Pukhraj v. Tht Stott of Gujorol

fl ve pt, titions umfor Art. 32 of tbe constitution, which am connected and will be dealt with together, raise questions a.A to the constitutionality of the Bombay Agricultural Produce Markets Act, Bombay Act No.XXII of 1939, (hereinafter referred to as the Act), as amended . by the Bombay and SauraBhtra Agricultural Pro duce Markets (Gujarat amendment and validating Provisions) Ordinance, No. I of l!l61 (hereinafter referred to as the Ordinance), arid the Rules and the bye-laws framed thereunder. They are a sequal to the judgment of this Court in Gulam Moliamined v. The State of Bombay ('), which was delivered on May 2, 1961. One of petitioners before us in these petitions was also a party in that petition, which was with respect to a market estabJished in Ahme In that petition the challenge to the con dabad. stitutionality of the main provisions of the Act failed but the provisions of certain Rules, namely rr. 53, 65, 66 and 67 wore held to.be ultra. vires In the provisions of s. 11 and s. 5A of the Act. consequence, a direction was issued prohibiting tho respondents in that petition from enforcing the provisions of the Act, Rules and Bye-laws agaill!!t that petition till a market the petit-ioners was established in law for that area under s.5AA levying any fe,, under e. 11 and from maximum wru; prescribed under the Rulce. Conse quent on that decision, the State of Gujarat amend ed r. 53 by notification dated June 23, 1961. Further the Ordinance wae promulgated on J unc 26, 1961, Ly which certain amendments were made in certain sections of the a.ct and a news. 2!!-13 was inserted in the Act validating certain acts or things done prior 'to the promulgation of the (I) [11162] 2 S.C.R. 6511, - 3 S.C.R. SUPREME COURT REPORTS . . 879 1962 J.1 ohamrn•dbhai Khudabu:c Chhipa v. The Stole ofGujora Wanchoo J. ordinance. The present petitions were filed there· after. the infirmity noticed in Four of tho petitions (namely, Nos. 226 to 229) are with respect to Abmedabad while fifth petition (No. 233) is with respect to Nadiad. Two of the petitioners of Ahmedahad are wholesale dealers while the other two claim to be retail dealers. 1'he contentions on behalf of the Ahme dabad petitioners are that the notification amended r. 53, offends Art. 14 of the Constitution and is therefore bad. It is further contended that though s. 5AA has been amended, the amendment is pros pective ; therefore earlier judgment of this Court still remains .and s. 29-B whioh has been inserted in the Act is insuffi cient to validate what had been done before the It is further contended Ordinance came into force. that the bye-law under which the market com mittee issues licences to A Class and B class dealers isdiscriminatory and imposes unreasonable restric tions on the fundamental right to carry on trade and business and is therefore bii.d. Lastly it is contended that the market committee insists on issuing licences for retail trade and this it. cannot do for control of retail trade is not within the provisions of the Act as held by this Court in the earlier judgment, and further in consequence the market committee is using r. 64 in a manner in which it was not intended to be used and therefore that rule though it was upheld in the earlier judg ment should be declared ultra vires. The majority of the petitioners in the Nadiad case are wholesale dealers but a few of them claim to be retail de&lers. These petitioners further challenge the constitutionality of the Act after its amendment by the Ordinance, and their contention is that the Ordinance makes radical changes in the main provisions of the Act and the basis on which these main provisions .were upheld by this Court 1161 JI ohammadhhai Kh11dalmx Chhipa v. The Stal< ojGujarot Wanclioo I. l I .. • ~so SUPREME COURT REPORTS (1962] SUPP. earlier, no longer applies, and therefore the Act as it now stands after the amendment is violative of the, fundamental right to carry on trarle and busi ness guaranteed under Art. I U( I )(g) of the constit.u tion as the restrictions placed by it on the said right are unreasonable. Further it is contended that rr. 65, 66 and 67 were struck down by th is Court in the earlier judgment as beyond the power conferred on the State under s. 26 of the Act. These rules therefore cannot be htold to be a part of the Rules in force now and in consequence it was not open to the markot committee to Act as pro· vided in these Ru leM. Lastly it is urged on behalf of one of the petitioners that he had paid licence foe 'to the market, committ~e and was entitled to a refund of that after the earlier judgment of this Court; but s. 29-B newly inserted in the Act which in effect deprives this petitioner of getting l·efund is invalid and illegal as it is against the provisions of Art. 31( I) .. Some other points have also been raised by tho Na.diad petitioners ; but as they arc not pressed, we shall not refer to them. The petitions have been opposed on behalf of the State and it has traversed a.II the points raised on behalf of the petitioners. It is not necessary to set out the grounds on which it is urged on behalf of the rcspondcntB that the contentions of the peti tioners have no force. These grounds will appear when we deal with t.he contentions raised on behalf of the petitioners one by one. Nor do we think it uccessary to set out the provious history as to the establishment of the market in Ahmeda.bad 118 that will be found in the earlier judgment ; nor is it necessary to set out the previous history as to the establishment of the market in Jl\adiad, for it is not in dispute that that history is similar to the history in the case of the Ahmedabad market. We shall therefore proceed to indicate the points which alone have been prnssed on behalf of the petitioners and then consider them one by one. 1962 ... Mohammadhh(li Khudabux Chhipa The State of Gujarat W onchoo J, ' 3 S.C.R. SUPREME COURT REPOR'rS 881 Some of the points are, not common; but as they have been raised in one petition or the other and these petitions have been dealt with together 3nd the decision on any point will effect even other petitions in which it has not been raised, we shall proceed on the basis that all the points have .been raised in all the petitions particularly as the learn ed counsel appearing in the various petitions adopt ed the arguments of one another during the hearing. The points therefore ·which call for decision are as below- ( I) Is the notification dated June 23, 1961 fixing the maximum fee to be charged hit by Art.14 of the Constitution ? ( 2) Does the insertion of s. 29-B in the Act suffice to validate acts or things done before the promulgation of the Ordinance? issues licences (3) Are the by-laws by which the market to A class and B class committee dealers discriminatory and thus offend Art. 14-, and do they amount to an unreasonable restriction on the fundamental right to carry on trade and busi- ness under Art. 19(l}(g)? · (4) Is the market committee acting beyond its power under the Act in requiring retail dealers to take out licences and is r. 64 bad on account of the manner. in which it is being enforced by the market committee? (5) Are the main provisions. of the Act after its amendment by the Ordinance liable to be struck down as an unreasonable restriction on the funda mental right to carry on trade and business under Art. 19( l )(g)? (6) 'Vas it necessary to re-frame rr. 65,66 and 67 under power conferred on the State Govern ment under s. 26; if so, what is thA effect of its not having been done? •\ 8s2 SUPREME OOURT REPoRTs (1962] SUPP. (7) Is s. 21!