Chapter VI POWERS AND DUTIES OF MARKET COMMITTEES

(1) Subject to the provisions of this Act, it shall be the duty of a market committee,- (i) to implement the provisions of this Act, the rules and bye-laws made thereunder in the market area; (ii) to provide such facilities for 1[transport and marketing] of agricultural produce therein as the State Government may from time to time direct; (iii) to do such other acts as may be required in relation to the superintendence direction and control of markets or for regulating marketing of agricultural produce in any place in the market area, and for 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 this Act. 1. Substituted by Act 17 of 1980 w.e.f.19.5.1995 (2) Without prejudice to the generality of the fore-going provision,- (a)a market committee shall,- (i) maintain and manage the yards 1[vesting in the market committee] 2[and regulate the manner of letting out the premises in the market yard including those belonging to market functionaries in the yard] ; 1[(ia) provide either independently or along with some other authority necessary facilities for the transport of notified agricultural produce in and to the yard;] (ii) provide the necessary facilities for the 1[transport and marketing] of agricultural produce in the yards and outside the markets and sub-markets in the market area; 1[(iia) provide facilities such as clearly demarcated adequate space commensurate with demand for direct sale by the producers to consumers for domestic consumption and not for subsequent sale or processing in such manner on such terms, as may be prescribed.] (iii) grant or refuse licences to market functionaries and renew, suspend or cancel such licences; (iv) supervise the conduct of the market functionaries; (v) regulate the opening, closing and suspending of trading in the yards; (vi) enforce the conditions of the licences; (vii) regulate the making, carrying out and enforcement or cancellation of agreements of sales, the weighment, delivery, payment and all other matters relating to the marketing of notified agricultural produce; (viii) Provide for the settlement of all disputes between the seller and the buyer arising out of any kind of transaction connected with the marketing of notified agricultural produce and all matters ancillary thereto; (ix) collect, maintain and disseminate information in respect of production, sale, storage, processing, prices and movement of notified agricultural produce; (x) take all possible steps to prevent adulteration of goods and promote grading and standardization of the notified agricultural produce; (xi) take measures for maintenance of market stability, by prevention of over- trading and thus decreasing the local risk attendant upon the business of selling and buying notified agricultural produce; (xii) levy, take, recover and receive rates, charges, fees and other sums of money to which the market committee is entitled; 1[(xiii) contribute to the Floor Price Scheme and Raita Sanjeevini Accidental Insrurance Scheme at such rate as may be determined by the Director of Agriculture Marketing] 1. Inserted by Act 19 of 1969 w.e.f.1.5.1968 2. Inserted by Act 35 of 1986 w.e.f.17.6.1986 1. Inserted by Act 17 of 1980 w.e.f.19.5.1975 1. Substituted by Act 17 of 1980 w.e.f.19.5.1975 1. Inserted by Act 20 of 2014 w.e.f.28.02.2014 16 . Inserted by Act 8 of 2001 w.e.f.24.1.2001. 1[(xiv) set up and promote public private partnership in management of market yards or market sub yards; (xv) promote public private partnership for carrying out extension activities in its area viz., collection, maintenance and dissemination of information in respect of production, sale, storage, processing, value addition, prices and movement of notified agricultural produce.] 2[(xvi) to make contribution to the Market Development Assistance Fund constituted under section 64-D”.] 1. Inserted by Act 23 of 2007 w.e.f.16.8.2007. 2. Inserted by Act 21 of 2024 w.e.f.07.03.2024. (b) a market committee may,- (i) regulate the entry of persons and vehicular traffic into the yard 1[vesting in the market committee] ; (ii) prosecute persons for violating the provisions of this Act, the rules and the bye-laws and compound such offences; (iii) acquire, hold and dispose of any moveable or immoveable property for the purpose of efficiently carrying out its duties; (iv) impose penalties on persons who contravene the provisions of this Act, the rules or the bye-laws or the orders or directions issued under this Act, the rules or the bye-laws by the market committee, its Chairman or by any officer duly authorised in this behalf: (v) institute or defend any suit, action, proceeding, application or arbitration and compromise such suit, action, proceeding, application or arbitration; (vi) provide facilities such as provision of adequate space for direct sales by a producer and assist a producer by preparing invoices and bills on his behalf when he sells his produce to a trader without employing a commission agent. 1[(vii)provide facilities for processing and packaging.] 1[(viii)grant loans to the State Agricultural Marketing Board or other market committees.] 1[(viii-a)grant loan to the Co-operative marketing or Agricultural Co-operative Processing Societies and any other co-operative society dealing in notified agricultural produce within the market area, having regard to their requirement of working capital in respect of transactions relating to the notified agriculture produce, and subject to such terms and conditions as may be prescribed; (viii-b) with the prior approval of the Director of Agricultural Marketing contribute shares to the Co-operative Marketing or Agricultural Co-operative Processing Societies established within the market area and dealing in notified agricultural produce; (viii-c) with the prior approval of the Director of Agricultural Marketing take such steps as are necessary to arrange through Co-operative Societies, for purchase, sale, storage or transport of agricultural produce or for such other matters during the period of disruption of functioning in the market yard or sub-market yard due to strike of any market functionary; (viii-d) so far as the surplus market fund at its disposal will allow and with the approval of the Director of Agricultural Marketing provide within the market area any infrastructural facilities as may be prescribed for the benefit of the users of the market;] 1. Inserted by Act 19 of 1969 w.e.f.1.5.1968 1. Inserted by Act 14 of 1976 w.e.f.24.1.1976 1. Inserted by Act 17 of 1980 w.e.f.19.5.1975 1.Clauses (viii-a) to (viii-d) inserted by Act 16 of 1991 w.e.f.1.4.1994 2[ 1[(ix)x x x] ] 1[(x) provide such short term advances as may be prescribed to producer- sellers in the market area on pledge of notified agricultural produce in favour of the market committee.] 2. Omitted by Act 16 of 1991 w.e.f. 1.4.1994 1. Clauses (x) and (xi) Inserted by Act 35 of 1986 w.e.f.17.6.1986 1. Inserted by Act 6 of 1988 w.e.f.19.11.1987 1[(xi) with the prior approval of the State Government donate funds to any Agricultural University to impart instructions in Agricultural Engineering and Research.] • (xii) • See footnote below section 10 **63A. ** See footnote below Section 61

