Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 12
PETITIONER:
CHINT RAM CHAND & ORS.
Vs.
RESPONDENT:
STATE OF PUNJAB & ORS.
DATE OF JUDGMENT: 08/02/1996
BENCH:
JEEVAN REDDY, B.P. (J)
BENCH:
JEEVAN REDDY, B.P. (J)
KIRPAL B.N. (J)
CITATION:
1996 AIR 1406 1996 SCALE (2)159
ACT:
HEADNOTE:
JUDGMENT:
WITH
CIVIL APPEAL NO. 2945/1996
(Arising out of S.L.P.(C) No. 10997 of 1995)
Parduman Chand Bhandari & Ors.
V.
State of Punjab & Ors.
WITH
CIVIL APPEAL NO. 2946/1996
(Arising out of S.L.P.(C) No. 9992 of 1995)
Kartar Singh Gajinder Singh & Ors.
V.
State of Punjab & Ors.
WITH
CIVIL APPEAL NO. 2947/1996
(Arising out of S.L.P.(C) No. 24712 of 1995)
Guru Nanak Fruit Company & Ors.
V.
State of Punjab & Ors.
J U D G M E N T
KIRPAL, J.
Leave granted.
The question which arises for consideration in these
appeals is that when a market yard is shifted from one site
to another whether the licensees working in the old market
yard, are entitled to have new sites in the new market yard,
as a matter of right by virtue of their being earlier in
business or whether they have also to compete with the
general public in open auction for acquiring land in the new
market yard.
The aforesaid question of law is common in all the
present appeals. Appeals arising out of Special Leave
Petition (c) Nos. 10997 of 1995 and 11139 of 1995 pertain to
market in Jagraon. appeal arising out of Special Leave
Petition (c) No. 24712 of 1995 is with regard to Fazilka.For
the purpose of deciding the point in issue, it is sufficient
to refer to facts pertaining to Jagraon only, as the facts
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 12
regarding Ludhiana and Fazilka are similar, barring minor
details. Which are not relevant.
Under the provision of Section of the Punjab
Agricultural Markets Act, 1961 (hereinafter referred to as
the Act’). Jagraon was declared as a notified market area.
Thereafter, on 23.8.1963. old grain market (hereinafter
referred to as ‘the old Mandi’). Jagraon was declared as a
principal market yard under Section 7 of the Act by the
State of Punjab. The appellants herein are persons who had
obtained licences as commission agents for carrying on their
business of sale and purchase of agricultural produce. It is
the case of the appellants that they were owners/tenants and
were licensees of shops which were situated within the old
Mandi. The State of Punjab on 27.3.1978. under Section 7 of
the Act. declared a new grain market. Jagraon (hereinafter
referred to as ’the new Mandi’) to be established as a sub-
market yard. On 17.9.1984, by Notification issued under
Section 7 of the Act, the old Mandi was denotified as the
principal market yard. By another Notification of the same
date, the Punjab Government declared the new Mandi as the
principal yard under Section 7 of the Act. This was followed
by Notification of the Punjab Government under Section 8 of
the Act, issued on 30.3.1988, whereby it was directed that
no transaction in agricultural produce would be transacted
within the 5 k.Ms. of the new Mandi.
The promulgation of the aforesaid Notifications gave
rise to the filing of a number of writ petitions before the
Punjab & Haryana High Court. With regard to Jagraon, the
first Writ Petition (C) No. 6174 of 1988 was filed by 92
dealers of the old Mandi of Jagraon on 26.7.1988 in favour
of the petitions(appellants herein). This petition was
dismissed on 26.7.1990 by the Single Judge and Letter Patent
Appeal No. 1107 of 1990 was filed. In the meantime Civil
Writ Petition No. 4199 of 1991 was filed on 18.3.1991 by the
dealers of Sirhind. Patiala. The said petition was admitted
and referred to the full Bench and, in that case also,
interim stay was granted.
