S.N. Jha, J.
1. This batch of seven writ petitions involving same dispute has been heard together. The dispute relates to competence of the Bihar Agricultural Marketing Board (hereinafter referred to as the Board) to fix guidelines for levy of the charges in respect of occupation of the shops and godowns at the market yard of different Market Committees and the validity of the demand notice including the certificate proceeding arising therefrom for realisation of the dues by the concerned Market Committees. The dispute arises in the context of the Bihar Agricultural Produce Market Act, 1960.
2. The Bihar Agricultural Produce Market Act (hereinafter referred to as the Act or the Market Act) was enacted to regulate buying and selling of agricultural produce and the establishment of markets for agricultural produce in the State of Bihar and for matters connected therewith. Section 15 of the Act inter alia prohibits sale or purchase of any agricultural produce within the meaning of Section 2(1) (a) of the Act by any person at any place in the market area other than the relevant principal market yard or sub-market yard or yards established therein, except retail sale/ purchase of such quantity thereof as may be prescribed for personal consumption. Section 4 empowers the State Government to declare after preliminary notification under Section 3 and considering the objections thereto the area specified in such notification or any portion thereof to be a market area for the purpose of the Act in respect of all or any of the kinds of agricultural produce specified in the notification. Section 5 provides for principal market yard and one or more sub-market yard or yards for each market area notified under Section 4. Section 6 provides for the Market Committee for every market area. Section 27 empowers the Market Committee to levy and collect market fee on the agricultural produce bought or sold in the market area at the rate specified therein. Sections 29 and 30 provide for Market Committee Fund and its application for the purposes mentioned therein. Reference may also be made at this stage to Rule 98 of the Bihar Agricultural Produce Market Rules, 1975 which obliges traders to obtain licence, and its renewal, on payment of the prescribed fee.
3. The representative facts may be noticed from C.W.J.C. No. 5606/91. There are two petitioners in this case. They are 'traders' carrying wholesale business of sale and purchase of food grains notified as 'agricultural prodeuce' within the meaning of Section 2 (1) (w) read with Section 2(1)(a) of the Market Act. The case of the petitioners is that the 'traders' are not required to pay anything else than the market fee payable under Section 27 of the Act and the licence fee payable under Rule 98 of the Rules, in the name of 'rent' or 'occupational charges' for the occupation of shops and godowns situate at the market yard. However, they were forced to execute lease deeds in respect of the premises stipulating payment of fixed rent @ Rs. 250 per month. Demands for arrears were raised and certificate proceedings were initiated for its realisation. On 2-9-1988 the Managing Director of the Board issued directives in the matter of fixation of rent in respect of buildings, godowns etc. situate at the market yards. According to the petitioners the Board and/or its Managing Director has no power to fix rent. It is the market committee which can fix the rent by written agreement duly executed in the manner laid down in Section 31 of the Act vide decision in the case of Syed Ezaz Ahmad v. State of Bihar, 1992(2) BLJ 736. Enhancement of rent is not permissible in view of the provisions of Transfer of Property. Act, 1882 and Bihar Building (Lease, Rent, Eviction and Control) Act, 1981 (in short, the BBC Act) without taking recourse to the procedure laid down therein, Indeed, the Market Act does not contain any provision for determination of rent/occupational charges. In any view of the matter, the term of the market committee having expired, with the passage of time, no market committee exists and, as such, in the absence of any notification under Section 9(5) of the Act, any enhancement of rent/occupational charges in purported exercise of power under Section 37 of the Act is illegal and without jurisdiction.
4. The respondents have filed counter-affidavit and a supplementary counter-affidavit taking the stand that the traders were paying rent pursuant to agreement executed by them with the Market Committee; they started objecting only after it was enhanced. The agreement provides for enhancement. The shops-cum-godowns were constructed as part of infrastructure to provide facilities to the traders after taking loan from the Bank @ 9.5%. Being a 'local authority' the provisions of the BBC Act are not applicable. In the supplementary counter-affidavit it has been stated that the impugned guidelines contained in the letter dated 2-9-1988 have been issued to rationalise and standardise the rent and to do away with anomalies in the rates prevailing in the different Market areas/It is relevant to mention here that by the said letter dated 2-9-1988 different market yards in the State of Bihar have been classified in four categories on the basis of trading potential at different places. Adverting to the respondents' case, there stand further is that the Market Committees are bound by the directives/guidelines issued by the Board. As regards the petitioners' case of the Market Committees not being in existence, the stand of the respondents is that the Market Committee is a body corporate having perpetual existence under Section 17 of the Act. The Market Secretary is a permanent post under Section 20 of the Act. He is also appointed by the Board and bound to carry on affairs and discharge the duties and functions of the Market Committee and further bound to implement the directive of the Board.
