee is on the purchaser i.e. 
Government and not the miller who sells it to the Government. High Cou!'t 
not accepting any of these contentions dismissed the writ petitions. Hence 
these appeals. The limited 11uestion raised in these appeals was whether 
the market fee payable to the Market Committee constituted under the Act 
G shall be paid by the seller or purch~ser when agricultural produce is sold 
by a trader to the Government. 
It was submitted on behalf of the Market Committee that the 
provisions of the Act are intended to make it feasible and practical for the 
Market Committee to realise market fee and if the primary liability to pay 
H market fee is that of purchaser and not a seller, the market committee 
8 
.. 
MAHALUXMI RICE MILLS v. STATE 
9 
would find it very difficult to collect the fee from the purchaser who might A 
leave the market area after purchasing the agricultural produce. 
The appellants argued that since clause (3) of Section 17(iii)(b) of 
the Act allows the seller to collect fee from the purchaser, trader's liability 
must be fastened with the purchaser and when the purchaser is Govern-
ment, the market fee is very often not paid by the Government to the seller B 
and in such a contingency it would be unjust for the Market Committee to 
realise the fee from the seller. 
Dismissing the appeals, this Court 
HELD : 1.1. In sub-clause (3) Section 17(iii)(b) of the U.P. Krishi 
Utpadan Mandi Adhiniyam, 1964, the word used for the seller to realise 
market fee from his purchaser is "may" while the word used as for the seller 
c 
to pay the market fee t'l the Committee is "shall". Employment of the said two 
monosyllables of great jurisprudential import in the same clause dealing 
with two rights regarding the same burden must have two different imports. D 
The legislative intendment can easily be discerned from the frame of the 
sub-clause that what i~ conferred on the seller is only an option to collect 
market fee from his purchaser, but the seller has no such option and it is 
imperative for him to remit the fee to the Committee. The Market Committee 
is entitled to collect market fee from the seller irrespective of whether the 
seller has realised it from the purchaser or not. [13-G-H; 14-A-B] 
E 
1.2. The Market Committee is fully entitled to collect the market fee 
from the seller and it is for the seller to pass the burden on the purchaser 
if he chooses. It is not the lookout of the Market Committee to see that 
seller gets the amount of fee paid by the purchaser. Thus the appellants 
cannot shirk the responsibility to pay the market fee to the Market 
Committee when the transaction falls within the purview of snb-clause (3) 
of Section 17(iii)(b) of the Act and then it would be open to them to recover 
the same from the purchaser • Government. [15-C-D] 
F 
/Vishi Utpada11 Mandi Samiti, Haldwani & Ors. v. Indian Wood G 
Products Ltd. & Anr., [1996] 3 SCC 321, overruled. 
/Vishi Upaj Mandi Samity & Ors. v. 01ie11t Paper & Industries Ltd., 
[1995] 1 sec 655, distinguished. 
Ramesh Cha11dr

Excerpt shown. Read the full judgment & AI analysis in Lexace.