Circular dated 2.3.193 was issued by the Punjab Mandi
Board to the effect that the dealers/licensees will arrange
for themselves plots in the new Mandi. Jagraon. This was
followed by Notices dated 18.10.1993 which were issued by
the Punjab State Agricultural Marketing Board to some of the
dealers. In these Notices. reference was made to the
Notification issued under Sections 7 & 8 of the Act and the
dealers/licensees were directed to shift to new Mandi for
the purposes of conducting the business of sale and purchase
of agricultural produce. Aggrieved by these Notices, 149
dealers, including the appellants in the appeal arising out
of Special Leave Petition (C) No. 11139 of 1995, filed civil
Writ Petition No. 15831 of 1993. It appears that 16 of these
petitioners were the petitioners in the first Writ Petition
No. 6174 of 1988 but the fact of filing of earlier Writ
Petition was not disclosed in this petition Civil Writ
Petition No. 15831 of 1993 was admitted and was also
referred to the full Bench and in the meantime interim shay
was granted.
On 17.2.1994, an order was passed by the Division Bench
of the Punjab & Haryana High Court High Court in Civil Writ
Petition No. 15831 of 1993 vacating the interim stay on the
ground that the said 16 persons (wrongly mentioned as 19 in
the High Court’s order) had not disclosed that they had
joined in the filing of earlier Writ Petition No. 6174 of
1988. The interim orders were, therefore, vacated because of
the concealing of this material fact, Special Leave Petition
(c) No. 12306 of 1994 was filed in this court against this
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 12
order and the same was dismissed on 16.8.1994.
On 30.5.1994, yet another Writ Petition being civil
Writ Petition No. 7211 of 1994 was filed purporting to
challenge the constitutional validity of Section 8 of the
said Act. It appears that out of these petitioners. 34 were
those who were party to the earlier Writ Petition. While
admitting this petition interim stay was granted. This Writ
Petition was dismissed by a Single Judge on 4,9.1995 for the
reason that the petitioners had deliberately withheld the
facts from the Court and had succeeded in misleading the
Court to pass interim orders in their favour. Furthermore,
it was observed that the conduct of the petitioners who had
filed successive petitions to challenge various
Notifications issued under Section 7(2) and 8 of the Act on
one ground or the another was condemnable and, therefore
they had disentitled themselves from hearing of the case on
merits. While dismissing the Writ petition, cost of Rs.,
20,000/-was also imposed
The main grievance before the High Court in all the
petitions which were filed was to the effect that the
licensees had applied to the Government of Punjab for
allotment of alternative sites in the new Mandies on no
profit no loss basis. The licensees had challenged the
selling of the plots in the new Mandies by open auction. It
was contended that in case the auction takes place, the
licensees would be compelled to shift their business to the
new Mandies even if they fail to buy plots in competition
with other non-licensees on higher rates and, in the welfare
state while making plan for establishment of a new Mandi,
the State Government should not act with the motive of
profit earning and that the petitioners/licensees should be
allotted plots first and only the remaining plots should be
auctioned. It was contended that the application for
allotment of alternative sites on no profit no loss basis
having rejected by the State Government the same had
resulted in violation of the petitioner’s fundamental rights
under Articles 14, 19(1)(g) and 31 of the Constitution of
India.
