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Judgment
Jeevan Reddy
These three petitions raising common questions can be disposed of together. Writ Petition No. 3209 of 1977 is filed by the Andhra Pradesh Fruit, Vegetable, Onion and Potato Merchants'' Federation, and Secunderabad, Wholesale Vegetable Merchants Association, and certain other individuals, while writ petitions No. 3351 & 3749 of 1977 are filed by a large number of vegetable and fruit vendors carrying on their business in Hissamgunj Market, at Secunderabad. In Writ Petition No. 3351 of 1977 there is only one petitioner (who is again the 1st petitioner in Writ Petition No. 3749/77. In the later writ petition (W.P. No. 3749/77) there are as many as 230 petitioners. The respondents in those writ petitions are (1) Municipal Corporation of Hyderabad: (2) its contractor for the current year for collection of what is called "That Bazari fees". (3) Agricultural Market Committee, Hyderabad; and (4) the State of Andhra Pradesh. The controversy pertains to the collection of various amounts under the general name of "That Bazari fees" by the Municipal Corporation and its contractor, in respect of Hissamgunj Monda Market, Secunderabad. Prior to the enforcement of Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966 (hereinafter referred to as the "Markets Act"), the Municipal Corporation had established and was maintaining several markets within its jurisdiction, including the Hissamganj Monda Market, at Secunderabad. It is stated that in the said Market area there are several buildings owned by private parties wherein either the owners or their lessees carry on business. (In some markets, there are shops, stalls and godowns constructed by the Municipal Corporation itself.) Besides the above there is also an open ground which too is used by several small vendors for selling their goods. The Municipal Corporation used to farm out its right to Collector the several fees and amounts, every year, after prescribing the rates payable by the users of the markets. The contractors used to collect those amounts on behalf of the Municipal Corporation, and pay to the Municipal Corporation the agreed amount While so, the Government issued G.O. Ms. No. 2095, dated 29-10-1968 u/s 3 (3) of the Markets Act notifying the notified areas. Item 13 in Schedule I to the said G.O. pertain to Hyderabad. Thereafter, a notification u/s 4 (3) of the Act was issued which is of course, not placed before me. It was followed by a notification u/s 4 (4) which is contained in G.O Ms. No 867, dated 30-6-1971. It is not in dispute that Hissamgunj Monda Market is within the notified market area. It also appears, that Hissamgunj Monda Market is also notified as a market. After the issuance of the these notifications controversy appears to have arisen with respect to the collection of fee by the municipality and/or its Contractor The complaint in these writ petitions is confined to two counts, viz., (1) collection of fees from carts, lorries and other vehicles bringing the notified produce and other goods into the market for sale, and (ii) collection of that Bazaari fees from users or the ground which is parceled out and each vendor allotted a small space or strip where he keeps and exhibits his goods for sale. According to a letter dt. 9-6-1977 addressed by the Municipal Corporation of Hyderabad to its contractor, various rates are prescribed; for example for carts coming into Monda Market with provisions, the charge is 0-65 paise per day per cent. For a loaded lorry it is Rs. 2/- Even persons carrying on wholesale-dealer business and commission agent business are charged, as also the vegetable vendors using the stalls or open ground.
The contention of the learned Counsel for the petitioners is that when once a notification is issued u/s 29 (1) of the Markets Act, the Municipal Corporation has no powers to levy any fee whatsoever in such market area or notified area, as the case may be, and that, therefore, the collection of fee by the Municipal Corporation and its contractor, under whatever name it is collected, is illegal.
On the other hand, the case of the Municipal Corporation and its contractor is that they are not collecting any market fee. All that they are collecting is rent and other amounts clearly mentioned in Section 534 of the Hyderabad Municipal Corporation Act, 1955 "(hereinafter referred to as "the H.M.C. Act"), and nothing more So far as the Agricultural Market Committee is concerned, its case is that the Municipal Corporation is not entitled to collect any fee under any nomenclature, by virtue of an agreement entered into between the Municipal Corporation of Hyderabad and the Agricultural Market Committee, which agreement is evidenced by G. O. Ms. No. 810, dated 25-1-1970.
