ABID HUSSAIN CHATTHA, J: This constitutional Petition is filed by Anjuman Dukandaran Samdani Grain Market, Toba Tek Singh (the "Anjuman") through its General Secretary in representative capacity for the benefit of its members seeking to set aside the order dated 28.11.2023 passed by the Additional Deputy Commissioner (Revenue), Toba Tek Singh / Respondent No. 3, whereby, it has been held that due process was adopted by the Market Committee, Toba Tek Singh (the "MC, TTS") while fixing fresh rent of shops of Samdani Market and the MC, TTS is within its right to recover the current prevalent rent from the respective lessees.
2. The case of the Petitioner is that rent of the shops in possession of members of the Anjuman has been unreasonably enhanced without following due process of law since the previously prevalent rate fixed on 02.12.2010 could not have been increased by more than 10% per annum or 25% per three years in terms of mandate of the Punjab Rented Premises Act, 2009 (the "Rented Premises Act") and as such, the impugned Order is liable to be set aside.
3. The facts discerned from the impugned Order are that Samdani Grain Market was leased out to MC, TTS during the year 1962 63. Tehbazari shops were existing at the time of lease. Later, the said shops were converted into land rent shops in the light of instructions issued by the Agriculture Department (Marketing Wing), Government of the Punjab in the year 2010. Since then, the shopkeepers are paying fixed monthly rent to MC, TTS. There are 173 shops which collectively paid rent of Rs. 2,517,384/- in the year 2020-2021. The MC, TTS considering that rent of each shop is far less than the prevailing market rate decided to reassess the same in the light of prevailing departmental guidelines. Accordingly, rent assessment was obtained from Excise & Taxation Department in accordance with the instructions dated 07.07.2010 issued by the Agriculture Department (Marketing Wing), Government of the Punjab as amended from time to time, whereafter, MC, TTS approved the enhanced rents and the Chairman MC, TTS issued order dated 21.05.2021 for enforcement and collection of enhanced rent of the shops w.e.f. 01.07.2021.
4. Out of 173 shopkeepers, only 40 started to pay the current rent while others did not deposit the same. One of the shopkeepers, namely, Muhammad Shafique filed W. P. No. 53055 / 2021 which was disposed of vide order dated 07.09.2021 with a direction to the Secretary MC, TTS to decide the matter. Accordingly, it was decided that rent of the shops had been enhanced after following due process of law and the Chairman MC, TTS as competent authority issued order dated 21.05.2021 for implementation of increased rent w.e.f. 01.07.2021. The Director of Agriculture (E & M) during the course of correspondence vide letter / order dated 14.10.2021 directed the MC, TTS to recover current rent. The said Muhammad Shafique again filed W. P. No. 73491 / 2021 before this Court of vide order dated 29.11.2021 with an observation that the Petitioner may pursue the matter before the Respondents in terms of order referred above by availing remedy of appeal under Rule 21 of the Punjab Agricultural Produce Markets (General) Rules, 1979 (the "Rules of 1979").
5. The Anjuman preferred an appeal on 17.08.2022 before Respondent No. 3 who passed the order dated 23.08.2022 observing therein that the MC, TTS did not adopt a structured procedure for assessm ent of rent and directed the administration of MC, TTS to reassess the rent of all the shops in a structured manner after engagement with all stakeholders and giving supreme focus to State interest. The MC, TTS filed a review against the said decision on the grounds that Rule 21 of the Rules of 1979 ceased to exist after promulgation of the Punjab Agricultural Marketing Regulatory Authority Act, 2018 (the "Act") and that the latest instructions issued by the Punjab Agricultural Marketing Regulatory Authority (the "PAMRA") for rent related matters dated 15.06.2021 are applicable which allows enhancement of rent after seeking its assessment from the Excise & Taxation Department.
Respondent No. 3 reviewed his decision dated 23.08.2022 vide order dated 29.09.2022 by holding that matter be placed before the competent authority to uphold the already enhanced rent or to enhance the nominal rent keeping in view the market rates to reduce the heavy liabilities of MC, TTS in the best interest of the State in the light of instructions of PAMRA. In the above context, W. P.
No. 79472 / 2022 was filed by the Anjuman before this Court which was referred to Respondent No. 3 as representation for decision after hearing all the concerned in accordance with law and in consequence thereof, the impugned Order was passed.
6. The question for determination before this Court is as to what is the due process for fixation of rent of leased properties by a Market Committee falling within its territorial jurisdiction?
7. In order to answer the query, it is imperative to examine the scheme of law enshrined in the Act promulgated on 24.05.2018 as amended till date. The Act was introduced with the objectives to facilitate and regulate the systematic growth and transformation of marketing of agricultural produce; to assist in the development of agricultural commerce through multiple channels; to provide meaningful support to the growers; and to make for incidental provisions. Section 3 of the Act established PAMRA as an apex regulatory body. Section 6 of the Act confers powers and assigns functions to PAMRA. The new mechanism was put in place by the Act by repealing erstwhile the Punjab Agricultural Produce Markets Ordinance, 1978 (the "Repealed Act") with saving clause which inter alia protects rules or bye-laws, orders or notifications issued under any of the provisions of the Repealed Act, if not inconsistent with the provisions of the Act until substituted under the provisions of the Act. An overriding effect was accorded to the Act under Section 31 thereof, notwithstanding anything to the contrary contained in the Repealed Act.
