Holding

Market fee under Section 17(iii)(b) can be levied only when the agricultural produce is physically present and the sale transaction is concluded within the market area; consequently, the Mandi Samiti was not entitled to levy the fee.

Summary

The appellant Krishi Utpadan Mandi Samiti, Ghaziabad claimed market fee under Section 17(iii)(b) of the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 on rice exported by the respondent partnership firm. The respondent argued that the rice was purchased from millers outside Uttar Pradesh and shipped directly to ports, never entering the market area of the Mandi, so no fee could be levied. The High Court held that the sale took place only when the rice was loaded on the ship at the port, and dismissed the fee demand. On appeal, the Supreme Court examined the statutory language, the Explanation to the provision, and precedents on the requirement of physical presence of produce for a transaction of sale. It concluded that market fee is payable only on a completed sale of produce physically present within the market area; the Explanation applies only when the produce is in the area. Since the rice was never in Ghaziabad, the Mandi Samiti could not levy the fee. The appeal was dismissed.

Issues considered

Whether the transaction of sale of the exported rice occurred within the market area of the Krishi Utpadan Mandi Samiti, Ghaziabad for purposes of levying market fee under Section 17(iii)(b).
Whether physical presence of agricultural produce in the market area is a prerequisite for the levy of market fee.
Interpretation of the Explanation to Section 17(iii)(b) regarding the presumption of sale when produce is taken out of the market area.
Whether market fee can be levied on a transaction of sale that takes place outside the market area.

Legislation cited

Sale of Goods Act, 1930s. 18
Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964s. 17(iii)(b), s. 32, s. 40

Subjects

market feeUttar Pradesh Krishi Utpadan Mandi Actsale of goodsphysical presenceexporttransaction of salejurisdictionagricultural producelevy

Judgment

[2008] 10 S.C.R. 176

A KRISHI UTPADAN MANDI SAMIT!, GHAZIABAD
AND ANR.
v.
MIS. METAL CRAFT & ORS.
(Civil Appeal No. 8690 of 2001)
B JULY 7, 2008
[DR. ARIJIT PASAYAT, P. SATHASIVAM AND AFTAB
ALAM, JJ~]

c Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 -
s. 17(iii)(b), Explanation appended thereto - Market fee - Levy
of - _Held: Physical presence of agricultural produce within
market area is necessary for levy of mprket fee - On facts,
transaction of sale of the rice exported by Respondent No. 1 ~
'D · did not take place within the market area of Appellant-Mandi ~- r
Samiti -: .Hence, Appellant-Mandi Samiti was not entitled to
levy market fee.
The question which arose for consideration in the
present appeal is whether the transaction of sale of the
E rice exported by· Respondent No.1 took place within the
market area of the Appellant-Mandi Samiti and ther-efore
the Appellant was entitled to levy market fee under
s.17(iii)(b) of the Uttar Pradesh Krishi Utpadan Mandi
Adhiniyam, 1964. ..._.
Dismissing the appeal, the Court
HELD:1.1. A plain reading of s.17(iii)(b) of the Uttar
Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 (Act)
shows that the Committee is empowered to levy and col-
G lect market fee which shall be payable on transaction of
sale of agricultural produce in the market area. The words
"specified agricultural produce in the market area" have
great relevance. The manner of realization of market fee
has been enumerated in sub clauses (1 ), (2), (3) & (4) of
H 176
KRISHI UTPADAN MANDI SAMIT!, GHAZIABAD v. 177
M/S. METAL CRAFT & ORS.
,A
s.17(iii)(b). Reference is to "produce". This apparently A
shows that physical presence of the agricultural produce
within the market area is necessary for levy of market fee.
The Explanation to s.17(iii)(b) appended at the end of the
Section lays down that unless the contrary is proved any
specified agricultural produce taken out or proposed to B
be taken out of a market area by or on behalf of the Ii-
cenced traders shall be presumed to have been sold
within such area. The Explanation has application only if
the agricultural produce is physically present within the
market area. The explanation becomes redundant if the c
stand of the appellant that s.17(iii)(b) is applicable even in
cases where agricultural produce is neither physically
brought nor is in existence within the market area. [Para
9] [184-H; 185-A,B,C & D]
1.2. Under s.17(iii)(b), the measure of levy of the fee D
is on the price of the goods sold. It obviously means that
there must be a complete transaction of sale or a con-
eluded sale. If there is only an agreement and the agree-
ment fails, the remedy for the aggrieved party is to file
suit for damages. Obviously, no fee can be charged on E
damages. The action for levy of fee can arise only on a
concluded sale and as the sale has not taken place within
the market area of Ghaziabad, no mandi fee can be lev-:-
- .._ ied. [Para 13] [188-E,F & G]
Ram Chander Kai/ash Kumar & Co. v. State of UP, AIR F
(1980) SC 1124- relied on.
PS.N.S. Ambalavana Chettiar and Company Ltd. v. Ex-
press Newspapers Ltd. AIR (1968) SC 741 and Jute and
Gunny brokers Ltd. & Ors. v. The Union of India and Ors. etc.
G
AIR (1961) SC 1214 - referred to.
,--J
2. The stand of the appellant is that the market fee is
levied on "transaction of sale" and not on "sale" only and,
therefore, what is to be seen is where the transaction took
place and not the situs of the sale. If this argument is ac- H