The Punjab Mandi Board, in its written statement filed
before the High Court, raised preliminary objection that the
writ petition was highly belated. The process of sale of the
plots/spaces in the new Mandi began as far back as in the
year 1986 and allottees had taken possession and had either
raised or were in the process of raising structures upon
them and to disturb the process of formation of new Mandi at
this belated stage would cause great harm. It was admitted
that the appellants were licensees carrying on their
business in the old Mandi. However, it was pleaded that the
old Mandi was not a planned Mandi and was grossly inadequate
for the needs of the farmers and the public and the
formation of the new Mandi was on the request of the farmers
and had all modern amenities and facilities. Further the
business of the Mandi was being carried out in an over-
crowded area of the town within the municipal limits. It was
also pleaded that the appellants do not have any prior claim
to the plots in the new Mandi which were being sold in open
auction and the appellants were at liberty to compete in
open auction and purchase the plots and space and the
appellants, as old licensees, had no legal or preferential
right to get the plots by allotment. Nor there was any legal
obligation on the part of the respondents to provide
alternative sites to the appellants. It was further pleaded
that the appellants had no such fundamental right and none
of the fundamental rights of the appellants had been
violated and that nobody had interfered with their ownership
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 12
in the premises in the old Mandi. The State of Punjab and
the Administrator. New Mandi Township in their joint written
statement pleaded that the plea of allotting plots on
reserve price had been thoroughly examined at all levels of
the Government, at different times, and it was considered
more suitable to sell the plots in open auction only. It was
denied that the auctioning the plots in the new Mandi would
result in the appellants being up-rooted or that they had
any legal right for allotment of plots Further the policy of
the State Government was only to sell the plots in open
auction to the public at large. It was further pleaded that
there was no policy of the State Government to allot the
plots in the new mandi: that the appellants could not be
allotted plots and they could purchase the same in open
auction, which in no way was unconstitutional and that the
demands of the appellants for allotment of plots was neither
legal nor justifiable. It was also denied that the motive of
the State Government was profit earning. Since the
Government was determined not to preserve the monopoly of
the existing Commission Agents and with a view to free
farmers from the exploitation/malpractices fampart in the
trade, carried out in old Mandi where there was no space for
unloading of good-trains it had been decided to sell the
plots by public auction. In rainy season, water collected up
to knee level in the old Mandi which resulted in damaging
the produce of the poor farmers. It was also pleaded that
the appellants were not entitled to get plots in new Mandi
as they would not be removed from their existing shops in
the old Mandi or compelled to shift their business in the
new Mandi. Further, the existing sub-yard or the old Mandi
would not be abolished. It was denied that the action of the
respondents to sell the plots in public auction is violative
of Articles 14, 19(1)(g) and 31 of the constitution of
India.
By the impugned judgment dated 20.12.1994, the full
Bench of the High Court while dismissing the Writ Petitions
and Letter Patent Appeals, came to the following conclusion:
"In view of the above discussion,
we are of the considered view that
the ousters of the old Mandi are
not entitled to get plots/sites in
the new Mandi as a matter of right
by virtue of their being earlier in
business for sale and purchase of
agricultural produce particularly
when there was sufficient time gap
between the denotification of the
old Mandi notification of new Mandi
as a principal market yard on one
hand and Notification under Section
8 of the Act on the other hand,
where after notification of the new
Mandi all the sale and purchase of
agricultural produce within a
specified distance from the new
principal market yard is prohibited
and the State of the competent
authority had already made
provisions for adequate number of
plots/open sites in the new mandi
and the plots made available in the
new Mandi are sold in open auction
giving equal opportunity to the
licensees and other persons from
the public who wanted to enter in
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 12
the trade of purchase and sale of
agricultural produce in the new
Mandi. Apart from that the fact
that aggrieved persons including
the petitioners had been given two
months time by the Single Bench to
shift their business to the new
Mandi would also be a most relevant
factor for determining the right of
the ousters from the old Mandi for
getting plots or sites in the new
Mandi. We are further of the view
that the sale of plots in the new
Mandi by public auction is the best
method for giving such plots and
would be preferable to the
allotment of plots to such ousters
by pick and choose method. Thus in
order to get new sites or plots in
the new Mandi, in our view, the
ousters of the old Mandi shall have
to compete with general public in
open auction."
On behalf of the appellants, three contentions have
been raised by Mr. R.K.Jain the learned counsel while
relying upon the order of this Court dated 9.5.1995 in
Appeal arising out S.L.P (c) No. 20644 of 1993 Harbans Lal
Subhash Chand & Ors. Vs. State of Punjab & Ors. and Appeal
arising out of S.L.P (c) No. 5229 of 1994 Lachman Das Sunder
Dass & Ors. Vs. State of Punjab & Ors, relating to allotment
of plots in the new Mandies at Ferozepur and Rajpura, it was
submitted that in the present case also alternative sites
should be allotted at the concessional rates or on lease to
the appellants. In the said order it was, inter alia, stated
that the auction already held in the new Mandies will not be
affected. A person who was an existing licensee would be
allotted a plot in the new Mandi on payment of a lump sum of
Rs. 1.65,000/- for Ferozepur and Rs. 2.50,000/- for Rajpura.