8. Section 2(nb) of the Act specifically defines a "Market Committee" to mean a body corporate constituted under Section 15A of the Act to manage a market established in the public sector.
Section 2(nc) thereof defines the term "Market Functionary" to mean a trader, commission agent, buyer, processor, stockist and such other persons as may be declared under the rules or by-laws to be a market functionary. Similarly, "Public Markets" as per Section 2(pc) include all existing markets notified by the Government immediately before the commencement of the Act, and any public market so notified in future. Section 15A of the Act deals with the establishment of Market Committee and provides that PAMRA shall, by notification in the Official Gazette, establish a Market Committee for every Public Market and PAMRA may entrust the management of more than one market(s) to a Market Committee with the caveat that all Market Committees existing immediately before the commencement of the Act shall stand dissolved and shall be constituted afresh by PAMRA under the Act, in such manner, as may be prescribed. Section 15B describes the composition of a Market Committee. Section 15C of the Act lists the duties and powers of a Market Committee. Section 15C(1) ordains that subject to the provisions of the Act, it shall be the duty of a Market Committee to implement the provisions of the Act, the rules and the bye-laws made or framed thereunder in the market area; to provide such facilities for marketing of agricultural produce as PAMRA may from time to time direct; to do such other acts as may be required in relation to the superintendence, direction and control of market or for regulating marketing of agricultural produce in any place in the market area, and for the purposes connected with the matters aforesaid, and for that purpose may exercise such powers and discharge such functions as may be provided by or under the Act; and to do all such other acts to bring about complete transparency in pricing system and transactions taking place in market area. Section 15C(2) provides for other powers that a Market Committee may exercise without prejudice to the generality of the foregoing provisions under Sub-Section (1) thereof. Importantly, clauses (i) & (k) of Section 15C(2) provide that a Market Committee is empowered to levy, take, recover and receive rates, charges, fees and other sums of money to which the Market Committee is entitled and has power to prosecute persons violating the provisions of the Act, the rules and the bye-laws. Section 15C(3) couched in a negative form unequivocally prohibits that no market functionary shall, unless duly authorized or registered, carry on his occupation in a public market.
9. Further provisions of the Act enshrine the mechanism for grant and cancellation of registration to market functionaries. Elaborate provisions are embodied in the Act regarding the formation of Market Committee Fund and purposes for which it may be expended. Section 15H of the Act declares that every Market Committee shall be a body corporate having such name as the Government may specify in the notification establishing it, shall have perpetual succession and a common seal, may sue and be sued in its corporate name and shall be competent to acquire and hold property, both moveable and immovable, to lease, sell or otherwise transfer any moveable or immovable property which may have become vested in or been acquired by it and to contract and to do all other things necessary for the purpose for which it is established provided that no Market Committee shall permanently transfer any immovable property except in pursuance of a resolution passed at a meeting specially convened for the purpose by a majority of not less than three-fourth of the members of the Market Committee and that no Market Committee shall be competent to exercise any power with regard to immoveable property without approval or special or general directions of the Government or a person authorized by the Government in that behalf.
10. Section 16(3) of the Act provides that the Market Committee after affording an opportunity of hearing, may cancel registration of market functionaries on one or more of the grounds mentioned therein including willful default in payment of fees or other dues payable under the Act or the rules or the regulations. Section 21(6) of the Act ordains that each market shall be operated by its Market Committee and shall ensure that such markets are financially solvent. Section 24 of the Act provides remedy of appeal against various functionaries created under the Act. Sub-Sections (3) &
(4) of Section 24 of the Act stipulate that any person aggrieved by the decision or order of the Market Committee may prefer an appeal to the Director of Agriculture (E&M), Punjab and an appeal shall lie to the Special Secretary, Agriculture Marketing against an order of the Director of Agriculture (E&M), Punjab confirming, modifying or reversing the decision or order of the Market Committee. Further remedies are stipulated under the Punjab Market Committees Regulations, 2021. Section 25 of the Act is with respect to penalties for various contraventions under the provisions of the Act which include Section 16 referred above. Section 27 of the Act also grants power to PAMRA as well as to the Market Committee to recover all sums due to them as arrears of land revenue. The power to make rules and regulations is also conferred to the Government and PAMRA pursuant to Sections 29 and 30, respectively. Under Section 30A of the Act, a Market Committee is also empowered to frame bye-laws for the management and operation of Public Markets with the approval of PAMRA.
