Full Judgment Text
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CASE NO.:
Appeal (civil) 6301 of 2001
PETITIONER:
Krishi Utpadan Mandi Samiti Pilibhit & Ors.
RESPONDENT:
Pilibhit Pantnagar Beej Ltd. & Anr.
DATE OF JUDGMENT: 28/11/2003
BENCH:
S.B. Sinha
JUDGMENT:
J U D G M E N T
S.B. Sinha, J.
The core question involved in this appeal is as to whether ‘seed’
would come within the purview of the expression ‘Wheat’ within the
meaning of the provisions of U.P. Krishi Utpadan Mandi Samiti Adhiniyam
(’The Act’). The Act was enacted to curb the malpractices in the old
markets. Mandi Samitis are established under Section 12 thereof. The
Mandis are entitled to collect market fee on the sale and purchase of
agricultural produce in terms of Section 17 of the Act.
Agricultural produce is defined in Section 2(a) of the Act to mean
:
"2(a) Agricultural produce means such items of
produce of agriculture, horticulture,
viticulture, apiculture, sericulture,
pisciculture, animal husbandry or forest as are
specified in the schedule and includes admixture
of two or more of such items and also includes
any such item in processed form and further
includes gur, rab, shakkar, khandsari and
jaggary."
Section 2(y) defines trader to mean :
"’Trader’ means a person who in the ordinary
course of business is engaged in buying or
selling agricultural produce as a principal or
as a duly authorized agent of one or more
principals and includes a person, engaged in
processing of agricultural produce."
It is not in dispute that the respondents are engaged in
production and sale of ’seeds’ which is governed by a Parliamentary Act
known as the ’Seeds Act, 1966’ (1966 Act). The entire process
beginning from procurement of seeds breeder, further production thereof
as well as sale is governed by 1966 Act and Rules framed thereunder and
Seed Control Order 1983. The preamble of the 1966 Act suggests that the
same was enacted with a view to monitor the production and sale of
seeds. The purport and object of enacting the 1966 Act was to bring
green revolution in the country as would appear from the following
statement of objects and reasons thereof:-
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"In the interest of increased agricultural
production in the Country, it is considered
necessary to regulate the quality of certain
seed, such as seeds of food crops, cotton seeds
etc., to be sold for purposes of agriculture
(including horticulture).
The methods by which the Bill seeks to achieve
this object are -
(a) Constitution of a Central Committee
consisting of representatives of the
Central Government and the State
Government, the National Seeds Corporation
and other interests to advise those
Governments on all matters arising out of
the proposed Legislation;
(b) fixing minimum standards of germination,
purity and other quality factors;
(c) testing seeds for quality factors at the
seed testing laboratories to be
established by the Central Government and
the State Government;
(d) Creating of seed inspection and
certification service in each State and
grant of licences and certificates to
dealers in seeds;
(e) Compulsory labelling of seed containers
to indicate the quality of seeds offered
for sale, and
(f) restricting the export import and inter-
State movement of non-descript seeds."
Section 2(11) of the Seeds Act defines seeds to mean :
"Seed means any of the following classes of
seeds used for sowing or planting :
(i) seeds of food crops including edible oil-
seeds and seeds of fruits and vegetables;
includes seedings, and tubers and bulbs,
rhizomes, roots, cutting, all topes of
grafts and other vegetatively propagated
material, of food crops or cattle
fodder".
The definition of ’seeds’, therefore, is not exhaustive.
It is not in dispute that the entire process for procurement of
‘breeder seeds’ to sale of ‘seeds’ is governed under the provision of
the Seeds Act as well as the rules framed thereunder.
Wheat is an agricultural produce within the meaning of Section
2(a) which together with thirteen other food products have been placed
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under the heading "cereals".
The Act contains both penal and fiscal provisions. A trader
within the meaning of the said Act would be a person who carries on
business inter alia in the agricultural produce. The question is as to
whether in the aforementioned situation the respondent would be a trader
of Agricultural produce within the meaning of the provisions of the said
Act. It is not disputed that ’seed’ as purchased and ’sold’ is not
meant to be used as a cereal. The respondent buys only certified seeds
and sales the same as seeds after processing the same. ’Seeds’ which are
sold by the respondent admittedly are not consumable. It is furthermore
not disputed that in terms of the licenses granted in their favour under
the 1966 Act, they are not permitted to deal in the commodities for any
other purpose.
In the State of Andhra Pradesh Vs. M/s. H. Abdul Bakhi & Bros.
(AIR 1965 SC 531), the Supreme Court held :-
"We are unable to agree with this view of the
High Court. A person to be a dealer must be
engaged in the business of buying or selling or
supplying goods. The expression ’business’
though extensively used is a word of indefinite
import; in taxing statutes it is used in the
sense of an occupation, or profession which
occupies the time, attention and labour of a
person, normally with the object of making
profit. To regard an activity as business there
must be a course of dealings, either actually
continued or contemplated to be continued with
profit motive, and not for sport or pleasure."
Yet again in Sri Krishna Coconut Co. Vs. East Godavari Coconut and
Tobacco Market Committee (AIR 1967 SC 973), this Court while considering
interpretation of Section 11 of the Madras Commercial Crops Markets Act
held :-
"The relevant provisions of the said Act and
the rules which fell for consideration by the
Supreme Court would be evident from paragraph 5
of the reported case which is in the following
terms :
Section 11(1) with which we are concerned in these appeals reads :
"The Market committee shall, subject to such
rules as may be made in this behalf, levy fees
on the notified commercial crop or crops bought
and sold in the notified area at such rates as
it may determine".
