Holding

Wheat seed is not specified in the Schedule of the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam and therefore does not constitute "agricultural produce"; consequently, the Market Committee cannot levy market fee on certified wheat seeds.

Summary

The appellant Market Committee sought to levy market fees under the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam on Pillibhit Pantnagar BeeJ Ltd., which deals in the purchase, processing and sale of certified wheat seeds. The respondents argued that wheat seed is not listed in the Schedule of the Act and therefore is not "agricultural produce" within the meaning of Section 2(a), making the fee unlawful. The High Court quashed the fee order, relying on State of Rajasthan v. Rajasthan Agriculture Input Dealers Association. On appeal, the Supreme Court examined the scope of Sections 2(a) and 17(iii) of the Act, the definition of "seed" under the Seeds Act, and the harmonious construction with the Essential Commodities Act. It held that wheat seed, being unlisted and a distinct commodity from wheat grain, falls outside the definition of agricultural produce and the Market Committee cannot levy market fee on it. Consequently, the appeal was dismissed and the High Court's order upheld.

Issues considered

What is the true scope and ambit of Sections 2(a) and 17(iii)(b) of the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam?
Whether market fee can be levied on the purchase of wheat for the purpose of producing certified wheat seed
Whether wheat seed, after chemical treatment and certification, is distinct from wheat and thus unfit for human consumption
Whether the legislature intended to notify only those seeds that are different from the produce itself

Legislation cited

Subjects

market feeagricultural produceseed certificationUttar Pradesh Mandi ActSeeds Actessential commoditiesstatutory interpretationtraderlevycertified seed

Judgment

A KRISHI UTPADAN MANDI SAMITI AND ORS.
v.
PILLIBHIT PANTNAGAR BEEJ LTD. AND ANR.

NOVEMBER 28, 2003

B [V.N. KHARE, CJ. AND S.B. SINHA AND
DR. AR. LAKSHMAJ'JAN, JJ.]

UP. Krishi Utpadan Mandi Adhiniyam, 1964; Sections 2(a), 2(y), 11,
17(iii)-Seeds Act, 1966,: Section 2(11)-Seeds Rules, 1968, Rule 2 (e) -
C Wheat and wheat seed - Respondents dealing i_n purchase and sale of
certified seeds of wheat-Levy of Market Fee under the State Act-
Competency of-Held, wheat and wheat seed are different-Hence, State
is not competent to levy market fee since seeds of wheat is not a specified
agricultural produre under the State Act-On harmonious reading ofState
Act and Central Act, respondents are not traders under the State Act- _
D Essential Commodities Act, 1955; Section 3-Seeds Control Order, ,
1983-Food grains Movement Restriction (Exemption of Seeds) Orders,
1970.

Respondents are engaged in business -of buyfog, processing and
selling of certified wheat seeds. The appellant-Market Committee
E issued notices to the respondents for levying market fees under section
17 (iii) (b) of the U.P. Krishi Utpadan Mandi Adhiniyam, 1964 (U.r.
Act) on the ground that the respondents are dealing in wheat, a
specified 'agricultural produce' under section 2(a) of the U.P. Act. The
respondents replied to the notices of the appellants that they are
F dealing with certified seeds of wheat and not wheat and hence are not
liable to market fee under the U.P. Act. The appellants rejected· the
representations and passed an order demanding market fees under 'the
U.P. Act. The respondents filed a Writ Petition before High Court for
quashing the order of the appellants. The High Court allowed the writ
petition and quashed the order of the appellants following the decision
G in State of Rajasthan v. Rajasthan Agriculture Input Dealers Association,
AIR (1996) SC 2179.

In appeal, the appellants contended that the market fee is levied
under the U.P. Ad on purchases of wheat by the respondents and not
H on sale of certified seeds; that wheat is an agricultural .produce notified
'.l.14
KRISHI UTPADAN MANDI SAMITI v. PILLIBHIT PANTNAGAR BEEJ LTD. 345

under the heading 'cereal' chargeable to market fee under the U.P. A
Act; that cereal is a seed in itself; and that there is no difference
between wheat and wheat seed.
i
The respondents contended that they are dealing only in certified
seeds of wheat and not in purchase or sale of wheat; that the breeder B
seeds of wheat are purchased from Agricultural Universities for
processing them into certified seeds; that the seeds of wheat are not
wheat; and that wherever seeds are intended to be notified, it has been
specifically mentioned as seeds in the Schedule to the U.P. Act and since
the seeds of wheat are not notified, it cannot be subjected to market
fee under the U.P. Act C
Dismissing the appeal, the Court

Per AR. Lakshmanan, J (for himself and V.N Khare, CJ):

HELD: 1.1. A perusal of the Schedule to the U.P. Krishi Utpadan D
Mandi Adhiniyam, 1964 (U.P. Act) shows that wherever seeds have
been intended to be notified, it has been specifically mentioned as see~s.
In case of wheat, the Schedule does not provide or notify seed of wheat
and thus the seeds of wheat are not specified in the Schedule and thus
not covered by the definition of 'agricultural produce'. The object of E
legislature was to notify only those seeds which are different from the
produce itself. 1360-G-Hl

1.2 The ratio decidendi of the decision in State of Rajasthan v.
Rajasthan Agriculture Input Dealers Association is squarely applica~le F
where the appellants seek to give a wide connotation to the words· in
the Schedule. Giving a wide interpretation is not possible and since
wheat seed is not included in the Schedule, the Market Committee is
not allowed to levy market fee on its purchase. As the Market
Committee plays no role in the trade of the respondents' seeds, it may G
not be allowed to levy the market fee. (364-F-G-Hl

1.3. There is no nexus whether the seed has been chemically
treated or not and the levy of market fees. Since the seed is a separate
~ommodity from grain, the same is not covered under the Schedule of
the U.P. Act and as such 110 market fee is leviable over .the sale or H
346 SUPREME COURT REPORTS (2003] SUPP. 6 S.C.R.

A purchase of the same. (366-C-D)

1.4. The seeds are not specified agricultural
. produce under the · ' '

provisions of the Act and therefore the business of purchase and sale
o_(seeds under the supervision of Seed Certification agency established
B under t~e ~ct is not a business of.~ale and purchase of specified
agricultura.1 produce and as such the. resp~ndents are not required to
pay the market fee or to take o.ut a licenc~. Since the processing. of ·
wheat resulting in loss of its basic characteristics of being cereal, it
cannot be subjected to levy .as agricultural produce since the purchase
by the respondent is for the purpose of g~o"'.ing seeds, no levy is ..
C permissible and therefore the market fee cannot be imposed on seeds
which are unfit for human consumption. (366-D-G)
.. '·
State of Rajasthan v. Rajasthan Agriculture Input Dealers Associa-
tion, AIR (1996) SC 2179, relied on.
D State of Rajasthqn v. Mangi Lal Pindwasl, (1996) · 5· SCC 60,
referred to.

Per S. B. Sinha, J (supplementing)

E 'l:t. The entire process beginning from procurement of see'ds
breeder, further production thereof as well a~ sale is g~verned under
the Seeds Act, 1966 and the Rules framed thereunder: The U.P. Krishi
Utpadan Mandi Adhiniyam, 1964 contains both penal and· fiscal
provisions. A 'trader' within the meaning of the U.P. Act wo.u!d be a.
person who carries on business inter ·alia i'n 'the agricultu'r~I produce.
F Although the dictionary meaning of 'business' may, be ~ide, but f~r
the purpose of conside,ring th~ same 'in the conte~t of regulatory ~nd
~ · ~ ~, ' • • • ;._ ·I • i • f ,
1
I l ' °t • I I

penal statute, the same must be read as carrying on a commercial
venture in th'e agricultural pr~d~ce. The. r~le' of st~ict c~-nstruction·
· shouid be applied in the 'instant case~ The intentio~ of the legislature
G in directing the ,trader to. obtain 'iicence is ab~olutely ~lear: ·a'nd·
unambiguous in so far ~s it seeks to regulate the. trade' for purc~ase
and sale. Thus a person who is not buying an agricultural produce for
the pu'rpose «:»fs.elling it, ~.hether i~ the s~me form o~,in the transf~~red ·
form, may n~r be ~ trader•. The construction of a stat~t~
• ' .J ~ t
t
wm.. depend
. • •
..
H upon the purport and object of the, Act. The di.fferent provisions of the
KRISHI UTPADAN MANDI SAMITI 1·. PILLIBHIT PANTNAGAR BEEJ LID. 34 7
statute which have the object of enforcing the provisions thereof A
namely levy of market fee, which was to be collected for the benefit
of the producers is to be interpreted differenily from a provision where
it requires a person to obtain a licence so as to regulate a trade. In case
of doubt in construction of a penal statute, the same should be ·
construed in favour of the subject and against the State. The fiscal ·B
statute must not only be construed literally, but also strictly. 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.
[368-C-D; 369-F-G; 370-G-H; 371-A-C, E-Fl
c
State ofAndhra Pradesh v. Niis Abdul Bashi & Bros, AIR (1965) SC
531 and Sri Krishna Coconut Co. v. East Godavari Coconut & Tobacco
Market Committee, AIR (1967) SC 973, referred to.

London & North Eastern Railway Company & Berrriman. (1946) AC
278 and Tuck & Sons v. Priester, [1987) 19 QBD 629, referred to. 0
1.2. The legal maxim "Expressio unius (persone vel rei) est exclusio
a/terius" is applicable in the instant case.

Mis. Khemka & Co. (Agencies) Pvt. Ltd. Etc. v. State ofMaharashtra E
Etc., f1975) 2 SCC 22, referred to.

1.3. A conflict would arise in the event it is held that buying of
seeds, which is a commodity governed by a Central Act (Seeds Act)
would attract payment of market fee in terms of the State A<'t (U.P.
Act). In ordinary parlance, at particular stages in which seeds are p
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', is of wide amplitude. It includes seedling of food
crops. It is thus necessary to construe both the statutes harmoniously. G
Both the statutes must be given proper effect and allowed to work in
their respective fields, Taking into consideration the totality of the
situation and upon giving harmonious construction to both the Seeds
Act' and the U.P Act, the respondent cannot be said to be a trader of
agricultural produce and hence no market fee can be demanded from
it by the appellants. [371-H; 372-A-DI H
348 SUPREME COURT REPORTS [2003} SUPP. 6 S.C.R.

A 1.4. 'Seed' is also an essential commodity withiri the meaning of
the provisions of the Essential Commodities Act; 1955. Ifa Parliamen-
tary Act governs the entire field; the seeds, which are brought and
further seeds produced therefrom and processed upon being governed
by the Parliament Acts aiid Statutory Rules, it must be h~ld to have
B been excluded from the purview of the provisions of the U.P. A'ct. The
seeds, which are subject matter of not only a Pariiamentary Act but
also an order made under Section 3 of the Essential Commodities Act
would by necessary implication are not meant to be included within
the definition of 'agricultural produce' uiider the i.J.P. Act. As the
respondents purchase the seed is riot meant to be used as a 'cereal',
C which is an agricultural produce within the meaning of the Said Act,
the High Court has tightly held that th~ respondents are not liable to
pay any market fee. [372-D-E, G-H; 373-E-F[

State of Maharashtra v. Indian Medical Association & Ors., [2002}
D I SCC 589 and S. Samuel, MD. Harrisons Malayalam & Anr. v. Union
of India & Ors., JT (2003) 8 SC 413, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6301 of
2001.

