Andhra Pradesh High Court - Amravati
M/S Godrej Agrovet Limited, vs The State Of Andhra Pradesh, on 9 January, 2024
HONOURABLE SMT. JUSTICE V.SUJATHA
WRIT PETITION No.28368 of 2023
ORDER:
The present Writ Petition came to be filed under Article 226 of the Constitution of India seeking the following relief:-
".... to issue an appropriate Writ, Order or Direction, more particularly in the nature of mandamus declaring the action of the 2nd Respondent in passing impugned order bearing Proc.No.NFSM-OP/1/2020 dated 10.10.2023 by directing the Petitioner Company to pay a sum of Rs.3.69 lakh per acre towards compensation to the Respondents 3 to 12 as being wholly arbitrary, without jurisdiction, having no statutory authority besides being violative of Article 14 and 300A of the Constitution of India and to consequently set aside the same and pass such other order....."
The brief facts of the case are as follows:
The petitioner - M/s Godrej Agrovet Limited is a company incorporated in 1991 and engaged in diversified Research and development backed agri-businesses to improve farmer productivity. The Oil Palm sector in the State of Andhra Pradesh is governed by the Andhra Pradesh Oil Palm (Regulation of Production and Processing) Act, 1993 (for short "the Act"). The areas/Factory Zones 2 VS,J wp_28368_2023 comprising of a few Mandals in one or more districts are allotted to various entrepreneurs/companies for Oil Palm Development like that of the petitioner. As normal practice, after the sprouts are being imported, the same are placed/developed at Petitioner's nurseries up to the sapling stage and then distributed to the farmers of Chintalapudi, Chatrai and Musunuru Mandals after obtaining Post Entry Quarantine clearance from the competent Authority of the State and Central Government.
It is further stated that the Petitioner's Company had purchased around 2,00,000 Oil Palm sprouts from Palm Elit CIRAD on 13.08.2013 and 03.09.2013. Out of the 2,00,000 nos of sprouts bought from Palm Elit, about 1,76,500 (approximately) sprouts after being developed/grown to the stage of saplings were released to various interested farmers after getting the post entry quarantine clearance from the concerned Government Authority for plantation in 1,200 Hectares of land approximately in different mandals of Petitioner's factory zones. Out of these 1,200 Hectares, 250 3 VS,J wp_28368_2023 Hectares of land in Chintalapudi Mandal have been planted with these saplings. Out of the 2,00,000 sprouts purchased, the Post Entry Quarantine Authority had scrutinized the saplings grown out of the said sprouts has directed culling of 23,500 Nos. of saplings as they were not fit for plantation/cultivation. The remaining quantities of saplings which were certified to be of good quality were released for plantation in the year 2014.
It is further stated that out of 250 Hectares of identified area in Chintalapudi Mandal for supply of the above saplings, farmers representing around 230 Hectares of area have agreed to continue with existing plantation (grown out of the Sprouts supplied by Palm Elite) and accordingly they do not have any complaint against the Petitioner Company as the Petitioner's Company had provided various support services to these famers towards better farm management and supply of fertilizers etc. However, 10 farmers, relating to the balance 20 Hectares of land had apparently complained to respondent No.2 in the 4 VS,J wp_28368_2023 year 2021 about "spurious" Oil Palm Seedlings/Saplings supplied by the Petitioner Company alleging that the plants were giving inferior yields despite the plants are of 7-8 years old.
It is further stated that respondent No.2 had apparently deputed a team of scientists to visit the oil palm fields and to evaluate the complaints of these farmers. A study was purportedly conducted by the team of scientists deputed by respondent No.2, behind the back of the Petitioner company and the same came to the knowledge of the Petitioner after receipt of the show cause notice. Based on the complaint and the subsequent opinion of the said team, a Show Cause Notice dated 02.05.2022 was issued to the Petitioner company to show cause as to why penal action should not be taken against the Petitioner Company for supply of inferior quality plantation material. In response to the said Show Cause Notice, the Petitioner company had given a detailed representation dated 13.05.2022. Without considering the submissions of the petitioner, respondent 5 VS,J wp_28368_2023 No.2 passed the impugned order dated 10.10.2023 directing the Petitioner company to pay a sum of Rs.3.69 lakh per acre (Rs.3.55 lakh towards plantation loss + Rs.0.14 lakh towards uprooting charges) to the above said Oil Palm farmers of Chintalapudi Mandal, Eluru district i.e. present Respondent No 3 to 12. The impugned order passed by respondent No.2 is challenged in the present writ petition.
