Wanchoo, J.
1. These five petitions under Art. 32 of the constitution, which are connectedand will be dealt with together, raise questions as to the constitutionality ofthe Bombay Agricultural Produce Markets Act, Bombay Act No. XXII of 1939,(hereinafter referred to as the Act), as amended by the Bombay and SaurashtraAgricultural Produce Markets (Gujarat amendment and validating Provisions)Ordinance, No. 1 of 1961 (hereinafter referred to as the Ordinance), and theRules and the bye-laws framed thereunder. They are a sequel to the judgment ofthis Court in Gulam Mohammed v. The State of Bombay : [1962]2SCR659 ,which was delivered on May 2, 1961. One of petitioners before us in thesepetitions was also a party in that petition, which was with respect to a marketestablished in Ahmedabad. In that petition the challenge to theconstitutionality of the main provisions of the Act failed but the provisionsof certain Rules, namely Rules 53, 65, 66 and 67 were held to be ultra vires theprovisions of s. 11 and s. 5A of the Act. In consequence, a direction wasissued prohibiting the respondents in that petition from enforcing theprovisions of the Act, Rules and Bye-laws against the petitioners in thatpetition till a market was established in law for that area under s. 5AA andfrom levying any fee under s. 11 till the maximum was prescribed under theRules. Consequent on that decision, the State of Gujarat amended r. 53 bynotification dated June 23, 1961. Further the Ordinance was promulgated on June26, 1961, by which certain amendments were made in certain sections of the actand a new s. 29-B was inserted in the Act validating certain acts or thingsdone prior to the promulgation of the ordinance. The present petitions werefiled thereafter.
2. Four of the petitions (namely, Nos. 226 to 229) are with respect toAhmedabad while the fifth petition (No. 233) is with respect to Nadiad. Two ofthe petitioners of Ahmedabad are wholesale dealers while the other two claim tobe retail dealers. The contentions on behalf of the Ahmedabad petitioners arethat the notification amended s. 53, offends Art. 14 of the Constitution and istherefore bad. It is further contended that though s. 5AA has been amended, theamendment is prospective; therefore the infirmity noticed in the earlierjudgment of this Court still remains and s. 29-B which has been inserted in theAct is insufficient to validate what had been done before the Ordinance cameinto force. It is further contended that the bye-law under which the marketcommittee issues licences to A Class and B class dealers indiscriminatory andimposes unreasonable restrictions on the fundamental right to carry on tradeand business and is therefore bad. Lastly it is contended that the marketcommittee insists on issuing licences for retail trade and this it cannot dofor control of retail trade is not within the provisions of the Act as held bythis Court in the earlier judgment, and further in consequence the market,committee is using r. 64 in a manner in which it was not intended to be usedand therefore that rule though it was upheld in the earlier judgment should bedeclared ultra vires.
3. The majority of the petitioners in the Nadiad case are wholesale dealersbut a few of them claim to be retail dealers. These petitioners furtherchallenge the constitutionality of the Act after its amendment by theOrdinance, and their contention is that the Ordinance makes radical changes inthe main provisions of the Act and the basis on which these main provisionswere upheld by this Court earlier, no longer applies, and therefore the Act asit now stands after the amendment is violative of the fundamental right tocarry on trade and business guaranteed under Art. 19(1)(g) of the constitutionas the restrictions placed by it on the said right are unreasonable. Further itis contended that Rules 65, 66 and 67 were struck down by this Court in theearlier judgment as beyond the power conferred on the State under s. 26 of theAct. These rules therefore cannot be held to be a part of the Rules in forcenow and in consequence it was not open to the market committee to Act asprovided in these Rules. Lastly it is urged on behalf of one of the petitionersthat he had paid licence-fee to the market committee and was entitled to arefund of that after the earlier judgment of this Court; but s. 29-B newlyinserted in the Act which in effect deprives this petitioner of getting refundis invalid and illegal as it is against the provisions of Art. 31(1). Someother points have also been raised by the Nadiad petitioners; but as they arenot pressed, we shall not refer to them.
4. The petitions have been opposed on behalf of the State and it has traversedall the points raised on behalf of the petitioners. It is not necessary to setout the grounds on which it is urged on behalf of the respondents that thecontentions of the petitioners have no force. These grounds will appear when wedeal with the contentions raised on behalf of the petitioners one by one. Nordo we think it necessary to set out the previous history as to theestablishment of the market in Ahmedabad as that will be found in the earlierjudgment; nor is it necessary to set out the previous history as to theestablishment of the market in Nadiad, for it is not in dispute that thathistory is similar to the history in the case of the Ahmedabad market. We shalltherefore proceed to indicate the points which alone have been pressed onbehalf of the petitioners and then consider them one by one. Some of the pointsare not common; but as they have been raised in one petition or the other andthese petitions have been dealt with together and the decision on any pointwill effect even other petitions in which it has not been raised, we shallproceed on the basis that all the points have been raised in all the petitionsparticularly as the learned counsel appearing in the various petitions adoptedthe arguments of one another during the hearing. The points therefore whichcall for decision are as below -
(1) Is the notification dated June 23, 1961 fixing the maximum fee to becharged hit by Art. 14 of the Constitution ?
