judgement:
129 of 1959.
Petition under article 32 of the Constitution of India for the enforcement of fundamental rights.
R. Ganapathy Iyer, J. B. Dadachanji, section N. Andley, Rameshwar Nath and P. L. Vohra, for the petitioners.
N. section Bindra and R. H. Dhebar, for the respondents.
section T. Desai, Trikamlal Patel and I. N. Shroff, for the Interveners.
May 2.
The Judgment of the Court was delivered by WANCHOO, J.
This petition raises a question as to the constitutionality of the Bombay Agricultural Produce Markets Act, No. XXII of 1939 (hereinafter referred to as the Act) and the Rules framed thereunder.
The petitioners are businessmen of Ahmedabad.
Their case is that by a notification under the 661 Act the whole area within a radius of 12 miles of Ahmedabad city was declared to be a market area under section 4 of the Act for the purposes of the Act in respect of certain agricultural produce from June 1, 1948.
At the same time a market yard and a market proper were established for dealing in the commodities mentioned above; and simultaneously a market committee was established under section 5 of the Act for the Ahmedabad market area by the name of "The Agricultural Produce Market Committee, Ahmedabad.
" By later notifications certain other agricultural produce was declared to be regulated under the provisions of the Act in this market area.
ID 1959 a locality known as the "Kalupur market" in the Telia Mill compound near the railway station Ahmedabad was declared to be a sub market yard for the purposes of the Act.
The petitioners apparently were carrying on business in the Kalupur market and therefore after the declaration of that area as sub market yard, the market committee required the petitioners to take out licences under the Act without which they were not to be allowed to carry on business.
The petitioners contend that the various provisions of the Act and the Rules and bye laws framed thereunder place un reasonable restrictions on their right to carry on trade in agricultural produce and thus infringe their fundamental right guaranteed under article 19 (1)(g) of the Constitution.
In particular, the heavy fees payable to the market committee for taking out licences in order to trade in various markets impose a heavy burden on trade in the regulated commodities resulting in an unreasonable restriction on the right of the petitioners to carry on their trade.
Further the declaration of the market area and the establishment of market yard and sub market yards has resulted in compelling producers of agricultural commodities to carry their produce for long distances, thus imposing an unreasonable restriction on their right to carry on trade.
The petitioners thus assail the main provisions of the Act and some of the provisions of the Rules and the bye laws framed by the market committee, 84 662 which we shall specify at their proper place later.
The petitioners also contend that the State of Bombay has never required the market committee to establish a market as required by section 5AA of the Act and no market has in law been established by the market committee and therefore the market committee has no power to issue licences and to exercise other powers conferred under the Act on market committees.
They therefore pray that the Act and the Rules and the bye laws framed thereunder may be declared unconstitutional, ultra vires and void.
In the alternative a direction should be issued to the respondents, in particular the market committee, not to enforce the provisions of the Act, the Rules and the bye laws against the petitioners so long as a market has not been established as required under the law.
The petition has been opposed on behalf of the respondents, and their contention is that the Act, the Rules and the bye laws provide reasonable restrictions on the fundamental right to carry on trade under article 19(1)(g).
It is further contended that a market has been established as required by law, and therefore the market committee in particular has the right to enforce all the provisions of the Act, the Rules and the bye laws and to insist upon the petitioners taking out licences as provided therein.
Before we consider the attack made on the constitutionality of the Act, the Rules arid the bye laws framed thereunder, we should like to refer to the main provisions of the Act and the scheme of regulation provided in it.
The Act deals with the regulation of purchase and sale of agricultural produce in the State of Bombay and establishment of markets for such produce.
Section 2 of the Act is the definition section.
Section 3 provides for the constitution of markets and market committees and gives power to the Commissioner by notification to declare his intention of regulating the purchase and sale of such agricultural produce and in such area as may be specified in the notification; and objections and suggestions are invited within a month of the publication of the notification.
Thereafter the Commissioner after considering the objections and suggestions, if any, and 663 after holding such inquiry as may be necessary, declares the area under section 4(1) to be a market area for the, purposes of the Act.
The consequence of the establishment of the market area is given in section 4(2) which lays down that after the market area is declared, no place in the said area shall, subject to the provisions of section 5A, be used for the, purchase or sale of any agricultural produce specified in the notification.
After the declaration of the market area, the State Government is given the power under section 5 to establish a market committee for every market area.
Thereafter under section 5AA it becomes the duty of the market committee to enforce the provisions of the Act, and also to establish a market therein, on being required to do so by the State Government, providing for such facilities as the State Government may from time to time direct, in connection with the purchase and sale of the agricultural produce with which the market committee is concerned.
The Act however envisages that there may be a time lag between the declaration of a market area and the establishment of a market; therefore the proviso to section 4(2) lays down that pending the establishment of a market in a market area the Commissioner may grant a licence to any person to use any place in the said area for the purpose of purchase and sale of any such agricultural produce, and it is the duty of the market committee under section 5AA also to enforce the conditions of a licence granted under section 4(2).
Further under section 5A, where a market has been established, the market committee is given the power to issue licences in accordance with the Rules to traders, commission agents, brokers, weighmen, measurers, surveyors, ware housemen and other persons to operate in the market; provided that no such licence shall be necessary in the case of a person to whom a licence has been granted under the proviso to section 4(2).
The effect therefore of these provisions of the Act read with the definition section is this.
A market area is first declared under section 4(1).
In the market area, a market may be established.
The Rules make it clear that the market may consist of what are called market proper and principal market yard and 664 sub market yards, if any.
Under section 4A for each market area there shall be one principal market yard and one or more sub market yards as may be necessary and the Commissioner is given the power by notification to declare any enclosure, building or locality in any market area to be the principal market yard for that area and other enclosures, buildings or localities to be one or more sub market yards for the area.
As we have already said, the Act envisages that there may be a time lag between the declaration of a market area and the establishment of a market, and that is why there is a provision for licences under the proviso to section 4(2) pending the establishment of a market in a market area.
The establishment of a market, however, takes place only when the State Government requires the market committee under section 5AA to establish a market in the market area.
There does not seem to be any provision in the Act or the Rules as to how the market committee shall proceed, on being required to do so by the State Government, to establish a market; but reading the provisions of section 4A and section 5AA together it appears that after the State Government has required the market committee to establish a market, it has to approach the Commissioner with its recommendation to declare localities as the principal market yard and the sub market yards, if any, and the Commissioner makes a notification in regard thereto, and thereafter the market is established.
Till however such action is taken by the committee and the Commissioner notifies a principal market yard and sub market yards, if any, no market can in law be established; and other provisions of the Act which come into force after the establishment of a market cannot be enforced and the trade is till then regulated in the manner provided in the proviso to section 4(2).
After the market is established, the market committee gets the power to issue licences under section 5A. Other provisions of the Act provide for the constitution of market committees and the establishment of a market committee fund and the ancillary powers of market committees with which however we are not directly concerned in the present case.
It is 665 enough to refer to section 11 only in this connection, which provides that the market committee may subject to( the provisions of Rules and subject to such maxima as may be prescribed levy fees on the agricultural produce bought and sold by licencees in the market area.
This section, it will be noticed, applies to the purchase and sale of agricultural produce in the market area and the power under it can be exercised by the committee as soon as the market area is declared, though no market might have been established under section 5AA.
Till such time as the market is established the fees prescribed under section 11 would be levied on the licencees under the proviso to section 4(2).
Then come sections creating offences for contravention of the various provisions of the Act, which it is unnecessary to consider.
Section 26 gives power to the State Government to frame rules for the purposes of carrying out the provisions of the Act.
Section 27 gives power to the market committee to frame bylaws with the previous sanction of the Director or any other officer specially empowered in this behalf by the State Government and subject to any rules framed by the State Government under section 26.
Finally, section 29 provides that the State Government may by notification in the official gazette add to, amend or cancel any of the items of agricultural produce specified in the Schedule to the Act.
These are the main provisions of the Act and the scheme which results in the declaration of a market area and the establishment of a market therein.
The first contention on behalf of the petitioners is that sections 4, 4A, 5, 5A and 5AA which provide for the declaration of a market area and the establishment of a market are unconstitutional as they are unreasonable restrictions on the right to carry on trade in agricultural produce.
We are of opinion that there is no force in this contention.
This Court had occasion to consider a similar Act, namely, the Madras Commercial Crops Markets Act, No. XX of 1933, in M. C. V. section Arunachala Nadar etc.
vs The State of Madras and others (1) and the regulation with respect to marketing (1) [1959] Supp 1 S.C.R. 92.
666 of commercial crops provided in that Act was upheld.
The main provisions of the Madras Act with respect to the declaration of a market area (called notified area in that Act) and the establishment of markets are practically the same as under the Act.
