Chapter VII REGULATION OF TRADING

(1) Subject to the provisions of this Act and the rules made in this behalf, a market committee may 2[on an application made by any person in such form as may be prescribed and] , after making such inquiries as it deems fit grant or renew a licence for the use of any place in the market area for the sale of the notified agricultural produce or for operating therein as a 3[x x x] commission agent, broker, processor, weighman, measurer, surveyor, warehouseman or any other market functionary in relation to the marketing of agricultural produce; or may, after recording its reasons in writing therefor, refuse to grant or renew any such licence. (2) Licences may be granted under sub-section (1), in such forms for such periods on such terms and conditions and restrictions (including provision for prohibiting brokers and commission agents from acting in any transaction both as buyer or seller or on behalf of both the buyer and seller, and also provision for prohibiting brokers from acting in any transaction, 1[x x x] for prescribing the qualifications and disqualifications of licensees, the circumstances in which licences may be refused, suspended or cancelled and prescribing the manner in which and the places at which auctions of agricultural produce shall be conducted and the delivery of agricultural produce shall be made in any market or market area) and on payment of fees not being in excess of such maxima, as may be prescribed. (3) The market committee or its Chairman, if so authorised by the committee, may grant a temporary licence for a period of not more than one month to any 3[x x x] not ordinarily resident in the market area to operate in the market yard or sub-yard on payment of such fee as may be fixed by the market committee subject to the condition that he shall not purchase any agricultural produce except by payment of the price in cash. 1. Omitted by Act 35 of 1986 w.e.f.17.6.1986. 2. Inserted by Act 16 of 1991 w.e.f.1.4.1994. 3. Omitted by Act 05 of 2014 w.e.f.04.01.2014. 4[(4) The Director of Agricultural Marketing or the Officer authorised by him may grant a trader license in such manner and in such form as may be prescribed to operate as trader in any of Agricultural Produce Marketing Committee yards/private markets in the State. The existing licensee shall obtain a fresh trader licence within a period of six months from the date of commencement of the Karnataka Agricultural Produce Marketing (Regulation and Development) (Second Amendment) Act, 2013] 4. Inserted by Act 05 of 2014 w.e.f.04.01.2014.

2[on an application made by any person in such form as may be prescribed and] , after making such inquiries as it deems fit grant or renew a licence for the use of any place in the market area for the sale of the notified agricultural produce or for operating therein as a

3[x x x]

commission agent, broker, processor, weighman, measurer, surveyor, warehouseman or any other market functionary in relation to the marketing of agricultural produce; or may, after recording its reasons in writing therefor, refuse to grant or renew any such licence.

1. (2) Licences may be granted under sub-section (1), in such forms for such periods on such terms and conditions and restrictions (including provision for prohibiting brokers and commission agents from acting in any transaction both as buyer or seller or on behalf of both the buyer and seller, and also provision for prohibiting brokers from acting in any transaction, 1[x x x] for prescribing the qualifications and disqualifications of licensees, the circumstances in which licences may be refused, suspended or cancelled and prescribing the manner in which and the places at which auctions of agricultural produce shall be conducted and the delivery of agricultural produce shall be made in any market or market area) and on payment of fees not being in excess of such maxima, as may be prescribed.
2. (3) The market committee or its Chairman, if so authorised by the committee, may grant a temporary licence for a period of not more than one month to any 3[x x x] not ordinarily resident in the market area to operate in the market yard or sub-yard on payment

of such fee as may be fixed by the market committee subject to the condition that he shall not purchase any agricultural produce except by payment of the price in cash.

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

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

³ Omitted by Act 05 of 2014 w.e.f.04.01.2014.

4[(4) The Director of Agricultural Marketing or the Officer authorised by him may grant a trader license in such manner and in such form as may be prescribed to operate as trader in any of Agricultural Produce Marketing Committee yards/private markets in the State. The existing licensee shall obtain a fresh trader licence within a period of six months from the date of commencement of the Karnataka Agricultural Produce Marketing (Regulation and Development) (Second Amendment) Act, 2013]

⁴ Inserted by Act 05 of 2014 w.e.f.04.01.2014.

(1) No person shall,-

1. (a) establish, a private market yard; or
2. (b) purchase notified agricultural produce directly from an agriculturist; or
3. (c) establish a farmer consumer market; unless he possess a valid licence issued under the provisions of this Act or rules made thereunder.