(2) Does the insertion of s. 29-B in the Act suffice to validate acts orthings done before the promulgation of the Ordinance ?
(3) Are the by-laws by which the market committee issues licences to A classand B class dealers discriminatory and thus offend Art. 14, and do they amountto an unreasonable restriction on the fundamental right to carry on trade andbusiness under Art. 19(1)(g) ?
(4) Is the market committee acting beyond its power under the Act in requiringretail dealers to take out licences and is r. 64 bad on account of the mannerin which it is being enforced by the market committee ?
(5) Are the main provisions of the Act after its amendment by the Ordinanceliable to be struck down as an unreasonable restriction on the fundamentalright to carry on trade and business under Art. 19(1)(g) ?
(6) Was it necessary to re-frame Rules 65, 66 and 67 under power conferred onthe State Government under s. 26; if so, what is the effect of its not havingbeen done ?
(7) Is s. 29-B bad in view of Art. 31(1) of the Constitution insofar as itprevents refund of licence-fee collected before the Ordinance came into force
Re (1).
5. The notification is in these terms :-
'No. APM/060/30797-F - In the exercise of the powers conferred by section 26of the Bombay Agricultural Produce Market Act, 1939 (Bom. XXII of 1939), theGovernment of Gujarat hereby amends the Bombay Agricultural Produce MarketRules 1941 as follows namely :-
'In the said rules in rule 53, for sub-rule (1) except in explanation theretothe following shall be substituted, namely :-
(1) 'The Market Committee shall levy and collect fees on agricultural producebought and sold in the market area at such rates as may be specified in theby-laws, subject to the following maximums, namely :-
(1) Rate when levied according to cart load shall not exceed 40 naya paise percart load.
(2) Rate when levied ad valorem shall not exceed 40 naya paise per Rs. 100.
(3) Rate when levied according to weight shall not exceed.
(1) per quintal 15 naya paise(2) per Bengali Maund 5 naya paise(4) Rate when levied according to the number of containers containing theagricultural produce shall not exceed,
(a) per bale of cotton 40 naya paise(b) per gunny bag or 5 naya paiseany other container,
(5) Rate when levied in respect of cattle, sheep and goat shall and exceed peranimal Rs. 2.'
By order and in the name of Governor of Gujarat.'
6. The contention on behalf of the petitioners is that the notification isdiscriminatory in two ways : in the first place, because it allows fees to becollected by different modes, i.e., by cart load, by value, by weight and bycontainers. It is urged that it is open to the market committee to levy fees oncertain agricultural produce by (say) cart load and on certain otheragricultural produce by (say) weight; and this is very likely to result indiscrimination. In the second place, it is urged that the notification givespower to the committee to levy fees on the same commodity by even two of themethods mentioned therein. For example, it is urged that the same commodity,say, potatoes may be charged under the notification by the market committeeboth by weight and by car load depending upon whether they are brought into themarket area in a cart, or for example, in a basket. It is said that there isnothing in the rule which prevents the market committee from doing so, and thismay result in discrimination.
7. We may however point out that the notification by itself does not imposeany fee on any commodity. What it does is to carry out the terms of s. 11 whichrequire the maxima to be prescribed subject to which the market committee canlevy fees on Agricultural produce. The imposition of the fees still remains tobe made by the market committee under the power conferred on it by s. 11subject to the maxima prescribed in the notification and therefore thenotification by itself cannot be said to be discriminatory.
8. Let us, however, examine the two contentions raised on behalf of thepetitioners on the basis that though the notification may not actually imposefees on any commodity, it still allows discrimination to be practised by themarket committee, when it proceeds under s. 11 to levy fees within the maximaprescribed by the notification. Taking the first contention, it may be that byusing one method in the case of one agricultural produce and another method inthe case of another agricultural produce, there may be some difference in theincidence of the fees charged, if one were to judge that incidence on the basisof only one of the modes prescribed in the notification. But that in ouropinion cannot be said to result in discrimination for each produce must forthis purpose be treated to be a class by itself. Therefore, so long as themarket committee uses one method of levying fee with respect to one kind ofagricultural produce, it cannot be said that it is discriminating if it usesanother method for levying fee on another kind of Agricultural produce. It iswell known even in systems of taxation that taxes are levied with differentincidence depending upon the nature of the article, taxed, and a fee leviedunder s. 11 is only the exercise of the power of taxation using that word inits widest sense. Therefore, the fact that under this rule, the marketcommittee may levy fees by one method on one agricultural produce and byanother method on another agricultural produce will not be a ground ofdiscrimination, for each commodity must be treated as a class by itself.