On 03.11.2023, when the matter came up for admission, this Court passed the following interim order.
"....... Considering the above submissions and on perusal of the material on record, there shall be interim suspension of the impugned orders dated 10.10.2023 passed by the 2nd respondent till the next date of hearing i.e. on 15.11.2023."
Respondent Nos.1 and 2 filed counter denying all the material allegations and contended that as per Rule 14 (vi) of A.P. Oil Palm (Regulation of Production and Processing) Rules, 2008, (for short "the Rules") the occupier of the factory on the application of any person interested to cultivate Oil Palm in the factory zone shall arrange for the supply of Oil Palm Seedlings from his own nursery or other nurseries, if it is from other nurseries, the additional 6 VS,J wp_28368_2023 transport shall be borne by the oil palm company and render extension work and provide for post-harvest facilities including processing. In the event of the failure of the occupier of factory, lending the above services, the Government may, on the recommendation of the Oil Palm Commissioner levy a penalty equivalent to the cost of each plant as decided from time to time on the occupier. The erstwhile Assistant Director of Horticulture, Jangareddygudem based on the report of the Horticulture Officer, Chintalapudi Mandal and the farmers' representation dated 15.09.2020 has requested the petitioner to depute a technical person and to furnish the remarks on the Oil Palm plant material supplied to the farmers and the reasons for not getting yield as the plantations are 7 years old. The petitioner company should apply 25% culling rate, however the petitioner has adopted 16% culling rate. Total of 2,10,000 seeds were received by the petitioner in 2013, out of which 1,76,588 seedlings were supplied by the petitioner to the farmers which is 7 VS,J wp_28368_2023 corresponding to 16% culling rate and 70% of the plant material was used to cover 856 Ha in Chintalapudi Mandal which were giving less than 4 Tons of Fresh Fruit Bunches (FFB) per year. The seed supplier has given certain remarks to the petitioner, to which the petitioner submitted reply to the seed supplier. The report submitted by the petitioner clearly indicates that the petitioner was well aware of the fact farmers are getting poor yields, because of the poor quality of seedlings supplied. The farmers (10 in No.) of Chintalapudi Mandal submitted representation to the concerned Horticulture Officer about the poor yielding of the oil palm plantation at the age of 7 years.
It is further contended that as per the scientific literature of the Directorate of Oil Palm Research, presently known as Indian Institute of Oil Palm Research (for short "IIOPR") after planting of the Oil Palm Seedlings, initial 1 to 3 years period is the juvenile period, 4 to 8 years period is the stabilizing period and 9 to 30 years period is the stabilized yield period assuming that the life span of oil palm 8 VS,J wp_28368_2023 is 30 years under Indian conditions. From the seeds supplied by the petitioner, it is evident that the age of plantation is 7 years old from the time of planting of Oil Palm seedlings. Therefore, the representation of farmers is valid and clearly established that as there are no yields even at the age of 7 years of plantation.
It is further contended that based on the Technical Evaluation Report submitted by IIOPR, Pedavegi, respondent No.2 has issued show cause notice on 02.05.2022 to the petitioner as to why penal action should not be initiated against the petitioner company for supply of inferior quality seedlings duly mentioning the report of IIOPR, Pedavegi. Further, the petitioner has constituted a group of in-house scientists and extension staff to observe the ground reality, the group has made the following observations:
1. Vegetative growth of the tree/palm is up to the mark.
2. The trunk size is normal.
3. Out of the total population, around 50% of the trees are giving normal yield.
4. 25% of the palms are giving bunches but are small in size.