1. (2) Subject to such conditions and such fees as may be prescribed, the Director of Agricultural Marketing or any other officer authorised by him may grant a licence for purchase or sale of notified agricultural produce by establishing private market yards or to purchase notified agricultural produce directly from the agriculturist in one or more market area for the purpose of, -
   • (a) processing of the notified agricultural produce; 1[(b) establish a Direct Purchase Center to purchase notified agricultural produce directly from an agriculturist; or]
   • (c) export of notified agricultural produce;
   • (d) grading, packing and transaction in other way by value addition of notified agricultural produce.

¹ Substituted by Act 05 of 2014 w.e.f.04.01.2014

1. (1) Subject to such conditions and such fees as may be prescribed, the Director of

Agricultural Marketing or any other officer authorised by him, may grant licence to establish farmer - consumer market in the market area.

1. (2) Farmer - consumer market may be established by any person in any place in the

market area by developing infrastructure as may be prescribed. At such place producers of notified agricultural produce may sell their produce directly to the consumer: Provided that the consumer shall not purchase more than such quantity of a notified agricultural produce at a time in the farmer - consumer market as may be specified by the Director of Agricultural Marketing in the notification from time to time.

1. (3) The person who has established the Farmer - Consumer Market may collect service charges as may be specified in the notification issued by the Director of Agricultural

Grant /Renewal of licence of private market yard and farmer-consumer market.- (1) Any person who,-

1. (a) under section 72A desires to purchase notified agricultural produce directly from the agriculturist or wishes to establish a private market yard; or
2. (b) under section 72B desires to establish farmer-consumer market in one or more in the market area; shall apply to the Director of Agricultural Marketing or authorised officer for grant or renewal of licence, as the case may be, in the manner and for the period, as may be prescribed.

1. (2) Along with every such application for licence, fee prescribed shall be deposited.
2. (3) Application received under sub-section (1) for grant or renewal of licence may be

accepted or rejected for reasons recorded in writing by the concerned authority, as the case may be. No licence shall be granted to an applicant, where,-

1. (i) the market committee dues are outstanding against the applicant;
2. (ii) the applicant is a minor or not bonafide;
3. (iii) the applicant has been declared defaulter under the Act and rules and bye- law made thereunder;
4. (iv) the applicant having been declared guilty in any criminal case and convicted by imprisonment;
5. (v) the concerned authority is satisfied that the applicant don’t possess the

market yard or farmer -consumer market; or

1. (vi) for any other reasons as the licencing authority deems appropriate.

1. (4) All the licences granted or renewed under this section shall be subject to provisions of this Act or rules made thereunder.

(1) Subject to the provisions of sub- section (3), the Director of Agricultural Marketing or authorised officer who has issued licence under section 72C

1[or section 72 (4)]

as the case may be, for the reasons to be communicated to the licence holder in writing, suspend or cancel, licence,-

1. (a) if the licence has been obtained through willful misrepresentation or fraud; or
2. (b) if the holder of the licence or any servant or anyone acting on his behalf with his (licence holder’s) expressed or implied permission, commits a breach of any of the terms or conditions or licence;
3. (c) if the holder of the licence himself or in combination with other licence holder commits any act or abstains from carrying on his normal business in the market area with the intention of willfully obstructing, suspending or stopping the marketing of notified agricultural produce in the private market yard/sub market yard and in consequence whereof the marketing of any notified agricultural produce has been obstructed, suspended or stopped;
4. (d) if the holder of the licence has become an insolvent;
5. (e) if the holder of the licence incurs any disqualification, as may be prescribed; or
6. (f) if the holder of the licence is convicted of any offence under this Act then within one year of the conviction if the conviction is for the first time and within three years for subsequent conviction.

1. (2) Notwithstanding anything contained in sub-section (1), but subject to the provisions of sub-section (3), the Director of Agricultural Marketing may, for the reasons to be communicated in writing to the licence holder, by order suspend or cancel his/its licence granted or renewed by the authorised officer: Provided that no order under this sub-section shall be made without intimation to the authorised officer.
2. (3) No licence shall be suspended or cancelled under this section without giving a reasonable opportunity of being heard to its holder to show cause against such suspension or cancellation. .