-ll bad in view of Art. 31(1) of the Constitution insofar as it prevents refuud of Jioonce fee collected before force? the Ordinance ca.mo 1962 Moha1nm1d;hai ICA.e.bux Chhipa . •. ~he Staie of Gujara& w ""'hoo J. Re (1). ' The notification is iu these terms:- " So. Ai'!U/061J/i!Oi07-E-In the exercise of the powers conferred by section 26 of the Bombay Agricultural Prm111cc .Jiarket Act, ID39 {Boru. XXII of l!Ji!9J, the Government of Gujarat hereby amends the Bombay Agri- cultural l:'roductJ .Jlarkct ltulcs 19·11 as follows namtJ!y:- "ln the said rules in ruic 5:!, for sub-rule (I) ex co pt in w:plaruition thereto tho following shall be su bstitutcd, namely:- ( I) "fbe Market Committee shall levy and collect fees on agricultural produce bought and sold m the market area at such rates as may be specified in the by-Jaws, sub ject to the following maximums, namoly:- ( 1) Rate when levied according to cart Joad shall not exceed 40 naya paise per ca.rt load. (2) Rate when levied ad vuwrem shall not exceed 40 naya paise per Hs. 100. (3) Rate when. levied according weight shall not exceed. (l} per quintal 15 naya pa.ise { 2) per Bengali Maund 5 naya pa.ise (4) Rate when levied .a~cording to. ~he number of containers contammg the agr1cul tural produce shall not exceed, - - (a) per bale of cotton 40 naya. paise •' ' (b) per gunny bag or 5 naya pa1se any other container, (5) Rate when levied in respect of cattle, sheep and goat shall and exceed per animal Rs.2.' By order.and in the name of Governor of Gujarat." -M ohammadbhai Khud®u• Chhipo v. The Stall of Gujara 1Vanchoo J. - The contention on behalf of• the petitioners is that the notification is discriminatory in two ways: in the first place; because it allowll foes to be collected by different modes, i.e., by cart load, by value, by weight and by containers. It is urged that it Is open to the market committee to levy fees on cer tain agricultural produce by (say) cart load and on certain other agricultural produce by (say) weight; and this is very likely to result in disorimina ti on. In the second p.lace, it is urged that the notification gives power to the committee to · Jevy fees on the same commodity by even two of the methods men· tioned therein. For example, it is urged that the same commodity, say, potatoes may be charged under the notification by the market committee both by weight and by cart . load depending upon whether they are brought into the market area in a oart, or for example, in a basket. It is said that there is nothing in the rule which prevents the market committee from doing so, and this may result in discrimination. We may however point out that the notifica tion by itself does not impose any fee on any com modity. What it does is to carry out the terms of s. 11 which require the maxima to be prescribed subject to which the market committee can levy fees on Agricultural produce. The imposition of the fees still remains to be made by the market committee under the power conferred on it by s. 11 subject to the maxima prescribed in the notification and therefqre the notification by itself cannot be ea id to be IU&orimin&tory. · • 1962 ]tf ohemmadbhai Khudabu:c Chhipa v. Tlir. Stoic ojGujorol WancAoo J. 884 SUPREME COUitT REPORTS [l962j SUPP. Let us, however, examine the two contentions raised on behalf of tho petitioners on the basis that though the notification may not actun lly impose fees on any commodity, it still allows discrimina tion to be practised by the market <'Ommittee, when it proceeds under s. 11 to levy fees within tho maxima preserihed by the notification. Taking the first contention, it may ho that by using one method in the caso of one agricul~ural produce and another method in the case of another agricultural produce, there may be some differenoo in tho inci dence of the fees charged, if one wern to judge that incidence on the ha.sis of only one of the modes pres cribed in the notification. But th1Lt in our opinion cannot be said to result in discrimination for each produc<' must for this purpose be treated to be a. class by itself. Therefore, so long as the market committee uses one method of levying fee with to one kind of agricultural produce, it can respect not be said that it if it uses is discriminating another method· for levying fee on another kind of Agricultural produce. It is well known even in svstems of taxation that taxes arc levied with diff. e~cnt incidence dependi11g upon the nature of the article taxed, and a fee levied und!'r s. I I is only . the exercise of the power of taxation using that word in its widc3t sense. Therefore, the fact that und<>r this rule, the markot committee may levy fees by one method on one agricultural produce and by another method on another agricultural produce will not ho a ground of discrimination, for each commodity must bo treated as a class by itself. - Turning now to the second contention, it is true that there is nothing in the rule expressly to prevent the market committee from using two of the modos prescribed therein for the purpose of levying fees on thv s·1me agricultural produce. It must be rcmem bercd however that the rule is a. gt•neral provision levying fees within 1962 •• Mohamm odbhai KhudabU< Chbipo The Stat' of Guj•rat Wanchoo J. - a s.c.R. SUPREME COURT ·REPORTS 885 maxima prescribed on the.agricultural produce by market committees in the market areas all over the State. Various methods of levying fees have been included in the rule, for we assume that the rule making authority kriew that there wore various in which things are brought into various market areas. The rule is meant to apply to .all situations that may arise in tho State and there things may be . m;i.y be different ways in which brought to the market areas in difforent parts of ~he State. That is why the rule has a wide sweep and allows the market committee to levy fees either by cart load, or by value, or by weight or by containers. It may be that if for the same agricul tural producii fees are levied subject to the maxima two different modes, the rates fixed may result in discrimination. It would however not be impro in r to assume that in framing the bye-laws in whioh pee rates for any particular agricultural produce .thll be fixed the market committee shall pay due wigard to the prohibition against discrimination rentained in Art. 14 of the Constitution. The prac cocal consequence of this is likely to be that for one tigricultural produce the market committee will fix ane rate only in one of the four modes: If that is oone no discrimination can be said to arise. It will dot