The second submission was that the State was duty bound to
provide to the existing licensees a place to do business at
the reasonable prices in the new Mandi and without such
provision being made, the old Mandi cannot be stopped from
functioning. It was, lastly, submitted that the State cannot
adopt a procedure of allotment in the new Mandi by which the
existing licensees can be thrown out of business all
together by forcing them to compete with outsiders.
including the properly dealers.
The aforesaid order dated 9.5.1995 can be of no
assistance to the appellants. Firstly, the order was passed
with the consent of both the parties, which consent is
lacking in the present case, Secondly, the order
specifically states that the same "shall not be treated as
precedent". Faced with this. Mr. Jain contended that even
though the said order may not be regarded as a precedent
nevertheless the State which had earlier agreed to allot
plots to the existing licensees in Ferozepur and Fazilka
cannot take a different stand with regard to the
establishment of new Mandies in other parts of the State.
There is no force in this contention. What are the
circumstances, which led the State to agree to the passing
of the consent order are not known. Furthermore the
contention of the appellant is that the alternative sites
should be sold to them at the reserve price plus 25%. In the
aforesaid order, however, this formula was not adopted and
the court had directed the proposed sites to be allotted on
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 12
lump sum payment of Rs. 1,65,000/- per plot in Ferozepur
Mandi and Rs. 2,50,000/- per plot in Rajpura Mandi.
According to the Advocate General, the State had agreed to
the passing of the consent order inasmuch as on 24.9.1995 a
letter had been written by the Government to the effect that
allotment of plots in the new Mandies will be made at the
reserve price plus 25% to all Artias. By another letter
dated 26.9.1985 the aforesaid decision of the Government was
withdrawn Auction at Ferozepur was notified for 4.12.1985
while in Rajpura, auction was held on 10.11.1986. The State
Government, it was submitted by the Advocate General, had
consented to sell all the plots at fixed price in favour of
the appellants therein and not be auction because of the
aforesaid letter dated 24.9.1985. It was further contended
that the transfer was to be at price which was above the
reserved price and the figure of Rs. 1.65,000/- and
Rs.2.50,000/- in respect of Rajpura was stated to have
arrived at by taking the average of the auction prices which
had been realist on the auction of the other plots in the
said Mandies. It is clear, therefore that the aforesaid
order of this court can give no right to the appellants to
the allotment of land at a concessional rate.
In support of this contention that the State was bound
to provide alternative sites at the reasonable prices in the
new Mandi to the existing licensees. Mr.Jain relied upon an
order dated 7.8.1991 passed in civil Appeal Nos. 3194-95 of
1991. Prem Chand Tarlok Chand & Ors. Vs. State of Haryana.
In that case the State of Haryana had a policy whereby 45%
of the available accommodation at the new site was reserved
for the existing licensees which was to be allotted on the
basis of lots to be cast. In this connection if was observed
that normally once the Government starts regulating the
place of sale of agricultural produce covered by the Act and
does not permit any other place to be used for the purpose,
there is an inherent obligation on the Government to provide
at the new site for all the licensed dealers sufficient
accommodation for carrying on their trade and until that is
done it would not be possible for the Government to direct
closure of the old site". The Advocate General is right in
contending that the aforesaid observation did not require
the allotment of alternative sites to be made at the
concessional rates. In fact this was not the issue in that
case. All that was observed was that sufficient
accommodation was to be provided to all the licensed dealers
to carry on their trade. Moreover the policy of allotment of
sites of the State of Punjab is different from the policy of
the State of Haryana with regard to which the order in Prem
Chand’s case (supra) was passed. In the State of Punjab, all
the sites are allotted by public auction. This gives an
opportunity to all the existing licensed dealers, and also
to the new entrants, to compete and obtain sites in the new
Mandi. Therefore, all the existing licensed dealers who may
be having a place of business in the old Mandi do have a
right to acquire by auction sites at the new place of
business in the new Mandi. This Court never directed in
Premchand’s case (supra) that alternative sites should be
allotted at a reasonable price or be given on lease. Putting
new sites to auction and allowing everyone to compete would
tantamount to the Government providing an opportunity to
enable the existing licensees to shift their place of
business to the new Mandi if they so desire. Therefore the
observations in Premchand’s case (supra) to the effect that
there was an obligation to provide new sites for all
licensed dealers would only mean that an opportunity should
be granted to the licensed dealers to acquire sites in the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 12
new Mandi.
