IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 08TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE WRIT PETITION NO.2282 OF 2016 (APMC) BETWEEN: 1. SUNIL AGRO FOODS LIMITED, NO.104, AHUJA CHAMBERS, KUMARA KRUPA ROAD, BANGALORE - 560001, BY ITS PARTNER S PARMOD KUMAR, AGED ABOUT 55 YEARS, S/O B SHANTHILAL, EXECUTIVE DIRECTOR. 2. VENUGOPAL FLOUR MILLS, NO.43, SULTANPET, BANGALORE BY ITS PARTNER - 560001, S P MADAN KUMAR, AGED ABOUT 60 YEARS. ...PETITIONERS (BY SRI B R SATENAHALLI, ADVOCATE) AND: 1. DIRECTOR OF AGRICULTURAL MARKETING. NO.16, RAJ BHAVAN ROAD. BANGALORE - 560001. 2. SECRETARY, AGRICULTURE PRODUCE MARKETING COMMITTEE MANGALORE - 575003, DAKSHINA KANNADA DISTRICT. 3. THE DEPUTY COMMISSIONER, BANGALORE DISTRICT, BANGALORE - 560001. - 2 - 4. THE TAHSILDAR, BANGALORE NORTH TALUK, BANGALORE - 560001. ...RESPONDENTS (BY SRI PRINCE ISAC, AGA FOR R1, R3 AND R4, DR NANDA KISHORE, ADVOCATE FOR R2, V/O/DT 20.03.2025 SHANTHI BHUSHAN, DSGI) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH RESOLUTION DTD.28.7.2015 AS PER ANNEX-D PASSED BY THE R-2 MARKET COMMITTEE. QUASH THE OFFICIAL MEMORANDUM DTD.29.9.2015 AS PER ANNEX-E IN RESPECT OF THE FIRST PETITIONER AND OFFICIAL MEMORANDUM DTD.24.11.2015 AS PER ANNEX-F ISSUED BY THE R-3 DEPUTY COMMISSIONER AND ETC. THIS PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 30TH JUNE, 2025 AND COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT PRONOUNCED THE FOLLOWING: CORAM: HON'BLE MR JUSTICE ANANT RAMANATH HEGDE CAV ORDER This Writ Petition is filed assailing the resolution dated 28.07.2015 passed by the Agricultural Produce Marketing Committee, Mangalore (for short ‘Committee’) under the Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1996 ( for short ‘Act of 1996’). 2. Respondent No.2 is the Secretary of Agricultural Produce Marketing Committee, Mangalore. - 3 - 3. In addition to assailing the resolution dated 28.07.2015, petitioners have also assailed the communication dated 29.09.2015, bearing No.MSC/CR/59/15-16, marked at Annexure-E, and the communication dated 24.11.2015 bearing No.MSC/CR/60/15-16 marked at Annexure – F. 4. The communication dated 29.09.2015 at Annexure – E, is by the Additional Deputy Commissioner, Bengaluru to the Tahsildar, Bengaluru North Taluk to proceed further against petitioner No.1 to recover the alleged dues payable by petitioner No.1, to the Committee. Annexure – F dated 24.11.2015 is the communication by the Deputy Commissioner, Bengaluru to Tahsildar, Bengaluru North Taluk to recover the alleged dues payable by petitioner No.2, to the Committee. 5. Further the petitioners have questioned the notice bearing No.MSC/CR/104/15-16 dated 07.11.2015 marked at Annexure – G and notice bearing No.MSC/CR/124/15-16 dated 14.12.2015 marked at Annexure – H. 6. Annexures-G and H are the notices under the provisions of Karnataka Land Revenue Act and Rules issued by the Tahsildar to petitioners No.1 and 2 respectively. - 4 - 7. In terms of the impugned resolution dated 28.07.2015, the Committee resolved to recover Rs.6,83,416/- from the petitioner No.1 as arrears of land revenue. The said amount of Rs.6,83,416/- comprises two components namely, (a) Rs.1,70,854/- towards market fee, (b) Rs.5,12,562/- towards penalty. 8. In terms of the impugned resolution, the Committee also resolved to recover Rs.13,66,833/- from petitioner No.2 as arrears of land revenue. The said amount of Rs.13,66,833/- comprises two components namely, (a) Rs.3,41,708/- towards market fee, (b) Rs.10,25,125/- towards penalty. 9. The impugned resolution does not provide the details as to why Rs.6,83,416/- is sought to be recovered as arrears of land revenue. The impugned resolution refers to the letter dated 20.07.2015 (appears to be the legal opinion of the Advocate for the Committee). The Committee claims to have discussed the subject and pursuant to legal opinion, has proceeded to pass the impugned resolution. 10. The pleadings, both in the Writ Petition and the Statement of Objection would reveal that the dispute is relating - 5 - to the alleged liability towards payment of market fee and penalty on account of alleged evasion of market fee payable by the petitioners, in connection with sale-purchase of certain quantity of notified agricultural produce i.e., wheat. 11. The Committee contends that the notified agricultural produce is found to be in the possession of the petitioners, within the “market area” as defined under the Act of 1966. Thus, according to the Committee, the person in possession of notified agricultural produce, has to either pay the market fee for having purchased the notified agricultural produce within the market area, or has to establish that the notified agricultural produce is purchased outside the “market area” as such not liable to pay any market fee or in any case, the transaction is not within the purview of the Act of 1966. 12. The petitioners have assailed the resolution on the premise that the agricultural produce in question was imported from Australia under a valid licence and sale transaction having taken place in Australia i.e, beyond the “market area” as defined under the Act of 1966, the petitioners are not liable to pay any market fee on the aforementioned sale transaction. 13. Though the Act of 1966 provides for an appeal, the Petitioners primarily contend that respondents No.1 and 2, - 6 - under the Act of 1966 have no jurisdiction to impose market fee and penalty in respect of sale transaction that has allegedly taken place in Australia. 