Holding

Fixation of rent is an executive function and cannot be interfered with by the judiciary except on the basis of Wednesbury unreasonableness, therefore the High Court’s decision is affirmed.

Summary

The Fruit Commission Agents Association challenged the rent fixed by the Agricultural Produce Market Committee for shop‑cum‑godowns at the Gaddiannaram fruit market, alleging the structures were not permanent and the rent excessive. The High Court upheld the rent fixation, finding the Committee had considered various factors and that the rent revision was approved by a government order. On appeal to the Supreme Court, the Court examined whether it could interfere with an administrative decision on rent. Relying on the principles laid down in Tata Cellular v. Union of India and S.C. Chandra v. State of Jharkhand, the Court held that rent fixation is an executive function and judicial interference is permissible only on the Wednesbury unreasonableness ground, which was not made out. Consequently, the Supreme Court dismissed the appeals, affirming the High Court’s decision and directing the Committee to consider any genuine grievances of the appellants.

Issues considered

Whether the Supreme Court can interfere with the rent fixation by the Agricultural Produce Market Committee, an executive function, except on the basis of Wednesbury unreasonableness.
Whether the Market Committee is obligated to construct pucca permanent shop‑cum‑godowns as claimed by the appellants.

Subjects

rent fixationadministrative lawexecutive functionWednesbury principleseparation of powersagricultural market committeeleasepucca structures

Judgment

--
FRUIT COMMISSION AGENTS ASSOCIATION AND ORS. A
V.

GOVT. OF ANDHRA PRADESH AND ORS.

SEPTEMBER 20, 2007
B
[A.K. MATHUR AND MARKANDEY KAT JU, JJ.J

Agricultural Produce Market Committee-Revision of rent of
shops/godowns-Challenged-Held: Various factors were taken into
consideration by Market Committee before fixing the revised rent- C
Fixation ofrent is an executive function andjudiciary cannot interfere
with the same except on Wednesbury principles-High Court rightly
dismissed the writ petition-Administrative Law-Executive
decision-Interference with.
D
Tata Cellular v. Union of India, AIR (1996) SC 11 and S. C.
Chandra and Ors. v. State of Jharkhand and Ors., JT (2007) 104
SC 272, relied on.

"The Spirit ofLaws" by Montesquieu, XI th Chapter, referred to.
E
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2426-
2428 of 2000.
From the Judgment and Order dated 17.2.1997 and 29.4.1999 of
the High Court of Judicature of Andhra Pradesh at Hyderabad in W.P. F
No. 2820of1992 and W.P. Rev. Misc. P. Nos. 9554 & 9555of1997
respectively.

M.N. Rao and T.V. Narayana, T.N. Rao, Manjeet Kirpal,
Paramjeet and D. Mahesh Babu for the Appellants.
G
--( R. Sundarvardhan, B. Sridhar, K. Ram Kumar, D. Bharathi Reddy
and Debojit Borkakati for the Respondents.
• The following Order of the Court was delivered:
149 H
150 SUPREME COURT REPORTS (2007] 10 S.C.R. -
A ORDER
"<'
1. Heard learned counsel for the parties.
2. These appeals under Article 136 of the Constitution have been
filed against the impugned judgment of the Andhra Pradesh High Court
B dated 17.2.1997 in W.P. No. 2820of1992 which has followed the
decision of the High Court dated 17.2.1997 in W.P. No. 2806 of 1992.
3. We have carefully perused the decision of the High Court in W.P.
No. 2806 of 1992 and find no infirmity therein.
~
4. The facts of the case are that the wholesale business in fruits was
c
located at Jambagh area in Hyderabad city. Because of its location on
either side of the road it gave rise to a lot of traffic problems, and there
were no facilities to the sellers and purchasers. Hence to ease the growing
traffic problems and provide better marketing facilities the Agricultural
Market Committee acquired 22 acres of spacious land at Gaddiannaram
D on the outskirts of Hyderabad city at a cost of Rs. 3 .5 crores in 1985
for shifting of the wholesale market there. It is alleged by the respondents
that the type-design and proposed construction of shop-cun1-godowns ......
'
(sheds) was taken up only after consultation with the representatives of
the Fruit Commission Agents who were doing business in Jambagh area,
E and shops were constructed accordingly.

