Kerala High Court
Rajan Cashew Company vs Union Of India (Uoi) on 1 February, 2006
Equivalent citations: 2006(2)KLT893
Author: K.S. Radhakrishnan
Bench: S. Siri Jagan, K.S. Radhakrishnan
JUDGMENT K.S. Radhakrishnan, C.J.
1. By this common order we propose to dispose of four connected Writ Appeals bearing Nos. 1635, 1637, 1707 and 1768 of 2005 as they emanate from a common impugned judgment rendered by a learned single Judge in W.P. (C) No. 648 of 2004 and connected cases Rajan Cashew Co., Maranadu and Ors. v. Union of India and Ors. dated 24.6.2005. Learned Counsel for the parties also suggested likewise. The brief facts that, however, need necessary mention have been extracted from W.A. No. 1635 of 2005 emanating from W.P. (C) No. 648 of 2004.
2. The appellants, as per the case set up by them, are engaged in the export of cashew kernels. Raw cashew nuts are processed in the factories and converted into kernels. This processing involves roasting raw cashew nuts at a very high temperature, shelling, drying in hot chamber, peeling and grading. Thousands of workers are stated to be engaged in the process and the processing is being done in the factories situated at different locations in Kollam, Pathanamthitta and Thiruvananthapuram districts. Appellants are stated to be earning substantial foreign exchange for the country by the export of cashew kernels. More than 80% of the raw cashew nuts required for the processing in the factories are imported from African countries and Indonesia whereas only 20% is produced from domestic markets. The first appellant is stated to have recently entered into a Sale and Purchase agreement with M/s. Ste B.P.S. (Corte D'lvoire) SA Limited for the import of 200 Metric tones of raw cashew nuts of Tanzanian origin of the crop of the year 2003. Pursuant to the application preferred by the first appellant a permit for the import of raw cashew nuts of Tanzanian origin has been issued by the Ministry of Agriculture. As laid down in Section 3(21) of the Plant Quarantine (Regulation of Import into India) Order, 2003 (hereinafter referred to as Order of 2003), a Phytosanitary Certificate issued by the authorized officer at the country of origin of the consignment has also been obtained. Other appellants have also entered into contracts with foreign sellers for the purchase of raw cashew nuts. As required by the Regulation relating to import, the requisite permits and Phytosanitary certificates relating to those consignments have been obtained by them. The Destructive Insects & Pests Act, 1914 (hereinafter referred to as Act of 1914) was promulgated by the Indian Government to prevent the introduction into India and the transport from one State to another of any insect, fungus or other pests which is or may be destructive to crops. Section 3 of the Act of 1914 empowers the Union of India-first respondent herein to prohibit or regulate subject to such restrictions and conditions concerning the import into India of any article likely to cause infection to any crop. Section 3(3) of the Act of 1914 also empowers the Central Government to issue notification to levy and collect such fees at such rates and in such manner as may be specified therein for making an application for permit to import or for making inspection, fumigation, disinfection, disinfestation or supervision of any article or class of articles or any insect or class of insects. Section 4(d) of the Act of 1914 also empowers the Central Government to issue notification-making rules prescribing the nature of the documents which would accompany any article the export or transport thereof, is subject to conditions imposed under Section 4A of the Act of 1914 or which shall be held by the consignor or consignee thereof, the authorities which may issue such documents and the manner in which the documents shall be employed. The first respondent had, in purported exercise of the power under Section 3(1) of the Act of 1914, promulgated the Plants, Fruits and Seeds (Regulation of Import to India) Order, 1984 (hereinafter referred to as Order of 1984) which was substituted by the Plants. Fruits and Seeds (Regulation of Import into India) Order, 1989 (hereinafter referred to Order of 1989). The Order of 1989 was repealed in the year 2003 by the promulgation of the Plant Quarantine (Regulation of Import into India) Order, 2003 (hereinafter referred to as Order of 2003). Clause 2 of the Order of 2003 deals with the definitions of certain words and expressions including 'Fruit', 'Pest', 'Seed' etc. Clause 3 of the Order of 2003 stipulates the general condition for import including application for permits, issue of permits, consignments imported to be accompanied by an official Phytosanitary Certificate issued by the competent authority of the exporting country etc. Other procedures to be complied with are stipulated in Clause 3 including payments to be made towards inspection, fumigation, disinfection by the Plant Protection Advisor or any other duly authorized officer and further that the importer shall pay to the Plant Protection Advisor, the fees prescribed in Appendix IX. The case of the appellants is that the Order of 2003 cannot be made applicable to the import of raw cashew nuts, since raw cashew nuts do not come under the definition of 'plant', 'seed' or 'fruit'. Appellants, it is stated, have been complying with the requirements for the purpose of taking delivery of the consignments with the least possible delay. It is further the case of the appellants that the Order of 2003 and the provisions contained therein do not apply to raw cashew nuts. In Clause 2(xix) 'plant' is defined as follows:
(xix) 'Plant' means a living plant or a part thereof including seed and germplasm Clause 2(xx) defines 'plant products' to mean un-manufactured material of plant origin including grain and those manufactured products that, by their nature or that of their processing, may create risk for the introduction and spread of a pest. Similarly, 'seeds' are defined to be seeds of any agricultural or horticultural crop or forest plant species produced by sexual reproduction and includes naked seeds (cones) produced by gymnosperms and seed sprouts meant for propagation or consumption. Clause 2(vi) defines 'fruit' as any fleshy portion of a plant that contains seeds, which is used for consumption and includes seedless fruit, both fresh and dry, but does not include preserved or pickled or frozen fruits. The case of the appellants is that cashew nut is neither a plant, nor a seed, nor a fruit. On the other hand, 'raw cashew nut' is a nut which has also not been defined in the Order of 2003. The raw cashew nuts imported by the appellants have to undergo a series of processing before it becomes an edible kernel. The series of processing includes roasting at very high temperature, shelling, drying in a hot chamber followed by peeling and grading. The Order aforesaid and the provisions therein would apply only for the import of seeds and plants for sowing or planting or for import of seeds, fruits and plants for consumption as is evident from Clause 3. It is further the case of the appellants that raw cashew nuts are not being imported for consumption, but is an industrial raw material imported for undergoing various series of processing as stated above. The appellants further state that even though it is stated in Clause 3(15) that on arrival at the first point of entry the consignment shall be inspected by the Plant Protection Advisor or any other officer duly authorized by him in this behalf and appropriate sample shall be drawn for laboratory testing in accordance with the guidelines issued by the Plant Protection Advisor from time to time, no such guidelines have been issued so far. The existing guidelines issued under the Order of 1989 do not take in raw cashew nuts imported as industrial raw material. It is dear from Clause A(1) of the said guidelines that it deals with the import of plants/ plant materials meant for sowing/planting/propagation/primary agricultural product and hence raw cashew nuts imported as industrial raw material will not fall under the same. Clause A(11) deals with import of plants/plant materials for consumption. It is the case of the appellants that raw cashew nuts cannot come under those classifications. Clause B of the said guidelines deals with import, inspection and clearance including registration of application, sampling/inspection/fumigation of consignment, release/detention of consignments and release of plant materials for growing under post entry quarantine. It is the case of the appellants that nowhere in the said guidelines there is a reference to raw cashew nuts and, therefore, the guidelines are not meant to apply to the import of raw cashew nuts. Thus by wrongly interpreting and misconstruing the provisions contained in the Order aforesaid and the guidelines, the respondents are coercing the appellants to pay all charges under the Order aforesaid and the guidelines alleging that the same would apply to the proposed import of raw cashew nuts by the appellants. It is further the case of the appellants that they are not liable to any amount as envisaged in the said order and guidelines. Appellants have been paying all charges as demanded by the respondents without any demur under the apprehension that harassment would be meted out by the respondents and their subordinates in the matter of prompt release of consignments entailing heavy demurrage. The consignments purchased by the appellants pursuant to the contracts have reached the ports as indicated in the import permits. Since they are not liable to pay any amount under the said order and guidelines, they are entitled to have the said consignments released from the ports without the respondents enforcing any of the provisions contained therein. All the consignments are covered by Phytosanitary Certificates evidencing the absence of any pest, insect or fungus. Such consignments do not require any fumigation in view of the series of processing which the imported nuts have to undergo. Inasmuch as the respondents are refusing to release the said consignments of the appellants unless the appellants pay the amounts as stipulated in the said Order and guidelines, the appellants are invoking the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India for redressing their grievances.
3. On the facts as narrated above what was urged before the learned Single Judge and which has been repeated and reiterated before us is that Section 3 of the Act of 1914 authorizes the Government of India to prohibit or regulate by notification import into India any article or class of articles likely to cause infection to any crop. The appellants are importing raw materials for their industry which has nothing to do with agricultural or other crop and, therefore, the import of cashew nuts for processing in the cashew factories will in no way cause any infection to any crop. Thus if the Rules are made applicable to cashew nuts it will be ultra vires to Section 3 of the Act of 1914. The appellants also relied upon the definition of 'seed' under Rule 2(1) and raised a contention that the said definition will not take in cashew nuts. Rule 2(1) of the Rules reads as follows:
'Seeds' means seeds of agricultural, horticultural, fruit and fodder crops, forest trees and includes seedlings and tubers, bulbs, rhizomes, roots, cuttings, all types of grafts and other vegetatively propagated material utilized for sowing, planting or consumption.
The appellants rely upon the words in the last part of the definition, i.e., "vegetatively propagated material utilized for sowing, planting or consumption" and state that these words will qualify the earlier part of the definition of seeds and, therefore, even if it is to be assumed that the cashew nuts are seeds, since they do not come under the description vegetatively propagated material utilized for sowing, planting or consumption, the rules would not cover the import of raw cashew nuts.