E From the Judgment and Order dated 25.8.99 of the Allahabad High
Court in C.M.W.P. No. 17877 of 1999.

Rakesh Dwivedi, Pradeep Misra, Ms. Iildu Misra, Ms. Virflla Sinha,
Abhishek Chaudhary for the Appellants.
F
Dushyant A. Dave Huzefa Ahmadi, Vibha Datta Makhija, Nakul
Diwan, Ms. Priya Ahluwalia, Sanjay R. Hegde for the Respondents.

The Judgments of the Court were delivered by

G DR. AR. LAKSHMANAN, J. 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 fa certified
H seeds either before or after processing and further in restraining the
KRISHIVTPADAN MANDI SA!ll!TI v. PILLIBHIT PANTNAGAR BEEJ LTD [DR. LAKSHMANAN, J] 349

appellants from demanding and realising market fee on the transaction of A
unprocessed or processed certified seeds.

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 reported in AIR ( 199~) B
SC 2179 which has also been followed by the Division Bench of the said
Court in Writ Petition No. 7262of1993 dated 18. 12.J 996. The High Coult
quashed the impugned order dated l 2.03. l 999 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
judgment of the High Court in Civil (M) No. 17877 of 1999 dated C
25.08.1999, a Special Leave Petition was filed under Article 136 of the
Constitution oflndia. 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. D
The facts giving rise to this appeal are s~ated below:-

The U.P. Krishi Utpadan Mandi Adhiniyam, 1964 (hereinafter re-.
ferred to as "the Adhiniyam") was enacted to regulate sale and purchase
of agricultural produce and for establishment, superintendence and control E
of market in U.P. Section 6 provides for declaration of market area and 1

Sections 9 and I 0 prohibit business of specified agricultural produce in
such market areas without licence.

Spei::ified Agricultural produce is defined under Section 2 (a) of the F
Adhiniyam, as follows:

"2(a) 'agricultural produce' means such items of produce of
agriculture, horticulture, viticulture, apiculture, sericulture,
pisciculture, animal husbandry ot forest as are specified in the
Schedule, and includes admixture of two or more of such items, G
and also includes any such item in processed form, and further
includes gur, rab, shakkar, khandsari and jaggery."

The schedule appended to the Adhiniyam provides a list of agriculture
produce. Section l 7(iii) of the Adhiniyam provides for imposition of H
350 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.
A 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
B 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.

The first respondent-company is a private limited company, engaged
in production of certified seeds since 1996-97 and holds valid registration
ce1tificate from the Distriet Agriculture Officer, Pilibhit under the Seeds
C Control Order 1983 valid upto 25.5.2000 and holds a certificate of
registration from the U.P. Seeds CertificaticnAge!"lcy, Alam. Bagh, Lucknow.

According to the first respondent, the business of the company is to
purchase 'breeder seeds' from Agricultural Research Institute and to
D 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 caref~lly under
E supervision of the Agency. The lots which do not confonn to sp~cifications
are rejected.

It was further submitted that the standardized seeds so obtained are
called 'Foundation Seeds'. These foundation seeds are thereafter again
F 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
G 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
H barastin) at the time of packing.
KRISHI UTPADAN MANDI SAMITI •·. PILLIBHIT PANTNAGAR BEEJ LTD. [DR. LAKSHMANAN, J.] 351

It is the case of the first respondent that the bags are marked as poi~on A
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 B
seeds. The notices were challenged and that after contest, the High Com1
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. l 06-110of1990. This Court relying upon the judgment C
i'n State of Rajasthan v. Rajasthan Agriculrural 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 dealer~ 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 D
respondent submitted a detailed reply a.nnexing 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 seeds and that the stock
stored by them were not of wheat but by the certified seeds of wheat unlier
the supervision of the U.P. Seeds Ce11ification Agency. The appellants E
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. I 090 of 1997. Again by Notification dated 11.8.1998, tne
first respondent was required to submit information regarding sale and
purchase of wheat for the year 1997-1998. A reply was submi~ed F
protesting the demands against law laid down by this Court. Aggrieved
by the demands, the first respondent filed Writ Petition No. 32740of1998
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 G
representation dated 15.2.1999. The repr~sentation was rejected by the
appellants on 123.1999 and a demand has been made for payment of 1

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. H
352 SUPREME COURT REPORTS [2003] SUPP. 6 S:C.R.

A Against the said judgment of the High Court, 1he above appeal by way
of special leave petition has been filed.

The instant appeal raises the following .questions of law:

(i) What is the true scope and ambit of Sections 2(a) and 17 iii (b)
B of the Krishi Utpadan Mandi Samiti Adhiniyam, 1964?

(ii) Whether the market fee can be levied on the purchases of •wheat
by ~he seed processing unit to process :and convert the same into certified
seed by treating it chemically?

c (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 hum~ consumption?

(iv) Whether it is necessary, to notify seed ofcereals which can itself
D be used as seed wh~n the object df the legislature w;:is .to notify only those
seeds which are different from produce itself?

On the above pleadings, we heard Mr. Rakesh Dwivedl, learned
senior counsel .appearing for :the appellants and Mr.. Dushyant :A. Dave,
learned senior counsel for the 1tontesting respondent.·
E
It was submitted by the appellants herein/respondents in the writ
petition that after the first resporident p~rchased wheat, they convert it.into
seed by applying pesticides and other chemicals and then the sale was
effected as wheat seed and on this transaction, 'Mandi Samiti is not
F demanding market fee. It was .also submitted that the decision of this
Court in State of Rajasthan 'v. Rajasthan Agricultural Jnput .Dealers
Association (supra) are not applicable in the case of the first respondent
and that what is purchased by the first respondent herein ·is nothing but
wheat and the entire .transadtion of wheat is within .the .market area ·of
Mandi Samiti, Pilibhit and ·hence subject to payment of ~arket fee. It was
G also submitted that the 'first respondent-·Company"is engaged:in producing
certified seeds but for that purpose it purchases regulaiJy .wlieat and other
commodities for preparing :seeds ana on "these 'trans!lctions, the first
respondent is liable'to pay·nrarket fee. Before:aavetti~g:to•theTespective
arguments, it is beneficiaI·to :reproduce sub~sections (a)c& (b)·of Section
H 17(iii) of the Adhiniyam, which reads as under:
KRISHI l'TPADAN MAl\'DI SAMIT! 1·. PILLIBHIT PANTNAGAR BEEJ LTD. [DR. LAKSHMANA.N. J.] 353

''(iii) levy and collect: A
(a) such fees as may be prescribed for the issue or renewal
of licences; and

(b) market fee, which shall be payable on transactions of sale
of specified agricultural produce in the market area at such rates, B
being not less than one percentum and not more than two and a
half percentum of the price of the agricultural produce so sold as
the State Government may specify by notification, and develop-
ment cess which shall be payable on such transactions of sale at
the rate ofhalfpercentum ofthe price of the agricultural produce C
so sold, and such fee or development cess shall be realised in the
following manner:-

(1) if the produce is sold through a commission agent, the
commission agent may realise the market fee and the development D
cess from the purchaser and shall be liable to pay the same to t~e
Committee;

(2) if the produce is purchased directly by a trader from the
producer, the trader shall be liable to pay the market fee and
development cess to the Committee; E

(3) if the produce is purchased by a trader from ancther
trader, th~ trader selling the produce may realise it from the
purchaser and shall be liable to pay the market fee and devel-
opment cess to the Committee: F
Provided that notwithstanding anything to the contrary
contained in any judgement, decree or order of any court, th~
trader selling the produce shall be liable and be deemed always
to have been liable with effect from June 12, 1973 to pay the
market fee to the Committee and shall not be absolved from sucti G
liability on the ground that he has not realised it from the
purchaser:

Provided further that tht trader selling the produce shall nqt
b.e absolved from the liability to pay the development cess on the H
354 SUPREME COURT REPORTS [2003] SUPP, 6 S.C.R.

A ground that he has not realised it from the purchaser;

(4) in any other case of sale of such produce, the purchaser
shall be liable to pay the market fee and development cess to the
Committee:

B Provided- that no market fee or development cess shall be
levied or collected on the retail sale of any specified agricultural
produce where such sale is made to the consumer for his domestic
consumption only:

Provided further that notwithstanding anything contained in
c this Act, the Committee may at the option of, as the case may be,
the commission agent, trader or purchaser, who has obtained the
licence, accept a lump sum in lieu of the amount of market fee
or development cess that may be payable by him for an agricul·
tural year in respect of such specified agricultural produce, for
D such period, or such terms and in such manner as the State
Government may, by notified order spe~ify:

Provided also that no market fee or development cess shall
be levied on transactions of sale of specified agricultural produce
on which market fee or development cess has been levied in any
E market area if the trader furnishes in the form and manner
prescribed, a declarati.on or certificate that on such specified
agricultural produce market fee or development cess has already
been levied in any other market area."

p It was submitted by Mr. Rakesh Dwivedi, learned senior counsel
appearing for the appellants that the first respondent being the purchaser/
trader is liable to pay market fee under Section 17(iii) of the Act and that
the contention of the respondent that they sell wheat and the entire
transaction is of wheat within the market area of Mandi Samiti cannot be
G accepted.

Mr. Rakesh Dwivedi, learned senior counsel for the appellants,
submitted that at the time of hearing in the case of State of Rajasthan v.
Mangi Lal Pindwal, [ 1996] 5 SCC 60 by this Court, it could not be brought
to the notice of this Court that the intention of the legislature was to notify
H only those seeds which are different from its produce and that the definition
KRISHI UTPAOAN MANDI SAMITI ''· PILLIBHIT PANTNAGAR BEEJ LTD. [DR. LAKSHMANAN. J.] 355
of agricultural produce being so wide that seeds of the cereals are included A
in that entry and hence there was no necessity to notify the same separ~tely
because there is no difference in Bazra or seed of Bazra. It was also
submitted that in the aforesaid judgment, this Court has held that seeds
which are manufactured after cJiemical treatment of Bazra by adding
insecticides the market fee cannot be levied on the sale and purchase of B
the same because the same cannot be used for hum-.:1 cvnsumption and
ceases to be a cereal. Therefore, it is clear that before chemical treatment
Bazra remains an agricultural produce and sale and purchase of the s~e
attracts imposition of market fee. Arguing further, learned senior cou~sel
for the appellants contended that the High Court failed to appreciate that
the cereals are seeds itself and hence the same have not been notified C
separately because there is no difference between wheat and seed of wtieat
and that Wheat includes its seed. Otherwise also the appellant is imposing
market fee on wheat and not its certified seed as manufactured by the first
respondent. Concluding his arguments, learned senior counsel, submitted
that since the Wheat purchased by the first respondent is neither chemically D
treated nor the same unfit for the human consumption and hence market
fee was rightly imposed.