5. Before noticing the submissions of the Counsel for the parties it would be appropriate to notice certain provisions of the Act, besides those referred to above, having bearing on the authority of the Board and its relationship with the Market Committees. It is relevant to mention at the outset that though the Market Act was enacted in 1960 the Board was established for exercising superintendence and control over Market Committees in 1974 under an ordinance replaced finally by Bihar Act 60 of 1982 incorporating Chapter IV-A in the Act. The provisions therein relate inter alia to establishment of the Board, the incorporation as a body corporate, its fund, audit and account, appointment of officers and servants and powers and its functions. Suitable amendment was also made by the said Ordinance/Act in Section 18 relating to powers and duties of the Market Committees, among other sections. Section 18 so amended provides that it shall be the duty of a Market Committee to implement the provisions of this Act, the rules and bye-laws made thereunder in the market area to provide such facilities for marketing of agricultural produce therein as the Board may from time to time direct. The amendment also conferred power on the Board to make appointment of Market Secretary amongst others. It may not be out of place to mention that the authority of the Board to transfer Market Secretaries has been upheld by a Full Bench of this Court in the case of Dhirendra Kumar Akela v. Bihar State Agriculture Marketing Board and Ors. 1985 BLJ R 199.
Section 33-J which provides for powers and functions of the Board may be quoted so far as relevant as under:--
'(1) The Board shall subject to the provisions of this Act, perform the following functions and shall have power to do such thing as may be necessary or expedient for carrying out those functions:--
(i) superintendence and control over the working of the market committees and other affairs thereof including programmes undertaken by such market committees for the development of markets and market areas:
(ii) giving direction to market committees in general or any market committee in particular with a view to ensure efficiency thereof;
(iii)... ... .... ....
(iv).... ............
(2) Without prejudice to the generality of the foregoing provisions, such power of the Board shall include the power
(i) ........ ........ ...... ....... ........ ..........
(x) to do such other things as may be of general interest to market committees ....................................'
Section 35 confers powers on the Managing Director of the Board or any officer
authorised in this behalf by him, to inspect the accounts of the Market Committee or
to institute an inquiry into the affairs of the Market Committee and to require the
Market Committee or its Chairman to do a thing or to desist from doing a thing which
he considers necessary in the interest of the market or the Market Committee and
to make a written reply within a reasonable time stating its or his reasons for not
desisting from doing it or for not doing such a thing, and after considering the reasons
given by Market Committee, the Managing Director of the Board or any officer
authorised by him may pass such order thereon as he thinks fit. Under Sub-section (2) thereof the Managing Director of the Board or any other officer authorised by him
is also empowered to summon and enforce the attendance of witnesses and to
compel the production of documents by the same means, in the manner provided in
the Civil Procedure Code. Under Section 37 where a Market Committee is unable or
not competent due to any order or decision of a Court or any other cause to perform
the duties, the Board may make such arrangements as it thinks fit for performance
of the duties and functions of such Market Committee and the Chairman of the
Committee. (This Section is particularly relevant in view of the submissions made by
the Counsel and I shall come back to it again later in this judgment). Section 38
empowers the Managing Director to call for and examine the proceedings of any
Market Committee for the purposes of satisfying himself as to the legality of any
decision or order passed by the Market Committee. Under Section 26 appeal lies
against the orders passed by the Chairman to the Managing Director of the Board
who may affirm, modify or set aside any such order or pass such other order as he
thinks fit. Similar provision regarding appeal against the assessment orders (with
respect to market fee), to the Regional Director of the Board is contained in Section
27-B of the Act.