9. Turning now to the second contention, it is true that there is nothing inthe rule expressly to prevent the market committee from using two of the modesprescribed therein for the purpose of levying fees on the same agriculturalproduce. It must be remembered however that the rule is a general provision forlevying fees within the maxima prescribed on the agricultural produce by marketcommittees in the market areas all over the State. Various methods of levyingfees have been included in the rule, for we assume that the rule makingauthority knew that there were various ways in which things are brought intovarious market areas. The rule is meant to apply to all situations that mayarise in the State and there may be different ways in which things may bebrought to the market areas in different parts of the State. That is why therule has a wide sweep and allows the market committee to levy fees other bycart load, or by value, or by weight or by containers. It may be that if forthe same agricultural produce fees are levied subject to the maxima twodifferent modes, the rates fixed may result in discrimination. It would howevernot be improper to assume that in framing the bye-laws in which per rates forany particular agricultural produce shall be fixed the market committee shallpay due wigard to the prohibition against discrimination rentained in Art. 14of the Constitution. The practical consequence of this is likely to be that forone agricultural produce the market committee will fixed rate only in one ofthe four modes. If that is one no discrimination can be said to arise. It willnot also in our opinion be unreasonable to think that in issuing thenotification the Government proceeded on the assumption that for any particularagricultural produce one mode of fixing fees - whether according to cart loador according to value or according to weight or according to the number ofcontainers - will be adopted. Nor would it be difficult if the rate is fixed inone of the modes, say according to cart load, to calculate the fees to belevied where the produce is brought in any other manner, say in baskets, forthen the proportional fee can be charged on each basket on the basis of so manybasket-fuls being equal to one cart load. Similarly where the bye-law fixes thefees according to containers and a dealer brings the produce in cart load, itwill be possible to calculate the fee due on the basis of containers, bycalculating how many containers would be equal to one cart load. Where the feeis fixed by weight or value there would be no difficulty in any case. Thereforeone may reasonably conclude that the market committee when acting under s. 11read with the notification will levy the fees on a single commodity in one onlyof the permitted modes. If that happens in actual practice there will be noquestion of any discrimination.
10. But assume that a market committee chooses to adopt two modes for levyingfees on the same agricultural produce, say one according to cart load andanother according to weight. In such a case a question may arise whether thereis discrimination in the incidence of fees. That question may have to beconsidered if and when it arises and whether discrimination actually arises insuch a case will depend upon the rates fixed by the market committee forlevying of fees on the same agricultural produce in the two modes that it mightchoose. If the rates are so fixed that the incidence is substantially the samewhether the fees are levied on the basis of cart load or on the basis ofweight, there will be no discrimination. On the other hand if the rates are sofixed that the incidence works out substantially differently there will be acase of discrimination and in such a case it is the bye-law that will have tobe struck down as being discriminatory for the actual imposition of fees willbe made by the bye-law framed by the committee and not by the impugnednotification. The chances however of fixing two modes for the levy of fees evenon the same agricultural produce in such a way as to result in discriminationare in our opinion so remote that the notification cannot be struck down onthat account as discriminatory. In such a case it is not the notification whichwill have to be struck down but the actual bye-law if it prescribes rates offees in two modes in such a way as to result in discrimination.
11. Turning now to the facts of the present case we find that the bye-lawsframed by the market committees have fixed only one mode of levying fees inthese cases for one kind of produce. It is not the petitioners' case that themarket committees with which we are concerned in the present cases have usedmore than one mode for levying fees on the same agricultural produce. There istherefore no case for discrimination made out on the basis of the actualbye-laws which have been framed by the market committees under the powerconferred on them under s. 11 read with the notification. In thesecircumstances, the attack on the notification on the ground of discriminationmust fail.
12. Re. (2).
Sub-section (1) of s. 29-B provides that in the case of a market areadeclared before the commencement of the Ordinance, a market for such marketarea shall be deemed always to have been established for the purposes of theAct with effect from the date on which a market yard for such market area wasdeclared for the first time under the Rules or the Act and such market shallinclude and shall be deemed always to have included the said market yard. Bythis provision the defect that was pointed out in the earlier judgment withrespect to the establishment of a market is intended to be validated. Thesub-section further provides that any action taken or anything done by a marketcommittee or any other authority after the establishment of a market therein asaforesaid but before the commencement of the Ordinance, which but for theprovisions of this clause would have been invalid, shall be and shall be deemedalways to have been valid and shall not be called in question merely on theground that no market was established for such market area when such action wastaken or thing done. Sub-section (2) then provides that any fees levied andcollected on agricultural produce bought and sold in a market area before thecommencement of the Ordinance by a market committee at the rates specified inits bye-laws shall be deemed to have been validly levied and collected and suchlevy and collection shall not be called in question merely on the ground thatat the time of such levy and collection no maxima were prescribed as requiredby s. 11. The intention of this provision is to cure the defect which wasnoticed in the earlier judgment inasmuch as no maxima had been prescribed unders. 11 by the State Government. Sub-section (3) finally provides that alllicences issued to operate in a market area or any part thereof and feescharged therefore before the commencement of the Ordinance by a market committeeunder the Rules and bye-laws and any action taken or thing done relating tolicensing of persons, or obtaining of a licence, to operate in the market areaor any part thereof, taken or done by a market committee or any other authorityor person under the Rules and bye-laws before the commencement of the Ordinanceshall be and shall be deemed always to have been valid and the validity thereofshall not be called in question merely on the ground that when such action wastaken or thing done, the power right or obligation therefore was not dulyconferred or imposed by the Act on such market committee, authority or person.This provision is intended to cure the defect arising from Rules 65 and 67 beingdeclared ultra vires by this Court in its earlier judgment.