'
178 SUPREME COURT REPORTS [2008] 10 S.C.R.

A cepted then even an agreement to sale without the pres-
ence or existence of the agricultural produce will come
within the ambit of the charging provision. It would also
mean that if the agreement takes place outside the bound-
aries of State of Uttar Pradesh, the provisions would still
,y
B become applicable. [Para 14] [188-G,H; 189-A]
3. A bare perusal of the order passed by the
revisional authority under the Act.shows that the Appel-
lant-Samiti as well as the revisional authority proceeded
on the basis that since the contract for goods was en-
c tered into at Ghaziabad and then goods were sent through
transport from Punjab, Haryana and Madhya Pradesh di-
rectly through ports, therefore, the market fee was levi-
able. The High Court rightly noted the admitted position
that the rice was never brought or was in existence within e:
D the market area of Mandi Samiti, Ghaziabad or for that ).-
matter within the State of Uttar Pradesh. The High Court
recorded a categorical finding that the sale took place only
when the rice was loaded on the sea at the port in terms
of the agreement. That being so, there was no transac-
E tion of sale within the market area of the Mandi Samiti,
Ghaziabad. Therefore, the High Court rightly held that the
Mandi Samiti was not entitled to levy any market fee. [Para
15 & 16] [189-8,C,D & E]
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 8690 --;--
F of 2001
From the final Judgment and Order dated 6/7/2001 of the
High Court of Judicature at Allahabad in C.M. W.P. No. 10342
Of 1998 I

G Pradeep Misra for the Appellants.
T.N. Singh for the Respondents.
The Judgment of the Court was delivered by
Dr. ARIJIT PASAYAT, J. 1. Challenge in this appeal is to
H
KRISHI UTPADAN MANDI SAMITI, GHAZIABAD v. 179
M/S. METAL CRAFT & ORS. [DR. ARIJIT PASAYAT, J.]
.,,.-_..- .

the judgment of a Division Bench of the Allahabad High Court A
holding that the appellant was not entitled to levy market fee
under Section 17(iii) (b) of the U.P. Krishi Utpadan Mandi
Adhiniyam, 1964 (in short the 'Adhiniyam') if the agricultural
produce is neither brought nor taken out of the market place,
.......
and deciding in favour of respondent no.1. B
2. Background facts in a nutshell are as follows:
Respondent is a registered partnership firm having its
business premises and office at 14, Navyug Market, Ghaziabad,
and it carried on the business of sale and purchase of iron and c
steel and also export of rice. It wanted to purchase broken rice
from the rice millers of U.P. for the purpose of export to foreign
countries and accordingly, made an application on July 31, 1997,
... {
to Krishi Utpadan Mandi Samiti, Ghaziabad, for grant of a Ii-
cence. It was also stated in the application that the respondent
D
had exported rice in November, 1996 by purchasing it from
places outside U.P. Appellant No.1 asked the respondent no.1
to deposit the licence fees for the years 1995-96, 1996-97 and
1997-98, which was done a~ per the demand. Thereafter, the
appellant no.1 sent a demand notice to the respondent no.1 on
October 12, 1997, demanding market fee at the rate of 2 per. . E
cent amounting to Rs.12,94,860.00. The respondent no.1 sent
a reply on October 18, 1997, stating that it had never purchased
any rice from inside the State of U.P. nor any transaction of sale
-~ or purchase of rice was carried out within the State, It was ac-
cordingly requested that the demand notice/order dated Octa- F
•
ber 12, 1997, be rescinded. The appellant no.1, however, initi-
ated proceeding for recovery of the amount in question and is-
sued a citation dated December6, 1997. The respondent no.1
thereafter, filed C.M. Writ Petition No, 43329of1997 in the High
Court which was disposed of on December 17, 1997, with a G
1~J
direction to appellant no.1 to decide the respondent no.1 's rep-
resentation within a month and the recovery proceeding were
suspended for six months. The respondent no.1 appeared be-
fore appellant no.1 on the date fixed, namely January 14, 1998,
along with the relevant records and submitted that the rice had H
180 SUPREME COURT REPORTS [2008] 10 S.C.R.