6. In view of these provisions the conclusion is irresistible that the directives of
the Board or its Managing Director are binding on the Market Committees. The
provisions, amongst others, were noticed by the Full Bench in the Case of Dhirendra Kumar Akela (supra) and it was held that the control of the Board over the Market Committees was all- pervasive and the Board was competent to transfer Market Secretaries from one Market Committee to another, It was however contended with vehemence that the life of the Market Committee came to an end on expiry of the period prescribed under Section 9(5) of the Act and in the eye of law became nonexistent and therefore, could not take any major decision except discharge routine functions as held by this Court in the case of Kasturi Lal and Ors v. The State of Bihar and Ors. 1990 (1) PLJR 184, affirmed by the Division Bench vide 1990 (1) PLJR 706. Reference was also made to Ramji Prasad v. State of Bihar and Ors. 1991 (2) BLJR 827 and Swagat Stores and Ors. v. State of Bihar and Ors, 1994(1) PLJR 315: AIR 1993 Patna 82. In these cases it was held that Section 37 of the Market Act presupposes the existence of a duly constituted Market Committee, which is unable or not competent, due to any order or decision of a Court or any other cause, to perform its duties, Where there is no Market Committee- which is prevented from discharging its duties for any such reason- the Boards has no power to make arrangements as contemplated in Section 37. Alternatively it was contended that the Board or the Managing Director was not competent to issue any guidelines/directives fixing the rental.
7. As regards the first submission Section 8 of the Act provides for constitution of the First Market Committee. The provisions relating to the constitution of the second and subsequent Market Committees and their tenure are contained in Section 9. In this case, we are not concerned with the constitution of the Market Committee. As regards its tenure, Sub-section (5) provides that the term of office of members, including the Chairman and the Vice-Chairman of the elected market Committee, shall save as otherwise provided in this Act, be three years, from the date of publication of their names as members under Section 13, and on the expiry of three years' term and thereafter if within a period of 6 months election is not held, the committee shall cease to function and all powers and duties of the committee under the provisions of the Act and Rules made thereunder shall exercised by such person as may be nominated by the State Government and new market committee shall be constituted within six months from the date of such nomination. If election is not held within six months the State Government may extend the period of election for another six months.
8. On behalf of the respondents it was submitted that the decision in the case of Kasturi Lal or Ramji Prasad or M/s Swagat Stores was rendered sub silentio without taking into consideration the fact that the Market Committee is a body corporate under Section 6 read with Section 17 of the Act, and therefore, they cannot be treated as binding precedent on the point. Reliance for the proposition was placed on Md. Jainul Ansari v. Md. Khalil, 1990 (2) PUR 378 (FB).
9. All the three decisions aforesaid were rendered by the Division Bench and this Bench cannot question its correctness, as the Counsel for the respondents invited us to do. It is also not necessary, in my opinion, to go into the question as to whether the decisions were rendered sub silentio. The dispute in these case is different from the dispute which arose of consideration in the above mentioned cases. In the case of Kasturi Lal (supra) and other cases referred to above, relied upon on behalf of the petitioners, the Court was co nsidering the validity of authroisation made by the Board, in terms of Section 37 of the Act. In Kasturi Lal's case (supra) the petitioners had sought writ of quo-warranto questioning the appointment of Sub-divisional Officer, Dhalbhum as the Administrator of Jamshedpur Area Market Committee by order of the Board under Section 37 of the Act. In Ramji Prasad's case (Supra) the dispute arose in the context of assessment orders passed by the Special Officer in purported exercise of power under Section 37 of the Act. In the case of M/s Swagat Stores and Ors. (supra) the dispute arose out of an order/direction asking the petitioners to shift their place to business to the market yard. The dispute involved herein is whether the Marketing Board can lay down the guidelines in the matter of rent or occupation charge with respect to shops and godowns at the market yard in occupation of the traders or direct the market committee to enhance the amount. The respective Market Committees have in fact simply implemented the directive and guidelines of the Marketing Board issued by its Managing Director.
