Gujarat High Court
National vs State on 22 April, 2011
Author: S.J.Mukhopadhaya
Bench: S.J. Mukhopadhaya
Gujarat High Court Case Information System
Print
SCA/4404/2010 31 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 4404 of 2010
For
Approval and Signature:
HONOURABLE
THE CHIEF JUSTICE MR. S.J. MUKHOPADHAYA
AND
HONOURABLE
MR.JUSTICE K.M.THAKER
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1
Whether
Reporters of Local Papers may be allowed to see the judgment
? Yes
2
To
be referred to the Reporter or not ? Yes
3
Whether
their Lordships wish to see the fair copy of the judgment
? No
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ? No
5
Whether
it is to be circulated to the civil judge ? No
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NATIONAL
SEEDS ASSOCIATION OF INDIA & 3 - Petitioner(s)
Versus
STATE
OF GUJARAT THROUGH SECRETARY & 5 - Respondent(s)
=================================================
Appearance :
DR
RAJEEV DHAVAN, Sr. Advocate with MR SN SHELAT, Sr. Advocate with Ms
HS CHANDOKE, MR PRASHANT PAKHIDDEY, MR ABDULLYAH HUSSAIN and MR
DILIP B RANA for Petitioner(s) : 1 - 4.
MR PK JANI, GOVERNMENT
PLEADER for Respondent(s) : 1 - 3.
NOTICE SERVED BY DS for
Respondent(s) : 4 - 6.
MR PS CHAMPANERI for Respondent(s) :
6,
=================================================
CORAM
:
HONOURABLE
THE CHIEF JUSTICE MR. S.J. MUKHOPADHAYA
and
HONOURABLE
MR.JUSTICE K.M.THAKER
Date
: 22/04/2011
CAV JUDGMENT
(Per : HONOURABLE THE CHIEF JUSTICE MR. S.J. MUKHOPADHAYA) This writ petition has been preferred by National Seeds Association of India and others challenging the validity of the Gujarat Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Act, 2008 [hereinafter referred to as "the Cotton Seeds Act, 2008"] and the price-fixation thereunder.
2. The brief facts of the case are that the Essential Commodities Act was enacted by the Parliament under Entry 33, List III of Schedule VII of the Constitution of India to govern trade and commerce in different essential commodities including "cotton seeds". In the year 1966, the Parliament passed "Seeds Act, 1966"
in exercise of power conferred under Entry 33, List III of the Schedule VII of the Constitution to regulate the quality of certain seeds, such as seeds of food crops, cotton seed, etc. to be sold for purposes of agriculture; including horticulture.
In exercise of powers conferred under Section 3 of the Essential Commodities Act, 1955 [hereinafter referred to as "the EC Act"], the Central Government passed "Seeds (Control) Order, 1983". The Rules for manufacture, use, import, export and storage of Hazardous Micro Organisms/Genetically Engineered Organisms or Cells were framed by the Central Government in the year 1989 under the provisions of the Environment (Protection) Act, 1986. Under the said provisions, Genetic Engineering Approval Committee approval is required for all manufacture, storage, trade and commerce in genetically modified cotton seeds.
In the year 2002, the Genetic Engineering Approval Committee approved various Bt cotton hybrids. BG-I cotton seed sales commenced in all States in the year 2002. In the year 2006, Genetic Engineering Approval Committee approved certain BG-II cotton seed hybrids. This was based on the performance report submitted by the said Committee. The State of Gujarat by executive order dated 31.5.2006 fixed the maximum retail price of BG-I cotton seeds at Rs.750/- per packet of 450 grms. Bt seed and 120 grms of refugia seeds. The maximum retail price of BG-II was not fixed. During Kharif season, 2006, the maximum retail price of BG-II cotton seed was fixed at Rs.1,350/- per packet. During Kharif, 2007, the maximum retail price of BG-I cotton seed was fixed at Rs.750/- per packet and that of BG-II cotton seed was fixed at Rs.925/- per packet.
In December, 2006, the Parliament passed the Essential Commodities (Amendment) Act, 2006, which came into effect on 12.2.2007. The 'cotton seed' was taken out of the items listed in the Schedule as an 'essential commodity'. [emphasis added].
The Gujarat Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Ordinance, 2008 was published by the State on 10.6.2008. It followed by the impugned notification dated 11.6.2008 passed under Section 12 of the said Ordinance fixing the maximum retail price of Bt cotton seed. Writ petition - Special Civil Application No. 8528 of 2008 was filed challenging the notification as aforesaid. During pendency of the said writ petition, the impugned Gujarat Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Act, 2008 [hereinafter referred to as "the Gujarat Cotton Seeds Act, 2008"] was passed. In the earlier writ petition - SCA No. 8528 of 2008 - wherein the notification dated 11.6.2008 and the Ordinance of 2008 were under challenge, a Division Bench of this Court by judgment and order dated 9.7.2009 repudiated the challenge on the ground that 'cotton seed' was no longer an 'essential commodity' under the Essential Commodities Act, 1955 by virtue of the Essential Commodities (Amendment) Act, 2006.
After the judgment was delivered, the Central Government issued notification dated 22.12.2009 in exercise of powers conferred under Section 2A of the EC Act bringing 'cotton seed' back into the list of 'essential commodities'. According to the counsel for the petitioners, the EC Act, Seeds (Control) Order, 1983 and the Seeds Act, 1966 again became applicable to 'cotton seeds'. In view of the said notification dated 22.12.2009 bringing back the 'cotton seed' into the list of 'essential commodities', the present writ petition has been preferred challenging the validity of the Gujarat Cotton Seeds Act, 2008 on the ground of repugnancy.