"'1---..._-
A been purchased from places outside the State of U .P. and had
been sent directly to the ports for being exported to South Af-
-,
rica and as such, it was not liable to pay any market fee. The
appellant passed an order on January 25, 1998, holding that
the transaction of sale of the rice exported by the respondent
y
B no.1 firm took place within the market area of Ghaziabad, and,
accordingly, the market fee imposed by the order dated Octo-
ber 12, 1997 was valid and proper. Feeling aggrieved, the re-
spondent no.1 preferred a revision under Section 32 of the Act
before the Rajya Krishi Utpadan Mandi Parishad, Lucknow (ap-
c pellant no.2) which was dismissed by order dated March 9,
1998. The writ petition under Article 226 of the Constitution of
India, 1950 (in short the 'Constitution') was filed for quashing

D
the orders dated October 12, 1997 passed by appellant no.1
and the order dated March 9, 1998 passed by appellant no.2.
The learned Single Judge, who heard the petition, was of the
opinion that the controversy raised involved a substantial ques-
~
.
tion of law of general importance and made a reference to larger
Bench. That is how the matter came before the Division Bench.
The case of the respondent no.1 was that the rice was )-
E exported by it because certain dealers in South Africa wanted
to buy rice from India. The respondent no.1 quoted the rates
and entered into negotiations. After the deal was settled, the
rice was purchased from rice millers in Haryana, Punjab, Madhya
Pradesh from where it was directly dispatched to the ports of
+
F Mumbai and Kand la and clearing and forwarding agents of the
• respondent no.1 loaded the same on the ship. After the goods
had been loaded a Bill of Lading was prepared and signed by
the Master of the ship in the capaCity of carrier acknowledging
the receipt of the goods. The Bill of Lading was given to the
clearing and forwarding agents and on receipt of the Bill of Lad-
G
ing by the buyer through the respondent no.1 's bankers, the rice
were retired by the buyer in South Africa. The sale price of the ~--<\_

rice was received by the respondent no.1 through its banker
viz. Oriental Bank of Commerce at Delhi. It is the specific case j:"
of the respondent no.1 was that the entire quantity of the ex-
H
KRISHI UTPADAN MANDI SAMITI, GHAZIABAD v. 181
__ .-:r M/S. METAL CRAFT & ORS. [DR. ARIJIT PASAYAT, J.]

ported rice was purchased from places outside the State of A
U.P. and was directly sent to the ports without it ever coming
within the market area of Ghaziabad or in the State of U.P. It
was also asserted that the sale was affected only at the ports
when the goods were loaded in the ship and the Bill of Lading
was handed over to the respondent no.1 's clearing and forward- B
ing agents.
The case of the present appellants was that the business
establishment of the respondent is at 14, Navyug Market
Ghaziabad and the entire transaction was done from the said
place. The purchase order was received and accepted by it at c
Ghaziabad and the sale price was also received there and
therefore the transaction of sale took place in Ghaziabad. It
was also pleaded that the transport of the goods and how it
-4. was actually exported was wholly irrelevant for ascertaining
where the transaction of sale took place. D
The High court did not accept the said stand and allowed
the writ petition filed.
3. In support of the appeal, learned counsel forthe appel-
lants submitted that since the transaction took place within the E
jurisdiction of the market area, the levy was justified and the
High Court was wrong in its view.
4. Learned counsel for the respondent no.1 on the other
- ·'- hand supported the judgment of the High Court.
F
5. It is to be noted that before the High Court the learned
counsel for the appellant no.1 had fairly admitted that rice ex-
ported by the appellant was never brought within the market
area of Mandi Parishad, Ghaziabad within the state of U.P.
6. Section 17(iii)(b) is the charging section which reads G
t-4 as follows:
"17. Powers of the Committee-A Committee shall, for the
purposes of this Act, have the power to -
(i) .................... H
182 SUPREME COURT REPORTS [2008] 10 S.C.R.
-+---..,
A (ii) ...................
(iii) levy and collect:
(
(a) such fees as may be prescribed for the issue or
renewal of licences, and ;r