10. I am inclined to agree with the Counsel for the respondents that the term 'Market Committee' in Section 6 read with Section 17 of the Act has a different meaning from the one in Section 9. The Market Committee as referred to in Sections 6 and 17 is a body corporate having perpetual succession and common seal with power to acquire and hold property, both movable and immovable, transfer any such property subject to the prescribed conditions and restrictions, may by the said name sue and be sued, and subject to rules, bye-laws and the provisions of this Act, competent to do all other things necessary for the purpose for which it is established. The Market Committee referred to in Section 8 or Section 9 is a Committee in the sense of managing committee. Section 2(1)(j) of the Act defines 'Market Committee' to mean 'a committee established under Section 6'. Section 6 provides that for every market area the State Government shall, by notification, establish a Market Committee. The Market Committee so established is a body corporate under Section 17 having perpetual existence as mentioned above. Section 8 on the other hand provides for constitution as well as tenure of the First Market Committee and Section 9 likewise provides for constitution of the second and subsequent Market Committees and their tenure. The distinction between the two can be illustrated by giving analogy of Co-operative Societies registered under the Bihar Co-operative Societies Act, 1935 and Managing Committees which manage them. Co-operative Societies Registered under that Act are bodies corporate having perpetual existence (until they are wound up) under Section 13 of the Act, like Section 17 of the Market Act. They are managed by what is called 'Managing Committee' constituted, with a tenure, under Section 14, like Sections 8/9 of the Market Act. After the term of the Managing Committee expires, the management of the Society comes into the hands of the Administrator under Section 14(5). The fact that the 'market committee' within the meaning of Section 8 or 9 is different from the 'market committee' under Section 17 of the Market Act becomes further evident from the fact that the 'market committee' constituted under Section 8 or 9 is liable to be superseded under Section 32 of the Market Act if in the opinion of the State Government, it is not competent to perform, or persistently makes default in performing, the duties imposed on it by or under this Act or exceeds or abuses its powers. Upon supersession, all the members including the Chairman and the Vice-Chairman are 'deemed to have vacated their office'. It is also worth pointing out that while Section 6 uses the term 'establish' in Section 8 or 9 the term used in 'constitute'.
11. According to the petitioners, the Market Committee is a juristic entity vested with certain powers and functions under the Act and the Rules or bye-laws. It has let out premises in question to the traders on certain terms and conditions on the basis of written agreement and it is not competent to enhance the rent without executing fresh agreement which it cannot do as it has ceased to be in existence in the eye of law. Where there is vacum, it is urged, the benefit should go to the individual - as held in Dr. (Miss) Aletta Grace Bell v. Dr(Miss) S. Tirkey, AIR 1996 SC 538. Further, it is said that the relationship between the parties being that of lessor and lessee the rent cannot enhanced except by taking recourse to the provisions of the BBC Act Also, the market committee being a statutory authority cannot travel beyond the scope of power conferred on it by the statute. Reliance is placed on Marathwada University v. Seshrao Balwant Rao Chavan, AIR 1989 SC 1582. It is also submitted that the action of State and its instrumentalities even in contractual field should be just and fair and guided by relevant considerations and in public interest. Reliance in this regard is placed on Dwarka Das Marfatia & Sons v. Board of Trustees, Bombay Port, AIR 1989 SC 1642, and LIC of India v. Consumer Education & Research Centre, (1975) 5 SCC 4182.
12. The crux of the dispute, as indicated above, lies in the enhancement of the rental. It is not in dispute that the petitioners have been paying certain amount which has been described as 'rent' or 'occupational charge' or 'licence fee' as described in the agreement, without any demur or protest. It is only after enhancement of the amount that they approached this Court challenging the levy. They acquiesced in payment and are, therefore, estopped from challenging the authority of the Market Committee. As regards enhancement, it is inherent in the very nature of the right to charge. Like any other charge, occupational charges or rent cannot remain static. With the rise in cost etc. enhancement cannot be avoided. The only thing is that considering the public character of the Market Committee and nature of duties performed by it, the extent of enhancement should not be arbitrary.
13. A few words about the levy. Occupational charges for occupation of shops & godowns at market yards is completely different from market fee payable under Section 27 of the Act or licence fee payable under Rule 98 of the Rules. Levy of occupation charge is for occupation of shops, godowns etc. The Market Committee is under no obligation to construct Warehouses or Shops and Godowns for the traders. It cannot be treated as part of quid pro quo an element of licence fee under Section 29 of the Act. The traders cannot expect and insist on free-of-charge occupation of the shops, godowns etc. at the market yard. Another aspect is that shops, godowns etc. are limited in number. And it will amount to discrimination if some of them only are allowed free occupation of the shops, godowns etc. leaving the rest to fend for themselves. The right of the Market Committee to realise occupational charges or 'rent in the circumstances cannot be challenged.
