BRITANNIA INDUSTRIES LTD. versus BOMBAY AGRICULTURAL PRODUCE MARKETING COMMITTEE & ANR. on 24 January 2019

SUPREME COURT REPORTS

[2019] 1 S.C.R.

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BRITANNIA INDUSTRIES LTD.

v.

BOMBAY AGRICULTURAL PRODUCE MARKETINGCOMMITTEE & ANR.

(Civil Appeal No. 1746 of 2010)

JANUARY 24, 2019

[R. BANUMATHI AND R. SUBHASH REDDY, JJ.]

Maharashtra Agricultural Produce Marketing (Regulation)Act, 1963 – s. 2(1)(a) – “Agricultural Produce” – Products “edibleoil”, “Vanaspati” and “sugar” – Applicability of the Act – Held:Products “edible oil”, “Vanaspati” and “sugar” are agriculturalproduce within the meaning of s.2(1)(a) of the Act.

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DDismissing the appeals, the Court

HELD: 1.1 The High Court rightly held that sugar is aproduce of agriculture coming into being in a processed formfrom sugarcane and the absence of the word “manufacture” inthe definition of “agricultural produce” under Section 2(1)(a) ofEthe Maharashtra Agricultural Produce Marketing (Regulation)Act, 1963 would not in any way affect the status of sugar as beingan agricultural produce under the Act. [Para 7][841-C]

1.2 So far as “Vanaspati” is concerned, the High Courtreferred to entire process as to how “Vanaspati” is produced fromF“edible oils” and that “edible oils” are subject to various processesand the end product of all these processes is “Vanaspati”. TheHigh Court held that the production of dalda or Vanaspati fromedible oils is thus the result of the edible oils undergoing all theseprocesses which convert edible oils to a new entity calledG“Vanaspati”. Thus, the High Court concluded that “Vanaspati” isnothing but Hydro Generated Refined Edible Oil and is anagricultural produce within the meaning of Section 2(1)(a) of theAct. The conclusion of the High Court that “edible oil”,“Vanaspati” and “sugar” are agricultural produce within themeaning of Section 2(1)(a) of the Act is accepted and there is no H

ground warranting interference with the said findings. [Paras 11,13][841-H; 842-A-B, E-F]

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1.3 Section 13(1A)(a) of the Act states that the areacomprising Greater Bombay and Turbhe Village in Thane Talukaof Thane District or such areas as may be specified by the StateGovernment by notification in the Official Gazette from time totime, shall be deemed to be a market area called the BombayMarket Area and respondent No. 1 is the Market Committee forthat area. [Para 15][842-H; 843-A-B]

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1.4 The relevant bills and other documents filed by theappellant insofar as alleged purchase of sugar from outside themarket area (Section 2(1)(i)) shall be considered as expeditiouslyas possible. The direction of the High Court in approaching theconcerned Authority is restricted only to sugar. [Paras 18, 19][844-A-B]

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Champak Lal H. Thakkar v. State of Gujarat (1980) 4SCC 329 : [1981] 1 SCR 440 – referred to.

Case Law Reference

[1981] 1 SCR 440referred toPara 12

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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1746of 2010.

From the Judgment and Order dated 16.06.2006 of the High Courtof Judicature at Bombay in Writ Petition No. 1072 of 1991.

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WITH

Civil Appeal No. 1747 of 2010.

Vikramjit Banerjee, ASG, Jawahar Lal, Vikas Mehta, Adith Nair,Nishant Sharma, Rakesh K. Sharma, Sarthak Raiza, Ms. Deepa M.GKulkarni, Nishant Ramakantrao Katneshwarkar,, Advs. for the appearingparties.

The Judgment of the Court was delivered by

R. BANUMATHI, J. 1. The issue involved in these appeals isthe interpretation of the term “Agricultural Produce” (Section 2(1)(a)

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Aof the Act) contained in the Maharashtra Agricultural Produce Marketing(Regulation) Act, 1963.

