ORDER
1. Petitioner, Krishi Utpadan Mandi Samiti, Bareilly has preferred this writ petition under Art. 226 of the Constitution of India for issuing a writ of certiorari for quashing the orders dated 4-7-87 and 14-8-87 passed by the respondents Nos. 1 and 1 respectively.
(2) The facts, in detail, are that respondents 3 to 10 filed a civil suit No. 293 of 87 in the Court of respondent No. 1 for an injunction restraining the petitioner from suspending or cancelling the licence or refusing to renew their licence in pursuance of the order dated 24-4-87 and for the realisation of the market fee as demanded by the petitioner w.e.f. 1-4-80 to 30th June, 84:
An application under O. 39, Rr. 1 and 2 of the Civil P.C. was also filed.
In the affidavit filed in support of this application, it was alleged that respondents held valid licences issued by the petitioner under Section 9 of the U. P. Krishi Utpadan Mandi Samiti Adhiniyam, 1964 (hereinafter referred to as the Adhiniyam) and in pursuance thereof, are entitled to carry on the wholesale business in Dal within the area of the Mandi Samiti. It was also contended in the affidavit that the respondents are entitled to realise market fee from the purchaser, on the sale of the specified agricultural produce sold by them in the market area and after collecting the same it is to be paid to the petitioner. It was asserted that the sale of the agricultural produce made on the basis of Form 9-R which are issued from the office of the petitioner showed the amount collected from the purchaser for the petitioners. The respondents alleged that prior to 25-9-84 there was a general understanding throughout the State that Dal did not fall within the category of specified agricultural produce and no market fee was leviable and thus the market fee was collected by the respondents from the purchasers nor was it demanded by the petitioner nor even Form 9-R issued to them for the collection of the market fee. The respondents further alleged that a notice demanding the market fee on the transaction of pulses was quashed by this Court on 28-1-83 and as such, there was no question of making any payment of market fee to the petitioner by the purchaser nor there was any occasion for the respondents to ask or demand any amount of market fee from the purchaser.
'However, the order of the High Court was set aside by the Supreme Court on an appeal by the petitioner on 25-9-84 (reported in AIR 1984 SC 1870) and it was held that the pulses also included legume and market fee is leviable on the sale of pulses.
(3) In view of the judgment of Supreme Court dated 25-9-84, the petitioner issued demand notice dated 20-2-87 calling upon the respondents to deposit the market fee for the year 1985-86 and subsequently vide order dated 6-4-87 the petitioner suspended the licences of the respondents 9 and 10, which, however, on their representation, was recalled by the order dated 24-4-87 on the condition that respondents would furnish sale and purchase records from 1-4-80 to 30-6-84 and deposit such market fee in the first week of May, 1987, failing which, their licences would again be suspended. The respondents thus alleged that such a threat was absolutely illegal, uncalled for and bad in law. It was also alleged by respondents that a threat was advanced that after the expiry of 30th June, 1987, the licenses of the respondents would not be issued.
With such allegations, an ad interim in injunction was prayed. Objections to this application filed by the respondents under O.39, Rr. 1 and 2 were filed by the petitioner duly supported by a counter-affidavit of one Sai Prakash, Secretary of the Mandi Samiti, Bareilly the allegations as contained in the affidavit were repudiated, It was shown on behalf of petitioner that the respondents are liable to pay the market fee as per S. 17(iii) of the Adhiniyam on the sale of agricultural produce including pulses irrespective of the fact that form 9-R was issued by the licensee to the purchaser under S. 17 and Rule 76(12) of the Rules framed under the Adhiniyam. It had been categorically asserted that respondents realised the market fee from the trader and in any case the respondents cannot escape the liability of payment of market fee irrespective of the fact whether it was been realised or not from the purchaser. The petitioner contended that vide notification dated 11-4-78 issued by the State Government, Dal was included as specified agricultural produce on which market fee was payable on transaction.