3. Dr Rajeev Dawan, learned senior counsel for the petitioners would contend that if the Gujarat Legislature wishes to validate the Gujarat Cotton Seeds Act, 2008 to the extent of the repugnancy, it can only do so under Article 254(2) of the Constitution of India by passing a fresh legislation and obtaining Presidential assent as prescribed. He would further contend that where two statutes occupy the same matter, Article 254(2) provides a mechanism to save the State law with the consent of the President. Thus, in a sense, it is the duty of the State Government to refer the matter to the President to resolve conflict. But where the whole subject matter is intended to be dealt with by the Union, any specific deviation must be referred by conceding the referred statute covers the same subject matter as the Union legislation, and can only be allowed to prevail with the Union's consent through the President. Reliance was placed on the decision of the Supreme Court in the case of Kiaser-I-Hind vs. National Textile Corporation, reported in (2002) 8 SCC 182. Therein, the Supreme Court examined the provisions of Article 254 of the Constitution and made its observations.
4. The case of the petitioners is that after notification dated 22.12.2009 bringing back 'cotton seed' into the list of 'essential commodity', admittedly no assent was sought from the President of India. It was the State's duty to seek the President's assent for the Act even if there was a minor doubt regarding repugnancy of any of the provisions. It was incumbent upon the State to refer the matter to the President under Article 213(3) read with Article 254(2) of the Constitution of India. The said provisions exist as a safety valve to avoid the sort of confusion created as in the present case.
5. The learned counsel for the petitioners would contend that in view of the changed legislation, the earlier judgment rendered by the High Court cannot be relied upon for determination of repugnancy of the Gujarat Cotton Seeds Act, 2008.
6. Thus, according to Dr Rajeev Dawan, learned senior counsel for the petitioners, the Gujarat Cotton Seeds Act, 2008 is void to the extent of repugnancy and assailed on the following grounds :-
(i) Gujarat Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Act, 2008 is now "void to the extent of repugnancy" in respect of various Union legislations by virtue of Article 254 of the Constitution of India because cotton seed has been re-included in the Schedule of the Essential Commodities Act,1955 [hereinafter referred to as "the EC Act"] by Government of India notification dated 22.12.2009 issued under Section 2A of the EC Act.
(ii) In this case, the extent of repugnancy invalidates - (a) the entire Cotton Seeds Act, 2008 because the EC Act is a comprehensive regulatory legislation reposing all matters covered by its provisions exclusively with the Union to the exclusion of the States or (b) alternatively the alleged 'saved" provisions of the Cotton Seeds Act, 2008 are not severable from the rest of the Cotton Seeds Act, 2008 thereby invalidating the entire Act.
7. Mr PK Jani, learned Government Pleader referred to the Statement and Object of promulgation of the Gujarat Cottons Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price), Ordinance, 2008. He would contend that the Gujarat Cotton Seeds Act, 2008 is intended to regulate supply, distribution, sale and fixation of sale price of cotton seeds which is also evident from the Statement and Object of the said Act, 2008. According to him, the EC Act is enacted essentially for the control of production, supply and distribution of and trade and commerce, in certain commodities, which are the essential commodities under the said Act. The Seeds Act, 1966 was enacted essentially for the purpose of regulating the quality of certain seeds for sale. The Seeds (Control) Order, 1983 has been issued under Section 3 of the Essential Commodities Act, 1955. For the purposes of the Seeds Act and more particularly for regulating the quality of any kind of variety of seed under the said Act, it is sine qua non that the particular kind or variety of seed is notified under Section 5 of the Seeds Act.
He would contend that the provisions of the Seeds Act, 1966 in their application to the State of Gujarat regulate the quality of seeds in respect of notified varieties, but Bt cotton seed is not notified under the said Act. For the fast few years, in view of the substantial change of pattern of agriculture particularly in usage of seeds, the provisions of the said Act. are found to be inadequate for enforcement in respect of quality of Bt cotton seeds and regulation of trade of non-notified cotton varieties, research hybrid varieties, etc., as a result, the entire economy of farmers is adversely affected. So far variety Bt cotton seed has never been notified by the Central Government under Section 5 for the purposes of Seeds Act and hence, Bt cotton seed has never been covered by the Seeds Act. Consequently, the Seeds Rules framed under the Seeds Act do not apply to Bt cotton seed.
8. With regard to competence of the State legislature to legislate, the learned Government Pleader for the State would contend that Article 246(2) of the Constitution empowers the Parliament as well as the State legislature both to enact laws with respect to any of the matters enumerated in List III i.e. Concurrent List of Schedule VII to the Constitution. As per Article 254(1), if any provisions of the State Act is repugnant to any provision of law made by the Parliament with respect to one of the matters enumerated in the Concurrent List, the law made by the Parliament shall prevail and the law made by the legislature of the State shall, to the extent of repugnancy, be void.
9. According to the counsel for the State, under Article 254(2) of the Constitution, the assent of the President is required in respect of the State legislation made with reference to one of the matters enumerated in the Concurrent List, if a particular provision of law is repugnant to the provision of the existing law of the Parliament and in view of such assent, the State legislation will prevail in that State. Thus, the question of repugnancy arises only in connection with the subjects enumerated in the Concurrent List as regards to which, both the Union and the State legislations have concurrent powers to make legislations.
10. The counsel for the State referred to Entry 33 and Entry 34 of List III of Schedule VII of the Constitution and submitted that the State Act is referable to Entry 33 as well as Entry 34 of List III and it cannot be held to be repugnant. He placed reliance on different decisions of the Supreme Court wherein the Court laid down the principles of construction in regard to repugnancy which will be discussed at an appropriate stage.
11. On behalf of the State, the learned Government Pleader accepted that some of the provisions of the Gujarat Cotton Seeds Act, 2008 is repugnant as the Central Act holds the field. However, according to him, there is no conflict between the State Act and the Central Act and there is no repugnancy with regard to most of the provisions being not inconsistent or in conflict with the Central Act. In order to appreciate the comparison between the main provisions of various enactments, including the Gujarat Cotton Seeds Act, 2008, Essential Commodities Act, Seeds (Control) Order, the following chart has been prepared and placed before the Court :-
Impugned Act Central Legislation Comments Sec.
3 Cotton Seed Controller Clause 2 of Seed Control Order Just definition of controller is given under Seed Control Order 83.
