Seedsman
Association, Hyderabad & Ors Vs. Principal Secretary to Govt., A.P. &
Ors [2004] Insc 90 (10
February 2004)
S. Rajendra
Babu & G.P. Mathur.
(Arising
out of SLP (C) No. 20787 of 2000) With Civil Appeal Nos.905,906,907-908,909 of
2004 (Arising out of SLP (C) Nos.10024/2001, 1107/2001, 4252-4253/2001 and
7685/2001) Civil Appeal Nos.8499/2001 G.P. MATHUR, J.
Leave
granted.
These
appeals by special leave have been preferred against the common judgment and
order dated 27.9.2000 of a Division Bench of Andhra Pradesh High Court by which
a batch of writ petitions were disposed of with certain directions.
2. We
will state the facts of Special Leave Petition (Civil) No.20787 of 2000. Seedsman
Association, Hyderabad and two other seed companies filed
writ petition under Article 226 of the Constitution impleading the Principal
Secretary to Government, Agricultural Department, Director-cum- Commissioner of
Agriculture Marketing Committee, Hyderabad and 16 Agricultural Market Committees of some Districts in the State of
Andhra Pradesh as respondents. The main prayer
made in the writ petition is that the action of the respondents especially
those of respondent nos.3 to 18 in compelling petitioner nos.2 and 3 to pay
market fee under Section 7 of the Andhra Pradesh (Agricultural Produce and
Livestock) Markets Act, 1966 be declared as illegal and arbitrary and the same
may be set aside.
3. In
the affidavit filed in support of the writ petition, it is averred that Seedsman
Association, Hyderabad is an Association registered under
the Societies Act for looking after the interest and welfare of the members who
are organizing seed production, processing and marketing seeds under the
provisions of Seeds Act, 1966 and the Seeds (Control) Order, 1983. From the
date of sowing the Breeder/Foundation seeds, the petitioners' responsibility is
to procure the seeds produced according to the procedure laid down in the
Indian Minimum Seed Certification Standards, 1988, which are not meant for
human consumption but for the exclusive purpose of sowing only. It is further
averred that the members of the petitioner association procure the special kind
of seeds though they are produced from agricultural land. Since the seeds are
not meant for direct human consumption, they do not fall within the definition
of the "consumer seeds" as notified under the Andhra Pradesh
(Agricultural Produce and Livestock) Markets Act, 1966 (hereinafter referred to
as "the Act"). After exchange of affidavits, the High Court disposed
of a bunch of writ petitions by the common judgment and order dated 27.9.2000
and the operative portion of the order reads as under :
(1)
That all such items like paddy, wheat, maize, bajra, cotton seed, sunflower,
safflower, jowar, etc., covered by this batch of writ petitions, which are
specified in the Scheduled-II appended to the A.P. (Agricultural Produce and
Livestock) Markets Act, 1966 whether sold in original form i.e. edible or
converted form i.e. chemically processed into non-edible form (seeds for
germination purposes), within the precincts of notified market area/market
yard, are exigible to the levy of market fee.
(2)
That such seeds like Tomato and castorseeds, which are derivatives of the main
produce, but are sold separately and which are not specified in the Schedule-II
annexed to A.P. (Agricultural Produce and Livestock) Markets Act, 1966, cannot
be made liable to the levy and collection of market fee.
(3)
That such items specified in Schedule II referred to above which suffered the
payment of market fee in an Agricultural Market Committee, shall not again be
subjected to payment of market fee in any other Agricultural Market Committee,
within the State of Andhra Pradesh, if the proof of such payment is furnished
to the authority concerned.
(4)
That the petitioners shall now submit the accounts to the respective committees
within a period of one month from today, whereupon the respective Agricultural
Market Committees shall make assessment of the market fee payable and within
one month of the service of the said assessment orders, the petitioners shall
pay off the said amounts; and
(5)
That henceforth, the petitioners shall be liable to comply the provisions of
A.P. (Agircultural Produce and Livestock) Markets Act, 1966 in their dealings
in items covered by paragraph (1) above, within the market areas/market yards
and failure to do so will render them liable for the consequences under the
said Act.
4.
Learned counsel for the appellants has submitted that the Parliament has
enacted the Seeds Act, 1966 to provide for regulating the quality of certain
seeds for sale and for matters connected therewith and this Act makes detailed
provisions for regulating sale of seeds of notified kinds and varieties.
