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Monday, January 13, 2014

Cold Storage of Chillies - Fixation of rate per bag for storage per year -Joint collector has no power to inter middle - Maximum Rate fixed by Association at Rs.100/- per bag - But joint collector issue show cause notice as violated the orders of District Administrative and collected excess of Rs.10/- per bag and liable to refund Rs.6 lakhas /- Show cause notice is with out jurisdiction - no rule nor notification or any tripartite agreement between the Association - farmers and joint collector was executed - High court quashed the same as with out jurisdiction = M/s.Venkateswara Vegetable Fruits Chillies growers' cold storage private limited and others ....petitioners District Collector and others.. Respondents = 2014 ( JANUARY - VOL - 1 - JUDIS.NIC.IN / JUDIS _ ANDHRA / FILE NAME = 10708

Cold Storage of Chillies - Fixation of rate per bag for storage per year -Joint collector has no power to inter middle - Maximum Rate fixed by Association at Rs.100/- per bag - But joint collector issue show cause notice as violated the orders of District Administrative and collected excess of Rs.10/- per bag and liable to refund Rs.6 lakhas /- Show cause notice is with out jurisdiction - no rule nor notification or any tripartite agreement between the Association - farmers and joint collector was executed - High court quashed the same as with out jurisdiction = 
While so, in the year 2008 the 1st respondent convened a meeting with the cold
storage owners in his office and enquired with regard to the procedure that was
adopted for charging the rates.  Thereafter, on 07.11.2009 the 1st respondent
convened a meeting of the owners of the cold storage.  
The season for the year 2009 ends by December 2009 and hence he enquired with regard to the charges  collected for that season also but no minutes were recorded and no agreement was
entered between the 1st respondent and members of the association.  
But the 1st respondent issued a show cause notice in 
RC.No.199/09/GR-II dated 07.12.2009 to all the cold storage owners stating that
they have been collecting Rs.100/- per bag where as the charges fixed by the
District Administration for the season up to 2009 was Rs.90/- only and the
excess collection of Rs.10/- per bag was unwarranted and it resulted in
collection of amount of Rs.6,00,000/- due to stock of 60,000 bags as on
01.05.2009 and if the amount was not paid he would see that the license issued
by the concerned departments would be cancelled.  A reply was sent by the
petitioners and without considering the said reply nor giving any opportunity to
the petitioners, the Joint Collector passed a final order on 08.05.2010
directing the petitioners to pay an amount of Rs.6,00,000/- each within 7 days
failing which the amount would be recovered under the provisions of Revenue
Recovery Act and the said notice was served on the petitioners on 11.05.2010.=
  Since the impugned order was passed on the ground of violating the orders
of the "District Administration" it is necessary for this Court to examine the
scope of "District Administration".
        The record in this case reveals that the Collector and District Magistrate
held meetings with the stakeholders and officials on various dates and tried to
fix the rate per bag, but that has only a persuasive value without any legal
sanction.  'District' is the basic unit of State administration and the District
Collector no doubt heads it.  He has regulatory, developmental, crisis
management, electoral duties and other residuary functions, but all these
functions have to be performed as sanctioned by law only.  The office of the
District Collector has a history of more than 200 years.  The post of District
Collector was created in 1772 by Warren Hastings.  It was abolished in 1773 but
was restored in 1781.  They were vested with magisterial powers since 1787.
Before the first War of Independence in 1857, the Collector was a fiscal
representative of the Government for receiving various types of revenue.  As a
Magistrate, he was responsible for the maintenance of law and order.  The Act of
1919 brought a change in the role of Collector by creation of legislative
Council and vesting power in the elected Ministers. Their role again underwent
change by Act 1935.  After the Constitution of India came into force, due to
separation of powers of Judiciary from the executive, the judicial powers of the
Collectors were divested and vested with judicial officers leaving the
Collectors with limited powers as District Magistrates and Collectors.  The
District Collector is not part of the political executive, and the political
executive is separate from bureaucracy.  The Collector has to implement the
decisions of the political executive and he cannot implement independent
policies without the sanction of the political executive and legislature.  No
doubt he acts as crisis manager and has to settle grievances of the public.  If
the grievance is within his/her jurisdiction, he can settle them independently,
but when other remedies are available he should advice the aggrieved persons to
invoke those remedies instead of settling them on his own.=
The administrator
cannot don the role of a Good Samaritan and his actions are subject to judicial
review by the Constitutional Courts. He can only govern but cannot reign.
In this batch of cases, the petitioners approached this Court challenging the
action of the District Collector and this Court has a duty to see whether the
District Collector has acted within his authority in fixing the price for
storage of chilli bags by the farmers and also in demanding the excess amount
alleged to have been collected by the petitioners for refund to the farmers.
This court has a duty to protect the business rights of the petitioners also
under Art.19 (1) (g) of Constitution of India and cannot order refund of the
alleged excess amount collected from the farmers even if the farmers approach
this court without showing any violation of law. The farmers are consumers vis-
-vis the cold storage owners and the farmers have other remedies open for
settlement of their grievances.  The District Collector cannot stay as mediator
where he is not supposed to sit.  The impugned order passed by the Joint
Collector/1st respondent is clearly without jurisdiction and not sanctioned by
any provisions of law.
        Consequently, all the writ petitions are allowed and the respondents are
directed to refund the amount to the petitioners, deposited by them in pursuance
of the interim orders passed by this Court.  No order as to costs.
        As a sequel, Miscellaneous Petitions, if any, pending in this petition
shall stand closed.
2014 ( JANUARY - VOL - 1 - JUDIS.NIC.IN / JUDIS _ ANDHRA / FILE NAME = 10708

