Statutory presumptions and place of sale: delegated rules cannot widen the Act, and title passed on despatch from Kerala.

Delegated legislation cannot enlarge a statutory presumption or create a new deeming fiction beyond the scope of the parent Act; Rule 74(2) and the Explanation to Bye-law 24(5) were therefore ultra vires because they treated weighment, measurement or counting within the market area as sufficient to deem a sale. In determining the place of sale of specific goods, the decisive test is the parties' intention as shown by the contract, conduct and surrounding circumstances under the Sale of Goods Act. On the facts, the goods were despatched at the purchaser's risk, transit loss remained the purchaser's concern, and title had passed on despatch from Kerala, so the sale was completed in Kerala and not Hyderabad.

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Issues: (i) Whether Rule 74(2) of the Andhra Pradesh (Agricultural Produce and Livestock) Market Rules, 1969 and the Explanation to Bye-law 24(5) of the Bye-laws were intra vires the parent Act. (ii) Whether the sale of copra took place in Kerala or at Hyderabad for the purpose of levy of market fee under the Act.

Issue (i): Whether Rule 74(2) of the Andhra Pradesh (Agricultural Produce and Livestock) Market Rules, 1969 and the Explanation to Bye-law 24(5) of the Bye-laws were intra vires the parent Act.

Analysis: The Act created only a limited statutory presumption in Explanation I to Section 12, namely, that notified agricultural produce taken out of a notified market area is presumed to have been purchased or sold within that area. The Rules and Bye-law enlarged that presumption by treating weighment, measurement or counting within the market area as sufficient to deem a sale or purchase. Delegated legislation cannot widen the scope of the parent statute or create a legal fiction beyond the legislative policy. The additional deeming factors were not authorised by the Act and exceeded the permissible field of subordinate legislation.

Conclusion: Rule 74(2) and the Explanation to Bye-law 24(5) were beyond the scope of the Act and were ultra vires.

Issue (ii): Whether the sale of copra took place in Kerala or at Hyderabad for the purpose of levy of market fee under the Act.

Analysis: The relevant test was the intention of the parties under the Sale of Goods Act, 1930, particularly Sections 19 and 20. The goods were specific goods in a deliverable state. The surrounding circumstances showed that the seller despatched the goods at the purchaser's risk, the seller had no liability for transit loss, and the purchaser insured the goods and paid the premium. Weighment at Hyderabad and payment through the bank did not postpone the passing of property where the contract and conduct indicated that title had already passed on despatch from Kerala. The evidence therefore supported the conclusion that the transaction was completed in Kerala.

Conclusion: The sale took place in Kerala and not at Hyderabad.

Final Conclusion: The market fee could not be levied on the footing that the transaction occurred within the notified area, and the respondent's challenge succeeded.

Ratio Decidendi: A delegate cannot enlarge a statutory presumption or create a new deeming fiction beyond the policy and scope of the parent Act, and in determining the place of sale of specific goods the decisive test is the intention of the parties as evidenced by the contract, conduct and surrounding circumstances.

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