For a proper appreciation of the controversy herein, it is necessary to notice a few relevant provisions of both the Acts, referred to above. Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1956, was enacted with a view to consolidate and amend the law relating to the regulation of purchase and sale of agricultural produce, livestock and products of livestock, and the establishment of markets in connection therewith. According to clause (i) in Section 2 of the said Act, "agricultural produce" means anything produced from land in the course of agriculture or horticulture, and includes forest produce or any produce of like nature, either processed or unprocessed and declared by the Government by notification to be agricultural produce for the purpose of the said act. It is not necessary to refer to the definition of ''livestock'' or ''products'' of livestock''.
The expression "market" is defined by clause (vi). "Market" means a market established under sub-section (3) of Section 4 and includes marketyard and any building therein. "Notified area" is defined by clause (xi) to mean any area notified u/s 3.
Clause (xii) defines ''notified market area'' as ''any are declared to be a market area by notification u/s 4''.
Section 3 provides for declaration of notified area I have already referred to the fact that G.O. Ms. No. 2095, dated 29-10-1968 was issued u/s 3 (3) and that Hyderabad and Secunderabad cities are within the notified are mentioned in item 13 of Schedule I to the said G.O.
Section 4 provides for constitution of Market Committee and declaration of notified market area It is appropriate to set out the said Section in fall: --
Section 4 (1):--The Government shall constitute, by notification, a market committee for every notified area from such a date as may be specified in the notification and the market committee so constituted shall be a body corporate by such name as the Government may specify in the said notification, having perpetual succession and a common seal with power to acquire, hold and dispose of property and may, by its corporate name, sue and be sued.
(2) It shall be the duty of the market committee to enforce the provisions of this Act and the rules and bye-laws made thereunder in the notified area.
(3) (a) Every market committee shall establish in the notified area such number of markets as the Government may, from time to time, direct for the purchase and sale of any notified agricultural produce, livestock or products of livestock and shall provide such facilities in the market as may be specified by the Government, from tine to time, by a general or special order.
(b) Every market committee shall also establish in the notified area such number of markets as the Government may, from time to time, direct for the purchase and sale, solely of vegetables or fruits and shall provide such facilities in the market as may be specified by the Government, from time to time, by a general or special order.
(c) The market committee shall declare, by notification the limits of every market established by it under clauses (a) and (b) (hereinafter referred to as the market area).
(4) As soon as may be after the establishment of a market under sub-section (3), the Government shall declare by notification the market area and such other area adjoining thereto as may be specified in the notification, to be a notified market area for the purposes of this Act in respect of any notified agricultural produce, livestock or products of livestock.
(5) Subject to the provisions of sub-sections (1), (2), (3) and (4), the Government may, by notification --
(a) exclude from a notified market area, any area comprised therein; or
(b) include in any notified market area, any area specified in such notification.........
Sub-section (1) of Section 29 then provides that "wherein pursuance of Sec. 3, the Government notified any area comprised within the local limits of the jurisdiction of a municipality or other local authority, no such municipality or other local authority shall levy any fees on any notified agricultural produce, livestock purchased or sold in the notified area". Sub-section (2) of Section 29 is also relevant, and may be set out:
(2) The market committee of the notified area shall, out of its funds, pay every year to the municipality or other local authority, which was levying such fees immediately before the notification of the area, a sum equivalent to the licence fees levied by such municipality or other local authority during the period of one year immediately before the notification of the area for a period of ten years as compensation for the loss of income of the municipality or the local authority on account of the establishment of markets in the area by the market committee..........
Section 30 which gives an over riding effect to the said Act, reads as follows:
Section 30:--Nothing in any law providing for the establishment, maintenance or regulation of market or the levy of fees therein shall apply to any market established under this Act or effect in any way the powers of a market committee in respect of such market.