B (b) market fee, which shall be payable on transactions
of sale of specified agricultural produce in the market
area at such rates being not less than one percentum
and not more than two percentum of the price of the
agricultural produce so sold as the State Government
c may specify by notification,, and such fee shall be
realised in the following manner -

(1) if the produce is sold through a commission ,,
agent may realise the market fee from the '
~
purchaser and shall be liable to pay the same
D
to the Committee;
(2) if the produce is purchased directly by a trader
from a producer the trader shall be liable to pay
the market fee to the Committee;
E
(3) if the produce is purchased by a trader for
another trader, the trader selling the produce
may realise it from the purchaser and shall be
liable to pay the market fee to the Committee
: and ""' -
F
(4) in any other case of sale of such produce, the
purchaser shall be liable to pay the market fee
to the Committees :
Provided that no market fee shall be levied or collected on
G the retail sale of any specified agricultural produce where
~--.
such sale is made to the consumer for his domestic
consumption only."

7. The object for which the Act was enacted is as fol-
lows:
H
KRISHI UTPADAN MANDI SAMITI, GHAZIABAD v. 183
M/S. METAL CRAFT & ORS. [DR. ARIJIT PASAYAT, J.]
..... --t
"(i) to reduce the multiple trade charges, levies and A
exactions charged at present from the produce-
sellers;
(ii) to provide for the verification of accurate weight and
scales and see that the producer-seller is not denied
"'""" his legitimate due; B

(iii) to establish market committees in which the
agricultural producer will have his due representation;
(iv) to ensure that the agricultural producer has his say in
the utilization of market funds for the improvement of c
the market as a whole;
(v) to provide for fair settlement of disputes relating to
... the sale of agricultural produce .
~
(vi) to provide amenities to the producer-seller in the D
market;
(vii) to arrange for better storage facilites;
(vii) to stop inequitable and unauthorized charges and
levies from the producer-seller; and E
(viii) to make adequate arrangements for market
intelligence with a view to posting the agricultural
producer with the latest position in respect of the
- ....-. markets dealing with his produce."
F
As the prefatory note and preamble clearly show the object
of the Act is to save the agricultural producer from
innumerable charges, levies etc. and to enable them to
have a say in the proper utilization of amounts paid by him
to reduce multiple charges levies, exactions charged from G
the producer and seller and generally to help the agricultural
!-- 4
producer to sell his produce to his best advantage.
8. At the end of the Section there is an explanation which
reads as follows:
H
184 SUPREME COURT REPORTS [2008] 10 S.C.R.

'f--..
A "Explanation - For the purpose of clause (iii), unless the
contrary is proved, any specified agricultural produce taken
out or proposed to be taken out of market area by or on
behalf of a licensed trader shall be presumed to have
been sold within such area and in such case the price of
y l

8 such produce presumed to be sold shall be deemed to be
such reasonable price as may be ascertained in the
manner prescribed."
In exercise of the powers conferred by Section 40, Rules
have been framed, which are known as U.P. Krishi Utpadan
c Mandi Niyamavali, 1965 (hereinafter referred to as the
'Niyamavali') and Rules 66 and 68 reads as follows:
"(66) Market Fee (Section 17 (iii)- The Market Committee

D
shall levy and collect market fee in the Market Area in
accordance with the provisions of sub-clause (b) of Glause
(iii) of Section 17 of the Act at such rate as may be specified
).- -
~

in the bye-laws:
Provided that no market fee shall be levied and charged
prior to the date on which provisions, Section 10 of the Act
E are enforced :
Provided further that when the specified agricultural
produce is presumed to have been sold in accordance
with the explanation given under clause (viii) of Section 17
of the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, .... -
F 1964 the price of such produce shall be the price prevailed
for that type of produce in that market just on the previous
working day.
(68) No market fee shall be levied more than once on any
consignment of the specified agricultural produce brought
G
for sale in the Market Yard if the market fee has already
been paid on it in any Market Yard of the same Market ~ .....
Area and in respect of which a declaration has been made
and a certificate has been given the seller in Form No. V."

