STATE OF MAHARASHTRA AND OTHERSversusMAHARASHTRA HYBRID SEEDS CO. PVT. LTD.

924                     [2019] REPORTS
               SUPREME COURT   12 S.C.R. 924              [2019] 12 S.C.R.


A             THE STATE OF MAHARASHTRA AND OTHERS
                                        v.
             MAHARASHTRA HYBRID SEEDS CO. PVT. LTD.
                         (Civil Appeal No.6564 of 2019)
B                              AUGUST 22, 2019
               [R. BANUMATHI AND A.S. BOPANNA, JJ.]
             Seeds Act, 1966 – Seeds Rules, 1968 – Seeds (Control) Order,
      1983 – Maharashtra Cotton Seeds (Regulation of Supply,
      Distribution, Sale and Fixation of sale price) Act, 2009 –
C
      Respondent-Company was processing cotton and non-cotton seeds
      of different varieties in its unit – According to respondent, all such
      processed seeds were stored in the storage/godown attached to the
      processing unit for transportation to different places – Case of the
      appellant was that the respondent not having a valid licence for
D     storage or sale of seeds in the said processing unit had committed
      gross violation of the law – Consequent to which the seed inspector
      had sealed the godowns of the respondent-company – Writ petition
      was filed by the respondent – High Court ordered to de-seal all the
      godowns of the respondent Company and held that the packed and
      labelled seeds were kept in the unit only for further transportation
E
      and no separate licence was required to be obtained for storage of
      seeds in the godown attached to unit for such transportation –
      Further, High Court held that the power of sealing was not available
      to the appellant-authorities – On appeal, held: During the inspection
      of the unit, it was found that packaging and labelling machines
F     were kept and respondent was carrying out the operations of
      “packaging and labelling” in the said unit – As per r. 2(j) of seeds
      Rules, 1968, “processing” does not include operations such as
      “packaging” and “labelling” – For any activity of labelling and
      packaging of the seeds and storing the same, the respondent was
      required to obtain separate licence under the Seeds Rules, 1968
G
      and the Maharashtra Cotton Seeds (Regulation of Supply,
      Distribution, Sale and Fixation of Sale Price) Rules, 2010 –
      Admittedly, respondent had no licence for its godown either as
      “storage of seeds” or “sale of seeds” – In the absence of such, the
      activity of labelling and packaging of seeds at godown was illegal
H
                                      924
   STATE OF MAHARASHTRA v. MAHARASHTRA HYBRID                            925
                SEEDS CO. PVT. LTD.

– Insofar as power of sealing of the appellant authorities are           A
concerned, s.14(1)(e) of the Seeds Act confers vide powers upon
the seed inspector – Since the seed inspector has to ensure that the
provisions of the Act are complied by the person who has obtained
the licence, in case of non-compliance, in rare and exceptional cases,
the seed inspector has power to seal the premises – However, in
                                                                         B
such a case he has to record grounds for his belief that how mere
search and seizure may not be sufficient to prevent further
contraventions – In the facts and circumstances of the case, the
action of the seed inspector and the authorities cannot be said to
be arbitrary – Therefore, judgment of the High Court set aside.
      Allowing the appeal, the Court                                     C

       HELD: 1. Respondent has obtained licence only under
the Factories Act for its unit. Admittedly, the respondent does
not have licence in Form ‘B’ of Seeds (Control) Order, 1983 to
carry on the business of “dealer in seeds”. The only activity
legally permissible to be conducted by the respondent at its             D
processing plant is “processing of seed”. During inspection, it
was noticed that packaging and labelling machines were kept and
respondent was carrying out the operations of “packaging and
labelling” in the unit. For any activity of labelling and packaging
of the seeds and storing the same, the respondent is required to         E
obtain separate licence under the Seeds Rules, 1968 and the
Maharashtra Cotton Seeds (Regulation of Supply, Distribution,
Sale and Fixation of Sale Price) Rules, 2010. In the absence of
such licence, the activity of labelling and packaging qua the seeds
and the cotton seeds carried out at its godown attached with unit
by the respondent is illegal. [Para 24] [939-A-C]                        F

      2. From the search of the godown and also from the
statement of the authorized signatory of the respondent, it was
found that the respondent was not only carrying out the activity
of seed processing in godown; but also carrying on operations of
“packing” and “labelling” etc. As per Rule 2(j) of Seeds Rules,          G
1968, “processing” does not include operations such as
“packaging” and “labelling”. The activities of the respondent
like packaging, pricing and labelling of various seeds in plant
therefore cannot be said to be falling within the meaning of
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926           SUPREME COURT REPORTS                     [2019] 12 S.C.R.


A     “processing” under Rule 2(j) of the Seeds Rules, 1968. The High
      Court erred in brushing aside the materials produced before the
      High Court and the huge quantity of seeds of various kinds found
      to have been stocked in random stake in various godowns of the
      unit. When the authorised signatory present in the plant is said
      to have submitted the signed document dated 10.12.2017 stating
B
      that packed seeds stocked at the unit were ready for dispatch
      and the seeds are packed for sale, the High Court, erred in saying
      that the seeds packed and labelled are meant for transportation
      for which no licence was required. [Para 25] [939-D-F]
            3. By a conjoint reading of Sections 14 and 15 of the Seeds
C     Act and Rule 23 of the Seeds Rules, 1968 and various other
      provisions, it is clear that the Seed Inspector is conferred with
      wide powers coupled with duties. In terms of Section 14(1)(c) of
      the Seeds Act, 1966, Clause 13(d) of the Seeds (Control) Order,
      1983 and Section 7(2) of the Maharashtra Cotton Seeds
D     (Regulation of Supply, Distribution, Sale and Fixation of Sale
      Price) Act, 2009, the Seed Inspector is empowered to enter and
      search any premises, draw samples, seize or detain the stock of
      the seeds in respect of which he has reason to believe that a
      contravention of the provisions of the Act has been committed
      or is being committed. Under Rule 23 of the Seeds Rules, 1968,
E     Seed Inspector can issue and stop sale order in case the seed in
      question contravenes the provision of the relevant Act and Rules
      (Form III). The Seed Inspector is empowered to enter and search
      any premises or break-open the door or any container, to examine
      any records, register, documents of the seed dealer and also to
F     seize the seeds stock(s) and/or records.[Para 32] [943-A-C]
            4. There is, of course, no express provision empowering
      the Seed Inspector to seal any place, where there is contravention
      of the provisions of the Act. But, such power to seal the place is
      deemed to be vested with the Seed Inspector in terms of Section
G     14(1)(e) of the Seeds Act which empowers the Seed Inspector to
      exercise such other powers as may be necessary for carrying out
      the purposes of the Act or any rule made thereunder. The provisions
      of Seeds Act, 1966 and Seeds Rules, 1968 provide for various
      safeguards that the Seed Inspector does not exceed his authority.
      [Para 33] [943-D-E, G]
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   STATE OF MAHARASHTRA v. MAHARASHTRA HYBRID                           927
                SEEDS CO. PVT. LTD.

