Patna High Court
Lucky Biscuit Co. vs The State Of Bihar And Ors. on 5 April, 1977
Equivalent citations: AIR1978PAT16, 1977(25)BLJR448, AIR 1978 PATNA 16
JUDGMENT Shambhu Prasad Singh, J.
1. The petitioner is a registered partnership firm and manufactures biscuits at Patna City in the district of Patna. A notice (Annexure 1 to the writ petition) dated l0th of September, 1976 was issued to the petitioner by the Secretary, Agricultural Produce Market Committee, Patna City (respondent No. 3) calling upon the petitioner to obtain a licence from the Committee. It was stated that the petitioner was required to obtain the licence as it was purchasing and selling notified agricultural produce in Patna City market area. The licence to be obtained was for the year 1975. It was further stated that if the petitioner did not obtain licence within a week of the receipt of the notice, then it would be deemed that it was deliberately contravening the rules and legal action under Section 48 of the Bihar Agricultural Produce Markets Act, 1960 (hereinafter referred to as 'the Act') would be taken against it. The petitioner sent a reply to the said notice which is Annexure 2 to the writ application. The petitioner claimed that it was manufacturing biscuits and thereafter selling them. It purchased only such materials which were necessary for manufacture of biscuit but did not sell goods other than biscuit. As biscuit was not a notified agricultural produce it was not necessary for the petitioner to obtain a licence. Respondent No. 3 sent another notice (Annexure 3) dated 25th of September, 1976 to the petitioner referring to the letter (Annexure 2) of the petitioner and stating that as the petitioner was a trader within the meaning of Section 2 (1) of the Act it was necessary for it to obtain a licence as required by Rule 98 of the Bihar Agricultural Produce Markets Rules, 1975 (hereinafter referred to as 'the Rules'). It was further stated therein that as the petitioner was purchasing notified agricultural produce which were used in biscuit and stored them in its premises till biscuit was made out of them it was necessary for the Agricultural Produce Market Committee, Patna City (respondent No. 2) to get details of the purchases made by the petitioner, fees paid by it and notified agricultural produce kept in its stock. According to the rules, it was the buyer who had to pay the market fee and as the place of manufacture of the petitioner was situate in the main bazar area it was necessary for the petitioner to be a licensee. It was, however, made clear that as biscuit was not a notified agricultural produce, respondent No. 2 would not realise any market fee on its sale. Respondent No. 3 sent another notice (Annexure 4) dated 30th November, 1976 to the petitioner that as the petitioner had not by that date obtained the licence nor given any valid reason for not getting a licence and having purchased 400 tins of vegetable oil for Rs. 69,600/- on 20th May, 1976 from M. D. C. M. Co. but having not paid the market fee of Rs. 696/- at the rate of 10 per cent by itself or through M. D. C. M. Co.. the petitioner must obtain a licence at once and pay the arrears of market fee. The petitioner prays for quashing of Annexures 1. 3 and 4.
2. The substance of the case of the petitioner, as made out in the main petition, is that it merely purchases some of the notified agricultural produce but does not sell any notified agricultural produce and as such it is not a trader within the meaning of the terms as defined in Section 2 (1) (w) of the Act. Only traders were required to obtain licence under Rule 98 and the petitioner was, therefore, not liable to obtain a licence. It has further been stated in the petition that directions issued by the respondents to obtain licence were arbitrary, illegal and invasive of the liberties of the petitioner in curtailment of its right to carry on trade and business.
3. A counter-affidavit has been filed on behalf of respondents 2 and 3. It is stated, inter alia, therein that the petitioner admittedly purchases and stores notified agricultural produces for the manufacture of biscuits and carries on business of purchase of agricultural produce and sells goods prepared out of said produce. It further states that the petitioner also sells some of the notified agricultural produce which becomes either excess or not required for its purpose. It is submitted in the counter-affidavit that even if the petitioner only purchases agricultural produce in course of its business and sells products made out of it, it is a trader and liable to obtain licence. It has further been averred that the Act is intra vires and the demand by respondent No. 2 does not infringe the petitioner's right to carry on trade and business.
4. A reply to the counter-affidavit has been filed on behalf of the petitioner in which it is stated that the statement in the counter-affidavit that the petitioner sells some of the notified agricultural produce which becomes excess or not required for its purpose is entirely false and has been made in order to mislead the Court. Some further grounds have been taken in this reply to counter-affidavit challenging the vires of the Act.
