High Court · 2009

The facts leading to the presentation of the writ petition are a The petitioner’s father one Shri Abala Kanta Talukdar establishe d a market in the year 1979 on a piece of his patta land bearing KP Patta No.30, Dag No.224 covering a total area of six bighas. Admittedly the Paschim Chaygaon Gaon Panchayat was collecting some money from the above mentioned Shri Abala Ka nta Talukdar and granting (cid:28)permission/ license (cid:29) to operate his private market ye ar to year upto 30the June, 2002. Thereafter the petitioner claimed that the abo ve mentioned piece of property was transferred to the petition by his father and the transfer was mutated in the revenue records. Thereafter the petitioner was also running the above mentioned private market from year to year though he has been paying some amounts, the details of which may not be necessary for the purp ose of this writ petition, year to year to the Gaon Panchayat.

3. When the so called permission granted by the Gaon Panchayat for the period commencing from 1-7-2006 to 30-6-2007 nearing completion the petition er made an application dated 28-5-2007 before the respondent authority for grant ing of a (cid:28)license (cid:29) for the said private market for the year 2007-08. It appears that on earlier period, that is, for the Panchayat year 2006-07 when the petitio ner was accorded with such permission by the Gaon Panchayat to run the market so me body challenged such arrangement by way of WP(C) No.4829/06 on the ground tha t the said settlement in favour of the writ petitioner was not preceded by any t ender process. The said writ petition was eventually disposed of by an order dat ed 20-6-2007 by a learned Judge of this court directing the first respondent to examine the matter in its entirety, having regard to the rival claims of the pet itioners therein and the petitioner herein, who was the respondent in the said w rit petition.

4. In view of the said order the petitioner approached the first re spondent not only for a resolution of the issues as pointed out by the order ref erred to earlier of this court but also for a (cid:28)permission (cid:29) in favour of the peti tioner to operate the private market for the year 2007-08. Once again the petitioner approached this court by way of WP(C) 5. No.3665/2007 seeking appropriate directions in the matter of grant of the necess ary (cid:28)license (cid:29) sought by him for the year 2007-08. During the pendency of the sai d writ petition the first respondent, however, considered the case of the petiti oner pursuant to the orders of this court referred to earlier. By an order dated 1-8-2007 the first respondent opined that the private cattle market, which the petitioner and his father were running on their property, should be settled by i nviting tenders. In view of the said order the WP(C) No.3665/07 and another writ petition which was tagged on to the said writ petition came to be closed withou t examining the issue.

6. Challenging the correctness of the decision of the first respond ent dated 1-8-07 referred to earlier the petitioner herein filed a fresh writ pe tition being WP(C) No.4193/07. In the meanwhile the 4th respondent invited tende rs on 8-8-07 for settlement of the private market run by the petitioner. This co urt by an interim order dated 23-8-07 in WP(C) No.4193/007 referred to earlier, directed that the respondents may proceed with the tender process initiated unde r the NIT dated 8-8-07 but should not take any final decision in that regard wit hout leave of the court. The petitioner also participated in the said tender pro cess. When the WP(C) No.4193/07 was taken up for final hearing a tentative opini on, it appears, was expressed that in the absence of any challenge to the Rule 4 7 of the Assam Panchayat (Financial) Rules, 2002 it would be difficult to mainta in the claim of the petitioner and, therefore, the petitioner withdrew the writ petition after obtaining liberty to file a fresh writ petition. Hence the presen t writ petition.

7. Section 107 of the Assam Panchayat Act, 1994 and Rule 47 of the Assam Panchayat (Financial) Rules, 2002 or the impugned provisions whose constit utional validity is required to be examined in this court in the present writ pe tition read as follows :- (cid:28)Sec 107. Settlement of private hat, ghat and fisheries etc., by the Gaon Pancha yat.- The powers of settlement of private hats, ghats an fisheries under the jur isdiction of the Gaon Panchayat shall be vested in the Standing Committee as und er sub-section (1)(i) of Section 22. (cid:29) (cid:28)Rule 47.(1) Such markets or ferries or fisheries or pounds as are vested in or placed under the control and administrative of the Panchayat under Section 105, 106, 107, 108 and 109 of the Act shall be settled by inviting sealed tenders aff ixing court fee stamp for such amount as has been prevailing otherwise and earne st money not below two percent of the minimum bid value for sale and settlement of the right to collect the authorised fees in respect of the markets or ferries or the fisheries and the pounds for a period coinciding with one Panchayats fin ancial year. Earnest money so received shall be entered in a Register in FORM No.12 t o the Schedule to these rules. (2) Such tender notice shall be floated at least forty five days before the last day of Panchayat Financial year such tender notice shall state- & & & &. & & & &.. & &.. &.. Section 107 of the Assam Panchayat Act ostensibly authorises the Gaon Panchayat to settle private hatts, etc under the jurisdiction of the Gaon Panchayat. Such a power is, by a statutory declaration, vested on the Standing C ommittee contemplated u/s 22 of the Act.