also in our opinion be unreasonable to think nhat in issuing the notificathn the Government tproceeded on the assumption that for any particular agricultural produce one mode of fixing fees whether according to cart load or according to value or according to weight or according to the number of containers-will be adopted. Nor would in one of the it be difficult if the rate modes, say according to cart load, to calculate the fees to be levied where the produce is brought in aey other manner, say in baskets, for then the proportional fee can bo charged on each basket on the basis of so many basket-fuls being equal to QIJ.e ca.rt loa.q. Si~ilarl~ wqere t4e b,Ye-lii.w fi~e~ is fixed 1962 .. MoMmtnodbhoi Kllld.tux Chhipa 1hf: Stal1 of Gujarat W1nchon J, - 886 SUPREMECOURT REPORTS (1962] SUPP. the fees according to containers and a dealer brings the produce in cart load, it will be possible to cal culate the fco due on the basis of containers, by calculating how many containers would be equal to one cart load. Where the fee is fixed by weight or value there w<1uld he no difliculty in any case. conclude that reasonably Therefore one may the market acting committee when s. l l read with the notification will levy the fees on a single commodity in one only of the permitted If that happens in actual practice there modes. will be no question of any discrimination. But assume that a market committee chooses to adopt two modes for levying fees on tho same agricultural produce, sny one according to cart load and another according to weight, In such a case a question may arise whether there is discrimination in the incidence of fees. That question may have to be considered if and when it arises and whether discrimination actually arises in such a case will depend upon the rates fixed by the market commit tee for levying of foes on the same agricultural produce in the two modes that it might choose. If the rates are RO fixed that the incidence is substan tially the same whether the fees arc !•~vied on the basiR of cart load or on the basis of weight, there will be no discrimination. On the other hand if the rates are so fixer! that the incidence works out substantially differently there will bo a case of dis crimination and in such a ease it is the bye· law that will have to il<l struck down as being discrimi natory for the act.ual imposition of fees will be made by tho bye-law fra.mecl hy the committee and not by the impugnod notification. Tho chances howevor of fixing two modes for the levy of fees even on the same agricultural produce in such a way as to result in discrimination are in our opini on so remote that the notification cannot be struck In sqc!J clown on that account as discriminator>'. 1968 •• M Dhammadbhai Khudabwr Chhipa '/he State ofQujaral Wanchoo J. 3 S.C.R. SUPREME COURT REPORTS 887 a case it is not the notification which will have to be struck down but the actual bye-law if it prescri bes rates of fees in two modes in such a way as to result in discrimination. Turning now to the facts of the present case we find that the bye-laws framed by the market committees have fixed only one mode of levying fees in these cages for one kind of produce. It is not the petitioners' case that the market commit tees with which we are concerned in the present cases have used more than one mode for levying fees on the same agricultural produce. There is therefore no case for discrimination made out on the basis of the actual bye-laws which have been fra med by the market committees under the power conferred on them under s.ll read with the notifi· cation. the attack on the notiffoation on the ground of discrimination must fail. Re. (2). Iu these circumstances, Sub-section ( 1) of s.29'.B provides that in the case of a market area declared before the commen cement of the Ordinance, a market for such market - area shall be deemed always to have been establi shed for the purposes of the Act. with effect from the date on which a market yard for such market area was declared for the first time under the R.u!es or the Act and such market shall include and shall be deemed always to have inc>luded the said market yard. By this provision the defect that was point ed out in the .earlier judgm\)nt with respect to the establishment of a market is intended to be validat ed. The sub -section further provides that any action taken or anything done by a market com mittee or any other authority after the establish ment of a market therein as aforesaid but before the commencement of tbe Ordinance, which but for the provisions of this clause would have been i~valid, shall be and shall be deemed alwa, YS to 19GZ .«11hommadhhai Khudahux Chl, ip• - v. Th, Stott of GujGral Jf ON(ht>O J • - 888 SUPREME COURT REPORTS [1962] SUPP. have been valid ann shall not bo called in question merely on the ground that no market w11s establi shed for such market arna when ~uch action was taken or thing done. 8uh-scction (:!) then provides that any fees leviocl and r:nlle0t~d on agricultural produc~ hought :ind sold in 11 market area before the commencement- of the Ordinance by a market committee at the rates spc.cificd in its bye-laws shall be deemed to have been validly levied and collectod and such levy and collection shidl not ho called in question merely on the ground that at the time of such levy and collection no maxima were prescribed as required by s. l I. The intention of this provision is to cure the defoct which was noticed in earlier judgment inll. Smuch as no maxima h~d been prescribed under s.11 by the State Government. Sub-seotion (3) finally provides that all licences issued to operate in a market area or any part thereof and fees charged therefor before the com mencement of the Ordinance hy a market committee under the Hules and bye-laws and any action taken or thing done relating to li"ensing of personR, or obtaining of a licence, to operate in the market area or any part thereof, taken or done hy a market committc" or any other authority or p1~raon nndor the Hules and bye-laws before t.ho commencement of the Ordinance ~hall be• and 11hall be deemed always to have been \-alid and the validity thereof shall not be called in question merely on th~ ground that when such action wa11 taken or thing done, the power rio-ht or obligation therefor was not duly conferred o; imposed by the Act on such market committee, authority or person. This provision is intended to the defect arising from rr.(i!i and fi7 being declare<! 1dtm vire.s by thio Court in its earlier judgment. The contention on hohalf of the petitionerR is that these provisions are iJlsutTiciont to validate 196~ Mohammadbhai Khudabux Chh;;pa v. The State of G1yarat Wanchoo J. 3 S.C.R. SUPREME COURT REPORTS 889 the defects which were noticed in the earlier judg ment of this Court itrnsmnch as the relevant provi sions of tho Act and the Rules have not been retrospectively amended. We s~c no force in this argument, for the provisions as they stand certainly validate the defects pointed out in the earlier judgment of this Court. It is true that the relevant sections and the Rules have not been retrospec tively amended by the Ordinance, but this in our opinion was unnecessary. Retrospective amend mant may be necessary when it is desired to change the law; but it seems that so far as s.11 is concern. ea, the legislature did not intend that the control of the State Government over levy of fees should be done awity with for the future also. Therefore, all that was necessary in that respect was to validate t):te past actions and this is specifically provided for by snb-ss.