13. The contention on behalf of the petitioners is that these provisions areinsufficient to validate the defects which were noticed in the earlier judgmentof this Court inasmuch as the relevant provisions of the Act and the Rules havenot been retrospectively amended. We see no force in this argument, for theprovisions as they stand certainly validate the defects pointed out in theearlier judgment of this Court. It is true that the relevant sections and theRules have not been retrospectively amended by the Ordinance, but this in ouropinion was unnecessary. Retrospective amendment may be necessary when it isdesired to change the law; but it seems that so far as s. 11 is concerned, thelegislature did not intend that the control of the State Government over levyof fees should be done away with for the future also. Therefore, all that wasnecessary in that respect was to validate the past actions and this isspecifically provided for by sub-ss. (2) and (3) of s. 29-B. As for theestablishment of market committees, an amendment has been made in s. 5-AA ofthe Act deleting the provision by which a market could be established only ifso required by the State Government. This amendment is prospective. It couldhave been made retrospective also and in that case sub-s. (1) of s. 29-B maynot have been necessary. The legislature, however, adopted the method ofamending s. 5-AA prospectively and making a separate provision for validatingthe establishment of markets in sub-s. (1) of s. 29-B. We see no reason why itshould be held that the validation made by sub-s. (1) is not sufficient becausethe legislature has adopted one method rather than the other for carrying outits purpose. We are therefore of opinion that s. 29-B is sufficient to cure thedefects pointed out in the earlier judgment of the Court and to validateactions taken and things done before the promulgation of the Ordinance whichwould otherwise have been invalid in view of the earlier judgment of thisCourt. The contention on this head must also be rejected.
14. Re. (3).
Under the bye-laws as they now stand two classes of traders are mentioned,namely A class traders and B class traders. A class traders are those who holdlicences to buy and/or sell agricultural produce in quantities not below 10lbs. in the market yard, and the licence-fee which they have to pay per year isRs. 75. B class traders are those who have licences to buy agricultural producein quantities not below 10 lbs. in the market yard and to sell in retail toconsumers anywhere in the market area. They have been divided into threeclasses, namely, (a) shop-keepers, (b) lariholders, and (c) Toplawala(hawkers), with a licence-fee of Rs. 12, Rs. 6 and Rs. 3 respectively. It isurged that this amounts to discrimination between A class and B class tradersinasmuch as A class traders are charged much higher fees than the B classtraders. It is however clear that there is a basis for classification betweenthe two classes of traders. A class traders are those who can both buy and sellagricultural produce in the market yard while B class traders can only buy inthe market yard but cannot sell there. It is submitted on behalf of the StateGovernment that B class traders are those persons who generally sell in retailto consumers after buying wholesale in the market yard from A class traders orproducers. The reason why B class traders have been permitted to buy in themarket yard is to allow for competition, as otherwise there would have been amonopoly of the few A class traders who operate in a particular market yard.This classification in our opinion is reasonable. A class traders are wholesaletraders who are permitted both to buy and sell in the market yard and are thuscharged a higher licence-fee. B class traders are ordinary retailers who inorder to carry on their retail trade are permitted to buy in the market yardbut they are not permitted to sell there. They are small traders and aretherefore charged lower licence fees. It appears to us that in order to avoidthe monopoly of A class traders, who are a few in number, with the result thatprices might be depressed by such traders, B class traders are permitted onlyto buy in the market yard on payment of a small licence fee in order that theproducer who brings his produce in the market yard may have a fair price. Wesee no reason therefore to hold that there is any discrimination in creatingthe two classes of traders, for there is a fair basis of classification oftraders into A class and B class. Nor can this restriction be deemed to be anunreasonable restriction on the right to carry on trade and business, for suchregulation is obviously envisaged by the Act in order to carry out its purposesand this Court has already held in the earlier judgment that the Act is a validpiece of legislation. It is unnecessary to repeat the reason given in theearlier judgment, where it was held that the restrictions placed by the Act,Rules and Bye-laws framed thereunder are reasonable restrictions in theinterest of general public.
15. It is however urged that B class traders are allowed to sell to consumersanywhere in the market area whereas A class traders are not so allowed. It hasalready been held in the earlier judgment that retail trade is not controlledunder the Act. Therefore, the fact that the bye-law has added the words 'tosell in retail to consumers anywhere in the market area' in the case of B classtraders is of no consequence, for B class traders, as they are retailers, wouldbe entitled in any case, without being controlled under the Act, to sell toconsumers anywhere they like. It is not the addition of these words which givesthat right to B class traders, for that right of theirs is not controlled bythe Act and they would be entitled to exercise it without the addition of thesewords, which we consider as surplusage in the circumstances. As for A classtraders they are admittedly wholesalers and there is no question of theirselling in retail. We are therefore of opinion that the addition of the wordsmentioned above with respect to B class traders is a mere surplusage and makesno difference to the basis of classification. There is no force therefore inthe contention under this head and it must be rejected.