8. he expression (cid:28)hatt (cid:29) is defined under Sec 2(19) as follows :- (cid:28)2(19) (cid:28)Bazar, Hatt or Market (cid:29) means any place within the administrative control The expression (cid:28)private hatt (cid:29) is not defined under the Act but t of the local authority where persons assemble daily or bi-weekly or periodicall y for sale or purchase of article to human or animal consumptions or of livestoc ks or of other merchandise. (cid:29) In other words it appears from the definition that any place whe re people gather either daily or periodically for sale or purchase of articles m eant for the consumption either by human being or animals or of livestock or oth er merchandise is a (cid:28)hatt (cid:29), synonymously known as (cid:28)market (cid:29) or (cid:28)bazar (cid:29). The Secti on does not specify that such place where the above mentioned activities are car ried on need to be either private property or property owned by some organ of th e State. Therefore, irrespective of the ownership and title of the property on w hich such activities take place such a place is a market for the purpose of the Act. Section 107 authorises, as already noticed, the Standing Committee of th e Gaon Panchayat within those jurisdiction a private hatt exists to settle such private hatt.

9. The expression (cid:28)private hatt (cid:29) and (cid:28)settlement (cid:29) occurring under S ection 107 require an examination as both the expressions are not defined. In th e absence of a definition of the expression (cid:28)private hatt (cid:29) and in view of the de finition of the expression (cid:28)hatt (cid:29), noted earlier, the only inference we can draw is that when the Legislature used the expression (cid:28)private hatt (cid:29) it is to be und erstood as the place where people assemble either daily or periodically for sale or purchase of articles, livestock or other merchandise and the title and owner ship of such place vests in some private parties, that is, persons other than th e State and its instrumentalities. If that is the import of the expression (cid:28)priv ate hatt (cid:29) the authority of the State to interfere with said activity by way of s ettlement is required to be examined. A Constitutional Bench of the Supreme Court in AIR 1955 SC 188 (

10. Ganpati Singhji vs. State of Ajmer & anr) held at para 3 as follows:- (cid:28)(3) It is admitted that the land on which the fair is normally held belongs to the appellant. That being so, he has a fundamental right under Article 19(1)(f) which can only be restricted in the manner permitted by sub-clause (5). The hold ing of an annual fair is an occupation or business within the meaning of Article 19(1)(g), therefore, the appellant also has a fundamental right to engage in th at occupation on his land provided it does not infringe any law imposing (cid:28)reason able restrictions on that right in the interests of the general Public (cid:29), or any law. (cid:29) It was a case where the appellant before the Supreme Court chall enged certain Rules framed by the Chief Commissioner of Ajmer for regulating cat tle and other fairs in the State of Ajmer. The appellant was so compelled to cha llenge the said Rules because the appellant before the Supreme Court applied for a permission contemplated under the above mentioned Rules for running a cattle fair which he had been earlier running. Such permission was declined by the conc erned District Magistrate. In the above mentioned background the Supreme held th at the appellant before the Supreme Court had two fundamental rights under Artic le 19(1)(f), (which came to be repealed by a subsequent amendment) and Article 19(1)(g) to engage in the activity of running a cattle fair on his property and such rights are subject only to a reasonable restrictions imposed by law in the interest of general public.