      5. The Seed Inspector must be satisfied or has reason to          A
believe that an offence under the Act has been committed or is
being committed and that exercise of such power of sealing is
necessary for carrying out the purposes of the Act or the rules
made thereunder. Since the exercise of power to seal in
exceptional circumstances is only to carry out the purposes of
                                                                        B
the Act or the rules made thereunder, it is necessary that before
the Seed Inspector proceeds to take action of sealing the
premises, he has to record grounds for his belief as to how and in
what manner the provisions of the Seeds Act and the rules made
thereunder have been contravened and how mere search and
seizure may not be sufficient to prevent further contravention.         C
The grounds for his belief so recorded in writing has to be forthwith
communicated to the Magistrate in terms of Section 15(5) of the
Seeds Act, 1966 and also to their immediate official superior. This
would ensure that the Seed Inspector does not exceed his
authority or that power to seal is not misused. [Para 35]
                                                                        D
[944-E-G]
      6. In the present case, since the respondent was found to
have stocked genetically modified seed of RRF Hybrid Cotton
which may include transgenic varieties, for which the approval of
Genetical Engineering Approval Committee is required, is also
not submitted by the respondent. In that view, the authorities          E
searched and inspected the godown but the seed material lying
there in a voluminous stock was not appropriately segregated/
staked and also the information was not furnished to inspection
team by plant in-charge. Despite constant follow-up in writing
and through oral instructions, the plant in-charge did not provide      F
stock position of seeds as expected by the Seed Inspector and
also not submitted the certified copy of licence having permission
to stock the seeds at godown. The respondent’s godown was
sealed by 07:00 pm on 15.12.2017 after giving sufficient
opportunity. In such facts and circumstances of the case, the
action of the Seed Inspector and the authorities in sealing the         G
plant cannot be said arbitrary. [Para 36] [944-H; 945-A-C]
      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6564
of 2019

                                                                        H
928             SUPREME COURT REPORTS                          [2019] 12 S.C.R.


A            From the Judgment and Order dated 21.02.2018 of the High Court
      of Judicature at Bombay, Nagpur Bench, Nagpur in Writ
      Petition No.8157 of 2017
            Nishant Ramakantrao Katneshwarkar, Anoop Kandari, Advs. for
      the Appellants.
B          V. Giri, Sr. Adv., Prashant P., Ms. Suveni Bhagat, Ms. Shivi Sethi,
      Abhay Kumar, Advs. for the Respondents.
            The Judgment of the Court was delivered by
            R. BANUMATHI, J.
C           1. Leave granted.
            2. This appeal is preferred against the judgment dated 21.02.2018
      passed by the High Court of Judicature at Bombay, Nagpur Bench in
      Writ Petition No.8157 of 2017 in and by which the High Court has allowed
      the writ petition filed by the respondent-Company thereby ordering the
D     appellant-authorities to de-seal all the godowns of the Company at
      Dhanora which was sealed by the appellant-authorities.
            3. Brief facts which led to filing of this appeal are as follows:-
             Respondent-Company is a registered Company under the
      Companies Act and is engaged in the business of research, production,
E     processing, marketing and sale of variety of Hybrid seeds. According to
      the respondent-Company, they have already obtained seeds licences under
      the provision of the Seeds (Control) Order, 1983 and the Maharashtra
      Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of
      Sale Price) Rules, 2010 and that they are having licence for the storage
F     and sale of such seeds in the State of Maharashtra. According to the
      respondent, the processing of cotton and non-cotton seeds of different
      varieties is done by the respondent in its processing unit/plant situated at
      Dhanora. All such processed seeds are then stored in the storage
      attached to the processing unit at the godown at Dhanora for being
      transported to different places.
G
             4. Case of the appellant is that the respondent not having a valid
      licence for the processing unit at Dhanora has committed gross violation
      of the provisions of the mandate of the Seeds Act, 1966, Seeds Rules,
      1968, Seeds (Control) Order, 1983 and the provisions of the Maharashtra
      Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of
H
  STATE OF MAHARASHTRA v. MAHARASHTRA HYBRID                                  929
        SEEDS CO. PVT. LTD. [R. BANUMATHI, J.]

Sale Price) Act, 2009. On 08.12.2017, local police inspected the godown       A
of the respondent located at Dhanora and noticed suspected seeds of
various kinds stocked and the police informed the concerned authorities
of the agricultural department. On 09.12.2017, the Seed Inspector
inspected the respondent’s godown at Dhanora and noticed huge quantity
of seeds of various kinds stocked in random stakes in various godowns
                                                                              B
along with seeds suspected as Roundup Ready Flex (RRF) Hybrid Cotton.
The Plant In-Charge was informed to furnish the Seed Inspector the
information about crop wise, variety wise and lot wise stock details of
the seeds along with stake details in various godowns. It is stated that on
10.12.2017, Plant In-Charge submitted the details of crop wise, variety
wise and lot wise quantity out of the total stock of seeds in the godown.     C
According to the appellant, the details so furnished were incomplete and
indeterminate. The appellant alleges that the Plant In-Charge did not
cooperate towards the written instruction of the Seed Inspector on the
same day. The Seed Inspector therefore issued a notice to the respondent-
Company on 15.12.2017 informing the Plant Manager that the appellant
                                                                              D
Company does not have the licence for storage or sale of the seeds in
Dhanora unit and that it has come to their knowledge that the activity of
sale is being carried out by respondent in their godown at Dhanora. In
the show-cause notice, the respondent was asked to provide certain
documents and informed that in case of non-supply of the documents,
the godown and the entire premises at Dhanora would be sealed. The            E
appellants claim that respondent did not produce the documents and
accordingly, the godown was sealed by executing a panchnama to
prevent further violation of the provisions.
       5. Aggrieved by the sealing of the Dhanora godown, respondent
filed Writ Petition No.8157 of 2017 before the High Court of Judicature       F
at Bombay, Nagpur Bench. The High Court vide interim order dated
22.12.2017 directed the appellant-authorities to open the sealed godown
after taking a prima facie view and held that since the requisite sample
of the seeds has already been taken and no purpose would be served in
keeping the storage sealed. The High Court held that packed and labelled
seeds were kept in Dhanora unit only for further transportation and no        G
separate licence was required to be obtained for storage of seeds in the
godown attached to respondent’s processing unit at Dhanora for such
transportation. High CThe High Court further held that the power of
sealing was not available to the appellant-authorities, especially to seal
                                                                              H
930             SUPREME COURT REPORTS                          [2019] 12 S.C.R.