H 9. A plain reading of Section 17(iii)(b) of the Act shows
KRISHI UTPADAN MANDI SAMIT!, GHAZIABAD v. H~5
M/S. METAL CRAFT & ORS. [DR. ARIJIT PASAYAT, J.]
,....--4'
that the Committee is empowered to levy and collect market A
fee which shall be payable on transaction of sale of agricultural
produce in the market area. The words "specified agricultural
produce in the market area" have great relevance .•The manner
of realization of market fee has been enumerated in sub clauses
. ~
(1 ), (2), (3) & (4) of Section 17(iii)(b). Reference is to "produce", B
This apparently shows that physical presence of the agricul-
tural produce within the market area is necessary for levy of
market fee. The explanation to Section 17 (iii)(b) appended at
the end of the Section lays down that unless the contrary is
proved any specified agricultural produce taken out or proposed c
to be taken out of a market area by or on behalf of the licenced
traders shall be presumed to have been sold within such area.
The explanation has application only if the agricultural produce
is physically present within the market area. The explanation
• -1, becomes redundant if the stand of the appellant that Section
D
17(iii)(b) is applicable even in cases where agricultural produce
is neither physically brought nor is in existence within the mar-
ket area.

10. In Ram Chander kailash Kumar & Co. v. State of UP
(AIR1980 SC 1124) it was inter alia observed as follows: E
"This point urged on behalf of the appellants is well founded
and must be accepted as correct. On the very wordings of
Clause (b) of Section 17(iii) market fee is payable on
- }- transactions of sale of specified agricultural produce in
the market area and if no transaction of sale takes place F
in a particular market area no fee can be charged by the
Market Committee of that area. If goods are merely brought
in any market area and are dispatched outside it without
any transaction of sale taking place therein, then no market
fee can be charged. If the bringing of the goods in a G
,._,., particular market area and their despatch therefrom are
as a result of transactions of purchase and sale taking
place outside the market area, it is plain that no fee can
be levied."
H
186 SUPREME COURT REPORTS [2008] 10 S.C.R.

'f-~
A 11. In P S.N. S. Ambalavana Chettiar and Company Ltd.
v. Express newspapers Ltd. (Al R 1968 SC 741) it was observed
as follows:
"Sectic5n 18 of the Sale of Goods Act provides that where
there is a contract for the sale of unascertained goods no Y·
B property in the goods is transferred to the buyer unless
and until the goods are ascertained. It is a condition
precedent to the passing of property under a contract of
sale that the goods are ascertained. The condition is not
fulfilled where there is a contract for sale of a portion of a
c specified larger stock. Till the portion is identified and
appropriated to the contract, no property passes to the
buyer. In.Gillett v. Hill [(1834) 2 C&M. 535: 149 E.R. 871,
873], Bayley, B. said:
"Where there is a bargain for a certain quantity ex a ~ ~
D
greater quantity, and there is a power of selection in
the vendor to deliver which he thinks fit, then the right
to them does not pass to the vendee until the vendor
has made his selection, and trover is not maintainable
before that is done. If I agree to deliver a certain
E quantity of oil as ten out of eighteen tons, no one can
say which part of the whole quantity i have agreed to
deliver until a selection is made. There is no
individuality until it has been divided."

12. Similarly, in Jute and gunny brokers Ltd. & Ors. v. The
--.--
F
Union of India and Ors. etc. (Al R 1961 SC 1214) it was held as
follows:
"The contention on behalf of the Union of India is that
property in the goods cannot pass in law to the holders of
G the pucca delivery orders till the goods are actually
appropriated to the particular order; therefore, as in this ).,__,._ _