11. Examined in the light of the above decision of the Supreme Court it is rather difficult to understand the expression (cid:28)settlement (cid:29) occurring unde r Section 107 of the Assam Panchayat Act. But as a matter of continuing practice the respondents have been inviting tenders from year to year for making such se ttlement contemplated under Section 107 of private hatts. In other words the rig ht to use of private property is being granted to the highest bidder by the Stat e for a limited period and for a specific purpose. The above mentioned facts cle arly make the transaction a lease as defined u/s 105 of the Transfer of Property Act. The only hitch is that such a right pre supposes the existence of some leg ally recognised and transferable right in the property. In the case of land belo ng to private parties there cannot be any right in favour of the State to lease out the property in favour of third parties and collect consideration for such l ease. The fact that either the petitioner or people who are similarly 12. situated who are owners of the landed property on which such hatts/markets are b eing conducted have either been asking for a license from the Panchayat or they participated in the tendering process earlier does not enable the State to igno re the constitutional provisions and trample upon the fundamental rights of the petitioner under Art 19(1)(g) or constitutional right in Article 300(A) which pr ohibits the State from depriving any person of his property save by way of autho rity of law. It may be mentioned here that the law contemplated under Art 300(A) should not only be the letter of law authorizing such deprivation but a law whi ch otherwise conforms to the requirement of the various other provisions of the constitution like the 2nd proviso to Article 31(A) which prescribed that when la nded property of any person is acquired, which is otherwise within the ceiling l imit applicable to such person prescribed under any law, the State is bound to p ay compensation which is required to be the market value of the property. As a m atter of fact the Assam Panchayat Act under various provisions like Sections 23, 55 and 87 authorises the Panchayats at various levels to acquired, hold and dis pose of property. The above mentioned provisions stipulate the procedure by whic h such acquisition is to be effected. While the Gaon Panchayats are authorised u /s 23 to acquired any property Section 23 it does not authorise acquisition of p roperty by way of compulsory acquisition, necessarily implying that such acquisi tion could only be a contract. On the other hand in the case of Anchalik Panchay ats u/s 55(4) the Anchalik Panchayats are authorised to acquire landed property by resorting to compulsory acquisition under the provisions of the Land Acquisit ion Act. (cid:28)55(4) Where an Anchalik Panchayat requires land to carry out any of the purpose of this Act, it may negotiate with the persons having interest in the said land , and if it fails to reach at an agreement, it may make an application to the De puty Commissioner of the district for acquisition of land, who may, if he is sat isfied that the land is required for a public purpose, take steps where permitte d by law to acquire the land under the provision of the relevant Land Acquisitio n Act, and such land shall on acquisition, vest in the Anchalik Panchayat. (cid:29) Similarly Section 87 authorises the Zilla Parishad to acquire la nded property compulsorily by resorting to Land Acquisition Act in the manner sp ecified under the said Section which is similar to the procedure u/s 55(4).

13. Therefore, in our view the provision under Sec 107 of the Assam Panchayat Act is not only inconsistent with the provisions of Sections 23, 55 an d 87 but also repugnant to the provisions of Article 300(A) read with 2nd provis o to Article 31(A).

14. Faced with the above situation the learned counsel for the State attempted to argue that the authority granted u/s 107 to settle the private hat ts is in substance an aspect of the responsibility entrusted to the Gaon Panchay at u/s 19 Clause (xvii). Section 19 authorises the Gaon Panchayat to perform the various functions which under the above mentioned Clause includes the function s of regulating cattle fairs and festivals. (cid:28)19. Functions of Gaon Panchayat.- ecified by the Government from time to time, the Gaon Panchayat shall perform th e functions specified below - & & & Subject to such conditions as may be sp XVII. MARKETS AND FAIRS - (1) Regulation of fairs including cattle fairs and festivals. (cid:29)

