Writ Petition No.1681 of 2012

27th April, 2012

Petitioner Counsel: Mr. R.S.PARSODKAR
Respondent Counsel: Mr. N.R.PATIL, Ms T.H.KHAN

JUDGMENT

A. P. BHANGALE, J. :- Rule. Taken up for final hearing by consent. Heard submissions at the bar.

2. By this Petition, the petitioner claims that the petitioner-company is deemed to have secured license for the purposes of purchasing cotton for processing of pressing and ginning under Section 7(1) of the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963 and has prayed to quash and set aside the seizure notice dated 17/03/2012 issued by respondent no.1/Market Committee.

3. The facts, briefly stated, are thus :-

That the Petitioner, a businessman and proprietor of Shree Shyam Baba Cotton Company, had purchased the land Gat No.286/3, admeasuring 2.25 acres situated at Karambhad in taluka Parseoni, District Nagpur with a view to establish Cotton Ginning and Pressing Factory. The Shed was constructed in the month of November/December, 2011 to establish the Cotton Ginning and Pressing Factory at the cost of Rs.4 crores. On or about 28/09/2011, the petitioner applied for license to purchase Cotton. We have perused the communication dated 28/09/2011 addressed to the Chairman from Shree Shyam Baba Cotton Co., Saoner. The petitioner addressed thus -

The above letter is translated in English thus:

Date : 28/9/2011.

Hon’ble Chairman Saheb, Krishi Utpanna Bazar Samitee, Parseoni.

Subject :- In respect of cotton purchase permission and                       getting of license

Applicant :- Shree Shyam Baba Cotton Company, Naik                          Layout, Saoner, District Nagpur

Respected Sir,

With reference to the above subject, application is presented that my own Gin factory is situated at Khasra no. 283/3 at Karambhad. Application is submitted to purchase cotton and for license of cotton at the land at Karambhad. Terms and conditions for the license shall be approved.

Yours

Sd/- Signature

4. Prima facie, the above communication appears to be a mere casual, vague or flippant communication in the form of a letter and not with a sincere application of mind for grant of license in obedience to law. It can not be considered in the prescribed format in accordance with the relevant provisions of the Act, Rules and bye-laws. The letter do not refer to any resolute declaration as to solvency of the applicant, details of cash security, license fees required to be tendered and the essential declaration as to commodity to be traded. The letter do not specify the market area - to be specific in the said ginning and pressing factory, as required under the Provisions of the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963 (Mah. Act XX of 1964) (hereinafter referred as " the Act"), which came into force with effect from 25/05/1967. The Authorities under the Act are obliged to act upon application if it is complete in all necessary particulars. Section 6 makes it obligatory for any person to comply with the terms and conditions of the license as prescribed by the Market Committee as to use of specific place in the market area for marketing of the declared agricultural produce. Terms and condition may vary according to the status of the licensee in the capacity as a trader, commission agent, broker, processor, warehouseman etc. Making the Application for grant of a license is not an empty formality as the Market Committee is required to decide the application by making a lawful inquiry resulting in a reasoned and written decision to grant, refuse or renew the license as contemplated under Section 7 of the Act. The petitioner also claimed that he had communicated by reminder letters dated 02/12/2011, 08/12/2011 and 26/12/2011 and requested for immediate License. According to the petitioner, the District Deputy Registrar, Co-operative Societies also issued a communication dated 28/12/2012 to the Chairman of APMC for grant of license to the petitioner.

5. Further, according to the petitioner, the APMC did not take any action on the letters sent from the petitioners for the grant of license. It is claimed by the petitioner that since no action was taken by the APMC within the period of 60 days period, in view of the proviso to Section 7 (1) of the Act, it must be construed as "deemed license" as on 28/02/2012 in favor of the petitioner. The petitioner, thus, started purchasing the cotton without obtaining the license. It is the grievance of the petitioner that respondent no.1/APMC, in stead of giving/supplying the prescribed format for grant of license and instead of accepting compliance of Solvency Certificate and fees, has issued attachment notice dated 17/03/2012 alleging that the petitioner has indulged in the activity as trader without valid license, contravening Section 6 of the Act and Rule 5 made thereunder. Rule 5 prohibits marketing of any declared agricultural produce except in a principal or subsidiary market duly established. License is must to operate as trader at any place within the market area. The question that arise here is as to whether mere informal request by a trader in letters issued by him would be considered as apt compliance of statutory provisions instead of an application in the prescribed format in accordance with the statutory requirements. We must answer the question in the negative for the following reasons -

6. We need to consider the aims and objects of the special legislation and the purpose required to be achieved by such legislation. The Act has benevolent object to protect agriculturists selling their agricultural produce; to ensure that they shall not be duped by any unscrupulous trader resorting to underhand dealings. It was brought into force with an object to develop and regulate marketing of agricultural and certain other produce in market areas and markets (including private and farmer -consumer markets) in the State. To achieve the objectives of the Act, powers were conferred upon the Market Committees to prescribe terms and conditions for the license, collect market fees/cess to establish the market fund to develop and regulate the marketing. Director of the Market Committee constituted under Chapter II can grant license to use any place in the market area for the marketing of declared agricultural produce or to operate in the market area as a trader, commission agent, broker, processor, weighman, measurer, surveyor, warehouseman etc. in relation to marketing of the declared agricultural produce. The Act ensures sufficient space to be reserved and maintained in the market area to enable retail sales by an agriculturist himself to another who buys agricultural produce for his personal or family's consumption.