14. According to the respondents the relationship between the parties is that of licensor and licensee and not that of lessor and lessee. Further, according to the respondents, being 'local authority' the Market Committee stands out of the purview of the BBC Act in view of provisions of Section 32 of that Act. Having considered the submissions of the Counsel for the parties and examined the terms and conditions of the agreement I am satisfied that it is a case of licence and not lease.
15. Whether it is a case of lease or licence depends on the intention of the parties evidenced by the terms and conditions of the deed. If the deed creates interest in favour of the transferor entitling him to exclusive possession and right of enjoyment it would be lease. Where however the deed simply permits the transferor to use the land without right to exclusive possession it would be a case of licence. Indeed, in the instant case, the very agreement describes the petitioners as licensees. The preface of the agreement states, 'whereas the licensee has applied for license to use a building for trade'. Clause Thirdly states that 'the licensee shall not occupy the said building or without the permission of the market committee use or permit use of the said building for the purposes other than those for which the license is granted.' In the fifth clause it is said 'the licensee shall not by reason of being allowed to use such building, acquire or be entitled to any right or interest whatsoever, save and except the right, enjoy or use the said building subject to the conditions of this agreement'. In clause Seventhly it is provided, 'if the Market Committee requires the vacation of the said building within the use and enjoyment of the licensee under this agreement, the licensee shall without objection comply with a requisition for its vacation within one month time after receipt thereof. In Clause Ninthly it is stated 'if the license is not renewed, the licensee shall vacate the premises within 30 days'. These provisions leave little room for doubt that it is a case of licence and not lease.
16. Even if it were lease it is doubtful if it would be amenable to the provisions of the BBC Act which contains provisions for enhancement of the existing rent by the House Controller under Section 4 of the Act. Under Section 32 of the said Act the provisions do not apply to buildings owned by a local authority besides the State Government, Central Government etc. On behalf of the respondents reference was made to Section 50 of the Market Act in terms of which for the propose' of Bihar and Orissa Local Fund Audit Act, 1925 (in the matter of audits of the accounts of the Market Committee) the Market Committees are deemed to be 'local authority.' Reliance was placed on the decision of a learned Single Judge of this Court in Mahendra Prasad v. State of Bihar, 2002(2) PUR 720, On behalf of the petitioners in this context reliance was placed on Amrit Varsha Dainik v. Bihar State Agricultural Marketing Board, 1999(1) PLJR 1. It was submitted on behalf of the respondents that the decision was noticed in the case of Mahendra Prasad and it was observed that the decision in the case of 'Amrit Varsha was rendered in different context.
17. I do not wish to go into the question as to whether the Market Committee under the Market Act is 'local authority'. There is an apparent divergence of opinion on the point and the writ petitions can be disposed of without going into that question. As stated above, the petitioners were payment certain amount described as licence fee in the agreement (distinct from the licence fee payable under Section 27 of the Act) or - rent in common parlance- the term used even in the counter-affidavit. Bereft of the legal semantics, to me it appears that the payment can be termed as 'occupational charges' payable for occupation of the shops and godowns the petitioners did enter into agreement with the respective Market Committee and in fact did pay he agreed amount namely Rs. 3000 a year i.e. Rs. 250 a month. It is relevant to mention here that the Market Committee let out the premises not on its own but in consultation with the Marketing Board. Further, the agreement stipulated renewal within 30 days of the expiry of the licence on the terms and conditions laid down afresh by the Market Committee, in consultation with the Marketing Board. It would be useful to quote the relevant part of the agreement as under:--
'Whereas the Licensee has applied for the license, to use a building for
trader belonging to the Market Committee described in the schedule here to and
whereas such licencee to use such building for the said purpose has been
granted by the Gaya Market Committee in consultation with the State Agricultural Marketing Board (hereinafter called the Board). Now it is hereby mutually agreed to by the parties here to as follows:--
Firstly.--That the licensee shall occupy the said building within 18th August 81 months and remain in occupation of the said building for a period of twelve months commencing from 18th August 81 any day therefore, yearly license fee of Rs. 3000,00 (Three thousand only) or on the statement in advance and that the yearly license fee shall be renewable within 30 days of the: expiry of the license on the terms and conditions laid down a fresh by the Market Committee in consultation with State Agricultural Marketing Board. The revised terms and conditions for renewing the license so determined by the Committee and the Board shall be binding and acceptable to the licensee. The licensee shall not transfer the licensed premises or sub-let the land or building except with the sanction of Market Committee which in its turn will obtain the previous permission in writing of the Board.'