Section 33 confers rule-making power upon the Government. According to the Rules framed by the Government u/s 33, the market committee is vested with absolute control over the markets and is entitled to maintain and manage the market yards and regulate the business in the notified areas in respect of notified agricultural produce etc., and to exercise all the powers conferred upon it by the Act and the Rules, to ensure due remuneration to the producers and smooth business.
In the Hyderabad Municipal Corporation Act the only provision referred to and relevant, is Section 534, which reads as follows:--
Section 534:--The Commissioner may--
(a) charge for the occupation or use of any stall, shop, standing, shed or open in a municipal market or slaughter-house and for the right to expose goods for sale in a municipal market, and for weighing and measuring goods sold in any such market and for the right to slaughter animals in any municipal slaughter-house such stallages, rents and fees as shall, from time to time, be fixed by him, with the approval of the Standing Committee, in this behalf;
(b) with the approval of the Standing Committee from the stallages, rents and fees, leviable as aforesaid or any portion thereof, for any period not exceeding one year at a time; or
(c) put up to public auction, or, with the approval of the Standing Committee, dispose of, by private sale the privilege of occupying or using any stall, shop, standing, shed or pen, in a municipal market of slanghter-house for such term and on such condition as he shall think fit to impose.
A reading of both the above set of provisions shows that once a notification is issued under sec. 3 notifying any area comprised within the local limits of the jurisdiction of a Municipality such Municipality is deprived of the power to "levy any fees on any notified agricultural produce, livestock or products of live-stock, purchased or sold in a notified area". The said deprivation is compensated in the manner provided by sub-section (2) of Section 29. Sec. 30 further provides that nothing in any law "providing for the establishment, maintenance or regulation of a market or the levy of fees therein shall apply to any market established under this Act or affect in any way the powers of a market committee, in respect of such market". It is thus clear that after the notification u/s 3 (3), the Municipal Corporation of Hyderabad is deprived of its power to levy any fee on any agricultural produce purchased or sold within the notified area, nor can any provision in the H.M.C. Act relating to the establishment, maintenance or regulation of a market or the levy of fees therein, come to its rescue. The contention of the petitioners is that the levy of the fees in question is directly prohibited by Section 29 and, therefore, its collection by the Municipal Corporation is, however taking shelter u/s 534 of the H.M.C. Act, which empowers it to "charge for the occupation or use of any stall, shop, standing, shed or open in a municipal market or slaughter-house and for the right to expose goods for sale in a municipal market, and for weighing and measuring goods sold in any such market and for the right to slaughter animals in any municipal slaughter house, such stallages, rents and fees as shall from time to time he fixed by him (Commissioner), with the approval of the Standing Committee, in this behalf."