No role and function are defined. No exhaustive provisions are given. Whereas State Act has well defined powers under Sections 4 and 6.
Sec.
4 Power of Controller Section 3 of Essential Commodities Act - Clause 10 of Seeds Control Order.
-do-
Sec.
6 Function of Controller Clause of 3 of Seeds Control Order
-do-
Sec.
7 Seed Testing Laboratory Seed Act Sec. 4 Environment Protection Act, Sec. 12 Seed Act 1966 is not applicable to BT Cotton Seeds.
No provisions of Laboratory under Seed Control Order, 1983.
Environment Protection Act cannot regulate BT cotton varieties, as Act is meant for the protection for the improvement of the environment and prevention and hazardous materials to human beings. BT cotton is proved as non-hazardous to human beings by various authorities.
Sec.
8 Compensation to the farmers Clauses 13 to 15 of Seeds Control Order Seed Control Order Clauses 13 to 15 give the penalty provision. No provision for compensation.
Sec.10, Appointment of Seed Analyst Clause 13(c) Duties of Inspector No provision for appointment of Seeds Analyst.
Sec.
12, Price fixation Essential Commodities Act, Sec. 3(2)(e) No order has been issued under Essential Commodities Act for the price fixation. The field is open.
12. The learned Government Pleader would contend that while enacting the Act, the legislature of the State has taken into consideration the interest of the farmers of the State, who are growing 'cotton'. The State of Gujarat is the largest producer of 'cotton' and, therefore, the farmers in the State of Gujarat require huge quantity of cotton seeds. The object of enacting the Act is see that the farmers are not exploited by the traders, who are dealing in cotton seeds including transgenic cotton seeds, and that there is no unjustified burden towards seed costs, which is essential and vital input in the process of agriculture. The rationale behind the Act is that the Companies do not take undue advantage of their monopoly in respect of scarce type of cotton seeds. The Act is also enacted to provide adequate compensation to the farmers in the event of supply of inferior quality of cotton seeds. Therefore, the Gujarat Cotton Seeds Act, 2008 is a benevolent legislation introduced in the interest of the farmers of the particular State at large.
13. The Central Government has practically supported the case of the petitioners. In its affidavit, it has taken a plea that the Gujarat Cotton Seeds Act, 2008 is invalid as being legislatively not competent on the following grounds :-
(i) Since 'cotton seed' has been re-introduced in the EC Act, the power and competence for controlling the price at which any essential commodity may be bought or sold is exclusively in the domain of issuance of an order by the Central Government.
(ii) The Government of India has constantly taken the view that administered control should not be introduced in the fixation of sale price of seeds, including cotton seeds.
(iii) Bt cotton seed sector is presently competitive and provides a wide choice to the farmer community since 619 Bt cotton hybrids are being produced by as many as 40 Companies/agencies.
(iv) On and from 23.12.2009, the provisions of the Cotton Seeds Act, 2008 are required to be considered in the light of the provisions contained in Article 254 of the Constitution of India.
14. We have heard the learned counsel for the parties, perused the record, relevant provisions of law and the decisions rendered by the Supreme Court and other High Courts.
15. Under Section 3 of the Essential Commodities Act, 1955, the Central Government is empowered to control production, supply, distribution, etc. of essential commodities and by order providing for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein. Under Clause (c) of sub-section (2) of Section 3, by an order, the Central Government can control the price at which such essential commodity may be bought or sold, as evident from Section 3, relevant portion of which is quoted hereinbelow :-
"3. Powers to control production, supply, distribution, etc., of essential commodities, - (1) If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, or for securing any essential commodity for the defence of India or the efficient conduct of military operations, it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein.
(2) Without prejudice to the generality of the powers conferred by sub-section (1), an order made thereunder may provide -
(a) for regulating by licenses, permits or otherwise the production or manufacture of any essential commodity;
(b) for bringing under cultivation any waste or arable land, whether appurtenant to a building or not, for the growing thereon of food-cops generally or of specified food-crops, and for otherwise maintaining on increasing the cultivation of food-crops generally, or of specified food-crops;
(c) for controlling the price at which essential commodity may be bought or sold;
(d) for regulating by licenses, permits or otherwise the storage, distribution, disposal, acquisition, use or consumption of, any essential commodity;
... ... .... ... ... ... ... ..."
16. The Central Government issued the Seeds (Control) Order, 1983 under Section 3 of the EC Act. The Rules for manufacture, use, import, export and storage of Hazardous Micro Organisms/Genetically Engineered Organisms or Cells were framed by the Central Government under the provisions of the Environment Protection Act, 1986. The Parliament in the meantime passed the Seeds Act, 1966 in exercise of its power conferred by Entry 33 List III of the Constitution governing different kinds of seeds including 'cotton seed'. Therefore, it will be evident that 'cotton seed' was completely within the control of the Central Government and, therefore, the State Government had not promulgated any Rule or Regulation fixing the sale price of 'cotton seed' till December, 2006.
17. The Essential Commodities (Amendment) Act, 2006 was passed by the Parliament in December, 2006 which came into effect from 12.2.2007. This time 'cotton seed' was taken out of the items listed in the Schedule of 'Essential Commodity'. Only thereafter, the State of Gujarat issued 'The Gujarat Cotton Seed (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Ordinance, 2008"
which came into effect from 10.6.2008 followed by the impugned notification dated 11.6.2008 issued under Section 12 of the Gujarat Cotton Seed Ordinance, 2008 fixing maximum retail price of Bt cotton seeds.