¹ Inserted by Act 05 of 2014 w.e.f.04.01.2014

(1) Any person aggrieved by an order of the Director of Agricultural Marketing or authorised officer, be passed under sections 72C and 72D, as the case may be, prefer an appeal,-

1. (a) to the Director of Agricultural Marketing, where such order is passed by the authorised officer within thirty days of receipt of the order; and
2. (b) to the Karnataka Appellate Tribunal, where such order is passed by the Director of Agricultural Marketing within thirty days of receipt of the order, in such manner, as may be prescribed.

1. (2) The Appellate Authority, if it considers it necessary so to do, grant a stay of the order appealed against for such period as it may deem fit.
2. (3) The order passed by the Director of Agricultural Marketing or the authorised officer shall, subject to the order in the appeal under this section, be final.]

1. Sections 72A, 72B, 72C, 72D & 72E inserted by Act 23 of 2007 w.e.f.16.8.2007.

(1) Subject to the provisions of sub- section (4), a market committee may, for reasons to be recorded in writing, suspend or cancel a licence,-

1. (a) if the licence has been obtained through wilful misrepresentation or fraud;
2. (b) if the holder thereof or any servant or any one acting on his behalf with his express or implied permission, commits a breach of any of the terms or conditions of the licence;
3. (c) if the holder of the licence in combination with other holders of licences commits any act or abstains from carrying out his normal business in the market with the intention of wilfully obstructing, suspending or stopping the marketing of agricultural produce in the market area, in consequence whereof the marketing of any produce has been obstructed, suspended or stopped;
4. (d) if the holder of the licence has become an insolvent ; 2[(dd) if the holder of the licence fails to pay the market fee due along with the penalties specified in the bye-laws;] 4[(de) if the holder of licence fails to pay the price to the producer seller immediately after sale;]
5. (e) if the holder of the licence incurs any disqualification as may be prescribed; or
6. (f) if the holder is convicted of any offence under this Act.

1. (2) (a) Subject to the provisions of sub-section (4), the Chairman of a market committee may, for reasons to be recorded in writing, suspend a licence for a period of not more than one month for any reason for which a market committee may suspend a licence under sub-section(1).
   • (b) Subject to the provisions of sub-section (4), the Secretary of a market

committee may, for reasons to be recorded in writing, suspend a licence for a period of not more than one week for any reason for which a market committee may suspend a licence under sub-section(1).

1. (3) Notwithstanding anything contained in sub-section (1), but subject to the provisions of sub-section (4), the 1[Director of Agricultural Marketing] may, for reasons to be recorded in writing, by order suspend or cancel any licence granted or renewed under this Chapter: Provided that no order under this sub-section shall be made without notice to the market committee.

3[or any other person likely to be affected, as the case may be]

1. (4) No licence shall be suspended or cancelled under this section, unless the holder thereof has been given a reasonable opportunity to show cause against such suspension or cancellation.

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

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

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

⁴ Inserted by Act 16 of 1991 w.e.f.1.8.1991

1. (a) of the market committee refusing to grant or renew a licence, or cancelling a licence, or suspending any licence may, within thirty days from the date on which the order is communicated to him, appeal to the 3[Director of Agricultural Marketing] ;
2. (b) of the Chairman 4[x x x] suspending any licence may, within seven days from the date on which the order is communicated to him, appeal to the market committee; 5[(bb) of the Secretary suspending any licence may within seven days from the date on which the order is communicated to him, appeal to the Chairman;]
3. (c) of the 3[Director of Agricultural Marketing] cancelling or suspending a licence may, within thirty days from the date on which the order is communicated to him, appeal to the State Government.

2[(d) of the

3[Director of Agricultural Marketing]

under sections 9 and 61, may, within sixty days from the date on which the order is communicated to him, appeal to the

6[State Government.] ]

5[(1A) Any appeal under sub-section (1) pending before the Government, or the Market Committee as against the order of the Secretary shall, on the date of commencement of the Karnataka Agricultural Produce Marketing (Regulation) and Certain other Laws (Amendment) Act, 1991 stand transferred respectively to the Karnataka Appellate Tribunal and the Chairman and such appeal shall be decided by it or him as if it had been filed before it or him.]

1[(1-B) Any appeal under sub-section (1) pending before the Karnataka Appellate Tribunal on the date of commencement of the Karnataka Agricultural Produce Marketing (Regulation and development) (Amendment) Act, 2009 shall stand transferred to the State Government and such appeal shall be decided by it as if such appeal had been filed before it.]