Per contra, Mr. Dushyant A. Dave, learned senior counsel appearing
for the first respondent, submitted that the respondent is not dealing in sale
and purchase of food grains or wheat but deals only in certified seeds and E
the stocks stored by them were not of wheat but the certified seeds of
wheat. It was further submitted that the first respondent purchases breeder
seeds from Agricultural Universities and that seeds of Wheat is not
included in the Schedule to the Adhiniyam. It was further argued that the
first respondent intakes only the standardised and certi-fied seeds from the F
farmers and the undersize, oversize and seeds found unfit by Seed
Certificate Agency are returned to the fanners and the certified seeds so
purchased are thereafter chemically treated at the processing plant and,
therefore, these certified seeds either before processing with chemical or
thereafter do not fall within the definition of tenn "wheat" and its
purchasers are not liable to market fee. G
At the time of hearing, our attention was drawn to a note on method
and process of seed production submitted by the first respondent.
The principle and method of production, as submitted in the note, is as
under:- H
356 SUPRE'.ME COURT REPORTS [2003] SUPP. 6 S.CR.

A "J. Reasons for Seed Production:

All high yielding seeds are made by scientists by changing
the compos.ition of genes in the seeds so that the seed gives high
yields. However, nature's force has a tendency to change the
seeds over a period of time and, .therefore, it is necessary to
B produce pure seed year after year.

2. Laws governing seeds business:

2.L The seed industry for production and sale is regulated under
C the Seeds Act, 1966 and Rules and Seed Control Order, 1983.
Under the seeds Act, the Government has made State Seed
Certification Agencies who are responsible to certify seeds and
monitor their prodµction and sales.

2.2. "The Indian Minimum Seed Standards" lays down the
D minimum seed standards required for each crop which can be
certified.

3. Method of Seed Pro<!uct(on:

3.,1. The company purchases breeder seed from the Agricultural
E
Universities and then produces the next stage i.e. foundation
seeds. These foundation seeds are given to contract farmers for
further production to certified seed. This certified seed is sold to
trade and subsequently to farmers. Foundation Seed is the
progeny of Breeder Seed and certified seed the progeny of
F Foundation Seed.

4. Procedure of pr.oduction:

4.1. Purchase of breeder seeds from universities. [Rule 14(a)]
:G 4.2. -Classification .of foundation seed from breeder seed. (Rule
14(a)]

4.3. Giving foundation seed to contract farmers. (Rule 14(c)]

'l-l 4.4. Registration of the contract farmers with the State Seed
KRISHI UTPADAN MANDI SAMIT!"· PILLIBHIT PANTNAGAR BEEi LTO. [DR. LAKSHMANAN, J.) 357
Certification Agency and payment of registration and inspection A
charges to the agency. [Rule 6(d) & fonn I]

4.5. Sowing the foundation seed by the contract farmer in his field.

4.6. Inspection of the farmer's field by an inspector of all the State
Seed Certification Agency, at least two times during the growth B
of the crop. [Rule 6(k)]

4.7. Submission offinal field report by the State Seed Certification
Agency, inspector stating that the crop meets the standards ()r
rejecting the crop if it does not meet the standards. The final filed C
report also states the estimated quantity of produce of every field
and farmer which the Company can purchase. [Rules 6(k) arid
23(e)]

4.8. If the farmers seed crop has been found satisfactory and
indicated as such in the final field report prepared by the State D
Seed Certificate Agency inspector it is purchased by the company
and the seed stored in company godowns.

4.9. The seed is then processed under the supervision of an
inspector of the State Seed Certification Agency who takes E
samples and sends them to the·Government Seed Testing Labo-
ratory. [Rule 6(g) & 6(e)]

4.10. After testing the Government Seed Testing Laboratory
gives a report which shows that either the seed meets the
"Minimum Seed Standards" or it does not. [Rule 21 (3)] F
4.11. If the seed ·meets the "Minimum Seed Standards", the
chemical treatment and baging of the seeds is made under the
supervision of an inspector of the State Seed Certification Agency.

.)
(Rule 17A) G
4.12. After the seed is put in bag the inspector of the Seed
Certification Agency will seal and tag each bag and this seed and
bag is called certified seed which goes to the market. (Rule 17 II)

4.13. The seed inspector will also give a ce11ificate to the. H
358 SUPREME COURT REPORTS [2003) SUPP. 6 S.C.R.

A company stating that the seed has been found above the "Mini-
mum Seed Standards" and has been certified as such by the State
Seed Certification Agency. (Rulel 7)"

A letter under Reference No. 3374/12-5-2001-600(88)/93 dated 7th
January, 2002 sent by the Secretary, U.P. Government to the Director,
B Mandi Parishad; u~P. Lucknow, was placed before us for oufperusal with
an english translation and Hindi version. The english translation of the
letter reads thus: ·

" No3374/12-5-2001-600(88)/93
c From Dr. Naseem Jedi,
Secretary,
U.P. Government

To Director
D Mandi Parishad
U.P. Lucknow.
Krishi Anubhag-5

Lucknow : Dated 07 January, 2002
E Sub:- Exemption of certified seeds by Trade Tax Department arid
accordingly exemption of certified seeds by Mandi Parishad from
Mandi Tax.

Sir,
F
Regarding your letter dated 13.08.2001, in relation to the above
subject No.V.P/M.SH/760/T.C.II Khand/86-2001-1220, I have
been ordered to inform you that the production of certified seeds
of various crops is taken through farmers and then this seed is
procured by the corporation in uncertified form, after which it
G goes through the certification procedures and chemical treatment,
and finally certified seed is produced. Therefore, please note that
for production ofcertified seeds, on the purchase ofraw uncert;fiea
seeds there will be no Mandi Tax Liability. Please ensure imme:.
diately and appropriate action to enforce this decision. (Emphasis
H supplied)
KRISHI UTPADAN MANDI SAMITI v. PILLIBHIT PANTNAGAR BEEJ LTD. [DR. LAKSHMANAN, J.] 359
Yours faithfully' A
Sd/-
(Dr. Naseem Jedi)
Secretary"

A reading of the said letter would also show that the production ~f B
certified seeds, on the purchase of raw uncertified seeds there will be n?
Mandi Tax Liability.

Learned senior counsel appearing for the parties also drew our
attention to the relevant provisions of the Seeds Act, 1966 (Act No. 54
of 1966) and the Seeds Rules, 1968 (hereinafter referred to as "the Rules")~ C
We have also perused the Schedule [Sections 2(a) and 4-A] to the
Addhiniyam in which under the Heading A-Agriculture, Wheat is included
as Item No. I in the sub-heading Cereals. In the Statement of Objects and
Reasons, it is stated that in the interest of increased agricultural production
in the country, it is considered necessary to regulate the quality of certain D
seeds, such as seeds of food crops, cotton seeds, etc. to be sold for purposes
of agriculture including horticulture.

Section 2 of the Act deals with definition of"Agricultural produce",
"Certification Agency" and the "Seed" etc. Section 2( 11) defines Seed E
which. 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;
F
(ii) cotton seeds;

(iii) seeds of cattle fodder;

(iv) jute seeds,
G
and includes seedlings, and tubers, bulbs, rhizomes, roots, cuttings; all
types of grafts and other vegetatively propagated material, of food crops
or cattle fodder;

Under Section 3 of the Act, the Central Government has the H
360 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.
A authority to constitute a Committee called the Central Seed Committee to
advice the Central Government and the State Governments on matters
arising out of the administration of this Act and to carry out the other
functions assigned to it by or under this Act. Section 4 deals with the
authority of the Central Government to establish a Central Seed Laboratory
B or declare any seed laboratory as the Central Seed Laboratory to carry out
the functions entrusted to the Central Seed Laboratory by or under this Act.
Section 5 of the Act deals with power to notify kinds or varieties of seeds
by the Central Government. Section 6 of the Act deals with the power of
the Centrai Goveituttent to specify- minimum i'imits of germination and
C purity,.,etc. Section 8 of the Act deals with Certification Agency ~hich
auth~rises the State 'Gover-r1merit or the Central Government to establish
to
a Certification Agency for the State 'carry out the functions entrusted to
the Certification -Agency by or under t~1S Act. Section 9 provides' the
procedure fot grant of certificate by Certification Agency. Section 25 deals
with power of the Central Government to make Rules. ·
D
Rule 2(e) of ·the Rules defines "certified·seeci';. Under Rule 2(f).of
the Rules "Certified seed producer" has been defined. Rule 20) defines
"processing" and 2(m) defines "treated". The functions of the Central Seed
Laboratory has been dealt with under Rule 5 of the Rules. The functions
E of the Certification Agency has been specified under Rule 6 of the Rules.
Rule 15 deals with the procedure for making application for the grant of
certificate under sub-section(l) of Rule 9. Form I is prescribed for
application for Seed production under the Seeds Certification programme:
We are Mt now concerned with the other Rules.

F We have already reproduced Section 2(a) and Section I ?(iii) of the
Adhiniyam. Section l 7(iii) of the Adhiniyam provides for imposition of
market fee on the transactions of sale of specified agricultural produce in
the market area at such rates notified by the State. As already noticed,
Wheat is specified in the Schedule at S.No.l under the }1eading 'Cereals'.
G A perusal of the Schedule would show that wherever seeds have been
intended to be notified, it has been specifically mentioned as Seeds. In
case of Wheat, however, Schedule does notprovide or notify seed of wheat
and thus the seeds of wheat are not specified in the Sc~edule ,and are thus
not covered by the definition of Agricultural produce. We have also
H referred to the Objects and Reasons for enacting the Seeds Act, 1966 and
KRISHI UTPADAN MANDI SAMIT! v. PILLIBHIT PANTNAGAR BEEJ l TD. [DR. LAKSHMANAN, l] 36 \

the Seeds Rules, 1968. As already seen, Seeds Rules, 1968 have made A
detailed provisions of production, processing and certification of seeds
under the Seed Certification Agency. The Central Government in order
to exempt the movement of seeds and in exercise of its powers under
the Essential Commodities Act, has enacted Foodgrains Movement Restric-
tion (Exemption of Seeds) Orders, 1970 and the Seeds Control Order, B
1983. The seeds are also exempted from Sales Tax under an exemption
Notification dated 19.8.1970 issued under Section 4(l)(a) of the Act
(Annexure CA 3).

We have already referred to the essential conditions incorporat~
in the Certificate of Registration. One of the essential conditions incor- C
porated in the Certificate of Registration is that the certificate holder shall
not carry on any business such as dealing in food grains, other than the
business of sale of certified seeds. Under the terms and conditions of such
certificate, the first respondent is not carrying any other business except
the business of certified seeds and it is also not in dispute that the D
respondent does not hold any other licence for dealing in food grains
including wheat.