15. No doubt that Section 19 of the Assam Panchayat Act authorises t he State to regulate the markets and cattle fairs. The question is whether such a power to regulate the markets can be exercised in such a way so as to complete ly deny the petitioner of his right to carry on a trade or business on a piece o f property owned by him. We are sad to notice that almost sixty years after the decision of the Supreme Court reported in AIR 1950 SC 163 (Rashid Ahmed vs. The Municipal Board, Kairana) the respondents still resort to an unconstitutional pr actice in view of the language of Section 107 of the Assam Panchayat Act. It is necessary to notice the facts, the issue and the decision of the Supreme Court i n the above mentioned case. The petitioner before the Supreme Court (under Article 32) in th e above mentioned case was carrying on wholesale business in vegetables and frui ts within the local limits of the Kairana Municipality. On the 1st January, 1950 the Municipality brought into force certain bye-laws. Just before coming into f orce the bye-laws the Municipal Board put to auction the right to carry one whol esale business in vegetables. One Habid Ahmed became the highest bidder of such an auction. The effect of such an auction was held by the Supreme Court to be (cid:28)p resumably meaning thereby the monopoly right to wholesale business of vegetables (cid:29). The petitioner before the Supreme Court also applied for a licence to continu e his business. The Board rejected such an application. Subsequently a notice was issued to Rashid Ahmed the content of which was extracted by the Supreme Court in the above mentioned Judgment and it reads as follows :- (cid:28)You are hereby informed that the Municipal Board, Kairana, have given the contr act of wholesale purchase and sale of the vegetables, which is in force from the 1st day of January, 1950. It has been repeatedly promulgated, in the city by th e beat of drum, through a Khakrob (sweeper) that excepting the contractor of veg etables the Municipal Board, Kairana, nobody shall deal in wholesale purchase an d sale of vegetables at a place other than the one approved by the Municipal Boa rd aforesaid (i.e. the place near police Post Imam). As against this, you in the first place kept selling vegetables by wholesale, at the house near Jama Masjid otherwise known as Wizwala, despite occasional verbal warnings requiring you to desist therefrom, which were conveyed through an employee of the Board. On your failure to comply, your were warned by a notice in writing, dated 3rd January, 1950. The notice was duly served on you. But still you paid no heed. Accordingly a complaint was lodged against you, under the bye-laws, quoted above, in the Co urt of Pargana Officer, Tahsil Kairana. The complaint is still pending. Now your are selling wholesale by auction, vegetable at another place in Jama Masjid Baz ar, which is a thoroughfare. Your above conduct is unlawful and in contravention of the Municipal Board’s Bye -la 2 pertaining to vegetable contract. Moreover, highly prejudicial as it is to the interest of both the contractor and the Board you are warned that after thi s notice has been served on you, you should cease to sell anymore vegetable in b reach of the bye-laws above mentioned. Herein fail not. (cid:29) Therefore Rashid Ahmed approached the Supreme Court. The Board d id not assign any reason for rejecting the application of Rashid Ahmed. Before t he Supreme Court it was argued that there was no provision under the bye-laws of the Municipal Board to grant such licences as sought by Rashid Ahmed. In the ba ck ground of the above mentioned facts the Supreme Court opined that (cid:28)the fact t hat the respondent Board had already auctioned the contract to Habib Ahmed might conceivably had some bearing on the refusal to grant a licence to the petitione r. (cid:29) The Supreme Court noticed that bye-law No.2 of the Municipal Boa rd recognised that (cid:28)everybody will be entitled to do business at the place fixed by the respondent Board but as a result of a monopoly in favour of the contract or Habib Ahmed having been created, nobody else can do business at that place, a s contended by the learned advocate for the respondent Board. (cid:29) In the background of the above mentioned fact the Supreme Court held - (cid:28)If it requires a licence then under S.241(2)(a) the respondent Board cannot ref use such license except on the ground that the place where the market or shop is established fails to comply with any condition prescribed by, or under the Act. It is conceded that the rejection of the petitioner’s application was not based on any such ground but that it was because there was no bye-law authorising the issue of any licence. The Constitution by Art. 19 (1) guarantees to the Indian citizen the right to carry one trade or business subject to such reasonable rest rictions as are mentioned in cl (6) of that article. The position, however, unde r bye-law 2 is that while it provides that no person shall establish a market fo r wholesale transactions in vegetables except with the permission of the Board, there is no bye-law authorising the respondent Board to issue the licence. The n ett result is that the prohibition of this bye-law, in the absence of any provis ion for issuing licence becomes absolute. Further, bye-law 4 contemplates the gr ant of a monopoly to a contractor to deal in wholesale transactions at the place fixed as a market. Acting upon that provision, the respondent Board has granted monopoly to Habib Ahmed and has put it out of its power to grant a licence to t he petitioner to carry on wholesale business in vegetables either at the fixed m arket place or at any other place within the municipal limits of Kairana. This c ertainly is much more than reasonable restrictions on the petitioner as are cont emplated by cl (6) of Art. 19. This being the position, the bye laws would be vo id under Art. 13(1) of the Constitution. On the other hand, if there is no bye-l aw requiring the petitioner to take out licence, then there can be no justificat ion for the respondent Board to stop the petitioner’s business or to prosecute h im. (cid:29)