It was submitted by Mr. Jain that if alternative sites
are not provided to the existing licensed dealers in the new
Mandi, they would be deprived of their livelihood and this
will result in violation of their fundamental rights under
Articles 14, 19(1)(g) & 21 of the constitution of India.
The scheme of the Act and the Rules framed thereunder
show that shifting of the Mandi from one place to another
without providing for an alternative site or a shop to a
licensed dealer, cannot violate any statutory or fundamental
right of any of the licensees.
It is not in dispute that after declaration of a
notified market area under Section 6 of the Act, the State
Government may notify one principal market yard and one or
more sub-market yards under Section 7 of the Act. These
market yards are established so as to enable the
agriculturists to bring their agricultural produce to the
market for sale. The sale is to take place, in the markets
established in Punjab, in the manner provided by Rule 24 of
the Punjab Agricultural Produce Markets (General) Rules,
1962 (hereinafter referred to as ’the Rules’) which reads as
under:
"SALE OF AGRICULTURAL PRODUCE
(1) All agricultural produce
brought into the market for sale
shall be sold by open auction in
the principal or sub market yard.
(2) Nothing in sub-rule (1) shall
apply to a retail sale as may be
specified in the bye-laws of the
Committee.
(3) A committee may, and on being
directed by the [chairman of the
Board or an officer authorized by
him] shall fix timings for the
starting and closing of the auction
in respect of any agricultural
produce, other than fruits and
vegetables.
(4) The price of agricultural
produce shall not be settled by
secret signs or secret bid and no
deduction shall be made from the
agreed price of the consignment.
(5) The auction shall not be
conducted by any person other than
the person engaged by the
Committee:.
Provided that under special
circumstances the [chairman of the
Board or an officer authorized by
him] may allow a committee to make
or permit any alternative
arrangement:.
Provided further that nothing
in this sub-rule shall apply to the
auction of vegetables and fruits.
(6) The highest bid offered by a
buyer at an auction and at which
the seller of the produce gives his
consent to sell his produce, shall
be the sale price of the produce.
(7) The buyer shall be considered
to have thoroughly inspected the
produce for which he has made a bid
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 12
and he shall have no right to
retract it.
(8) As soon as the auction for a
lot is over the auctioneer shall
fill in the particulars in a book
to be maintained in Form H and
shall secure both the buyer and the
seller or their respective
representatives, whoever may be
present at the spot.
[ (8-A) A register in form HH shall
be maintained by the Committee. The
agricultural produce which remained
unsold during the course of auction
be entered and it shall be
obligatory for every dealer or
kacha Arhtiya or commission agent,
as the case may be, to report about
the unsold produce to the committee
as soon as his agricultural produce
is sold]
(9) The buyer shall be responsible
to get the agricultural produce
weighed immediately after the
auction or on the same day the
produce is purchased by him Land
the seller or the buyer shall be
liable for any damage to or loss of
or deterioration in, the produce
after the auction according to the
local usage or custom for as per
provisions of rule 13].
(10) A person engaged by a producer
to sell agricultural produce on his
behalf shall not. act as a buyer
either for himself or on behalf of
another person in respect of such
produce [without the prior consent
of the producer:].
(11) The kacha Arhtiya shall make
payment to the seller immediately
after the weighment is over.
