The Commissioner and Spl. Officer, Anakapalli Municipality Vs. the Director of A.P. Agriculture Market Committees, and ors. - Court Judgment

Excerpt:
property - compensation - sections 29 (1) and 29 (2) of a.p. (agricultural produce and live stock) markets act, 1966 and section 277 of a.p. municipalities act, 1965 - suit filed before subordinate court for recovery of compensation payable to appellants by defendants - under section 29 (2) compensation payable only if municipality collecting licence fee - suit dismissed as time barred - consideration before high court - whether municipality collecting fee which makes it entitled for compensation and whether suit not within time - section 29 (2) to be read with section 29 (1) which talks about licence fee - defendant 2 liable to plaintiff for payment of market fee - plaintiff entitled to compensation and period of limitation 3 years - held, plaintiff entitled to decree of sum with.....orderm. jagannadha rao, j. 1. this letters patent appeal is preferred against the judgment of the learned single judge dated 25-4-1988 dismissing the first appeal -- a.s. no. 1499 of 1981. the appellant before us is the plaintiff and was also the appellant before the learned single judge. the suit, o.s. no. 85 of 1980, has been dismissed by the learned additional district judge on 6th january, 1981. the following are the material facts.2. the suit was filed initially in the sub court on 17th august, 1978, for recovery of a sum of rs. 5,63,364-83 towards compensation amount payable for the years 1971-72 to 1977-78 to the appellant by the defendants-respondents, at the rate of rs. 80,480-69 per annum, being the estimated amount of fees lost to the municipality on account of taking over the.....

Judgment:
ORDER

M. Jagannadha Rao, J.

1. This letters patent appeal is preferred against the judgment of the learned single Judge dated 25-4-1988 dismissing the first appeal -- A.S. No. 1499 of 1981. The appellant before us is the plaintiff and was also the appellant before the learned single Judge. The suit, O.S. No. 85 of 1980, has been dismissed by the learned Additional District Judge on 6th January, 1981. The following are the material facts.

2. The suit was filed initially in the Sub Court on 17th August, 1978, for recovery of a sum of Rs. 5,63,364-83 towards compensation amount payable for the years 1971-72 to 1977-78 to the appellant by the defendants-respondents, at the rate of Rs. 80,480-69 per annum, being the estimated amount of fees lost to the municipality on account of taking over the market from 1-4-1971. Admittedly, the market was taken over under the Andhra Pradesh (Agricultural Produce and Live Stock) Markets Act, 1966 (hereinafter called 'the Act'), by virtue of a notification issued by the Government.

3. In the plaint, the plaintiff stated that it is a municipality governed by the provisions of the Andhra Pradesh Municipalities Act, 1965, that it has been maintaining markets in the municipal area and that previous to the Amendment Act it was maintaining the markets and had been collecting certain fee from the merchants in Gandhinagar Market. The plaintiff stated that it used to get an amount of Rs. 80,480-69 per annum towards fee from Gandhinagar Market. By virtue of the notifications issued by the Government as also by the Director of Marketing, the defendant-market committee was constituted and the abovesaid market which was under the control of the municipality was taken over by the market committee in 1971. Under Section 29(2) of the Act, the defendants are bound to pay every year to the plaintiff compensation in respect of the market fee which is lost to the municipality on account of the prohibition contained in Section 29(1) of the Act. The plaintiff claimed that it has been sustaining a loss of income of Rs. 80,480-69 due to the taking over of the market by the second defendant. The defendants have not been paying the loss from 1971-72 onwards. The plaintiff issued a notice to the second defendant but the latter denied its liability by way of a reply notice. The suit is, therefore, laid for recovery of Rs. 5,63,364-83 for the years 1971-72 to 1977-78. The suit was filed, as already stated, on 17th August, 1978. In the written statement, the market committee (the second defendant) admitted that the plaintiff was maintaining certain markets in the Anakapalli municipality prior to the constitution of the market committee. It is, however, stated that the allegation that the plaintiff was collecting fee from the merchants of the market in Gandhinagar and that it was getting an amount of Rs. 80,480-69 per annum is hot correct. Under Section 29(2) of the Act com-pensation is payable only if the municipality was collecting a licence fee. Even in the notice issued by the plaintiff on 3-3-1972 it was not stated that the licence fee was being collected. The letter dated 3-3-1972 of the plaintiff only shows that market fee was recovered from the contractor and the amount was realised on the sale of jaggery lumps at the rate of 3/4th paise per lump. Therefore, the amounts mentioned in the abovesaid letter cannot be called licence fee. Reliance is also placed on a letter of the Chairman of the municipality dated 26th May, 1978, under which he admitted that no licence fee was collected by the municipality. Gandhinagar Market was taken over on 1-4-1971. Even so, no compensation is payable inasmuch as no licence fee was being collected. The liability has been rebutted in the reply notice dated 27-3-1978. In any view of the matter, the amount being a fee and not a tax, the suit is barred by time except for the compensation, if any, payable for the three years before the suit, Hence, the suit is liable to be dismissed.