A     the storage and keep it sealed indefinitely or till the report of the samples
      is received from the laboratory. Being aggrieved, the appellant-State of
      Maharashtra has preferred this appeal.
              6. Learned counsel for the appellants Mr. Katneshwarkar
      submitted that no licence was obtained by the respondent-Company “for
B     storage of seeds” in the godown attached to the processing unit at
      Dhanora under the Seeds (Control) Order, 1983 or in Form ‘B’ under
      Rule 5 of the Maharashtra Cotton seeds (Regulation of Supply,
      Distribution, Sale and Fixation of Sale Price) Rules, 2010. It was urged
      that the respondent has been operating seed processing plant at Dhanora
      and without obtaining a valid licence for the sale, the seeds were stored
C     in godown attached to it for sale and the respondent has thus committed
      violation of the provisions of the Seeds Act, 1966 and the Seeds (Control)
      Order, 1983. It was submitted that the manner of packing and labelling
      which contains details of lot number, germination, percentage, purity,
      MRP, etc. which is prescribed in Rules 7, 8 and 9 of the Seeds Rules,
D     1968 indicate that the seeds were packed for Sale and not for
      transportation as claimed by the respondent-Company. Learned counsel
      contended that the High Court erred in making a distinction between
      “storage for sale” and “storage for transportation” and in holding that
      Company does not need any licence for transportation of the seeds from
      the processing unit at Dhanora. The learned counsel urged that respondent
E     was given permission by the competent authority to undertake the field
      trial for ‘Ballgard II x RRF Cotton Hybrid’ (a prohibited seed) in the
      year 2010 only for a period of three years; but the respondent had been
      storing such seeds illegally even after expiry of three years’ time period
      without applying for any extension in the provided time period. It was
F     urged that in exercise of powers under Section 14(1)(e) of the Seeds
      Act, 1966, competent authority has full authority to seal the godown for
      violation of the provisions of the Seeds Act, 1966 and to keep it sealed till
      the report of the samples is received from the laboratory for testing.
             7. Refuting the above contentions, Mr. V. Giri, learned senior
G     counsel appearing for the respondent-Company inter-alia submitted that
      the respondent has already obtained seed licences under the provisions
      of the Seeds (Control) Order, 1983 and the Maharashtra Cotton Seeds
      (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Rules,
      2010. It was submitted that no separate licence is required to be obtained
      for processing the cotton and non-cotton seeds at Dhanora unit and
H
  STATE OF MAHARASHTRA v. MAHARASHTRA HYBRID                                   931
        SEEDS CO. PVT. LTD. [R. BANUMATHI, J.]

those processed seeds are stored in the godown attached to the processing      A
unit only for the purpose of transporting it to different sale points or
storages meant for putting the seed in the network of marketing. The
learned senior counsel contended that the power of seizure and sealing
of the godown was not available to the Seed Inspector under Section 14
of the Seeds Act, 1966 as claimed by the appellant authorities and the
                                                                               B
High Court rightly directed desealing of the godown attached to the
processing unit at Dhanora and the impugned order warrants no
interference.
       8. We have carefully considered the submission of both the counsel
and perused the impugned judgment and the relevant provisions and
other materials on record. The following points arise for consideration in     C
this appeal:-
      (i) Whether the High Court was right in saying that the packed
          seeds kept in Dhanora unit were only meant for
          transportation and no separate licence was required for such
          storage for transportation?                                          D

      (ii) Whether the High Court was right in saying that the power of
           seizure and sealing the godown is not available to the Seed
           Inspector?
       9. Seed is the basic input for the farmer for successful agricultural   E
production. Therefore, it is essential to maintain the purity and quality of
the seed through various stages of seed production till the stage of sale.
The Government of India had brought out different legislations to protect
the quality of seeds namely the Seeds Act, 1966, Seeds Rules, 1968,
Seed (Control) Order, 1983 and other policies. In order to ensure supply,
distribution and sale of cotton seeds, the State of Maharashtra has also       F
enacted Maharashtra Cotton Seeds (Regulation of Supply and Fixation
of Sale Prices) Act, 2009 and the rules framed thereunder. The provisions
of Maharashtra Cotton Seeds Act, 2009 are in pari materia with the
Seeds Act, 1966.
      10. The Preamble of the Seeds Act, 1966, provides “An Act to             G
provide for regulating the quality of certain seeds for sale, and for
matters connected therewith”. The Statement of Objects and Reasons
explains the methodology for achieving the said objective of regulating
the quality of seeds as under:-
                                                                               H
932            SUPREME COURT REPORTS                          [2019] 12 S.C.R.