16. Re. (4).
It is next urged that the market committee is attempting to control retaildealers and requires them also to take out licences, and this it is notauthorised to do, as this Court has already held in the earlier judgment thatretail trade is not within the ambit of the Act. This argument is based on theuse of the words 'to sell in retail to consumers anywhere in the market area'in connection with B class traders. It is said that in this way the marketcommittee is controlling retail trade also under the Act which it cannot do. Weare of opinion that this contention has no force. B class traders are requiredto take out licences in order to buy agricultural produce in quantities notbelow 10 lbs. in the market yard. The licence in our opinion is not meant topermit them to carry on retail sale any where in the market area. As we havesaid already these words are a mere surplusage and the real purpose of thelicence granted to B class traders is to permit them to buy in the market yardand thus control their activity in connection with wholesale trade. It isurged, however, that no provision has been made under s. 2(ix a) of the Act todefine the limit of retail sale under any bye-law. It is true that no specificprovision for that purpose has been made but when the limit of 10 lbs. is fixedbelow which no transaction can take place in the market yard it is someindication of what is the limit of retail sale. In any case the bye laws whichprovide for A class and B class traders, indicate the limit below which theycannot trade in the market yard and this clearly shows that the intention ofthe market committee was not to control retail trade by the issue of licence totraders for the large proportion of retail trade may well be below 10 lbs. foreach transaction. We cannot therefore accept the contention of the petitionersthat the bye-laws by providing for A class and B class traders are reallyproviding for control of retail trade. It is clear that B class traders canonly buy in the market yard but cannot sell there and as for sale, they will beentitled to sell in retail wherever they like, for the Act does not controlretail trade.
17. As for r. 64, it merely provides for incidental powers in connection withthe regulation of market yards and it has already been held valid in theearlier judgment. We see no reason to hold that that rule is invalid on theground that the market committee is using that rule to control retail trade. Wehave already pointed out that the market committee cannot be said to controlretail trade by providing for A and B class licences and there is no questiontherefore of r. 64 being used in a manner not intended thereunder.
18. Lastly, it seems that there is some dispute by some petitioners inPetitions Nos. 228 and 229 as to whether they hold certain shops in the marketyard from the municipal committee or must be deemed to hold them from themarket committee and what rights the market committee has over thosepetitioners in that connection. It appears that there have been suits in courtswith respect to that dispute. That is a matter which in our opinion has to bedecided by the courts where the suits are said to be pending and cannot be thesubject of adjudication in a petition under Art. 32. In any case r. 64 cannotbe declared bad because of any dispute between the market committee, themunicipal committee and stall holders as to their respective rights over thestalls in the market yard. There is therefore no force in this contentioneither and it must be rejected.
19. Re. (5).
The main contention under this head is that the main provisions of the Acthave been so amended by the Ordinance that the basis on which this Court upheldthe provisions as constitutional no longer exists and therefore the Act as itnow stands after its amendment by the Ordinance is an unreasonable restrictionon the right to carry on trade. This contention requires a consideration of theprovisions of the Act as they stand after the amendment by the Ordinance and itwill have to be seen whether there has been any radical departure from thescheme of the Act as it was before the amendment. If there has been no radicaldeparture after the amendment and the control envisaged by the Act as amendedis still the same, as it was before the amendment, the basis on which theearlier judgment of this Court upheld the main provisions of the Act wouldstill apply, and the Act as amended would be constitutional. Let us thereforesee if there has been any radical departure from the main provisions of the Actas they stood before the amendment. The Act still deals with the regulation ofpurchase and sale of agricultural produce and establishment of markets for suchproduce. Section 3 stands unamended and provides for the constitution of marketareas and market committees and gives power to the Commissioner by notificationto declare his intention of regulating the purchase and sale of suchagricultural produce and in such area as may be specified in the notification.Section 4(1) is also unamended and gives power to the Commissioner afterholding such inquiry as may be necessary and considering the objections andsuggestions if any made after the notification under s. 3 to declare aparticular area as a market area for the purposes of the Act. There has beensome amendment in s. 4(2) but it is not of a radical character and does notmake any difference to the main provisions of the Act. Section 4-A has alsobeen amended by providing for declaration of a market proper and consequentialchanges necessary due to such provision. This amendment only brings into theAct what was formerely in r. 51. This amendment also therefore makes no radicalchange in the Act. Section 5-AA has also been amended and the provision whichmade it necessary for the State Government to require a market committee toestablish a make that been deleted. Section 5-AA as it now stands makes it theduty of the market committee to enforce the provisions of the Act etc. and whena market is established thereunder to provide for such facilities in the marketas the State Government may from time to time direct in connection with thepurchase and sale of agricultural produce with which it is concerned. Thechange in s. 5-AA therefore is also of an incidental character and does not inany way affect the scheme of the Act as it was before the amendment. Section 5Ahas also been amended and it now reads as follows :-
'Where a market is established under section 4A, the market committee mayissue licences in accordance with the rules to traders, commission agents,brokers, weighmen, measurers, surveyors, warehousemen and other persons tooperate in the market area or any part thereof.'
