THE STATE OF RAJASTHANversusRAJASTHAN AGRICULTURE INPUT DEALERS ASSOCIATION

                       THE STATE OF RAIASTHAN                                          A
                                         v.
 RAIASTHAN AGRICULTURE INPUT DEALERS ASSOCIATION

                                   JULY 9, 1996
                                                                                       B
          [M.M. PUNCHHJ AND SU.TATA V. MANOHAR, J.T.]

     Rajasthan Ab"ic1tlt11ral Produce Mmkets Act, 1961: Section 2( l)(i) and
Schedule.

      Ag1iculture Produce--Bajra seeds-Coated with insecticides, chen1icals            c
and not jJoisonous substances for being sown and achieving gennina-
tion-Held : not covered by the itenz 'Bajra' in the Schedule since sztch
processed Bajra seeds becan1e unfit for Jnanan consun1ption and ceased to
                                                     1
be foodgrains--Hence, not agricultural produce'
                              11
                                                     •



                                                                                       D
       'Afj!icultural Produce-Definition-Held : inclusive and wide-But in
inte1preting the iten1s nientioned in the schedule, 111ention of a pllrlicular itenz
would not ipso facto mean inclusion of all its forms and deriva-
tii1es-Schedule was not nieant to be filled by inferences-What was contained
therein should be explicit and catego1ic--Fro1n the schen1e of seJialising itenis
in schedule intention could be gathered-!11te1pretation of Statutes.                   E

       The respondents were engaged in the business of purchasing and
selling seeds. One of them in particular raised and sold Bajra seeds. The
appellants demanded of the respondents to obtain licences for engaging in
the trade of purchase and sale of seeds as specified in the Schedule to the            F
Rajasthan Agricultural Produce Market Act, 1961. The respondents filed
a \ITit petition in the High Court challenging the aforesaid demand of the
appellants, which was allowed. Being aggrieved the appellants preferred
the present appeal.

       On behalf of the appellant, it was contended that the expression G
"agricultural produce" was an inclusive definition which could even include
processed items from foodgrains requiring the respondents to take licence
under the Act; and that by virtue of Notification dated 16th May, 1980,
certified seeds and foundation seeds of a description alone were excluded
from the purview of the Schedule and no other seed.                         H
                                        265
    266                   SUPREME COURT REPORTS (1996] SUPP. 3 S.C.R.

A         On behalf of the respondents it was contended that the seeds were a
    processed item and coated by insecticides, chemicals and other poisonous
    substances whereby the gains employed lost their use and utility as
    foodgrains and became unfit for human or animal consumption or for
    extraction therefrom for such consumption; that the seeds could not be
B   termed to be "agricultural produce" as defined in Section 2 (1) (i) of the Act;
    and that the demand of the appellants in requiring the respondents to
    obtain licences for engaging in the trade of purchase and sale of seeds was
    uncalled for.

          Dismissing the appeal, this Court
c         HELD : 1.1. The definition of the expression "agricultural produce"
    in Section 2(1) (i) of the Rajasthan Agricultural Produce Markets Act, 1961
    is wide and inclusive. But that does not mean that in interpreting the items
    mentioned in the schedule, mention of a particular item would ipso facto
    mean inclusion of all its forms and derivatives achieved by manufacture
D   or processing. or by some other method. [269-C)

           1.2. The schedule applicable rnn the relevant dates discloses that item
    2 is titled as "Dhanya" (foodgrains). The scheme of serialising processed
    items in this manner is reflective of a positive application of mind that not
E   only the original foodgrains which are foodgrains per se included, but their
    products and derivatives too are mentioned specifically as 'agricultural
    produce" due to its wide definition. Wherever any produce of agriculture,
    horticulture or animal husbandry or otherwise is sought to be inducted in
    the Schedule, other than what it is in the natural form, it is given a name
    and identity ciiStinct from the corpus from which it came. Wherever seeds
F   were intended to be separately serialized, like seeds of musk melon and
    water melon, they distinctly fonnd mentioned in contrast to the fruits, from
    which they came but as distinct products. [269-F-G, 270-A-B)

          1.3. Though foodgrains per se could be used as seeds for being sown
G   and achieving germination, but in that form they retain the dual utility of
    being foodgrains as well as seeds. By process of coating and applying
    insecticides, other chemicals and poisonous substances to the foodgrain
    meant to be utUised as seeds, one of its basic character, i.e., its consump-
    tion as food by human beings or animals or for extraction for the like
    purpose, gets irretrievably lost and such processed seeds a commodity
H   distinct from foodgrains as commonly understood. [270-C-D)
   STATE v. RAJ AGRICULTURE INPUT DEALER ASSN. [PUNCHHI,J.J 267