1. (i) to implement the provisions of this Act, the rules and bye-laws made thereunder in the market area;
2. (ii) to provide such facilities for 1[transport and marketing] of agricultural produce therein as the State Government may from time to time direct;
3. (iii) to do such other acts as may be required in relation to the superintendence direction and control of markets or for regulating marketing of agricultural produce in any place in the market area, and for 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 this Act.

¹ Substituted by Act 17 of 1980 w.e.f.19.5.1995

1. (2) Without prejudice to the generality of the fore-going provision,- (a)a market committee shall,-
   • (i) maintain and manage the yards 1[vesting in the market committee] 2[and regulate the manner of letting out the premises in the market yard including those belonging to market functionaries in the yard] ; 1[(ia) provide either independently or along with some other authority necessary facilities for the transport of notified agricultural produce in and to the yard;]
   • (ii) provide the necessary facilities for the 1[transport and marketing] of agricultural produce in the yards and outside the markets and sub-markets in the market area; 1[(iia) provide facilities such as clearly demarcated adequate space commensurate with demand for direct sale by the producers to consumers for domestic consumption and not for subsequent sale or processing in such manner on such terms, as may be prescribed.]
   • (iii) grant or refuse licences to market functionaries and renew, suspend or cancel such licences;
   • (iv) supervise the conduct of the market functionaries;
   • (v) regulate the opening, closing and suspending of trading in the yards;
   • (vi) enforce the conditions of the licences;
   • (vii) regulate the making, carrying out and enforcement or cancellation of agreements of sales, the weighment, delivery, payment and all other matters relating to the marketing of notified agricultural produce;
   • (viii) Provide for the settlement of all disputes between the seller and the buyer arising out of any kind of transaction connected with the marketing of notified agricultural produce and all matters ancillary thereto;
   • (ix) collect, maintain and disseminate information in respect of production, sale, storage, processing, prices and movement of notified agricultural produce;
   • (x) take all possible steps to prevent adulteration of goods and promote grading and standardization of the notified agricultural produce;
   • (xi) take measures for maintenance of market stability, by prevention of over- trading and thus decreasing the local risk attendant upon the business of selling and buying notified agricultural produce;
   • (xii) levy, take, recover and receive rates, charges, fees and other sums of money to which the market committee is entitled; 1[(xiii) contribute to the Floor Price Scheme and Raita Sanjeevini Accidental Insrurance Scheme at such rate as may be determined by the Director of Agriculture Marketing]

¹ Inserted by Act 19 of 1969 w.e.f.1.5.1968

² Inserted by Act 35 of 1986 w.e.f.17.6.1986

¹ Inserted by Act 17 of 1980 w.e.f.19.5.1975

¹ Substituted by Act 17 of 1980 w.e.f.19.5.1975

¹ Inserted by Act 20 of 2014 w.e.f.28.02.2014

16 . Inserted by Act 8 of 2001 w.e.f.24.1.2001.