18. I have already observed above that in view of the relevant provisions of the Market Act relating to relationship between the Market Committee and the Marketing Board, the all- pervasive control of the Board over the Market Committees cannot be doubted. In fact this is what the Full Bench in the case of Dhirendra Kumar Akela (supra) had also observed. By the impugned letter dated 2-9-1988 the Board simply revised the rates. The petitioners admittedly were in occupation of the premises and paying the same amount for several years. It is relevant to mention that before fixing the revised rates on 8-4-1988 the rent/occupational charges had been re-fixed but on receipt of the objections by different traders' organisations the matter was reconsidered and the rates were modified. As per the-revised rates the traders are required to pay the rent/occupational charges @ Rs. 1.25 per square feet with respect to the shops and godowns situate at the market yards at Patna City, Musallahpur, Muzaffarpur, Dhanbad, Bokaro, Ranchi & Jamshedpur falling in category A and, similarly, rent/ occupational charges has been fixed @ Rs. 1.00, Rs. 0.70, and Rs. 0.50 with respect to shops and godowns situate at market yards falling in categories B, C and D respectively. The categorisation is on the basis of trading potential. It goes without saying that trading potential at different places/market yards is not same and therefore, the classification cannot be said to be arbitrary. It would not be out of place to mention here that the rent/occupational charges were again enhanced during pendency of earlier cases by letter No. 597 dated 5-2-1998 i.e. after about ten years of the previous revision on account of rise in cost of construction and maintenance of market yards, giving to rise to another batch of writ petition in 1999.
19. It was submitted on behalf of the respondents that the enhancement has been upheld by different Benches of this Court in the cases of Mali Ram Pooran Chandra and Ors v. Bihar Agricultural Produce Market Committee, Gaya (C.W.J.C. No. 7015/91), Laxmi Narayan Om Prakash v. Bihar State Agriculture Marketing Committee (LPA No. 422/97), Vishnu Grain Stores v. Bihar State Agriculture Marketing Board (LPA No. 423/97) and Chandrika Singh Madan Mohan Singh v. Bihar State Agriculture Marketing Board (LPA No. 470/70). The then Ranchi Bench of this Court in the case of Ramroop Choudary Sita Ram Choudhary v. Bihar State Agriculture Marketing Board (C.W.J.C. No. 2015/91 R) and the Jharkhand High Court (now) in the case of Agricultural Produce Market Committee and Ors. v. Jagdish Singh and Ors, (LPA No. 590/20021 and analogous) has taken the same view.
20. The petitioners having availed of the facilities without any duress, compulsion or demur, and remained in occupation of the premises of the shops and godowns situate at the Market Yards, they cannot question the validity of the levy. Indeed, as observed above, any challenge on this point would be futile, for they cannot expect the market Committee to allow free-use and occupation of the premises. It would also amount to discrimination vis-a-vis those who though also engaged in the business of sale or purchase of the agricultural produce at the Market yard were not so fortunate as to be allotted shops or godowns. It is clearly an additional facility provided to the traders and part of infrastructure, and having availed of the same they cannot say that they would not pay for it. Their real grievance, it would appear, emanates from enhancement which aspect I have already dealt with. If the petitioners think that the revised rates are onerous it is open to them to leave. Indeed some of them have already vacated the premises during pendency of these cases, They cannot claim any right to continue occupation without paying the revised amount. The agreement too contemplated renewal of licence on fresh terms and conditions in consultation with the Marketing Board. In these premises, the petitioners cannot object to the enhancement.
21. In the result, I do not find any merit in these writ petitions, which are accordingly dismissed but without any order as to costs.
P.N. Yadav, J.
22. I agree.