It is therefore idle for the petitioners to contend that the main provisions contained in sections 4, 4A, 5, 5A and 5AA of the Act are unconstitutional.
Learned counsel for the petitioners, however, urges that there is a difference between the Madras Act and; the Act inasmuch as the Madras Act dealt with commercial crops whereas the Act makes it possible to bring every crop under its sweep.
It is conceded that though it may be con stitutional to regulate the sale and purchase of commercial crops, regulation of all crops made possible under the Act would mean an unreasonable restriction on the fundamental right enshrined in article 19(1)(g).
We are of opinion that there is no force in this contention.
The Madras Act which dealt with commercial crops specified certain crops as commercial crops in the definition section and added that the words "commercial crop" used in that Act would include any other crop or product, notified by the State Government in the Fort St. George Gazette as a commercial crop for the purposes of that Act.
In view of this inclusive definition of "commercial crop" in the Madras Act, it was open to the State Government under that Act to include any crop within the meaning of the words "commercial crop" which was regulated by that Act.
The Act had a schedule when it originally passed in which certain crops were included.
The State Government was however given the power to add to, or amend or cancel any of the items mentioned in the Schedule by section 29.
It is true therefore that under the Act it is open to the State Government to bring any crop other than those specified originally in the Schedule within its regulatory provisions; but the fact that it is possible to bring any crop within the regulatory provisions of the Act by amendment of the Schedule would not necessarily make the Act an unreasonable restriction on the exercise of the fundamental right guaranteed under article 667 19(1)(g).
As we have already pointed out, the definition of the words "commercial crop" in the Madras Act was also wide enough to bring any crop which the State Government considered fit to be included as a commercial crop for the purposes of that Act.
There is thus in our opinion no difference in the ambit of the Madras Act and of the Act.
Besides we see no reason why a crop which can be dealt with on a commercial scale should not be brought under the regulatory provisions of the Act.
Section 4(2A) makes it clear that the Act does not apply to the purchase or sale of specified agricultural produce, if the producer of such produce is himself its seller and the purchaser is a person who purchases such produce for his own private use or if such agricultural produce is sold to such person by way of a retail sale.
Thus it is clear from this exception that the provisions of the Act do not apply to retail sale and are confined to what may be called wholesale trade in the crops regulated thereunder.
This would suggest that the Act also deals with commercial crops in the same way as the Madras Act, for the notion of wholesale trade implies that the crop dealt with therein is a commercial crop.
There is thus no distinction so far as the main provisions are concerned between the Act and the Madras Act, and for the reasons that have been elaborately considered in Arunachala Nadar 's case (1) we are of opinion that sections 4, 4A, 5,5A and 5AA of the Act are constitutional and intra vires and do not impose un reasonable restrictions on the right to carry on trade in the agricultural produce regulated under the Act.
The next attack is on section 29 of the Act, which provides that the State Government may by notification in the official gazette, add to, amend or cancel any of the items of agricultural produce specified in the Schedule.
It is submitted that this gives a completely unregulated power to the State Government to include any crop within the Schedule without any guidance or control whatsoever.
We are of opinion that this contention must also fail.
It is true that section 29 itself does not provide for any criterion for determining which crop shall be put into the Schedule or which shall (1) [1959] Supp. 1 S.C.R. 92.
668 be taken out therefrom but the guidance is in our opinion writ large in the various provisions of the Act itself.
As we have already pointed out, the scheme of the Act is to leave out of account retail sale altogether; it deals with what may be called wholesale trade and this in our opinion provides ample guidance to the State Government when it comes to decide whether a particular agricultural produce should be added to, or taken out of, the Schedule.
The State Government will have to consider in each case whether the volume of trade in the produce is of such a nature as to give rise to wholesale trade.
If it comes to this conclusion it may add that produce to the Schedule.
On the other hand if it comes to the conclusion that the production of a particular produce included in the Schedule has fallen and can be no longer a subject matter of wholesale trade, it may take out that produce from the Schedule.
We may in this connection refer to The Edward Mills Co. Ltd., Beawar vs The State of Ajmer and another (1).
In that case, section 27 of the , which gave power to the appropriate Government to add to either part of the schedule any employment in respect of which it is of opinion that minimum wages shall be fixed by giving notification in a particular manner was held to be constitutional.
It was observed in that case that the legislative policy was apparent on the face of the enactment (impugned there); it was to carry out effectively the purposes of the enactment that power had been given to the appropriate Government to decide with reference to local conditions whether it was desirable that minimum wages should be fixed in regard to a particular trade or industry which was not included in the list.
The same considerations in our opinion apply to section 29 of the Act and the power is given to the State Government to add to, or amend, or cancel any of the items of the agricultural produce specified in the Schedule in accordance with the local conditions prevailing in different parts of the State in pursuance of the legislative policy which is apparent on the face of the Act.
Therefore, in enacting section 29, (1) ; 669 the legislature had, not stripped itself of its essential powers or assigned to the administrative authority, anything but an accessory or subordinate power which was deemed necessary to carry out the purpose and policy of the Act.
We therefore reject the contention that section 29 of the Act gives uncontrolled power to the State Government and is therefore unconstitutional.
The next attack is on section 11 of the Act and the rules framed in that connection.
Section II gives power to the market committee subject to the provisions of the rules and subject to such maxima as may be prescribed to levy fees on the agricultural produce bought and sold by licencees in the market area.
It is said that the fee provided by section 11 is in the nature of sales tax.
Now there is no doubt that the market committee which is authorised to levy this fee renders services to the licencees, particularly when the market is established.
Under the circumstances it cannot be held that the fee charged for services rendered by the market committee in connection with the enforcement of the various provisions of the Act and the provisions for various facilities in the various markets established by it, is in the nature of sales tax.
It is true that the fee is calculated on the amount of produce bought and sold but that in our opinion is only a method of realising fees for the facilities provided by the committee.
The attack on section 11 must therefore fail.
Besides this however, it is also contended that rr. 53 and 54 which provide for levying of fees under section II are ultra vires, as they do not conform to section 11 of the Act.
It will be noticed that section 11 provides for levy of fees to be fixed by the market committee, subject to such maxima as may be prescribed by the Rules and this fee is to be charged on the agricultural produce bought and sold.
There are thus two restrictions on the power of the market committee under section 11; the first is that the fee fixed must be within the maxima prescribed by the Rules and naturally till such maxima are fixed it would not be possible for the market committee to levy fees, and the second restriction is that fees have to be charged not on the produce brought into but only on such produce as is 85 670 actually sold.
Rule 53 provides that the market committee shall levy and collect fees on agricultural produce bought and sold in the market area at such rates as may be specified in the bye laws.
The Rules nowhere prescribe the maxima within which the bylaws will prescribe fees.
The first attack therefore on the Rules is that it will not be open to the market committee to prescribe any fee under section 11 till the State Government prescribes the maxima by the Rules, which it has not done so far.
Further there is an attack on r. 54 which lays down that the fees on agricultural produce shall be payable as soon as it is brought into the principal market yard or sub market yard or market proper or market area as may be specified in the bye laws.
The argument is that this rule allows fees to be charged on the produce brought into the market irrespective of whether it is actually bought and sold, and this is against section 11.
As we read section 11, there is no doubt that the State Government is expected to specify the maxima within which the market committee shall fix fees and until such maximum is specified by the State Government in the Rules it would not be possible for the market committee to fix any fees under section 11.
Further, there is no doubt that section 11 provides that fees shall be charged only on the amount of produce bought and sold and not on all the produce that may have been brought into the market but may have to be taken back as it is not sold.
The reply of the respondents so far as r. 54 is concerned is that the rule only prescribes a convenient method of levying fees and that various bye laws provide for refund in case there is no sale of the produce brought into the market.
The petitioners in their application have not specifically said that there is no provision for refund and in the circumstances all that we need say is that r. 54 will be valid if proper provision for refund is made in the bye laws with respect to the produce brought into the market on which fees have been charged but which has been taken back because it is not sold, for then it would only be a method of levying the fee permitted under section 11.
In the connected petition Yograj 671 Shankersingh Parihar and another vs The State of Bombay and another (57 of 1957) which was heard along with this petition there was an attack on r. 53; but the attack was confined to the fee being analogous to a sales tax and there was no ground taken that the fee could not be levied under r. 53 because the maxima had not been specified in the Rules.
However, it is not in dispute in this case that maximum has not been specified in any rule and r. 53 itself leaves it open to the market committee to prescribe such rates as may be specified in the bye laws.
We have already said that it would not be possible for the market committee to prescribe any fees under section 11 through byelaws till the State Government prescribes the maximum under section 11.