1[(xiv) set up and promote public private partnership in management of market yards or market sub yards;

1. (xv) promote public private partnership for carrying out extension activities in its area viz., collection, maintenance and dissemination of information in respect of production, sale, storage, processing, value addition, prices and movement of notified agricultural produce.] 2[(xvi) to make contribution to the Market Development Assistance Fund constituted under section 64-D”.]

¹ Inserted by Act 23 of 2007 w.e.f.16.8.2007.

² Inserted by Act 21 of 2024 w.e.f.07.03.2024.

1. (b) a market committee may,-
   • (i) regulate the entry of persons and vehicular traffic into the yard 1[vesting in the market committee] ;
   • (ii) prosecute persons for violating the provisions of this Act, the rules and the bye-laws and compound such offences;
   • (iii) acquire, hold and dispose of any moveable or immoveable property for the purpose of efficiently carrying out its duties;
   • (iv) impose penalties on persons who contravene the provisions of this Act, the rules or the bye-laws or the orders or directions issued under this Act, the rules or the bye-laws by the market committee, its Chairman or by any officer duly authorised in this behalf:
   • (v) institute or defend any suit, action, proceeding, application or arbitration and compromise such suit, action, proceeding, application or arbitration;
   • (vi) provide facilities such as provision of adequate space for direct sales by a producer and assist a producer by preparing invoices and bills on his behalf when he sells his produce to a trader without employing a commission agent. 1[(vii)provide facilities for processing and packaging.] 1[(viii)grant loans to the State Agricultural Marketing Board or other market committees.] 1[(viii-a)grant loan to the Co-operative marketing or Agricultural Co-operative Processing Societies and any other co-operative society dealing in notified agricultural produce within the market area, having regard to their requirement of working capital in respect of transactions relating to the notified agriculture produce, and subject to such terms and conditions as may be prescribed; (viii-b) with the prior approval of the Director of Agricultural Marketing contribute shares to the Co-operative Marketing or Agricultural Co-operative Processing Societies established within the market area and dealing in notified agricultural produce; (viii-c) with the prior approval of the Director of Agricultural Marketing take such steps as are necessary to arrange through Co-operative Societies, for purchase, sale, storage or transport of agricultural produce or for such other matters during the period of disruption of functioning in the market yard or sub-market yard due to strike of any market functionary; (viii-d) so far as the surplus market fund at its disposal will allow and with the approval of the Director of Agricultural Marketing provide within the market area any infrastructural facilities as may be prescribed for the benefit of the users of the market;]

¹ Inserted by Act 19 of 1969 w.e.f.1.5.1968

¹ Inserted by Act 14 of 1976 w.e.f.24.1.1976

¹ Inserted by Act 17 of 1980 w.e.f.19.5.1975

1.Clauses (viii-a) to (viii-d) inserted by Act 16 of 1991 w.e.f.1.4.1994

2[

1[(ix)x x x] ]

1[(x) provide such short term advances as may be prescribed to producer- sellers in the market area on pledge of notified agricultural produce in favour of the market committee.]

² Omitted by Act 16 of 1991 w.e.f. 1.4.1994

1. Clauses (x) and (xi) Inserted by Act 35 of 1986 w.e.f.17.6.1986

¹ Inserted by Act 6 of 1988 w.e.f.19.11.1987

1[(xi) with the prior approval of the State Government donate funds to any Agricultural University to impart instructions in Agricultural Engineering and Research.]

• • (xii)
• • See footnote below section 10 **63A.

** See footnote below Section 61

more sub-committees from among its members consisting of not less than two and not more than five members for the purpose of reporting or giving opinion on any matter referred to it by the market committee.]

¹ Substituted by Act 16 of 1991 w.e.f.1.8.1991

Subject to the provisions of this Act and rules, it shall be the duty of a private market yard licencee,- (a) to provide in the private market yard the necessary infrastructure facilities for making purchases from the growers of notified agricultural produce and for storage, for sale under the conditions of licence granted to him and as per the procedure prescribed; (b) to levy and collect registration fees, other charges for the services rendered and utilities provided to the sellers, buyers and all other functionaries registered with or using the private market yard not exceeding such amount as may be prescribed.