18. From the aforesaid facts, it will be evident that as the 'cotton seed' was holding the field under the Central Government pursuant to the Seeds (Control) Order, 1983 issued under Section 3 of the EC Act, the Central Government lifted control over 'cotton seeds' since 12.2.2007 when the Essential Commodities (Amendment) Act, 2006 was enacted and since then 'cotton seed' did not fall within the meaning of 'essential commodity' as defined under the Seeds (Control) Order, 1983. Since 12.2.2007, the Central Government has felt that 'cotton seed' was not governed by the Central Act (the Essential Commodities Act, 1955 - Seeds (Control) Order, 1983), which was well within the jurisdiction of the State to enact Ordinance, 2008, viz. 'The Gujarat Cotton Seed (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Ordinance, 2008". For the said reason, when the validity of the Ordinance, 2008 and the impugned notification dated 11.6.2008 issued by the State Government under Section 12 of the said Ordinance, fixing maximum retail price of Bt cotton seed was challenged by the parties in writ petition - Special Civil Application No. 8528 of 2008 followed by 'The Gujarat Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Act, , 2008", a Division Bench of this Court vide its judgment dated 9.7.2009 dismissed the aforesaid writ petition and upheld the Act and the notification dated 11.6.2008 issued thereunder. In the background of earlier enactment, the judgment having rendered, we are not discussing in detail the findings of the Division Bench in the case of All India Crop Biotech Association of India vs. State of Gujarat - Special Civil Application No. 8528 of 2008.
19. The situation changed after issuance of the notification dated 22.12.2009 issued by the Central Government under Section 2A of the EC Act, whereby the 'cotton seed' has been brought back in the list of 'Essential Commodity' under the Essential Commodities Act, 1955. Thus, since 22.12.2009, 'cotton seed' is to be treated as 'essential commodity' for the purpose of the Essential Commodities Act, 1955 and the Seeds (Control) Order, 1983 and the Seeds Act, 1966 will be attracted. Therefore, it is to be noticed whether 'The Gujarat Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Act, 2008" is "void to the extent of repugnancy" by virtue of Article 254 of the Constitution of India ?
20. The effect of inconsistency between the laws made by the Parliament and the laws made by the legislatures of the States has been laid down under Article 254 of the Constitution of India and reads as follows :
"254.
Inconsistency between laws made by Parliament and laws made by the Legislature of States, - (1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void.
(2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State :
Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State."
21. The operation of Article 254 is not complex. The real problem arises is the problem of determining whether a particular State law is repugnant to a Central Act. The Supreme Court on a number of judicial decisions has laid down the principles as to when the repugnancy arises.
22. In Kaiser-I-Hind vs. National Textile Corporation, reported in (2002) 8 SCC 182, the Supreme Court examined contours of Article 254 and observed as follows :-
"11. It is apparent that language of clause (1) of Article 254 gives supremacy to the law made by Parliament, which Parliament is competent to enact. It inter alia provides [subject to the provisions of clause (2)] that -
(a) if any provision of law made by the legislature of a State is repugnant to any provision of a law made by Parliament, which Parliament is competent to enact, then the law made by Parliament whether passed before or after the law made by the legislature of such State shall prevail and the law made by the legislature of the State shall, to the extent of repugnancy, be void; or
(b) if any provision of a law made by the legislature of a State is repugnant to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then the existing law shall prevail and the law made by the legislature of the State shall, to the extent of repugnancy, be void.
12. For the purpose of the present case, clause (2) requires interpretation, which on the analysis provides that where a law :
(a) made by the legislature of a State;
(b) with respect to one of the matters enumerated in the Concurrent List;
(c) contains any provision repugnant to the provisions of an earlier then, the law so made by the legislature of the State shall -
(1) if it has been "reserved for consideration of the President";
and (2) has received "his assent";
would prevail in that State.
13. Hence, it can be stated that for the State law to prevail, the following requirements must be satisfied :
(1) law made by the legislature of a State should be with respect to one of the matters enumerated in the Concurrent List;
(2) it contains any provision repugnant to the provision of an earlier law made by Parliament or an existing law with respect to that matter;
(3) the law so made by the legislature of the State has been reserved for the consideration of the President; and (4) it has received "his assent"."
23. In Pt.
Rishikesh vs. Salma Begum, reported in (1995) 4 SCC 718, the Supreme Court observed that Clause (2) of Article 254 is an exception to Clause (1). Where the Union enacts a law subsequent to the State enactment, the State enactment is void to the extent of repugnancy and the only course for the State is to re-introduce a new bill, reserve it for consideration of the President, and only on receiving his assent, the State law can prevail in that State. The Supreme Court observed :-
"15. Clause (2) of Article 254 is an exception to Clause (1). If law made by the State Legislature is reserved for consideration and received assent of the President though the State law is inconsistent with the Central Act, the law made by the Legislature of the State prevails over the Central Law and operates in that State as valid law. If the Parliament amends the law, after the amendment made by the State Legislature has received the assent of the President, the earlier amendment made by the State legislature, if found inconsistent with the Central amended Law, both Central law and the State Law cannot co-exist without colliding with each other. Repugnancy thereby arises and to the extent of the repugnancy the State Law becomes void under Article 254(1) unless the State Legislature again makes law reserved for the consideration of the President and received the assent of the President. Full Bench of the High Court held that since U.P. Act 57/76 received the assent of the President on December 30, 1976, while the Central Act was assented on September 9, 1976, the U.P. Act made by the State Legislature, later in point of time it is a valid law."
24. The question of repugnancy will come when the law made by the Parliament and the law made by the State legislature occupy the same filed. If they do not occupy the same field, the question of repugnancy under Article 254 does not arise.
The question of repugnancy between two statutes can be ascertained on the basis of certain principles :-
(i) There is direct conflict between the law made by the Parliament and the law made by the State legislature;
(ii) Whether the law laid down by the Parliament is an exhaustive code in respect of the subject matter replacing the Act enacted by the State legislature; and
(iii) Whether the law made by the Parliament and the law made by the State legislature occupy the same field.
25. In the case of State of Orissa vs. MA Tulloch & Co., reported in AIR 1964 SC 1284. the Supreme Court observed that the test of two legislations containing contradictory provisions is not, however, the only criterion of repugnancy, for if a competent legislature with superior efficacy expressly or impliedly evinces by its legislation an intention to cover the whole field, the enactments of the other legislature whether passed before or after would be overborne on the ground of repugnance. The relevant observation of the Supreme Court is as follows :-
"(15) But even if the matter was res integra, the argument cannot be accepted.