HON'BLE SRI JUSTICE A.RAMALINGESWARA RAO          

WRIT PETITION Nos.11693 OF 2010 AND BATCH      

03-01-2014

M/s.Venkateswara Vegetable Fruits Chillies growers' cold storage private
limited and others ....petitioners

District Collector and others.. Respondents

Counsel for the petitioners: Sri G.L.V. Ramana Murthy

Counsel for the Respondents: Government Pleader for Revenue,
                              Government Pleader for Agriculture      

<Gist :

>Head Note:

?Cases referred:
1. 2011 (6) ALT 48 (DB)
2. AIR 1997 SC 1236


HON'BLE SRI JUSTICE A.RAMALINGESWARA RAO          

WRIT PETITION Nos.11693, 11694, 11695, 11697, 11997, 11998, 11999, 12000, 12001,    
12002, 12003,
12004, 12006, 12007, 12008, 12009, 12010, 12013, 12014, 12016, 12017, 12018,
12021, 12022, 12023, 12025, 12026, 12027, 12028, 12029, 12031, 12032, 12034,
13193, 13200, 13248, 13643, 13656, 13660, 13662, 13764, 14145, 14158, 14929,
14947, 18596, 27295, 27457 and 27500 of 2010

COMMON ORDER:    

The facts and the issue raised in all these cases are common and hence they are
being disposed of by this common judgment.
        The petitioners are doing business in cold storage for storing chillies in
Guntur District.  The petitioners provide the required atmosphere of cooling to
the deposited stock so that the chillies do not get damaged.  The farmers as
well as the traders deposit their red chilli crop in the petitioners' cold
storage for a period not less than one year and take back their stock as and
when they get a reasonable price for their goods.  At the time of deposit of the
chilli stock, the farmers take bonds showing the quantity of chilli bags
deposited by them with the petitioners.  They hypothecate the said bonds and
obtain loans from nationalized, non-nationalized banks and other financial
institutions.  Thus, it is the duty of the petitioners to take care of the goods
deposited with them and to maintain the temperature for cooling the stocks
deposited in the cold storage.  They formed into an association by name 'Guntur
District Cold Storage Owners' Welfare Association'.  Every year before
commencement of the crop year, the Executive Body of the Association passes
resolution and fixes the cooling charges for every chilli bag of 45 kilograms
weight to be charged from the depositors.  The petitioners have necessary
licenses from the concerned departments for running their business.  During the
relevant year 2008 the Association passed a resolution for collecting charges at
the rate of Rs.90/- per bag for the entire year.  On 14.02.2009, the Association
passed a resolution for not collecting more than Rs.100/- for the year 2009.
Since the rate fixed was a maximum rate, some of the petitioners were collecting
less than the fixed rate also.  Similarly some of the depositors were depositing
bags weighing between 45 to 70 kilograms but the charged rate was uniform.
While so, in the year 2008 the 1st respondent convened a meeting with the cold
storage owners in his office and enquired with regard to the procedure that was
adopted for charging the rates.  Thereafter, on 07.11.2009 the 1st respondent
convened a meeting of the owners of the cold storage.  
The season for the year 2009 ends by December 2009 and hence he enquired with regard to the charges  collected for that season also but no minutes were recorded and no agreement was
entered between the 1st respondent and members of the association.
But the 1st respondent issued a show cause notice in 
RC.No.199/09/GR-II dated 07.12.2009 to all the cold storage owners stating that
they have been collecting Rs.100/- per bag where as the charges fixed by the
District Administration for the season up to 2009 was Rs.90/- only and the
excess collection of Rs.10/- per bag was unwarranted and it resulted in
collection of amount of Rs.6,00,000/- due to stock of 60,000 bags as on
01.05.2009 and if the amount was not paid he would see that the license issued
by the concerned departments would be cancelled.  A reply was sent by the
petitioners and without considering the said reply nor giving any opportunity to
the petitioners, the Joint Collector passed a final order on 08.05.2010
directing the petitioners to pay an amount of Rs.6,00,000/- each within 7 days
failing which the amount would be recovered under the provisions of Revenue
Recovery Act and the said notice was served on the petitioners on 11.05.2010.
        The 2nd respondent filed a counter on behalf of the respondents stating
that a huge fire accident took place in Market Yard, Guntur on 03.05.2008
causing great financial loss to hundreds of farmers.  The stock kept by the
farmers in the market yard was completely damaged.  Then the farmers were
constrained to keep their stocks in cold storage units owned by private parties.
