Bombay High Court
National Seed Association Of India vs // on 13 August, 2013
Author: Anoop V. Mohta
Bench: Anoop V. Mohta, Z.A. Haq
WP.3390.09
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR.
WRIT PETITION NOS. 3390/2009, 2207/2008 & 2493/2010.
1] WRIT PETITION NO. 3390 OF 2009
1] National Seed Association of India,
having its Registered office at Tower,
District Centre, Janakpuri,
New Delhi-110058, Represented by
its Authorized Signatory Mr. R.K. Sinha
(Executive Director),
2] Rasi Seeds Limited, having its
Registered Office at P. Box No. 30,
273, Kamarajanar Road, Attur,
Selam-636 102, Tamilnadu,
through its Authorized Signatory
Mr. Gandi Rama Mohan. ....PETITIONERS
// VERSUS //
1] The State of Maharashtra,
Rep. By the Secretary, Law &
Judiciary Department, Mantralaya,
Mumbai-400032,
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2] The State of Maharashtra,
Rep. By the Secretary, Agriculture,
Animal Husbandry, Dairy Development
& Fisheries Department, Mantralaya,
Mumbai-400032,
3] Commissioner & Director of Agriculture,
Agriculture, Animal Husbandry, Dairy
Development & Fisheries Department,
Mantralaya, Mumbai-400032,
4] Union of India, Rep. By the Secretary,
Ministry of Environment & Forests,
Paryavaran Bhavan, Lodhi Road,
New Delhi-110003,
5] Union of India, Rep. By the Secretary,
Ministry of Agriculture,
Krishi Bhavan, New Delhi-110001,
6] Union of India, Rep. By the Secretary,
Ministry of Consumer Affairs, Food
& Public Distribution, Krishi Bhavan,
New Delhi-110001.
7] Bhartiya Janatha Kisan Morcha,
Rep. By its Vice President,
Darapuneni Koteswara Rao,
S/o late Sri D. Chinna Ramaiah,
aged about 71 years, R/o
Medepally Village, Mudigonda
Mandal, Kammam District.
8] Baburao Ganpatrao Narote s/o
Ganpat Rao Narote, aged about
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58, R/o PO Gummi, Ta. & Dist.
Buldhana, Maharashtra.
9] Vinayak s/o Sudam Wagh,
aged about 48, years, R/o Chikhala
PO. Dudha, Ta. & Dist.
Buldhana, Maharashtra.
10] Giridhar s/o Vithoba Narote, aged
about 30 years, R/o PO Gummi, Ta.
& Dist. Buldhana, Maharashtra.
ig ....RESPONDENTS
Mr. Rajeev Dhawan, Senior Counsel with Mr. H.S. Chandhoke, Mr.
Prashant Pakhiddey, Mr. Koshy John, Mr. Manav Vohra & Mr. Akshay
A. Naik, Advocates for petitioners.
Mrs. B.H. Dangre, Additional Government Pleader for respondent
nos. 1 to 3,
Mr. S.K. Mishra, Assistant Solicitor General of India for respondent
nos. 4 to 6,
Mr. B. Mayur Reddy, Mr. A.C. Dharmadhikari & Mr. S.V. Bhutada,
Advocates for Intervenors/respondent nos. 7 to 10.
2] WRIT PETITION NO. 2207 OF 2008
1] All India Crop Biotech Association of India,
Registered office at Mohinder
st
Puri & Co., 1 floor, Vandana Building,
Tolstoy Marg, New Delhi-110001,
Represented by its Authorized Signatory
Mr. R.K. Sinha,
2] Rasi Seeds Limited, having its
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Registered Office at P. Box No. 30,
273, Kamarajanar Road, Attur,
Selam-636 102, Tamilnadu,
through its Authorized Signatory
Mr. D. Jai Kumar.
3] Ganga Kaveri Seed Limited,
Suit No. 1406, Babu Khan Estate,
Bashir Bagh, Hyderabad-500001,
Andhra Pradesh, through its Authorized
Signatory Mr. Vijender Reddy. ....PETITIONERS
// VERSUS //
1] The State of Maharashtra,
Rep. By the Secretary, Law &
Judiciary Department, Mantralaya,
Mumbai-400032,
2] The State of Maharashtra,
Rep. By the Secretary, Agriculture,
Animal Husbandry, Dairy Development
& Fisheries Department, Mantralaya,
Mumbai-400032,
3] Commissioner & Director of Agriculture,
Agriculture, Animal Husbandry, Dairy
Development & Fisheries Department,
Mantralaya, Mumbai-400032,
4] Union of India, Rep. By the Secretary,
Ministry of Environment & Forests,
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Paryavaran Bhavan, Lodhi Road,
New Delhi-110003,
5] Union of India, Rep. By the Secretary,
Ministry of Agriculture,
Krishi Bhavan, New Delhi-110001,
6] Union of India, Rep. By the Secretary,
Ministry of Consumer Affairs, Food
& Public Distribution, Krishi Bhavan,
New Delhi-110001.
ig ....RESPONDENTS
Mr. Rajeev Dhawan, Senior Counsel with Mr. H.S. Chandhoke, Mr.
