Case Note & Summary
These appeals arose from two writ petitions allowed by a Division Bench of the Rajasthan High Court on 3 July 1990. The State of Rajasthan and the Krishi Upaj Mandi Samiti, Jaipur, as appellants, challenged the High Court's order before the Supreme Court. The respondents, including Rajasthan Agriculture Input Dealers Association and M/s Hindustan Lever Limited, were engaged in the business of purchasing and selling seeds, particularly Bajra seeds. They contended that seeds, after processing and coating with insecticides, chemicals, and other poisonous substances, ceased to be foodgrains and thus fell outside the definition of agricultural produce under Section 2(1)(i) of the Rajasthan Agricultural Produce Markets Act, 1961 and its Schedule. The State, on the other hand, argued that foodgrains of all sorts mentioned in the Schedule were seeds per se, and that only blue tagged certified seeds and white tagged certified foundation seeds had been exempted by a notification dated 16 May 1980 under Section 40 of the Act; therefore all other seeds remained covered. The core legal issues were whether processed seeds constitute agricultural produce, whether Schedule items include all processed derivatives without explicit enumeration, and whether the exclusion notification implied inclusion of all other seeds. The appellants relied on Kishan Lal v. State of Rajasthan to argue that the inclusive definition of agricultural produce covered processed items. The respondents maintained that the Schedule specifically listed certain processed derivatives like wheat flour, maida, suji, rava, and rice, but did not list seeds of foodgrains, and that chemically treated seeds were unfit for consumption, becoming a distinct commodity. The Supreme Court examined the Schedule and found that it exhibited a deliberate scheme of separately listing processed products when intended to be covered. Although the definition of agricultural produce is inclusive, the mention of a foodgrain in the Schedule does not automatically include all its forms and derivatives. Seeds of Bajra and other foodgrains were not specifically mentioned, unlike seeds of musk melon and water melon which were separately listed under Miscellaneous. The court further held that the exclusion of certified and foundation seeds by notification did not mean all other seeds were included; any inclusion must be explicit. The State could not achieve indirectly what it could achieve directly by amending the Schedule. Accordingly, the Supreme Court dismissed the appeals without any order as to costs, affirming the High Court's decision that no licence under the Act was required for sale of such seeds and that market fees could not be recovered.
Headnote
A) Interpretation of Statutes - Agricultural Produce - Inclusive Definition Not Automatic Inclusion of Processed Derivatives - Rajasthan Agricultural Produce Markets Act, 1961, Section 2(1)(i) and Schedule - The court held that the inclusive definition of agricultural produce is wide but does not mean every processed form of a scheduled item is automatically covered; items must be specifically enumerated in the Schedule for such inclusion - Respondents challenged licence and market fee demands on the ground that chemically coated seeds are not foodgrains; the court agreed that processed seeds lose their character as foodgrains and become a distinct commodity, therefore not agricultural produce unless separately listed (Paras 1-4). B) Interpretation of Schedule - Specific Enumeration of Processed Items - Rajasthan Agricultural Produce Markets Act, 1961, Schedule - The Schedule reveals a scheme of listing processed derivatives like wheat flour, maida, suji, rava, and rice separately from their parent grains, but no entry for seeds of Bajra or other foodgrains; seeds of musk melon and water melon are separately listed under Miscellaneous, showing that where seeds are intended to be covered they are expressly mentioned - The court reasoned that the absence of any specific entry for foodgrain seeds means they are not included, and the State cannot require licences for trading in such seeds (Paras 1-4). C) Notifications - Exclusion of Certified and Foundation Seeds Does Not Imply Inclusion of Others - Rajasthan Agricultural Produce Markets Act, 1961, Section 40 and Notification dated 16.5.1980 - The State argued that by excluding blue tagged certified seeds and white tagged certified foundation seeds from the Schedule, all other seeds were included by implication; the court rejected this, holding that what is intended to be included must be explicit and categoric - The State cannot achieve indirectly what it could achieve directly by amending the Schedule, and the appeals were dismissed without costs (Paras 1-4).
Issue of Consideration
Whether chemically processed and coated seeds of Bajra or other foodgrains fall within the definition of 'agricultural produce' under Section 2(1)(i) and the Schedule of the Rajasthan Agricultural Produce Markets Act, 1961, thereby requiring a licence and market fee; whether the Schedule's mention of foodgrains includes all processed forms and derivatives; and whether the notification dated 16.5.1980 excluding certified and foundation seeds implies all other seeds are included.
Final Decision
Appeals dismissed without costs. Supreme Court affirmed High Court order. Processed seeds of Bajra or other foodgrains not agricultural produce under the Act; State cannot require license or market fees for sale of such seeds unless explicitly included in Schedule.
Law Points
- Definition of agricultural produce under Section 2(1)(i) of Rajasthan Agricultural Produce Markets Act
- 1961 is inclusive but not exhaustive
- Schedule items do not automatically include all processed derivatives
- specific enumeration required for processed products
- chemically treated seeds lose foodgrain character and become distinct commodity
- State cannot infer inclusion from exclusion notification for certified/foundation seeds
- State cannot achieve indirectly what it could do directly by amending Schedule