1. (2) The 3[Director of Agricultural Marketing] , the market committee 7[ 1[the State Government] 3[or the Chairman] ] , as the case may be shall, on such appeal, make such order as he or it deems just and proper. Act 18 of 2010 w.e.f.16.4.2010.

¹ Substituted by Act 17 of 1980 w.e.f.3.11.1979.

² Inserted by Act 17 of 1980 w.e.f.3.11.1979

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

⁴ Omitted by Act 16 of 1991 w.e.f.1.8.1991

⁵ Inserted by Act 16 of 1991 w.e.f.1.8.1991.

⁶ Substituted by Act 16 of 1991 w.e.f.1.8.1991 and again Substituted by

⁷ Substituted by Act 18 of 2010 w.e.f. 16.04.2010.

(1) Subject to such deductions, if any as are authorized to be deducted according to this Act or the rules or the bye-laws or under any other law for the time being in force, by way of,- (i) fees; (ii) market charges; (iii) taxes; and (iv) the advances, if any, on the goods made as evidenced by authentic vouchers with interest which shall not be more than the rates charged by the Scheduled Banks if any, due thereon; the price of the goods sold in the market yard and outside the market or the sub- market in the market area shall be paid to the seller by the buyer in cash or cheque, immediately after the sale except in a case where a commission agent, if any, agrees in writing, in the form prescribed by the bye-laws, to give delivery to the buyer on credit of a term which shall in no case exceed the maximum period of credit prescribed by the bye-laws, if any. (2) In case buyer does not make payment under sub-section (1), he shall be liable to make additional payment at the rate of one percent per day of the total price of the notified agricultural produce payable to the seller within five days. (3) In case buyer does not make payment with additional payment to the seller under sub-section (1) and (2) above, within five days from the day of such purchase his licence or registration as the case may be shall be deemed to have been cancelled on the sixth day and he shall not be registered or granted any licence or permitted to operate in any market area within the State under this Act for a period of one year from the date of such cancellation.] 1. Substituted by Act 23 of 2007 w.e.f.16.8.2007.

1. (i) fees;
2. (ii) market charges;
3. (iii) taxes; and
4. (iv) the advances, if any, on the goods made as evidenced by authentic vouchers with interest which shall not be more than the rates charged by the Scheduled Banks if any, due thereon; the price of the goods sold in the market yard and outside the market or the sub- market in the market area shall be paid to the seller by the buyer in cash or cheque, immediately after the sale except in a case where a commission agent, if any, agrees in writing, in the form prescribed by the bye-laws, to give delivery to the buyer on credit of a term which shall in no case exceed the maximum period of credit prescribed by the bye-laws, if any.

1. (2) In case buyer does not make payment under sub-section (1), he shall be liable to make additional payment at the rate of one percent per day of the total price of the notified agricultural produce payable to the seller within five days.
2. (3) In case buyer does not make payment with additional payment to the seller under sub-section (1) and (2) above, within five days from the day of such purchase his licence or registration as the case may be shall be deemed to have been cancelled on the sixth day and he shall not be registered or granted any licence or permitted to operate in any market area within the State under this Act for a period of one year from the date of such cancellation.]

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

The sale price of notified agricultural produce sold in the market area shall be determined either by tender system or by public auction or by open agreement or by sample or by reference to a known standard or in such other manner as may from time to time be directed, with the previous approval of the

1[Director of

Agricultural Marketing] , by the market committee.

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

2[Provided that in respect of any private market yard, or in case of direct purchase of notified agricultural produce by a licencee under section 72C, the price determination shall be in such manner as may be directed by the Director of Agriculture Marketing from time to time.]

² Inserted by Act 23 of 2007 w.e.f.16.8.2007.

Every licensed trader who buys notified agricultural produce shall at such time enter in to a written agreement with the seller in such form as may be prescribed by the bye-laws. The agreement shall be executed in triplicate, of which one copy shall be retained by the buyer, one copy shall be retained by the seller and the third copy shall be submitted to the market committee for record. *77A.

• • See foot note below section 10 **

(1) A commission agent shall recover his commission only from the buyer at such rates not exceeding two percent of the price, for which the agricultural produce is sold as may be specified in the bye-laws:

Provided that in the case of agricultural produce like fruits, vegetables and flowers, a commission agent may charge commission at such rates not exceeding five percent of the price for which such agricultural produce is sold as may be specified in the bye-laws.