14. Learned counsel for the petitioners urged that the petitioners (along with others) had filed Writ Petition No.1218/2007 challenging the demand notices issued by the Committee, and to restrain respondents No.1 and 2 from charging market fee on the goods imported by the petitioners. The said writ petition was disposed of vide order dated 07.01.2015 and the Court directed the Committee to ascertain as to whether any sale attracting “market fee” has taken place. 15. Petitioners allege that despite the order dated 07.01.2015 in W.P. No. 1218/2007, Committee has passed the impugned resolution at Annexure – D. 16. Learned counsel for Petitioners urged that the documents relating to sale of wheat in Australia, Bill of Lading and Bills of Entry issued by the Customs Department are conclusive proof of the sale transaction having taken place in Australia and respondents have no authority to impose market fee on the premise that the sale transaction has taken place within the market area as defined under the Act of 1966. - 7 - 17. The Committee opposed the petition raising a preliminary objection that Writ Petition is not maintainable in view of efficacious alternative remedy under Section 83A of the Act of 1996. 18. Learned counsel for the Committee also contends that though the impugned resolution at Annexure D is passed on 28.07.2015, petitioners have not questioned the earlier resolution dated 17.03.2015 and the notice dated 09.04.2015 communicating the earlier resolution dated 17.03.2015. 19. It is also urged that the petitioners have stocked huge quantity of wheat “in the market area” for which no market fee has been paid and no documents are produced to show that the agricultural produce is purchased outside the market area. It is submitted that despite the notices issued to the petitioners on 24.01.2015 pursuant to the order dated 07.01.2015 passed by this Court which directed reconsideration of the controversy between the petitioners and the Committee, the petitioners have not produced the documents to substantiate the sale transaction out side “market area”. 20. Learned counsel for the Committee contends that the burden is on the petitioners to establish that the transaction has not taken place within the market area and has taken place - 8 - outside the limits of market area under the Act of 1966 and this burden having not been discharged, the Committee has imposed market fee and penalty as provided under the Act of 1966 and the Committee is entitled to presume that the transaction has taken place within the market area. 21. The Committee also contends that the writ petitioner has suppressed the notices dated 24.01.2015 issued to the petitioners' to produce documents in support of the petitioners claim. It is also urged that resolution dated 17.03.2015 and communication dated 09.04.2015 are also suppressed. 22. In support of the contentions, learned counsel for the petitioners has cited the following judgments and the learned counsel for respondents No.1 and 2 have cited the following judgments: (1) J.V. Gokal & Co. (Private) Ltd. Vs. The Assistant Collector Sales – Tax (Inspection) and Others.1 (2) Shri Sajjan Mills Limited vs. Krishi Upaj Mandi Samiti and Others.2 (3) Ram Chandra Kailash Kumar & Co. vs. State of U.P.3 1 AIR 1960 SC 595 2 AIR 1981 MP 30 - 9 - (4) M/s. S.K. Goyal Oil Mill and Another vs. Krishi Upaj Mandi Samiti, Indore and Another.4 (5) APMC Yashwanthapura through its Secretary vs. M/s. Selva Foods through its Managing Partner.5 (6) Orient Paper & Industries Ltd. Vs. State of M.P and others.6 (7) M/s. Gujarat Ambuja Exports Ltd. vs. State of Uttarakhand.7 (8) Krishi Utpadan Mandi Samiti Ghaziabad and Another vs. Metal Craft and Others.8 23. This Court has considered the contentions raised at the bar and perused the records. 24. In the statement of objections filed by the Committee, the respondent-Committee has taken a plea that the Committee has passed a resolution on 17.03.2015 imposing market fee and penalty on the petitioners vide Annexure-R7. 25. The respondent-Committee has also produced the notices addressed to the counsel for the petitioners at Annexures – R8 and 9 respectively. These notices are issued 3 AIR 1980 SCC 1124 4 AIR 2000 MP 212 5 AIR 2022 SC 109 6 (2006) 12 SCC 468 7 AIR 2016 SC 394 8 (2008) 7 SCC 780 - 10 - pursuant to the resolution/decision by the Committee taken on 17.03.2015. 26. It is the contention of the respondent-Committee that the petition is not maintainable without assailing the order dated 17.03.2015. The respondent-Committee has also taken a contention that the petitioners have suppressed the fact that the resolution was passed on 17.03.2015 and notices were issued vide Annexures R8 and 9 on 09.04.2015. To this, statement of objection filed by the respondents, there is no counter by the petitioners disputing the communication of the resolution dated 17.03.2015 and the notices dated 09.04.2015. 