What is now to be decided is, whether there is any inconsistency between Section 29 of the Markets Act and Section 534 of the H.M.C. Act and to what extent, if any, the Municipal Corporation is deprived of its right to collect the fee which it was collecting earlier? In my opinion, the following results follow: After the issuance of the notification u/s 3 of the Markets Act, the Municipal Corporation is deprived, by virtue of Section 29 of the Markets Act (which has got an over-riding effect over the Municipal Corporation Act by virtue of Section 30 of the Markets Act to levy any fee on the purchase and safe of notified agricultural produce, live stock, or products of live-stock, and it is supposed to be compensated in that behalf in the manner prescribed by Section 29 (2) Section 29 (1) of the Markets Act, however, does not deprive the Municipal Corporation of its ownership either in the open land or in the buildings. By virtue of Section 30, the Municipal Corporation is undoubtedly deprived of its right to establish, maintain or regulate any Markets or to levy any fee therein respect of notified agricultural produce, livestock and products of livestock within the notified urea. But, since its right of ownership in lands or buildings, is not taken away, it is still entitled to charge and collect amounts by whatever name they are called-- for use or occupation of its land or buildings, as the case may be It is not disputed that it the Municipal Corporation owns any stalls or shops, or godowns, it is not deprived of its right to collect, the rent in respect of the same by virtue of Section 29 or section 30 of the Markets Act. But what is continued by the petitioners is that the Municipal Corporation is deprived of its right to collect the ground-rent called "Thai Bazari" fees in respect of the open land. I am unable to see any distinction or difference, in principle. The Municipal Corporation continues to be owner not only of the buildings but also of the open land. It cannot collect any fee on the sale or purchase of notified agricultural produce, but it can certainly collect the rent or compensation for the use of its land, open or otherwise, the nomenclature given to a collection or charge is not relevant; we have to look to the substance and ascertain the hue nature of the collection Section 534 of the H.M.C Act clearly entitles the Municipal Corporation to collect charges for occupation or use of any stalls, shops, stands, shed, or open land owned by it in a Municipal Market, or slaughter house. It is also entitled to collect such charges for the right to expose goods for sale in a Municipal Market. It needs to be made clear that if a person merely hawks, sells or otherwise trades in the notified product standing on the road within a market assuming that it is not prohibited by law no collection can be made from him. But, if a person wants specific plot to be allotted to him for a day or for a week, or for such longer period as the case may be, with a view to store, place and, or exhibit his goods for sale, he has to pay compensation therefore, which is really in the nature of rent.) Of course, it is true that it cannot strictly be called a rent, as there is no relationship of landlord and tenant, because of the several conditions and regulations subject to which, the persons are allowed to occupy open land, or stalls or shops. Even in the market or within the notified market area, there are bound to be roads, or stands on the road or parks a vehicle on the road and does business (if he is entitled to do so according to law), the Municipal Corporation cannot collect any charge from him, because any such collection would really amount to charging for passing along or using a Municipal road, besides amounting to levying of fee on sale and purchase of such goods. But, if any open ground apart from the road is sought to be occupied by a person for an exclusive use of his own, then the Municipal Corporation is, certainly entitled to collect the appropriate compensation therefor. Whether it is open ground or a stall or a shop belonging to the Municipal Corporation the position in law is the same. Such a collection does not amount to levy of market, nor does it amount to levy of any fee on the sale or purchase of notified agricultural produce. In fact, the Municipal Corporation is not concerned, whether the person to whom a shop, stall or a piece of land is allotted, carries on business in notified agricultural produce, or any other goods. It is not concerned whether such person carries on any business or not. All that it is doing is that it is charging him for the use of its land, or building, as the case may be. Such a charge, in may opinion, is not prohibited by Section 29 or any other provision in the Markets Act.
It thus follows that the levy of any on fess on carts, lorries or other vehicles, or upon persons, merely because they enter the market or merely because they make use of a road within the market or the market area, is bad. The Municipal Corporation is only entitled to charge for (collect compensation for) the use of its open land, or stalls, shops, sheds slaughter-houses, etc., as an owner. What that charge should be is a matter of agreement between the Municipal Corporation and the users, or a matter to be notified by the Municipal Corporation, according to the H.M.C. Act, Rules, and bye-laws, if any thereunder. In my opinion therefore, there is no conflict as such between Section 29 of the Markets Act and Section 534 of the H.M.C. Act. Since the roads are public roads and anybody and everybody is entitled to make use of the roads according to law, no collection can be made merely because a person uses a road or passes alonga road.
Counsel for the petitioners, however, submitted that certain decisions of this court have taken a view different from the one set out above. It is, therefore, necessary to see whether it is so.