Taking advantage of the situation, the petitioners started collecting exorbitant
rates from the poor farmers.  Under the said circumstances, the Joint Collector,
Guntur convened a meeting with the representatives of the Cold Storage Owners
Association and also some of the owners of the said units on 13.05.2008.  During
the course of meeting, the President of the Cold Storage Owners Association
stated that only Rs.90/- per bag was collected for 10 months period and no
excess amount was collected.  They agreed to exhibit through flexi boards in
front of every cold storage stating that storage charges were Rs.90/- per bag
and complaints could be lodged if any cold storage demands excess charges over
the above rate.  The representatives accepted the said proposals and signed the
minutes of the meeting.  On 07.11.2009, another meeting was convened by the 1st
respondent pursuant to the complaints received during the Adarsha Rythu Sadassu
stating that the cold storage units were collecting charges more than Rs.90/-
per bag.  They were asked to explain the reasons for collection of charges for
10 months even though the farmers withdrew their produce in a short period.  The
1st respondent was not convinced with the explanation of the representatives and
concluded that excess collection of storage charges have to be recovered from
the cold storages.  The
1st respondent constituted a committee to discuss with the cold storage units
with regard to collection of charges and complaints.  Accordingly, on 09.11.2009
a meeting was conducted wherein the 1st respondent was given the authority to
fix the rates for 2010 and 2011 seasons.  Pursuant to the decision taken in the
meeting held on 07.11.2009 and note orders dated 21.11.2009, the Joint
Collector, Guntur issued show cause notices to all the concerned cold storage
units and the petitioners submitted their explanation.  After considering the
explanation, the Joint Collector issued a final notice dated 08.05.2010 calling
upon the petitioners to pay the excess amount of Rs.6,00,000/- collected from
the farmers within 7 days from the date of receipt of the notice and informed
that the said amount would be recovered under the provisions of the Revenue
Recovery Act, if the same was not paid.  It is denied that there were no
resolutions or agreements or minutes recorded in the meeting and stated that the
petitioners agreed to recover the excess amount collected, if any, by the
members of the association.  Since the farmers are subjected to exploitation by
the petitioners, the action was taken and it is in accordance with law only.
        Heard the learned Counsel for the petitioners and learned Government
Pleader for the respondents.
        During the hearing, the learned Government Pleader passed a copy of the
resolution passed in the meeting held with the cold storage owners in the
meeting convened by the 1st respondent at DRC meeting hall on 24.12.2009.  A
perusal of the minutes show that the Joint Collector, Guntur requested to adopt
the rate of Rs.90/- fixed earlier and the owners expressed their willingness for
storage charges at Rs.95/- per bag including all charges.  They stated that most
of the members had collected at old rates fixed by the district Administration
and 2 or 3 cold storages only were collecting higher rates due to non-
availability of storage space.  Due to increase of Hamali charges, Rs.95/- per
bag was acceptable for the cold storages constructed during 10 to 15 years back
and hence requested to fix Rs.95/- per bag during the season.  It was decided to
collect Rs.95/- per bag for the price of storing, hamali, insurance during the
next 2 years season 2010, 2011 and the cold storages had to display notice board
mentioning vacancy position etc.
A memorandum of understanding was also recorded to the same effect between the
Collector and District Magistrate, Guntur; the Chairman, Agriculture Market
Committee, Guntur; Deputy Director and Assistant Director of Marketing, Guntur
on one hand and President, Cold Storage Association Guntur; Secretary, Cold
Storage Association, Guntur and association members.  While admitting the writ
petition on 26.05.2010 this Court granted interim stay of the proceedings dated
08.05.2010 subject to the petitioners depositing 1/3rd of the demanded amount
with the
1st respondent within 4 weeks and it is represented that the parties have
complied with the said order.
        The only point that arises for consideration in these cases is whether the
respondents are empowered to issue the orders of the nature issued by the Joint
Collector in Rc.No.199/09/GR-II dated 08.05.2010.  The impugned order reads as
follows:
"OFFICE OF THE COLLECTOR AND      
DISTRICT MAGISTRATE, GUNTUR.      

