08 Jun 2121

Market Committees constituted under the provisions of Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963 are entitled for Market Fees on purchases of Agricultural Commodities made under the Price Support Scheme (PSS) - Bombay High Court

Case : The Maharashtra State Market Committee Co-operative Federation Ltd. v. Union of India and Ors. Writ Petition No. 10289 of 2019

Court : Bombay High Court

Bench : Justice V. G. Bisht and Justice R. D. Dhanuka

Decided on : 08 Jun 2121

Relevant Statues

Articles 12, 226 of the Constitution of India, 1950

Sections 29, 31, 59 of the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963

Brief Facts & Procedure History

1. The Petitioner is a Federation of Agricultural Produce Market Committees in Maharashtra registered under the provisions of Maharashtra Co-operative Societies Act, 1960. According to Petitioner, in order to confer powers on Market Committees to establish market funds for various purposes, the State of Maharashtra enacted the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963. Then he contends that there were no Guidelines to regulate the Price Support Scheme operation. Subsequently, the Government of India, through the Ministry of Agriculture Department of Agriculture & Co-operation issued Guidelines for the said scheme.

2. He further contends that as per the said Guidelines, the Respondent No.4 i.e. National Agricultural Co-operative Marketing Federation of India Ltd. (NAFED) is one of the Central Nodal Agencies for procurement of 16 notified agricultural commodities of oilseeds and pulses under Price Support Scheme. It procures stocks under the said Scheme directly from the farmers through its co-operative network at the State level and primary level. National Agricultural Co-operative Marketing Federation of India Ltd. also undertakes procurement and marketing of agricultural commodities in a joint venture with States Co-operative Marketing Federations/ Marketing Co-operative Societies.

3. The Petitioner further contends that as per clause (C) of Chapter II of Price Support Scheme Guidelines, it is the responsibility of Central Nodal Agencies to identify the purchase centres in consultation with State Government. Furthermore, as per clause (XIV) of Chapter III of said Guidelines, the service charges, at 2.5% for copra and 1.5% for other commodities are paid on the Minimum Support Price (MSP) to the Central Agencies. Additionally, a maximum of 2% service charge is paid to the procuring agencies at the State and procurement level. Procurement by State Level Marketing Federation shall be made through the Primary Co-operative Societies in which service charges, at 1% (out of total 2%) is to be paid to Primary Societies. However, if there are no Primary Societies functional in a particular area as certified by the State Government, the State Agencies/ Federations would be paid a 2% service charge provided they open and manage the procurement centres as per the Guidelines. Besides, the Department of Agriculture and Co-operation (DAC) shall also provide a 2% incentive to the central agencies on the net profit earned for disposal of Price Support Scheme stocks. Thus, the nodal agencies are entitled to service charges and incentives for implementing the Price Support Scheme Guidelines. According to the petitioner, the nodal agencies are liable to pay all statutory taxes and service charges.

4. It is the further case of the Petitioner that if provisions of the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963 are read with Price Support Scheme Guidelines, then the Market Committees are entitled to fees and charges payable to them under Section 31 for services provided to seller and purchaser. Further, the Market Committees provided basic facilities for the management of the procurement centres opened in the respective market areas. Therefore, the Market Committees requested the Respondents to pay market fees payable under Section 31 in addition to the fees payable under clause (XIV) of Chapter III of Price Support Scheme Guidelines. Accordingly, upto the year 2016-17, the said market fee was duly paid.

5. However, from 2017-18 onwards the Respondents have stopped payment of market fees. On an inquiry and demand, the District Marketing Officers have informed to the Market Committees that as per Price Support Scheme Guidelines, the said market fees are not payable. Despite repeated demands seeking payment of market fees and charges for the purchase of notified stocks made by the National Agricultural Co-operative Marketing Federation of India Ltd., no payments are made till date. Therefore, the present Writ Petition.

The Issue(s) of the Case

Whether the Market Committee constituted under the provisions of Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963 are entitled to market fees on purchases of agricultural commodities made under Price Support Scheme (PSS)?

The Observations of the Court

The Honourable Bombay High Court observed the following:

1. Critically analyzed Section 31 of the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963 and opined that the said section does not make any distinction between the private purchaser and Respondent No.4, National Agricultural Co-operative Marketing Federation of India Ltd.

2. Noted that the exemption is given only to State duties or Taxes and not for fees under clause (B) (ii) of Chapter II of guidelines for Price Support Scheme (PSS) by referring to the case of Kewal Krishan Puri and Another Versus State of Punjab and Another, (1980) 1 SCC 416. The principles culled out by the above case are characterized and reflected by Section 29 of the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963.

3. Contemplated that the fees levied are not on the agricultural produce but on Respondent No.4, National Agricultural Co-operative Marketing Federation of India Ltd., the buyer of the agricultural produce in the market in relation to the transaction of its purchase. Therefore, the Court opined that it would be myopic to draw any self-serving interest from clause (B) (ii) of Chapter II of guidelines for Price Support Scheme.

4. Took cognizance of the failure on the part of the Respondents to fulfil the guidelines for Price Support Scheme by not publishing a notification in the Official Gazette as per the mandate of Section 59 of the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963.

5. Observed that the Central Government through its Nodal Agencies, like Respondent No. 4, National Agricultural Co-operative Marketing Federation of India Ltd., is performing public and statutory duty in the light of Price Support Scheme Guidelines. Since Respondent No.4 is discharging public functions, the Court opined that it would be amenable to writ jurisdiction under Article 226 of the Constitution of India, 1950.

6. Concurred with the fact that the scheme has been formulated for the purpose of giving maximum benefit to the farmers and opined that the market fee which the Petitioner is entitled to under the provisions of the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963 cannot be deprived of.

The Decision Held by the Court

The Honourable Bombay High Court declared in favour of the Petitioner in terms of prayer clauses (b) and (c) and directed Respondent No.4, National Agricultural Co-operative Marketing Federation of India Ltd. (NAFED) to make payment of market fees to the Market Committees. 

Click here to view/download the judgement >