A           “The methods by which the Bill seeks to achieve the object
            are:-
            (a) constitution of a Central Committee consisting of
                representatives of the Central Government and the State
                Government, the National Seeds Corporation and other
B               interests, to advise those Governments on all matters arising
                out of the proposed Legislation;
            (b) fixing minimum standards of germination, purity and other
                quality factors;
            (c) testing seeds for quality factors at the seed testing
C               laboratories to be established by the Central Government and
                the State Government;
            (d) creating of seed inspection and certification service in each
                State and grant of licences and certificates to dealers in seeds;

D           (e) compulsory labelling of seed containers to indicate the quality
                 of seeds offered for sale; and
            (f) restricting the export, import and inter-State movement of
                non-descript seeds.”
              11. The business of selling, keeping for sale, offering to sell,
E     bartering or otherwise supplying any seed of any notified kind or variety
      other than cotton seeds is regulated by Section 7 of the Seeds Act, 1966
      and it is controlled by the Seeds (Control) Order, 1983. As per Section
      7 of the Seeds Act, 1966, no person shall, himself or by any other person
      on his behalf, carry on the business of selling, keeping for sale, offering
      to sell, bartering or otherwise supplying any seed of any notified kind or
F
      variety unless such seed conforms to the requirements as may be
      prescribed under Section 7(a) to 7(d) of the Seeds Act, 1966.
             12. Sections 12 and 13 of the Seeds Act enables the State
      Government to appoint persons as Seed Analysts and Seed Inspectors.
      The State Governments including the Government of Maharashtra through
G     their functionaries of agricultural department exercises its power to have
      an effective control over the quality and quantity aspects of the
      agricultural inputs. In the State of Maharashtra, various officers working
      at state level, district level, sub-division level and taluka level are by

H
  STATE OF MAHARASHTRA v. MAHARASHTRA HYBRID                                    933
        SEEDS CO. PVT. LTD. [R. BANUMATHI, J.]

virtue of their post have been notified as the Seed Inspectors in terms of      A
Section 13 of the Seeds Act, 1966. These Seed Inspectors perform
their duties as Quality Control Inspectors and also exercise powers to
regulate the sale, export, import and storage of the seeds relating to the
respective provisions of the Seeds Act, 1966, Seeds Rules, 1968, Seeds
(Control) Order, 1983 and the provisions of the Maharashtra Cotton
                                                                                B
Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price)
Rules, 2010 etc.
       13. Section 14 of the Seeds Act provides for the powers of Seed
Inspector and Section 15 of the Seeds Act provides for the procedure to
be followed by the Seed Inspectors in taking samples. As per the provision
under Section 14(1)(c) of the Seeds Act, 1966, the Seed Inspectors are          C
empowered to search or inspect the premises any time, where the Seed
Inspectors have reason to believe that such offence has been committed.
As per Section 14(1)(d) of the Seeds Act, the Seed Inspector may
examine any record, register, document or any other material object
found in any place and if he has reason to believe that the record, register,   D
etc., may furnish evidence of the commission of an offence punishable
under the Act, he may issue a seizure order in Form IV of the Seeds
Rules, 1968 and seize the records. As per Section 14(1)(e) of the Seeds
Act, 1966, the Seed Inspector can exercise such other powers as may
be necessary for carrying out the purposes of this Act or any rule made
thereunder. Section 14(1)(c), (d) and (e) of the Seeds Act, 1966 reads          E
as under:-
       Powers of Seed Inspector
       14(1). The Seed Inspector may:-
       ………..                                                                    F
       (c) enter and search at all reasonable times, with such assistance,
       if any, as he considers necessary, any place in which he has reason
       to believe that an offence under this Act has been or is being
       committed and order in writing the person in possession of any
       seed in respect of which the offence has been or is being                G
       committed, not to dispose of any stock of such seed for a specific
       period not exceeding thirty days or, unless the alleged offence is
       such that the defect may be removed by the possessor of the
       seed, seize the stock of such seed;
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934            SUPREME COURT REPORTS                          [2019] 12 S.C.R.


A           (d) examine any record, register, document or any other material
            object found in any place mentioned in clause (c) and seize the
            same if he has reason to believe that it may furnish evidence of
            the commission of an offence punishable under this Act; and
            (e) exercise such other powers as may be necessary for carrying
B           out the purposes of this Act or any rule made thereunder.
            14. As per Section 14(5) of the Seeds Act, 1966 the provisions of
      the Code of Criminal Procedure shall, so far as may be, apply to any
      search or seizure under this Section as they apply to any search or seizure
      made under the authority of a warrant issued under Section 98 of the
C     said Code.
             15. Section 15 of the Seeds Act stipulates the duties of the Seed
      Inspector. As per Section 15(1) of the Seeds Act, whenever an Inspector
      intends to take sample of any seed of any notified kind or variety for
      analysis, he shall give notice of such intention in writing in Form IV of
D     the Seeds Rules, 1968 to the person from whose seed lots he intends to
      take samples. He shall, as far as possible, call not less than two persons
      to be present at the time when he draws sample(s) and take their
      signatures in Form VIII of the Seeds Rules, 1968.In terms of Section
      15(2) of the Seeds Act, 1966, the Seed Inspector shall divide the
      representative sample drawn, into three equal and identical parts and (a)
E     deliver one sample to the person from whom it has been taken; (b) send
      another sample in the prescribed manner for analysis to the Seed Analysts
      for the area within which such sample has been taken; and (c) retain the
      remaining sample in the prescribed manner for production in case any
      legal proceedings are taken or for analysis by the Central Seed Laboratory
F     under sub-section (2) of Section 16 of Seeds Act, 1966, as the case may
      be. Section 15(5) of the Seeds Act provides for the safeguards regarding
      the seizure of the stock, record, register, etc. and after seizure of such
      record, register and other documents, he shall as soon as may be, inform
      the Magistrate and take his orders as to the custody thereof.

G            16. Rule 23 of Seeds Rules, 1968 provides for the “duties of a
      Seed Inspector” in addition to the duties specified by the Seeds Act.
      As per Rule 23(a) of the Seeds Rules, the Seed Inspector shall inspect
      as frequently as may be required by certification agency all places used
      for growing storage or sale of any seed of any notified kind or variety.

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  STATE OF MAHARASHTRA v. MAHARASHTRA HYBRID                                  935
        SEEDS CO. PVT. LTD. [R. BANUMATHI, J.]