It was also argued by Mr. Dushyant A. Dave that the Market
Committee has completely failed to appreciate the declaration oflaw in the
case of State of Rajasthan v. Rajasthan Agriculture Input Dealer Dealers E
Association (supra) affirmed by this Court on 21.8.1996. In these orders,
two reasonings were adopted to hold that the transaction of seeds do not
attract market fee namely (a) that the definition of agricultural produce
includes items specified in Schedule and that wherever it was intended
to separately cerealised seeds, they have been distinctly found mentioned F
in the Schedule and that wherever the Schedule does not include seeds
specifically in the serialised item such seeds are not specified agricultural
produce and (b) on the process of coating and applying insecticides, other
chemicals and poisonous substances the basic character i.e. its consumption
as food by human being or animals is irretrievably lost and that such G
commodity is distinct from food grains.

The decision of the State Government ~oes not take into account the
first reasoning and treats only that commodity as seeds which is treated
with chemicals and that the action, in our view, is apparently and palpably
wrong. It is to be noticed that the farmers are paid prices on the certified H
362 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.
A seed only after its certification and that the entire quantity of such seeds
is chemically treated and is thus· a distinct commodity as certified seeds.
It was denied that the first respondent purchased wheat from farmers and
the seeds purchased from the farmers are of very high quality specified
standardised se.eds each of which price is very high as compare to wheat.
B It is not sold in the. market and cannot be so sold as wheat and the entire
quantity is taken for processing with chemicals at processing plant. The
High Cmm has, in our viev;, correctly appreciated and accepted the
contention of the respondent-Company and has rightly relied upon the
judgment of this Court in State of Rajasthan v. Agricultural Input Dealers
C Association (supra).
Learned senior counsel appearing for the first respondent drew our
attention to Annexure CA 1J which is the representation in pursuance to
the judgment of the High Court in Writ Petition No. 3274 of 1998. The
relevant portion of the representation reads as under:
D "Thus our business procedure makes it clear that by the time we
purchase seeds from farmers it remain no longer simple unprocessed
seed but it comes into the category ofcertified seed after chemical
treatment. At the time of purchase, this wheat is necessary to be
determined is the nature of commodity at the time of purchase.
E As per the specific view taken by Hon 'ble Supreme Court in
Mis State of Rajasthan Agriculture Input Dealer Association, AIR
(1996) 2179 seed undergone chemical and pesticicie treatment is
an entirely different commodity and the same is not subject to
market fee on account of its non inciusion on the Schedule of
F Mandi Act.

Under provisions of Section l 7(iii)(b)(2) of the Mandi Act
if agricultural produce is purchased directly by a trader from a
producer, the trader shall be liable to pay the market fee but in
the present circumstances it is clear that we have purchased only
G certified seeds from the farmers and certified seed not being
scheduled produced the same is not liable to fee at our level.

In the same reference, the decision taken in the meeting
dated 16.5.1998 presided by Secretary Agriculture is also impor-
H tant. In the abovesaid meeting, it has been decided that if trader
KRISHI L'TPADAN MANDI SAMITI ''· PILUBHIT PANTNAGAR BEEJ LTD. [DR. LAKSHMANAN, I] 363
purchases unprocessed seed before chemical treatment in that case A
the trader is liable to pay market fee on such purchase of
unprocessed seeds. However, in the present case, the trader has
not purchased unprocessed seed before chemical treatment, there-
fore, trader is not liable to pay fee on such purchases. Thus
direction issued by Secretary Agriculture in meeting dated B
16.5.1998 also support trader's stand."

I.A.No. 3 of 200 l is filed by the first respor.dent for seeking
permission to place on record a letter dated 19.1.2000 annexed as
Annexure A which is very important for the final adjudication of the case.
The said I.A. be taken on record. By the said I.A., the first respondent C
sought to place on record a letter dated 19. l .2000 addressed by the
Principal Secretary,. Government of Uttar Pradesh to the Commissioner,
Trade Tax Department, Government of Uttar Pradesh directing that
instructions be issued to the taxation officers that when the growers or the
distribt!tors, seed certification machinery sell the seeds in sealed containers D
after producing themselves after certification along with the tag of the
Uttar Pradesh Certification Agency affixed as under the Central Seed Act,
1966 then in such circumstances, no liability of purchase tax is attracted
under Section 3 AAAA(4). We have perused the communication dated
19.01.2000 marked as Annexure A.
E
· The judgment in the case of State of Rajasthan v. Rajasthan
Agriculture !input Dealers Association (supra) was heavily relied on by the
learned senior appearing for the first respondent. In the said case, the
respondent therein claimed themselves to be engaged in the business of
purchasing and selling seeds and, in particular, Bazra seeds. According F
to them, seeds can not be termed to be agricultural Produce for the purposes
of the Rajasthan Agricultural Produce Market Act, 196 l and its Schedule,
as amended from time to time by the State Government in exercise of
powers under Section 40 enabling it to add, amend or cancel any of the
items of agricultural produce specified in the Schedule. It is maintained G
that seeds are a processed item and coated by insecticides, chemicals and
other poisonous substances whereby the grains employed lose their use and
utility as foodgrains and become unfit for human or animal consumption
or for extraction therefrom for such consumption. The challenge posed
by the respondents before the High Court was answered by the appellants H
364 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.
A (State of Rajasthan) maintaining that foodgrains of all so1ts, as mentioned
in the Schedule, were seeds, per se, the only exception carved out from
the items mentioned in the Schedule being those relating to blue tagged
certified seeds and white tagged certified foundation seeds; such exceptions
have been notified by way of amendment to the Schedule in exercise of
B the power of the State Government under Section 40 of the Act. 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". It was ordered that no licence
under the Act was required for sale of such seeds. On appeal, this Court
held as under:
c
"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 coqting and applying insecticides, other chemicals
and poisonous substances to the foodgrain meant to be. utilised as
D
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 com-
modity distinct from foodgrains as commonly understood. That
distinction was borne in mind by the High Court in allowing t,he
E writ petition of the respondents, and in our view rightly."

The other decisions cited by the counsel for the appellants will not
be of any assistance in deciding the factual disputes involved in· the instant
case.
F
In our view, the High Court has correctly applied the above judgment.
This Court held that no market fee could be levied by the State ofRajasthan
on seeds on the ground that a seed was distinct from foodgrains inasmuch
as they were not fit for human consumption. The ratio decidendi of the
above decision is squarely applicable to this case wherein the appellant
G seeks to give a wide connotation to the words in the Schedule. In our
opinion, that giving a wide interpretation is not possible and as Wheat Seed
is not included in the Schedule, the Mandi Samiti is not allowed to levy
a market fee on purchase. As the Mandi Samiti plays no role in the trade
of the respondent's seeds. it may not be allowed to levy the market fee.
H It is also not in dispute that the Breeder Seeds are allocated by the Ministry
KRISHI UTPADAN MANDI SAM!Tl i·. P!Ll!BH!T PANTNAGAR BEEJ LTD. [DR. LAKSHM.~NAN. J] 365

of Agriculture or by the Universities to the various seed producing agencies A
and companies who multiply the breeder seeds into foundations seeds.

Jt is also very useful to refer hereunder the process by which the seed
is manufactured under the Seeds Act and the Seeds Rules:

"(i) Seeds developed in laboratories are classified as Breeder B
Seeds and are sold through the Ministry of Agriculture or notifie~
Agriculture Universities to producing agencies, Companies and
farmers. Foundation Seeds (Stage l and II) are developed a$
progenies of Breeder Seeds and are required to obtain a Certificate
from the Seed Certification Agency. C
(ii) The production of Foundation Seeds is supervised and ap-
proved by the Certification Agency to maintain specific genetic
identity and genetic purity and are required to conform to
certification standards specified for the crop/variety being certi-
fied. [)

(iii) The Foundation Seed is then grown by fhe fanner in .a land
earmarked specifically for the sowing of the Foundation Seed.
The offsprings of these Seeds are terms as Certified Seeds, which
too are required to meet the minimum standards of genetic purity E
and genetic identity.

(iv) It is only if the Seeds meet the minimum standards are they
subsequently categorised as Certified Seeds and can be purchased
by the respondent for further processing.

(v) The processing done by the respondent is done under the aegis
of an Inspector of the State Seed Certification Agency and
thereafter the samples are taken for testing to notified Government
Seed Testing laboratories.

(vi) It is only after meeting the minimum standards of genetic G
purity and genetic identity that the Seed is put in a bag that is
sealed and tagged by the Inspector of the Seed Certification
Agency. It is this seed which is allowed to be sold in the market
and a certificate is issued by the Agency stating the standards of
the Seed and other particulars." H
366 SUPREME COURT REPORTS [2003) SUPP. 6 S.C.R.

A It was submitted by the first respondent that all the above mentioned
stages of Certification are as per the provisions of the Rules and that right
from the inception to the time when the Seed is sold in the market, it is
done under regulation issued to govern each and every stage of seed
production and certificates are only issued after the seed is found to achieve
the n,iinimum standards of genetic identity and genetic purity. It was also
pointed out that no such certification standards exist for food grains sold
by farmers to the Mandi Samiti. Thus the production of seeds is an
integrated process and needs to be regulated at every stage, .right from the
inception, in order to maintain genetic identity and genetic purity.

01 There is no nexus whether the seed has been chemically treated or
not and the levy of market fees. Since the seed is a separate commodity
from grain, the same is not covered under Schedule I of the Adhiniyam
and as such no market fee is Jeviable over the sale and/or purchase of the
same.

We are, therefore, of the view that the seeds are not specified
agricuh.ural produce under the provisions of the Act and, therefore, the
business of 'purchase and sale of seeds under the supervision of Seed
Certification Agency established under the Act is not a business of sale and
Bi purchase of specified agricultural produce and as such the first respondent
is not required to pay the market fee or to take out a licence.

We are also of the view that the respondents have grossly erred in
ignoring the Jaw settled by this Court in the case of State of Rajasthan v.
Ray·asthan Agricultural Input Dealers Association (supra) under Article
F' 141 of the Constitution in demanding market fee on seeds. Since the
processing of wheat resulting in Joss of its basic characteristics of being
cereal, it cannot be subjected to levy as agricultural produce since the
purchase by the respondent is for the purpose of growing seeds, no levy
is permissible and, therefore, market fee cannot be imposed on seeds which
G· are unfit for human consumption.
Question No. i

Thus, the true scope and ambit of Sections 2 (a) and 17 (iii) (b) of
H• the Act has been explained in paras supra.
KRISHI UTPAOAN MANDI SAMITI v. PILLIBHIT PANTNAGAR BEEJ LTD. [SINHA, J.] 367

Question No. ii A
The appellant has no authority to levy market fee on the purchase of
wheat by the seed processing unit. This question is answered in the
negative.

Question No. iii B

Wheat seed converted into certified seed is unfit for human consump-
tion and, therefore, market fee levy is impermissible.