Rc.No.199/09/Gr-II
Dated: 08.05.2010


FINAL NOTICE  

Sub:- Agricultural Market Committee, Guntur - Cold Storages Fixation of storage
        charges payable by farmers - Collection of excess storage charges by
        Cold Storage Units - Recovery of excess amount of Rs.6,00,000/- -
        Final Notice -  Issued.

Ref:- 1. Notice issued vide Rc.No.199/09/Gr-II, Dt.    .12.2009 of Joint
Collector       and Addl. District Magistrate, Guntur.
                 2. Explanation submitted by S.V. Clod Storage, Dt: 14.12.2009.
                 3. Note orders of Collector and District Magistrate, Guntur, Dt:
22.03.2010.



        You have been issued a Notice in the reference 1st cited to explain why
the excess amount Rs.6,00,000/- collected from farmers as storage charges shall
not be recovered from you as you have violated the Orders of District
Administration.

        The explanation submitted by you vide reference 2nd cited is not
convincing and it clearly shows that you have deliberately violated the orders
of the District Administration by collecting excess storage charges against
fixed rate.

        Hence you are hereby directed to pay the excess amount collected from
farmers Rs.6,00,000/- as storage charges to this office within 7 days from the
date of receipt of this Notice failing which the amount will be recovered under
the provisions of RR Act.