5. 25% of palms are not yielding any bunches. 9
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6. The farmers followed normal agronomic practices with irrigation and fertilizer management but farmers are getting 25-30% lesser yield than normal gardens. As per the above admission made by the petitioner at points 1 and 2, it is evident that the crop is managed well by the farmers and the poor yielding status of the Oil Palm Plantations as per points 4 to 6, and the petitioner has proposed to extend the following financial help from their side such as supply of free saplings, transportation charges to be borne by them, planting charges for such free sampling to be borne by them, providing required fertilizers for 4 years. Thereafter, respondent No.2 has given directions dated 22.07.2022 and 26.08.2022 to the District Horticulture Officer, Eluru to convene a meeting with the farmers and the officials of the petitioner, to sort out the issue and to submit compliance. Accordingly, the District Horticulture Officer, Eluru has conducted a meeting on 09.11.2022 with the farmers and officials of the petitioner, in which, the farmers have requested the compensation by the way of penalty. However, both the parties have not come to consensus regarding the compensation in the above said 10 VS,J wp_28368_2023 meeting. Therefore, respondent No.2 has proposed to convene a meeting on 12.12.2022 with the parties. On 12.12.2022 farmers have attended the meeting, whereas the petitioner has not attended the meeting. In view of the Rule 14 (vi) of the Rules, 2008 (referred above) as the petitioner has failed to fulfill the conditions as stated in the said rule, and as the Government is the competent authority, respondent No.2 has submitted the proposals to Government for awarding penalty named as compensation at the rate of Rs.3.69 lakh per acre. Based on the proposals submitted by respondent No.2, respondent No.1 as per Section 24 of the A.P. Oil Palm (Regulation of Production and Processing) Act, 1993, has given directions to respondent No.2 vide Government Memo No.AGC01- HORT/134/2023-HS, dated 06.10.2023 of Agri & Cooperation (H&S) Department to take further action for payment of the amount towards loss of plantation i.e. compensation to the farmers by the petitioner at the rate of Rs.3.69 lakh per acre, requested to dismiss the writ petition. 11
VS,J wp_28368_2023 The petitioner filed rejoinder reiterating the contentions urged in the petition and specifically contended that Rule 14 (vi) of the Rules, 2008 specifies that the developer shall provide seedlings to farmers and in case of failure to provide the same, the said Rule gives power to the Commissioner of Horticulture to impose penalty. In the instant case, penalty imposed is not on account of non- supply of seedlings by the petitioner but it is in the nature of compensation by way of damages, therefore, Rule 14 (vi) is not applicable to the present case. As indigenous seed sprouts are not available with IIOPR to achieve the targets framed by the Commissioner of Horticulture, the petitioner was forced to import the seed sprouts after obtaining necessary permission from the Government of India vide permit No.321P133805, dated 06.08.2013 and No.321P133867 dated 06.08.2013. Thereafter, the sprouts are grown to sapling stage at petitioner's nurseries by following the DIA-PEQ norms and distributed to the farmers after obtaining release order from the DIA-PEQ authority 12 VS,J wp_28368_2023 vide proceedings dated 07.09.2014. Thus, the petitioner has followed the stipulations and guidelines set by the Government for supplying quality sapling material to the farmers. Out of 580 farmers in Chintalapudi Mandal, only 10 farmers holding 20 Ha of land have complained to respondent No.2 about faulty sapling and that out of 10 farmers, 8 farmers already getting almost 20 MT per Ha of land for the present financial year. Therefore, the complaint of respondent Nos.3 to 12 is unbelievable and baseless. Respondent No.2 has no jurisdiction or authority of law to adjudicate liability and damages or penalty proceedings as the same is not sanctioned by law or by AP Oil Palm (Regulation of Production and Processing) Act, 1993. Further, the reply submitted by the petitioner on 13.05.2022 has not been considered. Alleged scientific study conducted by a team of Scientists is behind the back of the petitioner and the petitioner has not been provided an opportunity of hearing. Hence, the entire proceedings are 13 VS,J wp_28368_2023 against the principles of natural justice, requested to allow the writ petition.