(2) and (3) of s.29-B. As for the establish ment of market committees, an amendment has been made in s.5.AA of the Act deleting the provi sion by which a market could be established.only if so required by the State GovPrnment. This amend It could have been made ment is prospective. retroepective also and in that case sub-s. ( 1) of s.29-B may not havo been necessary. The legisla ture, however, adopted the method of amending s.5-AA prospectively and .making a separate provi sion for validating the establishment of markets in sub-s. (1) of s.211-B. We see no reason why it should be held that the validation made by sub-s.(l) is not sufficient because the legislature has adopted one method rather tha,n the other for carrying out therefore of opinion that its purpose. We are s.29-B is sufficient to cure the defects pointed out in the earlier judgment of the Court and to validate · actions taken and things done before the promulga tion of the Ordinance '.vhich would otherwise have been invalid in view of the earlier judgment of this Court. The contention on this head must · ·. ii. Jso be rejected. · 890 SUPREME COURT REPORTS [1962) SUPP. 196t Re. (3). M,,._modbhai 1171""4!ia Chippa •• TM Blatt of Guj4rat W onchoo J. retail Gnder the bye-laws as they now stand two classes of traders are mentioned. namely A class traders and B class traders. A class traders are those who hold licences to buy and/or sell agricul tural produce in quantities not below 10 lbs. in the market yard, and tho liconce-fee which they have to piiy per year is Rs. 75. B olass traders are those who have licences to buy agricultural produce in quantities not below 10 lbs. in the market yard and to sell to consumers anywhere in tho market area. They have been divided into three classes, namely, (a) shop-keepers, (b) /,ari holders, and (cl Toplawala (hawkers), with a licence-fee of Rs. 12, Its. 6 and Rs. 3 respectively. It is urged that th, is amounts to discrilllination bet ween A class an<l B class traders inasmuch as A class traders are chari;e<l much higher fees than the B class traders. It is however clear that there is a basis for clruisification between the two classes of traders. A class traders are those who can both buy and sell agricultural produce in the market yard while B class traders can only buy iii the It is submitted markc•t yard but cannot sell there. on behalf of the Sui.tc Government that H class traders arc those perHons \yho generally sell in retail to consumers after buying wholesale in t.he market yard from A class traders or· producers. The reason why B class traders have been permitted to buy in the market yard is to allow for competition, as otherwise there woulcl have been a monrpoly operate in a particular market yard. This classification in our opinion is reasonable. A cla 0 s traders are wholesale traders who are permitted both to buy an<l sell in the market yar<l and arc thus charged a higher licence-fee. R class traders are ordinary ro tailers who in order to carry on their retail tmcln are permitted to buy in the 'market yarcl but they are ~ot permitteq to sell there. They are small traders few A class traders who 196S Mohammad61lai Khutlabux Cliliipa v. Tht St.te of Gujarat Wanehaa J. 3 S.C.R. SUPREME COURT REPORTS 891 and are therefore charged lower licence fees. It appears to us that in order to avoid the monopoly of A class traders, who are a few in number, with the result that prices might be depressed by such traders, B class traders are permitted only to buy in the market yard on payment of a small licence fee in.order that the producer who brings his pro duce in the market yard may have a fair price. We to hold that there is any see no reason therefore discrimination in creating the two classes of traders, for there is a fair basis of .classification of traders into A class and B class. Nor can this restriction be deemed to be an unreasonable restriction on the right to carry on trade and business, for such regulation is obviously envisaged by the Act in order to carry out its purposes and this Court has already held· in the earlier judgment that the Act is a valid piece of legislation. It is unnecessary to repeat the reason given in the earlier judgment, where it was held that the restrictions placed by the Act, Rules and Bye-laws framed thereunder are reas..,nable restric tions in the interest of general public. It is however urged that B olass traders are allowed to sell to consumers anywhere in the mar ket area whereas A class traders ar.e not so allowed. It has already been held in the earlier judgment that retail trade iH not controlled under the Act . . Therefore, the fact that the bye-law has added the words "to sell in retail to consumers anywhere in the market area" in the case of B class traders is of no consequence, for B class trader8, ns they are retailers, would be entitled in any case, without be the Act, to sell to consumers ing controlled under anywhere they like. It is not the addition of these words which gives that right to B class traders, for that right of theirs is not controlled by the Act and to exercise it without the they would be entitled addition of these words, which we consider ns sur plusage in tJie circumstances .. As for A class traders • 1962 •.. Mohommadbhai KAudabwr ChiPP• Tht Stal• of Guj•lfol WanchoO J. 892 SUPREME COURT REPORTS [1962] SUPP. they are admittedly wholesalers and there is no queAtio11 of their selling in retail. We aro therefore of opinion that tho addition of the words mentioned above wit.h respect to B class trader• iH a more ~ur­ plusago and makeR no difference to tho basis of classification. There is no forco therefore in the contention under thi8 head and it must be rejected. Re. ( 4) . . It is next urged .that the market committee is attempting to control retail dealt1rs and requires them also to takn out' licences, and thiH it is not authorised to do, as this Court has already held in the earlier judgment that retail trade is not within the ambit of the Act. This argument is based on the use of the words "to sell in retail to consumers anywhere in the market area" in connection with B class traders. It is said that in this way the market. committee i.'l controlling ret'lil trade also under the Act which it 011.nnot do. We are of opinion that this cont{lntion )11\s no force. 