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Supreme Court of India

STATE OF MADHYA PRADESH & ORS. versus GALLA TILHAN VYAPARI SANGH & ORS.

Decided
17 January 1977
Judges listed
S. MURTAZA FAZAL ALI (as the open data lists them; this may not name the whole bench)
Disposal
Appeal(s) allowed

Citations

Official
[1977] 2 S.C.R. 619 · 1977 INSC 14

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The Court's text

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FA~AL Au, J. In this appeal by special leave, on an app~ication filed by the respondents before the High Court of Madhya Pradesh, the High Court struck down the constitutional "."alidity of sub-s. (5)(a) of s. 37 of the Madhya Pradesh Krislti Upaj Mandi Adhiniyam, 1?72 -hereinafter· referred to as 'the Act'-(No. 24 of 1973). The impugned sub-section runs as follows : ' ' ...

p. 619, margin F

" ( 5) Every commission agep.t shall be liable-:-;

p. 619, margin F

to keep the go~ds' of' his. pr_inc;ipal 'in ·. s~fe: custody . without any charge other than the comm1s~1on payable to him; and" The High. C:ourt thought that this statutory provision places unreasona~le res.tnct~on on the co~mission agent and pu!B great burden on ~1m for storm~ 'f!he good.s given to him by the principal without chargrng. the. comm1ss1on for its safe custody. The Act is a social piece of leg1slat~on and should have been liberally construed so as' to advance the. obiect of the Act and fulfil the aims to be achieved thereby. The mam purpose of the Act is to secure a scientific method of storage, sale, distribution and marketing of agricultural produce and cut out a~ far. as possible middle-man's profit. The Act, therefore, contains prov!S!ons of a beneficial nature preventing profiteering tendencies. It is not, however, the hardship that can be termed unreasonable so as to make a statute unconstitutional. Moreover, the High Court does not appear to have looked to the scheme of the Act and has in fact completely overlooked the ptovisions of s. 3 7 ( 4) which runs as follows : .

pp. 619–620, margin H

" ( 4) The commission agent shall recover his commission only from his principal trader at such rates as may be specified in the bye-laws including all such expenses as may be incurred by him in storage of the produce and other

p. 620, margin C

services rendered by him." This section clearly empowers the commission agent to charge such rates as may be specified by the bye-laws even for the storage of the Produce and other services rendered by him. This provision also does not prevent the commission agent from levying reasonable charges for the storage over and above his commission. All that the Act prevenffi is that the commission agent is prohibited from levying any charges for safe custody from the farmer or the principal. This is done in order to attract and lure the farmers to place their goods with commission agents without additional payment of charges for ~afe custody. Section 37 ( 4), however, compensates the commission agent by authorising him to charge his commission and all expenses which may be incurred by the commission agent in connection with the storage of the produce and the services rendered by him. This ~ection, therefore, clearly authorises the commission agent not only to charge his commission from the principal trader but also expenses incurred by him for the purpose or the storage. That apart s. 2(e) of the Act which defines a "Commission agent" empowers him to charge any commission or percentage upon the amount involved in ~uch transaction.

p. 620, margin C

For these reasons, therefore, we do not see any hardship or unreasonablenei& in the provisions df s. 3 7 ( 5) (a) of the Act. The High Court, therefore, committed an error of law in striking down this provi~ion as unconstitutional. In our opinion, therefore, s .. 3_7 (5)(a) of the Act is constitutionally valid. In the view we take, 1t is not necessary to 80 into the question whether the law violates Art. 19 of the CoI111titution which stands suspended during the emergency.

p. 620, margin F

The lilppeal is accordingly allowed. The order of the High Court is quashed. In the circumstances, there will be no order as to costs. M.R. Appeal allowed.

p. 620, margin H