As no such maximum has been prescribed in the Rules, the contention that fees which are being charged under the bye laws for the purposes of section 11 are ultra vires of that section, must prevail.
It has been urged on behalf of the respondents that the true construction of section 11 is that if maxima are prescribed by the Rules, fees will be fixed by the market committee within the maxima; but if no maxima are fixed under the Rules, it will still be open to the market committee to prescribe any fees it thinks proper under its power under section 11.
We are not prepared to accept this interpretation of section 11, for it amounts to adding the words "if any" after the word "maxima" therein.
Besides, the legislature was conferring power of taxation (using the word in its widest sense) by section 11 on the market committee.
While doing so, the legislature apparently intended that the committee shall not have unlimited power to fix any fees it liked.
It restricted that power within the maxima to be prescribed by the State Government in the Rules.
Thus the power given to the committee was meant to be subject to the control of the State Government which would be in a position to view the situation as a whole and decide the maxima.
At the same time, some flexibility was provided by leaving it to the committee to fix fees within the maxima.
We may in this connection refer to various municipal Acts for example where also the power of taxation is subject to the control of the 672 different form.
Section 11 also prescribes similar control by the State Government over this taxing power of the committee and this is obviously in the interest of the community as a whole.
The State Government cannot practically abdicate that power as it seems to have done under r. 53 by leaving it to the committee to fix any rates it likes.
We are therefore of opinion that unless the State Government fixes the maxima by rule it is not open to the committee to fix any fees at all and the construction urged on behalf of the respondents is not correct.
The next attack is on r. 64 which provides that no person shall (a) enter a principal market yard or sub market yard in contravention of a direction given by a servant or a member of the market committee, or (b) disobey any of the directions of the market committee in regard to the places where carts laden with agricultural produce may stand or loads of agricultural produce may be exposed or in regard to the road by which or in regard to the times at which they may proceed.
Any person contravening or disobeying any of the directions referred to in sub r.
(1) shall, on conviction be punishable with fine.
It is urged that this rule is ultra vires as it imposes an unreasonable restriction on the right to carry on trade.
We are of opinion that there is no force in this contention because this rule is merely a method of enforcing the regulatory provisions with respect to market yards and sub market yards.
The next attack is on r. 65 which provides that "no person shall do business as a trader or a general commission agent in agricultural produce in any market area except under a licence granted by the market committee under this rule.
" The contention is that this rule goes beyond the provisions of section 5A which lays down that "where a market is established under section 5AA, the market committee may issue licences in accordance with the Rules to traders, commission agents. .
So far as the grant of licence to traders before the establishment of a market is concerned, the provision is to be found in the proviso to 673 s.4(2) and the power to grant licences before the establishment of a market for trading in any market, area, is given to the Commissioner and not to the market committee.
The power of the market committee to grant licences under section 5A arises only after a market is established and is confined to operation in the market.
Rule 65 therefore in our opinion when it authorises the market committee to grant a licence for doing business in any market area goes beyond the power conferred on the market committee by section 5A and entrenches on the power of the Commissioner under the proviso to section 4(2).
It must therefore be struck down as ultra vires of the provisions in section 5A read with the proviso to section 4(2).
Rule 66 which is incidental would fall along with r. 65.
The next attack is on r. 67.
It gives power to the market committee to grant licences for doing business in the market area and prohibits doing of business without such licences.
This rule is open to the same objection as r. 65, for the power of the market committee to grant licences is with respect to operation in the market and not in the market area, the latter power being in the Commissioner under the proviso to section 4(2) till the market is established.
It seems to us that rr. 65 and 67 as they are framed show a confusion in the mind of the rule making authority.
It would have been enough if the Rules had been confined to grant of licences for operation in the market, for under the law as soon as the market area is declared and a market is established, section 4(2) comes into force and no place in the said area can be used for the purchase and sale of any agricultural produce except as provided by section 5A.
It seems to us therefore that the intention probably was to confine the issue of licences under rr. 65 and 67 to markets which the market committee has the power to do where a market is established under section 5A; but the two rule. , as drafted refer to the market area and not to the market and must therefore be held to be beyond the power granted to the market committee under section 5A.
The last point that is urged is that no market has been established in law as required under section 5AA of the 674 Act.
We have already said while dealing with the scheme of the Act that the scheme envisages that there may be a time lag between the declaration of a market area under section 4 and the establishment of a market.
under section 5AA.
We have also pointed out that a market can only be established by a market committee constituted under section 5, if it is required so to do by the State Government under section 5AA.
Therefore, the requirement by the State Government is a condition precedent to the establishment of a market under section 5AA.
No procedure has however been prescribed either under the Act or under the Rules as to what the market committee has to do after it has been required to establish a market.
We presume, in view of the provisions of section 4A which gives power to the Commissioner to establish a market yard or sub market yards, that the market committee after it receives a direction from the State Government to establish a market will have to approach the Commissioner with its recommendation and ask him to notify the establishment of a principal market yard and sub market yards, if any.
The contention of the petitioners is that no direction was issued by the State Government under section 5AA to the market committee for the establishment of a market and that in any case the committee took no steps after the receipt of any such direction for the establishment of a principal market yard and sub market yards, if any.
It appears that the market area was declared for the first time in Ahmedabad from June 1, 1948, by notification dated April 15, 1948.
This was followed by another notification by which the State Government established a market and a market proper under the Act as it stood before the amendment of 1954 by which the power to establish a principal market yard and sub market yards has now been given to the Commissioner.
It seems however that no direction was issued as required by section 5 of the Act as it stood before the amendment (now section 5AA) requiring the market committee to establish a market.
This matter had come to the notice of the Bombay High Court in Bapubhai 675 Ratanchand Shah vs The State of Bombay (1).
Chagla, C. J., then pointed out as follows at p. 887: "Now, a very curious situation was disclosed to us by Mr. Joshi.
No market has been established under section 5 of the Act and therefore section 5A has not come into operation.
The result is this that the Market Committee cannot issue licences under section 5A to traders, commission agents, etc., to operate in the market.
In the absence of a market being established under section 5 and the absence of licences being issued under section 5A, licences can only be issued by the State Government under the proviso to section 4A(2).
But the rules show that licences have been issued by the Market Committee and not by the State Govern ment.
It is difficult to understand how either the Government or the Market Committee came to the conclusion that the Market Committee was authorised to issue licences without section 5 and section 5A being brought into force.
Mr. Joshi suggests that the Market Committee acts as a delegate of the State Government and the authority to issue licences has been delegated by the State Government.
It is rather difficult to accept this contention.
" Having said this, the learned Chief Justice went on to observe that as there was no such challenge in the petition itself, therefore whether the challenge could be sustained or not, it was not open to the petitioners before him to make that challenge.
That observation was made with respect to another market area but the same, we understand, applies to the present case.
It appears that after that observation of the Bombay High Court, the State Government on August 11, 1955, issued a notification (No. PMA 7055) dated August 1, 1955, directing the Agricultural Produce Market Committee Ahmedabad to establish a market in the market area for which the said committee had been established.
But there is nothing in the affidavit of the respondents to show that after this direction was issued on August 11, 1955, the market committee took any steps to establish a market by making recommendations to the Commissioner to establish a principal (1) I.L.R. 676 market yard or sub market yards under section 4A of the Act.
As a matter of fact, the principal market yard was already there from before this direction given in 1955 and has continued.
Even in the case of the sub market yard established at Kalupur in 1959 there is nothing in the notification issued by the Commissioner on January 16, 1959, to show that he was doing so in pursuance of the desire of the market committee and on its recommendation.
We should have thought that if the market committee had requested the Commissioner to establish a sub market yard and recommended Kalupur as the place for it, the notification should have shown that the Commissioner was acting at the desire of the market committee and on its recommendation.
In any case, even if the notification did not show this, it was the duty of the respondents, when this question was specifically raised in para.
25 of the petition, to state when the State Government directed the market committee to establish the market and what steps the market committee took in that behalf after such direction.
But in para.
24 of the counter affidavit filed on behalf of the respondents all that is stated is that "with reference to paragraph 25 of the petition, I crave leave to refer to section 5 A of the Act for ascertaining its contents, true meaning and legal effect.
I deny all the allegations, contentions and submissions contained in paragraph 25 of the petition as are contrary to or inconsistent with what is stated herein as if they were specifically set out herein and traversed.
" We must say that this is a most curious way of meeting the allegations made on behalf of the petitioners that no direction as required by section 5AA of the Act has been ever given to the market committee to establish a market and no steps were ever taken by the market committee in pursuance of such a direction to establish a market.
The notification No. PMA 7055 which was produced before us during the course of arguments seems in the circumstances to have been an empty formality which was observed in view of the observations of the Bombay High Court in Bapubhai Ratanchand Shah 's case (1).