The High Court vide order dated 28-1-83 held that the market fee was not payable on the transaction of Dal but, however, this judgment was set aside by the Supreme Court and it was contended on behalf of the petitioner that the market fee was liable to be paid by the respondents. The Supreme Court while laying the controversy to rest held the liability of the respondents to pay the market fee from 1980 to 1984 holding that legume included split Dal as well.
Even the High Court has held on 16-4-87 that respondents shall produce their accounts for the said period and pay the amount demanded within one month from the date of intimation. However, the respondents did not deposit the amount in utter disregard of the order dated 16-4-87. The petitioner has contended that the respondents are under statutory obligation within the postulates of S. 17(iii) of the Act read with Rule 71 of the Rules and the bye-laws to deposit the market fee within three days from the date of sale. The petitioner is thus competent and entitled to realise the market fee.
The petitioner also showed in the affidavit that the respondents filed writ petition No. 18068 of 84 and 10555 of 84 in the High Court which had been dismissed on 24-3-87. It was thus contended that the matter cannot be reagitated again by the respondents. The petitioner further alleged that there is no limitation for the realisation of the market fee. The order dated 24-3-87 is binding on the parties and the civil courts have 110 jurisdiction to go behind that order and if they feel aggrieved by the order of the High Court, the proper remedy for them is to approach the Supreme Court.
The petitioner had submitted that the respondents have failed to set out a prima facie case nor the balance of convenience was in their favour and in any case, no irreparable injury was likely to be caused to the respondents which cannot be compensated in terms of money. It was further submitted on behalf of the petitioner that in case ultimately the suit failed, it would be hazardous to the petitioner to realise the amount while the Mandi Samiti being a corporate body would refund the amount as per the directions of the Court.
(4) No doubt, the amount has been detained for the last several years, thus, causing financial prejudice to the interest of the petitioner.
The trial Court (respondent No. 2) vide order dated 4-7-87 granted the injunction and held that the petitioner shall not cancel, suspend or refuse to renew the licence and further the recovery of the market fee was stayed subject to furnishing security within a period of one week.
Being aggrieved against this order, a Misc. civil Appeal was preferred, which however, was dismissed by respondent No. 1 by order dated 14-8-87.
The petitioner has challenged both the orders passed by the respondent No. 2 and I respectively by means of the writ petition under Art. 226 of the Constitution, for quashing the same.
(5) A detailed affidavit has been filed by the petitioner. Counter affidavit has been filed on behalf of respondents 3 to 10 and the allegations in the writ petition have been categorically repudiated. The main thrust of the respondents 3 to 10 is that the market fee is not leviable and that the petitioner has no right to demand it. It has also been alleged by them that the controversy between the parties is regarding the right to demand the market fee and the High Court as well as the Supreme Court had nowhere dwelt upon this aspect. The respondents 3 to 10 have thus maintained that the courts below (respondents 1 and 2) have rightly granted the ad interim injunction during the pendency of this suit. A rejoinder affidavit has been filed denying the allegations and the counter affidavit and reiterating the averments as contained in the writ petition.
(6) Learned counsel for the parties have submitted that instead of disposing the subject matter, the whole of the writ petition be disposed of finally. Agreeing to such a submission made on behalf of the Bar, the writ petition was taken up for final disposal.
Heard learned counsel for the parties.
(7) At the present juncture instead of adverting to various contentions at the Bar by the parties, it is relevant to reproduce the order of the Supreme Court dated 30-3-84, which is as follows : --
"Till the disposal of the appeals there will be stay of the operation of the judgment of the High Court subject to the conditions hereinafter specified. The respondent shall pay all arrears of market fee within two months from today and further market fee shall be paid regularly according to law. The appellants shall file an undertaking supported by an affidavit on oath of a competent Senior Executive Officer that in the event the appeals fail, the appellant shall pay the entire amount within two months from the date of the decision of the Court with 18% interest per annum from the date of payment till the amount is repaid to the respondents.
Shorter matter. All the parties say that the hearing shall not require more than two or three hours.