5. On the abovesaid pleadings, the trial Court framed the following points for consideration :

(1) Whether the municipality was collecting licence fee as per Section 29(2) of the markets Act, or, fee only?

(2) Whether the municipality is entitled tocompensation as prayed for?

(3) Whether the suit is not within time? and

(4) To what relief?

The plaintiff examined three witnesses and marked Exs. A1 to A11. The defendants did not adduce any oral evidence but marked Exs. B1 to B5. On the first issue, the learned District Judge held, on a consideration of the oral and documentary evidence, that the municipality was collecting only market fee and not a licence fee and, therefore, Section 29(2) of the Act did not apply. That section would apply if the fee collected was a licence fee. Coming to issue No. 2, the Court held that the fee used to be collected by the plaintiff on the jaggery lump is only a market fee and not a licence fee. Therefore, there was no liability to pay at the rate of Rs. 80,480-69, which was the market fee. On issue No. 3, the Court held that the suit was barred. In the result, the suit was dismissed. The abovesaid findings of the learned District Judge were substantially confirmed by the learned single Judge. It is against this judgment that the plaintiff has preferred this appeal.

6. In this appeal, it is contended by Shri D. Venkata Reddy that the market fee that was used to be collected through the contractor by the plaintiff was in the nature of a licence fee and that it, therefore, squarely comes within the purview of Section 29 (3) of the Act. He invited our attention to Section 277 and other provisions of the Andhra Pradesh Municipalities Act. He also relied upon thejudgment of Vishwanadha Sastry, J. in Subba Rao v. Eluru Municipal Council, ILR 1956 Andhra 515, for the proposition that the fee collected from the persons who are allowed to conduct business in the market yard maintained by the municipality was a fee for a licence and could not be treated otherwise. He also relied upon Section 52 of the Easements Act.

7. On the other hand, it is contended by Smt. C. P. Sarathy, learned counsel for the second defendant-market committee, that, admittedly, the plaintiff was not describing the fee as a fee towards any licence granted to the various persons doing business in the market yard and that, therefore, the claim does not come within the ambit of Section 29(2) of the Act.

8. The Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966, is an Act to consolidate and amend the law relating to the regulation of purchase and sale of agricultural produce, livestock and products of livestock and the establishment of markets in connection therewith. Section 30 of the Act gives overriding effect and provides that nothing in any law providing for the establishment, maintenance and regulation of a market or the levy of fees thereunder shall apply to any market established under this Act or affect in any way the powers of the market committee in respect of such market. Section 3 declares notified area and Section 5 deals with the composition of the market committee while Section 7 deals with trading etc., in notified agricultural produce, livestock and products of livestock within the notified area. Section 7 (1) of the Act says that no person shall, within the notified area, set up, establish or use or continue or allow to be continued, any place for the purchase, sale, storage weighment, curing, dressing or processing of any notified agricultural produce or products of livestock or for the purchase or sale of livestock except under and in accordance with the conditions of a licence granted to him by the market committee. Sub-section (6) of Section 7 of the Act says that no person shall purchase or sell any notified agricultural produce, livestock, or products of livestock in a notified market area, outside the market in that area. Section 12 deals with the levy offees by the market committee. Sub-s. (1) thereof says that the market committee shall levy fees on any notified agricultural produce, livestock or products of livestock, purchased or sold in any notified market area, at such rate, not exceeding one rupee, as may be specified in the bye-laws, for every hundred rupees of aggregate amount for which the notified agricultural produce, livestock, or products of livestock, is purchased or sold, whether for cash or deferred payment or other valuable consideration. The fees referred to above shall be paid by the purchaser of the notified agricultural produce or livestock or products of livestock. Section 23 provides for levy ofpenalty on persons contravening the provisions of Section 7 or on persons failing to pay fee levied under Section 12 (1). Section 28 states that the Act will not apply to markets established by or on behalf of the Government. So far as the markets in the municipalities and in areas within the jurisdiction of other local authorities are concerned, it is provided in Section 29 that these-local authorities and municipalities shall not levy any fee after the market in that particular area comes within the purview of the Act. In order to compensate for this loss, provision is made in sub-section (2) of Section 29 for payment of compensation by the market committee to the concerned municipality or local authority every year for a period of ten years.