13 class traders are requi red to take out licencrs in order to buy agricultural produce in quantities not below 10 lbs. in the market yard. The licence in our opinion is not. meant to permit thorn to carry on retail sale anywhere in the market area. AA we h1tve said already these wordR are a mere surplnsage and the r<ial purpose of the liccncP grankd to 13 class tradcrR is to prrmit them to buy in t.hc market vard and thus control their It. iR activity in connection with. wholesale trade. urgf'd, 'however, that no provision haR bcon made under s.2(ix a) of the Act to define the limit of retail sale under any bye-law. that no It is true that purpose has been made Bpccific provision for but whP-n the limit of 10 lbs. is fixed below which no transaction can take place in the market yard it is some indication of what is tho limit of retail s;ile. In any case the bye· laws which provide for A class and 13 class traders, indicat<> the limit below which t)1ey cannot trade in the market yard and this c)Qarly 196Z M ohammadbhai Khudabux Chhipa v. The State of Guja,0 1 WanchooJ. :s.c.:R. SUPREME CoURT REPORTS 8!i3 shows that the intention of the market committee was not to control retail trade by the issue of lice nce to traders for the large proportion of retail trade may well be below 10 lbs. for each transaction. We cannot therefore accept the contention of the· peti tioners that thti bye-laws by providing for A class and B class traders are really providing for control of retail trade. It is clear that B class traders can only buy in the market yard but cannot sell there and as for sale, they will be entitled to sdl in retail wherever they like, for the Act does not con trol retail trade. As for r. 64, it inerely provides for incidental powers ;n connection with the regulation of market yards and it has already been held valid in the ear lier judgment. We see no reason to hold that that rule is invalid on the ground that the market com mittee is using that rule to control retail trade. We have already pointed out that the market committee cannot be said to control retail trade by providing for A and B class licences and there is no question therefore of r. 64 being used in a manner not inten ded thereunder. Lastly, it seems that there is some dispute by some petitioners in Petitions Nos. 228 and 229 as to whether they hold certain shops in the market yard from the municipal committee or must be deemed to hold them from the market committee and what rights the market committee has over those peti tioners in that connection. It appears that there have been suits in courts with respect to that dis pute. That is a matter which in our opinion has to be decided by the courts where the suits are said to be pending and cannot be the subject of adjudica In any case r. 64 tion in a petition under Art. 32. cannot be declared bad because of any dispute be tween the mnrket committee, the municipal com mittee and stall holders as to their respective rights _, 1962 Mo"4mmdbhai Kludobtu CllMH• •• Th4 State of <lujorat W-.looJ, 8114 SUPREME COlJRT REPORTS (1962] SUPP. over the stalls in the market yard. There is there fore no force in this contention either and it must be rejected. Re. (5). The main coutention under this head ii that the main provisicns of tho Act havt' been so amen ded by the Ordinance that the ha.sis on which this Court upheld the provisions as constitutional no longer exists and therefore the Act as it now stands aftRr its amendment by the Ordinance is an unrea sonable restriction on the right to carry on trade>. This cont<·ntion requires a .consideration of the pro visions of the Act as they stand after tho amend ment by the Ordinance nnd it will have to be seen whether there has been any radiral rfoparture from the scheme of the Act as it was before the amenrl ment. If there has been no radica,l departure after the amendment and the control envisaged by the Act as amended is still the same, as it was before the amendment, the basis on which tho earlier judg ment of this Court upheld the main provisions of the Act would still apply, and the Act as amended would ho constitutional. Let us therefore see if there has been any radical departure from the main provisions of the Act as they stood before the amendment. The Act still deals with the regulation of purchase and sale of agricultural produce and establishment of markets for such produce. Section 3 stands unamended and provideR for the eonstitu-. tion of market areas and market committees and gives power to the Commissioner by notification to declare his intention of regulating the purchase and sale of such agricultural produce and in such area a.s m1Ly be specified in the notification. Section 4( I) is also unamended and gives power to tho Commies ioner after holding such inquiry as may be necessary and eonsirlering the objections and suggestions if any made after the notification under s. 3 to declare 111J2 ftl ohammedbhai Khudabux Chhipa •• The Stall of {}ujaraf WanchaaJ. \ . 3 s.d.R. SuPREME COUBT REPORTS s95 a particular area as a market area for the purposes of the Act. There has been some amendment in s: 4(2) but it is not of a radical character and does not make any difference to the main provisions of the Act. Section 4-A has also been amended by pro viding for declaration of a market proper and con sequential changes necessary due to such provision. This amendment only brings into the Act what was formerly in r. 51. This amendment also therefore makes no radical change in the Act. Section 5-AA has also been amended and the, provision which made it necessary for the State Government to require a market committee to establish a marke thas been deleted. Section 5-AA as it now stands makes it the duty of the market committee to enforce the provisions of the Act etc. and when a market is established thereunder to provide for such facilities in the market as tho State Government may from time to time direct in connection with the purchase and sale of agricultural produce with which it is concerned. The change in s. 5-AA therefore is also of an incid, ental character and does not in any way affect the· scheme of the Act as it was before the amendment. Section 5A has also been amended and it now reads as follows:- "Where a market is established under section 4A, the market committee may issue to tra licences in accordance with the rules ders, commission agents, brokers, weighmen, measurer~, surveyors, warehousemen and other persons to operate in the market area or any . part thereof." The main argument of the petitioners is based on thi~ amendment. It is urged that under the unamended Act after a market was established the market com· mittee had to issue licences for operation in the market so that the business of sale and purcha, se of agricultural produce was concentrated in the market which consisted of a principal market. yard and 1962 ilt u hammufflhoi Khud .bux Cl1hipa v. The Slot! o/Gujnrat IV am/Joo J, 896 SUPREl'lfE COURT REPORTS fl962) SUPP. the con is urged Now, however, 0·1·~ )'." mrJre 811\J-markct yards with Sllquent a<lva.ntage to the. agricultural producer that they had a place or places where they could find a large number of buyers for their produce and could thus secure fair prices under regulated conditions. under s. 5A it is open to the market committee, after tho market is established under s. 4A to traders and othor to operate in give licences the market area or any part thereof with result that it would not be necessary to have a principal market yard or sub-market yR.rds. Tber" would be some for"e in this argument if we were to ignorn tho rules fmmud under the Act. Ilut the rules which were framed by the State Government are still the same. Huie 51 provides for the dec laration of market yards and market proper by the State Government. Rule 60 provides that all agricultural produce brought into the market shall pass through the principal market yard or sub-market yards and Rhall not subject to the provisions of Rub-r.