Sri B.Adinarayana Rao, learned Senior Counsel for the petitioner has contended that respondent No.2 is an executive authority, he cannot undertake penalty proceedings without sanction of law. Further, respondent No.2 is not a statutory tribunal or quasi-judicial body created by law and there is no statutory provision empowering respondent No.2 to pass the impugned order. There is no substantive law that obligates the petitioner to compensate the allegedly aggrieved farmers. The impugned order is bereft of any explanation as to how the liability of the petitioner is made out and the impugned order was passed without considering the reply dated 13.05.2022 submitted by the petitioner. Further, the impugned order was passed without giving opportunity of hearing, requested to set aside the impugned order.
Learned Government Pleader for Agriculture has contended that as per Rule 14 (vi) of the Rules, 2008, in the 14 VS,J wp_28368_2023 event of the failure of the occupier of factory in lending the services specified therein, the Government may, on the recommendation of the Oil Palm Commissioner levy a penalty equivalent to the cost of each plant as decided from time to time on the occupier. Petitioner purchased 2,00,000 nos. of sprouts and obtained clearance from the concerned government authority for planation in 1,200 Hectares. Out of 1,200 Hectares, 250 Hectares of land in Chintalapudi Mandal have been planted with these saplings. Out of 250 Hectares in Chintalapudi Mandal, 230 Hectares of area has agreed to continue with existing plantation. However, 10 farmers relating to the balance 20 Hectares complained about spurious oil palm seedlings/saplings supplied by the petitioner company alleging that the plants were giving inferior yields despite the plants are of 7-8 years old. After due inspection, Government issued Memo No.AGC01- HORT/134/2023-HS dated 06.10.2023 permitting the Commissioner of Horticulture, A.P., for the payment of compensation by M/s Godrej Agrovet Ltd., to the Oil Palm 15 VS,J wp_28368_2023 farmers of Chintalapudi Mandal, West Godavari District an amount of Rs.3.69 lakh per acre i.e. (Rs.3.55 lakh - plantation loss + Rs.0.14 lakh - uprooting charges) as per land acquisition guidelines issued vide G.O.Ms.No.196 dated 08.07.2020 and as per the operational guidelines of NMEO- OP. He further contended that keeping in view the interest of the Oil Palm farmers, respondent No.2 passed the impugned order directing the petitioner to pay compensation to the farmers, requested to dismiss the writ petition.
Admittedly, the Oil Palm sector in the State of Andhra Pradesh is governed by the Andhra Pradesh Oil Palm (Regulation of Production and Processing) Act, 1993. In the present case, petitioner purchased 2,00,000 nos. of sprouts for supplying them to the farmers, thereafter, the Post Entry Quarantine Authority had scrutinized the saplings grown out of the said sprouts and directed culling of 23,500 nos. of saplings as they were not fit for planation/cultivation. Further, concerned Government authority issued clearance for planation of 1200 Hectares with the sprouts supplied by 16 VS,J wp_28368_2023 the petitioner. Out of which, 250 Hectares of land in Chintalapudi Mandal have been planted with these saplings. Out of 250 Hectares, 230 Hectares of area have agreed to continue with the existing plantations and remaining 20 Hectares complained about spurious oil palm seedlings/saplings supplied by the petitioner. Thereafter, IIOPR deployed team of scientists to visit the said farmers' fields and submit a technical report regarding poor yielding of oil palm plantations. The team of IIOPR scientists opined that the farmers are not getting FFB yields due to the following reasons.
a) Palms possessing small, immature bunches leading to 100 per cent abortion - suspected pisifera,
b) Palms with only made inflorescence
c) Palms with no inflorescence and
d) Palms producing tiny FFB.