5. The main arguments which were advanced by Mr. Balbhadra Prasad Singh appearing on behalf of the petitioner and learned Solicitor-General appearing on behalf of the respondents were on the question whether the petitioner was a trader or not within the meaning of the term as defined in Section 2 (1) (w) of the Act. Learned Solicitor-General did not put emphasis on the averment made in the counter-affidavit that the petitioner also sells notified agricultural produce which remains in excess with him. In order to appreciate respective arguments of learned counsel appearing for the parties it is necessary to quote the definition of the expression "trader" as given in Section 2 (1) (w) of the Act :
" "Trader" means a person ordinarily engaged in the business of buying and selling agricultural produce as a principal or as a duly authorised agent of one or more principals and includes a commission agent or a person ordinarily engaged in the business of processing of agricultural produce."
According to Mr. Balbhadra Prasad Singh, the word "and" between the words "buying" and "selling" has to be read conjunctively and only such a person is trader for the purposes of the Act who is ordinarily engaged in the business of buying and selling agricultural produce. In other words, who buys agricultural produce as well as sells agricultural produce. A person who merely 'buys agricultural produce but does not sell it or sells agricultural produce without buying it is not a trader. According to learned Solicitor-General, the word "and" has been used disjunctively and a person who is ordinarily engaged in the business of either buying or selling agricultural produce is a trader. There was also a controversy at the bar as to the meaning of the clause "a person ordinarily engaged in the business of processing of agricultural produce.'' According to learned Solicitor-General, as the petitioner is ordinarily engaged in the business of preparing biscuits out of agricultural produce it is engaged in the business of processing agricultural produce and therefore, is a trader for the purposes of the Act. According to Mr. Balbhadra Prasad Singh, the petitioner is not engaged in the business of processing of agricultural produce but it is engaged in the business of manufacturing biscuit which is not agricultural produce, Mr. Singh drew a distinction between the expression "processing" and "manufacturing" and submitted that manufacturing of biscuit was not processing of agricultural produce as biscuit itself was not an agricultural produce. It may be stated here that the Act also defines in Section 2 (1) (a) "agricultural produce" as follows:
" "agricultural produce" Includes all produce, whether processed or non-processed of agriculture, horticulture, animal husbandry and forest specified in tine Schedule."
Maida, sugar and vanaspati oil which the petitioner admittedly purchases for pre-paring biscuits are specified as agricultural produce in the schedule but biscuit itself is not specified as an agricultural produce in the schedule.
6. In support of his contention that the word "and" has to be read conjunctively Mr. Balbhadra Prasad Singh in the first place relied on the following observations in the Mersey Docks & Harbour Board v. Henderson Brothers, ((1888) 13 AC 595) :
"In the first place I know no authority for such a proceeding unless the context makes the necessary meaning of "or" "and," as in some instances it does; but I believe it is wholly unexampled so to read it when doing so will upon one construction entirely alter the meaning of the sentence, unless some other part of the same statute or the clear intention of it requires that to be done, as in the case of Fowler v. Padget, ((1798) 7 TR 509), where the Act of Jac. 1, Clause 15, made it an act of bankruptcy for a trader to leave his dwelling-house to the intent or whereby his creditors might be defeated or delayed. These words if construed literally would have made every trader commit an act of bankruptcy if he casually left his dwelling-house and some creditor called for payment during his absence. It may indeed be doubted whether some of the cases of turning "or" into "and" and vice versa have not gone to the extreme limit of interpretation, but I think none of them would cover this case. Here, not only is "or" changed into "and", but the whole sentence is practically struck out, since the construction insisted on reads it thus (leaving out the words altogether): "Vessels arriving in ballast, but trading outwards, and also vessels built within the port of Liverpool shall be liable to the rates payable in respect of the most distant of all the ports to which they shall trade outwards."
Mr. Singh also relied on the decision of the Supreme Court in Ishwar Singh v. State of U.P., (AIR 1968 SC 1450). He specially referred to para 11 of the said decision which reads as follows :--
"Now if the expression "Substances" is to be taken to mean something other than "medicine" as has been held in our previous decision it becomes difficult to understand how the word "and" as used in the definition of drug in Section 3 (b) (i) between "medicines" and "substances" could have been intended to have been used conjunctively. It would be much more appropriate in the context to read it disconjunctively. In Stroud's Judicial Dictionary, 3rd Edn. it is stated at p. 135 that "and" has generally a cumulative sense, requiring the fulfilment of all the conditions that it joins together, and herein it is the antithesis of or. Sometimes, however, even in such a connection, it is, by force of a context, read as "or". Similarly in Maxwell on Interpretation of Statutes, llth Edn., it has been accepted that "to carry Out the intention of the legislature it is occasionally found necessary to read the conjunctions "or" and "and" one for the other."