Question No. iv c~

The object of legislature was to notify only those seeds which are
different from the produce itself.

Thus all the questions are answered as above.
D
The argument of the counsel for the first respondent is well merited
and founded on sound legal principles and on practical and factual asiiects
of the matter.

For the foregoing reasons, we hold that the appeal has no merit and
is liable to be rejected. Accordingly, we do so. However, there will be E
no order as .to costs.

S.B. SINHA, J. The core question involved in this appeai is as to
whether 'seed' would come within the purview of the expression 'Wheat'
within the meaning of the provisions ofU.P. Krishi Utpadan Mandi Samiti F
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 ag1 icultural produce in terms of Section 17 of the Act.

Agricultural produce is defined in Section 2(a) of the Act to mean:
G

"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 H.
368 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A 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
B is engaged in buying or selling agricultural produce as ·a principal
or as a du-ly authorized agent of one or more principals and
includes a person, engaged in processing of agricultural produce."

It is not iu dispute that the respondents are engaged in production and
sale of 'seeds' which is governed by a Parliamentary Act known as
C 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 l 983, The preamble of the 1966 Act suggests that the same was
enJtct~d with a view to monitor the production and sale of seeds. The
D 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:-

"In the interest of inci:eased agricultural production in the Coun-
try, it is considered necessary to regulate the quality of certain
E 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 -

f (a) Constitution of a Central Committee consisting of repre-
sentatives of the Central Government and the State Govern-
ment, the National Seeds Corporation and other interests to
advise those Governments on all matters arising out of the
proposed Legislation;
G (b) fi>;ing minimum standards of germination; purity and other
quality factors;

(c) t~stlng seeds for quality factors at the seed testing labora-
tories to ce established by the Central Government and the
H State Government;
KRISHI UTPADAN MANDI SAMITI '" PILLIBHIT PANTNAGAR BEEJ LTD. [SINHA, J.) 369

( d) Creating of seed inspection and certification service in each A
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
B
(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
c
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 D
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 E
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 under F
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 G
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 H
370 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A 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 v. Mis. H Abdul Bakhi & Bros., AIR
(1965) SC 531, the Supreme Col!rt held:-

B "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
C 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 contem-
plated to be continued with profit motive, and not for sport or
pleasure."
D
Yet again in Sri Krishna Coconut Co. v. East Godavari Coconut and
Tobacco Market Committee, AIR (1967) SC 973, this Court while consid-
ering interpretation of Section 11 of the Madras Commercial Crops
Markets Act held :-

E "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 :
F "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". -

G 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
H legislature in directing the trader to obtain licence is absolutely clear and
KRIS HI UTPADAN MANDI SAMITI '" PILLIBHIT PANTNAGAR BEEJ LTD. [SINHA,].) 3 71

unambiguous in so far as it seeks to regulate the trade for purchase and A
sale. Thus a person who is not buying an agricultural' produce for the
purpose of selling it whether in the same form or in the transformed form
may not be a trader. Fuithermore, 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 B
provisions of the statute which have the object of enforcing the provisions
thereof, namely, levy of market fee, which was t0 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 C
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 D
following observations of Lord Esher N. K. in the case of Tuck & Sons
v. 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 E
for ~he 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. F
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 Mis Khemka G
& Co. (Agencies) Pvt. Ltd. etc. v. 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 H
372 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.
A 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
B 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
C 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
D 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
E 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.

F The Central Government, made Foodgrains Market Restrictions
(Exemption of Seeds) Order, 1970 and Seeds Control Order, I 983 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
G thereunder shall have effect, notwithstanding anything inconsistent there-
with 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
H of 'agricultural produce~ under the said Act.
KRISHI lITPADAN MANDI SAMITI 1·. PILLIBHIT PANTNAGAR BEEJ LTD. [SINHA, J.] 373

Furthermore the interpretation Clauses contained in Section 2 of the A
said Act is prefaced with the expressions "unless there is anything
repugnant in the subject or context".

This Court in State of Maharashtra v. Indian Medical Association
and Others, [2002] l sec 589, inter alia, held that the expression B
contained in one Statute may have to be read c':fft;:·ently in a particular
context.

Recently in S. Samuel, MD., Harrisons Malayalam & Anr. v. 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 C
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 D :
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 E
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.
F
I respectfully agree with the proposed judgment of Brother Dr. AR.
Lakshmanan that the appeal be dismissed.

B.S. Appeal dismissed.

G
A KANPUR DEVELOPMENT AUTHORITY
v.
SMT. SHEELA DEVI AND ORS. ETC. .'
NOVEMBER 28, 2003

B [SHIVRAJ V. PATIL AND D.M. DHARMADHIKARI, JJ.]

Development Authority-Housing Scheme floated in 19 78-Tentative
cost of MIG Flat fixed at Rs. 48, 000-Applications received for such
scheme less than total number offlats to be constructed under the scheme-
C Brochure containing a clause that the price was not to be escalated in
excess of 10% ofthe tentative cost-Construction offlats under the Scheme
was completed in 1980-However, flats not allotted to eligible applicants
who applied for the scheme-No fault was attributed to the applicants-
In 1994 the price of the Flat was increased from Rs. 48,000 to Rs.
D 2,08,000-Challenge to High Court directing delivery ofpossession offlats
at the cost mentioned in the brochure-Held, valid-The cost ofconstruction
of flats was to be determined on the date of the completion of the
construCtion and not on the date ofdelivering possession - The determination
of cost of house/flat or escalation of cost cannot be arbitrary or erratic~
.E The Development Authority could not enhance the prices for the unforeseen
or/or compelling reasons beyond control of the Development Authority
even as against the terms and conditions contained in. the brochur~'. ·"
t·.

Appellant floated three housing schemes with financial support
from 'HUDCO' "on no profit no loss basis" for Lower Income GFb'up;
F and Middle Income Group. A brochure was issued showing the' cost
of each house and terms and conditions of the scheme. Respondents
applied for Middle Income Group (the "MIG") and were not allMteci
the house after more than 18 years for no fault of theirs. The estimated
cost of each house was specified in the brochure, which was Rs. 48,000.
G The houses were to be allotted among the valid applicants by lottery
and on receipt of letter of information of allotment, the applicants ha'd
to deposit the balance of the I/4th of the cost of the house. Thereafter
the physical possession of the houses was to be delivered to the allottees
and the remaining 3/4th of the cost of the house was to be paid by t'1e
H allottees in 48 quarterly installments in 12 years. Out of 111 MlG flats
374
KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI 375

only 108 were valid applications so all the applicants were required to A
be allotted the MIG flats when l/4th of the cost of the flats were
deposited. However, the Appellant chose to include the names of some
more persons after the last date, which gave rise to disputes. Some
affected applicants filed suits and the court finding fault with the
Appellant decreed the suit and directed it to allot the houses to 108 B
valid applicants keeping 8 houses reserved for the persons who were
plaintiffs in those two suits. The appeals filed by the Appellants against
the decree passed by the trial court were also dismissed. Instead of
complying with the decree, Appellant increased the cost of house from
Rs. 48,000 to Rs. 2,08,000 and directed the applicants to deposit further C
sum of Rs. 40,000 and in case of default the name of such applicant
would not be included in the list of lottery for allotment of houses. Some
of the Respondents filed Writ Petitions, which were admitted. The High
Court quashed the order issued by the Appellant and directed the
Appellant to deliver the possession of the houses to the Respondents D
at the cost fixed in the brochure. Hence these appeals.

It was contended by the Appellant that the High Court failed to
appreciate that the Vice Chairman of the Appellant could determine
the cost of the houses and the cost fixed by him was reasonable and
fair; t!iat the Appellant had brought out the scheme for allotment of E
houses on 'no profit no loss basis'; that the cost fixed was based on the
relevant materials and it was not arbitrary so as to interfere with the
same; that it was not open for the High Court to hold that the price
of the house fixed was arbitrary and unreasonable without going into
the method or the basis for calculating the cost of the house; the delay F
in allotment of houses was not deliberate or intentional but was
because of the long pending litigation in court; that the houses were
constructed by raising loans under the HUDCO Scheme; that enor-
mous amount of interest has been paid on the loan amount; and that
the appellant had to pay heavy compensation for the acquisition of
~~ G
It was contended by the Resp'.>ndents that the delay in allotment
of houses and delivering possession of the same to the Respondents was
on account of the Appellant; the Respondents compiled with every
condition of the brochure; the unreasonable stand and the conduct of H
-
376 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A the Appellant was responsible for delay and no blame can be put on
the Respondents; that the suits were filed by 8 Plaintiffs and nothing
prevented the Appellant from allotting the houses to the Respondents
keeping aside eight ·houses for those Plaintiffs as houses were available
in excess of the Apptications; that the interim orders in those suits were
B passed ·in 1981/1982 whereas the Ap,pel1ants moved the court for
vacating the interim order in t990; that the present Respondents were
not parties in those suits; that as .per the br-0chure issued by the
Appellant, escalation of cost of houses could not exceed 10%; that the
cost of tbe house should be determined as on the date of com·pletion
of itbe 1houses and .not on the date of the allotment or delivering
C possession of tbe !10uses; and that ithe Respondents were salaried
employees having fosser income and they had arranged their financial
affairs •With a ho,pe 1to .get the houses; that had they been given the
,possession oftbe·.houses :in 1981, after its construction, they could have
saved money paid by way of rent to houses where they were staying.
D
Dismissing the appeals, the Court

HELD : 1.1. It 'is not in dispute that the Respondents made
applications within the time fixed, satisfied the terms and conditions
E for aUotment of houses and they wer:e not the Plaintiffs in the suits filed
in 1981/1982. Tfie const·ruction of houses was completed in 1980, the
cost ofthe house was determined as on 24.12.1994. Nothing prevented
the Appellant from allotting houses to the Respondents, when the
houses were ready_ for allotment .particularly, when houses available
F were more than the applications received before the last date. For no
fault on the Respondents, they were made to wait for more than 1'8
years. As per the brochure the houses were to be allotted t.hrough
lottery system by drawing lot among the eligible applicants, who got
themselves r:egistered through the pr.escribed format within the time
fixed and paid the required money within time. In the MIG Scheme,
G 111 houses were available but the number of applicants were less
including the Respondents. Only 8 pe1·sons had filed suit in the years
1981/1982. There shou.ld have been no difficulty in allotting the houses
and delivering possession to the Respondents immediately on their
completion in 1980. In that event, the payment of interest on loan said
H to have been taken by the authority would not have arisen. 1386-C-F)

