Authority: Supreme Court of India

Order Date: 27 July 2026

Case Overview

  • Appeal No(s). 25184‑25185 (2024) filed by Krishi Upaj Mandi Samiti Dhar (appellant) against Prestige Agro Tech Limited & others (respondents), arising from the impugned order dated 03‑01‑2024 passed by the Division Bench of the High Court of Madhya Pradesh, Indore.
  • The High Court had allowed the writ appeal filed by respondent No.1, set aside the cancellation of its licence and the consequential penalty.
  • The appellant contended that there is no privity of contract between it and respondents Nos.5 and 6, that the licence was issued only to respondent No.1, and that respondent No.1 submitted forged declarations claiming the mandi fees had already been paid by respondents 5 and 6.
  • The learned Senior Counsel for the appellant argued that the Division Bench erred in interpreting the definition of “Commercial Transactions” under Section 19 read with Section 33 of the M.P. Krishi Upaj Mandi Adhiniyam, 1972, and in reversing the Single Judge’s order.
  • Respondent No.1’s counsel maintained that the appellant should verify the records and pursue respondents 5 and 6, asserting no need for Supreme Court interference.
  • The Court observed that there is indeed no contractual relationship between the appellant and respondents 5 and 6, and that the forged documents were produced solely to obtain exemption from paying the mandi fees.
  • It held that the definition of “Commercial Transactions” does not apply where the transaction is not between two licencees, and that the licensing authority retains power to cancel and revoke licences.
  • While restoring the Single Judge’s order regarding licence cancellation, the Court noted the absence of a clear finding on the willfulness of respondent No.1; criminal liability was not pursued.
  • The Court distinguished the cancellation of the licence from the imposition of the penalty, stating that the latter requires a determination of willful default.

Final Outcome

  • The Supreme Court allowed the civil appeals.
  • It restored the Single Judge’s order concerning the cancellation of the licence of respondent No.1.
  • It set aside the Division Bench’s order that had waived the penalty, directing respondent No.1 to pay the penalty, excluding the mandi fee.
  • All pending applications, including the exemption from filing an official translation, were disposed of.

Topics: Agricultural Licensing, Mandi Fee Dispute