7. Section 7 of the Act makes it necessary for the applicant seeking license to prefer an application in prescribed format accompanied with the prescribed fees in accordance with Rules and Bye-laws framed under the Act. To ensure payments from the trader or his agent, the applicant is required to furnish information about his solvency, furnish details as to cash security and details of his capacity to provide adequate equipment for the smooth conduct of business along with the conduct of the applicant. Market Committee can, within a period of 60 days of the application for license, by reasons stated in writing, grant, refuse or renew license, failing which there is provision for "deemed license". Market committee is deemed a " local authority" for the market area under Section 12(2) and is also empowered to suspend and cancel licenses if needed, for any reason mentioned in section 8 of the Act, after giving an opportunity to show cause against such suspension or cancellation. Any such decision is appealable under Section 9 of the Act. Section 10 provides for settlement of disputes between the Buyers and Sellers or their agents through the mediation of Dispute Sub-Committee constituted by the Market Committee. Rule 6 of the Maharashtra Agricultural Produce Marketing (Development and Regulation) Rules, 1967 obliges any person desiring to operate as a trader, commission agent or broker and use any place in the market area for marketing of any declared agricultural produce, to apply in writing in the form prescribed by the bye-laws for grant or renewal of the license as the case may be, to the Market Committee. Newly added Chapter-IA also introduced requirement as to issuance of licenses for direct marketing, or to establish private market or farmer-consumer Market as prescribed in accordance with the said Rules. The Rules have prescribed formats for the application, grant or renewal of a license with terms and conditions as also prescribed format for the registration of License holders, as required for different purposes under the law. The normal rule of construction which applies to procedural requirements which impose duties is that such requirements are, prima facie, mandatory. When legislature lays down a statutory requirement for the creation of any legal authority/right, it expects its Authority to be obeyed down to the minutest detail. The provisions enacted for protection and welfare of the agriculturists and orderly administration of the marketing of agricultural produce in the market areas established under the Act ought to be construed accordingly.

8. It appears in this case that the petitioner never made any sincere and appropriate application in the prescribed format accompanied with fees and information, as required in the prescribed format and as essential under the Act and Rules framed thereunder nor supplied the documents as required by the APMC under the Rules. In our opinion, the proviso of the "deemed license", as urged, would not come into play unless it is shown that the petitioner had submitted the appropriate application in prescribed format accompanied with the fees and necessary information furnished as to his solvency, cash security, good conduct Certificate etc. as required by law. Omission to avail of the prescribed procedure disentitles the petitioner to claim "deemed license". We do not find merit in the submission that the prescribed format was not given or supplied by the APMC to the petitioner. Even assuming for the sake of argument that a proper application was made but rejected and license is refused, the remedy by way of an appeal is available and self-contained under Section 9 of the Act. Section 10 provides a special Forum of Dispute Sub-Committee to settle any dispute between buyers and sellers or their agents. The Legislature, it appears, in its wisdom thought it fit to provide separate, speedy and cheap Forums to the persons for settlement of any dispute in the market area and, therefore, created a special legislation, i.e. Maharashtra Act XX of 1964. The above-mentioned alternate Forums provided under the Act are vested with the powers and functions, empowered to give an opportunity of hearing to the person aggrieved and then to render reasoned and binding decisions. The intention of the Legislature in providing such alternate Forums is with a specific purpose to avoid the lengthy procedure of the Civil Courts and to give finality to the decision rendered by such alternate Forum. Section 55 of the Act, while protecting the Market Committee and its Officials acting in good faith, bars general remedy of Civil suit in the absence of a pre-suit statutory notice and valid cause of action accruing within a period of six months prior to institution of the suit.

9. In the facts and circumstances of the case, in our opinion, the petitioner can neither claim license nor "deemed license", without having made necessary and proper compliance of the provisions of Section 6 of the Act read along with the Rules and the Bye-laws applicable for grant of license. The petitioner cannot be clothed with any important legal right to enable him to start trading in cotton without having obtained a valid license to trade in agricultural produce in the market area under the control of APMCrespondent no 1. Under the circumstances, intended action under Section 32-A of the Act by the APMC cannot be termed as arbitrary or unlawful. Otherwise also, such action even if adopted as intended, is not without the alternate efficacious statutory remedy of appeal under Section 52 B of the Act.

10. Regarding affidavit and counter-affidavit on record, we need not enter into disputed questions of facts which can be decided by the Authorities under the Act as, under the circumstances, alternative remedy has to be exhausted first.

11. In the letter dt.26.12.2011, the petitioner has expressed his readiness and willingness to submit Solvency Certificate and other documents. He, thus, accepted himself that his application for license was incomplete in essential particulars. It, therefore, follows that there was never any proper application containing necessary particulars as to documents required till 26.12.2011 or till filing of this petition. The statutory fiction of "deemed license" is, therefore, not attracted in the facts and circumstances of the case.

12. For the reasons stated, therefore, the contention that the petitioner is "deemed licensee" and that respondent no.1 cannot initiate action against the petitioner under Section 32A of the Act is not acceptable. No good ground is made out for interference in exercise of extraordinary Writ jurisdiction. The Petition is, therefore, dismissed. No order as to Costs. Rule is discharged accordingly.

Petition dismissed.