2. The appellant filed the writ petition seeking the followingdeclarations:

(i) The Maharashtra Agricultural Produce Marketing(Development) and Regulation Act, 1963 is not applicable to sugar,cashew nuts, refined oil, vanaspati and dry fruits purchased bythe appellant.

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(ii) The notification dated 25.09.1987 is illegal and utra vires toCthe extent that it adds the above items to the Schedule of the Act.

(iii) The bulk sugar purchased by the appellant is directly from theSugar mills located outside the market area of the first respondentis not covered by the provisions of the Act.

D3. During the pendency of the writ petition, before the High Court,the appellant gave up the challenge in respect of “cashew nuts” andother “dry fruits”.

4. The question falling for consideration in these appeals is whetherthe provisions of the Maharashtra Agricultural Produce MarketingE(Regulation) Act, 1963 (Marketing Act) are applicable to the products“edible oil”, “Vanaspati” and “sugar”?

5. We have heard Mr. Jawahar Lal, learned counsel appearing onbehalf of the appellant as well as Mr. Vikramjit Banerjee, learned AdditionalSolicitor General appearing on behalf of Respondent No. 1 - AgriculturalFMarket Committee.

6. Section 2(1)(a) of the Maharashtra Agricultural ProduceMarketing (Regulation) Act, 1963 defines “agricultural produce” asunder:- 2(1). In this Act, unless the context otherwise requires:- G

(a) “agricultural produce” means all produce (whetherprocessed or not) of agriculture, horticulture, animal husbandry,apiculture, pisciculture and forest specified in the Schedule.

Section 2(1)(a) of the Maharashtra Agricultural ProduceMarketing (Regulation) Act, 1963 unambiguously shows that theagricultural produce which are to be covered by the sweep of the Actnecessarily has to be specified in the Schedule.

7. As pointed out by the High Court, “sugarcane” has beenseparately listed under Item VI in the Schedule along with Gul and Sugarand thus the intention of the Legislature is to treat sugar as a produce ofsugarcane, which is a separate agricultural produce. The High Courtrightly held that sugar is a produce of agriculture coming into being in aprocessed form from sugarcane and the absence of the word“manufacture” in the definition of “agricultural produce” under Section2(1)(a) of the Act would not in any way affect the status of sugar asbeing an agricultural produce under the Act.

8. Admittedly, “sugarcane” has been separately listed under ItemVI in the Schedule along with Gul and Sugar and hence, the Committeehas the power of enforcing its statutory right under Section 31 of theMarketing Act to levy market fees on the marketing of sugar in its marketarea.

9. So far as “sugar” is concerned, the High Court rejected thecontention of the appellant by holding that sugar was included in theSchedule of the Act originally and it came to be deleted from Item VI bya notification dated 13.04.1982 and it is not as if for the first item thatsugar is included in the agricultural produce by notification dated25.09.1987. After referring various process involved in bringing out thesugar, the High Court has held that the sugar is an “agricultural produce”within the meaning of Section 2(1)(a) of the Act. The High Court alsoheld that the intention of the Legislature is to treat sugar as produce of“sugar cane” as it is added along with other items. The High Court heldthat the absence of word “manufacture” would not affect the status ofsugar as being an agricultural produce within the meaning of Section2(1)(a) of the Act.

10. So far as the “edible oil” and the “Vanaspati” are concerned,the High Court has held that they are agricultural produce within themeaning of Section 2(1)(a) of the Act.

11. So far as “Vanaspati” is concerned, the High Court referredto entire process as to how “Vanaspati” is produced from “edible oils”

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Aand that “edible oils” are subject to various processes and the endproduct of all these processes is “Vanaspati”. The High Court heldthat the production of dalda or Vanaspati from edible oils is thus theresult of the edible oils undergoing all these processes which convertedible oils to a new entity called “Vanaspati”. Thus, the High Courtconcluded that “Vanaspati” is nothing but Hydro Generated RefinedBEdible Oil and is an agricultural produce within the meaning of Section2(1)(a) of the Marketing Act.