It seems to us that the curious situation which (1) I.L.R. 677 the Bombay High Court noticed as far back as March, 1955 still continues with respect to the market in this( case and no proper steps have been taken in law even after the formal direction made by notification No. PMA 7055 in August, 1955 to establish a market.
It is true that in fact the State Government before the amendment of 1954 and the Commissioner after that amendment have established a principal market and a sub market yard for this market area; but there is nothing to show in the case of the principal market yard that it was established at the instance of the market committee on a direction given by the State Government as required by section 5 of the Act as it was before the amendment of 1954 or that the sub market yard at Kalupur which was established in 1959 was so established at the instance of the market committee.
In the circumstances the curious situation that was noticed with respect to another market area by Chagla, C. J., is there with respect to the Ahmedabad market area and the Ahmedabad market, with the result that the market committee cannot issue licences under section 5A of the Act and exercise such other powers as may be exercisable on the establishment of a market under the law.
In the result therefore the petition must be allowed and the market committee forbidden to enforce any of the provisions of the Act, the rules and the bye laws with respect to the market until a market is properly established under section 5AA.
No other point has been urged before us.
In conclusion we hold that the challenge made by the petitioners to the constitutionality of the main provisions of the Act and of the provisions in r. 64 fails; but the challenge in respect of (i) the provisions in r. 53 on the ground that they are ultra vires section 11, there being no maximum fee prescribed by the State Government, and (ii) the provisions in rr.
65, 66 and 67 on the ground that they are ultra vires the provisions in section 5(a) read with the proviso in section 4(2) succeeds.
As however we have held that the market in this case has not been properly established, the market 86 678 committee cannot enforce any of the provisions of the Act or the rules or the bye laws framed by it and cannot issue licences till the market is properly established in law.
We therefore allow the petition partly and direct the respondents not to enforce any of the provisions of the Act, the rules and the bye laws against the petitioners with respect to the market till a market is properly established in law for this area under section 5AA and not to levy any fees under section 11 till the maximum is prescribed under the Rules.
In the circumstances we order parties to bear their own costs.
Petition allowed in part.

summary:
The Bombay Agricultural Produce Markets Act, 1939, was enacted by the Bombay Legislature to provide for the better regulation of buying and selling of agricultural produce in the State of Bombay and the establishment of markets for such produce.
Under the provisions of the Act power was given to the commissioner by notification to declare certain areas as market areas as a result of which such areas could not thereafter be used for the purchase or sale of any agricultural produce specified in the notification, except under a licence.
Markets were to be established and market committees constituted with power to grant licences for operation in the market.
By section 11 a market committee may, subject to the provisions of the Rules and subject to such maxima as may be prescribed, levy fees on the agricultural produce bought and sold by licencees in the market area.
Section 29 enabled the State Government by notification in tile official Gazette to add to, amend or cancel any of the items of agricultural produce specified in the Schedule to the Act.
The petitioners challenged the validity of the Act and the rules framed thereunder, and in particular sections 4, 4A, 5, 5A, and 5AA which provided for the declaration of a market area and the establishment of a market, as unconstitutional on the ground that they placed unreasonable restrictions on their right to carry oil trade in agricultural produce and thus infringed their fundamental right guaranteed under article 19(1)(g) of the Constitution of India.
They also attacked the validity of sections 11 and 29 and rr. 53, 64, 65, 66 and 67.
Held: (1) that sections 4, 4A, 5, 5A and 5AA of the Act are constitutional and intra vires and do not impose unreasonable restrictions on the right to carry on trade in the agricultural produce regulated under the Act.
M. C. V. section Arunachala Nadar vs The State of Madras, [1959] Supp. 1 S.C.R. 92, followed.
660 (2) that the fee provided by section 11 though calculated on the amount of produce bought and sold, is not in the nature of sales tax as it is only a levy charged for services rendered by the market committee in connection with the enforcement of the various provisions of the Act.
Accordingly, section 11 is valid.
(3) that r. 53 in so far as it enables the market committee to fix any rates as it liked of the fees to be collected on agricultural produce bought and sold in the market area, is not valid, because under section 11 unless the State Government fixes the maxima by rule it is not open to the committee to fix any fees at all.
(4) that under section 29, the power given to the State Govern ment to add to, or amend, or cancel any of the items of the agricultural produce specified in the Schedule in accordance with the local conditions prevailing in different parts of the State is only in pursuance of the legislative policy which is apparent on the face of the Act, and, therefore, the section is intra vires.
The Edwards Mills Co. Ltd., Beaway vs State of Ajmer and Another, ; , applied.
(5) that r. 64 is merely a method of enforcing the regu latory provisions with respect to market yards and sub market yards and is valid.
(6) that rr.
65, 66 and 67, in so far as they authorise the market committee to grant a licence for doing business in any market area, go beyond the power conferred on the market committee by section 5A, and are ultra vires.


judgement:
Appeal No. 425 of 1957.
Appeal from the judgment and order dated February 21, 1956, of the Patna High Court in Misc.
Judicial Case No. 53 of 1955.
B. K. P. Sinha and D. P. Singh, for the appellants.
L. K. Jha and R. C. Prasad, for the respondent.
May 3.
The Judgment of the Court was delivered by 688 SUBBA RAO, J.
This appeal by certificate raises the question of the construction of section 4(h) of the Bihar Land Reforms Act, 1950 (Act 30 of 1950) (hereinafter referred to as the Act), as amended by the Bihar Land Reforms (Amendment) Act, 1959 (Bihar Act 16 of 1959) (hereinafter called the Amending Act).
The facts giving rise to the appeal lie in a small compass.
Plots NOW.
383 and 1033 are tanks in village Lakshmipur alias Tarauni in the District of Darbhanga.
The respondent claims to have taken settlement of the said plots in the year 1943 from the landlords of Raghopur Estate of which the said plots formed a part.
After the coming into force of the Act, the said Estate vested in the State of Bihar.
Thereafter, one Sheonandan Jha and some other villagers of Lakshmipur filed a petition before the Collector alleging that the alleged settlement was not true, and that in fact the settlement was nominally effected only after January 1, 1946.
The Additional Collector, Darbhanga, in exercise of the powers conferred on him under section 4(h) of the Act, held that the said settlement was actually made after January 1, 1946, and that it was only a paper transaction; having annulled the said settlement, the Additional Collector, by his order dated January 18, 1955, called upon the respondent to give up possession of the said plots by January 30, 1955.
Aggrieved by the said order, the respondent filed a petition in the High Court of Judicature at Patna under article 226 of the Constitution for a rule in the nature of a writ of mandamus or any other appropriate writ cancelling the order of the Additional Collector dated January 18, 1955, and res training the appellants from interfering with his possession of the said two plots.
That petition came to be decided by a division bench of the High Court; and the learned Judges by their order dated February 21, 1956, held that the Additional Collector had no jurisdiction to entertain and decide the question whether the settlement, which was prima facie shown to have been made before January 1, 1946, was actually made after that date.
On the basis of that finding, the order of the Additional Collector was set aside.
689 The State of Bihar and the Additional Collector of Darbhanga have preferred the present appeal against the said order.
Learned counsel for the State contends that section 4(h) of the Act has been amended with retrospective effect, that under the amended section the Collector has power to decide whether a transfer is made before 1946 or thereafter, and that, therefore, the order of the High Court can no longer be sustained.
Learned counsel for the respondent, while conceding the retroactivity of the amendment, relies upon the second proviso added by the amendment to section 4(h) and contends that under the said proviso the order of the Collector cannot take effect nor possession taken thereunder, unless the said order has been confirmed by the State Government and that in the instant case there has not been any such confirmation.
Further he questions the constitutional validity of the said section on the ground that it infringes the fundamental right of the respondent under articles 14, 19 and 31 of the Constitution and is not saved by article 31A thereof.
The second contention of learned counsel for the respondent may be disposed of first.
Under article 31A of the Constitution, no law providing for the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by article 14, article 19 or article 31.
The question is whether section 4(h) of the Act is such a law as to be hit by article 31A of the Constitution.
Section 4(h) of the Act confers power on a Collector, inter alia, to make inquiries in respect of any transfer of any land comprised in an estate and to cancel the same if he is satisfied that such transfer was made any time after January 1, 1946, with the object of defeating any provisions of the Act or causing loss to the State or obtaining compensation thereunder.
It is said that the section ex proprio vigore does not provide for acquisition by the State of any estate or of 690 any rights therein or for the extinguishment or modification of any such rights and therefore, is not protected by article 31A of the Constitution This argument in effect disannexes section 4(h) of the Act from the setting in which it appears and seeks to test its validity independently of its interaction on the other provisions of the Act.