As per Rule 23(e) of the Seeds Rules, the Seed Inspector shall maintain       A
a record of all inspections made and action taken by him in the
performance of his duties including the taking of samples and the seizure
of stocks and submit copies of such record to the Director of Agriculture
or the certification agency as may be directed in this behalf. Rule 23(g)
of the Seeds Rules enables the institution of the prosecutions in respect
                                                                              B
of any breaches of the Act or the Rules.
      Seeds (Control) Order, 1983
       17. The inclusion of seeds as an essential commodity item under
the Essential Commodities Act, 1955 has brought the Seeds (Control)
Order. In terms of the Seeds (Control) Order, 1983, a person carrying         C
on the business of selling, exporting and importing of seeds needs to
obtain a licence. The licence provided to a seed dealer remains valid
only for three years from the date of its issue which can be later renewed.
The seed dealer has to display the stock position (opening and closing)
on daily basis along with the list indicating prices or rates of different
                                                                              D
seeds.

      18. As per Clause 2(c) of the Seeds (Control) Order, 1983,
“Dealer” means a person carrying on the business of selling,
exporting or importing seeds, and includes an agent of a dealer.”
As per Clause 3 of the Seeds (Control) Order, 1983, no person can             E
carry on the business of selling, exporting or importing seeds at any
place except under and in accordance with the terms and conditions of
licence granted to him in Form ‘B’ under Clause 5 of the said order. As
per Clause 4 of the Seeds (Control) Order, 1983, “Every person desiring
to obtain a licence for selling, exporting or importing seeds shall
make an application in duplicate in Form ‘A’ together with a fee of           F
rupees fifty for licence to licensing authority.” Clause 5 of the Seeds
(Control) Order, 1983 states that “The licensing authority may, after
making such enquiry as it thinks fit, grant a licence in Form ‘B’ to
any person who applies for it under clause 4……..When the licensing
authority refuses to grant licence to a person who applies for it under       G
clause, he shall record his reasons for doing so.” Licence to carry on
the business of a dealer in seeds is granted as per Form ‘B’ of the Seeds
(Control) Order, 1983 which reads as under:-


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936      SUPREME COURT REPORTS                         [2019] 12 S.C.R.


A                                FORM ‘B’
                               (See clause 5)
      LICENCE TO CARRY ON THE BUSINESS OF A
      DEALER IN SEEDS
B     Licence No.____________                      Date:
         Subject to the provisions of the Seeds (Control) Order, 1983
      and to the terms and conditions of this Licence Shri/M/s
      __________________ is hereby granted licence to sell, export,
      import and store for the said purposes of seeds.
C     2. The liencee shall carry on the aforesaid business
      at _____________(Place for storage and place for sale)
      ___________ (Tehsil or District)_________________
      Date: _____________
      Seal:
D
                                                    Licensing Authority
                                                State of ____________
      Terms and conditions of licence

E     (i) The licence shall be displayed at a prominent and conspicuous
           place in a part of the business premises open to the public.
      (ii) The holder of the licence shall comply with the provisions of
           the Seeds (Control) Order, 1983 and the notifications issued
           thereunder and for the time being in force.
F     (iii) This licence comes into force with immediate effect and shall
            be valid upto ____________ unless previously cancelled or
            suspended.
      (iv) The holder of the licence shall from time to time report to the
           licensing authority any change in the premises where he car-
G          ries on his business of sale, export, import or storage for the
           said purposes of seeds.
      (v) The licencee shall give every facility to the licensing
          authority or any other officer acting under his Author-
          ity for the purpose of inspecting his stock in any shop,
H
  STATE OF MAHARASHTRA v. MAHARASHTRA HYBRID                                   937
        SEEDS CO. PVT. LTD. [R. BANUMATHI, J.]

           depot or godown or other place/places used by him for               A
           the purpose of storage, sale or export of seeds. [em-
           phasis added]
       19. By combined reading of the above provisions of the Seeds
(Control) Order, 1983 and Form ‘B’, it is clear that for obtaining licence,
the applicant has to furnish “place for storage” and “place for sale”.         B
The dealer’s licence is obtained in Form ‘A’. Note 1 of Form ‘A’ states
that “where the business of selling/exporting/importing seeds is
intended to be carried on at more than one place, a separate licence
should be obtained for each such place.” The object of the licences
and such requirements to carry on the business of “sale of seeds” and
“storage of seeds” at specific places as mentioned in the licence is that      C
the locations of sale and storage of seeds be known to the Seed Inspector
and be subject to the inspection and operation of the related laws.
      20. In terms of the Seeds (Control) Order, 1983, the respondent is
having “licence for sale” at three places namely:– (i) Plot No.301, Chinar
Heights, Pune, Maharashtra; (ii) Akola Z.P. Primary Teachers                   D
Cooperative Credit Society Building, Akola; and (iii) B4, Industrial Estate,
Taluka Jalna, Maharashtra. The respondent also has licences for storage
in three places namely:– (i) B4, Industrial Estate, Taluka Jalna,
Maharashtra; (ii) Survey No.164 3c 2b 4b 1c 4, Taluka Haveli, Pune,
Maharashtra; and (iii) C/o M/s Ambar Corporation Plot No.TA81,                 E
Godown No.2,3,4 Mide, Taluka Akola, Maharashtra. The respondent is
obligated to conduct business of “sale of seeds” and “storage of
seeds” only at the places as mentioned in the licence so that the
locations of sale and storage as mentioned in the licence obtained
by the respondent is subject to the operation of the related laws.
                                                                               F
       21. Admittedly, the respondent has no licence for its godown at
Dhanora either as “storage of seeds” or “sale of seeds”. Case of the
respondent is that Dhanora plant is only a processing unit where they
are carrying on only processing of seeds and the seeds are stored only
for the purpose of processing the seeds and there is no requirement
under the Seeds Act, 1966 and the Seeds (Control) Order, 1983 for              G
obtaining the licence. The word “processing” is explained in Rule 2(j)
of the Seeds Rules, 1968 which reads as under:-
      “2. Definitions: -
      …….
                                                                               H
938             SUPREME COURT REPORTS                          [2019] 12 S.C.R.