(12) Every kacha Arhtiya shall on
delivery of agricultural produce to
a buyer execute a memorandum in
Form I and deliver the same to the
buyer on the same day or the
following day, mentioning sale
proceeds plus market charges
admissible under rules and bye-
laws. The counterfoil shall be
retained by the kacha Arhtiya:.
[Provided that nothing in this
sub rule shall apply where
agricultural produce, being
vegetable or fruit, not exceeding
one quintal in weight is
delivered.]
(13) In the absence of any written
agreement to the contrary the sale
price of agricultural produce
purchased under these rules shall
be paid by the buyer to the kacha
Arhtiya on delivery of Form I.
(14) Delivery of agricultural
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 12
produce after sale shall not be
made or taken unless and until the
kacha Arhtiya or, if the seller
does not employ a kacha Arhtiya,
the buyer has given to the seller a
sale voucher in form J, the
counterfoil whereof shall be
retained by the kacha Arhtiya or
the buyer, as the case may be."
It is apparent that the aforesaid Rule stipulates that
all agricultural produce brought into the market for sale
shall be sold by open auction in the principal or the sub-
market yard. In order to enable the sale by auction to take
place, platforms are constructed for the producers to come
and place their produce. Establishment of a Mandi in effect
means the erection of the platforms where agricultural
produce is brought and placed for sale by auction. In order
to further facilitate the purchase and sale shops are
constructed which are acquired by the licensed dealers.
Neither the Act, nor the Rules, makes is obligatory on the
State Government to construct such shops before notifying a
market yard. The existence of such shops only make it
convenient for the licensed dealers to conduct their
business. but is not essential that they must have shops
within the Mandi to enable them to carry on their business
activities.
A dealer is granted a licence under Section 10 of the
Act which allows him to carry on business in a notified
market area. According to Rule 17(5) of the Rules, a
separate licence is required by a person for "setting up
establishing or continuing or allowing to be continued more
than one place for the purchase, sale, storage and
processing of agricultural produce in the same notified
market area" In other words, a dealer having one place of
business in a notified area is required to have only one
licence which would entitled him to carry on business in any
of the Mandies situated in that notified area but, if he has
more than one places of business, then for each place he is
obliged under Rule 17(5) of the Rules to have a separate
licence. Neither the Act nor the Rules requires that the
place of business of a licensed dealer must be within the
precincts of the Mandi. All that he Act and the Rules
require is that the auction, for the sale and purchase of
agricultural produce, shall be within the notified market
yard or sub-yard The appellants and other licensees who are
already having shops or plots in the old Mandies have not
been deprived of the same and nor are they prevented, in any
manner, from carrying on in their shops their trade or
business other than that of purchase and sale of
agricultural produce in public auction. The sale of
agricultural produce by auction, as contemplated by the Act
and the Rules, does not take place in the business premises
or shops of the licensed dealers even if they are located
within the Mandi. It can only take place on the platforms in
the said market yards. Once the purchase and sale take
place, then bye-law 11 of the Bye-laws framed under the
Rules makes it obligatory for the buyer to lift the
agricultural produce bought by him within 48 hours of
auction or purchase. The agricultural produce brought to the
Mandi by the agriculturist has thus to be removed from the
auction platforms by the buyers and there is no requirement
of law that the produce so purchased has to be stored within
the Mandi itself. Therefore as long as the licensed dealers
continue to hold valid licences for a notified area then
irrespective of the locations of their shops or offices,
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 12
they are entitled to do their business even if they do not
have shops within the Mandi. This being so, the question of
appellants fundamental rights under Articles 14, 19(1)(g) or
21 of the constitution of India being violated do not arise.
The decision to sell the sites in the new Mandi by
auction would mean that the existing licensees may have to
compete with the non-licensees or newcomers for the purchase
of the sites within the Mandi. It is not possible to accept
the contention that adoption of a procedure to sell by
auction is in any way bad in law. If the contention of the
appellants in accepted, the result would be that the
business of commission agents would continue to be in the
hands of the old and established licensed dealers and no new
person would have any chance of entering the said business.
