1962 (3) TMI 98 - SC - Indian Laws

Court upholds constitutionality of Act, by-laws, and fees; affirms market committee's licensing authority.

MUHAMMADBHAI KHUDABUX CHHIPA Versus STATE OF GUJARAT

MUHAMMADBHAI KHUDABUX CHHIPA Versus STATE OF GUJARAT - 1962 AIR 1517, 1962 (3) Suppl. SCR 875 Issues Involved:1. Constitutionality of the notification dated June 23, 1961, fixing the maximum fee under Art. 14.2. Validity of acts or things done before the promulgation of the Ordinance under s. 29-B.3. Discrimination and unreasonable restriction on the fundamental right to carry on trade and business under Art. 19(1)(g) due to by-laws issuing licenses to A and B class dealers.4. Authority of the market committee to require retail dealers to take out licenses and the validity of r. 64.5. Constitutionality of the main provisions of the Act after its amendment by the Ordinance under Art. 19(1)(g).6. Necessity to reframe rr. 65, 66, and 67 under the power conferred on the State Government under s. 26.7. Validity of s. 29-B in view of Art. 31 (1) concerning the refund of license fees collected before the Ordinance.Issue-wise Detailed Analysis:1. Constitutionality of the Notification Dated June 23, 1961 (Art. 14):The notification allows fees to be collected by different modes, i.e., by cart load, by value, by weight, and by containers. The petitioners argued that this could result in discrimination. However, the court held that the notification itself does not impose fees but prescribes maxima within which the market committee can levy fees. The court found no discrimination as each agricultural produce is treated as a class by itself, and the market committee is expected to act within the bounds of Art. 14. The court concluded that the notification is not discriminatory and upheld its validity.2. Validity of Acts or Things Done Before the Ordinance (s. 29-B):Section 29-B was intended to validate the defects pointed out in the earlier judgment, such as the establishment of markets and the collection of fees without prescribed maxima. The court held that the provisions of s. 29-B are sufficient to cure the defects and validate past actions. The court rejected the argument that the relevant sections and rules needed retrospective amendment, stating that the legislature's method of validation was adequate.3. Discrimination and Unreasonable Restriction (Art. 19(1)(g)):The court examined the classification of A and B class traders under the by-laws. A class traders are wholesale traders who can buy and sell in the market yard, while B class traders are retail traders who can only buy in the market yard. The court found this classification reasonable and not discriminatory. The court also held that the restriction is not unreasonable as it prevents monopolies and ensures fair prices for producers. The addition of words allowing B class traders to sell in retail anywhere in the market area was deemed surplusage, as retail trade is not controlled under the Act.4. Authority of the Market Committee and Validity of r. 64:The court rejected the argument that the market committee is controlling retail trade by requiring B class traders to take out licenses. The licenses are meant to permit buying in the market yard, not to control retail sales. The court upheld the validity of r. 64, stating that it provides incidental powers for regulating market yards and is not used to control retail trade.5. Constitutionality of the Act After Amendment (Art. 19(1)(g)):The court found no radical departure from the scheme of the Act after its amendment. The control envisaged by the Act remains the same, and the rules still require agricultural produce to pass through market yards. The court concluded that the reasons for upholding the Act's constitutionality in the earlier judgment still apply. The court also dismissed subsidiary contentions regarding the burden of obtaining multiple licenses and the impact on transactions between traders.6. Necessity to Reframe rr. 65, 66, and 67:The court held that rr. 65 and 67, which were struck down earlier, have revived due to the amendment of s. 5A by the Ordinance. The doctrine of eclipse applies, and the rules are no longer overshadowed by the previous inconsistency. The court concluded that the market committee has the power to issue licenses under the revived rules.7. Validity of s. 29-B (Art. 31(1)):The court held that the retrospective validation of license fees under s. 29-B is within the legislature's power, including taxation. The court rejected the argument that s. 29-B is invalid under Art. 31(1), stating that Art. 265 permits retrospective legislation for taxation purposes. The court upheld the validity of s. 29-B and dismissed the contention.Conclusion:The petitions were dismissed with costs, and the court upheld the constitutionality of the Act, the notification, and the by-laws. The court found no discrimination or unreasonable restriction on the fundamental right to carry on trade and business. The retrospective validation of past actions and fees was deemed adequate, and the revived rules were held to be valid.