A           j. “Processing” means cleaning, drying, treating, grading and
            other operations which would change the purity and germination
            of the seed and thus requiring re-testing to determine the quality
            of the seed, but does not include operations such as
            packaging and labelling.”
B            22. According to the appellants, when the initial inspection was
      conducted by the Seed Inspector in the godown of the respondent situated
      at Dhanora, huge quantity of seeds of various kinds were stocked in
      random stakes in various godowns. Roundup Ready Flex (RRF) Hybrid
      Cotton seeds were also found stocked in various godowns. It is stated
      that the quantity and kinds of specific seed/variety could not be assessed
C     and categorized easily to undertake the seed sampling for quality analysis
      and hence, the plant in-charge was immediately informed to furnish the
      information about crop wise, variety wise and lot wise stock details of
      the seeds along with the stock details in various godowns. Case of the
      appellants is that the plant in-charge did not cooperate towards the written
D     instructions of the Seed Inspector on the same day. It is stated that on
      10.12.2017, the plant in-charge submitted details of crop wise, lot wise
      and variety wise quantity out of the total stock of seeds in godown; but
      the same was not godown wise and stake wise which according to the
      appellants was incomplete and indeterminate to the Seed Inspector to
      proceed further. According to the appellants on 15.12.2017, a warning
E     letter was issued towards sealing of the godown in the presence of the
      police. As seen from the counter filed before the High Court in the writ
      petition, these documents have been produced before the High Court as
      annexures.
             23. Case of the appellants is that, on search of respondent’s godown
F     at Dhanora, it was found to have many lots of seeds were “packed”
      and “labelled” there. According to the appellants, at the time of
      inspection, photographs taken by appellant No.3 show that there were
      labelling and packaging machines installed by the respondent at its
      Dhanora processing plant and also the huge quantity of finished products
G     packed and labelled were found stored. In the counter affidavit filed
      before the High Court, it is stated that the authorized signatory of the
      respondent present at Dhanora plant has submitted a signed document
      dated 10.12.2017 stating that the packed seeds stocked at Dhanora is
      ready for dispatch and standard seeds stock is available there to be
      packed for sale.
H
  STATE OF MAHARASHTRA v. MAHARASHTRA HYBRID                                 939
        SEEDS CO. PVT. LTD. [R. BANUMATHI, J.]

         24. Respondent has obtained licence only under the Factories Act    A
for its Dhanora unit. Admittedly, the respondent does not have licence in
Form ‘B’ of Seeds (Control) Order, 1983 to carry on the business of
“dealer in seeds” in Dhanora. The only activity legally permissible to
be conducted by the respondent at Dhanora processing plant is
“processing of seed”. During inspection, it was noticed that packaging
                                                                             B
and labelling machines were kept and respondent was carrying out the
operations of “packaging and labelling” in Dhanora unit. For any activity
of labelling and packaging of the seeds and storing the same, the
respondent is required to obtain separate licence under the Seeds Rules,
1968 and the Maharashtra Cotton Seeds (Regulation of Supply,
Distribution, Sale and Fixation of Sale Price) Rules, 2010. In the absence   C
of such licence, the activity of labelling and packaging qua the seeds and
the cotton seeds carried out at Dhanora godown by the respondent is
illegal.
       25. From the search of the godown at Dhanora and also from the
statement of the authorized signatory of the respondent, it was found        D
that the respondent was not only carrying out the activity of seed
processing at Dhanora godown; but also carrying on operations of
“packing” and “labelling” etc. As per Rule 2(j) of Seeds Rules, 1968,
“processing” does not include operations such as “packaging” and
“labelling”. The activities of the respondent like packaging, pricing and
labelling of various seeds at Dhanora plant therefore cannot be said to      E
be falling within the meaning of “processing” under Rule 2(j) of the
Seeds Rules, 1968. The High Court erred in brushing aside the materials
produced before the High Court and the huge quantity of seeds of various
kinds found to have been stocked in random stake in various godowns of
Dhanora unit. When the authorised signatory present in the Dhanora           F
plant is said to have submitted the signed document dated 10.12.2017
stating that packed seeds stocked at the unit were ready for dispatch
and the seeds are packed for sale, the High Court, in our view, erred in
saying that the seeds packed and labelled are meant for transportation
for which no licence was required.
                                                                             G
        26. As pointed out earlier, as per Rule 2(j) of the Seeds Rules,
1968, “processing” does not include operations such as packaging and
labelling and this significant aspect was not kept in view by the High
Court. As the respondent claims that Dhanora plant is only a processing
unit, the respondent cannot carry on the activities of packaging, selling,
                                                                             H
940            SUPREME COURT REPORTS                          [2019] 12 S.C.R.


A     pricing, labelling of various seeds under pretext of processing. Unless
      the licence is obtained for the Dhanora unit where huge quantity of
      seeds was found stocked, it cannot be subject to inspection with respect
      to related laws. Appellants-authorities rightly observed that the
      respondent has contravened the provisions of clause 3 of the Seeds
      (Control) Order, 1983 and Section 11 of the Maharashtra Cotton Seeds
B
      (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Act,
      2009 and Maharashtra Cotton Seeds (Regulation of Supply, Distribution,
      Sale and Fixation of Sale Price) Rules, 2010. The High Court erred in
      drawing the distinction between “storage for sale” and “storage for
      transportation” and holding that no licence was required for
C     transportation of packed seeds.
             27. Let us make a brief reference to the Maharashtra Cotton
      Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price)
      Act, 2009 which is in pari materia of Seeds Act, 1966 insofar as the
      cotton seeds. Section 5 of the Maharashtra Cotton Seeds (Regulation of
D     Supply, Distribution, Sale and Fixation of Sale Price) Act, 2009 deals
      with grant of licence for cotton seeds. Every person, who has obtained
      licence under Section 11 of the Maharashtra Cotton Seed Act, 2009,
      shall sale cotton seeds in accordance with the requirement of the
      Maharashtra Cotton Seed Rules, 2010. As per Section 12(1) of
      Maharashtra Cotton Seeds (Regulation of Supply, Distribution, Sale and
E     Fixation of Sale Price) Act, 2009, no person shall sale or keep in his
      possession for sale any cotton seed which is misbranded. Section 7(2)
      of the Maharashtra Cotton Seeds (Regulation of Supply, Distribution,
      Sale and Fixation of Sale Price) Act, 2009 provides for the entry, search
      any premises and draw samples, detain or seize the stock of seeds, if he
F     has reason to believe that any person dealing in trade of cotton seed has
      contravened any of the directions issued by the Controller or that the
      quality of the cotton seed supplied by such person is of suspicion nature
      or that any person is about to commit an offence in respect of cotton
      seed. The proforma Form ‘A’ specified under Rule 4 of the Maharashtra
      Cotton Seed Rules, 2010 requires to specifically mention the place of
G     business as place of sale and place of storage. Form ‘B’ specified under
      Rule 5 of the Maharashtra Cotton Seed Rules, 2010 consist of specific
      terms and condition Nos.3 and 4 mandates the licence holder to inform
      the controller any change in the place where he is carrying on the business
      of sale or storage of cotton seed.
H
  STATE OF MAHARASHTRA v. MAHARASHTRA HYBRID                                     941
        SEEDS CO. PVT. LTD. [R. BANUMATHI, J.]

