1958 (10) TMI 45 - SC - Indian Laws

Supreme Court Validates Commercial Crops Markets Act Restrictions, Pending Further Review

M.C.V.S. ARUNACHALA NADAR Versus STATE OF MADRAS A.P. MYSORE & M.P.U.O.I.

M.C.V.S. ARUNACHALA NADAR Versus STATE OF MADRAS A.P. MYSORE & M.P.U.O.I. - 1959 AIR 300, 1959 (1) Suppl. SCR 92 Issues Involved:1. Validity of the Madras Commercial Crops Markets Act and the Rules framed thereunder.2. Reasonableness of the restrictions imposed by the Act on the appellants' fundamental right to do business.3. Validity of G.O. No. 356 dated 8-3-1952 establishing a market at Virudhunagar.4. Validity of the prohibition on the collection of 'mahimai' allowances.Detailed Analysis:1. Validity of the Madras Commercial Crops Markets Act and the Rules framed thereunder:The appellants challenged the Madras Commercial Crops Markets Act (Mad XX of 1933) and the Rules framed under it, arguing that they constituted an unreasonable restriction on their fundamental right to do business. The Act aimed to regulate the buying and selling of commercial crops in the State of Madras and establish markets for this purpose. The High Court upheld the Act and the Rules under Article 19(6) of the Constitution, considering them a valid piece of marketing legislation. The Act was designed to protect producers from exploitation by middlemen and ensure fair returns for their produce. The Supreme Court agreed with the High Court's view, emphasizing that the Act was the result of extensive investigation by experts and aimed to eliminate middlemen, ensuring fair market conditions for growers. The provisions of the Act were found to be reasonable and related to the object the legislature sought to achieve.2. Reasonableness of the restrictions imposed by the Act on the appellants' fundamental right to do business:The appellants argued that the Act's provisions were unreasonable and crippled their business. The Supreme Court scrutinized the Act's provisions, which fell into two groups: one providing machinery for controlling trade in commercial crops and the other imposing restrictions on carrying out the trade. The Court found that the restrictions were reasonable and necessary to achieve the Act's objectives. The licensing requirements and other regulations were aimed at ensuring correct weighment, providing market information, and settling disputes, thereby facilitating fair trading conditions. The Court held that the impugned provisions constituted reasonable restrictions on the appellants' right to do business.3. Validity of G.O. No. 356 dated 8-3-1952 establishing a market at Virudhunagar:The appellants contended that the government's order to establish a market at Virudhunagar imposed an unreasonable restriction on their right to do business, as there was already a well-established market in the area. The Supreme Court noted that the reasonableness of the restriction could not be decided based on the material before them and left the question open to be decided when the market was actually established. The Court emphasized that the reasonableness of the restriction would depend on the circumstances at the time the market was established, including the conditions in the trade and the standards maintained in the existing market.4. Validity of the prohibition on the collection of 'mahimai' allowances:The appellants challenged the prohibition on the collection of 'mahimai' allowances, arguing that it was not a trade allowance and therefore not covered by Section 14 of the Act. The Supreme Court found ambiguity in the High Court's conclusion on this issue and emphasized that the question of whether 'mahimai' was a trade allowance needed to be decided based on the facts of each case. The Court noted that if 'mahimai' was not a trade allowance, the prohibition would be invalid. However, if it was a trade allowance, the prohibition would be superfluous. The Court left this question open to be decided in appropriate proceedings, as there was insufficient material to arrive at a definite finding.Conclusion:The Supreme Court upheld the validity of the Madras Commercial Crops Markets Act and the Rules framed thereunder, finding them to be reasonable restrictions on the appellants' right to do business. The Court left open the question of the reasonableness of the restriction imposed by the establishment of a market at Virudhunagar and the validity of the prohibition on the collection of 'mahimai' allowances, to be decided in appropriate proceedings. The appeals were dismissed without costs.