Besides the aforesaid enactment, the Central Government has in exercise of
power conferred by Section 3 of the Essential Commodities Act made the Seeds
(Control) Order, 1983, which provides for licensing of dealers in seeds,
besides appointment of Inspectors and taking of samples and analysis of seeds
meant for sale or export. These statutory provisions and Control Order, it is
submitted, deal with every aspect of the sale and purchase of seeds and,
therefore, the vary same activity cannot come within the purview of Andhra
Pradesh (Agricultural Produce and Livestock) Markets Act, 1966. Learned counsel
for the respondents has submitted that the aforesaid Act has been enacted to
consolidate and amend the law relating to the regulation of purchase and sale
of agricultural produce, livestock and products of livestock and the establishment
of markets in connection therewith. The Act has been enacted with reference to
Entry 28 of State List of Seventh Schedule of the Constitution, namely,
"Markets and Fairs". The purpose and object of Seeds Act, 1966
enacted by the Parliament and the Seeds (Control) Order, 1983 made by the
Central Government is entirely different, namely, to maintain the quality of
seeds meant for sale. The Act, on the other hand, regulates the actual trade in
seeds so that the producer gets the proper price and the grower may get the
proper quality of seed having regard to the price paid by him. Learned counsel
has submitted that Section 2(i) defines "agricultural produce" and it
means anything produced from land in the course of agriculture or horticulture
and includes forest produce or any produce of like nature either processed or
unprocessed and declared by the Government by notification to be agricultural
produce for the purposes of the Act and therefore seeds will be fully covered
by the provisions of the Act. It is urged that seeds are produced from land in
the course of agriculture or horticulture and, therefore, the State Government
is fully competent to issue a notification under Section 3 of the Act and the
appellants are liable to pay market fee.
5. The
Preamble of the Seeds Act, 1966 shows that it has been enacted to provide for
regulating the quality of certain seeds for sale and for matters connected
therewith. The provisions of the Act show that the Central Government has to
constitute a Central Seed Committee and establish a Central Seed Laboratory. It
can, by notification in the official gazette, declare notified kinds or
varieties of seeds, specify the minimum limits of germination and purity with
respect to any seed of any notified kind or variety and also the mark or label
to indicate that such seed conforms to the minimum limits of germination and
purity specified. This Act enjoins establishment of a Seed Certification Agency
for the State to carry out the functions entrusted to the certification agency
and any person selling, keeping for sale or offering to sell or otherwise
supplying any seed of any notified kind or variety may apply to the
certification agency for the grant of certificate for the purpose. This Act
further provides for appointment of Seed Analysts and Seed Inspectors. Section
7 of this Act enjoins that no person shall carry on the business of sale,
keeping for sale, offering to sell or otherwise supplying seed of any notified
kind or variety unless the same is identifiable as to its kind or variety,
conforms to the minimum limit of germination and period specified under Section
6 and the container of such seeds bears, in the prescribed manner, the mark or
label containing the correct price thereof and complies with such other requirements
as may be prescribed. The Seeds (Control) Order, 1983 lays down that no person
shall carry on the business of selling, exporting or importing seeds, except
and in accordance with the terms and conditions of licence granted to him under
the Order. The dealer of seeds has to display in his place of business details
of opening and closing stock of different varieties of seeds held by him and
also a list indicating the prices thereof. The Seeds (Control) Order also
empowers the State Government to appoint Inspectors who are authorised to draw
samples of seeds meant for sale or export or seeds imported and send the same
to laboratory to ensure that the sample conforms to the standards of quality
claimed.
6. In
the counter-affidavit filed on behalf of the respondents, it is asserted that
the plea of the writ petitioners that the seeds produced by them is not an
agricultural produce since it is not fit for human consumption, is not correct
and is specifically denied. It is averred that the seeds purchased or sold by
the writ petitioners do not change their productivity, originality and
characteristics and as they are grown from land in the course of agriculture or
horticulture, they are fully covered by the provisions of the Act.
7. We
have given our careful consideration to the submissions made by learned counsel
for the parties. There are two decisions of this Court touching upon the
controversy in hand. The first one is State of Rajasthan v. Rajasthan Agricultural Input Dealers Association AIR
1996 SC 2179. In this case, the High Court took the view that when foodgrains
of particular varieties were treated and subjected to chemical process for
preservation, those grains become commercially known as "seeds". If,
however, a dealer was found dealing in foodgrains under the garb of seeds, the
authorities were not precluded from prosecuting the offender in a criminal
Court. The judgment of the High Court was upheld on the following premise :
"It
is undoubtedly true that foodgrains per se could be used as seeds for being
sown and achieving germination, but in that form they retain the dual utility
of being foodgrains as well as seeds. By process of coating and applying
insecticides, other chemicals and poisonous substance to the foodgrain meant to
be utilised as seeds, one of its basic character, i.e. its consumption as food
by human beings or animals or for extraction for the like purpose, gets
irretrievably lost and such processed seeds become a commodity distinct from foodgrains
as commonly understood. That distinction was borne in mind by the High Court in
allowing the writ petition of the respondents, and in our view rightly."