Repugnancy arises when two enactments both within the competence of the two Legislatures collide and when the Constitution expressly or by necessary implication provides that the enactment of one Legislature has superiority over the other then to the extent of the repugnancy the one supersedes the other. But two enactments may be repugnant to each other even though obedience to each of them is possible without disobeying the other. The test of two legislations containing contradictory provisions is not, however, the only criterion of repugnancy, for, if a competent legislature with a superior efficacy expressly or impliedly evinces by its legislation an intention to cover the whole field, the enactments of the other legislature whether passed before or after would be overborne on the ground of repugnance. Where such is the position, the inconsistency is demonstrated not by a detailed comparison of provisions of the two statutes but by the mere existence of the two pieces of legislation. In the present case, having regard to the terms of S.18(1) it appears clear to us that the intention of Parliament was to cover the entire field and thus to leave no scope for the argument that until rules were framed,t here was no inconsistency and no suppression, of the State Act."
26. The test of two legislations containing contradictory provisions cannot be said to be the only criteria of repugnance. In certain cases, repugnancy may arise between two enactments even though obedience to each of them is possible without disobeying the other if a competent legislature with superior efficacy expressly or impliedly evinces by its legislation an intention to cover the whole filed, as held by the Supreme Court in the case of Thirumurga vs. State of Tamil Nadu, reported in (1996)3 SCC 15 as quoted hereunder :-
"26. It cannot, therefore, be said that the test of two legislations containing contradictory provision is the only criterion of repugnance. Repugnancy may arise between two enactments even though obedience to each of them is possible without disobeying the other it a competent legislature with a superior efficacy expressly or impliedly evinces by its legislation an intention to cover the whole field. The contention of Shri Sanghi that there is no repugnancy between the proviso to Section 5(5) of the Medical University Act and Section 10-A of the Indian Medical Council Act because both can be complied with, cannot, therefore, be accepted. What has to be seen is whether in enacting Section 10-A of the Indian Medical Council Act, Parliament has evinced an intention to cover the whole field relating to establishment of new medical colleges in the country."
27. In the case of State of Jammu & Kashmir vs. MS Farooqi, reported in (1972) 1 SCC 872, the Supreme Court held that inconsistency does not lie in the mere co-extensive of two laws which are susceptible of simultaneous obedience. it depends upon the intention of the paramount legislature to express by its enactment, completely, exhaustively, or exclusively, what shall be the law governing the particular conduct or matter to which its attention is directed. When a Federal statute discloses such an intention, it is inconsistent with it for the law of a State to govern the same conduct or matter.
"26. The Judicial Committee of the Privy Council, in O'Sullivan vs. Noarlungs Meat Ltd., 1957 AC 1, 28., approved of the following lines from the judgment of Dixon, J., in ex parte Mclean :
"The inconsistency does not lie in the mere co-existence of two laws which are susceptible of simultaneous obedience. It depends upon the intention of the paramount Legislature to express by its enactment, completely, exhaustively, or exclusively, what shall be the law governing the particular conduct or matter to which its attention is directed. When a Federal statute discloses such an intention, it is inconsistent with it for the law of a State to govern the same conduct or matter."
28. The learned Government Pleader appearing on behalf of the State referring to the earlier decision of this Court in the case of All India Crop Biotech Association of India vs. State of Gujarat dated 9.7.2009 in Special Civil Application No. 8528 of 2008, contended that the Gujarat Cotton Seeds Act, 2008 has been upheld and thereby cited the precedents for taking into consideration the same to decide the present issue.
Precedents have to be interpreted in the light of the facts and context of the decisions in which they are made, as held by the Supreme Court in the case of Union of India vs. Bahadur Singh, reported in (2006) 1 SCC 368 wherein the Court held :-
"9. The following words of Lord Denning in the matter of applying precedents have become locus classicus :
"Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cardozo) by matching the colour of one case against the colour of another. To decide, therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive."
"Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path to justice clear of obstructions which could complete impede it."
29. In the case of All India Crop Biotech Association of India vs. State of Gujarat - Special Civil Application No. 8528 of 2008, the Division Bench held that :
(i) the Gujarat Legislature was competent to enact the Gujarat Act, 2008 because the Union took 'cotton seed' out of the purview of the Essential Commodities Act, 1955;
(ii) such legislation would become invalid if the Union Government and/or Legislature brings back cotton seed under the aegis of the Essential Commodities Act, 1955.
30. In the present case, we have noticed that the Union Government earlier took out 'cotton seed' from the purview of the Essential Commodities Act, 1955 and after the judgment rendered in the case of All India Crop Biotech Association of India vs. State of Gujarat, the Union Government again brought back 'cotton seed' under the aegis of the EC Act, 1955, by notification dated 22.12.2009. Therefore, the question arises whether the Gujarat Cotton Seeds Act, 2008 is now "void to the extent of repugnancy" when the 'cotton seed' has been brought back in the Schedule to the Essential Commodities Act, 1955 by notification dated 22.12.2009.
31. In the case of Virender Singh Hooda vs. State of Haryana, reported in (2004) 12 SCC 588, the Supreme Court held that where the basis of a law is altered by legislation, conditional legislation or notification, the legislation declared valid earlier will be rendered invalid to the extent of the change of basis.
32. Where some parts of a statute are alleged to be valid and some parts invalid, what principle is to be applied was noticed and determined by the Supreme Court in RMD Chamarbaugwalla vs. Union of India, reported in AIR 1957 SCR 930 : AIR 1957 SC 628, wherein the Court held as follows :-
"1. In determining whether the valid parts of a statute are separable from the invalid parts thereof, it is the intention of the legislature that is the determining factor. The test to be applied is whether the legislature would have enacted the valid part if it had known that the rest of the statute was invalid. Vide Corpus Juris Secundum, vol. 82, p. 156 : Sutherland on Statutory Construction, vol. 2 pp. 176 - 117.