Section 4(h) is an integral part of the Act, and taken out of the Act it can only operate in vacuum.
Indeed, the object of the section is to offset the anticipatory attempts made by landlords to defeat the provisions of the Act.
Suppose the Collector cancels a transfer of land by the owner of an estate under the said section; the said land automatically vests in the State, with the result that the rights of the transferor and the transferee therein are extinguished.
The said result accrues on the basis that the said land continued to be a part of the estate at the time the Act came into force.
That apart, the section is a part of the Act designed to extinguish or modify the rights in an estate, and the power conferred on a Collector to cancel a transfer of any land in an estate is only to prevent fraud and to achieve effectively the object of the Act.
This question was directly raised and answered by this Court in Thakur Raghubir Singh vs State of Ajmer (1).
There, the constitutional validity of the Ajmer Abolition of Intermediaries and Land Reforms Act, 1955 (Ajmer III of 1955) and section 8 thereof was attacked.
Section 8 of the said Act conferred a power on the Collector to cancel a lease or contract, if he was satisfied that it was not made or entered into in the normal course of management, but in anticipation of legislation for the abolition of intermediaries.
Repelling the said contention, Wanchoo, J., speaking for the Court, observed thus: "The provision is not an independent provision; it is merely ancillary in character enacted for carrying out the objects of the Act more effectively.
Such cancellation would sub serve the purposes of the Act, and the provision for it therefore be an integral part of the Act, though ancillary to its main object, and would thus be protected under article 31A(1)(a) of the Constitution." (1) [1959] SUPP.
1 S.C.R. 478.
691 The same reasoning applies to section 4(h) of the Act, and for the same reasons we hold that section 4(h) of the Act is likewise protected by article 31A of the Constitution.
The first question turns upon the interpretation of the relevant provisions of the Amending Act.
To appreciate the argument it would be convenient to read the material provisions of the said Act.
Section 3.
Amendment of section 4 of Bihar Act XXX of 1950.
In section 4 of the said Act, (iv) in clause (h) (a) the words, figures and commas "made at any time after the first day of January, 1946," shall be omitted and shall be deemed always to have been omitted; (b) after the words "if he is satisfied that such transfer was made," the words, figures and commas "at any time after the first day of January, 1946," shall be inserted and shall be deemed always to have been inserted; and (c) the words "and with the previous sanction of the State Government" shall be omitted; (v) to clause (h) as amended above, the following provisos shall be added, namely: "Provided that an appeal against an order of the Collector under this clause, if preferred within sixty days of such order, shall lie to the proscribed authority not below the rank of the Collector of a district who shall dispose of the same according to the prescribed procedure: Provided further that no order annulling a transfer shall take effect nor &hall possession be taken in perursuance of it unless such an order has been confirmed by the State Government." After the said amendment the relevant part of the section reads: The Collector shall have power to make inquiries in respect of any transfer including the settlement. . if he is satisfied that such transfer was made at any time after th e first day of January, 1946, with the object of defeating any provisions of this Act or causing loss to tile State or obtaining higher 692 compensation thereunder, the Collector may, after giving reasonable notice to the parties concerned to appear and be heard and with the previous sanction of the State Government annul such transfer, dispossess the person claiming under it and take possession of such property on such terms as may appear to the Collector to be fair and equitable.
The main differences material to the present enquiry between the section as it was before.
the amendment and thereafter are that under the unmended section it was a moot point whether the Collector had the power to set aside a transfer, whether it was effected before or after January 1, 1946; whereas under the amended section such a power is clearly and expressly conferred on him: while under the original section, the Collector had to take the previous sanction of the State Government before he made the order annulling a transfer and dispossessing the person claiming under it, under the amended section the order made by the Collector shall neither take effect nor can he take possession before his order is confirmed.
The short question is whether the second proviso, added by the Amending Act, is retrospective in operation, that is, whether the order of the Collector made before the Amending Act, though made with the previous sanction of the State Government, would still require for its taking effect a subsequent confirmation by the State Government.
Learned Counsel for the State contends that the amendments made by section 3(iv)(a) and (b) are retrospective, but the amendment made by section 3(v) of the Amending Act is prospective.
This contention appears to be sound, both in letter as well as in spirit.
The different phraseology used in cls.
(a) and (b) of subs.
(iv) of section 3 of the Amending Act in the matter of omissions supports it.
While in cl.
(a) the omission ,%hall be deemed always to have been omitted, in cl.
(c) the words mentioned therein shall only be omitted indicating by contrast that the omission in the former is expressly made retrospective while in the latter it is necessarily prospective.
, If that be the true con struction, the condition of previous sanctions would 693 continue to operate in respect of the Collector 's order made before the amendment came into force.
If the proviso be given a retrospective operation, it directly comes into conflict with the result brought about by cl.
(c) of sub section
(iv) of section 3 of the Amending Act.
An order with the previous sanction of the Government may have been passed and possession also taken by the Collector, yet a further confirmation by the Government should be sought for to revalidate it.
This construction would not only attribute to the Legislature redundancy but would also enable a party to seek for restoration of the land taken possession of by the Collector on the basis of a technicality.
Even in a case where possession has not been taken by the Collector, the said anomaly would persist, for two sanctions would be required.
The alternative construction makes the working of the section smooth and avoids the introduction of the said incongruity and, therefore, we prefer to accept it, particularly when it is consistent with the plain meaning of the words used in the section.
The result is that in respect of an order already made by the Collector before the Amending Act, the previous sanction obtained would suffice, and in respect of an order made after the Amending Act, a subsequent confirmation by the State Government is required.
Even so, it is argued by learned counsel for the respondent that the High Court, presumably in view of its acceptance of the respondent 's preliminary point, did not consider the question whether the inquiry had been made by the Collector in strict compliance with the provisions of the section, and whether the previous sanction of the State Government was obtained before he made the said order.
In the affidavit filed in support of the petition in the High Court there is no specific allegation that no such inquiry has been made or that no such sanction has been obtained.
Nor did the counsel for the appellant raise the said question in the arguments before the High Court.
In the circumstances we do not think that this Court is justified in allowing 88 694 the respondent to raise the said question for the first time before us.
We, therefore, reject this plea.
In the result we set aside the order of the High Court and allow the appeal.
But, in the circumstances of this case, we direct the parties to bear their own costs here and in the High Court.
Appeal allowed.

dataset_name: IN-Abs

summary:
Section 4(h) of the Bihar Land Reforms Act, 1950, as amended by the Bihar Land Reforms (Amendment) Act, 1959, which empowers the Collector to annul anticipatory transfers of land designed to defeat the object of the Act, is protected by article 31A of the Constitution although it does not by itself provide for the acquisition by the State of any estate or of any rights therein or for the extinguishment or modification of any such rights and its constitutional validity cannot be questioned under articles 14, 19 and 31 of the Constitution since the Act of which it is an integral part, is itself directed to that end and is protected by that Article.
Thakur Raghubir Singh vs State of Ajmer, [1959] Supp. 1 S.C.R. 478, applied.
On a true construction of section 3 of the Amending Act, the second proviso to section 4(h) cannot be retrospective in operation and therefore, in respect of an order of annulment made by the Collector before the Amending Act came into force the previous sanction obtained from the State Government would be sufficient, but subsequent confirmation by the State Government would be necessary in the case of an order made after the Amending Act came into force.


judgement:
Appeals Nos. 646 and 647 of 1960.
Appeals by special leave from the judgments and orders dated January 28, 1958, of the Andhra Pradesh High Court in Writ Appeals Nos. 149 and 150 of 1957.
537 A. V. Viswanatha Sastri and T. Satyanarayana, for the appellants.
A. Ranganatham Chetty, section V. P. Venkatappayya Sastri and T. M. Sen, for the respondent.
April 28.
The Judgment of the Court was A delivered by AYYANGAR, J.
These two appeals are by special leave of this Court and arise out of orders of the High Court of Andhra Pradesh dismissing two writ petitions filed before it by the respective appellants in the two appeals.
On January 14, 1953, the Government of Madras issued a notification reading, to quote only the material words, "in exercise of the powers conferred by section 1(4) of the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948 (Madras Act XXVI of 1948), read with section 2 of the Madras Scheduled Areas Estates (Abolition and Conversion into Ryotwari) Regulation, 1951: "The Governor of Madras hereby appoints the 4th of February 1953, as the date on which the provisions of the said Act shall come into force in the Estates in the Scheduled Areas of the West Godavari District which are specified in the schedule below: " and the schedule set out inter alia: "1.
Agency Area of Gangole 'A ' Estate, consisting of 2 3.