Prashant Pakhiddey, Mr. Koshy John, Mr. Manav Vohra & Mr. Akshay
A. Naik, Advocates for petitioners.
Mrs. B.H. Dangre, Additional Government Pleader for respondent
nos. 1 to 3,
Mr. S.K. Mishra, Assistant Solicitor General of India for respondent
nos. 4 to 6,
3] WRIT PETITION NO. 2493 OF 2010
1] National Seed Association of India,
having its Registered office at 1120,
Vishal Tower, District Centre, Janakpuri,
New Delhi-110058, Represented by
its Authorized Signatory Dr. N.K. Dadlani,
2] Maharashtra Hybrids Seeds Company
Limited, having its Registered Office at
th
Resham Bhavan, 4 floor, 78, Veer
Nariman Road, Mumbai-400 020,
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through its Deputy Managing Director &
Authorized Signatory Mr. S.S. Agrawal,
3] M/s. Kaveri Seed Company Limited,
having its Regd. Office at 513-B,
th
5 Floor, Minerva Complex, S.D. Road,
Secunderabad-500 003, through its
Authorized Signatory Mr. P. Malla Reddy,
4] Mr. G.V. Bhaskar Rao, Managing Director,
Kaveri Seed Company Limited,
having its Regd. Office at 513-B,
th
5 Floor, Minerva Complex, S.D. Road,
Secunderabad-500 003. ....PETITIONERS
// VERSUS //
1] The State of Maharashtra,
Rep. By the Secretary, Agriculture,
Animal Husbandry, Dairy Development
& Fisheries Department, Mantralaya,
Mumbai-400032,
2] Commissioner (Agriculture),
Commissionerate of Agriculture,
Maharashtra State, Pune-411011
Maharashtra,
3] Bhartiya Janatha Kisan Morcha,
Rep. By its Vice President,
Darapuneni Koteswara Rao,
S/o late Sri D. Chinna Ramaiah,
aged about 71 years, R/o
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Medepally Village, Mudigonda
Mandal, Kammam District.
4] Baburao Ganpatrao Narote s/o
Ganpat Rao Narote, aged about
58, R/o PO Gummi, Ta. & Dist.
Buldhana, Maharashtra.
5] Vinayak s/o Sudam Wagh,
aged about 48, years, R/o Chikhala
PO. Dudha, Ta. & Dist.
Buldhana, Maharashtra.
6] Giridhar s/o Vithoba Narote, aged
about 30 years, R/o PO Gummi, Ta.
& Dist. Buldhana, Maharashtra. ....RESPONDENTS
Mr. Rajeev Dhawan, Senior Counsel with Mr. H.S. Chandhoke, Mr.
Prashant Pakhiddey, Mr. Koshy John, Mr. Manav Vohra & Mr. Akshay
A. Naik, Advocates for petitioners.
Mrs. B.H. Dangre, Additional Government Pleader for respondent
nos. 1 & 2,
Mr. B. Mayur Reddy, Mr. A.C. Dharmadhikari & Mr. S.V. Bhutada,
Advocates for Intervenors/respondent nos. 3 to 6.
CORAM : ANOOP V. MOHTA & Z.A. HAQ, JJ.
DATE OF CLOSING FOR JUDGMENT : AUGUST 7, 2013.
DATE OF JUDGMENT: AUGUST 13, 2013.
ORAL JUDGMENT (PER ANOOP V. MOHTA, J.).
1] The petitioners "the producers of the cotton seed" have ::: Downloaded on - 27/08/2013 21:17:27 ::: WP.3390.09 8 challenged the statutes and notifications of the State of Maharashtra (the State) of "price control of cotton seed" in Maharashtra.
2] In W.P. 2207 of 2008 (AICBA v. State of Maharashtra & Ors.), the petitioners challenged the validity of the Maharashtra Cotton Seed (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Ordinance, 2008 (the Ordinance) (published in the official Gazette on 23.05.2008) and Notification dated 23.05.2008 (the notification) fixing the Maximum Retail Price (MRP) of Bt. cotton seeds.