2. If the valid and invalid provisions are inextricably mixed up that they cannot be separated from one another, then the invalidity of a portion must result in the invalidity of the Act in its entirety. On the other hand, if they are so distinct and separate that after striking out what is invalid, what remains is in itself a complete code independent of the rest, then it will be upheld notwithstanding that the rest has become unenforceable. Vide Cooley's Constitutional Limitation, vol. at pp. 360 - 361 : Crawford on Statutory Construction, pp. 217 - 218.
3. Even when the provisions which are valid are distinct and separate from those which are invalid, if they all form part of a single scheme which is intended to be operating as a whole, then also the invalidity of a part will result in the failure of the whole. Vide Crawford on Statutory Construction, pp. 218 - 219.
4. Likewise, when the valid and invalid parts of a statute are independent and do not form part of a scheme but what is left after omitting the invalid portion is so thin and truncated as to be in substance different from what it was when it emerged out of the legislature, then also it will be rejected in its entirety.
5. The separability of the valid and invalid provisions of a statute does not depend on whether the law as enacted in the same section or different section : (Vide Cooley's Constitutional Limitations, vol. 1, pp 261-362); it is not the form, but the substance of the matter that is material, and that has to be ascertained on an examination of the Act as a whole and of the setting of the relevant provision therein.
6. If after the invalid portion is expunged from the statute what remains cannot be enforced without making alterations and modifications therein, then the whole of it must be struck down as void, as otherwise it will amount to judicial legislation. Vide Sutherland on Statutory Construction, vol. 2, p. 194
7. In determining the legislative intent on the question of separability, it will be legitimate to take into account the history of the legislation, its objection, the title and the preamble to it. Vide Sutherland on Statutory Construction, vol. 2, pp. 177- 178."
33. In the case of State of U.P. vs. Daulat Ram Gupta, reported in (2002) 4 SCC 98, the Supreme Court held that the Essential Commodities Act, 1955 read with the Seeds (Control) Order, 1983 is a complete code in itself.
"11. it is not disputed that the method of grant of license as well as the conditions of license and its renewal are provided in the Statutory Order framed under the Essential Commodities Act. Clause 2(d) of the Statutory Order provides that "dealer" means a person engaged in the business of purchase, sale or storage for sale of high speed diesel oil or light diesel oil or both but does not include an oil company. Clause 2(h) of the Statutory Order provides that the "licensee" means a dealer holder a license granted under the provisions of this Order. Clause 4 of the Statutory Order further provides that for grant or renewal of a license an application is Form 'B' attached to the Order, shall be given to the Licensing Authority. Every license granted or renewed under this Order shall be in Form 'C' and shall be subject to the conditions specified therein. Clause 8 of the Statutory Order further provides that the Licensing Authority may, for reasons to be recovered in writing, suspend or cancel any license it it is satisfied that the licensee has contravened any provisions of this Order or the conditions of the license or any direction issued thereunder. It is not disputed that the respondent was granted license under the Statutory Order. Form 'B' attached to the Statutory Order does not show that the license to vend diesel oil can be refused if the applicant has place of business within the redius of 5 km of a retail outlet. Similarly, neither clause 4 nor Form 'C' attached to the Statutory Order provides that no license shall be renewed if the place of business of a licensee falls within a radium of 5 km of a government retail outlet.
12. It is, therefore, manifest from the provisions of the Statutory Order that insofar as conditions of grant of license for sale of diesel oil and its renewal are concerned, the Statutory Order is a complete code in itself and there is no provision in the Statutory Order under which a Licensing Authority could refuse to renew a license if the licensee's place of business falls within a radium of 5 km of a government-run retail outlet."
34. In the present case, it is not in dispute that while the Central enactments
- Essential Commodities Act, 1955 and the Seeds (Control) Order, 1983 - were holding the field of 'cotton seed', the State legislature did not choose to enact any State law in respect of 'cotton seed'. The Gujarat Cotton Seed Act, 2008 was enacted only when the Central enactment withdrew itself from the field of 'cotton seed".
35. The Union of India has taken a specific plea that the Gujarat Cotton Seeds Act, 2008 is invalid as being legislatively incompetent, as can be seen from the following extracts :-
(i) Since 'cotton seed' has been re-introduced in the Essential Commodities Act, 1955, the power and competence for controlling the price at which any essential commodity may be bought or sold is exclusively in the domain of issuance of an order by the Central Government (para 4.7 of the reply affidavit).
(ii) The Government of India has constantly taken the view that administered control should not be introduced in the fixation of sale price of seeds including 'cotton seed' (para 5.8(i) of the reply affidavit).
(iii) Bt cotton seed sector is presently competitive and provides a wide choice to the farmer community since 619 Bt cotton hybrids are being produced by as many as 40 Companies/agencies (para 5.8(ii) of the reply affidavit.
(iv) On and from 22.12.2009, the provisions of the Gujarat Cotton Seeds Act, 2008 is required to be considered in the light of the provisions contained in Article 254 of the Constitution of India.
36. The State Government in its affidavit have also conceded the following facts :-
(a) The order dated 22.12.2009 results in some of the provisions of the Gujarat Act cannot now operate in the field where identical provisions are found in the Essential Commodities Act, 1955 and the Seeds (Control) Order, 1983 inviting a direct and real repugnancy and not probable repugnancy, between the same (para 11 of the reply affidavit).
(b) that the purpose of the said notification dated 22.12.2009 was "with a view to coming out of the aforesaid judgment" of this Court (para 11 of the reply affidavit).
(c) the State Government under Section 21 of the Gujarat Act has delineated those provisions of the State Act which survive and are not repugnant (it is respectfully submitted that such a course of action is not open to the State Government under Section 21 read with Section 23 of the Gujarat Act) [para 12 of the reply affidavit].