(2), be sold a.t any place outside such yards. The only exception to this is sub-r.(2), which providcA that proceed agricultural produce may be sold either in the principal market yard, or sub-market yard, or in the market proper, or in the market provisions of the bye-laws. The reason for this distinction is clear, for where produce is to be pro cessed, as for example, ginned cotton, it bas to be taken to a ginning factory in which case it would be most inconvenient to bring the produce to the market yard for sale and that may also add to the price by further transport charges. Heading s. 5A therefor!" a.long with the Rules, it is clear that the present provisions are materially the same as tho agricultural produce (except that which is processed) shall have to 1mss through the principal market yard or suh-Jllarket yards and be sold there. Tho only difference that the amendment has mad0 accordance with /Y62 M ohammad61rai Khudabux Chhipo v. The State of Oujatal Wonchoo J, 3 8.C.R. SUPREME COURT REPORTS 89, is that whereas formerly under s. 5A traders could only operate in the market by virtue of the pro-· visions o( the Act, now they will op~rate in the market by virtue of the provisions of the Act read with the Rules. The rules, however, are still the same and therefore in effect t,he provisions of the Act and the Rules read together still provide for the same kind of regulation which was intended under the unamended Act. It is urged that it will be open in ·the future for the. market committee to do away with the necessity of having market yards and sub-market yards and concentrating wholesale trade only in market yards and sub market yards in view of the provisions in the amen ded s.5A, for the market committee would be entitled to issue licences in accordance with the Rules in case they are changed to traders etc. to trade in the market area or any part thereof .. It will be seen however that the power to change the Rules is not in the ma<ket committee and until the Rules are changed the position as it was under the unamended Act would remain the same. We have no reason to suppose that the State Gov ernment intends to change the Rules as they are now and to permit the market committee to grant licences under s. 5A for trade anywhere in the market indiscriminately. It is true that such a possibility can arise . if the State Government changes the Rules as t]Jey exist at present. But there is no reason to suppose that such a change is in tended. So long therefore as the Rules stand as they are, there is no radical departure from the scheme of the Act as it was before its amendment and the reasons which impelled this Court t.o up hold the Act and the Rules framed thereunder would still hold good. If and when the Rules are so changed as to make a radical departure from the present position, a question may well arise whether the scheme of control envisaged under the • }JohGmmadblloi Kliulabux Chliipa v. Tiu Slolt of ~ojorol ll'411choo J. 898 SUPREME COURT REPORTS [1962] SUPP. Act has failed in its purpose. It may then be nece- the ru !es . esary to <l<'cidc whether the Act and framed thereuuder are urwonstitutional; hut so long as the rules st.ind aR they arc, we have to read s.5A along wit.h the Hules, for licences are issued under that section in accordauce with the Rules, and readings. 5A and tbe present Rules together it must be held that there has been no radical drparture from the scheme of the act ail it was before the amendment and therefore the reaRcms which impelled this court to uphold the Act, Rules and bye-laws framed under it in the earlier judgment still stand. Hesi<l<~ this main argument certain subsidiary contentions am also urged on hch11lf of the petitioners to challenge the co11stiWtionality of thci act, and the Rules framed thereunder on the ground that it was an unreasonable restrict.ion on the funda.mentnl right to carry on trade or business. It is urged that a trade1: who has busineHs all over the St.ate may have to take 80 or morn licences to trade in tlift'c rent market area.; and that will mean a heavy burdon on b_im resulting in increase in price of agricultural produce. This in our opinion is a theoretical con· sitleration and in any case if a tr; tder is so big as to carry on trade in all the 80 or more market areas establishetl in the State we see no reason why he should not take licence in each market area. He will be in a position to bear the burden and it need not necessarily affect tho price of agricultural pro duce seriously. Then it is urged that the Aet affects transaction8 between traders outside the market areA. We have not been able to under stand what exactly is weant by this. It is only when the sale takes place within the market area that tlie produce has tu pass through the principal market yard 01· sub-market yard, but if a trader gets something from ou t"ide the market area and the sale takes plal'e on t ,;jd,, the market area and the thing is brought in to the market 1~rea by the trllill suction will not trader after the purchase, such \ L .. 1VG2 M ohammadbhai Khudaiwc Chhipa .. v. The Stole of Gujarat Wanchoo J. 3 s.d.R; SUPREME COURT REPORTS s99 be subject to any fees, for fees have only to be charged on agricultural produce bought and sold in the market area under r. 53 read with ·s. 11. But where the sale takes place outside the market area 1md the commodity is merely brought into the market area by· the wholesale trader, the.re will be no question of any fee being charged on that trans action; of course, if there is a further sale in the market area or in the market yards by the wholesale trader to some one locally that may be liable to foe. We do not see how iii the circumstances tt can be said that this is a case of unreasonable restriction 011 the right to carry on trade and business. Next it is urged that the provisions in the Act also affect transaction between traders .and traders, and also affect produce not grown within the market area if it is sold in the market area. That is undoubtedly so. But if control has to be effective in the interest of the agricultural producer siich incidental control of produce grown outside the market area and brought into the market yard for sale is necessary as otherwise the provisions of the Act would be evaded by alleging that the particular produce sold in the market yard was not grown in the market area. For the same reasons transactions between traders and traders have to be controlled, if