                                              Sd/- A. Sharath,
                                Joint Collector and Addl. District Magistrate,
         GUNTUR "
        It is contended by the learned Counsel for the petitioners that the 1st
respondent has no authority under law to direct the petitioners to deposit the
amount alleged to have been collected in excess of amount fixed by the 'District
Administration' and since the orders emanated from the 1st respondent the
petitioners are under constant threat to obey his orders.
It is his further
contention that the relationship between the petitioners and the farmers are
contractual and dictated by the market conditions and there is no law which
governs the relationship enabling the 1st respondent to enforce the same.
The
learned Counsel for the petitioners submitted a note on 'District
Administration' in support of his contention with regard to the role of the
District Collector in administration of district.
On the other hand the learned Government Pleader for the respondents submits
that the High Court should keep larger public interest in mind while exercising
the powers and it should adopt ways to sustain the orders passed by the
authorities in public interest instead of quashing the proceedings.  The Writ
Jurisdiction of High Court, being discretionary, Writs cannot be issued as of
right or as a matter of course and it should be issued only if substantial
injustice is ensued or is likely to ensue and   the court should interfere only
when it comes to conclusion that overwhelming public interest requires
interference in the matter.
        In the back drop of these rival contentions the powers of 'bureaucracy' in
a democratic setup in general and that of the 'District Administration' in
particular have to be delineated and explored for the purpose of proper decision
in this case.
        Since the impugned order was passed on the ground of violating the orders
of the "District Administration" it is necessary for this Court to examine the
scope of "District Administration".
        The record in this case reveals that the Collector and District Magistrate
held meetings with the stakeholders and officials on various dates and tried to
fix the rate per bag, but that has only a persuasive value without any legal
sanction.  'District' is the basic unit of State administration and the District
Collector no doubt heads it.  He has regulatory, developmental, crisis
management, electoral duties and other residuary functions, but all these
functions have to be performed as sanctioned by law only.  The office of the
District Collector has a history of more than 200 years.  The post of District
Collector was created in 1772 by Warren Hastings.  It was abolished in 1773 but
was restored in 1781.  They were vested with magisterial powers since 1787.
Before the first War of Independence in 1857, the Collector was a fiscal
representative of the Government for receiving various types of revenue.  As a
Magistrate, he was responsible for the maintenance of law and order.  The Act of
1919 brought a change in the role of Collector by creation of legislative
Council and vesting power in the elected Ministers. Their role again underwent
change by Act 1935.  After the Constitution of India came into force, due to
separation of powers of Judiciary from the executive, the judicial powers of the
Collectors were divested and vested with judicial officers leaving the
Collectors with limited powers as District Magistrates and Collectors.  The
District Collector is not part of the political executive, and the political
executive is separate from bureaucracy.  The Collector has to implement the
decisions of the political executive and he cannot implement independent
policies without the sanction of the political executive and legislature.  No
doubt he acts as crisis manager and has to settle grievances of the public.  If
the grievance is within his/her jurisdiction, he can settle them independently,
but when other remedies are available he should advice the aggrieved persons to
invoke those remedies instead of settling them on his own.  Lord Atkin said long
back in Eshugbayi Eleko Vs. Officer Adminstering the Governmnet of Nigeria (AIR
1931 PC 248) that the executive can only act in pursuance of the powers given to
it by law and it cannot interfere with the liberty, property and right of the
subject except on the condition that it can support the legality of its action
before the Court.       The Supreme Court dealing with executive functions held in
'Rai Sahib Ram Jawaya Kapur Vs. State of Punjab (AIR 1955 SC 549) that it may
not be possible to frame an exhaustive definition of what executive function
means and implies. Ordinarily the executive power connotes the residue of
governmental functions that remain after legislative and judicial functions are
taken away.
        In this connection, we can usefully quote from the decision of the Supreme
Court in Tata Cellular Vs. Union of India (AIR 1996 SC 11) wherein it was quoted
in para 102 referring to Administrative Law- Rethinking Judicial Control of
Bureaucracy by Christopher F. Edley, JR (1990 Edn.) At page 96 wherein it was
stated thus:
"A great deal of Administrative law boils down to the scope of review problem;
defining what degree of deference a Court will accord an agency's findings,
conclusions, and choices, including choice of procedures. It is misleading to
speak of a "doctrine" or "the law", of scope of review. It is instead just a big
problem, that is addressed piecemeal by a large collection of doctrines. ....."