20. The main argument of the petitioners is based on this amendment. It isurged that under the unamended Act after a market was established the marketcommittee had to issue licences for operation in the market so that thebusiness of sale and purchase of agricultural produce was concentrated in themarket which consisted of a principal market yard and one or more sub-marketyards with the consequent advantage to the agricultural producer that they hada place or places where they could find a large number of buyers for theirproduce and could thus secure fair prices under regulated conditions. Now,however, it is urged that under s. 5A it is open to the market committee, afterthe market is established under s. 4A to give licences to traders and other tooperate in the market area or any part thereof with the result that it wouldnot be necessary to have a principal market yard or sub-market yards. Therewould be some force in this argument if we were to ignore the rules framedunder the Act. But the rules which were framed by the State Government arestill the same. Rule 51 provides for the declaration of market yards and marketproper by the State Government. Rule 60 provides that all agricultural producebrought into the market shall pass through the principal market yard orsub-market yards and shall not subject to the provisions of sub-r. (2), be soldat any place outside such yards. The only exception to this is sub-r. (2),which provides that proceed agricultural produce may be sold either in theprincipal market yard, or sub-market yard, or in the market proper, or in themarket area in accordance with the provisions of the bye-laws. The reason forthis distinction is clear, for where produce is to be processed, as forexample, ginned cotton, it has to be taken to a ginning factory in which caseit would be most inconvenient to bring the produce to the market yard for saleand that may also add to the price by further transport charges. Reading s. 5Atherefore along with the Rules, it is clear that the present provisions arematerially the same as the agricultural produce (except that which isprocessed) shall have to pass through the principal market yard or sub-marketyards and be sold there. The only difference that the amendment has made isthat whereas formerly under s. 5A traders could only operate in the market byvirtue of the provisions of the Act, now they will operate in the market byvirtue of the provisions of the Act read with the Rules. The rules, however,are still the same and therefore in effect the provisions of the Act and theRules read together still provide for the same kind of regulation which wasintended under the unamended Act. It is urged that it will be open in thefuture for the market committee to do away with the necessity of having marketyards and sub-market yards and concentrating wholesale trade only in marketyards and sub-market yards in view of the provisions in the amended s. 5A, forthe market committee would be entitled to issue licences in accordance with theRules in case they are changed to traders etc. to trade in the market area orany part thereof. It will be seen however that the power to change the Rules isnot in the market committee and until the Rules are changed the position as itwas under the unamended Act would remain the same. We have no reason to supposethat the State Government intends to change the Rules as they are now and topermit the market committee to grant licences under s. 5A for trade anywhere inthe market indiscriminately. It is true that such a possibility can arise ifthe State Government changes the Rules as they exist at present. But there isno reason to suppose that such a change is intended. So long therefore as theRules stand as they are, there is no radical departure from the scheme of theAct as it was before its amendment and the reasons which impelled this Court touphold the Act and the Rules framed thereunder would still hold good. If andwhen the Rules are so changed as to make a radical departure from the presentposition, a question may well arise whether the scheme of control envisagedunder the Act has failed in its purpose. It may then be necessary to decidewhether the Act and the rules framed thereunder are unconstitutional; but solong as the rules stand as they are, we have to read s. 5A along with theRules, for licences are issued under that section in accordance with the Rules,and reading s. 5A and the present Rules together it must be held that there hasbeen no radical departure from the scheme of the act as it was before theamendment and therefore the reasons which impelled this court to uphold theAct, Rules and bye-laws framed under it in the earlier judgment still stand.
21. Besides this main argument certain subsidiary contentions are also urgedon behalf of the petitioners to challenge the constitutionality of the act, andthe Rules framed thereunder on the ground that it was an unreasonablerestriction on the fundamental right to carry on trade or business. It is urgedthat a trader who has business all over the State may have to take 80 or morelicences to trade in different market areas and that will mean a heavy burdenon him resulting in increase in price of agricultural produce. This in ouropinion is a theoretical consideration and in any case if a trader is so big asto carry on trade in all the 80 or more market areas established in the Statewe see no reason why he should not take licence in each market area. He will bein a position to bear the burden and it need not necessarily affect the priceof agricultural produce seriously. Then it is urged that the Act affectstransactions between traders outside the market area. We have not been able tounderstand what exactly is meant by this. It is only when the sale takes placewithin the market area that the produce has to pass through the principalmarket yard or sub-market yard, but if a trader gets something from outside themarket area and the sale takes place outside the market area and the thing isbrought in to the market area by the trader after the purchase, suchtransaction will not be subject to any fees, for fees have only to be chargedon agricultural produce bought and sold in the market area under r. 53 readwith s. 11. But where the sale takes place outside the market area and thecommodity is merely brought into the market area by the wholesale trader, therewill be no question of any fee being charged on that transaction; of course, ifthere is a further sale in the market area or in the market yards by thewholesale trader to some one locally that may be liable to fee. We do not seehow in the circumstances it can be said that this is a case of unreasonablerestriction on the right to carry on trade and business.