,
»
KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI 377

1.2 It cannot also be ignored that the Respondents were I are mostly A
salaried employees having monthly income of Rs. 601 to Rs.1500. They
must also have adjusted and arranged their finance and affairs to make
payment towards the houses. It may also be kept in mind the allottees
were expected to pay the remaining amount after initial deposit in 48
installments. Even having regard to the payment of money in B
installments, the estimated cost which was fixed at Rs. 48,000 with a
clear and express understanding that increase in the cost of the house
could be up to 10% of the cost of the house. Jn the brochure, it is also
mentioned that the price of the house mentioned is totally approximate
and that the final price of the houses would be determined by the Vice
Chairman, on the completion of the houses. Prices of the houses in these C
cases were determined as on 24.12.1994 as against the express clause
that the determination of the final price shall be as on the date of
completion of the construction of the houses i.e. in the year 1980. As can
be seen from the prescribed form of application and rules for payment
the increase of the cost of the house can be up to 10%. Further it is clear D '
from the prescribed form of application as filed by the Respondents
that the estimated cost of the house is Rs. 48,000, which could exceed up
to 10%. (386-F-H; 387-A-CI

1.3. The arguments advanced on behalf of the appellant to the
effect that the Vice Chairman has power to determine the prices of the E
houses and the price determined is binding on the Respondents, runs
contrary to brochure. Hence it cannot be accepted. (387-CJ

1.4. For no fault of the Respondents they cannot be penalized to
pay the cost of construction as determined on 24.12.1994 when the F
houses were ready in 1980. [387-D)

1.5. The High Court rightly concluded that delay in allotting and
in delivering possession of the houses to the Respondents was caused
due to the lapse on the part of the Appellant, and, therefore, in the
fairness of things, the Appellant should not be allowed to determine G
unjust and unfair cost of the houses in an arbitrary ·manner. [388-E]

Delhi Development Authority v. Pushpendra Kumar Jain, (1994]
Supp. 3 SCC 494 and Prashant Kumar Shahi v. Ghaziabad Development
Authority, (2000] 4 sec 120, distinguished. H
378 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A 2. As regards the claim that the Appellant ~orks on no profit no
loss basis and it has raised huge loan under the HUDCO scheme _for
construction of houses and it has to pay heavy interest on the amount
ofloan raised, the Appellant neither urged nor laid any foundation for
this argument before the High Court. No details or particulars were
B given as to the amount of loan raised and the period for which interest
has been paid in respect of the houses constructed which are to be
allotted to the Respondents. (388-F-G]

3. As found, there was delay on account of the Appellant and if
that occasioned payment of interest, the re:opondent cannot be held
c responsible, having regard to the terms and conditions contained in the
brochure. This apart, no justifiable case has been made out for
escalation of price of the houses in these cases, to say that the Appellant
could enhance the prices for the unforeseen or for compelling reasons
beyond its control even as against the terms and conditions contained
D in the brochure. (388-H; 389-A-B]

4. Each case is to be decided in the facts and circumstances of the
case in the light of the scheme published /framed and the terms and
conditions mentioned in the brochure and/or in the prescribed form
E of application in the matter of escalation/determination of cost of house/
flat. However, cases where there is limit for fixing the escalation of cost,
normally the price .of house or flat cannot exceed the limits so fix~d.
The determination of cost of house/flat or escalation of cost cannot be
arbitrary or erratic. The authority has to broadly satisfy by placing
F material on record to justify the escalation of cost of a house/flat.
Whether the delay was caused by the allottee or the authority itself is
also a factor, which has bearing in determination of cost of house/flat.
The unforeseen cause or the reason beyond control of the authority in
a given case may be another factor to be kept in view. (393.;C-E]

G Indore Development Authority v. Sadhana Agarawal (Smt.) and Ors.,
(1995) 3 SCC 1 and Bareilly Development Authority v. Ajay Pal Singh,
(1989] 2 sec 116, referred to.

5. In these cases the tentative cases of houses was fixed at Rs.
H 48,000 but the final cost was determined .at Rs. 2,08,000. This increase
KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI [PATIL, J.] 379

is not mere escalation but it is a multiplication by almost four and half A
times, although escalation could not exceed 10% as is evident from the
contents of the brochure read with prescribed form application for
allotment of house. itself. Contentions of the appellant run contrary to
the contents of its own brochure on which the Respondents acted
adjusting their financial affairs understanding that the cost of the B
houses would be fixed in terms of brochure and that too not exceeding
10% of the estimated cost fixed initially. (393-E-Gl

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 913-914
of 1998.
c
From the Judgment and Order dated 21.5.97 of the Allahabad High
Court in c.M.W.P. Nos. 303 and 9478 of 1995.

Vikas Singh ancl Ms. Amrit Narayan for L.R. Singh for the Appellant.
D
Ranjeet Kumar, Ms. Bina Gupta, Ms. Rakhi Ray and Ms. Sreedevi
Raja for the Respondents.

The Judgment of the Court was delivered by

SHIVARAJ V. PATIL, J. Kanpur Development Authority (KDA) E
has filed these appeals challenging the correctness and validity of the
common order dated 21.5.1997 made by the Division Bench of the High
Court in Writ Petitions.

Three schemes were floated by KDA in September, 1978 with F
financial support of 'HUDCO' "on no profit no loss basis". The three
scheme were; (1) For Economically Weaker Section; (2) For lower Income
Group and (3) Middle Income Group. Applications were invited in the
prescribed form fixing the last date as 29.9.1978. The applications were
to be made in the prescribed form along with the earnest money for each
category. A brochure was issued showing the cost of each house and terms G
and conditions of the Schemes. In these cases, we are not concerned with
the houses constructed in two other schemes which were allotted to the
applicants on the basis of lottery on 25. l 0.1980 and cost specified in the
brochure and the possession of the houses was delivered to them. However,
the applicants (respondents herein) in the Middle Income Group were not H

l
380 SUPREME COURT REPORTS '[2003] SUPP. 6 S.C.R.
A allotted the houses and their applications were kept pending for more than
18 years for no fault of them.

As per the terms and conditions mentioned in the brochure inthe MIG
Category, the applications were to be made along with the earnest money
B by 29 .9 .1978. The estimated cost of each house was specified in the
brochure as Rs. 48,000. The persons wh0se income was between Rs. 601
to Rs. 1500 per month were eligible for Middle Income Group Houses: The
houses were to be.allotted among the valid applicants byfottery. After the
lottery was drawn and on receipt of letter of information-of allotment, the
applicants had to deposit balance of the 1/4th of the cost of the house.
c Thereafter, physical possession of the houses was to be delivered to the
allottees and the remaining 3/4th of the cost of the house i.e. Rs. 36,000
was to be paid by the allottees in 48 quarterly installments in 12 years with
11.5% interest as per the brochure. Since there were only 108 valid
applications altogether for 111 MIG houses, all the applicants could have
D been allotted MIG houses when l/4th cost of the house was deposited by
the applicants as on 31.3.1979, what remained was only to draw a lottery
among the I 08 valid applicants for the specific houses to each one of the
applicants. And thereafter the possession of specified house was to be
delivered to each allottee as the constructions of 111 MIG houses were
E completed in 1980.

However, KDA chose to include names of some more applicants after
the last date i.e. 29.9.1978, which gave rise to disputes.· Some affected
applicants filed suits in 198 Ill 982. None of these respondents were parties
F in those suits.

The court finding fault with the KDA decreed the suit and directed
it to allot the houses to I 08 valid applicants.keeping 8 houses reserved for
the person who are plaintiffs in those two suits. The appeals filed by the
KDA agair.st the decree passed by the trial court were also dismissed.
G Instead of complying with the decree, KDA increased the cost of each
houses from Rs. 48,000 to Rs. 2,08,000 by the notification dated 24.12.1994
stating that each applicant had to deposit a further sum of Rs. 40,000 and
in case of default the name of the applicant-would· not be included fa the
list of lottery for allotment of houses. In•these circumstances, some of the
H respondents were compelled to file writ petitions.
KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI (PATIL, J.] 3lU

The writ petitions were admitted and interim orders were issued to A
include the names of 85 general category applicants in the lottery. In spite
of the interim order dated 4.1.1995, KDA again issued a notification on
l 0.1.1995 stating that the date of lottery had been extended to 17.1.1995.

The lottery was drawn among the 108 valid applications, keeping 8 B
houses reserved to the plaintiffs in the two suits. In February, 1995,
information of allotment was issued to all the allottees along with demand
for Rs. 24,000 from each one of them towards first 6th monthly installment.
The High Court in the writ petitions stayed this demand. The KDA filed
the counter affidavit in the writ petitions taking a stand that it was entitled C
to escalate the price as per the brochure; the initial price fixed as the cost
of the houses, was only tentative; the· delay in drawing of lottel')' and
allotment of house was on account of the suits filed and because of the
pendency of the cases. According to the KDA, the action taken by it in
increasing the cost of the. house to Rs. 2,08,000 was quite justified. The D
Division Bench of the High Court, after detailed consideration of the
respective contentions, allowed the writ petitions granting relief to the
respondents by quashing the order dated 24.12.1994 of the KDA increasing
the cost of the houses and directed it to .deliver the possession of the houses
to the respondents on the cost fixed in the brochure.
E
The learned counsel for the appellant urged that the High Court failed
to appreciate that the Vice Chairman of KDA could determine the cost of
the houses and the cost fixed by him was reasonable and fair; the High
Court could not have interfered with such determination of cost. The High·
Court should have .taken into consideration the position that the KDA F
brought out the scheme for allotment of houses on 'no pwfit and no loss
basis'; the cost fixed was based on the relevant materials and it was not ·
arbitrary so as to interfere with the same; it was not open to the High Court
to hold that the price of the house fixed was arbitrary and unreasonable
without going into the method or the basis for calculating the cost of the G
house. The delay in allotment of houses was not deliberate or intentional;
it was because of long pending litigation in courts. The learned counsel
added.that KDA constructed houses by raising loans under the HUDCO
Scheme; it has paid enormous amount of interest on the Joan raised; it had
to pay heavy compensation for acquisition of land.
H
382 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A On the other hand, the learned senior counsel for the respondents
argued fully justifying the impugned order. He submitted that the delay in
allotment of houses and delivering the possession of the same to the
respondents was on account of the appellant; the respondents complied
with the every condition contemplated in the brochure; the unreasonable
B stand and conduct of the appellant was responsible for delay and no blame
can be put on the respondents in that regard. Two suits were filed in 1981/
1982 by eight plaintiffs in all. Nothing prevented the appellant from
allotting the houses to the respondents keeping aside eight houses for the
eight· plaintiffs as they were available in excess of the applications. The
C appellant moved for vacating the interim order in those suits filed in 1981 I
1982-only in 1990. The present respondents were not' parties in those suits.
The-appeals filed by the KDA against the decree µassed in the suits were
dismissed on 24.5.1994. The learned counsel fmther contended that as per
the brochure issued by the appellant, escalation of cost of houses could not
exceed l 0%; cost of the houses should be determined as on the date of
'completion of the houses and not on the date of the allotment or delivering
-the possession of the houses. The appellant has tried fo prosecute parallel
remedies inasmuch as it filed review petitions before the High Court and
special° leave petition before this Court against the impugned order.· The
E respondents were salaried employees having income between: Rs. 601 to
Rs. 1500 per month; they had arranged their financial affairs with a hope
to get houses. Had they been given the possession of the houses immediately
after their completion in 1981, they could have saved money paying by
way of rent to houses where they were staying. The learned counsel drew
. · our attention to I.A. Nos. 7-8 of2003 filed by the respondents to take action
.F against the appe1la:-1t under Section 340 read with Section 195 of the Code
of Criminal Procedure by ordering an inquiry into the offences committed
by the appellant under Sections 193, 196, 199, 200, 463, 464, 465, 467,
468, 4 71 read with Section 120-B of the Indian Penal Code in ~espect of
production of false and fabricated documents and giving false evidence
G during the proceedings. In these applications it is specifically averred that
the appellant produced a translated copy of the brochure (Annexure A- I)
alleging the same to contain the 1978 Scheme for allotment of houses in
Mohalla Barra Third Phase, Kanpur. The correct copy (translated) of the
brochure that was given to the respondents at the time of application for
: H the said scheme is filed as Annexure A-2. The original copy in Hindi was
KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI [PATIL, J.] 383