1. (a) to provide in the private market yard the necessary infrastructure facilities for making purchases from the growers of notified agricultural produce and for

storage, for sale under the conditions of licence granted to him and as per the procedure prescribed;

1. (b) to levy and collect registration fees, other charges for the services rendered and utilities provided to the sellers, buyers and all other functionaries registered with or using the private market yard not exceeding such amount as may be prescribed.

The following shall be credited into the said fund, namely:-

1. (i) such percentage of service charges as may be notified by the Director of Agricultural Marketing collected by the person who has established the farmer consumer market;
2. (ii) contributions collected through market committees towards floor price scheme under section 63(2)(a)(xiii);
3. (iii) contributions from the State Government;
4. (iv) contributions by the Central Government; and
5. (v) from any other sources.

1. (2) The Managing Director of Agricultural Marketing Board shall operate the Revolving Fund which shall be kept or invested in a Scheduled bank and shall apply the fund for the purpose specified in section 64C.
2. (3) The Accounts relating to the revolving fund shall be prepared annually and

audited by the State Accounts Department. Such audited accounts shall be submitted to the

Application of the revolving fund.- (1) Subject to the provision of this Act and rules made thereunder, the fund shall be utilized for the purpose of,-

1. (i) implementation of floor price scheme; and
2. (ii) for purchase of notified agricultural produce at minimum support price. Explanation.- (1) For the purpose of this section, “Floor price scheme” means the scheme formulated by the State Government, by order, to protect the interest of farmers against the distress sale of notified agricultural produce by assuring a minimum support price.

1. (2) “Minimum support price” means the minimum support price fixed by the State Government for purchase of notified agricultural produce (other than the commodities with reference to which minimum support price is fixed by the Government of India) due to fall in market price. While fixing the minimum support price, the State Government may take the following factors into consideration, namely:-
   • (a) price of the notified agricultural produce;
   • (b) cost of production of such notified agricultural produce;
   • (c) recommendation of a technical expert committee, if any, appointed by the State Government for this purpose;
   • (d) fair average quality of the commodity;
   • (e) reasonable profit margin to the producer.
   • (f) such other factors as may be ordered by the Government in the scheme.]

1. Sections 64A, 64B & 64C inserted by Act 23 of 2007 w.e.f.16.8.2007.

1[64-D. Establishment of Market Development Assistance Fund.- (1) The State Government shall establish a fund called as the Market Development Assistance Fund. The Agricultural Produce Market Committees shall remit to the said fund not less than 5% of revenue collected from market fee and license fee, before 15 th of every month.

1. (2) The Market Development Assistance Fund shall be administered by a committee consisting of the following members, namely:–
   • (i) The Minister for Agricultural Marketing Ex-officio Chairperson
   • (ii) The Secretary to Government, Department of Co- operation Ex-officio Member
   • (iii) The Secretary to Government, Finance Department Ex-officio Member
   • (iv) The Director, Agricultural Marketing and Ex- Officio Managing Director of the Karnataka State Agricultural Marketing Board Ex-officio Member Secretary
2. (3) The Managing Director of the Karnataka State Agricultural Marketing Board shall operate the said fund which shall be kept or invested in a Scheduled Bank.
3. (4) The accounts relating to the fund shall be prepared annually and audited by the State Audit and Accounts Department. Such audited accounts report shall be submitted to the State Government for approval. 64-E. Application of Market Development Assistance Fund.- (1) Subject to the provisions of this Act and rules made thereunder, the Market Development Assistance Fund may be utilized for the purpose of development of market yards of financially weak Agricultural Produce Marketing Committees: Provided that, the Fund may be utilized for any flagship program as suggested by the Chairman.
4. (2) Such weak Agricultural Produce Marketing Committees shall submit project reports seeking financial assistance for undertaking the development of market yards in their jurisdiction, to the Committee as under sub-section (2) of section 64-D.
5. (3) Administrating Committee while selecting the financially weak Agricultural Produce Marketing Committees seeking assistance, shall take into account the factors like trade potentiality, availability of resources with the Agricultural Produce Marketing Committee, backwardness of the region, location of the market and the impact on the trade after development etc.]

1. Section 64D & 64E Inserted by Act 21 of 2024 w.e.f.07.03.2024

2[(1) x x x]

¹ Substituted by Act 24 of 1975 w.e.f.19.5.1975.