1. (2) A commission Agent shall,-
   • (a) arrange for the storage of the goods of the seller;
   • (b) keep the goods of the seller in safe custody and adequately insured against fire, theft or flood, rain or any other natural calamites; and
   • (c) pay the seller in cash the price of the goods as soon as such goods are sold.]

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

** See foot note section 61 and foot note below section 10

In case the commission agent does not make payment under clause (c) of sub-section (2) of section 78, he shall be liable to make additional payment at the rate of one percent per day of the total price of the notified agricultural produce payable to the seller within five days, failing which his licence or registration as the case may be shall, liable to be cancelled on the sixth day and he shall not be registered or granted any licence or permitted to operate operate in any market area within the State under this Act for a period of one year from the date of such cancellation.] 1. Inserted by Act 23 of 2007 w.e.f.16.8.2007 1[78-B. Responsibility of Warehouse service provider.- (1) A warehouse service provider shall receive his service charge only from the buyer of the notified agricultural produce which shall not exceed five percent of the price for which such notified agricultural produce is sold in respect of fruits, vegetables, flowers and two percent in all other notified produce. (2) A warehouse service provider,- (i) shall arrange for the safe custody of the goods of the seller and storage of notified agricultural produce and adequately insure against fire, theft, flood, rain or any other natural calamities; (ii) shall provide for fire fighting arrangements, electronic weighment and facilities for e- trading, assaying facilities, quality certification, display of prices of commodities in the markets and other facilities to be provided as notified by the Director of Agricultural Marketing; and (iii) A warehouse service provider shall make arrangements for pledge loan facility. (3) In case the payment of price is not made under section 78 of the Act, A warehouse service provider shall be liable to make additional payment at the rate of one percent per day of the total price of the notified agricultural produce payable to the seller within five days, failing which the declaration of the warehouse for the purpose of warehouse based sales shall be cancelled.] 1. Inserted by Act 19 of 2025 w.e.f. 25.03.2025

78, he shall be liable to make additional payment at the rate of one percent per day of the total price of the notified agricultural produce payable to the seller within five days, failing which his licence or registration as the case may be shall, liable to be cancelled on the sixth day and he shall not be registered or granted any licence or permitted to operate operate in any market area within the State under this Act for a period of one year from the date of such cancellation.]

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

1[78-B. Responsibility of Warehouse service provider.- (1) A warehouse service provider shall receive his service charge only from the buyer of the notified agricultural produce which shall not exceed five percent of the price for which such notified agricultural produce is sold in respect of fruits, vegetables, flowers and two percent in all other notified produce.

1. (2) A warehouse service provider,-
   • (i) shall arrange for the safe custody of the goods of the seller and storage of notified agricultural produce and adequately insure against fire, theft, flood, rain or any other natural calamities;
   • (ii) shall provide for fire fighting arrangements, electronic weighment and facilities for e- trading, assaying facilities, quality certification, display of prices of commodities in the markets and other facilities to be provided as notified by the Director of Agricultural Marketing; and
   • (iii) A warehouse service provider shall make arrangements for pledge loan facility.
2. (3) In case the payment of price is not made under section 78 of the Act, A warehouse service provider shall be liable to make additional payment at the rate of one percent per day of the total price of the notified agricultural produce payable to the seller within five days, failing which the declaration of the warehouse for the purpose of warehouse based sales shall be cancelled.]

¹ Inserted by Act 19 of 2025 w.e.f. 25.03.2025

(1) No market functionary shall solicit or receive remuneration for his services by way of commission, fees, charges or in any other form except as prescribed by the rules or bye-laws.

1. (2) No commission agent and no other market functionary shall solicit or receive, recover or collect market charges or fees or taxes from any person other than those permissible under this Act or the rules or bye-laws or under any other law for the time being in force.
2. (3) No market functionary shall solicit, receive, recover or collect any contribution in cash or in kind for any function, or for any religious, educational or charitable purpose from a producer or seller with whom he operates as a market functionary.

All market charges payable after the sale of the agricultural produce shall be recovered from the buyer.]