(d) the preamble of the Ordinance, 2008 itself indicates that the latitude claimed by the State Government arose because 'cotton seed' was deleted from Essential Commodity Act (para 14).
37. The learned Government Pleader took a plea to suggest that the following provisions of the Gujarat Cotton Seeds Act, 2008 still hold the field, as the Central enactments do not hold the field :-
(i) Sections 3, 4 and 6 - which deals with appointment, power and function of the Controller;
(ii) Section 7
- which deals with State's seed testing labs;
(iii) Section 8
- which deals with compensation to farmers;
(iv) Sections 10 and 11 - which deal with seed analyst; and
(v) Section 12
- which deals with pricing.
38. The question arises whether the Central enactment i.e. the Essential Commodities Act, 1955 occupies the field, as occupied by Sections 3, 4, 6, 7, 10, 11 and 12 of the Gujarat Cotton Seeds Act, 2008. The Union of India has indicated that the repugnancy in the Gujarat legislature earlier arose due to removal of 'cotton seed' from the purview of the EC Act, as evident from their letter dated 30.1.2009.
39. The learned counsel appearing on behalf of the petitioners rightly compared the provisions vis-a-vis Sections 3, 4, 6, 7, 10, 11 and 12 of the Gujarat Cottons Seeds Act, 2008 (State legislation) and the corresponding provisions of the Essential Commodities Act, 1955 read with Seeds (Control) Order, 1983 (Central enactment) The following comparison were brought to the notice of the Court to suggest that the Central legislation occupy all the aforesaid field, which according to State, do not occupy : :-
State enactment (Gujarat Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Act, 2008) Central Legislation (Essential Commodities Act, 1955 - Seeds (Control) Order, 1983 Section 3 provides for appointment of an officer as the Cotton Seeds Controller for the State.
Clause 2 of the Seeds Control Order provides for a person appointed as Controller of Seeds by the Central Government and includes any person empowered by the Central Government to exercise all or any functions of the Controller under the Order.
Section 4 empowers the Controller to order any person holding, or engaged in the manufacture and sale of, cotton seed, to sell the whole or part of the stock at prices fixed by the State Government and to such persons as may be specified, and to comply with such other directions as may be issued.
Section 3 of the Essential Commodities Act empowers the Central Government to pas orders in relation to any essential commodity requiring any person holding in stock, or engaged in the production, or in the business of buying or selling, of any essential commodity, to sell the whole or a specified part of the quantity held in stock or produced or received by him to the Central Government or a State Government or to an officer or agent of such Government or to a Corporation owned or controlled by such Government or to such person or class of arsons and in such circumstances as may be specified in the order.
Clause 10 of the Seeds Control Order empowers the Controller to order/direct any producer or dealer to sell or distribute any seed in such manner as may be specified therein.
Section 6 specifies the function of the Controller, namely:
(i) arrange for registration of cotton seed firms;
(ii) arrange for payment of compensation;
(iii) advise the State Government on matters relating to regulation of sale of cotton seed;
(iv) such other matters that may be assigned to him by the State Government.
Clause 3 of the Seeds Control Order requires the dealers in seeds to obtain license for sale, import, export of seeds.
Section 7 provides for establishment of Seeds Testing Laboratories and a referral seeds testing laboratory.
Section 4 of the Seeds Act provides for establishment of Central and State Seed Laboratories. Under Clause 13 of the Seeds Control Order the samples are to be sent to the laboratories established under the Seeds Act.
Section 12 of the Environment Protection Act also establishes Environment Laboratories, whose function it is, inter alia, to analyse samples of Bt cotton seeds (Rule 9 of the 1989 Rules).
Section 8 provides for payment of compensation to farmers in cases where the performance of the seeds fails to meet the standards disclosed.
Clauses 13-15 of the Seeds Control Order provide for inspection and analysis of cotton seeds. Any violation invites cancellation of licences and further penalties under the Order and the EC Act. The performance of seeds is also regulated under the Seeds Act as it provides for quality parameters and action can be taken in case of violation of the same. (See Section 6 of the Seeds Act and Rule 6 of the Seeds Rules) Rule 23-A of the Seeds Rules also can be used in case of lack of performance.
Section 10 provides for appointment of Seed Analysts.
Section 11 provides that the analyst shall within 30 days of receipt of the samples from the seed inspector, analyse and furnish a report.
Clause 13(c) of the Seeds Control Order empowers the inspectors to draw samples of seeds meant for sale, export and seeds imported, and send the same in accordance with the procedure laid down in Schedule I, to a laboratory notified under the Seeds Act. Seed Analysts, appointed under Section 12 of the Seeds Act, perform the analysis, and as per Clause 14 of the Seeds Control Order, sends the analysis report to the concerned Inspector within 60 days from the date of receipt of the sample in the laboratory.
Section 12 enables the State Government with the power to fix the maximum sale price of all types of cotton seeds after taking into consideration, the cost of production, including trait value and other related factors obtained from various agencies concerned from time to time.
Under Section 3(2)(c) of the Essential Commodities Act, the Central Government has the power to fix prices under the EC Act. The established position of the Central Government is that no administered price control mechanism should be levied on cotton seeds. The Central Government retains the power under the EC Act and the role of the State Government is that of a consultee. The consultee cannot then contend that wide powers have been left open to the State Government to legislate in this field.
Patents Act 1970: Where a gene is patented (which is the case with BG-II) 'patents' fall within the exclusive jurisdiction of the Union of India (Entry 49 List 1) and the Patents Act which allows royalty payments to the patentee.