placed before us during the hearing. According to the respondents Annexure A
A-1 was filed before the High Court by the appellant, which is fake,
fabricated and materially different from the true translation of the original
brochure and that the said document has been filed by the appellant with
oblique motives to thwart/alter the course of justice. It is further stated in
these I.As. that the case of the appellant before this Court is based on the B
premise that "In the brochure Clause 4 relating to payment of price,
stipulated that the final price shall be determined by the Vice Chairman
of the KDA and that the said price shall be determined by the Vice
Chairman of the KDA and the price would be binding on the applicants.
The brochure for allotment of houses under the Scheme also provided that C
the Vice Chairman of the KDA is empowered to alter/change the price/
· shape of the houses shown in the brochure and it shall be binding on every
applicant". The prayer is made in these I.As. to order for a preliminary
inquiry into the offences committed by the persons responsible in the
appellant authority during the course of the judicial proceedings and after D
recording the findings make a complaint to the Chief Judicial Magistrate
for the prosecution of the accused persons in accordance with law. During
the course of hearing when the original brochure in Hindi was produced
on behalf of the respondents the learned counsel for the appellant did not
dispute its correctness and authenticity.
E
We have carefully considered the respective submissions made on
behalf of the parties and to appreciate them, it may be necessary to refer
to the relevant tenns and conditions under different headings contained in
the brochure. In the light of the controversy as to the translated copies of
F'
the brochures produced by the appellant and the respondents and in view
of what is stated above in relation to them the relevant terms and conditions
contained in translated copy of the brochure (Annexure A-2) filed along
with I.A. Nos. 7-8 on comparison of the same with the original in Hindi,
reads : -
G·
"Signature
(L.N. Tripathi) (Rubber stamp)
Head Cleark (Sales)
Kanpur Development Authority
H
384.· SUPREME COURT REPORTS [2003] SUPP. ·6 S.C.R.

BURRA HOUSING CONSTRUCTION SCHEME
(financially supported1·by. HUDCO)

Third Phase

(Application Form)

KANPUR DEVELOPMENT AUTHORITY

Price Rs. 5·

c "(Application form for applicant only)

KANPUR DEVELOPMENT AUTHORITY No;: .......... .
(without putting adverse effect)

Price Rs. 5
D;
BARRA·HOUSING SCHE\1E

To:

Vice Chairman
E Development Authority
Kanpur

Sir, .

f.: I/We: ..................................................................... son/wife of·
......................................................................................... apply for.
l:\ ·house in the proposed 'houses under "Barra~.iGran Ninnan
Yogna"· of Kanpur:Development Authority; the estimated cost of
which· is Rs. 48,000' (which ·can also exceed ·upto I 0%)
G:
"SYSTEM AND RULES OF ALLOTMENT OF HOUSES

(8) ·The Vice~Chairman can ·change any rulec.or,.cn~cancel and
f, can make other rule which shall be acceptable .to.the applicant."
H 1·
KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI [PATIL, J.] 385

"KANPUR DEVELOPMENT AUTHORITY A
BARRA HOUSING CONSTRUCTION SCHEME
Details of House & Rule for Payment

SI. Category Area Details Monthly Sale Adv. 31.12.78 31.12.79 Qtly. Rate
No. of house of land
In sq.
of
house
income
of family
price
of
amt.
with
. install- of
ments intere- B
mt. Not house appli- st/year
exceeding which cation
can
increase
upto
10% c
1 2 3 4 5 6 7 8 9 10 11

1. ...............

2. ...............
D
1500 ' 2500 4500 11.5%
3. Middle 167.20 2 rooms, 48000 5000 48
Income drawing
Group dinning,
Bath&
Toilet
Room&
Lounge E
In the application form as prescribed by the KDA, it is clearly
mentioned that the estimated cost of the house in MIG schr,me is Rs, 48,i..OO
(which can also exceed up to 10%). There was some controversy with
regard to the terms and conditions mentioned in the brochure. It was F
contended on behalf of the respondents that there was deliberate misrep-
resentation by KDA before the High Court by filing incomplete and
incorrect extract of Brochure. Before us, not only translated copy but
original ofBrot:hure in Hindi itself was produced by respondents and there
. was no controversy as to the terms and conditions in relation to the relevant
clauses extracted above. As rightly contended on behalf of the respondents G
there is no clause 4 in the brochure re,lating to payment of price on which
the appellant claimed that the Vite-Chairman of the KDA has the right to
increase the price and fix the final price that would be binding on the
applicants. This being the position, the very foundation for increase of the
price of houses and justification thereof itself is destabilized and knocked H
386 SUPREME COURT REPORTS [2003] SUPP; 6 S.C.R.

A down. Cfause 4 of the brochure is altogether different, which reads:-
"(4) House category 2 and 3, the interested applicants to deposit
full amount of the house, will have to deposit balance of the
I/4th of cost by 3 l.12.1978. The if!formation of lottery will be
B sent by registered·post on the address mentioqed in the application
form. The remaining 3/4th .of the cost of the house will have to
be deposited in cash or by Bank draft in favour of Development
Authority within 60 days from the information of lottery given by
registered post, otherwise all proceedings regarding allotment will
be cancelled and the advance money will be forfeited."
c
It is not in dispute that the respondents made applications within the
' • l '
time fixed, satisfied the terms and conditions for allotment of houses and
they were not the plaintiff in the suits filed in 19810982. The construction
of houses was completed in 1980, the cost of the house was determined
D as on 24.12.1994. Nothing prevented the KDA from allotting houses to the
respondents, when the houses were :ready for al1otment. Particularly, when
houses available were more than the applications received before the last
date. For no fault of the respondents, they were made to wait for more than
18 years. As per the brochure, the house were to do allotted through lottery
E system by drawing lot among the eligible applicants, who got themselves
registered through the prescribed format within the time fixed and paid
required money withi.n time. In the instant case in MIG scheme, 111 houses
were available but the number of applications were less including the
respondents. Only 8 persons had filed suits in the years 1981/1982. There
F should have been no difficulty, in allotting fhe houses and delivering the
possession to the respondents immediately <?n their complet.ion in 1980. In
that event, the payment of interest on loan said to have been taken by the
authority would not have arisen. It can,not also be ignored that the
respondents were/are mostly salaried employees having monthly. inco!Ile
G of Rs. 601-1500. They must also have adjusted.and arranged their finances
and affairs to make payment towards the houses. It may also be kept in
mind that the allottees were expected to pay the remaining amount after,
initial deposit and first installment, in 48 jnstallments. Even having regard
to the payment of money in installments, the estimated cost which was
H fixed at Rs. 48,000 with a clear and express understanding that increase
KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI [PATIL, J.] 387

in the cost of the house could be up to I 0% of the cost of the house. In A
the brochure, it is also mentioned that the price of the house~ mentioned
is totally approximate and that the final price of the houses would be
determined by the Vice Chairman, KDA, on the completion of the houses.
Prices of the houses in these cases were determined as on 24.12.1994 as
against the express clause that the determination of the final price shall be B
as on the date of completion of the construction of the houses i.e. in the
year 1980. As can be seen from the prescribed form of ai;plication and rules
for payment the increase of the cost of the house can be up to 10%. Further
it is clear from the prescribed form of application as filled by the
respondents that the estimated cost of the house is Rs. 48,000 which could C
exceed up to 10%. The argument advanced on behalf of the appellant to
the effect that the Vice Chairman has power to determine the prices of the
houses and the price determined is binding on the respondents, runs
contrary to brochure. Hence it cannot be accepted.

D
Further for no fault of the respondents they cannot be penalized to
pay the cost of construction as detenni~ed on 24.12.1994 when the hous.es
were ready in 1980. As can be seen from the impugned oraer, the High
Court has found thus : -

"It was undesirable conduct of the authority which gave rise to E
the civil litigation. There were no restraints and constraints for the
respondents in drawing the lottery and making the allotments to
the genuine applicants even during the pendency ofthe civil suit
and appeal before the District Judge. There is nothing in the
counter affidavit to demonstrate that the respondents were under F
legal obligation to refuse the allotment of the houses to the persons
or make delay in allotment of the houses to them. So in absence
of a reasonable and sufficient justification preventing the
respondents to make allotment in 1979, we feel that the respondents
should be blamed for delay in. making the allotment." G

The High Court has further observed :

"It may be mentioned that the petitioners deposited the installments
under the hope and trust that they will get the houses within the H
388 SUPREME COURT REPORTS [2003] SUPP. 6 S;C.R.

time schedule advertised at the initial.stage. Much time is elapsed
between the registration of the applications for aliotment of the
houses and actual construction and delivery of possession there-
after. It is worth mentioning that the petitioners might be living
in the rented house since 1979 and they might have managed their
financial position in such a manner that after the deposit of the
installments they will get the house of their own and thereafter
they will be· free- from· payment of house rent and then they wi II
be shifted from the rented ·house to the allotted house, but. on
account of inordinate delay in.delivery of possession of allotted
c house;.their financial calculation and expectation stands frustrated
causing.various types of financial loss to them. Ori the other hand,
once th~ authorities made-'Offers-and the same were accepted,by
the allottees, with. the legitimate -exception, the statutory obliga-
tion cast upon the authorities to complete the same within the time
schedule mentioned in the offer and if they fail to discharge the
D.:.
same, they should be held responsible for it and not the petition-
ers."

The High Court finally concluded that delay in allotting and in
E delivering the possession of the houses to the respondents was caused due
to the lapse on the part of the appellant, and, therefore, in the fairness of
things, the KDA should not be allowed to determine unjust and .unfair cost ·
of the houses in an arbitrary manner.