The first decision referred to is Abdul salmon v. Municipal Corporation of Hyderabad (1966) An. W.R. 301. That was a case in which the occupants of certain shops and stalls belonging to the Municipality, in a Municipal market, raised a contention that they are tenants of the Municipality and are protected by the provisions of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960. The Municipality denied that there was existing any relationship of landlord and tenant between the parties. After examining the terms of the agreement under which the said persons were allowed to occupy those shops, and stalls, and the conditions under which the said persons were allowed to occupy, it was held that there was no relationship of landlord and tenant between the parties and that relationship was merely that of a licensor and licensee. For that reason, it was held that the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act has no application to the said shops and stalls. From The feet that this court held that relationship of licensor and licensee exists, it is sought to be contended that what is collected from such occupants is licence fee and if so, it is argued, Section 29 of the Markets Act prohibits the Municipal Corporation from collecting the said licence fee. I cannot agree. All that the learned Judge held was that what is being paid is not really rent though it is so called in a large sense and that it is really compensation for use and occupation of the Corporation''s property. If was further held that the relationship is that of a licensor and licensee; but that is entirely different from saying that the amount paid by such licensee is licence fee That decision therefore, does not support the petitioners'' contention.
Counsel then relied upon a decision of a Bench of this Court in Writ Appeal No. 579/1972, dated 19-6 1974. It may be stated that, in that decision, the question now in issue did not at all arise for consideration. All that was held was that, by virtue of Section 29 of the Market Act, a Panchayat Samithi or Municipality will have no jurisdiction to make any provision for markets in notified areas, or collect any fees. The learned Judges were not concerned with the right of ownership of a Municipality, or its right to collect compensation for use and occupation of its property from the occupants thereof.
Reliance is then placed upon the decision of Venkatarama Sastry, J, in Writ petition No. 3364/1975, dated 1-3-1976. In that case, the contention of the petitioners was that alter a notification is issued u/s 3 the Municipality has no power to levy any fee on any notified agricultural produce, livestock or products of livestock, purchased or sold in the notified area. The Municipality in that case contended that Section 29 applies only to notified agricultural produce, but not to other products and goods and that, therefore, section 29 of the Markets Act does not take away the power of the Municipality to establish public markets, which power is vested in it by Section 276 of the Andhra Pradesh District Municipalities Act, it was therefore, contended that the Municipality still has power to notify public markets and to collect fees in such public markets, for exposure of goods for sale in such public markets, The learned Judge then examined the provisions of the Markets Act and held that, so far as the notified agricultural produce is concerned, the Municipality has no power either to establish public markets, or to recover any fees on account of sale or purchase of such produce after the Issuance of notification u/s 3 of the Markets Act. It may incidentally be noted that even in that case, a fee was sought to be collected on goods brought to the lorry-office or to godown by the petitioners. The fee was sought to be levied treating them as goods brought lot sale in a public market. The learned Judge held that since the goods were not brought on to the public street for sale, the levy of fee is unjustified. So far as the milk vendors are concerned, the levy was upheld. Against the said decision, appeals were filed by the petitioners (but not by the milk vendors) and the same were dismissed on 4-11-1976 ; vide writ Appeal Nos. 204 & 205 of 1970. I am, therefore, unable to see as to how the said decisions support the petitioners case, or run counter to the view taken by me herein.
At this stage, I must refer to another circumstance. Mr. Reddi Pantulu contended that there was an agreement between the Municipal Corporation and the Hyderabad Agricultural Market Committee, with respect to the sharing of licence fee. He referred me to the agreement recited and accorded in G O. Ms. No. 810, Food and Agricultural (Agri. IV) Department, dated 25-1-1970. The said G.O. states that at the time of the enforcement of the Hyderabad Agricultural Markets Act in the twin cities of Hyderabad and Secunderabad in the year 1964, the question of issuing licences to the traders had arisen and it was decided in a meeting held under the Chairmanship of the Secretary to Government, Local Agricultural Department and that, the points mentioned therein were agreed upon, as per the agreement (a copy of which is now produced before me) the points agreed are :--
......(1) it was agreed to enforce the Hyderabad Agricultural Markets Act in the areas of the Hyderabad and Secunderabad Municipal Corporation for the better regulation of the existing markets for purposes of purchase and sale of cotton and other agricultural produce, subject to the following conditions :
(a) In order to facilitate regulation of trade in agricultural produce under the Hyderabad Agricultural Markets Act, Licences for trade in cotton and agricultural produce in the notified market in consultation with the Municipal Commissioner.