the control in the interest of agricultural pro ducers and the general public has to be effective. We are therefore of opinion that the Act and the Rules and Bye-laws thereunder cannot be struck down on this ground. The. contention uuder this head therefore must fail. Re. (6). -. , I The next contention is that rr. 65, 66 and 67 were struck down by this Court in the earlier judg ment and have neither been reframed nor validated by the Ordinance. Therefore, these rules do not exist. Consequence of this, it is alleged, is that it • 1962 Moltamm•dhhai n·hudabux CJihipa v. 1/u Stal< ojGuja•ol If anchoo J. OOo SUPREME COURT REPORTS [1962) SUPP. is not open to the market committee to licences which were provided by these rules. Rules 65 provides tba.t no person shall do business as a trader or. a gener·il commission agent in agricultural produce m any market area except und1fr a licence granted by the market committee under this rule. Huie 67 prov id~s that no person shall do business as a trader, oommissiou a.gent, broker, weighmen, meas urer:, surveyor, warnhouse-man or operate in any other manner in any m11rkct area except und·er licence granted by. the market com"litl.ee. It is urged that licences aro granted under these rules read with s.5A, which now provides that where a market is ustablished the market committee may issue licences in aceordanco with rules to traders, commission agentll, brokers ete. to operate in the market area or any pint thereof. Sc<,tion 5A, it is urged, is a mere enabling provision and becomes effective when the ruleE are framed and that licences under the enabling provisions of s. <iA are to issue in accor dance with the rules; and if there arc no rules as to the enabling provisions of s. 5A issue of licences cannot be availed of by the market committee to require the taking out of liocnces. It is rr. 65 and 67 wbich prohibit business in the market area. without taking licences anrl provide for the manner in which applications for licence shall b,. made, the period for which tlie licence shall remain valid and other incidental m;itters. It is urged that as these rules were struck down by this Court and ha vo nei ther been re-framed nor validat«d under the Ordi nance there is no power in the market committee to require traders to take out. licences merely be cause s. 5A enables it to issue licences. The. argu ment on behalf of the State is that even though these ;r. 65 and ()7 were struck down because they were in consistent withs. 5A as it 8tu1)d before the amend ment, now that s. 5A has hc<'n amended these rules must be held to have reviv'cd and reliance in this connection is placed on certain decisions of ._ I 19GB •• Mohommadbhai Khud•bux Chhipo The State of Gt1jllfat Wonchoo J, I . 3 S.C.R. SUPREME COURT REPORTS 901 this Court where it w:1s held that an Act ·which was valid when it was passed before the Constitution came into force and some provisions of which be came invalid for certain purposes in view of the provisions in the Constitution relating . to funda mental rights and Art. 13 thereof, became wholly effective again when the Constitution was amended and the inconsistency with the fundamental rights removed. This principle was laid down by this Court in Bhilmji Narain Dhakras v. The State of Madhya Pradesh ('), in these words: "The true effect of Art. 13(1) is to render the fundamental an Act inconsistent with right inoperative to the extent· of the inconsis tency. It is over-shadowed by the fundamen tal right and remains dormant but is not dead. With the amendment made in clause (6) of Art. 19 by the First Amendment Act, the pro visions of the impugned Act .were no longer inconsistent therewith and the result was that the inpugned Act. began to operate once again from the date -0f such amendment with this difference that, nnlike amended clause (2) of Art.19 which was expressly made retrospec tive, no right~ and obligations could be founded on the provisions of the impugned Act from the date of the commencement of the constitu sion till the date of the amendment." This matter was further considered in De,ep Ohnnd v. The State of Uttar _Pradesh(') and it was held by majority that "there was a clear distinction bet~een the two clauses of A.rt. 13. Under cl. (I), pre-Constitution law subsisted·e~cept to the extent of its inconsistency with the provisions or Part III whereas under cl. (2) any post Constitution• Jaw contravening those provisions was a nullity from its inception to the extent of such contravention," and (I) (1955) 2 s.c.R. 589. (21 (1955) Suppl. 2 s.C.R, 8, . ... 19~1 Mo"4mmwlb/uJi KJmddux CMipa v. T"' State of a,.Ja"u lY1n~hoo J. 902 SUPREME COURT REPORTS (1962] SUPP. therefore a. law which was bad ab initio under Art. 13 (~) either wholly or to the extent of the con travention could not be revived by tho application of the doctrine of eclipse and the doctrine could only apply in the case of a law that was valid when made but was rendered invalid for certain purposes by a supervening constitutional inconsiotency. The argu ment on behalf of the State is that if rr. 65 and 07 were valid when they were first framed and became invalid on the introduction of s. ;)A in the Act, they became cffecti ve again when s. 5A was amended by the Ordinance. · It has not been disputed in this case that the doctrine of eclipse applies to cases of rules. The . only dispute was whether rr. 65 and 67 in the preB ent form were in existence before 1953 when s. 5A was inserted in the Aet and if so w hethn they were valid in that form before l 9ii3. Time was taken by tho parties to trace the history of the Act and theBe two rules and the form in which the Act and these rules stood beforo 1953. Investigation in this matter shows that rules were frame<! for the first time in 1941 after the Act came on the statute book. Rule 65 (1) was in the same form as it existerl when it was struck rlown by the earlier judgment. Rule 67 (1) was also substantially in the same form except that it did not originally include a trader or a com mission agent or warehouseman as it did at tho time when it was struck down. The addition or tho words "tho trnders and commission agents" in r. 67(1) is however not material, ,for these classes were already covered by r.65( I). As for the werrhousemen which were adrlerl sometime later to I'. 67( I), that addition need not detain us because we arc not concerned in these petitions with warehousemen. So it seems that r. 6ii (I) and r. fi7 (1) were practically the same when they were first framed in Hl4 l as they existed when they wem struck down. The Act as originally passed in 1939 dirl not. ()Olltain a section like s.5A. 