The Act and the Rules framed thereunder do not contain any
provision which provides for or makes it obligatory on the
State to construct shops or to provide for sites and to give
preferences to the existing licensed dealers It is well
recognized that one of the fairest means, which a State can
adopt without showing any favour in disposing of the
property is to sell it by auction specially where the
property in question is business premises. The sale of plots
by public auction is a judicious method for providing
sites/plots and givens an equal opportunity to all sections
of public who may be interested in carrying out trade for
the purchase and sale of agricultural produce including the
appellants or other licensees who had already been carrying
on such trade or business in the old Mandies.
Mr. R.L. Batta, learned Senior Counsel appearing for
some other dealers of Jagraon, submitted that in the old
Mandi, which was spread over an area of 25 acres, there were
109 grain shops measuring 57" x 14". The total number of
licensees working therein were stated to be 250. In the new
Mandi, there are 139 grain shops measuring 125" x 20". By
providing for bigger shops, it was submitted, the smaller
traders have not been able to get shops in the new Mandi in
public auction. Referring to Circular dated 14.11.1994
issued by the Director, colonization, Punjab, it was
submitted that more grain shops of smaller sizes can be
constructed in the new Mandi.
In the aforesaid Circular dated 14.11.1994, it is
stated that five grain shops in the new Mandi in Jagraon
remained to be auctioned. The Circular recognized the need
for more grain shops and provision being made for future
expansion of the Mandi. It was stated in the circular that
an area measuring 6.33 acres "has been earmarked for
additional auction platforms in the north-west of the Mandi
site some smaller or bigger size grain shops can be carved
out in this area. Divisionl Town planner, Mandi Board is
being requested to send the requirement of additional grain
shops. Some grain shops of suitable size be planned in the
reserve area mentioned above in such a way that there is a
parking in the front of these shops and service lane on the
sides keeping in view the immediate requirement of plots in
Mandi".
The area of the grain shops of the new Mandi is much
larger than that of the area of the shops of old Mandi.
Though, the new Mandi is spread over an area of 75.125
acres, the number of shops which are earmarked for grain are
only 139. The Advocate General, however submitted that apart
from 139 shops which are earmarked for grain, large number
of booths have been constructed which can also be used by
the licensed dealers dealing in grain. Apart from that
considering the nature of the business of the licensed
dealers, it is possible for them to conduct their business
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 12
in smaller shops. Therefore, even if shops are to be
allotted by auction the smaller size shops would be within
easy reach of the smaller traders. Keeping in view the
aforesaid Circular dated 14.11.1994, but without issuing any
formal directions, it is hoped that some more grain shops or
booths of smaller sizes will be constructed or earmarked in
the aforesaid area measuring 6.33 acres and when this is
done, the smaller traders, who are still out of the new
Mandi, would be in a position to acquire business premises
within the new Mandi. The scheme envisaged in the circular
dated 14.11.1994 should be considered, and if possible,
implemented at an early date.
Before the High Court, provision of Section 8 of the
Act was challenged by contending that the same infringes
upon the freedom to carry on trade and business enshrined in
Article 19(1)(g) of the constitution because the power is
given to the State Government to notify a place as sub
market yard under Section 7 and to prohibit any person to
set up or establish any other market within the limits of
such notified market or within a distance thereof to be
notified in the official gazette. The said Act has been
enacted for the purpose of better regulation of the
purchase/sale/storage and processing of agricultural produce
and establishment of markets for agricultural produce in the
State of Punjab . It is quite obvious that for the proper
regulation or monitoring of such sale, unauthorized markets
within the notified area should not be allowed to be
established. It cannot be doubted that Section 8 does give
the power to place 8 restriction on the establishment of
unauthorized markets, but such a restriction is in public
interest and bears a reasonable nexus to the object which is
sought to be achieved by the Act. The new Mandies have been
established with a view to remove the old Mandies from the
congested areas and with the object of providing better and
more modern facilities to the farmers and others connected
with the purchase and sale of agricultural produce. The new
Mandies have been located at such places so as to provide
suitable and convenient location to all concerned after
taking into consideration the development of the town and
city as a whole. In fact no argument was addressed impugning
the locations which have been selected for the establishment
of new Mandies. The High Court was. therefore, right in
concluding that neither the provisions of Sections 7 or 8 of
the Act nor the restrictions imposed by the impugned
Notification violated the fundamental rights contained in
Article 19(1)(g) of the Constitution and that the
restrictions imposed were reasonable.