4. The learned Single Judge after reproducing Section 3 of the Act of 1914 and also taking into consideration the definition of seeds as contained in Rule 2(1) of the Rules, repelled the contention of the appellants by observing as follows:
4. Going by the above provision, the contention of the petitioners that the material imported should be something meant to be used for agricultural purpose or for raising crop cannot be accepted. If raw cashew nuts are imported and in transit if some of them are dropped on the way such nuts shall be a source of infection. So any seed or other product which is likely to cause infection in India especially to the crops or agricultural produces should be disinfected or disinfestated before their entry is permitted. Once the cashew nuts are imported, none have any effective control over it. At least some of the nuts can go out of the factory premises resulting in spreading of infection. Going by the object of the Act as evident from its Preamble it is competent for the Government to restrict and also to impose conditions in importing raw cashew nuts. So the submission of the petitioners that Section 3 does not enable the Government to regulate or control the import of cashew nuts is untenable. The contention that the Rules if they are applicable to the import of cashew nuts are ultra vires of Section 3, also, cannot be accepted. The definition of seed contained in Rule 2(1) of the Rules reads as follows:
"Seeds" means seeds of agricultural, horticultural, fruit and fodder crops, forest trees and includes seedlings and tubers, bulbs, rhizomes, roots, cuttings, all types of grafts and other vegetatively propagated material utilized for sowing, planting or consumption.
5. Going by the above definition it can be seen that the widest possible meaning has been given to the word 'seed'. Even the first limb of the definition which says that a seed means seeds of agricultural, horticultural, fruit and fodder crops will take in cashew nuts. Cashew nut is a seed of cashew tree. So the contention of the petitioner that in view of the last limb of the definition that cashew nut cannot be treated as a seed cannot be accepted. In the light of the experience gained by the working of the Rules issued in 1989, the Government have framed new Rules. The new Rules expressly include cashew nuts in one of its schedules. The fact that cashew nut was not expressly included in Ext.P4, will not be a ground to say that Ext.P4 Rules do not cover cashew nut. In the definition of seed no particular seed or a nut is specifically mentioned. In view of the above, the challenge against Ext.P4 is repelled.
5. Learned Counsel for the appellants have not been able to pinpoint any error in the observation of the learned Single Judge as extracted above. All that they would still urge is that the learned Single Judge clearly erred in holding that if raw cashew nuts are imported and in transit if some of them are dropped on the way such nuts shall be a source of infection and that once the cashew nuts are imported none have any effective control over it and at least some of the nuts can go out of the factory premises resulting in spreading of infection. It is also urged on behalf of the appellants that in-so-far-as the appellants are concerned, they are importing raw cashew nuts for processing the same in their factories. The cashew nuts have been brought in cans straight into the factories and put to processing as narrated above.
6. Before we may proceed any further in this case we would like to mention that the Government has indeed framed rules in 2004 and in the said rules, cashew nuts have been expressly included in one of the schedules of the rules. It is the conceded position that cashew nut would be a seed and the charging section obliging the appellants to pay the inspection fee etc. would be applicable from 1.1.2004. What is still agitated at this stage is making the appellants pay with regard to the period prior to 1.1.2004.
7. We have heard learned Counsel for the parties. We, however, find no merit whatsoever in the contention of the learned Counsel as noted above. It may be true that the finding recorded by the learned Single Judge that once the cashew nuts are imported no one will have any effective control over it and that some of the nuts can go out of the factory premises resulting in spreading of infection may not be absolutely correct, but that in our view would be of no solace to the appellants. The word 'seeds' as per the definition noted above means seeds of agricultural, horticultural, fruit and fodder crops etc. vegetatively propagated material utilized for sowing, planting or consumption. It is not disputed in the course of arguments that cashew nuts are indeed a seed of cashew tree. It is also not disputed that cashew nut seed is utilized for sowing, planting and for consumption. What, however, still being urged is that in-so-far-as the appellants are concerned they are not utilizing cashew nuts either for sowing, or planting or for consumption. They, as mentioned above, are importing cashew nuts from abroad in big cans which straightaway land in their factories from the ports for processing. Once the processing starts, the cashew nut is neither used for sowing, nor planting nor for consumption. This contention has necessarily to be repelled as the definition of the word 'seeds' is not meant to cover any particular purpose or use of the appellants which is taken into consideration. Once cashew nut is covered under the definition of seeds and it is a kind of seed which is vegetatively propagated material utilized for sowing, planting or consumption, the charging section would come into play straightaway. May be in a given case a party may not use cashew nuts for the purpose as defined or use it as a seed as defined in Rule 2(1) of the Rules. However, as mentioned above, once cashew nut is treated as a seed the case would be squarely covered. It will be wholly immaterial as to for which use the appellants are putting the cashew nuts. Their purpose and the manner of use have no meaning and consequence.
No other point has been raised in support of the case. Finding no merit in the same, we dismiss this and all other connected appeals. Costs are made easy.