The appeals will be listed in the 2nd week of August, 1984, at the bottom of Misc. List on a regular hearing day."
(8) Further in writ petition No. 12208 of 82, Nihal Chandra Mahendra Kumar v. Krishi Utpadan Mandi Samiti, a Division Bench of this Court consisting of Hon'ble Mr. Justice N. D. Ojha, as he then was, and Hon'ble Mr. Justice A. P. Misra was pleased to pass an order dated 7-8-84 in the light of the order passed by the Supreme Court, which is as under : --
"Having heard counsel for the parties we are of the opinion that with a view to safeguard the interests of both the parties it is expedient in the ends of justice that a similar interim order may be passed in this case as was passed by the Supreme Court in the case of Ganga Dal Mills, Kanpur (supra) on 30th March, 1984. Accordingly in supersession of the interim order passed by this Court on 18th October, 1982 we direct that the petitioners shall pay to the respondents all arrears of market fee within two months from today and shall continue to pay further market fee regularly according to law. Sri B.D. Mandhyan, counsel for the respondent has given an undertaking before us today on behalf of the respondent that in the event of the writ petition being allowed, the respondent shall refund the entire amount of market fee paid by the petitioners in pursuance of this order to them within three months from the date of derision of this Court with 18% interest per annum from the date of the payment till the amount is refunded to the petitioners. The effect of this undertaking obviously is that in the event of the writ petition being allowed the petitioners will be entitled to a refund in the manner stated in the said undertaking by counsel for the respondent".
(9) In another writ petn. No. 4465 of 84, a Division Bench of this Court passed an order dated 9-1-86 directing the traders to pay the amount. The order read as under : --
"Issue notice.
Sri Mandhyan accepts notice on behalf of the respondents. He prays for and is granted three weeks' time to file counter affidavit. The petitioner will thereafter have two weeks to file rejoinder affidavit. List the application for orders thereafter. Meanwhile, the petitioner shall continue to pay market fee regularly according to law on the transactions of sale and purchase of paddy price. As regards the past transaction are concerned, the petitioner should make the payment of market fee within one month. Sri Mandhyan gives an undertaking on behalf of the Mandi Samiti that in the event of the petition being allowed the Mandi Samiti will refund the amount so realised to the petitioner within two months of the decision along with interest at the rate of 18 per cent per annum".
(10) Learned counsel for the petitioner has submitted that a sum of Rs. 9 lakhs is Outstanding against the respondents. The respondent No. 1 has only directed that 3% of the market fee be deposited in cash with the petitioner. Learned counsel for the petitioner has further submitted that the orders passed by respondents 1 and 2 are wholly perverse being the outcome of misreading of the evidence and contrary to the provisions of law. It has also been submitted that the order passed by the respondents 1 and 2 are in the teeth of the order passed by this Court and that of the Supreme Court. It has further been submitted that the grant of injunction is clearly barred under O.39, R. 2 of the Civil P.C., as proceedings for the recovery of any dues recoverable as land revenue, unless the adequate security has been furnished, could not have been stayed. It has been strenuously urged that it is mandatory and incumbent on respondents to pay the market fee irrespective of the dues being recovered by the respondents from the purchaser which is only directory. It has also been alleged that respondent No. 1 (learned Munsif) had no jurisdiction to entertain the suit in view of the pecuniary jurisdiction of Rs. 10,000/- while the amount involved in the suit is more than 9 lakhs. It was moreover, stressed on behalf of the petitioner that in the event of the respondents failing to pay- the market fee, their licence was liable to be suspended or cancelled and renewal could be refused but the courts below have perversely taken the view ignoring that the respondents feeling aggrieved by such a levy have challenged such imposition or realisation in a writ petition in the High Court and also when the Supreme Court had upheld the levy on Dal and once such a levy was realizable, then any direction to recover the amount was not at all necessary. Irrespective as to whether the respondents have realised the market fee from the purchaser, their liability being independent countinues.