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

(1) No market functionary and no other person shall make, give, allow, receive or recover any deductions in weight or payment or any other allowance in respect of any transaction relating to notified agricultural produce other than those provided in this Act, the rules or the bye-laws; and no civil court shall, in any suit or proceeding arising out of any such transaction, entertain or allow any claim for any deduction or allowance not so provided for. (2) For the purpose of sub-section (1), the following deductions shall be deemed to be permissible deductions, namely:- (i) deduction of the weight of the container where the price fixed according to the bye- laws or the standing orders of the market committee relates only to the goods contained in the container and either a separate price is fixed for the container or the container is to be retained by the seller or the container is made of such material and is of so negligible value that it is permitted to be delivered to the buyer without payment of any price in accordance with the bye-laws or the standing orders of the market committee; (ii) deduction in weight on account of driage of raw produce as shall be fixed by the bye-laws or standing orders of the market committee, where according to such bye-laws or the standing orders, the produce is required to be weighed and the weight recorded as soon as it is entrusted to the commission agent for sale and there is no likelihood of the produce being sold on the same day on which it is so entrusted; (iii) deduction in weight or price, on account of deviation from sample or known standard, made in accordance with the decision of the authority entrusted with settlement of disputes under this Act, where the purchase is made by sample or by reference to a known standard; (iv) deduction in weight or price, on account of the detection of adulteration not readily detectable on customary examination made in accordance with the decision of the authority entrusted with settlement of disputes under this Act. (3) The 1[Director of Agricultural Marketing] shall ensure that deductions under clause (i) of sub-section (2) are uniform in alll the market areas in the State in respect of similar types of containers and that deductions under clause (ii) of sub-section (2) do not materially vary in markets located in areas with similar climatic conditions. 1. Substituted by Act 35 of 1986 w.e.f.17.6.1986

1. (2) For the purpose of sub-section (1), the following deductions shall be deemed to be permissible deductions, namely:-
   • (i) deduction of the weight of the container where the price fixed according to the bye- laws or the standing orders of the market committee relates only to the goods contained in the container and either a separate price is fixed for the container or the container is to be retained by the seller or the container is made of such material and is of so negligible value that it is permitted to be delivered to the buyer without payment of any price in accordance with the bye-laws or the standing orders of the market committee;
   • (ii) deduction in weight on account of driage of raw produce as shall be fixed by the bye-laws or standing orders of the market committee, where according to such bye-laws or the standing orders, the produce is required to be weighed and the weight recorded as soon as it is entrusted to the commission agent for sale and there is no likelihood of the produce being sold on the same day on which it is so entrusted;
   • (iii) deduction in weight or price, on account of deviation from sample or known standard, made in accordance with the decision of the authority entrusted with settlement of disputes under this Act, where the purchase is made by sample or by reference to a known standard;
   • (iv) deduction in weight or price, on account of the detection of adulteration not readily detectable on customary examination made in accordance with the decision of the authority entrusted with settlement of disputes under this Act.
2. (3) The 1[Director of Agricultural Marketing] shall ensure that deductions under clause
   • (i) of sub-section (2) are uniform in alll the market areas in the State in respect of similar types of containers and that deductions under clause (ii) of sub-section (2) do not materially vary in markets located in areas with similar climatic conditions.

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

Every licensed trader, commission agent, ginner, presser, processer, warehouseman, importer, exporter, stockiest and any other market functionary operating in the market area

1[except the licencee of a private market and farmer - consumer markets]

shall maintain accounts in such manner and submit to the market committee or to the officer specified by the committee in this behalf such periodical reports and returns at such times and in such forms as may be prescribed by the rules or bye-laws or as the market committee may by standing orders from time to time direct.

1[Provided that if the market functionary fails to file the returns within the stipulated time, the market committee shall impose a penalty which shall not be less than rupees one thousand but shall not exceed rupees five thousand.]

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

Every private market licencee, licencee for direct purchase and farmer – consumer market licencee shall maintain accounts in such manner and submit to the Director of Agricultural Marketing or to the officer authorised by him in this behalf, such periodical reports and returns in such forms as specified by the Director of Agricultural Marketing from time to time: Provided that if the licencee specified above fails to file the returns within the stipulated time, the Director of Marketing shall impose a penalty which shall not be less than rupees one thousand but shall not exceed rupees five thousand.]

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

Every market functionary shall render such assistance in the collection and the prevention of the evasion of payment of fees or

market committee.