16. Close on the heels of Rashid Ahmed’s case (Supra) came another j udgment of the Supreme Court reported in AIR 1952 SC 115 (Mohammad Yasin vs. Tow n Area Committee, Jalalabad & anr) , where the issue though was not identical wi th the issue in Rashid Ahmed but was substantially similar. The factual backgrou nd of Mohammad Yasin in the language of the Supreme Court is as follows :- (cid:28)(2) The case sought to be made out in the petition may be shortly stated as fol lows : The petitioner is a wholesale dealer in fresh vegetables and fruits at J alalabad in the district of Muzaffarnagar in the State of Uttar Pradesh and clai ms to have been carrying on such business for the last 7 years or so at his shop situated in the town of Jalalabad. The vegetable and fruit growers used to brin g their goods to the town and get them auctioned through any of the vegetable de alers of their choice who used to charge one anna in the rupee as and by way of commission. The respondent Committee which is a Town Area Committee has framed c ertain bye-laws under which all right and power to levy or collect commission on sale or purchase of vegetables and fruits within the limits of the town vest in the respondent Committee or any other agency appointed by the Committee and no one except the respondent Committee is authorised to deal in wholesale vegetable s and fruits and collect the commission thereof in any place and in any event. The respondent Committee has by auction given the contract for sale of v egetables and fruits and for collecting the commission for the current year to t he respondent Bishamber who, it is alleged, has never dealt in vegetables and fr uits. The respondent Committee has not set up any market nor has it framed any b ye-laws for issue of licenses to the vegetable and fruit merchants. The bye-laws also provide for prosecution for the breach of any of the provisions of these b ye-laws. Although, in terms, there is no absolute prohibition against carrying o n business as wholesale dealer in vegetables and fruits, the result of the bye-l aws requiring the wholesale dealers to pay the prescribed fee of one anna in the rupee to the contractor who holds the monopoly is, in effect, to bring about a total prohibition of the business of the wholesale dealers in vegetables and fru its. (cid:29) In the background of the above mentioned facts the petitioner be fore the Supreme Court argues that his fundamental right guaranteed under Art 19 (1)(g) to carry on trade and business was infringed. The Supreme Court upheld th e contention and directed as follows :- (cid:28)[9] In this view of the matter the petitioner is entitled to a suitable order f or protection of his fundamental right. The prayer in the petition, however, has been expressed in language much too wide and cannot be granted in that form. Th e proper order would be to direct the respondent Committee not to prohibit the p etitioner from carrying on the business of a wholesale dealer in vegetables and fruits within the limits of the Jalalabad Town Area Committee until proper and v alid bye-laws are framed and thereafter except in accordance with a license to b e obtained by the petitioner under the bye-laws to be so framed. (cid:29)

17. The facts of the present case are substantially similar. The ord er dated 1-8-2007 passed by the 1st respondent herein, in substance holding that the private market being run by the petitioner herein and his father at an earl ier point of time should be settled by inviting tenders, is wholly illegal as it not only deprives the petitioner of his constitutional right to property recogn ised under Art 300A but also violates his fundamental right to carry on the busi ness, which is not otherwise prohibited by any law, on his own property. We cann ot really blame the respondents for their action in view of the language of Sect ion 107 of the Assam Panchayat Act. We are, therefore, of the opinion that Secti on 107 of the Assam Panchayat Act is plainly unconstitutional as it violates Art 300A and also Article 19(1)(g) of the Constitution.

18. Consequently Section 107 of the Assam Panchayat Act and Rule 47 of the Assam Panchayat Financial Rules are declared unconstitutional. The petiti oner would be entitled to carry on his business of conducting a cattle market on his private land. The respondents did not bring to out notice any other provision which requires any kind of a permission or licence to be obtained for running of such a market, from any one of the authorities of the State including the respo ndents herein except the provisions of Section 107 of the Assam Panchayat Act an d Rule 47 of the Assam Panchayat Financial Rules.

19. The writ petition is accordingly allowed.