It has lastly been submitted that time and again the Supreme Court has repeatedly deprecated the practice of granting injunction in financial matters and it has been clearly laid that ordinary security or Bank guarantee cannot be a substitute therefor.
In the instant case, respondents Nos. 3 to 10 are liable to pay the amount but in the terms of S. 17(iii) of the Adhiniyam and the Rules framed thereunder, it has been shown that such market fee is leviable and is liable to be paid by respondents 3 to 10.
For the grant of injunction, it is settled law that all the three ingredients encompassing the grant of such injunction shall be satisfied. Mere existence of a prima facie case would not be sufficient to grant ad interim injunction. It was necessary that coupled with the existence of a prima facie case, balance of convenience is also in favour of the party claiming it. It has also to be shown by a person claiming injunction that irreparable injury which cannot be compensated in terms of money would be caused if an injunction is refused. All the three ingredient read together are wanting in the instant case.
Learned counsel for the petitioner has placed reliance in the case of Ram Chandra Kailash Kumar & Co. y. State of U. P., AIR 1980 SC 1124. It was found that the notification so issued by the State Government was upheld. However, in the case of Krishi Utpadan Mandi Samiti, Kanpur v. M/s. Ganga Dal Mills & Co., AIR 1984 SC 1870. It was held that the market fee is realizable on Dal.
(11) Learned counsel for the respondents has placed reliance on the following decisions that rendering of service is an integral part for the levy by the demand of the market fee. These are :--
1. Sreenivasa General Traders v. State of U. P., AIR 1983 SC 1246.
2. Bhanwarlal v. State of M. P., AIR 1981 Madh Pra 220(FB).
Presently such a submission does not help the respondents as the controversy, if any, is still open to be determined by the courts below. Learned counsel for the petitioner has submitted, that Government, local bodies, corporations or instrumentalities of the State cannot run on ordinary security or Bank guarantee. Learned counsel for the petitioner has placed reliance in the case of Assistant Collector of Central Excise, Chandan Nagar v. Dunlop India Ltd, AIR 1985 SC 330. It was held as under:--
"A tendency to grant interim orders with a great potential for public mischief for the mere asking is deprecated by the Supreme Court. It was further observed that such interim orders often ex parte and non-speaking are made even by the High Courts while entertaining writ petitions under Art. 226 of the Constitution, and in the Calcutta High Court, on oral application too. The Supreme Court also deprecated the practice of granting interim order which practically give the principal relief sought in the petition for no better reason than that a prima facie case has been made out, without, being concerned about the balance of convenience, the public interest and a host of other relevant considerations.
(12) In the case of Siligurt Municipality v. Amalendu Das, AIR 1984 SC 653. A special leave was directed against an interlocutory order restraining the Siliguri Municipality from recovering the graduated consolidated rate on the annual value of the holdings in terms of the amended provisions in Ss. 123 and 124 of the Bengal Municipal Act, 1932 as amended by the Bengal Municipal (Amendment) Act, 1980. The Supreme Court held as under (Paras 2 to 4):--
"We are constrained to make the observations which follows as we do feel dismayed at the tendency on the part of some of the High Courts to grant interlocutory orders for the mere asking. Normally the High Courts should not as a rule in proceedings under Article 226 of the Constitution grant any stay of recovery of tax save under very exceptional circumstances. The grant, of stay in such matters should be an exception and not a rule.
