A.R.LAKSHMANAN, J. - (1.) THE unsuccessful respondents 2,3 and 4 before the High Court of Allahabad are the appellants in this appeal. THE writ petition was filed by the first respondent herein to quash the order dated 12.03.1999 (annexure 17 to the writ petition) and for mandamus restraining the appellants herein from interfering in the business in certified seeds either before or after processing and further in restraining the appellants from demanding and realising market fee on the transaction of unprocessed or processed certified seeds.
(2.) A Division Bench of the Allahabad High Court allowed the writ petition following the decision of this Court in State of Rajasthan v. Rajasthan Agriculture Input Dealers Association which has also been followed by the Division Bench of the said Court in writ petition no. 7262 of 1993 dated 18.12.1996. The High Court quashed the impugned order dated 12.03.1999 and also held that the respondents in the writ petition/appellants herein cannot charge mandi fee on the seeds in which the first respondent herein deals. Aggrieved by the judgement of the High Court in Civil (M) No. 17877 of 1999 dated 25.08.1999, a special leave petition was filed under Article 136 of the Constitution of India. When the special leave petition came up for hearing on 06.09.2001, leave was granted by this Court and considering the importance of the questions involved, the matter was placed before Hon'ble the Chief Justice for referring to a larger bench. The facts giving rise to this appeal are stated below:- 3.1. The U.P. Krishi Utpadan Mandi Adhiniyam, 1964 (hereinafter referred to as "the Adhiniyam") was enacted to regulate sale and purchase of agricultural produce and for establishment, superintendence and control of market in U.P. Section 6 provides for declaration of market area and sections 9 and 10 prohibit business of specified agricultural produce in such market areas without licence. 3.2. Specified agricultural produce is defined under section 2 (a) of the Adhiniyam, as follows: "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 jaggery." 3.3. The Schedule appended to the Adhiniyam provides a list of agricultural produce. Section 17(iii) of the Adhiniyam provides for imposition of market fee on the transactions of such specified agricultural produce in the market area, on such rates notified by the State. Wheat is specified in the Schedule at serial no.1 under the heading of cereals. It was submitted that wherever seeds have been intended to be notified, it has been specifically mentioned as seeds. In case of wheat, however, it has not been notified for seed and thus the seeds of wheat are not covered in the Schedule and are thus not covered by the definition of specified agricultural produce . 3.4. The first respondent-company is a private limited company, engaged in production of certified seeds since 1996-97 and holds valid registration certificate from the district agriculture officer, Pilibhit under the Seeds Control Order, 1983 valid upto 25.5.2000 and holds a certificate of registration from the U.P. Seeds Certification Agency, Alam Bagh, Lucknow. 3.5. According to the first respondent, the business of the company is to purchase 'breeder seeds' from Agricultural Research Institute and 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 (hereinafter referred to as "the Act"). The harvest is selected carefully under supervision of the Agency. The lots which do not conform to specifications are rejected. 3.6. It was further submitted that 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 again supervised by the Agency. This crop is again germinated under strict supervision of the Agency and once again the lots rejected are not taken back by farmers. After harvesting the approved standardised certified seeds, these lots are fumigated for preservation under the samples of each lot is tested in the laboratories of Seeds Certification Agency at Alam Bagh(Lucknow), Kanpur, Rudrapur (Udham Singh Nagar). 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. 3.7. It is the case of the first respondent that the bags are marked as poison and are thereafter marketed. The entire production, operation is supervised by the Seed Certification Agency. It was submitted that until the seeds are certified they continue to be the property of the farmer, who agrees to such agreement on the foundation seed distribution form. In the year 1988, the Market Committee issued notices to the companies engaged in certified seeds. The notices were challenged and that after contest, the High Court allowed the writ petition holding that certified seeds are not specified agricultural produce and the notices issued by the Mandi Samiti were quashed. The aforesaid judgment was challenged by the Mandi Samiti in civil appeal nos. 106-110 of 1990. This Court relying upon the judgment in State of Rajasthan v. Rajasthan Agricultural Input Dealers Association, (supra) dismissed the civil appeals. Based on the aforesaid judgment, all the pending writ petitions were also decided in favour of the dealers in certified seeds. However, by notice dated 15.10.1997, the Mandi Samiti directed the 1st respondent to deposit the market fee on seeds. The first respondent submitted a detailed reply annexing certificates issued by the Seeds Certification Agency and the other relevant documents. The first respondent also submitted that they are not dealing in sale and purchase of food grains or wheat but deals only in certified se.eds and that the stock stored by them were not of wheat but by the certified seeds of wheat under the supervision of the U.P. Seeds Certification Agency. The appellants rejected the representation of the first respondent and directed them to pay market fee. The first respondent challenged the aforesaid order by filing writ petition no.1090 of 1997. Again by notification dated 11.8.1998, the first respondent was required to submit information regarding sale and purchase of wheat for the year 1997-1998. A reply was submitted protesting the demands against law laid down by this Court. Aggrieved by the demands, the first respondent filed writ petition no. 32740 of 1998 against the order dated 22.9.1998. The writ petition was disposed of with a direction to the first respondent herein to file a fresh representation. In pursuance of the aforesaid order, the first respondent filed a detailed representation dated 15.2.1999. The representation was rejected by the appellants on 12.3.1999 and a demand has been made for payment of market fee which was again challenged by the first respondent herein by filing the present writ petition no. 17877 of 1999 which was allowed by the High Court on 25.8.1999. Against the said judgment of the High Court, the above appeal by way of special leave petition has been filed.
(3.) THE instant appeal raises the following Questions of law: (i) What is the true scope and ambit of section 2(a) and 17 iii (b) of the Krishi Utpadan Mandi Samiti Adhiniyam, 1964? (ii) Whether the market fee can be levied on the purchases of wheat by the seed processing unit to process and convert the same into certified seed by treating it chemically? (iii) Whether there is any difference in wheat and wheat seed before it is chemically treated and converted into certified seed and thus becomes unfit for human consumption? (iv) Whether it is necessary, to notify seed of cereals which can itself be used as seed when the object of the legislature was to notify only those seeds which are different from produce itself? On the above pleadings, we heard Mr. Rakesh Dwivedi, learned senior counsel appearing for the appellants and Mr. Dushyant A. Dave, learned senior counsel for the contesting respondent.;