        28. Case of the appellants is that the respondent has violated Section   A
12(2)(g) of Maharashtra Cotton Seeds (Regulation of Supply, Distribution,
Sale and Fixation of Sale Price) Act, 2009 by keeping in their possession
the cotton seeds for sale which is misbranded. According to the appellants,
reliable information was received that the genetically modified seed
material of Roundup Ready Flex (BGII RR Flex) Cotton Hybrid are
                                                                                 B
available at respondent’s godown at Dhanora which requires the
registration of Genetical Engineering Approval Committee (GEAC). It
is in this context, the search was conducted in the respondent’s premises
on the basis of verified information and inspection was undertaken.
Respondent stocked genetically modified seed of RRF Hybrid Cotton
for which the approval of Genetical Engineering Approval Committee               C
(GEAC) is required. According to the appellants, the respondent did not
submit the valid subsisting permission granted to them by GEAC for the
stock of “Roundup Ready Flex (BGII RR Flex) Cotton Hybrid” kept at
Dhanora godown. The respondent has produced the document dated
24.06.2010 stating that the respondent has got the permission from GEAC
                                                                                 D
to undertake confined BRL II field trial of “Bollgard II × Roundup Ready
Flex (BGII RR Flex) Cotton Hybrid”; the said permission granted by
GEAC was only for a period of three years. The respondent has not
produced the permission granted by GEAC beyond 2013. As per the
guidelines issued by GEAC in this regard towards conducting confined
field trials of regulated genetically engineered (GE) plant, GE materials        E
should have been burnt or specific permission from GEAC is required to
keep it with them. The permission obtained by the respondent in the
year 2010 to undertake field trial of “Bollgard II × Roundup Ready Flex
(BGII RR Flex) Cotton Hybrid” cannot be treated as a permission to
retain GE material even after the evaluation by GEAC was terminated.
                                                                                 F
       29. The respondent has only obtained the licence under the
Factories Act. For labelling and packaging of cotton seeds, the respondent
was required to have a separate licence granted under Section 11 of the
Maharashtra Cotton Seeds (Regulation of Supply, Distribution, Sale and
Fixation of Sale Price) Act, 2009 and Rule 4 of the Maharashtra Cotton
Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price)      G
Rules, 2010. Without such licence, the activity of labelling and packaging
carried out at Dhanora godown by the respondent was illegal. This was
all the more so, when the respondent stocked RRF Cotton Hybrid. The
High Court erred in brushing aside the material brought before the High
                                                                                 H
942             SUPREME COURT REPORTS                          [2019] 12 S.C.R.


A     Court as to the alleged storing of “Roundup Ready Flex (BGII RR Flex)
      Cotton Hybrid” at Dhanora godown.
             30. The High Court held that under Section 14 of the Seeds Act,
      power of sealing was not available to the appellants to seal the storage
      of seeds at Dhanora and such action on the part of the appellants is in
B     breach of the procedure prescribed under Section 15 of the Seeds Act.
      The High Court further held that if on examination, the report of the
      analysts disclose “misbranding”, the penalty can be imposed or the
      offences can be registered for that purpose as provided under the
      provisions of the Seeds Act but there is no power vested in the appellants
      to seal the godown and to continue to keep it sealed indefinitely or till the
C     report of the samples is received from the laboratory. The correctness
      of the findings of the High Court that the Seed Inspector does not have
      the power to seal the godown till the report of the samples is received
      from the laboratory, has to be examined in the light of the various
      provisions of the Seeds Act, 1966, Seeds Rules, 1968, Seeds (Control)
D     Order, 1983, Maharashtra Cotton Seeds (Regulation of Supply,
      Distribution, Sale and Fixation of Sale Price) Act, 2009 and the
      Maharashtra Cotton Seeds (Regulation of Supply, Distribution, Sale and
      Fixation of Sale Price) Rules, 2010.
             31. As discussed earlier, Section 14(1)(c) of the Seeds Act
E     empowers the Seed Inspector to enter and search any place in which he
      has reason to believe that an offence under the Act has been or is being
      committed. Section 14(1)(e) of the Seeds Act empowers the Seed
      Inspector to exercise such powers as may be necessary for carrying out
      the purpose of the Act or any rule made thereunder. Clause 13(d) of the
      Seeds (Control) Order, 1983 also provides that the Seed Inspector may
F     seize or detain any seed in respect of which he has reason to believe
      that a contravention of the Order has been committed or is being
      committed. As per Section 14(3) of the Seeds Act, the power conferred
      upon the Seed Inspector includes power to break-open any premises
      where any seed of the notified kind or variety may be kept for sale in
G     case, the owner or any person in occupation of the premises, in spite of
      being present, refuses to open the door even upon the request made by
      the Inspector and also to break-open any container in which any seed of
      any notified kind or variety may be contained. As per Section 15(5) of
      the Seeds Act, 1966, when Seed Inspector seizes any record, register,
      documents or any other material, he should inform the Magistrate and
H     take his order for which he can use Form IV.
  STATE OF MAHARASHTRA v. MAHARASHTRA HYBRID                                  943
        SEEDS CO. PVT. LTD. [R. BANUMATHI, J.]