² Omitted by Act 17 of 1980 w.e f. 28.9.1978.

1. (2) The market committee shall levy and collect market fees from every buyer in respect of agricultural produce bought by such buyer in the market area, at such rate as may be specified in the bye-laws 1[(which shall not be more than two rupees per one hundred rupees of the value of such produce bought except in case of livestock where the market fee shall not be more than 2[five rupees per head] of cattle other than sheep or goat, and in the case of sheep or goat such fee shall not be, more than 2[one rupee per head] )] in such manner and at such times as may be specified in the bye-laws. 3[Provided that in the case of any co-operative society doing business in agricultural produce within a market yard, market fee shall be levied and collected at the rate of eighty per cent of the market fee payable under this Act.] 1[Provided further that, if on any agricultural produce market fee has already been levied and collected under sub-section (2) in any market area within the State and such agricultural produce is processed and sold in any other market area within the State or

¹ Substituted by Act 4 of 1982 w.e.f.4.11.1981

² Substituted by Act 16 of 1991 w.e.f.1.8.1991

³ Inserted by Act 16 of 1991 w.e.f.1.8.1991

exported out side the State it shall be exempted from the levy of market fee.

1[Provided also that in case of a buyer in a spot exchange established by a licencee or a licencee for direct purchase of notified agricultural produce or a contract farming sponsor buying from a contract forming producer, market fee shall be levied and collected at the rate of seventy percent of the market fee payable under this Act.] 2[

Provided also that in case of any private markets established under section 72A of the Act, market fee shall be levied and collected at the rate of thirty three percent of market fee payable under this Act, provided that no market fee is leviable on flowers, fruits and vegetables. Instead the Market committee may collect user charges in respect of the above articles, user charges for such services provided by the Market Committee from the buyer of the produce at such rates as may be specified in the bye-laws as approved by the Director of Agricultural Marketing ]2

¹ Inserted by Act 23 of 2007 w.e.f.16.8.2007

² Inserted by Act 05 of 2014 w.e.f.04.01.2014

Explanation: Nothing in this proviso shall apply to,-

1. (i) any processed agricultural produce imported from out side the State and sold in any market area within the State ; or
2. (ii) any agricultural produce imported or caused to be imported by any person either on his own account or as an agent for another person, from out side the State into any market area within the State for the purpose of processing or manufacturing except for one's own domestic consumption.]

¹ Inserted by Act 22 of 2004 w.e.f. 17.5.2004

1[(2A) The market fee payable under this section shall be realised as follows, namely:-

1. (i) if the produce is sold through a commission agent, the commission agent 2[shall] realise the market fee from the purchaser and shall be liable to pay the same to the committee; 3[(ia) if the produce is sold by an importer to the purchaser, the importer shall realise the market fee from the purchaser and shall be liable to pay the same to the committee;]
2. (ii) 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;
3. (iii) if the produce is purchased by a trader from another trader, the trader selling the produce 2[shall] realiste it from the purchaser and shall be liable to pay the market fee to the committee; and
4. (iv) in any other case of sale of such produce, the purchaser shall be liable to pay the market fee to the committee.]

¹ Inserted by Act 4 of 1982 w.e.f.19.5.1975

² Substituted by Act 35 of 1986 w.e.f.17.6.1986

³ Inserted by Act Act 35 of 1986 w.e.f.17.6.1986

1[(2B) The market fee payable under clauses (i), (ia), (ii) or (iii) of sub-section (2A) shall be paid to the market committee within such time as may be specified in the bye-laws. ]

¹ Inserted by Act 35 of 1986 w.e.f.17.6.1986

2[(3) Notwithstanding anything contained in this Act, if any market committee in the State has already levied and collected market fee under sub-section (2) from a buyer in respect of any agriculture produce as may be specified by the State Government by notification, no market fee shall be levied and collected again in respect of such agricultural produce by any other market committee in the State

² Omitted by Act 17 of 1980 w.e.f. 19.5.1975 and again Inserted by Act 10 of 2001 w.e.f. 7.4.2001

³ Omitted by Act 23 of 2007 w.e.f.16.8.2007

3[XXX] subject to production of such proof as may be prescribed for having collected the market fee] ] 1. Section 65 has been Substituted by Act 24 of 1975 w.e.f.19.5.1975

