M/s Maha Laxmi Fruit Company v. State of Haryana & Ors.

Judgment

1. To be referred to the Reporters or not?

2. Whether the judgment should be reported in the Digest? M.M. KUMAR, J. This order shall dispose of C.W.P. Nos. 9308 and 9399 of 2009 as common facts and questions of law are involved. In these petitions filed under Article 226 of the Constitution challenge is made to the common order dated 17.4.2009, passed by the Chief Administrator, Haryana State Agricultural Marketing Board (for brevity, ‘the Board’) rejecting the claim of the petitioner(s) for allotment of plots in the New Fruit and Vegetable Market, Pehowa. CWP No. 9308 of 2009 2

The petitioner(s) have also challenged vires of clause (iii) of sub-rule (1) of Rule 3 of the Haryana State Agricultural Marketing Board (Sale of Immovable Property) Rules, 2000 (for brevity, ‘the Rules’).

2. Brief facts of the case are that the petitioner(s) are Commission Agents carrying on their business of sale and purchase of fruits and vegetables in the Subzi Mandi (Vegetable Market), Pehowa, District Kurukshetra. They have license of Commission Agent issued by the Market Committee, Pehowa. In the case of M/s Maha Laxmi Fruit Company (CWP No. 9308 of 2009) licence was granted on 28.10.2005, whereas in the other case of M/s Durga Fruit Company (CWP No. 9399 of 2009) it was granted on 12.1.2006. The petitioner(s) have also furnished the details of their annual turnover and the market fee paid, which is as under: M/s Maha Laxmi Fruit Company (CWP No. 9308 of 2009) Year 2005-06 6,500/- 2006-07 18,000/- Annual Turnover Market Fee Rs. 3.25 lacs Rs. 9.00 lacs Rs. Rs. M/s Durga Fruit Company (CWP No. 9399 of 2009) Year 2005-06 2006-07 Annual Turnover Market Fee Rs. 2,66,000/- Rs. 5,326/- Rs. 4,92,050/- Rs. 9,841/- CWP No. 9308 of 2009 3 2007-08 2008-09 2009-10 (Upto 6/2009) Rs. 17,06,100/- Rs. 34,122/- Rs. 23,00,450/- Rs. 46,009/- Rs. 6,59,950/- Rs. 13,199/-

3. In 2007 land was acquired for the purpose of construction of a new Mandi. The draw of lots for allotment of plots to the old eligible licensees/Category-II licensees was fixed for

6.6.2007. Since by that time the land in question was not transferred in the name of the Market Committee, the draw of lots was postponed for 25.7.2007. The land was transferred to the Market Committee on

3.7.2007. The Chief Administrator of the Board decided the cut-off- date for establishing the eligibility of old licensees as 3.7.2007, vide letter dated 9.7.2007. The petitioner(s) applied for allotment of plots on reserve price claiming themselves to be old licensees of the old mandi. However, after scrutiny of their applications by the Allotment Committee they were not found eligible and their applications were rejected on the ground that they were possessing licenses for less than two years from the cut off date they did not fulfill the requisite condition of payment of Market Fee as stipulated in clause (iii) of sub-rule (1) of Rule 3 of the Rules. The lists of eligible and ineligible applicants, was displayed on the notice board of the Market Committee. The draw of lots was conducted on 25.7.2007.

4. Feeling aggrieved against non-inclusion of their names in the list of eligible applicants, the petitioner(s) preferred appeals CWP No. 9308 of 2009 4 under Rule 11 of the Rules before the Chief Administrator of the Board, inter alia, on the ground that it is obligatory on the part of the respondents to provide sufficient accommodation to the old licensees and their applications have been wrongly rejected. In support of their claim the petitioner(s) have placed reliance on the judgment of Hon’ble the Supreme Court rendered in the case of M/s Labha Ram and Sons v. State of Punjab, (1998) 5 SCC 207. The Chief Administrator clubbed all the appeals and by a common order dated

17.4.2009 rejected the claims of the petitioner(s) in light of the judgment of this Court rendered in the case of M/s Rozy Trading Company v. State of Haryana and others (C.W.P. No. 4175 of 2007, decided on 1.12.2008). Against the said order the petitioner(s) have filed the instant petitions.