In Central Inland Water Transport Corporation Ltd. Vs. Brojo Nath Ganguly (AIR
1986 SC 1571), the Supreme Court court observed....
"At the same time, 'bureaucracy' came under a cloud. In Great Britain the late
Lord Hewart had written of 'the new despotism', and Dr.C.K.Allen of 'bureaucracy
triumphant.' In France the Confederation General du Travail (CGT) had stated in
its Programme in 1920 that 'We do not wish to increase the function of the State
itself nor strengthen a system which would subject the basic industry to a civil
service regime, with all its lack of responsibility and its basic defects, a
process which would subject the forces of production to a fiscal
monopoly.........'. This distrust of government by civil service, justified or
not, was a powerful factor in the development of a policy of public
administration through separate corporation which would operate largely
according to business principles and be separately accountable........."

        In this case, the District Collector has done what he was not supposed to
do as fixation of price for the goods stored in a cold storage is not within his
purview.  It is regulated by market conditions between the cold storage owners
and the farmers and is a legislative function.  The establishment of cold
storages is of recent origin.  There is no obligation on the part of the farmer
to store his produce in the cold storages.  If it is advantageous to the farmer
he uses that facility and if it is prohibitive he would seek alternative
sources.  Till price fixation mechanism is put in place by relevant laws or made
by the competent legislature, the administrator has no role to play on his own
even for public good.
        It is contended by the learned Government Pleader that Writ is not issued
as of right or as a matter of course and it is discretionary and such
discretionary power of this Court need not be exercised in all cases where there
is no error of law.  He relied on a division bench of this Court reported in
Associated Cement Company Limited Vs. Commercial Tax Office and another1.
 In  
that case, this Court was considering the refund of amount forfeited by
assessing authority towards excess collection of sales tax with interest
thereon. This court opined that refund would enable it to unjustly enrich itself
at the cost of State and retain the tax collected from the purchasers.
In the
instant case, there is no question of unjust enrichment and rates were collected
during the course of their business. 
The learned Government Pleader also relied
on a judgment of the Hon'ble Supreme Court reported in
Ramniklal N. Bhutta and another Vs. State of Maharastra and others2, a
nd contends that the Courts have
to weigh the public interest vis--vis the private interest while exercising the
power under Article 226 of the Constitution of India.  The said case was
delivered under Land Acquisition Act and those observations were made in the
context of moulding relief in land acquisition proceedings.  This Court is
conscious of the nature of jurisdiction exercisable under Article 226 of the
Constitution of India.  This Court in exercise of its powers under Article 226
sees that an authority exercises his functions/powers within the four corners of
law and does not transgress the same even for public good.  Whether a particular
act is for the public good or not is a matter left to the legislature and to
some extent to the constitutional courts by the Constitution.
The administrator
cannot don the role of a Good Samaritan and his actions are subject to judicial
review by the Constitutional Courts. He can only govern but cannot reign.
In this batch of cases, the petitioners approached this Court challenging the
action of the District Collector and this Court has a duty to see whether the
District Collector has acted within his authority in fixing the price for
storage of chilli bags by the farmers and also in demanding the excess amount
alleged to have been collected by the petitioners for refund to the farmers.
This court has a duty to protect the business rights of the petitioners also
under Art.19 (1) (g) of Constitution of India and cannot order refund of the
alleged excess amount collected from the farmers even if the farmers approach
this court without showing any violation of law. 
The farmers are consumers vis-
-vis the cold storage owners and the farmers have other remedies open for
settlement of their grievances.  
The District Collector cannot stay as mediator
where he is not supposed to sit.  
The impugned order passed by the Joint
Collector/1st respondent is clearly without jurisdiction and not sanctioned by
any provisions of law.
        Consequently, all the writ petitions are allowed and the respondents are
directed to refund the amount to the petitioners, deposited by them in pursuance
of the interim orders passed by this Court.  No order as to costs.
        As a sequel, Miscellaneous Petitions, if any, pending in this petition
shall stand closed.
_______________________  
A.RAMALINGESWARA RAO, J      
Date: 03.01.2014

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