22. Next it is urged that the provisions in the Act also affect transactionbetween traders and traders, and also affect produce not grown within themarket area if it is sold in the market area. That is undoubtedly so. But ifcontrol has to be effective in the interest of the agricultural producer suchincidental control of produce grown outside the market area and brought intothe market yard for sale is necessary as otherwise the provisions of the Actwould be evaded by alleging that the particular produce sold in the market yardwas not grown in the market area. For the same reasons transactions betweentraders and traders have to be controlled, if the control in the interest ofagricultural producers and the general public has to be effective. We aretherefore of opinion that the Act and the Rules and Bye-laws thereunder cannotbe struck down on this ground. The contention under this head therefore mustfail.
23. Re. (6).
The next contention is that Rules 65, 66 and 67 were struck down by this Courtin the earlier judgment and have neither been reframed nor validated by theOrdinance. Therefore, these rules do not exist. Consequence of this, it isalleged, is that it is not open to the market committee to issue licences whichwere provided by these rules. Rules 65 provides that no person shall dobusiness as a trader or a general commission agent in agricultural produce inany market area except under a licence granted by the market committee underthis rule. Rule 67 provides that no person shall do business as a trader,commission agent, broker, weighmen, measurer, surveyor, warehouse-man oroperate in any other manner in any market area except under licence granted bythe market committee. It is urged that licences are granted under these rulesread with s. 5A, which now provides that where a market is established themarket committee may issue licences in accordance with rules to traders,commission agents, brokers etc. to operate in the market area or any partthereof. Section 5A, it is urged, is a mere enabling provision and becomeseffective when the rules are framed and that licences under the enablingprovisions of s. 5A are to issue in accordance with the rules; and if there areno rules as to issue of licences the enabling provisions of s. 5A cannot beavailed of by the market committee to require the taking out of licences. It isRules 65 and 67 which prohibit business in the market area without takinglicences and provide for the manner in which applications for licence shall bemade, the period for which the licence shall remain valid and other incidentalmatters. It is urged that as these rules were struck down by this Court andhave neither been re-framed nor validated under the Ordinance there is no powerin the market committee to require traders to take out licences merely becauses. 5A enables it to issue licences. The argument on behalf of the State is thateven though these Rules 65 and 67 were struck down because they were inconsistentwith s. 5A as it stood before the amendment, now that s. 5A has been amendedthese rules must be held to have revived and reliance in this connection isplaced on certain decisions of this Court where it was held that an Act whichwas valid when it was passed before the Constitution came into force and someprovisions of which became invalid for certain purposes in view of theprovisions in the Constitution relating to fundamental rights and Art. 13thereof, became wholly effective again when the Constitution was amended andthe inconsistency with the fundamental rights removed. This principle was laiddown by this Court in Bhikaji Narain Dhakras v. The State of Madhya Pradesh : [1955]2SCR589 , in these words :
'The true effect of Art. 13(1) is to render an Act inconsistent with thefundamental right inoperative to the extent of the inconsistency. It isover-shadowed by the fundamental right and remains dormant but is not dead.With the amendment made in clause (6) of Art. 19 by the First Amendment Act,the provisions of the impugned Act were no longer inconsistent therewith andthe result was that the impugned Act began to operate once again from the dateof such amendment with this difference that, unlike amended clause (2) of Art.19 which was expressly made retrospective, no rights and obligations could befounded on the provisions of the impugned Act from the date of the commencementof the constitution till the date of the amendment.'
24. This matter was further considered in Deep Chand v. The State of UttarPradesh (1955) Suppl. 2 S.C.R. 8 and it was held by majority that 'there wasa clear distinction between the two clauses of Art. 13. Under clause (1),pre-constitution law subsisted except to the extent of its inconsistency withthe provisions of Part III whereas under clause (2) any post Constitution lawcontravening those provisions was a nullity from its inception to the extent ofsuch contravention,' and therefore a law which was bad ab initio under Art.13(2) either wholly or to the extent of the contravention could not be revivedby the application of the doctrine of eclipse and the doctrine could only applyin the case of a law that was valid when made but was rendered invalid forcertain purposes by a supervening constitutional inconsistency. The argument onbehalf of the State is that if Rules 65 and 67 were valid when they were firstframed and became invalid on the introduction of s. 5A in the Act, they becameeffective again when s. 5A was amended by the Ordinance.