5. In the written statements filed in respective cases on behalf of the Market Committee and the Board, the broad factual matrix has not been disputed. However, the respondents have disclosed different figures of the amount of market fee paid by the petitioner(s), which are as under: M/s Maha Laxmi Fruit Company (CWP No. 9308 of 2009) Year 2005-06 2006-07 Market Fee Rs. 5,625/- Rs. 17,553/- M/s Durga Fruit Company (CWP No. 9399 of 2009) Year Market Fee CWP No. 9308 of 2009 5 2005-06 2006-07 Rs. 5,326/- Rs. 9,733/- The respondents have justified rejection of the claim of the petitioners as they do not fulfill requisite conditions as laid down in clause (iii) of sub-rule (1) of Rule 3 of the Rules.

6. Having heard learned counsel for the parties and perusing the paper book with their able assistance, we are of the considered view that there is no merit in these petitions and the same are liable to be dismissed. In order to decide the controversy raised by the petitioner(s), it would first be necessary to examine clause (iii) of sub-rule (1) of Rule 3 of the Rules. The rule reads as under:- “(iii) only those category (ii) licensees shall be eligible for allotment of plots who had valid license of two years on the date of first auction, in case of mandis where since auction have already been held. In the case of already developed mandis where no auctions have so far been held, the licensee should have valid license of category (ii) for at least five years as on 1st January, 2000. In the case of mandis to be developed in future, the licensee should have at least two years license of category (ii) on the date of issuance of notification under Section 4 of the Land Acquisition Act, 1894 (Act of 1894), or the date of transfer of land to the Market Committee, if the land is obtained otherwise, as the case may be.”

7. The rule provides for eligibility for allotment of plots at reserve price for category (ii) licensees who had valid licence for a CWP No. 9308 of 2009 6 period of two years on the date of first auction. In case mandi is to be developed in future then also licensee of category (ii) should have at least two years licence on the date of issuance of notification under Section 4 of the Land Acquisition Act, 1894 or the date of transfer of land to the Market Committee if the land has been obtained otherwise.

8. In the present case obviously the petitioners do not answer the basic requirement because the land was transferred to the Market Committee on 3.7.2007. The petitioners were required to have obtain licence more than two years preceding the date of taking possession. Thus, calculated the date would workout to be 3.7.2005 or earlier. In para 2 of the judgment we have observed that the petitioner in CWP No. 9308 of 2009 was granted licence on

28.10.2005 and in the other petition (CWP No. 9399 of 2009) it was granted on 12.1.2006. They do not fulfill the requirement of period of two years preceding the date of transfer i.e. 3.7.2007. Therefore, they are ineligible. The petitioners have then submitted that clause (iii) of sub-rule (1) of Rule 3 of the Rules is violative of Article 14 of the Constitution. The object of the rule is to protect the old licensees from being uprooted from their old business. The object is not to encourage the greedy to acquire a plot and then sell it at a premium in the open market. It is well known that before a new market is to be established, representations are made, even objections are sent about site and the Government decision either culminates in a declaration under Section 4 of the Land Acquisition Act or the land is acquired CWP No. 9308 of 2009 7 and transferred to the Market Committee. In either case the general public becomes fully aware that a new market place is to be developed. In order to discourage the property dealer and to ensure that only genuine old licensees are allotted plots at reserved price the requirement of two years old licence imposed by Rule 3(1)(iii) of the Rules, is absolutely rational, fair and justifiable. Such like licensees (petitioners) have to go for open auction and purchase plot instead of expecting the allotment at reserve price. There is, thus, a valid basis for discrimination and that basis has a rationale nexus with the object of rehabilitating the old licensees in the new market area. The nexus theory propounded and developed by the 7-Judge Bench of Hon’ble the Supreme Court in the case of State of West Bengal v. Anwar Ali Sarkar, AIR 1952 SC 75, stands fully satisfied. The judgment has laid down two conditions, which are required to be fulfilled – “……(1) that the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others and (2) that that differentia must have a rational relation to the object sought to be achieved by the Act. The differential which is basis of the classification and the object of the Act are distinct things and what is necessary is that there must be a nexus between them ……”

9. The aforesaid principle has been applied, followed and reiterated in a large number of cases by Hon’ble the Supreme Court. The latest may be referred being Ashok Kumar Thakur v. Union of CWP No. 9308 of 2009 8 India, (2008) 6 SCC 1 and State of Bihar v. Bihar State ‘Plus-2’ Lecturers Associations, (2008) 7 SCC 231. As already noticed in the preceding paras these principles are fully applicable to the facts of present case and the provisions of Rule 3(1)(iii) does not suffer from the vice of arbitrariness. Accordingly, both the petitions fail and are accordingly dismissed. (M.M. KUMAR) JUDGE (JASWANT SINGH) JUDGE September 8, 2009 Pkapoor