It is needless to stress that a levy or impost does not become bad as soon as a writ petition is instituted in order to assail the validity of the levy. So also there is no warrant for presuming the levy to be bad at the very threshold of the proceedings. The only consideration at that juncture is to ensure that no prejudice is occasioned to the rate payers in case they ultimately succeed at the conclusion of the proceeding. This object can be attained by requiring the body or authority levying the impost to give an undertaking to refund or adjust against future dues, the levy of tax or rate of a part thereof as the case may be, in the event of the entire levy or a part thereof being ultimately held to be invalid by the Court without obliging the tax payers to institute a civil suit in order to claim the amount already recovered from them. On the other hand, the Court cannot be unmindful of the need to protect the authority levying the tax, for at that stage the Court has to proceed on the hypothesis that the challenge may or may not succeed, The Court has to show awareness of the fact that in a case like the present a municipality cannot function or meet its financial obligations if its source of revenue is blocked by an interim order restraining the municipality from recovering the taxes as per the impugned provision. And that the municipality has to maintain essential civil services like water supply, street lighting and public streets etc. apart from running public institutions like schools, dispensaries, libraries etc. What is more, supplies have to be purchased and salaries have to be paid. The grant of an interlocutory order of this nature would paralyze the administration and dislocate the entire working of the municipality. It seems that these serious remifications of the matter were list sight of while making the impugned order.....
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The main purpose of passing an interim order is to evolve a workable formula or a workable arrangement to the extent called for by the demands of the situation keeping in mind the presumption regarding the constitutionality of the legislation and the vulnerability of the challenge, only in order that no irreparable injury is occasioned. The Court has therefore to strike, a delicate balance after considering the pros and cons of the matter lest larger public interest is not jeopardized and institutional embarrassment is eschewed."
(13) Learned counsel for the petitioner has submitted that principle governing the grant of temporary injunction are too far well settled to require a elaboration. Reliance has been placed in the case of Smt. Kusum Gupta v. Sarla Devi, (1988) 2 SCD 8 : (AIR 1988 All 154) where a Division Bench of this Court held as under (at p. 157 of AIR) :--
"Thus where the Court below has committed a clear error. It has ignored the undisputable legal position that the grant of temporary injunction is governed by Order XXXIX of the Code of Civil Procedure. The principles governing the grant of temporary injunctions are far too well settled to require any elaboration. To capitulate these are the existence of (i) a prima facie case and (ii) a balance of convenience in favour of the plaintiff before he can ask for interim injunction. The consideration of the balance of convenience necessarily brings in the concept of irreparable injury. Needless to add that the very first principle on which temporary injunction may be granted is that the Court will not grant the same to restrain actionable wrong for which damages might be the proper remedy. The Court has to consider the comparative mischief or inconvenience of both the parties. In order to succeed the plaintiff must establish that the inconvenience he is likely to suffer by refusal of the injunction would be greater than that which the defendant would suffer, if it is granted and the injury which the plaintiff is likely to suffer as unquantifiable, that is, the damages and other forms of security would not furnish an adequate remedy at the end of the trial Court of the suit."
(14) in view of the fact that the petitioner is a body corporate and an instrumentality of the State, it has to run the organization and perform the functions on the basis of the revenue. It is well settled that where revenues are involved neither the Government nor the local body nor the corporate organization nor the instrumentality of the State can afford to run the administration. The Courts below lost sight of this fact. The lower Court further ignored to consider that the petitioner in the case of the suit be decided against him would be in a better position to pay and refund the amount so claimed from the respondents 3 to 10 but in the event of the suit being dismissed, it may be difficult to realise the amount of the public fund. The conclusions arrived at by the Courts below are incomprehensible and as shown above in the teeth of the law laid down by the High Court and the Supreme Court. However, no prima facie case existed in view of the decision of the High Court and Supreme Court is unanswered. There is thus an apparent error on the face of record and the respondents 1 and 2, in view of the decisions of the High Court and the Supreme Court assumed a jurisdiction thus transgressing the decisions of the High Court and the Supreme Court in granting injunction. Apparently the orders passed by the respondents 1 and 2 being patently illegal and suffer from perversity and deserves to be quashed. While exercising power under Article 226 of the Constitution, an equitable relief has to be granted and considering that the equity is in favour of the petitioner, it is imperative that the orders passed by the Courts below are liable to be quashed.
(15) In the result, the petition succeeds and is allowed. The orders passed by the Courts below are, hereby quashed. The respondents 3 to 10 are directed to deposit the entire amount with the Court below which may be withdrawn by the Mandi Samiti.
16. Petition allowed.