1[(4) Notwithstanding anything contained in this Act, no market fee is payable for a period of five years by a New Agricultural produce Processing Industries in respect of purchases of agricultural produce by such Processing Industries, in accordance with the Industrial policy of the Government vide Government Order CI 319 SPI 2005, dated 26 th August 2006.] 1. Subsection (4) inserted by Act 23 of 2007 w.e.f.16.8.2007

1[Provided that the existing processing industries who undertake expansion/ modernization/diversification shall also be exempted from payment of market fee, for a period of five years from the date of the commencement of the Karnataka Agricultural Produce Marketing (Regulation and Development)(Amendment) Act, 2011 subject to the following conditions, namely:-

1. (a) a minimum investment of fifty percent of the earlier investment on fixed assets has to be made;
2. (b) the increased production compared to the average of the production made in the previous three years qualifies for exemption under expansion programme;
3. (c) raw material used for production of new product other than existing one will be considered for diversification programme;
4. (d) the existing units which have replaced all the old machineries with the modern machineries under the modernization programme shall be exempted from payment of market fee on the total raw material purchases for processing capacity only;
5. (e) a certificate issued by the Director of Industries and commerce, Government of Karnataka or his nominee certifying that he has fulfilled the above conditions and he is eligible for exemption of fee shall be produced.]

¹ Inserted by Act 18 of 2011 w.e.f.06.04.2011.

1[(5) No market fee shall be payable for a period of five years, four years and three years from the date of the commencement of the Karnataka Agricultural Produce Marketing (Regulation and Development) (Amendment) Act, 2011, in case of new agricultural produce processing industries and existing processing industries who undertake expansion/modernization/ diversification in Zone-1, 2 and 3 respectively as identified under Karnataka New Industrial Policy 2009-2014, published in Government Order No. CI/223/SPI/2008, dated 28.02.2009, on the purchases of agricultural produce as specified in Sl. No.II, III, IV, VI, VII, IX and X of the Schedule appended to the Act directly from farmers, subject to the following conditions, namely:-

1. (i) A minimum investment of fifty percent of the earlier investment on fixed assets has to be made under expansion/modernization/diversification projects.
2. (ii) The increased production compared to the average of the production made in the previous three years qualifies for exemption under expansion program.
3. (iii) Raw material used for production of new product other than the existing one shall be considered for diversification programme.
4. (iv) The existing units, which have replaced all the old machineries with the modern machineries under the modernization programme shall be exempted from payment of market fee on the total raw material purchases for processing capacity only.
5. (v) a certificate issued by the Director of Industries and commerce, Government of Karnataka or his nominee certifying that he has fulfilled the above conditions and he is eligible for exemption of fee shall be produced.]

¹ Inserted by Act 18 of 2011 w.e.f.06.04.2011.

1[(6) Notwithstanding anything contained in this Act, no market fee is payable for a period of ten years by new agricultural produce processing industries,-

1. (a) in respect of purchases of agricultural produce by such processing industries in accordance with the Integrated Karnataka Agri-Business Development Policy-2011 of the Government published in the Governament Order No. AHD 172 AFT 2010, dated: 05.03.2011;
2. (b) on any agricultural produce exported or caused to be exported by any person either on his own account or as an agent for another person from the market area to outside the country; Subject to the production of a certificate issued by the Director of industries and commerce, Government of Karnataka certifying that he is eligible for exemption of fee.] 2[Provided that, no market fee is payable by new agricultural produce processing industries identified under Karnataka New Industrial Policy 2009-14, who have gone into production between the period from 06-04-2011 to 16-03-2013 in respect of purchase of agricultural produce for the extended/ balance period under Integrated Agri-Business Development Policy-2011 as announced in the Karnataka Industrial Policy 2014-19, subject to the production of a certificate issued by the Director of Industries and Commerce, Government of Karnataka, to the effect that the unit is eligible for exemption of fee.] 2[(7) Notwithstanding anything contained in this Act, no market fee is payable for a period of ten years by new agricultural produce processing industries in respect of purchases of agricultural produce by such industries in accordance with the Karnataka Agri-Business and Food Processing Policy-2015 of the Government published in the Government Order No. AGD 94 AMS 2015, dated: 11.12.2015, subject to the production of a certificate issued by the Director of Industries and Commerce, certifying that he is eligible for exemption of fee.]

¹ Inserted by Act 38 of 2013 w.e.f.16.03.2013.