25. It has not been disputed in this case that the doctrine of eclipse appliesto cases of rules. The only dispute was whether Rules 65 and 67 in the presentform were in existence before 1953 when s. 5A was inserted in the Act and if sowhether they were valid in that form before 1953. Time was taken by the partiesto trace the history of the Act and these two rules and the form in which theAct and these rules stood before 1953. Investigation in this matter shows thatrules were framed for the first time in 1941 after the Act came on the statutebook. Rule 65(1) was in the same form as it existed when it was struck down bythe earlier judgment. Rule 67(1) was also substantially in the same form exceptthat it did not originally include a trader or a commission agent orwarehouseman as it did at the time when it was struck down. The addition or thewords 'the traders and commission agents' in r. 67(1) is however not material,for these classes were already covered by r. 65(1). As for the warehousemenwhich were added sometime later to r. 67(1), that addition need not detain usbecause we are not concerned in these petitions with warehousemen. So it seemsthat r. 65(1) and r. 67(1) were practically the same when they were firstframed in 1941 as they existed when they were struck down. The Act asoriginally passed in 1939 did not contain a section like s. 5A. The scheme ofthe Act then was that under s. 4(2), the Government alone could grant licencesfor setting up any place for the purchase and sale of agriculture producenotified under the Act and thereafter under s. 5 it was the duty of the marketcommittee established under the Act for every market area to enforce theprovisions of the Act the conditions of the licence granted by the Governmentsetting up a place as above and to establish a market therein, if so, requiredby the Government. Section 26 gave power to the Government to frame rules forthe purposes of carrying out the provisions of the Act. Sub-section (2)(e) and(f) were as below :-
'(2) In particular and without prejudice to the generality of the foregoingprovisions such rules may provide for or regulate :- ............................................................
(e) the maximum fees which may be levied by the market committee in respect oflicences granted to traders and on the agricultural produce bought and sold inthe market area and the recovery of such fees;
(f) the issue of licences to brokers, weighmen measures and surveyors the formin which and the conditions subject to which such licences shall be issued orrenewed and the conditions subject to which the licences shall carry on theirbusiness and the fees to be charged therefore.'
26. It will be seen that these provisions by which rules could be framed forgrant of licences did not confer power for issuing licences only for the marketestablished under s. 5 as it originally stood. These powers were general interms and the Government could frame rules empowering the market committee toissue licences for carrying on business throughout the market area. Rules 65(1)and 67(1) therefore would be within the power granted to the State Governmentunder s. 26 when they were originally framed in 1941 and would thus be validthen.
27. Then we come to the amendment of the Act in 1948. By this amendment,clauses (e) and (f) of s. 26(2) were combined in one and were numbered assub-s. (2)(f), which runs as follows :-
(2) In particular and without prejudice to the generality of the foregoingprovision such rules may provide for or regulate :- ............................................................
(f) the issue of licences to traders, commission agents, warehousemen andother persons operating in the market, brokers, weighmen, measurers andsurveyors, the form in which, and the conditions subject to which such licencesshall be issued or renewed and the fees to be charged therefore;'.
28. It will be seen that though the words 'market area' do not appear in thisprovision, it is still of a general nature and does not restrict the operationof the licence only to the market. So Rules 65 and 67 would not be inconsistentwith it.
29. Then we come to the amendment of 1953 which introduced s. 5A (as it wasbefore the amendment by the Ordinance) in the Act and that provided that 'wherea market is established under s. 5, the market committee may issue licences inaccordance with the rules to traders, commission agents, brokers, weighmen,measurers, surveyors, warehousemen and other persons to operate in the market.'This section was considered in the earlier judgment and it was held there onthe basis of this section that Rules 65 and 67 when they gave power to thecommittee to issue licences for operation in the market area as distinguishedfrom the market were bad after the enactment of s. 5A.
30. It is however clear from the above narration of facts that r. 65(1) and r.67(1) were valid when they were originally framed and remained valid till s. 5Awas enacted in 1953 and became bad on the insertion of s. 5A in the Act. Nowthat s. 5A has been amended by the Ordinance, Rules 65 and 67 are obviously inconformity with it, r. 66 being merely consequential. Therefore they willrevive by the application of the doctrine of eclipse as they are no longerovershadowed by s. 5A as it was before the Ordinance. The contention under thishead must therefore fail.
31. Re. (7).
The argument under this head is that sub-s. (3) of s. 29-B which validates thecollection of licence-fees by market committees is bad inasmuch as it makes itimpossible for refund to be made of licence-fees collected at the time when themarket committee had no power to collect it. We have not been able tounderstand this contention, for it is not disputed that the legislature haspower to legislate retrospectively even with respect to taxation (see M.P.V. Sundararamier & Co. v. The State of Andhra Pradesh : [1958]1SCR1422 , where Sales Tax Laws Validation Act, 1956, was held constitutionally valid.Fees are also included within the taxing power of the legislature in thebroadest sense. Article 31(1) therefore has no application in the present caseand we have to look to Art. 265 which says that 'no tax shall be levied orcollected except by authority of law'. Sub-section (3) of s. 29-B is the lawwhich retrospectively authorises the levy of licence-fees collected in thiscase. Retrospective power of the legislature to make a law being there even inthe case of taxation, we fail to see how the provisions of sub-s. (3) of s.29-B which validate the levy and collection of licence-fees can be held to beinvalid under Art. 31(1). We may add that the same will apply to fees collectedunder s. 11 and validated by sub-s. (2) of s. 29-B. There is therefore no forcein this contention. It is hereby rejected.
32. In the result, the petitions are dismissed with costs. One set of hearingfee.
33. Petitions dismissed.