Agency Area of Gangole 'C ' Estate, consisting of. " It is the legality of this notification that is impugned by the two appellants who are the proprietors respectively of Gangole 'A ' and Gangole 'C ' estates.
The two writ petitions by the appellants which were numbered respectively 28 and 29 of 1953 were dismissed by the learned Single Judge of the Andhra High Court and appeals under the Letters Patent filed against this common judgment were also dismissed by the learned Judges of that Court.
An application for the grant of a certificate was also dismissed but this 538 Court having granted special leave to the appellants, the ' matter is now before us.
The Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948, to which we shall refer as the Abolition Act, was a piece of legislation of the State enacted to effect reform in land tenures and landholding by the elimination of intermediaries.
In line with similar legislation in the rest of the country, the interests of intermediaries of three categories the estates of Zamindars, of undertenure holders and of Inamdars were enabled to be vested in Government on the publication of a notification to that effect, compensation being provided for such taking over.
The entire legal difficulties in the case of the Gangole 'A ' and IC ' estates which were admittedly Zamindaris arise out of the fact that a small portion of each of them is situated in what is known as the Godavari Agency tract.
This Agency area was originally included as part of the Scheduled District of the Madras Presidency under the Scheduled Districts Act XIV of 1874.
When the Godavari Agency was governed by the Scheduled Districts Act, 1874, the Madras Legislature enacted the Madras Estates Land Act (Act 1 of 1908), which was in force from July 1, 1908.
This enactment regulated the rights of, inter alia, the proprietors of zamindari estates and the ryots and tenants who cultivated the lands included in the estates.
Though, some argument was raised in the High Court, disputing the operation of the Estates Land Act to the Godavari Agency tracts, it has not been repeated before us.
That Act on its terms applied to the entire Presidency of Madras and in view of a catena of decisions of the Madras High Court starting from the judgment of Muthuswami Iyer, J. in Chakrapani vs Varahalamma (1), on the construction of section 4 of the Scheduled Districts Act XIV of 1874, the contention was hardly tenable and was therefore properly abandoned.
The position therefore was that the entirety of the lands and villages forming Gangole 'A ' and IC ' were governed by the Madras Estates Land Act, 1908, (1) Mad.
539 and were "estates" within the meaning of that enactment.
In this situation the Government of India Act, 1935, came into force on April 1, 1937.
Under its provisions the Godavari Agency was included in the territory classified as "partially excluded areas" under section 91 of the Act.
The laws applicable to the "partially excluded areas" and their administration was governed by section 92 which enacted: "92(1) The executive authority of a Province extends to excluded and partially excluded areas therein, but, notwithstanding anything in this Act, no Act of the Federal Legislature or of the Provincial Legislature, shall apply to an excluded area or a partially excluded area, unless the Governor by public notification so directs; and the Governor in giving such direction with respect to any Act may direct that the Act shall in its application to the area, or to any specified part thereof, have effect subject to such exceptions or modifications as he thinks fit.
(2) The Governor may make regulations for the peace and good government of any area in a Province which is for the time being an excluded area, or a partially excluded area, and any regulations so made may repeal or amend any Act of the Federal Legislature or of the Provincial Legislature, or any existing Indian law, which is for the time being applicable to the area in question.
Regulations made under this sub section shall be submitted forthwith to the Governor General and until assented to by him in his discretion shall have no effect, and the provisions of this Part of this Act with respect to the power of His Majesty to disallow Acts shall apply in relation to any such regulations assented to by the Governor General as they apply in relation to Acts of a Provincial Legislature assented to by him.
(3) The Governor shall, as respects any area in a Province which is for the time being an excluded area, exercise his functions in his discretion.
" We shall be pointing out a little later, the interconnection between the Estates Land Act, 1908 and 540 the Abolition Act, but for the present narrative it is sufficient to state that when the Abolition Act was enacted in 1948, it could not of its own force, apply to the 'partially excluded areas ' and no action as contemplated by section 92 of the Government of India Act, 1935, was taken to render that Act applicable to that area.
The result was that only a part of Gangole 'A ' and 'C ' were within the operation of the Abolition Act, while there were portions of each of the estates which were outside its purview and operation.
This legal situation was however not noticed and under the wrong impression that the Abolition Act was in operation in the Godavari Agency also, the Government of Madras issued on August 15, 1950, a notification under section 1(4) of the Abolition Act by which, among other estates, the entirety of Gangole estate 'A ' and Gangole estate 'C ' were purported to be taken over, and specifying September 7, 1950, as the date on which the vesting was to take place.
Before the latter date, however, the error was noticed and in consequence another notification was issued on the 5th of September by which the villages and hamlets lying in the "partially excluded areas" of Gangole estate 'A ' and Gangole estate IC ' were excluded from the scope of the notification dated August 15,1950.
Thereafter the question of the extension of the Abolition Act to the "partially excluded areas" was taken on hand.
By that date, it would be seen, the Consti tution had come into force and the law applicable to areas like the Godavari Agency was provided for by article 244 read with the Sch.
V to the Constitution.
article 244(1) enacted: "The provisions of the Fifth Schedule shall apply to the administration and control of the Scheduled Areas and Scheduled Tribes in any State other than the State of Assam.
" As regards the law applicable to the Scheduled Areas, the relevant provision is that contained in paragraph 5 of that Schedule of which the material portions are: "5.
Law applicable to Scheduled Areas (1) Notwithstanding anything in this Constitution, the Governor may by public notification 541 direct that any particular Act of Parliament or of the Legislature of the State shall riot apply to a Scheduled Area or any part thereof in the State or shall apply to a Scheduled Area or any part thereof in the State subject to such exceptions and modifications as he may specify in the notification and any direction given under this sub paragraph may be given so as to have retrospective effect.
(2) The Governor may make regulations for the peace and good government of any area in a State which is for the time being a Scheduled Area.
(3) In making any such regulation as is referred to in subparagraph (2) of this paragraph, the Governor may repeal or amend any Act of Parliament or of the Legislature of the State or any existing law which is for the time being applicable to the area in question.
" In exercise of the power under paragraph 5(2) of the Fifth Schedule, Madras Regulation IV of 1951 was passed on September 8, 1951.
The territorial extent of its operation extended to certain areas specified in the Schedule, which included the areas in the Godavari district in which the two Gangole estates were situate and by its operative provisions the Abolition Act together with the amendments effected to it, were made applicable to these areas with retrospective effect from April 19, 1949.
The Abolition Act having thus been extended to that part of the Gangole 'A ' and Gangole 'C ' estates which lay within "the Scheduled area" the Government of Madras issued the impugned notification vesting those portions of the estate to which the Act was extended by Regulation IV of 1951.
As stated earlier, it is the validity of this last notification and the vesting effected thereunder of those portions of Gangole 'A ' and Gangole 'C ' which lay within the Scheduled area that is alone challenged in the appeals before us.
The notification was impugned on several grounds, all of which were rejected by the High Court.
Several 69 542 of them have been put forward before us, though not all of them with equal emphasis.
Before however adverting to them it might be convenient to set out the relevant statutory provisions which bear upon the points urged.
The long title of the Abolition Act states: "Whereas it is expedient to provide for the repeal of the Permanent Settlement, the acquisition of the rights of landholders not permanently settled and certain other estates in the Province of Madras ". .
It is hereby enacted as follows:" Section 1(3) defining the extent of its application runs: "It applies to all estates as defined in section 3, clause (2), of the Madras Estates Land Act, 1908, except inam villages which became estates by virtue of the Madras Estates Land (Third Amendment) Act, 1936.
" Section 2 which is the definition section provides by sub section
(1): "(1) All expressions defined in the Estates Land Act shall have the same respective meanings as in that Act with the modifications, if any, made by this Act." and sub section
(3) provides: "(3) 'estate ' means a zamindari or an under tenure or an inam estate." and sub section
(4) of this section defines 'Estates Land Act ' to mean "the Madras Estates Land Act, 1908.
" Having regard to these provisions it is necessary to refer to the terms of the Estates Land Act to which one is directed by section 1(2) of the Abolition Act.
Section 3 (2) of the Estates Land Act defines "an estate" as meaning: "3 (2)(a) any permanently settled estate or temporarily settled zamindari, (b) any portion of such permanently settled estate or temporarily settled zamindari which is separately registered in the office of the Collector; (c) (d) (e) 543 We shall now proceed to deal with the several points raised, though except one all the others do not merit any serious consideration and have been properly rejected by the High Court.
The first point urged was that the Polavaram zamindari the parent estate from which the Gangole estate was, by successive sub divisions, separated was not "a permanently settled estate" because the ' Madras Permanent Settlement Regulation XXV of 1802 was excluded from its application to Scheduled districts by the Laws Local Extent Act, 1874.