      1.4. By excepting from the purview. of the Schedule, certified and         A
foundation seeds, bearing tags of particular colours, it cannot be spelt out
that words relating to foodgrains would automatically include seeds also.
The Schedule is not meant to be filled by inferences. What is meant to
contain therein shall be explicit and categoric .. Nothing stops the State
Government to add suitable words therein to convey that foodgrains, as
                                                                                 B
processed for seeds, would also be agricultural produce within the mean-
ing of the expression "or otherwise" occurring in Section 2(1) (i) of the Act.
Since no such exercise has been taken, the State Government cannot be
permitted to achieve indirectly which it could have achieved directly, by
being specific in that regard. It must therefore, be concluded that bajra
seeds are not "agricultural produce" within the meaning of Section 2(1)(i)       C
and the Schedule of the Act. (270-F-G]

      Kishan Lal v. State of Rajasthan and Ors., (1990) Suppl. SCC 742,
held inapplicable.

      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4064-67                    D
of 1995.

     From the Judgment and Order dated 3.7.90 of the Rajasthan High
Court in D.B.C.W.P. No. 221 of 1989.

      Aruneshwar Gupta for the Appellants.                                       E
     G.L. Sanghi, Ravinder Narain for JBD & Co., N.K. Sagar for B.D.
Sharma for the Respondents.

      The Judgment of the Court was delivered by
                                                                                 F
     PUNCHHI, J. In Civil Appeal Nos. 4064 and 4065 of 1995, the
common appellant is the State of Rajasthan and in Civil Appeal Nos. 4066
and 4067 of 1995, its ally, the Krishi Upaj Mandi Samiti, Jaipur is the
common appellant. The grievance voiced herein by them is common and
hence disposal of these appeals by a common order.
                                                                                 G
       These appeals are directed against order dated 3.7.1990 passed by a
Division Bench of the Rajasthan High Court, Jaipur Bench, allowing two
writ petitions preferred by the respective respondents herein. Facts giving
rise thereto would require no elaboration, except reference to the barest
minimal. The respondents claim themselves to be engaged in the business
of purchasing and selling seeds. One of them, M/s. Hindustan Lever H
    268                   SUPREME COURT REPORTS [1996] SUPP.3 S.C.R.

A Limited, in particular, raises and sells Bajra seeds. as claimed. According
    to the respondents, seeds cannot be termed to be agricultural Produce for
    the purposes of the Rajasthan Agricultural Produce Markets Act, 1961 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
B   maintained that seeds are a processed item and coated by insecticides,
    chemicals and other poisonous substances whereby the gains employed lose
    their use and utility as food grains and become unfit for human or animal
    consun1ption or for extraction therefrom for such consumption. Since, as
    claimed, these were outside the ambit of the expression "agricultural
    produce" as defined in Section 2(1)(i) of the Act; a definition inclusive in
C   nature applying to produce whether of agriculture, horticulture, animal
    husbandry or ot/1C1wise (emphasis supplied) as specified in the schedule,
    the demand of the appellants in requiring the respondents to obtain
    licences for engaging in the trade of purchase and sale of seeds was
    uncalled for, as well as the threatened prosecutions, in the event of failure.
D   The challenge posed by the respondents before the High Court was
    answered by the appellants maintaining that foodgrains of all sorts, 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 having been notified on May 16, 1980 by way of amendment to
E   the Schedule, in exercise of the State Government's power under Section
    40 of the Act.

           The High Court on consideration of the entire matter, took the view
    that when foodgrains of particular varieties were treated and subjected to
    chemical process for preservation, those grains become commercially
F   known as "seeds". Reservation was kept however by the High Court to its
    statement afore-referred that in case a dealer was found dealing in
    foodgrains under the garb of seeds, the appellants, were not precluded
    from prosecuting the offender in a Criminal Court. In sum, it was ordered
    that the appellants stand precluded from requiring the respondents to take
    licences under the provisions of the Act in relation to their business of
G   dealing in seeds of Bajra or any other foodgrain, as well as restrained from
    realising or recovering market fees in respect thereof. Sequelly, it was
    ordered that no licence under the Act was required for sale of such seeds.
    This is how these appeals' are before us.

H         Strong reliance was placed by Mr. Aruneshwar Gupta, learned coun-
   STATE v. RAJ AGRICULTURE INPUT DEALER ASSN. [PUNCHHI, J.J 269

sel for the appellants on Kishan Lal v. State of Rajasthan and Ors., [1990] A
Suppl. SCC 742 to contend that for the purposes of Section 2 (l)(i) and
the Schedule of the Act, the expression "agricultural produce" is an in-
clusive definition which could even include processed items from
foodgrains. Thus processed foodgrains on becoming seeds, as alleged by
the respondents, would all the same remain foodgrains requiring the
respondents to take licence under the Act. Secondly, it was urged that by B
virtue of Notification dated 16th May, 1980, certified seeds and foundation
seeds of a description alone were excluded from the purview of the
Schedule and no other seed.