After receipt of said report, respondent issued notice to the petitioner with regard to supply of Spurious Oil Palm Seedlings to the farmers. Thereafter, respondent No.2 issued showcause notice on 02.05.2022 to the petitioner as to why penal action should not be initiated against the petitioner 17 VS,J wp_28368_2023 company for supply of inferior quality seedlings. On 09.11.2022, the authorities conducted a meeting with the farmers and officials of the petitioner, wherein the representative of the petitioner has agreed to provide the following:
1. Supply free saplings to the farmers.
2. Payment of uprooting charges for off type plants.
3. Payment of transportation & planting charges of saplings.
4. Maintenance cost of saplings for (4) years.
5. If any compensation given by the sprouts suppliers, such compensation will be transferred to the farmers on area basis.
As both the parties have not come to consensus regarding the compensation, respondent No.2 has proposed to convene a meeting on 12.12.2022 with the parties. Accordingly, on 12.12.2022 a meeting was organized, for the said meeting the farmers have attended the same and requested for payment of compensation, however, no representative from the petitioner company has attended the meeting.
It is also evident from the impugned order dated 10.10.2023 that no representative from the petitioner 18 VS,J wp_28368_2023 company has attended the meeting on 12.12.2022. However, after careful examination of the proposals of the company and demands of the farmers regarding compensation, respondent No.2 submitted proposals to Government based on the existing land acquisition guidelines. Government issued Memo No.AGC01-HORT/134/2023-HS, dated 06.10.2023 permitting respondent No.2 to take necessary action regarding payment of compensation by the petitioner to the Oil Palm Farmers of Chintalapudi Mandal.
For better appreciation, Memo No.AGC01- HORT/134/2023-HS, dated 06.10.2023 issued by the Government is extracted hereunder.
"In the circumstances reported by the Commissioner of Horticulture, A.P. Guntur in the reference cited, Government, after careful examination of the proposal, hereby permitted to the Commissioner of Horticulture, A.P. for the payment of compensation by M/s. Godrej Agrovet Ltd., to the Oil Palm farmers of Chintalapudi Mandal, West Godavari District an amount of Rs.3.69 lakh per acre i.e. (Rs.3.55 lakh - plantation loss + Rs.0.14 lakh - uprooting charges), as per land acquisitions guidelines vide G.O.Ms.No.196 dated 08.07.2020 and as per the operational guidelines of NMEO-OP."19
VS,J wp_28368_2023 As per the said memo, the Government issued permission for payment of compensation as per land acquisition guidelines issued vide G.O.Ms.No.196 dated 08.07.2020.
By virtue of G.O.Ms.No.196 Revenue (Lands-1) Department dated 08.07.2020, Government issued guidelines for capitalization of the value of garden lands under acquisition and guidelines for valuation of Orchards in the State. As per the said G.O. the land acquisition officers concerned shall determine the Market Value of the land with Orchards with due regard to the comparable bonafide sale transactions of a similarly placed Orchards in that locality in recent year, as per the rates specified in the tables annexed to the said G.O. The said G.O.Ms.No.196 dated 08.07.2020 speaks about the capitalization of the value of Garden lands under acquisition only. The issue involved in the present case is not relating to land acquisition, it relates to supply of some spurious oil palm seedlings/saplings supplied by the petitioner company. It 20 VS,J wp_28368_2023 may be true that the respondents assessed the value of the damaged trees basing on the guidelines issued in G.O.Ms.No.196 dated 08.07.2020, but the said G.O.Ms.No.196 did not specify the aspect of compensation.
It is evident from the impugned proceedings dated 10.10.2023, the authorities conducted a meeting with the farmers and officials of the petitioner on 09.11.2022, wherein the representative of the petitioner has agreed to supply free saplings to the farmers, payment of uprooting charges for off type plants, payment of transportation & planting charges of saplings, maintenance cost of saplings for (4) years, and if any compensation given by the sprouts suppliers, such compensation will be transferred to the farmers on area basis as the petitioner purchased 2,00,000 oil palm sprouts from Palm Elit CIRAD on 13.08.2013 and 03.09.2013.
As the farmers and the petitioner company have not come to amicable solution, the respondent authorities conducted meeting on 12.12.2022. Accordingly, farmers 21 VS,J wp_28368_2023 have attended the said meeting, but no representative from the petitioner company has attended the said meeting and on the request of the farmers, respondent No.2 submitted proposals to the Government regarding compensation based on the existing land acquisition guidelines.