² Inserted by Act 51 of 2020 w.e.f. 01.12.2020

Where a person fails to pay the market fee payable by him under clause (i), clause (ia), clause (ii) or clause (iii) of sub- section (2A) of section 65, to the market committee on or before the due date, the 2[market committee shall] in addition to the fee as payable, 3[x x x] , impose a penalty on such person at such rates not exceeding thirty per cent of the fee due but not less than twelve per cent of the fee due as may be specified in the bye-laws.] 1. Inserted by Act 35 of 1986 w.e.f.17.6.1986 2. Substituted by Act 29 of 1987 w.e.f.10.8.1987 3. Omitted by Act 16 of 1991 w.e.f.1.8.1991

2[market committee shall] in addition to the fee as payable,

3[x x x] , impose a penalty on such person at such rates not exceeding thirty per cent of the fee due but not less than twelve per cent of the fee due as may be specified in the bye-laws.]

¹ Inserted by Act 35 of 1986 w.e.f.17.6.1986

² Substituted by Act 29 of 1987 w.e.f.10.8.1987

³ Omitted by Act 16 of 1991 w.e.f.1.8.1991

(1) Any officer or servant of the

2[State Government empowered by it] in this behalf, may, for purposes of this Act, require any person carrying on business in any kind of notified agricultural produce to produce before him the accounts and other documents and to furnish any information relating to the stocks of such agricultural produce, or purchases, sales and deliveries of such agricultural produce by such person and also any other information relating to payment of the market fees by such person.

1. (2) All accounts and registers maintained by any person in the ordinary course of business in any notified agricultural produce and documents relating to the stock of such agricultural produce or purchases, sales and deliveries of such agricultural produce in his possession and the offices, establishments, godowns, vessels or vehicles of such person shall be open to inspection at all reasonable times by such officers and servants 3[x x x] as may be authorised by the state Government in this behalf.
2. (3) If any such officer or servant has reason to suspect that any person is attempting to evade the payment of any market fee due from him under section 65, or that any person has

purchased any notified agricultural produce in contravention of any of the provisions of this

Act or the rules, or the bye-laws in force in the market area, he may for reasons to be recorded in writing, seize such accounts, registers or documents of such person as may be necessary, and shall grant a receipt for the same and shall retain the same only so long as may be necessary for examination thereof or for a prosecution.

1. (4) For purposes of sub-section (2) or sub-section (3), such officer or servant may enter or search any place of business, warehouse, office, establishment, godown, vessel or vehicle where such officer or servant has reason to believe that such person keeps or for the time being keeps any accounts, registers or documents of his business, or stocks of notified agricultural produce relating to his business.
2. (5) The provisions of 1[section 100 of the Code of Criminal Procedure, 1973 (Central Act 2 of 1974)] shall, so far as may be , apply to a search under sub-section (4).
3. (6) Where any books of account or other documents are seized from any place and there are entries therein making reference to quantity, quotations, rates, receipt or payment of money or sale or purchase of goods, such books of account or other documents shall be admitted in evidence without witness having to appear to prove the same, and such entries shall be prima facie evidence of the matters, transactions and accounts purported to be therein recorded. 4[(7) If such officer or servant has reason to suspect that any person is attempting to evade payment of any market fee due from him under section 65, he may, while seizing accounts, registers or documents under sub-section (3) also seize so much of the notified agricultural produce as in his opinion would be sufficient to meet the amount of fee which

may be found due from such person and also the penalty leviable under section 65A, and retain the same with him until the fee and the penalty are paid or for ten days, whichever is earlier. After the expiry of the period of ten days if the fee or other amount due is not paid, the officer or servant shall dispose of the notified agricultural produce in public auction and adjust the sale proceeds towards the fee or other amount due. If the sale proceeds are more than the fee or other amount due, the excess amount shall after deducting the charges incurred by the market committee, be refunded in the prescribed manner:

¹ Substituted by Act 17 of 1980 w.e.f. 30.6.1979.

² Substituted by Act 35 of 1986 w.e.f.17.6.1986.

³ Omitted by Act 35 of 1986 w.e.f.17.6.1986.

Provided that in the case of perishable notified agricultural produce the officer or servant may dispose of the same before the expiry of the period of ten days if in his opinion such disposal is necessary.]

⁴ Inserted by Act 35 of 1986 w.e.f.17.6.1986.