40. The learned counsel for the petitioners submitted that preamble of the Gujarat Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Act, 2008 is allegedly misleading. For example, in the State Act, 2008, in the preamble 1st recital, there is mentioned that since certain varieties of cotton seeds are not notified under Section 5 of the Seeds Act, and hence not regulated under Section 7 of that Act, that was one of the grounds to enact the 2008 Act. According to him, Section 2(11)(ii) defines 'cotton seed' which includes transgenic and other cotton seeds, which come under the Seeds Act, 1966. The power under Section 5 applies to all 'seeds of any kind or variety' which include 'cotton seed'. Further, Clause 8A of the Seeds (Control) order, 1983 makes the standards laid down under the Seeds Act mandatory for all seeds whether or not they have been specifically notified under the Seeds Act. Thus, all Bt cotton seeds are also required to conform to the standards laid down by the Central Government under the Seeds Act, 1966. He further contended that 2nd and 3rd recitals of the preamble of the Gujarat Cotton Seeds Act, 2008, a misleading statement has been made that since 'cotton seed' is not an 'essential commodity' under the EC Act, and since the Seeds (Control) Order is not applicable from 12.2.2007. According to him, it is misleading and wrong. The Central Government had notified 'cotton seed' as an 'essential commodity' earlier, which was later on taken away, but re-notified with effect from 22.12.2009 by inserting 'cotton seed' within the meaning of 'essential commodity'. Similar position has been made with regard to the 4th recital to the preamble of the Gujarat Cotton Seeds Act, 2008 wherein it is stated that no provision in the Environment (Protection) Act to regulate the supply, distribution, sale and fixation of sale price of genetically modified cotton, though transgenic cotton seeds are covered under the Rules for Manufacture, Use, Import, Export and Storage of Hazardous Micro-Organisms/Genetically Engineered Organisms or Cells, 1989.
41. We are not going to discuss other misleading object pointed out by the counsel for the petitioner with regard to the 5th, 6th and 7th recitals of the preamble of the Act, 2008, as we are not giving any finding with regard to the preamble of the 2008 Act for determination of the issue whether the Gujarat Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Act, 2008 is "void to the extent of repugnancy" since 22.12.2009.
42. We have noticed that Sections 3, 4, 6, 7, 10, 11 and 12 of the Gujarat Cotton Seeds Act, 2008 are alleged to be saved as per the stand taken by the State, but disputed by the Central Government. It will be evident that there are corresponding Central Government legislations to Sections 3, 4, 6, 7, 10, 11 and 12 of the Gujarat Cotton Seeds Act, 2008, as shown in the comparative chart and noticed at paragraph No. 39 above.
43. It is a settled law that Clause (1) of Article 254 gives supremacy to the law enacted by the Parliament which is competent to enact so in respect of the same subject matter, If there is a State enactment made by the legislature of the State, such provisions of law will be repugnant to that extent in view of Article 254 of the Constitution of India. The Parliament intended to lay down an exhaustive code in respect of all essential commodities, as defined and specified in the Schedule to the 'Essential Commodities Act, 1955'. Under Article 369 of the Constitution, the Parliament having empowered during the period of five years from the commencement of the Act, to make laws with respect to trade and commerce in, and the production, supply and distribution of, certain essential commodities, the Essential Commodities Act, 1955 was enacted. It applies to different categories viz. foodstuffs, cattle fodder, coal, textile, etc. Under Section 2A of the Essential Commodities Act, 1955, the Central Government if satisfied in the public interest can notify and thereby add a commodity to the Schedule of 'Essential Commodity' and can remove any commodity from the said Schedule in consultation with the State Government. Under sub-section (2) of Section 3, the Central Government is empowered to regulate license, permission, production and manufacture of essential commodity. Under clause (c) of sub-section (2) of Section 3, the Central Government is empowered for controlling the price at which the essential commodity may be bought or sold. Under clause (2) of the Seeds (Control) Order, 1983, a person can be appointed as Controller of Seeds. Under Section 3 of the Essential Commodities Act, 1955, the Central Government can pass order in relation to any essential commodity requiring any person to hold in stock, or engage in the production, or in the business of buying or selling, of any of the essential commodities. Under Clause (3) of the Seeds (Control) Order, 1983, the dealer of the seed is required to obtain license for sale, export and import of seeds. Under Section 4 of the Seeds Act, 1966, the Central or the State Seed laboratory can be established and under Clause 13 of the Seed (Control) Order, 1983, employees can be sent to the laboratories established under the Seeds Act, 1966. Section 12 of the Environment (Protection) Act also deals with the laboratories whose, inter alia, function is to analyze samples of the different matters including Bt cotton seed. Clause (c) of Section 13 of the Seeds (Control) Order empowers the inspectors to draw samples of seeds meant for sale, export, etc. read with appointment of Seed Analyst under Section 12 of the Seeds Act and Clause 14 of the Seeds (Control) Order, which is akin to the power vested under Sections 10 and 11 of the Gujarat Cotton Seeds Act, 2008. Section 3(2)(c) of the EC Act, as already noticed, empowers the Central Government to fix the price under the EC Act including the price of 'cotton seeds'.
44. Therefore, it will be evident that the Parliament intended to lay down an exhaustive code in respect of the seeds including 'cotton seeds' and for that reasons, the State legislature thought it fit not to enact such enactment till the Central enactment was holding the filed of 'cotton seed'. From the aforesaid provisions, we find that law made by the Central Government like the Essential Commodities Act, 1955, the Seeds Act, 1966, Seeds (Control) Order, 1983 and the Environment (Protection) Act, 1986 are holding the field of 'cotton seed' including appointment, the power and function of the Seed Controller, establishment of Seed Testing Laboratory, Analysts of seeds and pricing of cotton seed, and thereby the Gujarat Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Act, 2008, since 22.12.2009, has come in direct conflict with the provisions of the Central enactments as referred to above, so far as it relates to 'cotton seeds'. Thereby the enactment of the State legislatures - The Gujarat Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Act, 2008, since 22.12.2009 became void to the extent of repugnancy, as stated above, in view of Article 254 of the Constitution of India. In view of such declaration, the notification dated 11.6.2008 issued pursuant to The Gujarat Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Act, 2008, and impugned in the present case, cannot be upheld and is accordingly set aside. The writ petition is allowed, but there shall be no order as to costs.
[S. J.
MUKHOPADHAYA, CJ.] [K. M. THAKER, J.] sundar/-
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