No market functionary shall without giving a notice of not less than seven days to the market committee, participate in any demonstration or strike.] 1. Inserted by Act 35 of 1986 w.e.f.17.6.1986

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

(1) If any market functionary fails to send any report or return in accordance with the provisions of section 81, or if the committee considers it necessary to examine the account books relating to the business of any market functionary to satisfy itself about the correctness of any report or return submitted by him or for any other sufficient reason, the market committee may direct such functionary to produce before it or before any officer specified by it in this behalf, the account books and other relevant books and documents, for inspection, and to explain the contents thereof.

1. (2) If any market functionary fails, without sufficient cause to comply with the direction of the market committee under sub-section (1), the market committee may, without prejudice to any other action against such functionary, after such inquiry as may be prescribed, direct him to pay such amount as may be prescribed by the bye-laws as penalty to the committee.

(1) If a market functionary fails to submit reports and returns under section 81 and fails to comply with any notice by the market committee, the market committee may, without prejudice to any other action against such functionary, after such inquiry as it deems necessary assess the market fee payable by such market functionary during the period in question to the best of its judgement and direct him to pay such fee together with such penalty not exceeding three times the market fee so assessed. (2) Any market functionary aggrieved by an order of the market committee under sub- section (1) may, within thirty days from the date of communication of such order appeal to the Director of Agricultural Marketing or an officer authorised by him in this behalf whose decision is final.] 2[(3) No appeal under sub-section (2) shall be entertained by the Director of Agricultural Marketing unless it is accompanied by satisfactory proof for having deposited the amount in question with the Market Committee concerned.] 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. (2) Any market functionary aggrieved by an order of the market committee under sub- section (1) may, within thirty days from the date of communication of such order appeal to the Director of Agricultural Marketing or an officer authorised by him in this behalf whose decision is final.] 2[(3) No appeal under sub-section (2) shall be entertained by the Director of Agricultural Marketing unless it is accompanied by satisfactory proof for having deposited the amount in question with the Market Committee concerned.]

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) For the purpose of settling disputes between producers, buyers and sellers, or their agents, including any disputes regarding the quality or weight of, or payment for, any agricultural produce, or any matter in relation to the regulation of marketing, of agricultural produce in the

1[market yard, market sub yard or sub market-yard, as the case may be] the market committee of that area shall appoint a panel of arbitrators periodically consisting of agriculturists, traders and commission agents, and constitute a Disputes Committee from among its members in such manner as may be prescribed.

1. (2) Rules shall be made regulating the procedure for settlement of disputes, the authority or authorities for settling the disputes and appeals from the decisions of such authorities, payment of fees by parties for settlement of disputes, by an arbitrator or arbitrators and all other matters connected with such settlement including the extent to which the provisions of the Arbitration Act, 1940, shall be applicable to arbitrations under this section. ` (3) Subject to the rules made under sub-section (2), a market committee may make bye-laws regulating the details in respect of settlement of disputes relating to transactions in notified agricultural produce in the market area.
2. (4) Notwithstanding anything contained in any law, no suit or other legal proceeding shall be entertained by any court in respect of disputes referred to in sub-section (1), without the previous sanction of the market committee.

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

private market licensee, licensee for direct purchase or farmer-consumer market licensee.- (1) Any dispute between the producer, buyer, seller and the private market licensee, licensee for direct purchase, farmer-consumer market licensee shall be referred to the Director of agricultural marketing or any subordinate officer authorised by him in this regard. The Director of Agricultural Marketing or the authorised officer shall resolve the dispute after giving both parties a reasonable opportunity of being heard, in the manner as may be prescribed.

1. (2) Any person aggrieved by the order of such officers under sub-section (1) may appeal to the Karnataka Appellate Tribunal within thirty days from the date of communication of the order.] *

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

(1) No trader shall buy or take delivery of any goods from any commission agent on credit and no trader's licence shall be granted to any person who intends to buy or take delivery of goods from commission agents on credit unless he has deposited with or furnished to, the market committee cash security or a bank guarantee of not less than rupees one thousand. (2) No licenced trader shall buy or take delivery of goods, from licenced commission agents in the yard so as to remain indebted to such agents on account of the purchases of goods to such an extent as the security or guarantee deposited or furnished by him falls short of such percentage as shall be provided in the bye- laws which shall not be less than one percent of the aggregate amount of the indebtedness arising out of such credit purchases.] *. See foot note below section 61 *86. Security by commission agents.- (1) No person shall act as a commission agent and no commission agent's licence shall be granted to any person unless he has deposited with or furnished to the market committee cash security or a bank guarantee of 1[not less than one thousand rupees but not exceeding five thousand rupees as may be specified in the bye laws.] • See footnote below section 61 2[(2) x x x] 1. Substituted by Act 29 of 1987 w.e.f.10.8.1987 1. Substituted by Act 35 of 1986 w.e.f.17.6.1986 2. Omitted by Act 35 of 1986 w.e.f.17.6.1986