5. A procedure was formulated duly constituting a sub-committee
for allotment of shops, and the sub-committee invited the representatives
of the Fruit Commission Agents, and after consultation with them the shop-
cum-godowns were allotted on lease for eleven months based on the l
F ~
quantum of business turnover of each individual subject to payment of
monthly rent as fixed by the I gicu'·ural Market Committee, Hyderabad.
6. On allotment of shop-cum-godowns the Commission agents have
shifted their wholesale business to the Fruit Market at Gaddiannaram. It
G is stated that the Market Committee has constructed shop-cum-godowns
on semi-permanent basis, the height of each shed wall being 14' with brick
masonry wall in cement mortar, well fabricated steel tubular trusses
covered by CGI sheets.
7. The appellants have alleged that the sheds are not pucca ,._
H constructions and are not permanent in nature, but this has been denied
FRUIT COMMISSION AGENTSASSOCIATIONv. GOVT.151
OFANDHRAPRADESH
by the respondents. It is not possible for this Court to adjudicate on this A
issue, and there is no discussion on this question in the impugned judgment
of the High Court. Hence it is evident that this point was not pressed before
the High Court.
8. The dispute in this case is about the rent. The rent was fixed by
the Market Committee taking into consideration the view expressed by B
the Fruit Commission Agents, and the Government vide G.O. Rt. No.
589 Food & Agriculture Department dated 6.4.1987 approved of the
rent. The Market Committee reviewed the rent after two years on the
recommendation of the Executive Engineer of the Market Committee.
9. The respondents have alleged that they have spent Rs.3.50 crores C
for purchase of the land, and have provided various amenities and facilities
to the traders e.g. bank building, ryot rest house, open auction platforms,
laying of cement roads in the market yard incurring expenditure of Rs.3
crores etc. apart from spending Rs. 2 lacs every month for upkeep of
the market yard. Water and electric supply, drainage and sanitation ,D
arrangements have also been made there.
10. It may be mentioned that the appellant Fruit Commission Agents
Association had also filed W.P. No. I 0026 of 1992 in the High Court
praying for a direction to the respondents to construct a pucca permanent
market complex and a learned Single Judge by order dated 4.12.1992 E
directed the Market Committee to construct permanent sheds and hand
them over to the traders within six months. Aggrieved, appeals were filed
being W.A. No. 342 of 1993 and 172 of 1993 which were disposed off
with a direction to make Ci.rtain improvements. It is alleged by the
respondents that accordingly cement concrete was laid in between the F
two platforms, and other improvements were made. It is alleged that if
the present sheds are converted into R.C.C. structures it will involve a
huge further cost. It is alleged that the present shops-cum-godowns were
constructed by the Market Committee in 1986 after consultation with the
appellant association. Concessional rent was initially charged, and when G
-( the rent was revised W.P. Nos. 2806 of 1992, 2820 of 1992 and 3565
of 1992 were filed, in which the impugned judgment was passed.
11. It is alleged by the respondents that they have already spent Rs.
6.50 crores for this purpose (Rs.3 crores for the land, and Rs. 3.5 crores
for the constructions). Two big size platforms for auction of the fruits have H
152 SUPREME COURT REPORTS [2007] 10 S.C.R.

A been built in the market yard at a cost of Rs. 62 lacs. Apart from that, 'y
one electronic weigh bridge and one cold storage plant with capacity 3000
M.T. have been provided there. The Market Committee has constructed
RCC platforms for conduct of auctions, and has provided for free
electricity, garbage disposal etc. Rs. I. 75 lac is spent every month for
B garbage disposal.
12. It is alleged that if pucca shops have to be built by the Market
Committee it will eP.tail further expenditure of Rs. 3.70 crores for only
51 shops-cum-godowns. ~

c 13. On the facts and circumstances of this case, we find there is no
merit in these appeals. In the judgment in W.P. No.2806 of 1992 which
has been followed in the impugned judgment in W.P. No. 2820 of 1992
of 17.2.1997' it has been clearly mentioned that various factors were taken
into consideration by the Market Committee before fixing the revised rent.
.D 14. Fixation of rent is an administrative function and the court cannot
sit as a Court of Appeal over administration decisions vide Tata Cellular .....L
v. Union ofIndia, AIR (1996) SC 11. Hence the view taken by the High
Court is correct.
15. As we have held in S.C. Chandra and Ors. v. State of
E Jharkhand and Ors., JT (2007) 10 4 SC 272, the judiciary should
exercise restraint and should not ordinarily encroach into the legislative
or executive domain. In our opinion fixing of the rent is an executive
function and hence the judiciary cannot interfere with the same except on
Wednesbury principles. There is broad separation of powers under the
F Constitution and ordinarily one organ of the State should not encroach
into the domain of another. Montesquieu's theory of separation of powers
(Xlth Chapter of his book 'The Spirit of Laws') broadly applies in India
too.
G 16. In the facts and circumstances of this case, we dismiss these
appeals but with the request to the Market Committee to consider any .,,_
genuine grievances of the appellant expeditiously. No costs.

RP. Appeals dismissed.