11. From the above analysis of the scheme of law encapsulated in the Act, it is manifestly evident that a Market Committee under the overall regulatory umbrella of PAMRA is an independent and separate body corporate fully competent to deal with its moveable and immoveable properties subject to the conditions attached by the provisions of the Act itself which includes the power to fix rent qua its leased properties located in a public market regulated by it and rented out to its registered members or licensees. No approval or special or general direction of Government or a person authorized by Government in that behalf is required with respect to fixation of rent of already leased properties. A Market Committee is under an obligation to fix market based rents with respect to its leased properties to fetch maximum revenue to ensure that the Market Committee may function as a financially solvent and economically viable entity fully capable to perform its functions under the Act to ensure best services to all stakeholders in the business of marketing of agricultural produce. Hence, a Market Committee is required to generate maximum resources and is expected to expend the same in the provision of facilities to realize the objectives of its establishment and does not remain wholly dependent upon the grants made by the Government. As such, a Market Committee is not only competent to fix and collect rents with respect to its immoveable properties in the manner stated above but also empowered to cancel registration of market functionaries in case of default in payment of dues and can also initiate civil and criminal proceedings by invoking Sections 25 & 27 of the Act with respect to punishment to defaulters and recovery of dues as arrears of land revenue.
12. In the instant case, the MC, TTS acting upon the prevalent Departmental instructions of 2010 at the relevant time saved by virtue of Section 33 of the Act after taking assessment from Excise & Taxation Department fixed rent of shops of Samdani Grain Market with the approval of the Market Committee and a valid order was passed by its Chairman. The Departmental instructions of 2010 requiring the Market Committee to obtain assessment of rent from the Excise & Taxation Department were issued with the rationale to obtain a benchmark for fixation of reasonable rent. It is imperative to note that after passing of the rent fixation order dated 21.05.2021 by the Chairman MC, TTS, PAMRA as apex regulatory body issued instructions vide order dated 15.06.2021, constituting a Committee at District level for renting out shops by a Market Committee with terms of reference including the settlement of terms and conditions of rented properties after obtaining assessm ent from Excise and Taxation Department as reserve price, directing auction upon proper advertisement and ensuring incorporation of necessary details in the lease agreements qua period of tenancy, nature of permitted business, penalties for non-payment of rent, mode of payment and registration of tenancy agreements. Currently, latest instructions dated 13.03.2025 are in field with the same mandate but with a reconstituted Committee. Needless to state that a Market Committee under the Act is obliged to comply with the orders of PAMRA.
13. Nothing has been brought on record that the assessment so provided did not reflect prevailing market rents. Nothing has been placed on record that any bye-laws of MC, TTS exist regarding the management and operation of public markets which has been violated in fixation of rent of shops of Samdani Grain Market. It is also noted that there is no substance in the contention of the Petitioner that the rent could not be increased by more than 10% per annum or 25% after 3 years as there is no such stipulation in the Rented Premises Act. Section 6 thereof unequivocally provides that the rent between the landlord and the tenant shall be determined through a tenancy agreement including the rate of rent, rate of enhancement, due date and mode of payment of rent.
There is no prohibition in the Rented Premises Act that the existing rents could not be enhanced or rationalized subject to existing tenancy agreements to conform to market realities, particularly, when the rent of the shops in question had not been increased since 02.12.2010. It is also manifest from record that meaningful and elaborate consultation has already taken place between the stakeholders and a substantial number of shopkeepers are already paying enhanced rent. There is nothing on record to demonstrate that the enhanced rent is unreasonable inasmuch as it does not reflect prevalent market rent. Similarly, no breach of any statutory provision on the part of the Respondents has been pointed out. The applicable instructions merely allow the concerned Market Committee to obtain fair and reasonable basis to fix rent of its immovable properties so that it may be equitably fixed. It is reasonably expected that the rents should be based on prevalent market rates and are settled with mutual consultation of the stakeholders. Nevertheless, in case of undue resistance, the Market Committee as owner / landlord of the shops can determine reasonable rent which must be accepted and paid by the tenants. In case of undue resistance or abuse of the process as is manifest in the instant case, a Market Committee is equipped with necessary powers under the Act to enforce its decision in accordance with law. It, therefore, follows that due process has been adopted by MC, TTS during assessment of rent of shops which is liable to be paid by the members of the Anjuman and in case of non-payment, the defaulting members of the Anjuman are liable to be dealt with in accordance with law.
14. Before parting, it is imperative to note that upon promulgation of the Act, Section 24 thereof specifically provides for appeal against the order of Market Committee to the Director of Agriculture (E&M), Punjab and thereafter, to the Special Secretary, Agriculture Marketing. The said remedies were not availed and incompetent Writ Petitions were filed seeking directions for reconsideration of fixed rent against various functionaries in violation of the express provisions of the Act, notwithstanding that Rule 21 of the Rules of 1979 providing remedy of appeal before Respondent No. 3 became inapplicable being inconsistent to the express provisions of Section 24 of the Act and the applicable regulations made under the Act. Therefore, the Appeal was misdirected to Respondent No. 3 due to lack of assistance provided to this Court in the Petitions referred in the earlier part of this Judgment. Notwithstanding the fact that the remedies of two appeals provided under Section 24 of the Act were not availed by the Petitioner and as such, this Petition is not maintainable yet the same has been merely entertained to give a conclusive finding in this behalf considering that the case is of first instance.
15. In view of the above, this Petition is devoid of any merit and the same is dismissed, accordingly,