27. It is also noticed that even after production of those documents by the respondent-Committee, the petitioners have not chosen to amend the petition. However, the petitioners have filed a synopsis dated 15.02.2023 providing the dates and events and have produced certain documents viz., at documents No.1 to 20 along with the synopsis. This synopsis apparently appears to have been filed to assist the Court by narrating the events that have taken place, as per petitioners’ version. However, it is relevant to notice that none of the documents referred to in the synopsis dated 15.02.2023 is pleaded in the Writ Petition. As already noticed, petitioners - 11 - have not filed the rejoinder to the contentions urged by the respondent -Committee. 28. Petitioner No.1 – M/s Sunil Agro Foods Private Limited claims to have purchased the wheat in Australia, however, the documents produced by the petitioners along with the synopsis are not the documents relating to M/s Sunil Agro Foods Private Limited. Thus, this Court cannot come to the conclusion that petitioner No.1 has imported the agricultural produce from Australia without there being any proper pleading and supporting documents. 29. As far as petitioner No.2 – Venogopal Flour Mills is concerned, it is noticed that records produced along with the synopsis dated 15.02.2023 are the records relating to M/s Brindavan Roller Flour Mills Pvt. Ltd. 30. It is not pleaded in the petition that the petitioners are assignees of the entities like M/s Brindavan Roller Flour Mills Private Limited, Vivek Agro Foods referred in the documents produced along with the synopsis dated 15.02.2023. 31. As already noticed, despite the Committee producing the resolution dated 17.03.2015 wherein the market - 12 - fee and penalty is imposed on the petitioners, the petitioners have not chosen to assail the said resolution. 32. This being the position, this Court is of the view that the impugned orders cannot be quashed or set-aside by recording a finding that the transaction has taken place outside the “market area” as claimed by the petitioners, when necessary facts are not pleaded and the documents are not placed as required. 33. Moreover, there is no challenge to the resolution dated 17.03.2015. Even if plea that resolution dated 17.03.2015 is not questioned is overlooked, and the petitioners contention in the oral arguments, that the sale transaction has taken place outside the market area is considered, then also this Court does not find any materials to accept the contention, based on the averments made in the Writ Petition. 34. Again if the documents referred to in the synopsis dated 15.02.2023 are taken into consideration, there is nothing to indicate that the petitioners viz., M/s Sunil Agro Foods Private Limited and Venugopal Flour Mills purchased the notified agricultural produce outside the market area. - 13 - 35. It is urged in the Writ Petition that the order passed by the Co-ordinate Bench of this Court in W.P.No.1218/2007 is not complied. 36. The Court has considered the order dated 07.01.2015 passed in W.P.No.1218/2007. The said petition is filed by present petitioners as well as three others viz., Brindavan Roller Flour Mills Private Limited, Nandi Roller Flour Mills Private Limited, and Vivek Agro Foods, challenging the demand notices dated 02.01.2007. 37. Paragraph No.3 of the order in the said petition reads as under: "It appears, petitioners have deposited amount towards market fee and the same has been forfeited by the market committee. The amount so deposited by the petitioner is towards advance market fee and that could only be forfeited or adjusted if any sale transaction is there. In the present case, the raw material is brought from Australia and the same will be shifted to concerned destinations for the purpose of processing. In this process, there will be no sale effected. However, the amount so deposited by the petitioners is said to have been forfeited by the 3rd respondent- market committee which appears to be without - 14 - giving an opportunity to the petitioners or without holding any enquiry. In the circumstances, it is for the respondent - authorities to either deposit the amount or extend bank guarantee and after holding enquiry, to pass appropriate orders in accordance with law with regard to whether there is any liability on the part of the petitioners in the event the sale is effected in transit from ship yard to manufacturing unit. Ordered accordingly, Writ Petition is disposed of " 38. As already noticed, there were five petitioners in Writ Petition No.1218/2007 including two petitioners who have filed the present petition. The order in the said writ petition cannot be said to be in adjudication and the finding on the alleged fact that the present petitioners have imported notified commodity from Australia. As already noticed, the records placed before this Court, in the synopsis dated 15.02.2023 are not the records evidencing sale transaction in favour of the present petitioners. Hence, the petitioners cannot take shelter under the order dated 07.01.2015 in Writ Petition No.1218/2007 to urge a prayer to quash the resolution dated 28.07.2015. - 15 - 39. The contention that the petitioners are not liable to pay market fee under Section 65 of the Act of 1966 is not supported by any materials to provide exemption from levy of market fee as provided under Section 65 of the Act of 1966. 40. This Court has also considered the ratio laid down in the judgments cited and those judgments are rendered in entirely different factual context and are not applicable to the present set of facts of the case. 41. For the reasons recorded supra, Writ Petition is dismissed. Sd/- (ANANT RAMANATH HEGDE) JUDGE BRN/CHS/GVP