       32. By a conjoint reading of Sections 14 and 15 of the Seeds Act       A
and Rule 23 of the Seeds Rules, 1968 and various other provisions, it is
clear that the Seed Inspector is conferred with wide powers coupled
with duties. In terms of Section 14(1)(c) of the Seeds Act, 1966, Clause
13(d) of the Seeds (Control) Order, 1983 and Section 7(2) of the
Maharashtra Cotton Seeds (Regulation of Supply, Distribution, Sale and
                                                                              B
Fixation of Sale Price) Act, 2009, the Seed Inspector is empowered to
enter and search any premises, draw samples, seize or detain the stock
of the seeds in respect of which he has reason to believe that a
contravention of the provisions of the Act has been committed or is
being committed. Under Rule 23 of the Seeds Rules, 1968, Seed Inspector
can issue and stop sale order in case the seed in question contravenes        C
the provision of the relevant Act and Rules (Form III). The Seed Inspector
is empowered to enter and search any premises or break-open the door
or any container, to examine any records, register, documents of the
seed dealer and also to seize the seeds stock(s) and/or records.
        33. There is, of course, no express provision empowering the Seed     D
Inspector to seal any place, where there is contravention of the provisions
of the Act. But Section 14(1)(e) of the Seeds Act confers wide powers
upon Seed Inspector to “exercise such other powers as may be
necessary for carrying out the purposes of the Seeds Act or any
rule made thereunder”. Rule 13 of the Seeds Rules provides for the
requirements to be complied with by a person carrying on the business         E
as referred to under Section 7 of the Seeds Act. Since the Seed Inspector
is to ensure that the person who obtained licence is carrying on business
in accordance with the provisions of the Act, in case of non-compliance
with the provisions of the Seeds Act and the Seeds Rules, in rare and
exceptional cases, the Seed Inspector has power to seal the premises          F
where the exigencies of the situation require such sealing to carry out
the purposes of the Seeds Act or the Seeds Rules thereunder. Such
power to seal the place is deemed to be vested with the Seed Inspector
in terms of Section 14(1)(e) of the Seeds Act which empowers the
Seed Inspector to exercise such other powers as may be necessary
for carrying out the purposes of the Act or any rule made thereunder.         G
The provisions of Seeds Act, 1966 and Seeds Rules, 1968 provide for
various safeguards that the Seed Inspector does not exceed his authority.
In view of various safeguards provided under the Seeds Act, 1966 and
other provisions in case the Seed Inspector proceeds to exercise his
powers for sealing the godown, it is necessary to ensure necessary            H
944            SUPREME COURT REPORTS                         [2019] 12 S.C.R.


A     safeguards so that the Seed Inspector does not exceed his authority or
      misuse his power.
             34. The sine qua non of Section 14(1)(c) of the Seeds Act -”to
      enter and search in places at all reasonable times” is that the Seed
      Inspector must have “reason to believe that an offence under the
B     Seeds Act has been or is being committed”. The expression “has
      reason to believe that an offence under the Seeds Act has been or is
      being committed….” implies a belief arrived at after consideration of
      the available materials with the sense of responsibility. For entering and
      search of any place, the statute stipulates “reason to believe that an
      offence under the Act has been or is being committed”, “Reason to
C     believe” means that the belief must have been arrived at judicially after
      considering all the materials and on prima-facie satisfaction of the
      authority concerned. Section 26 of the Penal Code defines that “a person
      is said to have “reason to believe” a thing, if he has sufficient cause
      to believe that thing but not otherwise.” Since the “sealing of
D     premises” is a drastic step, such power can be exercised only in rare
      and exceptional cases and only on satisfaction of the Seed Inspector
      that such power of sealing is necessary to carry out the purposes of the
      Seeds Act or the rules made thereunder.
             35. The Seed Inspector must be satisfied or has reason to believe
E     that an offence under the Act has been committed or is being committed
      and that exercise of such power of sealing is necessary for carrying out
      the purposes of the Act or the rules made thereunder. Since the exercise
      of power to seal in exceptional circumstances is only to carry out the
      purposes of the Act or the rules made thereunder, it is necessary that
      before the Seed Inspector proceeds to take action of sealing the premises,
F     he has to record grounds for his belief as to how and in what manner the
      provisions of the Seeds Act and the rules made thereunder have been
      contravened and how mere search and seizure may not be sufficient to
      prevent further contravention. The grounds for his belief so recorded in
      writing has to be forthwith communicated to the Magistrate in terms of
G     Section 15(5) of the Seeds Act, 1966 and also to their immediate official
      superior. This would ensure that the Seed Inspector does not exceed his
      authority or that power to seal is not misused.
            36. In the present case, since the respondent was found to have
      stocked genetically modified seed of RRF Hybrid Cotton which may
H     include transgenic varieties, for which the approval of Genetical
  STATE OF MAHARASHTRA v. MAHARASHTRA HYBRID                                  945
        SEEDS CO. PVT. LTD. [R. BANUMATHI, J.]

Engineering Approval Committee is required, is also not submitted by          A
the respondent. In that view, the authorities searched and inspected the
godown but the seed material lying there in a voluminous stock was not
appropriately segregated/staked and also the information was not
furnished to inspection team by plant in-charge. Despite constant follow-
up in writing and through oral instructions, the plant in-charge did not
                                                                              B
provide stock position of seeds as expected by the Seed Inspector and
also not submitted the certified copy of licence having permission to
stock the seeds at godown located at Dhanora. The respondent’s godown
was sealed by 07:00 pm on 15.12.2017 after giving sufficient opportunity.
In such facts and circumstances of the case, the action of the Seed
Inspector and the authorities in sealing the plant at Dhanora cannot be       C
said arbitrary.
       37. The finding of the High Court that seeds were stored in
Dhanora unit and no licence was required for storage of seeds for
transportation is set aside. The finding of the High Court that the Seed
Inspector does not have the power to seal the godown and seizure is not       D
in consonance with the provisions of the Seeds Act, 1966, Seeds Rules,
1968 and Seed (Control) Order, 1983 and the same is liable to be set
aside. In compliance of the order of the High Court dated 22.12.2017,
the authorities have already desealed the Dhanora unit of the first
respondent and no further direction is necessary in this regard.
                                                                              E
       38. In the result, the impugned judgment of the High Court is set
aside and the appeal is allowed.


Ankit Gyan                                                  Appeal allowed.
                                                                              F




                                                                              G




                                                                              H