2004 (2) TMI 681 - SC - Indian Laws

Whether 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?

Summary

Issues Involved:
1. Legality of compelling payment of market fee under Section 7 of the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966.
2. Applicability of the Seeds Act, 1966 and the Seeds (Control) Order, 1983 versus the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966.
3. Definition and classification of "agricultural produce" and whether seeds qualify as such under the Act.
4. Previous judicial precedents on the classification and treatment of seeds versus foodgrains.
5. Adequacy of the factual details provided by the petitioners regarding the nature and production process of the seeds.

Detailed Analysis:

1. Legality of Compelling Payment of Market Fee:
The appellants contended that the action of the respondents, particularly respondent nos. 3 to 18, in compelling the payment of market fee under Section 7 of the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966, was illegal and arbitrary. The High Court, however, ruled that items listed in Schedule-II of the Act, whether sold in their original or processed form, are liable for the levy of market fee within the precincts of the notified market area/market yard. This ruling was upheld by the Supreme Court, which dismissed the appeals, thereby affirming the legality of the market fee imposition.

2. Applicability of the Seeds Act, 1966 and the Seeds (Control) Order, 1983:
The appellants argued that the Seeds Act, 1966, and the Seeds (Control) Order, 1983, which regulate the quality and sale of seeds, should preclude the application of the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966. The respondents countered that the latter Act was enacted to regulate the trade of agricultural produce, including seeds, to ensure fair pricing and quality for both producers and consumers. The Supreme Court agreed with the High Court's interpretation that the Seeds Act and the Seeds (Control) Order focus on quality control, whereas the Andhra Pradesh Act regulates trade and market practices.

3. Definition and Classification of "Agricultural Produce":
The core issue was whether seeds fall under the definition of "agricultural produce" as per the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966. The Act defines "agricultural produce" as anything produced from land in the course of agriculture or horticulture, including processed or unprocessed items. The High Court concluded that seeds, being produced from agricultural land, are indeed covered by this definition and thus subject to market fee. The Supreme Court upheld this interpretation, emphasizing that the seeds' original agricultural nature does not change even if they are meant exclusively for sowing.

4. Judicial Precedents:
The Supreme Court referred to two significant precedents. In State of Rajasthan v. Rajasthan Agricultural Input Dealers Association (AIR 1996 SC 2179), it was held that chemically treated foodgrains, which become unfit for consumption, are distinct from foodgrains and thus not subject to the same regulations. Similarly, in Krishi Utpadan Mandi Samiti v. Pilibhit Pantnagar Beej Ltd. (JT 2003(9) SC 548), the Court ruled that certified seeds, unfit for human consumption, should not be subject to market fees. However, in the present case, the Supreme Court found that the appellants did not provide sufficient evidence to prove that the seeds had irretrievably lost their basic character as foodgrains.

5. Adequacy of Factual Details:
The Supreme Court noted that the writ petition lacked detailed information about the nature and production process of the seeds. The petitioners failed to demonstrate that the seeds had been certified by the Seeds Certification Agency or that they had undergone a process that rendered them unfit for human consumption. This lack of specific factual details made it impossible for the Court to conclude that the seeds were distinct from foodgrains and thus exempt from market fees.

Conclusion:
The Supreme Court dismissed the appeals, affirming the High Court's decision that seeds, as agricultural produce, are subject to market fees under the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966. The Court emphasized the need for detailed factual evidence to distinguish seeds from foodgrains and left open the possibility for the appellants to seek appropriate relief in fresh proceedings with adequate documentation.