(b) Fifty per cent of the income accruing from the issue of licences to traders should be paid by the Market Committee to the concerned Municipal Corporation in lieu of loss of income to the Corporation due to the aforesaid decision, i.e., having only one licensing authority. "The market Committee" in the market area for trade in the agricultural produce.
(c) The Municipal Corporation shall issue licences for trades other than those of agricultural produce in accordance with the provisions of the Hyderabad Municipal Corporation Act and these trades shall continue in the market areas at present.
(2) It was agreed to enforce the Hyderabad Agricultural Markets Act in the cities of Hyderabad and Secunderabad with effect from 1st December 1954 with the concurrence of both the Municipal Corporations. The Commissioners will kindly take necessary action to place the matters before the Corporations as early as possible and intimate the result to the Secretary, Local Government Department.
Subsequent correspondence also is brought to my notice, where-under the Municipal Corporation has been asking for its share of amount as per the agreement, and also the statements of income and share, prepared by the Market Committee in that behalf, in my opinion, the said agreement is not of much relevance. We have to look to the provisions of the statute. In any event, I do not find any inconsistency between the said agreement and section 29 of the Markets Act, Section 29 says that after the issuance of notification u/s 3, no local authority shall levy any fees on the purchase or sale of notified agricultural produce, livestock or products of livestock, in the notified area. Further, according to Section 7 of the Markets Act, it is the Market Committee which is empowered to issue licences to traders within the notified area. The said agreement, of course, does not speak of the tee ret erred in Section 29, but it does refer to the licence-fee contemplated by Section 7 and other Rules in that behalf. Nothing further need be said, therefore, on this aspect.
The result of the above discussion, therefore, is that the Municipal Corporation of Hyderabad is not disentitled from collecting compensation (or rent, as the case may be) from occupiers of its open land, or stalls or shops, or godowns, or other buildings. It is not entitled to collect any lee on the sale and purchase of goods notified agricultural produce, livestock or products of livetook. It cannot collect any fee or other charge merely because lorries, carts or other vehicles, or persons pass along or stand on the roads, either in the market or in the notified market area. Even if such persons carry on any business on the road itself, no compensation can be collected from them by the Municipal Corporation. It may be that such carrying on of business on public road is prohibited by the H.M.C. Act, rules or bye-laws made thereunder. If there is any such provision in Act, or the Rules or bye-laws, such trading may be illegal but, certainly, the Municipal Corporation cannot collect any compensation or any other charge, by whatever name it is called, merely because vehicles or men pass (sic) or, carry on their trade on a public road. As I have made in clear, (sic) any persons want the exclusive use of a portion of an open land, or a stall, or any other property belonging to the Municipal Corporation, it can as an owner collect compensation from them--whether the occupation is for a day, week or more--It is obvious that these directions are confined only to the agricultural produce, livestock, and products of livestock.
Before parting with this case, I must observe that it appears from the material placed before me that a charge of about 0.16 ps. or so is collected from each vendor who is allotted a small strip of open land. It is such type of persons who are petitioners in W.P. Nos. 3749/77. The Municipal Corporation may consider whether any such charge is really called for. All the persons concerned are small vendors who seek out their livelihood from the small margin of profit made by such sales. The Municipality can always regulate the use of its open space and may also be entitled to charge compensation therefor ; but, the present rate of compensation does, prima facie, appear to be rather excessive. Of course, it is for the Municipality to consider this aspect, in the present day circumstances and having regard to the present trend of thinking. With the above directions and observations, these writ petitions are disposed of but, in the circumstances of the case, there shall be no order as costs.