8. A
similar controversy has recently been examined again by this Court in Krishi Utpadan
Mandi Samiti v. Pilibhit Pantnagar Beej Ltd. JT 2003(9) SC 548. The High Court
allowed the writ petition of the respondent company, namely, Pilibhit Pantnagar
Beej Ltd. and issued a writ of mandamus restraining the Agriculture Market
Committee from interfering in the business of the Company in certified seeds
and from demanding and realizing market fee on the transaction of unprocessed
or processed certified seeds. The case set up by the company was that the
business of the company is to purchase 'breeder seeds' from Agricultural
Research Institute and thereafter to produce 'certified seeds'. The first step
of production is to distribute this breeder seeds to the listed and scheduled
farmers. The breeder seeds are sown and are germinated under strict supervision
of the statutory Seeds Certification Agency, set up under the Seeds Act, 1966 .
The harvest is selected carefully under supervision of the Agency. The lots
which do not conform to specifications are rejected. The standardized seeds so
obtained are called 'Foundation Seeds'. These foundation seeds are thereafter
again supplied to the listed farmers variety-wise with intimation to the
Agency. The farmers sow these foundation seeds which are also supervised by the
Agency. This crop is thus germinated under strict supervision of the Agency and
the lots rejected are not taken back by farmers. After harvesting the approved
standardized certified seeds, the lots are fumigated for preservation and the samples
of each lot is tested in the laboratories of Seeds Certification Agency. The
rejected lots and losses at processing are returned to farmers only after the
foundation seeds are certified as conforming to specifications, the lots are
subjected to treatment with insecticides (Cell phose, Quick phose) and
pesticides (thiram and barastin) at the time of packing. The company had filed
certificates issued by the Seeds Certification Agency and other relevant
documents to show that they are not dealing in sale and purchase of foodgrains
or wheat but only in certified seeds and that the stock stored by them were not
of wheat but of certified seeds of wheat under the supervision of the U.P.
Seeds Certification Agency. Having regard to the material produced by the
company it was held that as the wheat seed converted into certified seed is
unfit for human consumption, the levy of market fee is not permissible.
9. The
writ petitioner no.1 in the writ petition filed before the High Court
(Appellant no.1 in this Civil Appeal) is Seedsman Association, Hyderabad. No details regarding the members
of the Association have been given. The only fact stated in the affidavit is
that the petitioner association is a society registered under the Societies Act
formed for looking after the interests and welfare of the members who are
organizing seed production and processing and marketing the seeds. No details
of the activity being carried on by the members of the association have been
given. The writ petition and the affidavit filed in support thereof is
conspicuously silent about the nature and variety of the seeds allegedly being
produced by them and the method or process being adopted in production of
seeds. There is no averment that the seeds in which the members of the
petitioner association are dealing have been certified by the Seeds
Certification Agency of the State Government. The averment in the affidavit
filed in support of the writ petition that "it is from the date of sowing,
the Breeder/Foundation seeds, the petitioner's responsibility is to procure the
seeds produced according to the procedure laid down in the Indian Minimum Seed
Certification Standards, 1988, .." is not only vague but also shows that
the petitioners themselves do not produce seeds but they in fact procure seeds
produced by someone else. Who is the producer of seeds and what steps have been
taken by such producer to ensure the quality of the seeds is not disclosed.
Similarly, there is no clear averment that on account of application of
insecticides or chemicals and poisonous substances, the basic character of the
article, namely, its consumption as food by human beings or animals is
irretrievably lost and that such commodity is distinct from foodgrains.
10. In
view of the fact that the writ petition is very vague and necessary details of
the commodity and the manner of its production in which the members of the writ
petitioner no.1 (Association) claim to be dealing have not been given, it is
not possible to arrive at the necessary factual finding that the foodgrains
meant to be utilised as seeds has irretrievably lost its basic character i.e.
its consumption as food by human beings or animals or for extraction for the
like purpose and that such processed seeds have become a commodity distinct
from foodgrains as commonly understood.
Similar
is the case of the other connected appeals. It is, therefore, not possible to
give any relief to the appellants in the present appeals.
11.
For the reasons mentioned above, the appeals are dismissed. It is, however,
made clear that this order will not preclude the members of the appellant no.1
(Association) or other appellants from seeking appropriate relief in fresh
proceedings, which may be instituted in accordance with law.
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