1. (2) No licenced trader shall buy or take delivery of goods, from licenced commission agents in the yard so as to remain indebted to such agents on account of the purchases of goods to such an extent as the security or guarantee deposited or furnished by him falls short of such percentage as shall be provided in the bye- laws which shall not be less than one percent of the aggregate amount of the indebtedness arising out of such credit purchases.] *. See foot note below section 61 *86. Security by commission agents.- (1) No person shall act as a commission agent and no commission agent's licence shall be granted to any person unless he has deposited with or furnished to the market committee cash security or a bank guarantee of 1[not less than one thousand rupees but not exceeding five thousand rupees as may be specified in the bye laws.]
   • • See footnote below section 61 2[(2) x x x]

¹ Substituted by Act 29 of 1987 w.e.f.10.8.1987

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

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

The cash security deposited by a trader or commission agent shall not form part of the Market Fund but shall be deposited by the market committee in such bank situated in the place where the office of the market committee is located, as the trader or commission agent may specify. The amount of security shall be deemed to have been enhanced to the extent of the interest credited by the bank in respect of the security held in deposit.

(1) The security deposited or a bank guarantee furnished by a licensee under section 85 or 86 shall be liable to forfeiture by the market committee for any default made by the licensee in payment of any money payable by him to the market committee

functionary under this Act or the rules or bye-laws made thereunder.

1. (2) The security deposited a bank guarantee furnished by a licensee under section 85 or 86 shall be subject to a first charge in favour of the market committee for all sums due to the committee by the licensee.
2. (3) (a) The security deposited or a bank guarantee furnished by a trader shall be subject to a second charge in favour of such of the commission agents as the trader shall be indebted to in respect of the credit purchases, for the total amount of such indebtedness.
   • (b) The security deposited or a bank guarantee furnished by a commission agent, shall be subject to a second charge in favour of such of the principals as the commission agent shall be indebted to in respect of the sales of their goods, for the total amount of such indebtedness.
3. (4) The bank guarantee furnished by the licensee under section 85 or 86 shall be unconditional and the amount guaranteed by the bank or part thereof as the market committee may demand shall be payable to the market committee on demand. No other kind of bank guarantee shall be accepted by the market committee under sections 85 and 86.
4. (5) Subject to the provisions of this Act and the rules and bye-laws, the cash security deposit made by any trader or commission agent with the market committee shall be refunded to him within twelve months from the date of his ceasing to be a licensee, if the market committee is satisfied that there are no liabilities due by the depositor either to the

market committee or to any of the creditors who have a second charge on such deposit in respect of the transactions for which the security is deposited.

1. (6) The security amount deposited or bank guarantee furnished shall be deemed to be held in trust for the purposes for which it is made and shall not be used or utilised for any

purpose of the market committee, nor shall it be liable to levy of attachment or execution by any court or other authority for any other purpose.

1. (7) The market committee may make bye-laws to carry out the purposes of sub- sections (1), (2), (3), (4), and (5).

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

(1) A market committee and its Chairman shall have the power by order to impose the penalties of censure and fine on any market functionary or 1[seller] for contravention of any bye-law, after giving the person concerned a reasonable opportunity to be heard: Provided that the market committee shall not be competent to impose fine exceeding 1[one hundred] rupees and the Chairman shall not be competent to impose fine exceeding 1[twenty-five] rupees. (2) An appeal against an order under sub-section (1) shall lie to the 1[Director of Agricultural Marketing] or such officer sub-ordinate to him as he may specify, within such period as may be prescribed. 1. Substituted by Act 35 of 1986 w.e.f.17.6.1986

1[seller] for contravention of any bye-law, after giving the person concerned a reasonable opportunity to be heard: Provided that the market committee shall not be competent to impose fine exceeding

1[one hundred] rupees and the Chairman shall not be competent to impose fine exceeding

1[twenty-five] rupees.

1. (2) An appeal against an order under sub-section (1) shall lie to the 1[Director of Agricultural Marketing] or such officer sub-ordinate to him as he may specify, within such period as may be prescribed.

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