On the basis of the observations above quoted from the two judgments relied on by him, Mr. Singh wanted us to accept his contention that the word "and" should ordinarily be interpreted to have been used conjunctively.
7. Learned Solicitor-General for the respondents did not challenge the correctness of the aforesaid contention of Mr. Singh. He submitted that at times, the word "or" has to be given the meaning of "and" and "and" has to be given the meaning of "or". According to him, what meaning should be given to "and" and "or" depends on the context in which they have been used as well as the purpose behind the enactment of the statute in which they are used. He submitted that for that purpose one may have to read the entire statute. He pointed out that his contention that sometimes the word "and" has to be interpreted to have been used disjunctively is established by para 11 itself of the judgment of the Supreme Court in Ishwar Singh Bindra's case, (AIR 1968 SC 1450). Learned Solicitor-General placed before us passages from Craies on Statute Law Seventh Edition, at page 161 and pages 212 to 216. The passage at page 161 is as follows:
"The more modern statute contains, in the form of an interpretation clause, a little dictionary of its own, in which it endeavours to define, often arbitrarily, the chief terms used. Any ambiguity in the definition of such terms can rarely be solved otherwise than by examination of the statute itself, or other enactments with which it is to be read by reason of its subject-matter or the direction of the legislature."
At pages 212-16 the learned author deals with interpretation clauses in detail pointing out that such clauses may extend the meaning of words but ordinary meaning is not taken away by clause extending the meaning of word; sometimes interpretation clauses are inserted ex abundanti cautela and interpretation clause is not necessarily applicable on every occasion when word interpreted is used in Act. The learned author relying on Jobbins v. Middlesex County Council, ( (1949) 1 KB 142) has said that definition section ought to be construed as not cutting down the enacting provisions of an Act unless there is absolutely clear language having the opposite effect. Learned Solicitor-General also placed Before us passages from Maxwell on Interpretation of Statutes, Eleventh Edition, pages 229-31 where the learned author deals with the topic under the heading "The conjunctions" "or" and "and". He placed special reliance on the following passage:
"To carry out the intention of the legislature, it is occasionally found necessary to read the conjunctions "or" and "and" one for the other. The Disabled Soldiers Act, 1601 (c. 3) for instance, in speaking of property to be employed for the maintenance of "sick and maimed soldiers", referred to soldiers who were either the one "or" the other, and not only to those who were both."
8. Learned Solicitor-General placed strong reliance on the decision of the Supreme Court in Sri Krishna Coconut Co. v. East Godavari Coconut & Tobacco Market Committee, (AIR 1967 SC 973) where the words "bought and sold" in Madras Commercial Crops Markets Act were subject-mattter of interpretation. Learned Judges of the Supreme Court said that interpretation should be such which would result in validity of provision rather than its invalidity and which would give effect to manifest intention of legislature enacting the statute. They held that the words "bought and sold" aim at transaction whereunder dealer buys from producer who brings to market his goods for sale, i.e., the transaction is one resulting in buying by one and selling by other and that the words do not aim at transactions which have dual aspect, viz., buying by dealer from producer and selling of these identical goods by dealer to his customers within notified area. According to learned Solicitor-General, this decision of the Supreme Court was almost settler on the point. He maintained that the Act was brought into existence to provide for the better regulation of buying and selling of agricultural produce and the establishment of markets for agricultural produce in the State of Bihar and for matters connected therewith and it was intended that market fee should be levied and collected on the agricultural produce bought or sold in the market area. He drew our attention in this connection to the preamble of the Act and Section 27 of the Act. Section 27 says that the Market Committee shall levy and collect market fees on the agricultural produce bought or sold in the market area, at the rate of rupee one per Rs. 100/- worth of agricultural produce. He submitted that the provisions of Section 27 for levying and collecting market fees on purchase as well as sale of the agricultural produce cannot be given full effect if the expression "buying and selling" in Section 2 (1) (w) of the Act is given a meaning as contended on behalf of the petitioner that it aims at transactions which have dual aspect, namely, buying of agricultural produce by a dealer from a seller and selling of agricultural produce by the dealer to his customers. Learned Solicitor-General also relied on the definition of the word "trade'' in Section 2 (1) (v) as under:--
" 'Trade', means any kind of transaction of sale and purchase or any kind of remuneration on sale and purchase of any agricultural produce."
According to him, applying the ratio decidendi of the Supreme Court decision in Krishna Coconut Co's case, transaction of "sale and purchase" in this definition will mean whereunder a dealer buys from a person who brings to market his goods for sale, i.e., the transaction is one resulting in buying by one and selling by another. In view of the decision of the Supreme Court I find no difficulty in accepting this contention of learned Solicitor-General as to the interpretation of the expression "transaction of sale and purchase" in Section 2 (1) (v) of the Act.
