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Issues: (i) Whether pressed cotton in bales is covered by the expression "cotton (ginned or unginned)" in the Schedule to the Bombay Agricultural Produce Markets Act, 1939, so as to attract the licensing requirement under Rule 65(1) of the Bombay Agricultural Produce Markets Rules, 1941. (ii) Whether Rule 65 of the Bombay Agricultural Produce Markets Rules, 1941 is within the rule-making power conferred by the Bombay Agricultural Produce Markets Act, 1939.
Issue (i): Whether pressed cotton in bales is covered by the expression "cotton (ginned or unginned)" in the Schedule to the Bombay Agricultural Produce Markets Act, 1939, so as to attract the licensing requirement under Rule 65(1) of the Bombay Agricultural Produce Markets Rules, 1941.
Analysis: Agricultural produce under the Act includes the items specified in the Schedule. Cotton, whether ginned or unginned, is specifically listed. Pressing cotton into bales is only a method of facilitating transport and does not involve any chemical or industrial change that destroys its identity. Cotton in bales remains cotton and is not transformed into a different commodity merely because it is packed or pressed. The purpose of the Act is to regulate market dealings and protect producers from exploitation by middlemen, and that purpose would be defeated if traders could avoid regulation by pressing cotton into bales.
Conclusion: Pressed cotton in bales is covered by the Schedule and business in such cotton without a licence falls within the prohibition in Rule 65(1).
Issue (ii): Whether Rule 65 of the Bombay Agricultural Produce Markets Rules, 1941 is within the rule-making power conferred by the Bombay Agricultural Produce Markets Act, 1939.
Analysis: Section 26(1) empowers the State Government to make rules for carrying out the provisions of the Act, while Section 27(1) enables the Market Committee to make bye-laws for regulating business and trading conditions in the market area, subject to the rules made under Section 26. Rule 65 requiring a licence for trading in agricultural produce in a market area was made to facilitate effective regulation under the Act and to enable the Market Committee to function properly. The power under Section 26(1) was sufficient to support the rule, and recourse to the specific fee-related provision was unnecessary.
Conclusion: Rule 65 is intra vires the Act and validly requires a licence for doing business as a trader or general commission agent in the market area.
Final Conclusion: The appeal was liable to fail because pressed cotton remained agricultural produce within the Act and the impugned licensing rule was validly made under the statutory rule-making power.
Ratio Decidendi: A commodity retains its statutory identity unless it is altered by a process that changes its essential character, and a general power to make rules for carrying out an Act includes a valid licensing regulation necessary for effective market control.
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