9. The point raised by the defendants in the present case is based upon the fact that Section 29 (2) used the words 'licence fees' and it is contended that whatever fee the appellant-municipality was collecting from the contractor in respect of jaggery from the various tradesmen, could not be equated with 'licence fee'. In order to appreciate the said contention it is necessary to refer to subsections (I) and (2) Section 29 of the Act:

'29. Payment of compensation in respect of markets in municipalities and in areas within jurisdiction of other local authorities:-- (1) Where in pursuance of Section 3, the Government notified any area comprised within the local limits of the jurisdiction of a municipality or other local authority, no such municipality or other local authority shall levy any fees on any notified agricultural produce, livestock or products of livestock purchased or sold in the notified area.

(2) The market committee of the notified area shall, out of its funds, pay every year to the municipality or other local authority, which was levying such fees immediately before the notification of the area, a sum equivalent to the licence fees levied by such municipality or other local authority during the period of one year immediately before the notification of the area, for a period of ten years as compensation for the loss of income of the municipality or the local authority on account of the establishment of markets in the area by the market committee.'

10. It is true that if one reads sub-section (2) of Section 29 exclusively or in isolation it can be said that the compensation that is payable by the market committee every year for a period of ten years to the municipality or the local authority is in respect of a sum equivalent to the 'licence fee' levied by such municipality or local authority during the period of one year immediately before the notification of the area under the Act. But. in our view, sub-section (2) of Section 29 cannot be read in isolation. It has to be read along with sub-section (1) of Section 29. Subsection (1) states that where in pursuance of Section 3 the Government notified any area comprised within the local limits of the jurisdiction of a municipality or other local authority, then no such municipality or local authority, shall levy 'any fees on any notified agricultural produce, livestock or products of livestock' purchased or sold in the notified area. It is, therefore, clear that the compensation payable under sub-section (2) is in respect of 'such fees' mentioned in sub-section (1) and therefore the loss to the municipality or the local authority in respect of 'any fees' on any notified agricultural produce, livestock or products of livestock purchased or sold in the notified area is to be compensated. Reading sub-sections (1) and (2) together, it is clear that the Legislature was treating the fee mentioned in sub-section (1) of Section 29 as a fee for a licence.

11. In the present case, the fee was levied by the municipality in the previous year under Section 277 of the Andhra Pradesh Municipalities Act, 1965. That section provides in subsection (2) that the council may, in any public market, levy any one or more of the following fees at such rates and may place the collection of such fees in the management of such persons as may appear to it proper or farm out such fees for any period not exceeding one year at a time and on such terms and subject to such conditions as it may deem fit. The sub-section enumerates the following types of fees that may be collected by the council.

'(a) Fees for the use of, or for the right toexpose goods for sale in such markets;

(b) Fees for the use of shops, stalls, pens or stands in such markets;

(c) Fees on vehicles or pack-animals Carrying, or on persons bringing goods for sale in such markets;

(e) Licence fees on brokers, commission agents, weighmen and measurers practising their calling in such markets.'