9. Now. "Trader" ordinarily means one who does trade. Therefore, "buying and selling" in Section 2 (1) (w) of the Act has to be given the same meaning on sale and purchase in Section 2 (1) (v) of the Act. An interpretation reading the word "and" in between the words "buying" and "selling" as "or" or at least that the transaction of buying and selling need not necessarily be by the same person in respect of the agricultural produce but it may also include such transactions where buyer is one person and the seller is another person will also give full effect to the intention of the legislature of levying and collecting market fees on the agricultural produce bought or sold in the market area as envisaged by Section 27 of the Act. In this connection our attention was drawn by Mr. Balbhadra Prasad Singh, learned counsel for the petitioner, to Rule 8 2 of the Rules which while providing that the Market Committee shall levy and collect market fee, on agricultural produce 'bought or sold in the market area as envisaged by Section 27 of the Act further provides as follows :
"(ii) If the buyer is a licensee, he shall within a week of the purchase, deposit the market fee, with the Market Committee.
(iii) If the seller is a licensee and the buyer is not a licensee, the seller shall realise the market fee from the buyer and shall within a week deposit the same with the Market Committee.
(iv) If neither the buyer nor the seller is a licensee, the buyer shall deposit the market fee with the Market Committee or to its authorised officer or to staff or to any person authorised by the Market Committee.
(v) The Market Committee may authorise any of its officers or staff or any other person to collect market fee directly from the buyer or his agent."
According to Mr. Singh, this rule shows that market fee can be collected in all cases of purchase or sale irrespective of the fact whether the buyer or seller is a licensee or not and, therefore, it is not necessary to give an interpretation to the words "buying and selling" in Section 2 (1) (w) of the Act as contended by learned Solicitor-General for giving full effect to the provisions of Section 27 of the Act. The rule appears to have been made in such a way for realisation of market fee even in cases of stray purchases and sales. A person can be called upon to obtain a licence only if he is engaged in the business of buying and/or selling agricultural produce. Business indicates continuity. If a person buys or sells agricultural produce occasionally, then he cannot be said to be engaged in the business for the purposes of Section 2 (1) (w) of the Act and cannot be called upon to obtain a licence. Hence merely on account of Rule 8 2, the contention of learned Solicitor-General as to the interpretation of Section 2 (1) (w) of the Act cannot be rejected.
10. Learned Solicitor-General further contended that if the interpretation as contended by learned counsel appearing on behalf of the petitioner was accepted, then the validity of the definition of "Trader" as given in Section 2 (1) (w) of the Act may be challenged on the ground that it makes a discrimination between different persons doing business of buying agricultural produce for one who buys and sells the agricultural produce will be liable to obtain a licence but another who buys the agricultural produce but sells it after transforming it into another goods which is not agricultural produce will not be liable to obtain a licence even though the business of his buying the agricultural produce may be much more than that of one who buys agricultural produce and sells it in the same form. According to learned Solicitor-General, the definition in Section 2 (1) (w), therefore, has to be given an interpretation as contended by him to make it intra vires. There also appears substance in this contention of learned Solicitor-General. I would accordingly hold that the petitioner firm which is ordinarily engaged in the business of buying agricultural produce is a trader within the meaning of the terms as defined in Section 2 (1) (w) of the Act.
11. As stated earlier, arguments were also advanced by learned counsel for the parties as to the meaning of the clause "engaged in the business of processing of agricultural produce." In support of his contention that the petitioner was not engaged in the business of processing of agricultural produce but of manufacturing of biscuits which was admittedly not an agricultural produce, Mr. Singh placed reliance on the following decisions: (i) Boulton v. Bull, ((1795) 126 ER 651), (ii) Union of India v. Delhi Cloth and General Mills Co. Ltd., (AIR 1963 SC 791) and (iii) The Secy., Madras Gymkhana Club Employees' Union v. Management of the Gymkhana Club, (ATR 1968 SC 554). These decisions were cited to show that distinction between "processing" and "manufacturing". To appreciate the point raised by Mr. Singh it will suffice to quote para 14 from the decision of the Supreme Court in Union of India v. Delhi Cloth & General Mills which is as follows :--
"The other branch of Mr. Pathak's argument is that even if it be held that the respondents do not manufacture "refined oil" as is known to the market they must be held to manufacture some kind of "non-essential vegetable oil" by applying to the raw material purchased by them, the processes of neutralisation by alkali and bleaching by activated earth and/or carbon. According to the learned Counsel 'manufacture' is complete as soon as by the application of one or more processes, the raw material undergoes some change. To say this is to equate 'processing' to 'manufacture' and for this we can find no warrant in law. The word 'manufacture' used as a verb is generally understood to mean as 'bringing into existence a new substance' and does not mean merely 'to produce some change in a substance', how-ever minor in consequence the change may be. This distinction is well brought about in a passage thus quoted in Permanent Edition of Words and Phrases, Vol. 26, from an American Judgment. The passage runs thus:--
'Manufacture' implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge having a distinctive name, character or use."