(1) At any time when so required by any officer or servant of

1[the State Government empowered by it in this behalf]

, the driver or any other person in charge of any vehicle, vesssl or other conveyance, which is taken

1[out of the market area or moving in] shall stop the vehicle, vessel, or other conveyance, as the case may be, and keep it stationary as long as may reasonably be necessary, and allow such officer or servant to examine the contents in the vehicle, vessel or other conveyance and inspect all records relating to the notified agricultural produce carried, and give his name and address and the name and address of the owner of the vehicle, vessel or other conveyance and of the owner of the notified agricultural produce carried in such vehicle, vessel or other conveyance.

1[(2) If such officer or servant has reason to suspect that any fee or other amount due under this Act has not been paid in respect of the notified agricultural produce taken out of or being transported in, the market area in any vehicle, vessel or other conveyance, he may seize so much of the notified agricultural produce as in his opinion would be sufficient to meet the amount of fee or other amount due and retain the same with him until the fee or other amount due is paid or for ten days, whichever is earlier. After the expiry of the period of ten days, if the fee or other amount due is not paid, the officer or servant shall dispose of the notified agricultural produce in public auction and adjust the sale proceeds towards the fee or other amount due. If the sale proceeds are more than the fee or other amount due, the excess amount shall, after deducting the charges incurred by the market committee, be

may dispose of the same before the expiry of the period of ten days if in his opinion such disposal is necessary.]

¹ Substituted by Act 35 of 1986 w.e.f.17.6.1986

(1) A market committee may with 1[the prior approval of the Director of Agricultural Marketing borrow money from the Board or a Scheduled Bank or any other public finance institutions] required for carrying out the purposes for which it is established on the security of any property vested in it and of any fees leviable by it under this Act.

2[(2) x x x

1. (3) x x x]

¹ Substituted by Act 16 of 1991 w.e.f. 1.8.1991.

² Omitted by Act 16 of 1991 w.e.f. 1.8.1991.

4, the market committee

1[or the Board] or the State Government is of opinion that any land is needed for the purposes of this Act, the State Government may, proceed to acquire it under the provisions of the Land Acquisition Act, 1894:

Provided that once a proposal is made by the market committee

not be withdrawn by it except for such reasons as may be approved by the State Government:

2[Provided further that if the local authority concerned is unable to provide land or other facilities for establishment or development of rural shandies, the State Government may acquire land for that purpose.]

1. (2) When such land vests in the State Government, it shall be transferred by the State Government to the market committee 1[or the Board]

on payment by the market committee

1[or the Board]

of the compensation awarded under the Land Acquisition Act, 1894, within such period and in such manner as the State Government may, by general or special order, determine, and on such transfer, the land shall vest in the market committee

¹ Inserted by Act 35 of 1986 w.e.f.17.6.1986.

² Inserted by Act 16 of 1991 w.e.f.1.8.1991.

1[or the Board] .

(1) The market committee 1[or any officer or servant

person who has committed or is reasonably suspected of having committed an offence (other than such offences as may be prescribed) against this Act or the rules or bye-laws, by way of composition of such offence,-

1. (a) where the offence consists of the failure to pay or the evasion of any fee, or other amount recoverable under this Act or the rules or the bye-laws, in addition to the fee or other amount so recoverable, a sum of money not exceeding five hundred rupees or 2[three times the amount] of the fee or other amount whichever is greater; and
2. (b) in other cases, a sum of money not exceeding five hundred rupees.

1. (2) On the composition of any offence under sub-section (1), no proceeding shall be taken or continued against the person concerned in respect of such offence, and if any proceedings in respect of that offence have already been instituted against him in any court the composition shall have the effect of his acquittal.

¹ Inserted by Act 35 of 1986 w.e.f.17.6.1986

² Substituted by Act 35 of 1986 w.e.f.17.6.1986

A market committee may write off any amount (other than market fee) whatsoever due to it, whether under a contract or otherwise, or any amount payable in connection therewith if in its opinion such amount is irrecoverable: Provided that the market committee shall before writing off any such amount, obtain the sanction of,- (i) the Director of Agricultural Marketing, if the amount exceeds five hundred rupees but does not exceed five thousand rupees; (ii) the State Government, if the amount exceeds five thousand rupees;] 1. Substituted by Act 16 of 1991 w.e.f.1.8.1991

1. (i) the Director of Agricultural Marketing, if the amount exceeds five hundred rupees but does not exceed five thousand rupees;
2. (ii) the State Government, if the amount exceeds five thousand rupees;]

¹ Substituted by Act 16 of 1991 w.e.f.1.8.1991