case it is not in dispute that no goods were actually
appropriated towards the pucca delivery orders
concerned, the property in the goods did not pass to the
H holders thereof but was still in the mills. Reliance in this
KRISHI UTPADAN MANDI SAMITI, GHAZIABAD v. 187
M/S. METAL CRAFT & ORS. [DR. ARIJIT PASAYAT, J.]
<"~
connection is placed on s. 18 of the Indian Sale of Goods A
Act, No Ill of 1930. That section lays down that "where
there is a contract for the sale of unascertained goods, no
property in the goods is transferred to the buyer unless
and until the goods are ascertained." In the present case,
as we have already said it is not in dispute that the goods B
covered by the pucca delivery orders are not ascertained
at the time such orders are issued and ascertainment
takes place in the shape of appropriation when the goods
are actually delivered in compliance therewith. Therefore,
till appropriation takes place and goods are actually c
delivered, they are not ascertained. The contract therefore
represented by the pucca delivery orders is a contract for
the sale of unascertained goods and no property in the
goods is transferred to the buyer in view of s. 18 of the
~ Indian Sale of Goods Act till the goods are ascertained by
D
appropriation, which in this case takes place at the time
only of actual delivery. The appeal court in our opinion was
therefore right in holding that the property in the goods
included in the pucca delivery orders did not pass to the
holders thereof in view of s. 18 of the Sale of Goods Act
in spite of the decision in the case of the Anglo-India Jute E
Mills Co. [(1910) l.L.R. 38 Cal. 127]. What that case
decided was that in a suit between a holder .of a pucca
delivery order - be he the first holder or a subsequent
• lo:-
holder who has purchased the pucca delivery order in the
mar~et - and the mills, there will be an estoppel and the F
mill will be estopped from denying that cash had been
paid for the goods to which the delivery order related and
that they held the goods for the holder of the pucca delivery
.. order. That case therefore merely lays down the rule of
estoppel as between the mill and the holder of the pucca G
) - ·~ delivery order and in a suit between then the mill will be
estopped from denying the title of the holder of pucca
delivery orders; but that does not mean that in law the _,title
·'

passed to the holder of the pucca delivery order a$<$oon
as it was issued even though it is not disputed that'there H

I
188 SUPREME COURT REPORTS [2008) 10 S.C.R.

A was no ascertainment of goods at that time and that the
asyertainment only takes place when the goods are
appropriated to the pucca delivery orders at the time of
actual delivery. The appeal court was in our opinion right
in holding that the effect of the decision in the case of
B Anglo-India Jute Mills Co. [(1910) I.LR. 38 Cal. 127], was
not that the property in the goods passed by estoppel and
that that case only decided that as between the seller and
the holder of the pucca delivery order, the seller will not be
heard to say that there was no title in the holder of the
c deliver order. That case was not dealing with the question
of title at all as was made clear by Jenkins C.J. but was
merely concerned with estoppel. In the present case the
question whether the Government of India will be estopped
is a matter which we shall consider later; but so far as the
question of title is concerned there can be no doubt in
D
view of s. 18 of the Sale of Goods Act that title in these
cases had not passed to the holders of the pucca delivery
orders on September 30, 1946, for the goods were not
ascertained till then, whatever may be the position of the
holders of the pucca delivery orders in a suit between
E them and the mills to enforce them."
13. Under Section 17(iii)(b) the measure of levy of the fee
is on the price of the goods sold. It obviously means that there
must be a complete transaction of sale or a concluded sale. If
F there is only an agreement and the agreement fails, the remedy
for the aggrieved party is to suit for damages. Obviously, no
fee can be charged on damages. The action for levy of fee can
arise only on a concluded sale and as the sale has not taken
place within the market area of Ghaziabad, no mandi fee can
G be levied.
14. The stand of the appellant is that the market fee is
levied on "transaction of sale" and not on "sale" only and, there-
fore, what is to be seen is where the transaction took place and
not the situs of the sale. If this argument is accepted then even
H
KRISHI UTPADAN MANDI SAMITI, GHAZIABAD v. 189
M/S. METAL CRAFT & ORS. [DR. ARIJIT PASAYAT, J.]

an agreement to sale without the presence or existence of the A
agricultural produce will come within the ambit of the charging
provision. ·it would also mean that if the agreement takes place
outside the boundaries of State of Uttar Pradesh, the provisions
would still become applicable.
15. It is to be noted that the challenge in the writ petition B
was essentially to the revisional order passed by the revisional
authority under the Act. The revision was filed against the order
passed by the Mandi Samiti in respect of rice exported. A bare
perusal of the revisional order shows that the Samiti as well as
the revisional authority proceeded on the basis that since the C
contract for goods was entered into Ghaziabad and then goods
were sent through transport from Punjab, Haryana and Madhya
Pradesh directly through ports, therefore, the market fee was
leviable.
D
16. The High Court rightly noted that the admitted position
was that the rice was never brought or was in existence within
the l"Qarket area, Mandi Samiti, Ghaziabad or for that matter
within the State of Uttar Pradesh. The High Court recorded a
categorical finding that the sale took place only when the rice
was loaded on the sea at the port in terms of the agreement. E
That being so, there was no transaction of sale within the mar-
ket area of the Mandi Samiti, Ghaziabad. Therefore, the High
Court rightly held that the Mandi Samiti was not entitled to levy
any market fee. There is no merit in the appeal, which is ac-
cordingly dismissed.

B.B.B. Appeal dismissed.