12. The learned counsel for the respondents contends that among the various types of fee enumerated in sub-section (2) of Section 277 it is only fee collected under Clause (e) of Section 277(2) that could be called 'licence fee' and that the fee collected under Clauses (a) to (d) could not be called 'licence fee'. It is contended that, in the. present case, the fees collected by the municipality would come under clauses (a) and (b) of S. 277(2) of the Andhra Pradesh Municipalities Act and that therefore, the said fee cannot be called a licence fee so as to attract the provisions for payment of compensation under Section 29(2) of the Act. In our view, this submission cannot be accepted. While it is true that the words 'licence fee' is mentioned in clause (e) of Section 277 (2) of the Andhra Pradesh Municipalities Act, it cannot be said that the fee levied under Clauses (a) to (d) of Section 277(2) are not in the nature of licence fee. The word 'licence' is a very general term which has been construed very liberally as a permission granted to a person to do a certain thing which but for the said permission would be unlawful. In case of immovable property used by a person obtaining licence from the owner, the said enjoyment would have amounted to a trespass into the propety of the other but for the licence. Section 52 of the Easements Act says that where one person grants to another or to a definite number of other persons a right to do or continue to do in or upon the immoveable property of the grant or something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the propety, the right is called a licence.

13. Adverting to the abovesaid definition of licence in the Easements Act, in the context of Section 262 (b) of the Madras District Municipalities Act, 1920, which corresponds to Section 277 of the Andhra Pradesh Municipalities Act, 1965, Vishwanadha Sastry, J. in Subba Rao's case, (supra) clearly held that the fee for the use of shops under Section 262 (b) of the Madras District Municipalities Act created a licence between the municipality and the traders. The licence is granted for a consideration in the shape of a fee payable by the licencee at the rates fixed by the municipal council under Section 262 (b) of the Act. There is no transfer of any right, or interest, in the irnmoveable property and the provisions of the Rent Control Act do not apply.

14. It is, therefore, clear that though 'fee' mentioned in clauses (a) and (b) of Section 277 (2) of the Andhra Pradesh Municipalities Act, 1965, is not expressly described as a licence fee, it is nothing but a fee collected in respect of the licence granted for the use of or for the right to expose goods for sale in the market under Clause (a) of Section 277 (2), or a fee for the use of pens or stands in such markets as provided in clause (b) of Section 277 (2).

15. Thus, the provisions of the Andhra Pradesh Municipalities Act, in Section 277 (2), in so far as they permit levy of fees under clauses (a) and (b), must, in our opinion, be treated as fee levied for the purpose of a licence and the said fee being a licence fee squarely comes within the meaning of the words 'licence fee' mentioned in Section 29 (2) of the Act. We are, therefore, of the view that the second defendant in this case is liable to the plaintiff for payment of the market fee at the rate at which the municipality was collecting market fee in the year immediately preceding the application of the Act to this market.

16. It is true that in the correspondence between the parties and in the evidence also some of plaintiffs witnesses mentioned that they were not collecting licence fee as such but were only collecting the market fee. The witnesses and the persons who wrote these letters were only mentioning the actual description under which the fee was being collected but had no idea as to the legal relationship or basis of the said collection orthe effect of the said collection. Surely, the opinions of these lay persons as to the nature of the fee collected by the municipality could not be treated as an admission. The matter is one of law and is to be decided by the Court having regard to the general principles of law as also the provisions of the two Acts and the purpose for which Section 29, sub-sections (1) and (2), have been enacted in the Act. We are, therefore, unable to give any importance to the manner in which the fee was described in the letters addressed by the municipality or in the evidence of the witnesses examined for the. municipality.

17. Coming to the quantum, we are of the view that the defendants did not dispute the amount of Rs. 80,480-69 which was actually collected as market fee from the contractor by the municipality to whom the right to collect the fees was farmed out. What the defendants contended was that the same could not be treated as licence fee. Inasmuch as we have now held that the said amount is a licence fee, it is clear that the compensation has to be paid at the rate of Rs. 80,480-69 per annum. So far as limitation is concerned, we are clearly of the view that the plaintiff is entitled to claim the compensation only for a period of three years before the filing of the present suit, that is, for the three years prior to 17-8-1978. For each of the said years, the plaintiff is entitled to a decree at the rate of Rs. 80,480-69. The total amount comes to Rs. 2,41,442-07. The plaintiff is, therefore, entitled to a decree for the said sum with interest at 6% per annum from 17-8-1978 till the date of realisation. The appeal is partly allowed. There shall be no order as to costs.

18. Appeal partly allowed.