Although the dictionary meaning of business may be wide, in our
opinion, for the purpose of considering the same in the context of
regulatory and penal statute like the Act, the same must be read as
carrying on a commercial venture in agricultural produce. The rule of
strict construction should be applied in the instant case. The intention
of the legislature in directing the trader to obtain licence is
absolutely clear and unambiguous in so far as it seeks to regulate the
trade for purchase and sale. Thus a person who is not buying an
agricultural produce for the purpose of selling it whether in the same
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form or in the transformed form may not be a trader. Furthermore, it is
well known that construction of a statute will depend upon the purport
and object of the Act, as has been held in Sri Krishna Coconut’s case
(supra) itself. Therefore, different provisions of the statute which
have the object of enforcing the provisions thereof, namely, levy of
market fee, which was to be collected for the benefit of the producers,
in our opinion, is to be interpreted differently from a provision where
it requires a person to obtain a licence so as to regulate a trade. It
is now well known that in case of doubt in construction of a penal
statute, the same should be construed in favour of the subject and
against the State.
In the case of London and North Eastern Railway Company and
Berrriman, 1946 AC 278 Lord Simonds quoted with approval the following
observations of Lord Esher N. K. in the case of Tuck & Sons Vs.
Priester, (1887) 19 QBD, 629, 638. "We must be very careful in
construing that section, because it imposes a penalty. If there is a
reasonable interpretation which will avoid the penalty in any particular
case, we must adopt that construction. If there are two reasonable
construction we must give the more lenient one. That is the settled
Rule for the construction of penal sections." It is trite that fiscal
statute must not only be construed literally, but also strictly. It is
further well known that if in terms of the provisions of a penal statute
a person becomes liable to follow the provisions thereof it should be
clear and unambiguous so as to let him know his legal obligations and
liabilities thereunder.
The matter may be considered from another angle, "Expressio unius
(persone vel rei)est exclusio alterius", is a well known maxim which
means the express intention of one person or thing is the exclusion of
another. The said maxim is applicable in the instant case. [See M/s
Khemka & Co. (Agencies) Pvt. Ltd. etc. vs. State of Maharashtra etc. -
(1975) 2 SCC 22 paras 47 and 48]
Having regard to the fact that in the event it is held that
buying of seeds which is a commodity governed by a Parliamentary Act
would attract payment of market fee in terms of the said Act, a conflict
would arise. In ordinary parlance at particular stages in which seeds
are grown from breeder seeds may take the form of wheat but the said
production which is bought by the respondents is also governed by the
provisions of the Seeds Act and the Rules framed thereunder. The
definition of ’seed’ as noticed hereinbefore is of wide amplitude. It
includes seedling of food crops. It is, thus, necessary to construe both
the statutes harmoniously. Both, the Statutes must be given proper
effect and allowed to work in their respective fields. Even if there is
some over-lappings, the same should be ignored.
Taking into consideration the totality of the situation and upon
giving harmonious construction to both the 1966 Act as well as the said
Act, we are of the opinion that the respondent cannot be said to be a
trader of agricultural produce as in the ordinary course of business, he
is engaged in buying or selling agricultural produce. Once it is held
that the respondent is not a trader, no market fee can be demanded from
it by the appellant.
’Seed’ is also an essential commodity within the meaning of the
provisions of the Essential Commodities Act 1955 which has been enacted
by the Parliament in exercise of its power conferred under Entry 33 of
List III of the 7th Schedule of the Constitution of India. Further more,
if a Parliamentary Act governs the entire field, the ’seeds’ which are
bought and further seeds produced therefrom and processed upon being
governed by the Parliamentary Acts and Statutory Rules must be held to
have been excluded from the purview of the provisions of the said Act.
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The Central Government, made Foodgrains Market Restrictions
(Exemption of Seeds) Order, 1970 and Seeds Control Order, 1983 in
exercise of its power under Section 3 of the Essential Commodities Act,
1955. In terms of sub-section (2) of Section 4 of the Act, the
provisions of Section 3 of Essential Commodities Act, 1955 and the
orders made thereunder shall have effect, notwithstanding anything
inconsistent therewith contained in the said Act or in any law made
thereunder, thus, the seeds which are subject matter of not only a
Parliamentary Act but also an order made under Section 3 of Essential
Commodities Act would by necessary implication are not meant to be
included within the definition of ’agricultural produce’ under the said
Act.
Furthermore the interpretation Clauses contained in Section 2 of
the said Act is prefaced with the expressions "unless there is anything
repugnant in the subject or context".
This Court in State of Maharashtra Vs. Indian Medical Association
and Others [(2002 (1) SCC 589], inter alia, held that the expression
contained in one Statute may have to be read differently in a particular
context.
Recently in S. Samuel, M.D., Harrisons Malayalam & Anr. Vs. Union
of India & Ors. [J.T. 2003(8) SC 413], this Court has held that ’tea’
does not come within the purview of the expression ’food stuff’
contained within the meaning of the provisions of Essential commodities
Act, holding :-
"It is thus clear that in common parlance food is
something that is eaten. In a wider sense
’food’ may include not only solid substances but
also a drink. Still the fact remains that
whether a solid or a liquid, the substance called
’food’ should possess the quality to maintain
life and its growth; it must have nutritive or
nourishing value so as to enable the growth,
repair or maintenance of the body.
As the purpose for which the respondents purchase the ‘seeds’ is
not meant to be used as a ’cereal’ which is an agricultural produce
within the meaning of the provisions of the said Act, the High Court, in
our opinion, has rightly held that the respondents are not liable to pay
any market fee.
I respectfully agree with the proposed judgment of Brother Dr. AR.
Lakshmanan that the appeal be dismissed.
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