Praveen Kumar Fruit Company and Others vs The Hyderabad Agricultural Market Committee and Another

M.H.S. Ansari, J.—The petitioners six (6) in number have questioned the action of the 2nd respondent Agricultural Market Committee in rejecting the applications of the petitioners for issue of licence as Commission Agents and sought a writ in the nature of Mandamus for directing the respondents to issue licence to the petitioners.

u/s 7(1) of the A.P. (Agricultural Produce and Livestock) Markets Act, 1966, "no person shall within a notified area set up, establish or use, or continue or allow to be continued any place for the purchase, sale storage, weighment, curing, dressing or processing of any notified agricultural produce or products of livestock or for the purchase or sale of livestock except under and in accordance with the conditions of a licence granted to him by the Market Committee."

u/s 7(6) of the said Act, no person shall purchase or sell any notified agricultural produce, livestock and products of livestock in a notified market area, outside the market in that area.

Rule 48 of the Rules framed under the said Act prescribes the form in which a person desiring to obtain or renew a licence u/s 7(1) shall make an application.

The petitioners rely upon a Circular Rc.No. I(3)246/93 dated 28-7-1994 of the Director of Marketing, Government of Andhra Pradesh, wherein instructions have been issued to all the Market Committees in the State that the Agricultural Market Committees can issue/renew, new/old licence to Commission Agents. The case of the petitioners is that they have satisfied all the conditions prescribed for grant of a licence to function as Commission Agents and the 2nd respondent has erroneously rejected the grant of the said licence.

A counter affidavit has been filed on behalf of the 1st respondent wherein it is stated that before issuing new licence, the Market Committee has to take into account the availability of space, shops/sheds in the Market that can be provided to the Commission Agents. It is further stated that to enable the Commission Agents to function in compliance with the rules made under the Act, the Market Committee has to see whether premises are available with the Commission Agent within the Market Yard before issuing fresh licences. In view of the shortage of space, sheds/shops in the Market Yard in respect of which licences were applied for by the petitioners, the Market Committee has decided not to issue fresh licences to the petitioners and the petitioners were accordingly informed of the same.

It is the contention of Sri K. Jaya Kumar, learned Counsel for the petitioners that without a licence, the petitioners cannot function as Commission Agents as that would be in violation of the Act and the, respondents cannot on the ground of paucity of space deny to the petitioners the right to carry on business effecting their livelihood. The learned Counsel relied upon an unreported judgment of this Court in W.P. No. 15274 of 1996, dated 1-8-1996 wherein a direction was issued to the Market Committee -Respondent therein to consider the application of the petitioners therein for issuance of licence to do business in the open area.

Smt. Nanda Ramachander Rao, learned Standing Counsel for the Respondents, however, submitted that the said judgment appears to be one based on a concession and cannot be an authority for issuing a direction in the instant case, as prayed for by the petitioners.

A perusal of the said judgment supports the stand taken by learned Standing Counsel for the Respondents and it appears that the said directions were issued in that case, based upon concession made by the Counsel for the Market Committee.

Smt. Nanda Ramachander Rao, learned Standing Counsel for the Respondents referred to the averments made in the counter-affidavit filed on behalf of the respondent No. 1 and submitted that there is no space available in the Market Yard and the order refusing the grant of licence to the petitioners also states that the Fruit Market, Gaddiannaram is not in a position to provide any accommodation to the Commission Agents at Fruit Market, Gaddiannaram. It was the submission of Smt. Nanda Ramachander Rao, learned Standing Counsel for the Respondents that as per the rules framed under the A.P. (Agricultural Produce and Livestock) Markets Act, the Commission Agents have a responsibility to arrange for storage of the commodities pending such sale or transport and for issuing Amanat patties and it is therefore submitted that it is obligatory for a Commission Agent to have storage space within the Market Yard to enable such Commission Agent to function properly and function in accordance with the rules. It was the submission of the learned counsel for the respondents that unless there is such storage space available, a Commission Agent cannot function as per the rules or provide facilities to the sellers/purchasers which is expected of Commission Agent.

It would be appropriate to refer to the rules which have been relied upon by the learned Counsel for the respondents. They are Rules 64 to 67. Under Rule 64, a Commission Agent or buyer is required to pay the sale proceeds to the seller promptly and under Rule 65, the Commission Agent shall effect payment in accordance with the Tak Patti (sale slip). Rule 66 deals with issue of Amanat Patti (Storage slip) and Rule 67 states that Commission Agents are to arrange storage facilities. The said Rules 66 and 67 read as under:

"66. Issue of amanat patti:- Where any notified commodity is brought to the commission agent to conduct its sale in the market or to transport it to other market or export at a later date, the latter shall arrange for its storage on his own account pending such sale or transport thereof, and he shall issue amanat patti (storage slip) in the manner specified in the bye-laws of the market committee.

Commission agent to arrange storage facilities: It shall be the responsibility of the commission agent to arrange for the storage of the notified commodities and its insurance against theft, fire, floods, rains or any natural calamity, if desired by the seller pending its sale in the market or export thereof, at a later date:

Provided that where a seller assembles any notified commodity in the market by direct sale, the market committee besides providing all facilities for such sales, may provide temporary storage for unsold stocks for a period not exceeding one week, if so desired by the seller and also undertake such insurance on his behalf and recover such amounts as may from time to time, be determined;

Provided further that where a notified commodity is stored and not removed within a week, the said notified commodity may be dealt with as specified in the bye-laws of the market committee."

In the light of the above rule position, the submissions made on behalf of the respondents by their learned Standing Counsel Smt. Nanda Ramachander Rao have to be accepted. Unless the Commission Agent has facilities, he cannot function and perform the duties as envisaged under the Act and the Rules.

In the instant case, it is stated that at the Fruit Market, Gaddiannaram in respect of which the petitioners have sought licence to function as Commission Agents, there are about 240 Commission Agents already operating. In the counter-affidavit of 1st respondent, it is stated that the Market Committee could provide accommodation of only 133 sheds to Commission Agents. The other Commission Agents who obtained licences through interim directions of this Court, in various writ petitions are also seeking for the accommodation of sheds or places in the Market Yard, which the Agricultural Market Committee, Hyderabad is unable to provide. It is further stated that in view of the paucity of space, the Market Committee has decided not to issue fresh licences to Commission Agents. The order dated 15-10-1996 impugned in the above writ petition rejecting the request of the petitioners for grant of commission agent licence also states the same reason.

Admittedly, when there is no accommodation available in the Market where from the Commission Agent can perform the functions as envisaged under the rules, the respondents cannot be compelled to consider the grant of licence to the petitioners.

This Court, therefore, in the light of the above, finds no infirmity in the order rejecting the request of the petitioners for grant of licence. No direction in the circumstances can be issued to the respondents for grant of licence to the petitioners to operate in the Market Yard even if the petitioners are willing or offer to operate in the open space.

The above writ petition is accordingly dismissed. But, in the circumstances without costs.