As already mentioned the proposal to shift the Mandies
to new sites has given rise to a spate of Writ Petitions
being filed before the Punjab & Haryana High Court. This has
resulted in inordinate delay in the establishment of the
Mandies and the closure of the old ones. Even though a new
grain Mandi was declared to be established in Jagraon in
March, 1978, it is only recently according to the Advocate
General, that the old Mandi has been closed and business has
started in the new Mandi. The litigation has presumably
resulted in the escalation of the cost of constructing new
shops, besides resulting in the old Mandies to continue in
the congested areas perhaps causing great deal of
inconvenience to the general public living in the vicinity.
Though, all the plots in the new Mandies at Jagraon and
Fazilka have been auctioned but in Ludhiana the old Mandi
has not yet been denotified and not a single auction of
plots has taken place. It is clear that this dealy in
shifting to new sites has occurred due to the actions of the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 12
existing licensed dealers of the old Mandies. Different Writ
Petitions have been filed in the High Court without
disclosing the pendency of earlier petitions and the orders
passed thereon. The conduct of some of the appellants of
withholding this relevant fact from the court and misleading
it to pass interim orders, despite the fact that similar
stay orders passed earlier had been vacated has been
adversely commented upon in Civil Writ Petition No. 7211 of
1994 by G.J. Singhvi J. of the Punjab & Haryana High Court
in his judgement dated 4.9.1995. That Writ Petition was
dismissed on the ground of the said conduct of the
appellants and heavy costs were imposed some of the
petitioners (appellants herein) in the said Writ Petition
No.7211 of 1994 before the High Court are the appellants in
Appeal arising out of Special Leave Petition (C) No. 10997
of 1995. These are appellant Nos. 3,7,9,21,24,32,37,and 41.
Appellant Nos.1,2,16,19,20,23,28, 34.35.36.37.39 & 45 in the
Appeal arising out of Special Leave Petition (C) No. 11139
of 1995 are persons who were also petitioners in the said
Writ Petition No. 7211 of 1994.
Apart from the fact that these appellants were parties
to the latter Writ petition and had not disclosed the filing
of the earlier writ petition in the High Court these
appellants in Appeal arising out of Special Leave Petition
(C) No. 11139 of 1995 have also not disclosed the filing of
Writ Petition No. 15883 of 1993 in the Punjab & Haryana High
Court. That petition was filed by persons who had purchased
sites in the new Mandi at Jagraon and had wanted a direction
for the establishment of the said Mandi and the closure of
the old one. 149 of the appellants in Special Leave Petition
(C) No. 11139 of 1995 moved an application before the High
Court and were impleaded as parties. The said Writ Petition
No. 15831 of 1993 was allowed and the validity of the
Notification issued under Sections 7 & 8 of the Act was
upheld. The filing of said civil Writ Petition No. 15831 of
1993 and its being allowed by the punjab & Haryana High
Court by its Judgment dated 8.4.1994 has not been disclosed
in Special Leave Petition (C) No. 11139 of 1995 even though
there were some common petitioners. There is a merit in the
contention of the Advocate General that even in this Court,
an attempt has been made on the part of the appellants not
to disclose full facts and to secure a favorable order. Such
a practice cannot be encouraged and has to be deprecated.
Accordingly, while dismissing these appeals, we impose a
cost of Rs 5,000/- on each of the appellant Nos.
3,7,9.21.24.32.37 and 41 in the Appeal arising out of S.L.P
(c) No. 10997 of 1995 and appellant Nos.
1,2,16,19,20,22,23,28,34,35,36,37,39 and 45 in the Appeal
arising out of S.L.P. (C) No. 11139 of 1995. The cost to be
paid to the State of Punjab.