'J.'4e scheme of the ;\ct the11 was tllat qnder e. 4 ( 2 ) , 3 S.C.R. SUPREME COURT. REPORTS 903 i 9as Moha=adbhoi Khudabux Chhipa the Government alone could grant licences for sett- ing up any place for the purchase and sale of agricul- ture produce notified under the Act and thereafter under s. 5 it was the duty of the market committee · The State :j Guja,.1 established under the Act for every market area to enforce the provisions of the Act afld the conditions of the licence granted by the Government setting up a place as above and to establish a market there- in, if so, required by the Government. Section 26 gave power to the Government to frame rules for the purposes of carrying out the provisions of the Act. Sub-section (2)(e) and (f) were as below:- Wanclioo J. · - - "(2) In particular and without prejudice to the generality of the foregoing provisions such rules may provide for or regulate:- .............................................................. the maximum fees which may be levied by the market committee in respect of licences granted to traders and on the agricul tural produce bougFit and sold in the market area and the rerovery of such fees; (e) ( f) the issue of licences to brokers , weigh men measures and surveyors the form in which and. the conditions subject to which such licences shall be issued or renewed and the con ditions subject to which the licences shall carry on their business and the fees to be charged therefor." 1 It will be seen that these provisions by whichc rules could be framed for grant of licences did not confer power for issuing licences only for the market established under s.5 ris it originally Rtood. These powers were general in terms and the Government could frame rules empowering the market commi ttee to issue: licences for carrying on business through out the market area. Rules 65 (I) and 67 (I} there fore would be within the power granted to the ~tate GovernlJlent unqer s. 26 w4en the;r were 904 SUPREME COURT REPORTS [1962] SUPP. }962 Jlohammadbhai lrhuda/Jux Chhippa v. 7 ht Stale of Gujarat. IY "'-"°" J • originally framed in l!l4 l and would thus be valid then. Then we come to tlw amendment of the Act in I !M8. By this aruenrlment, clauses (e) and (f) of s. 26(2) wnc combined in one and were numbered as sub-s. (2)(f), which runs as follows:- ( f) (2) Tn particular and without prejudice to the generality of tho foregoing provision such rules may provide for or regulate:- ................................ ' .......................... . the isAue of licences to traders, eom miHsion agents, warohousemf'n and other per sonR operating in the market, brokers, weigh men, measurers and surveyors, the form which, and the conditions subject to which such licences shall be issued or renewed and the fees to be charged thnefor;". It will be seen that tJiough the words "market area" do not appear in this provision, it is still of a gt1neral nnture nnd does not restrict the.operation nf the licence only to the market.'I So rr. li5 and Gi won Id not he incnnsistent with it. Then we eome to the amen<lmPnt. of 1953 which introduced s.5A · ( ftR it was lwforc th" amend ment hy the Or<linnnrn) in the Act and that pro vided that "whcrn a market is established uncfor s.5, the market commit.tee may issue licences in acc ord1mce with the rules to traders, commission agents, broktirs, wcighmen, mea.surers, surveyors, ware in tho hous1·mcn and other persons t.o operate market." This section was ~onsidered in the earlier judgment and it was held thore on the bnsis of this Rection that rr. (j,; and 67 when they gavo power to the committee to issue licences for operation in the mark1•t arPa. as distinguished the market were bad after the enactment of s. 5A. J 3 S.C.R. SUPREME COURT REPORTS 905 'It is howaver clear from the above narration of facts th1.t r.fi5(1) and r.67 (I) were valid when they were originally framed and remained valid till s. 5A was en 1cte:l. in 195:1 and became bad on the insertion of s. 5A in the Act. Now that s. 5A has been amended by the Ordinance, rr. 65 and 67 are obviously in conformity with it, r. 66 being merely oonsequential. Therefore revive by the application of the doctrine of eclipse as they are no longer overshadowed by s. 5A as it was before the Ordinance. The contention under this head ~ust therefore fail. they will Re. ( 7). The argument under this head is that sub s.(3) of s. 29-B which validates the collection of licence-fees by market committees "is bad inasmuch as it makes it impossible for refund to be made of licence-fees collected at the time when the market committee had no power to collect it. We h'1ve not been able to understand this contention, for it is not disputed that the legisl1tture has power to legislate retrospectively even with respect to taxa tion (see M. P. V. 81mdararam.ier cG Go. v. The 8tat,e of Andhra Pradesh (1), where Sales Tax Laws Valida tion Act, 1956, was held consititutionally valid. Fees are also included within the taxing power of the legislature in the broadest sense. Article 31 (l) therefore has no application in the present case and we have to look to Art. 265 which says that "no tax shall be levied or collected exc.ept by authority of law". Sub-section (3) of s. 29-B is the law which retrospectively·authorises the levy of licence-fees collected in this case. Retrospective power of the legislature to make a law being there even in the case of taxation, we fail to see how the provisions of sub-s. (3) of s. 29-B which validate the levy and collection of licence-fees can be held to be invalid (1) [1958) S.C.R. 1422· 196! Mohammadbh•i Khudab"" Chhipa Y, Tiu Stat, oJ Guj.,al WanchaoJ. • 906 SUPREME COURT REPORTS [1962) SUPP. 1161 Mohamm<dbh.i Khudob..x Cll/tipa •• WancAH ,1. Tira Blall of<Jujarol \Ve may add that the same will undor Ar_t. 31(1). apply to fecH collcctecl 11nder 8. I I ancl validated by sub-s. (2) of s. 29.R. Thcre iR therefore no force in this contention. It iR hcrc:by rejected. In the result, the petitions are dismissed with cost;i, One set of hearing fee. Petilfon.y dismissed. 1961 Morch JG. MADAN GOPAL RU~GTA v. SECRETAH.YTO THE OOVERNMENTOF ORISSA (B. P. SINHA, ·p, B. GA.mNDRAGADKAR, K. ~­ WANCHOO, N. RA.JAOOPALA AYYANOAH, and T. L. VENKATARA)[A AIYAR, JJ.) Writ-Iliyh Court-If can torial 00-Constilution of India Ari. 226. i.<.1uc writs beyond its terri juristliclion-Mi11eral Conce..;sion /l1de.~, 194.9, 6,57 !J.'J ' ' The Stace Government of Orissa rejected the appli cation of the appellant who had applied f()r grant of a min ing least: in Decr.rnher 1957 on the ground that the State Government proposed to arrangr. for lhe exploitation of the area in the public si:ctor. The appellant rnadr. an application for review to the Central Govern1nent under r. 57 of the rules of Mineral Concession Rub, 1949. This application was rejected by the Central Government in June 1959. Thereupon the appellant filed a petition under Art. 226 of the Constitution in the High Court of Oris'ia. This petition was dismhsed by th~ 1-ligh Court on the ground that it had the matter under l\rt. 226 a'i no j11risdiction to dc;1l the final order in the case \\'a." passed by the Central Govern ment, \vhich ,.,·as located beyond the territorial jurisdiction of the High Court. The appellant came up by special leave to appeal to the Supren1e Court. The 1nain question is as to the limit of the jurisdiction of the Iiigli Court under Art. 226. The appellant contended that as the Central Go,·ern the effective !JlCnt had rq.crely dismissed the rev~cw petition, \vi th •