Market localisation under agricultural produce law upheld, including trader-to-trader sales and shifting market yards by notification.

The Court upheld the market-regulation scheme under the Maharashtra Agricultural Produce Marketing Act, confirming that the power to establish a market includes the power to discontinue it at one place and shift it elsewhere by notification, and that localisation of marketing is a reasonable supervisory measure. Rule 5 was held consistent with Section 6 because the Act and Rules form a coherent code requiring notified produce to be sold in the established market and not elsewhere in the market area. Trader-to-trader dealings and produce imported from outside the area were held to remain within the regulatory ambit. The challenged market-area and market-yard notifications were also sustained, as they were legislative in character and not shown to be unreasonable.

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Issues: (i) Whether the Director and the rule-making authority under the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963 could validly require declared agricultural produce to be marketed only in the principal or subsidiary market and shift an existing market to another place. (ii) Whether Rule 5 of the Maharashtra Agricultural Produce Marketing (Regulation) Rules, 1967 was ultra vires or inconsistent with Section 6 of the Maharashtra Act. (iii) Whether transactions between trader and trader, and transactions involving produce imported from outside the market area, fell outside the regulatory scheme. (iv) Whether the declarations of market areas and market yards, including the Bihar notifications, were invalid for want of notice, natural justice, or unreasonableness.

Issue (i): Whether the Director and the rule-making authority under the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963 could validly require declared agricultural produce to be marketed only in the principal or subsidiary market and shift an existing market to another place.

Analysis: The statutory scheme contemplated a notified market area, followed by establishment of a principal market and subsidiary markets, licensing of traders and other market functionaries, and control of marketing through the Market Committee. The power to establish a market carried with it the power to discontinue it at one place and establish it elsewhere. Sections 14 and 21 of the Maharashtra General Clauses Act supported the power to vary or rescind notifications. Localisation of marketing was held necessary for effective supervision, prevention of evasion, and better service to traders and agriculturists.

Conclusion: The power to shift or localise the market was upheld and the restriction was held reasonable.

Issue (ii): Whether Rule 5 of the Maharashtra Agricultural Produce Marketing (Regulation) Rules, 1967 was ultra vires or inconsistent with Section 6 of the Maharashtra Act.

Analysis: Section 6 was expressly made subject to the rules regulating marketing in the market area. Rule 5 merely gave effect to the statutory purpose by requiring declared agricultural produce to be marketed in the established market and by barring marketing elsewhere in the market area. The Court held that the Act and the rules formed a coherent regulatory code and that there was no inconsistency between the licensing provision and the market-localisation rule.

Conclusion: Rule 5 was held intra vires and consistent with Section 6.

Issue (iii): Whether transactions between trader and trader, and transactions involving produce imported from outside the market area, fell outside the regulatory scheme.

Analysis: The Court held that marketing under the Act was not confined to the first sale by the producer. A regulated market necessarily covered the full chain of marketing so that evasion through resale by traders or import from outside the area could not defeat the statute. The regulatory measures, fees, auction, weighment, records, grading and dispute-resolution provisions showed that the scheme was intended to govern all marketing operations within the regulated market.

Conclusion: Trader-to-trader transactions and imported produce were held to be within the regulatory ambit.

Issue (iv): Whether the declarations of market areas and market yards, including the Bihar notifications, were invalid for want of notice, natural justice, or unreasonableness.

Analysis: The declaration of a market yard was treated as legislative or delegated legislative action, not a judicial or quasi-judicial act, and therefore did not attract a pre-decisional hearing unless the statute so required. The Court also found no arbitrariness in the shifting notifications, holding that the changes were aimed at improving facilities and accommodating traders. The challenged market areas and market yards were not shown to be unreasonable.

Conclusion: The challenges based on natural justice and unreasonableness were rejected.

Final Conclusion: The statutory schemes in Maharashtra, Karnataka and Bihar were upheld to the extent challenged, and the impugned restrictions requiring marketing in specified markets were sustained as valid regulatory measures.

Ratio Decidendi: A market-regulation statute may validly require all sales and purchases of notified agricultural produce, including trader-to-trader transactions, to take place in designated markets, and delegated power to establish a market includes the power to discontinue it at one place and establish it elsewhere by notification.

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