In our opinion, the High Court has rightly rejected this contention, because even if the Madras Permanent Settlement Regulation did not apply, there could be no dispute that the Polavaram zamindari was "a permanently settled estate", because its peishcush was fixed and from the kabuliyat which was executed by the proprietor it is clear that it conforms to the pattern of the sanads and kabuliyats issued under the Madras Permanent Settlement Regulation.
Though before the High Court it was urged that on the issue of the notification on August 15, 1950, under section 1(4) of the Abolition Act the power of the State Government was exhausted and that they were thereafter incompetent to issue any further notification under the same Act, this contention which entirely lacks substance was not seriously urged.
It was next contended that Regulation IV of 1951 was invalid as having outstepped the limits of the legislation permitted by paragraphs 5(1) and (2) of the Fifth Schedule to the Constitution.
It was said that if the Governor desired to enact a law with retrospective effect it must be a law fashioned by himself, but that if he applied to the Scheduled areas a law already in force in the State, he could not do so with retrospective effect.
Reduced to simple terms, the contention merely amounts to this that the Governor should have repeated in this Regulation the terms of the Abolition Act but that if he referred merely to the title of the Act he could not give retrospective effect to its provisions over the area to which it was being applied.
It is obvious that this contention was correctly negatived by the High Court.
544 We shall now proceed to deal with the only point put forward by Mr. Viswanatha Sastri which, we have said, merits serious consideration, though it must be said that it was not presented in the same form before the learned Judges of the High Court of Andhra Pradesh.
The, argument was as follows: The Madras Estates Land Act of 1908, admittedly applied to the entire estate of Gangole including that portion of the estate which was in the Scheduled area which, in the phraseology employed by the Government of India Act, was "a partially excluded area.
" Gangole 'A ', Gangole 'B 'and Gangole 'C ' had been subdivided and had been separately registered.
Each one of them was therefore a unit each one was itself "an estate" within section 3(2)(b) of the Estates Land Act, 1908, being "a portion of a permanently settled estate . . . . which is separately registered in the office of the Collector.
" The Abolition Act contemplates the taking over of "estates" as a unit and not in parts.
The entire scheme of the Abolition Act is based upon this principle which would be upset if it were held that the Government in issuing notifications under section 1(4) of the Abolition Act could take over portions merely of such units.
When a notification is issued under section 1(4) its legal consequences are set out in section 3 which reads: "With effect on and from the notified date and save as otherwise expressly provided in this Act (the saving does not cover anything material for the present purpose) (a) (b) the entire estate (including all communal lands; porambokes; other non ryoti lands; ) shall stand transferred to the Government and vest in them, free of all encumbrances. ." The provisions of the Act determining the amount of compensation are related to the sum payable in respect of the entirety of the estate, for sections 24 and 25 enact: "24.
The compensation payable in respect of an estate shall be determined in accordance with the following provisions.
" 545 "25.
The compensation shall be determined for the estate as a whole, and not separately for each of the interests therein.
" The mode of computation of the compensation amount for which provision is made in sections 27 to 30 all proceed on the basis that it is the entire estate that is taken over and not a portion merely of the estate.
All these, taken together, would point to the scheme of the Act contemplating the entire estate being taken over.
On that scheme he urged that it would not be possible to work out the compensation payable for separate portions of an estate, for instance for one village out of the several which might be comprised in an estate, The claims by the proprietor against the Government for compensation, as well as the determination of disputes inter se between claimants to the compensation amount, he pointed out, all proceed on the basis that the entire estate as a unit was taken over by notification under section 1(4).
On these premises Mr. Viswanatha Sastri submitted that what the Government had done in the present case was to deal with the two estates of Gangole 'A ' and Gangole 'C ' each of which was a unit, as if each one of them were really two estates one that which lay in the Agency tract, and the other outside that area and had issued notifications in respect of these units piece meat which was not contemplated and therefore not permitted under the Abolition Act.
He further pointed out that if the original notification dated August 15, 1950, stood without the "denotification" effected by the notification dated September 5, 1950, there might be a valid vesting by reason of the retrospective operation of Regulation IV of 1951.
Similarly if the impugned notification of 1953, had.
included not merely that portion of the estate of Gangole 'A ' and Gangole 'C ' which were within the Scheduled areas but the entirety of the two estates, that notification would not have been open to chal lenge.
But the point urged was that it was only by the combined operation of (1) the notification dated August 15, 1956, as modified by that dated September 5, 1950, and (2) the notification dated January 14, 546 1953, that the entirety of the two "estates" was taken over and that this rendered the second notification invalid because it had taken over only a portion of the estate.
Learned Counsel, no doubt, conceded that the taking over of those portions of Gangole 'A ' and Gangole 'C ' which were within the operation of the Abolition Act before its extension to the Scheduled areas not having been challenged, he would not be entitled to any relief in respect of the portion of the estate covered by the first notification, but his argument was that would not preclude him from disputing the validity of the last notification vesting those portions of the two estates which were within the Scheduled areas in the State.
We shall now proceed to consider the tenability of these submissions.
We might premise the discussion by observing that learned Counsel is right in his submission that the Abolition Act does not contemplate or make provision for the taking over of particular portions only of estates and that if the State Government having power to take over the entirety of an estate chose, however, to exclude certain portions of it from the operation of a vesting notification and took over only defined portions of an estate, this could be open to serious challenge on the ground that it was not contemplated by the scheme of the enactment.
But the acceptance of this principle does not, in our opinion, compel us to answer the question pro.
pounded by the learned Counsel for the appellants in his favour.
To start with, it might be pointed out that it looks somewhat anomalous that learned Counsel who strongly urges that the scheme of the Act contemplates the taking over only of the entirety of an estate and not of a portion thereof, should resist a taking over which, if effective, would result in the entire estate vesting in the Government and the compensation being determined according to the rules laid down by the Act, whereas it is the invalidation of the impugned notification that would result in a partial or piece meal taking over, to the disadvantage of the proprietors to which learned Counsel very properly drew our attention.
547 As already pointed out learned Counsel 's submission was that not merely the notification dated January 14, 1953, but also the earlier one dated August 15, 1950 (as modified by the one dated September 5, 1950) was invalid as providing for vesting of parts only of an "estate" and not of it as a unit.
It would also follow that if the first notification dated August 15, 1950, was valid, the impugned notification which by its operation effected the vesting of the entirety of the estate in the State could not be open to challenge as violating the principle invoked by learned Counsel.
We are necessarily therefore driven to consider the validity of the first notification dated August 15, 1950, in dealing with the validity of the impugned notification of January 14, 1953.
In considering this matter it is necessary to recall some of the provisions of the Abolition Act.
Section 2(3) defines "an estate" as meaning, inter alia, a "zamindari estate".
No doubt, as stated already, where the Abolition Act operates over the whole of "a zamindari estate", it does not contemplate the Government taking over a portion only of such "estate".
But in saying this it should not be assumed that if in respect of a single estate two notifications were issued, say on the same date which together vested the entirety of the "estate" in the State under section 3, either notification or both together would be invalid or ineffective.
The reason for this must obviously be that the intention of the Government was to take over the entire estate though it was being given effect to by the issue of two notifications.
That would not obviously be the same thing as the Government having the liberty to pick and choose certain of the villages or certain portions of an estate leaving out others.
If the Abolition Act as enacted does not 'extend to the entirety of an "estate" as defined in the Estates Land Act but only to a portion thereof, the question would be whether that portion of "the estate" which is within the operation of the Act is "an estate" within the meaning of the Act or not.
On this matter there are two views possible: (1) that having regard to the Abolition Act referring to and as it were incorporating the provisions of the 548 Madras Estates Land Act, the "estates" to which the Abolition Act could apply are only those which being "Estates" within the Estates Land Act, are also wholly within the operation of the Abolition Act.
In other words, even if a few acres of an "estate" as defined in the Estates Land Act were outside the operation of the Abolition Act, it would not be an "estate" which could be taken over.
(2) The other view attributing a crucial value to the policy and purpose underlying the legislation, viz., a reform of land tenures and landholding by the elimination of intermediaries to treat any land held on the tenures specified and within the territorial operation of the Act as falling within the category of "estates" liable to be taken over and vested in Government.
We consider that the latter view is to be preferred as being in accord with the intention of the law and as subserving its purposes.
In this connection it cannot be overlooked that the entire argument of learned Counsel is built up on the definitions of an "estate" in section 2 of the Abolition Act (read with section 1(3) of that Act), and that the definitions contained there could be applied on the terms of the opening words of that section only "unless there is anything repugnant in the subject or context.
" The position could possibly be better explained in these terms: Assume that Regulation IV of 1951 was not enacted.