       We are one with Mr. Gupta, learned counsel for the appellants, so
far as the definition of the expression "agricultural produce" being wide and    C
inclusive goes. But, then the real difficulty comes in interpreting the items
mentioned in the schedule as to whether mention of a particular item
would ipso facto mean inclusion of all its forms and derivatives achieved
by manufacture or processing or by some other method. On reading the
schedule as it stood at the relevant time, we come to the view that .such a      D
wide interpretation tu the times in the schedule can in no event be given.
In Kishan Lat's case, Khandsari, Shakkar, Gur and Sugar were brought in
the Schedule as "agricultural produce" and the argument that these items
were not agricultural produce per se, and thus incapable of being brought
in the Schedule, was repelled because when a particular item finds way in
the Schedule in that form, it stays there for all purposes as long as it is in   E
some way referable to the purpose for which the Schedule is set up.

       The Schedule applicable on the relevant dates discloses that Item 2
is titled as "Dhanya" (foodgrains). Serial No. 1 thereunder is Gehun
(wheat). Serial No. 11 is Aata (wheat flour). Serial No. 12 is Maida (refined
wheat flour). Serial No. 13 is Suji and Serial No. 14 is Rava (both semilona). F
Similarly, Serial No. 2 is Jau Ghat Sahit (barley as also in the dehusked
form). Serial No. 6 is Dhan (paddy) and Serial No. 7 is Chawal (rice). The
scheme of serialising processed items in this manner is reflective of a
positive application of mind that not only the original foodgrains ·which are
foodgrains per' se included, but their products and derivatives too are G
mentioned specifically as "agricultural produce" due' to its wide definition.
Noticeably, Serial Nos. 3" to 5 are jawahar, Makka and Bajra but only-in
their natural form and not in any other form. Going further down in the
Schedule Item No.6 is Phal (fruit). At Serial No. 8 thereof is Kharbuja
(Musk Melon) and Serial No. 9 is Tarbuj (Water Melon). Going to Item
No. 11 Vividh (Miscellaneous), one finds at Serial No. 14 Tarbuj Ke Beej H
    270                  SUPREME COURT REPORTS [1996] SUPP. 3 S.C.R.

A (Seeds of Waler Melon) and to Serial No. 16 Kharbuje Ke Beej (Seeds of
    Musk Melon). It is thus evident that wherever any produce of agriculture,
    horticulture or animal husbandry or othe1wise is sought to be inducted in
    the Schedule, other than what it is in the natural form, it is given a name
    and identity distinct from the corpus from which it came. Mr. Gupta,
    learned counsel, could not point out to us anywhere if seeds of foodgrains,
B   inclusive of Bajra seed, per Item No. II were specifically mentioned as such
    in the Schedule. Wherever seeds were intended to be separately serialised,
    like seeds of musk melon and water melon, they distinctly found mentioned
    in contrast to the fruits, from which they came but as distinct products.

          It is undoubtedly true that foodgrains per se could be used as seeds
C   for being sown and achieving germination, but in that form they retain the
    dual utility of being foodgraias as well as seeds. By process of coating and
    applying insecticides, other chemicals and poisonous substances to the
    foodgrain meant to utilised as seeds, one of its basic character, i.e., its
    consumption as food by human beings or animals or for extraction for the
D   like purpose, gets irretrievably lost and such processed seeds become a
    commodity distinct from foodgrains as commonly understood. That distinc-
    tion was borne in mind by the High Court in allowing the writ petition of
    the respondents, and in our view rightly.

           The next argument of Mr. Gupta, learned counsel, based on Notifica-
E   tion dated May 16, 1980 must also fail because by excepting from the
    purview of the Schedule, certified and foundation seeds, bearing tags of
    particular colours, it cannot be spelt out that words relating to foodgrains
    would automatically include seeds also. The Schedule is not meant to the
    filled by inferences. What is meant to contain therein shall be explicit and
    categoric. Nothing stops the State Government to add suitable words
F   therein to convey that foodgrains, as processed for seeds, would also be
    agricultural produce \Vithin the n1eaning of the expression 11 or otherwise"
    occurring in Section 2 (l)(i) of the Act. Since no such exercise has been
    taken, the State Government cannot be permitted to achieve indirectly
    which it could have achieved directly, by being specific in that regard. The
G   High Court rightly rejected such contention raised before it by the appel-
    lants.

         For the foregoing reasons, we find no merit in these appeals. The
    same are accordingly dismissed, but without any order as to costs.

H v.s.s.                                                    Appeals dismissed.