The petitioner stated in the affidavit that the Oil Palm Sector in the State of Andhra Pradesh is governed by the Andhra Pradesh Oil Palm (Regulation of Production and Processing) Act, 1993, which is not disputed by the respondents.
Section 11 of the Act postulates "declaration of factory Zone". Section 15 says about "penalties", which reads thus:
"15. Penalties -
(1) Every person or occupier of a factory who contravenes the provisions of section 11 shall be punishable with fine which may extend to rupees ten thousand and in the case of a continuing contravention of the provisions of the said section with a further fine not exceeding rupees one thousand for each day during which the contravention continues.
(2) Any person of occupier of a factory contravening any of the provisions of this Act or of any rule or order made under this Act for which no penalty is provided in sub-section (1) 22 VS,J wp_28368_2023 shall be punishable; with fine which may extend to rupees five thousand."
As per Section 15 of the Act, every person or occupier of a factory who contravenes the provisions of Section 11, which deals with declaration of factory zone, shall be punishable with fine as stated in Section 15 of the Act.
Further, Section 23 of the Act says about power of Government to give directions, which is as follows:
"23. Power of Government to give directions -
The Government may subject to other provisions of this Act, by order, direct the Oil Palm Commissioner or any other Officer to make an enquiry or to take appropriate proceeding under this Act, in respect of any matter specified in this order, and the Oil Palm Commissioner or the other officer, as the case may be, shall report to the Government in due course, the result of the enquiry made or the proceeding taken by him."
In view of Section 23 of the Act, the power is conferred on the Government to direct the Oil Palm Commissioner or any other officer to make an enquiry or to take appropriate proceeding under this Act. But the Act does not speak about award of compensation, in case of supply of spurious oil 23 VS,J wp_28368_2023 palm seedlings, to be paid to the farmers by the supplier of seedlings.
Therefore, there is no statutory provision empowering respondent No.2 to pass the impugned order and the Act does not empower or authorize respondent No.2 to pass the order fixing compensation payable to respondent Nos.3 to 12 - farmers. Moreover, respondent No.2 is not a statutory tribunal or quasi-judicial body created by law. It is settled law that any order passed without authority or sanction of law is void ab initio. Therefore, in the absence of statutory provision, the impugned order passed by respondent No.2 is illegal and arbitrary.
It is also an admitted fact that basing on the complaint raised by 10 farmers, the authorities have conducted a meeting on 09.11.2022, wherein the representative of the petitioner has agreed to provide the following:
1. Supply free saplings to the farmers.
2. Payment of uprooting charges for off type plants.
3. Payment of transportation & planting charges of saplings.
4. Maintenance cost of saplings for (4) years. 24
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5. If any compensation given by the sprouts suppliers, such compensation will be transferred to the farmers on area basis.
In view of the same, as the petitioner company has purchased around 2,00,000 Oil Palm Sprouts from Palm Elit CIRAD, he agreed to transfer the compensation amount to the farmers on area basis, subject to receipt of the same from the original supplier.
When respondent No.2 intended to grant huge compensation/damages basing on the complaint made by 10 farmers out of 250 farmers, he has to give one more opportunity to the petitioner to participate in the enquiry, instead of doing so, straight away passed the impugned order without jurisdiction as discussed above.
In view of my aforesaid discussion, the impugned order dated 10.10.2023 issued by respondent No.2 is liable to be set aside.
Accordingly, the writ petition is allowed setting aside the impugned order issued by respondent No.2 bearing proc.No.NFSM-OP/1/2020 dated 10.10.2023 and the matter is remanded back to respondent No.2 for fresh enquiry duly 25 VS,J wp_28368_2023 taking into consideration the proposal made by the representative of the petitioner in the meeting held on 09.11.2022. No costs.
Miscellaneous petitions pending, if any, in this Writ Petition shall stand closed in consequence.
______________________ JUSTICE V.SUJATHA 09.01.2024 Ksp