We have no good reason·to take a different view in the light of what
F is stated above. We have to note ·one more submission made on behalf of
the appellanLthat the appellant works on no loss and no profit basis and
it has raised ,huge .loan under. the HUDCO scheme for construction of
houses and iLhas to .pay heavy interest on the amount of loan raised. The
appellant neither urged nor laid any foundation for this argument before
G; the High Court. No,details and.particulars were given·as to the amount of
loan raised and the period for which interest has been paid in respect of
the houses constructed which are to be allotted to the respondents. ,

Further the final price ofthe houses had to be determined on the date
H of their completion. As found, there was delay on account of the appellant
KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI [PATIL, J.) 389

and ifthat occasioned payment of interest, the respondents cannot be held A
responsible, having regard to the terms and conditions contained in the
brochure. This apart, no justifiable case is made out for escalation of price
of the houses in these cases, to say that the appellant could enhance the
prices for the unforeseen or compelling reasons beyond control of appel-
lants even as against the terms and conditions contained in the brochure. B

The learned counsel for the appellant cited two decisions in Delhi
Development Authority v. Pushpendra Kumar Jain, [1994] Supp. 3 SCC
494 and Prashant Kumar Shahi v. Ghaziabad Development Authority,
· [2000] 4 SCC 120, in support of his submissions. In our view both the
decisions do not help the appellant when we look at the facts of those cases C
and the views expressed therein.

In the case of Delhi Development Authority (supra) the facts were that
Delhi Development Authority (DDA) published a scheme called "Regis-
tration Scheme of New Pattern, 1979 of intending purchasers of flats to D
be constructed by Delhi Development Authority" providing a procedure
for allotment of flats. In the brochure, clause (11) provided schedule of
payment. Clause (14) was to the effect that "it may please be noted that
the plinth area of the flats indicated and the estimated prices mentioned
in the brochure are illustrative and are subject to revision/modification E
depending upon the exigencies of lay-out, cost of construction etc.". The
Court took notice that there were always more applicants than the number
of flats available. The DDA had been adopting the method of draw of lots
among the registered applicants to select the allottees. The writ petition was
filed by one of the allottees because between the date on which lots were
drawn and the date on which the allotment was communicated to the F
respondent, the land rates were revised by the DDA by the circular dated
6.12.1990, as the_re has been substantial enhancement of land rates in the
region of about 50 to 70%. Since the allotment was made ot allottee on
January 9/13, 1991, he was called upon to remit the amount on the basis
of revised land rates as aforesaid. The Division Bench of the High Court G
accepted the plea of the allottee writ petitioner. This Court, allowing the
appeal filed by the ODA, found fault with two reasons given by the High
Court:(l) Though the draw was held on 12.10.1990, the allotment-cum-
demand letter was issued to the respondent only on January 9/13, 199\.
This delay was the result of inefficiency of the DDA, and (2) as the issue H
390 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A of allotment-cum-demand letter was delayed in the office of DDA, it
cannot charge the revised land rates to the respondent inasmuch as the
respondent became entitled to get the flat on 12. l 0.1990; the revision of
land rates subsequent to the draw of lots cannot effect the respondent. This
Court held that there was no legal basis for holding that the respondent
B obtained the vested right to allotment on the draw of lots as the system of
drawing of lots was resorted to with a view to identify the allottee; it was
not the allotment by itself. Mere identification or selection of the allottee
does not clothe the person selected with a legal right to allotment at the
price prevailing on the date of draw of lots. The scheme did not say so
C either expressly or by necessary implication. On the contrary clause (14)
made provision for modification or revision of cost of construction, etc.
On facts it was also found that there was no unreasonable delay or
inefficiency on the part of the DDA. Further, the validity or justification
of the revision ofland rates by circular dated 6.12.1990 was not questioned
D in the writ petition. But in the present case the facts are entirely different.
On fa~ts it is found that there has been unreasonable and unjustified delay
on the part of the appellant in allotting and delivering the possession of
the houses. The clause in regard to determination of price is not similar
to clause (I 4) in the aforementioned case of DDA. The cost of escalation
could not exceed l 0% of the tentative cost. The cost of construction of
E house in these cases on hand was to be determined as on the date of the
completion of the construction of the house and not on the date of
delivering possession of the house. Unlike in the case of DDA it was n•)t
the case of revision of land rates alone, that too in the absence of any
circular indicating revision of cost of land before allotment or delivery of.
F possession of houses.

The case of Prashant Kumar Shahi, aforementioned, is also of no help
to the appellant. It supports the case of the respondents. This Court held
that if the authority is found to be re~ponsible for the delay in delivery of
G the possession of the plots in terms of the agreement arrived at or acc~rding
to the assurance given in the brochure~ the allottee cannot be burdened with
the interest on the balance amount not paid by him. But on the facts of
that case fault was found with the allottee in reagard to the delay in
payment. As already recorded above, in these appeals, with which we are
H concerned, delay was on account of the appellant. authority itself.
KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI [PATIL, J.] 391

The learned counsel for the respondents in support of his submissions A
cited the decision of this Court in Indore Development Authority v.
Sadhana Agarwal (Smt) and Others., [1995) 3 SCC l. In the facts and
circumstances of that case having regard to the reasons for the increase in
the cost no interference was called for by the High Court. Further, the High
Court was justified in saying that in such circumstances, the authority owed B
a duty to explain and satisfy the court, the reasons for such high escalation.
The High Court has to be satisfied on the materials on record that the
authority has not acted in an arbitrary or erratic manner. In the said decision
reference is made to two earlier decisions of this Court including the case·
of DDA aforementioned. In paragraph 9 it is stated, thus : -
c
"9. This Court in the case of Bareilly Development Authority v.
Ajai Pal Singh, [1989) 2 SCC 116, had to deal with a similar
situation in connection with the Bareilly development Authority
which had undertaken construction of dwelling units for people
belonging to different income groups styled as "Lower Income D
Group", "Middle Income Group", "Higher Income Group" and
the "Economically Weaker Sections". The respondents to the said
appeal had registered themselves for allotment of the flats in
accordance with the tenns and conditions contained in the brochure'
issued by the Authority. Subsequently, the respondents of that E
appeal received notices. for the Authority intimating the revised
cost of the houses/flats and the monthly installment rates which
were almost double the cost and rate of installments initially stated
in the General Information Table. But taking all facts and
circumstances into consideration, this Court said that it cannot be
held that there was a misstatement or incorrect statement or any F
fraudulent concealment, in the brochure published by the Author-
ity. It was also said that the respondents cannot be heard to say
that the Autharity had arbitrarily and unreasonably changed the
tenns and conditions of the brochure to the prejudice of the
respondents. In that connection, it was pointed out that the most G
of the respondents had accepted the changed and varied tenns.
Thereafter they were not justified in seeking any direction from
the Court to allot such flats on the original terms and conditions.
Recently, the same question has been examined in the case of
Delhi Development Authority v. Puspendra Kumar Jain. In H
392 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A respect of hike in the price of the flats, it was said : (SCC p. 497,
Para 8)

"Mere identification or seledion of the allottee does not
clothe the person selected with a legal right to allotment at
the price prevailing on the date of draw of lots. The scheme
B evolved by the appellant does not say so either expressly or
by necessary implication. On the .contrary, clause (14)
thereof says ·that 'the estimated, prices mentioned in the
brochure are illustrative and are subject to revisions/modi-
fication depending upon the exigencies of lay out, cost of
c construction etc.'."

•Although this Court has from time to time, taking the special facts
,and circumstances of cases in question, has upheld the excess
charged. by the .development authorities over the cost initially
D announced as·estimated cost, but it should not be understood that
this Court has· held· that such development authorities hav~
absolute right-to hike the cost of flats, initially announced as
, approximate-or ·estimated cost for such flats. It is well known that
· persons belonging ·to· middle and lower income groups, before
registering themselves for such flats, have to take their financial
E capacity into consideration and in some cases it results in great
hardship when the· development authorities announce an estimated
·or approximate cost andideliver the same at twice or thrice of the
said· amount. The· final cost should be proportionate to the
approximate· or estimated cost.mtmtioned in the offers or agree-
. ments. With the high rate of inflation, escalation of the prices of
construction materials, and labour charges, if the scheme is not
· ready within•the time-frame, then-it is not possible to deliver the
flats or houses in question at the cos~ so announced. It will be
advisable that·before offering the flats to the public such devel-
G opment authorities should fix the estimated cost of the flats taking
into consideration'the·escalation ofthe cost during the period the
scheme is to be completed. In the instant case the estimated cost
for the LIO flat was given outat Rs. 45,000. But by the impugned
communication, the appellant.informed the respondents that the
actual cost of the flat shall be Rs. 1;16,000 i.e. the escalation is
KANPUR DEVELOPMENT AUTHORITY v. SHEELA DEVI [PATIL, J.] 393
more than 100%. The High Court was justified in saying that in A
such circumstances, the Authority owed a duty to explain and to
satisfy the Court, the reasons for such high escalation. We may
add that this does not mean that the High Court in such disputes,
while exercising the writ jurisdiction, has to examine every detail
of the construction with reference to the cost incurred. The High B
Court had to be satisfied on the materials on record that the
Authority has not acted in an arbitrary or erratic manner."

We are of the view that each case is to be decided in the facts and
circumstances of the case in·the light of the scheme published/framed and
the terms and conditions mentioned in the Brochure and/or in the pre- C
scribed form of application in the matter of escalation/determination of cost
of house/flat. However, cases where there is limit for fixing the escalation
of cost, normally the price of house or flat cannot exceed the limits so fixed.
The determination of cost of house/flat or escalation of cost cannot be
arbitrary or erratic. The authority has to broadly satisfy by placing material D
on record to justify the escalation of cost ofa house/flat. Whether the delay
was caused by the allottee or the authority itself is also a factor which has
bearing in determination of the. cost of house/flat. The unforeseen cause
or the reason beyond control of the authority in a given case may be another
facto.- to be kept in view. We may also notice that is these cases the E
tentative cost of houses was fixed at Rs. 48,000 but final cost was
detennining at Rs. 2,08,000. This increase is not mere escalation but it is
a multiplication by almost four and half time, although escalation could
not exceed I 0% as is evident from the contents of the Brochure read with
prescribed form of application for allotment of house itself. Contentions
of the KDA ruh contrary to the contents of its own Brochure on which the F
respondents acted adjusting their financial affairs understanding that the
cost of the houses would be fixed in terms of brochure and that too not
exceeding I 0% of the estimated cost fixed initially.

As to the complaint that the appellant having filed review petition G
before the High Court seeking review of the impugned judgment could not
prosecute parallel remedy by filing :::ILP in this Court, the learned counsel
for the appellant was not in a position to say as to what happened to the
review petition filed in the High Court. In our view it may be unnecessary
to say anything ·fu11her on this aspect in the view we have taken and are H
394 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A disposing of these appeals themselves on merits. As regards the prayer
made by the respondents in I.As. 7-8 we do not think it necessary to probe
fu1ther in these proceedings. Hence no orders are required to be passed in
these I.As.

B Thus having regard to the facts found and in view of what is stated
above, we cannot find fault with the conclusions arrived at by the High
Court in the impugned judgment. Hence, finding no merit iP these appeals,
they are dismissed but with no order as to costs.

R.K.S. Appeals dismissed.