Could the State Government take over that portion of the "estate" which was within the operation of the Abolition Act or does the definition of "an estate" and the reference section 1(3) to section 3(2) of the Madras Estates Land Act of 1908 preclude the State from taking over that portion because the Act does not extend to the entirety of the "estate"? It appears to us that this question is capable of being answered only in one way, viz., that the definition of "an estate" in the Abolition Act must be limited to that portion of an "estate" which is within the operation of the Act.
Any other construction would mean that if that Act did not apply to a few square yards in an estate, it ceases to be an "estate" governed by the Act, which, in our opinion, would be plainly contrary to the intention of the enactment as 547 As already pointed out learned Counsel 's submission was that not merely the notification dated January 14, 1953, but also the earlier one dated August 15, 1950 (as modified by the one dated September 5, 1950) was invalid as providing for vesting of parts only of an "estate" and not of it as a unit.
It would also follow that if the first notification dated August 15, 1950, was valid, the impugned notification which by its operation effected the vesting of the entirety of the estate in the State could not be open to challenge as violating the principle invoked by learned Counsel.
We are necessarily therefore driven to consider the validity of the first notification dated August 15, 1950, in dealing with the validity of the impugned notification of January 14, 1953.
In considering this matter it is necessary to recall some of the provisions of the Abolition Act.
Section 2(3) defines "an estate" as meaning, inter alia, a "zamindari estate".
No doubt, as stated already, where the Abolition Act operates over the whole of "a zamindari estate", it does not contemplate the Government taking over a portion only of such "estate".
But in saying this it should not be assumed that if in respect of a single estate two notifications were issued, say on the same date which together vested the entirety of the "estate" in the State under section 3, either notification or both together would be invalid or ineffective.
The reason for this must obviously be that the intention of the Government was to take over the entire estate though it was being given effect to by the issue of two notifications.
That would not obviously be the same thing as the Government having the liberty to pick and choose certain of the villages or certain portions of an estate leaving out others.
If the Abolition Act as enacted does not extend to the entirety of an "estate" as defined in the Estates Land Act but only to a portion thereof, the question would be whether that portion of "the estate" which is within the operation of the Act is "an estate" within the meaning of the Act or not.
On this matter there are two views possible: (1) that having regard to the Abolition Act referring to and as it were incorporating the provisions of the 548 Madras Estates Land Act, the "estates" to which the Abolition Act could apply are only those which being "Estates" within the Estates Land Act, are also wholly within the operation of the Abolition Act.
In other words, even if a few acres of an "estate" as defined in the Estates Land Act were outside the operation of the Abolition Act, it would not be an "estate" which could be taken over.
(2) The other view attributing a crucial value to the policy and purpose underlying the legislation, viz., a reform of land tenures and landholding by the elimination of intermediaries to treat any land held on the tenures specified and within the territorial operation of the Act as falling within the category of "estates" liable to be taken over and vested in Government.
We consider that the latter view is to be preferred as being in accord with the intention of the law and as subserving its purposes.
In this connection it cannot be overlooked that the entire argument of learned Counsel is built up on the definitions of an "estate" in section 2 of the Abolition Act (read with section 1(3) of that Act), and that the definitions contained there could be applied on the terms of the opening words of that section only " unless there is anything repugnant in the subject or context.
" The position could possibly be better explained in these terms: Assume that Regulation IV of 1951 was not enacted.
Could the State Government take over that portion of the "estate" which was within the operation of the Abolition Act or does the definition of "an estate" and the reference section 1(3) to section 3(2) of the Madras Estates Land Act of 1908 preclude the State from taking over that portion because the Act does not extend to the entirety of the "estate"? It appears to us that this question is capable of being answered only in one way, viz., that the definition of "an estate" in the Abolition Act must be limited to that portion of an "estate" which is within the operation of the Act.
Any other construction would mean that if that Act did not apply to a few square yards in an estate, it ceases to be an "estate" governed by the Act, which, in our opinion, would be plainly contrary to the intention of the enactment as 549 gathered from its preamble and operative provisions.
Let us suppose that instead of the problem created by a portion of the estate being in a Scheduled area and therefore though within the State outside the normal legislative power of the State Legislature, a permanently settled estate had by reason of say the State 's Reorganisation, fell both within the territory of the Madras and the Andhra States, with the result that the taking over under the Abolition Act could be operative only in regard to that portion within the State of Madras.
Could it then be contended that the portion of the estate within the State of Madras did not fall within the definition of an estate and so could not be taken over by notification under section 1(4) of the Act.
Indeed, the answer of the learned Counsel for the appellants to such a question was that it could be taken over but for the reason that in such a case the portions outside the State territory could not be an " estate" within the Madras Estates Land Act at all and that in consequence the inter relation between the unit constituting the estate under the Estates Land Act and the concept of an "estate" under the Abolition Act was not disrupted.
But this, however, hardly suffices as a complete answer, for even after a portion of the "estate" becoming situated in a State other than Madras the State might still be governed by the "Madras Estates Land Act", though applied as the law of tile new State.
What is relevant in the illustration is that along with the concept of the unit con stituting the "estate" being taken over, there is also underlying it, another principle, viz., that it is sufficient if the entirety of the estate over which the State Legislature has competence is taken over.
In such a taking over the difficulty suggested by learned Counsel in working out the scheme of the Act, would not arise because the portion taken over will constitute the estate and the compensation for that unit will be worked out on the basis laid down in section 24 and those following.
The other portions of the estate which are beyond the territorial operation of the enactment would continue to remain unaffected, so that the State 70 550 Government could not be in a position to take them over.
We accordingly, consider that the first notification dated August 15, 1950, apart from its being binding and not open to challenge in these proceedings by the appellants, is valid and effective in law to vest the portion to which it related in the State Government.
We then have Regulation IV of 1951 which brought the other portion of the estate to which the Abolition Act did not originally extend within the operation of that enactment.
If, after this change in the law, the Government did not take over the rest of the estate, it would be open to the objection that the State Government had artificially split up the estate into two parts and had taken over or rather retained in its possession one part, and that notwithstanding that the Act posited the unit constituting an estate being taken over, had departed from that principle.
The impugned notification therefore far from being invalid, was necessary to be issued in order to satisfy the very principle which learned Counsel for the appellants submits as the one underlying the scheme of the Abolition Act.
We therefore hold that the challenge to the validity of the impugned notification dated January 14, 1953, should be repelled.
We have thus reached the same conclusion as the learned Judges of the High Court, though by a different line of reasoning.
The appeals fail and are dismissed with cost one set.
Appeals dismissed.

summary:
The areas in question which were parts of two estates belonging to the appellants, called Gangole A and Gangole C, were situated in what was known as the Godavari Agency tract which was governed by the Scheduled Districts Act, 1874.
By section 92 of the Government of India Act, 1935, no Act of the Provincial Legislature was applicable to certain areas in which the Godavari Agency was included, unless the Governor by public 536 notification so directed.
The Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948, was enacted in 1948, and on August 15, 1950, the Government of Madras issued a notification under section 1(4) Of the Act by which, among other estates, Gangole A and Gangole C in their entirety were purported to be taken over, specifying September 7, 195o, as the date on which the vesting was to take place.
But as no action as contemplated by section 92 of the Government of India Act, 1935, had been taken to render the Madras Act of 1948 applicable to the Godavari Agency tract, only parts of the Gangole estates were within the operation of that Act, while there were portions of the estates which were outside its purview and operation.
When this legal situation was noticed another notification was issued on September 5, 1950, by which the areas in question were excluded from the scope of the notification dated August 15, 1950.
In exercise of the power under para 5(2) Of the Fifth Schedule to the Constitution, Madras Regulation IV of 1951 was passed on September 8, 1951 by which, inter alia, the Act Of 1948 was made applicable to the areas in which the two Gangole estates were situate with retrospective effect from April 19, 1949.
On January 14, 1953, the Government of Madras issued a notification vesting those portions of the Gangole estates to which the Act Of 1948 was extended.
The appellants challenged the legality of the notification on the ground that the various provisions of the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948, showed that the Act contemplated the taking over of estates as a unit and not in parts, while what the Government had done in the present case was to deal with the two estates of Gangole A and Gangole C as if each one of them were really two estates, one that which lay in the Godavari Agency tract and the other outside that area, and had issued notifications in respect of these units separately.
Held, that the first notification dated August 15, 1950, as modified by that dated September 5, 1950, was valid and effective in law to vest the portion of the estate to which it related in the State Government.
Held further, that the notification dated January 14, 1953, was equally valid.
The action taken by the Government in issuing the said notification was in conformity with the scheme of the Act of 1948 that the entirety of the estate should be taken over.