12. In Champak Lal H. Thakkar v. State of Gujarat (1980) 4SCC 329, this Court held as under:-C

“11. …..Oil will remain oil if it retains its essential properties andmerely because it has been subjected to certain processes wouldnot convert it into a different substance. In other words, althoughcertain additions have been made to and operations carried out onoil, it will still be classified as oil unless its essential characteristicsDhave undergone a change so that it would be a misnomer to call itoil as understood in ordinary parlance……”

Relying upon Champak Lal case, the High Court held that oilwill remain oil even if it has been subject to certain processes and heldthat “edible oil” is an “agricultural produce” within the meaning ofESection 2(1)(a) of the Marketing Act.

13. We fully agree with the conclusion of the High Court that“edible oil”, “Vanaspati” and “sugar” would fall within the meaning ofSection 2(1)(a) of the Marketing Act – agricultural produce. We do notfind any good ground warranting interference with the findings of theFHigh Court that “edible oil”, “Vanaspati” and “sugar” are agriculturalproduce within the meaning of Section 2(1)(a) of the Marketing Act.

14. Contention of the appellant is that it procures sugar from thesugar mills which are located beyond the limits of the market area ofrespondent No.1 and therefore, the said transactions do not take placeGwithin the market area so as to empower respondent No.1 to levy marketfees under Section 31 of the Act read with Rule 5 of the Rules on thesugar produced from outside the market area.

15. Section 13(1A)(a) of the Act states that the area comprisingGreater Bombay and Turbhe Village in Thane Taluka of Thane DistrictH

or such areas as may be specified by the State Government by notificationin the Official Gazette from time to time, shall be deemed to be a marketarea called the Bombay Market Area and respondent No. 1 is the MarketCommittee for that area.

16. Insofar as the contention of the appellant that the appellant isnot a buyer within the meaning of Section (2)(1)(ca) as bulk sugar ispurchased from outside the market area, the High Court observed:

“Unless the sugar procurement is done by the petitioner-company within the area of Greater Mumbai and Turbhe Villageof Thane Taluka of Thane District or any other area notified bythe Government of Maharashtra to be a part of the market areaof respondent No. 1, it cannot levy market fees on sugar. Therespondent No. 1 has no power to levy market fees under Section31 of the Act on the entire quantity of sugar that arrives within itsmarket area on the procurement made by the petitioner-companyand directly from the sugar factories which are located within themarket area of respondent No. 1. It is, therefore, necessary thatthe petitioner-company places before the respondent No. 1 all itsrecord to show that sugar was procured/purchased from the placesoutside the market area of respondent No. 1 and if the respondentNo. 1 on a verification is satisfied, to that extent the respondentNo. 1 shall have no authority to levy market fees under Section 1of the Act. This is an issue which will have to be examined by theMarket Committee afresh and it is imperative for the petitioner-company to submit all the records before the respondent No. 1for such a verification and this should be done at the earliestpossible. We have no doubt in our mind that the respondent No.1- Market Committee shall have powers to levy market fees underSection 31 of the Act only on the quantity of sugar that has beenpurchased/procured within its market area and it cannot levymarket fees on the entire sugar quantity that is received by thepetitioner-company……...”

17. Mr. Vikramjit Banerjee, learned Additional Solicitor General,submitted that as per direction of the High Court, if the appellant is ableto produce relevant documents, Respondent No. 1 shall consider thesame by passing appropriate orders.

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18. The relevant bills and other documents filed by the appellantinsofar as alleged purchase of sugar from outside the market area(Section 2(1)(i)) shall be considered as expeditiously as possible. It isstated by the learned counsel for the appellant that the issue is concernedonly limited to the period from 01.07.1988 to 03.03.2004.

19. We make it clear that the direction of the High Court inapproaching the concerned Authority is restricted only to sugar.

20. The appeals are, accordingly, dismissed.

Nidhi Jain

Appeals dismissed.