There can be no doubt that the two words 'processing' and 'manufacturing' cannot be equated. Manufacturing means bringing into existence a new substance whereas processing means merely bringing out some changes in the substance. Thus each case of processing is not a case of manufacturing whereas in each case of manufacturing there is element of processing. According to learned Solicitor General, in manufacturing biscuits which is not an agricultural produce the petitioner is engaged in the business of processing of agricultural produce such as Maida, sugar and vanaspati oil. In order to appreciate respective contentions of learned counsel appearing for the parties we put certain questions to them and asked them to illustrate their view point. While learned counsel for the petitioner maintained if maida is made of wheat it is processing of maida; according to learned Solicitor General, it is processing of wheat into maida. In view of my finding that the petitioner is trader within the meaning of the term as defined in Section 2 (1) (w) of the Act as it is ordinarily engaged in the business of buying agricultural produce, decision of the question under discussion is not of much importance, but I am inclined to hold even on this question in favour of the respondents that the petitioner while engaged in the business of manufacturing of biscuits is also engaged in the business of processing of agricultural produce such as maida, sugar and vanaspati oil.
12. Mr. Balbihadra Prasad Singh appearing on behalf of the petitioner also submitted that in case his argument as to the interpretation of Section 2 (1) (w) of the Act was not accepted, in the alternative, he would challenge the vires of the Act on the ground that the provisions thereof are invasive of the liberties of the petitioner being in curtailment of the petitioner's right to carry on trade and business as guaranteed by the Constitution of India. He drew our attention to the averments made in paragraphs 12 and 13 of the petition in this regard and Article 301 and 304 of the Constitution of India. It appears that in B. & K. Traders v. State of Bihar, (1975 BBCJ 1') vires of the Act were challenged on the ground that it contravened the provisions of Article 301 and 304 of the Constitution. The argument was rejected by a Bench of the Court holding that provisions of those articles were not attracted and even if they were attracted, the restrictions imposed were reasonable within the meaning of Article 19 (6) as well as Article 304 (b) of the Constitution. According to Mr. Singh, as the constitutional validity of the Act was challenged in the petition, if the petition could not succeed on his contention as to the interpretation of Section 2 (1) (w) of the Act. the case should be heard by a Bench of not less than five Judges as provided in Sub-article (3) of Article 228-A of the Constitution. Since the challenge to the constitutional validity of the Act on the same ground has been rejected by a Bench of the Court before coming into force of Article 228-A of the Constitution, it cannot be claimed by the petitioner that as a question as to the constitutional validity of the Act which is State law has been raised in this petition, it must be heard by a Bench of the Court consisting of not less than five Judges unless we are inclined to think that the earlier decision was not correct and requires reconsideration. It may be stated here that in B. & K. Traders' case, the petitioner of that case went to the Supreme Court for special leave against the judgment of this Court and leave was refused. The contention that once the constitutional validity of State law is raised the matter has to be heard by a Bench of five or more Judges irrespective of earlier decisions of the Court cannot be accepted. If that is accepted the result may be that even if there are earlier decisions of five Judges given after coming into force of the Constitution (Forty-Second Amendment) Act, the matter may have to be again heard by a Bench of five or more Judges. Such an interpretation will lead to absurdity and cannot be given to Sub-article (3) of Article 228-A of the Constitution. Following the reasons given in B. & K. Traders' case I hold that the Act is not ultra vires on account of contravention of provisions of Articles 301 and 304 of the Constitution and the petitioner is not entitled to insist that this case must be heard by a Bench of not less than five Judges in accordance with provisions of Article 228-A of the Constitution.
13. Before closing the judgment I would like to observe that even if 1 would have held with the petitioner on the question of interpretation of Section 2 (1) (w) of the Act, it would not have been possible to quash Annexure 4 in its entirety for even as a buyer the petitioner was liable to pay market fee on 400 tins of vegetable oil purchased by it on 20th of May, 1976.
14. For the foregoing reasons, the application fails and is dismissed. In the circumstances of the case, however, there will toe no order as to costs.
S.K. Choudhuri, J.
15. I agree.