An interim order was passed on 27.06.2008 "...whenever the Ordinance is issued or legislation is evolved by the Legislature, State cannot shirk its responsibility to make good the loss, if any caused in the event such Ordinance or Legislation is held to be unconstitutional and is quashed and set aside by the Courts. In the present case, if the petition succeeds appropriate orders in this regard will be passed; however since the rule is made returnable on 20.08.2008, we are not inclined to stay the effect and operation of the ::: Downloaded on - 27/08/2013 21:17:27 ::: WP.3390.09 9 impugned ordinance at this stage."
3] In W.P. 3390 of 2009 (NSAI v. State of Maharashtra & Ors.) the petitioners challenged the validity of the Maharashtra Cotton Seed (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Ordinance, 2009 (the Ordinance) (published in the official Gazette on 09.05.2009) and the notification dated 10.05.2009 fixing the prices of BG-I and BG-II cotton seeds.
The Ordinance was replaced by an Act, namely the Maharashtra Cotton Seed (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Act, 2009 (published in the official Gazette on 03.07.2009 ("the Mah. Cotton Seed Act").
4] In W.P. 2493 of 2010 : NSAI v. State of Maharashtra & Ors., the petitioners challenged the validity of Notification dated 14.05.2010 issued by the State under Section 10 of the Mah. Cotton Seed Act. By the Notification the maximum sale price of BG-I and BG-II cotton seeds was fixed at Rs.650/- and 750/- per packet ::: Downloaded on - 27/08/2013 21:17:27 ::: WP.3390.09 10 respectively.
Similar Interim Order was passed by this Hon'ble Court on 10.06.2010.
5] The contesting respondents resisted every aspect of the petitioners' case by filing their respective reply-affidavits. The State filed counter-affidavits on 18.9.2009 & 9.6.2010. The respondent-
Union-of-India (UOI) filed affidavit/reply on 27.7.2010. The other respondents/intervenors have also filed their affidavit and resisted the challenges of "cotton seed price fixation". All the respondents placed on record material to support the stand/action taken by the State and provided the details, apart from denying the averments and submissions and the details provided by the petitioners in all the matters.
6] Rule returnable forthwith. By consent, heard finally and as common and interlinked issues are involved, therefore, this common judgment.
::: Downloaded on - 27/08/2013 21:17:27 :::WP.3390.09 11 7] Following are the Central Acts and the State Acts and Ordinances involved and read and referred by the parties :-
Central Acts and Rules :
I. The Essential Commodities Act, 1955, (for short "EC Act").
This Act provides in the interests of the general public, for the control of the production, supply and distribution of, and trade and commerce in certain commodities. The term "essential commodities" is described in the Schedule (Section 2A) which includes cotton seed.
II. The Seeds Act, 1966, (for short "Seeds Act"), This Act provides for regulating the quality of certain seeds for sale and for matters connected therewith. The term "seed"
includes cotton seeds also.
III. The Seeds (Control Order), 1983, (Seeds Control Order) Under Section 3 of EC Act, the Seed Control Order has been passed. It also referred the word "seeds" as per the Seeds Act.::: Downloaded on - 27/08/2013 21:17:27 :::
WP.3390.09 12 This basically deals with the licence, inspection, laboratory, analysis, stock price list, quality parameters and power of authorities to direct producers to sell and distribute the seeds.
The Enforcement Authorities are also provided.
IV. The Environment (Protection) Act, 1986, (for short "Environment Act"), This Act provides for the protection and improvement of environment and for matters connected therewith.
V. Rules for Manufacture, Use, Import, Export and Storage of Hazardous Micro Organisms/Genetically Engineered Organisms Or Cells, 1989 (for short "Environment Rules").
State Ordinances/Acts & Notifications in question :
VI. The Maharashtra Cotton Seed Act and the Ordinances are to regulate the supply, distribution, sale and fixation of sale price of cotton seeds and for the matter connected therewith or incidental thereto. The term "cotton seed" is defined in Section 2 which means cotton seed of any variety and includes transgenic and genetically modified cotton seeds varieties used ::: Downloaded on - 27/08/2013 21:17:27 ::: WP.3390.09 13 for sowing.
The term "producer" is also defined as under :-
(vii)"Producer" means a person, group of persons, firm or company or organization who grows or organizes the production of cotton seed;
The other terms like "spurious seeds", "sub-standard seed", transgenetic variety" and "variety" are also defined. The word "variety" is also defined in the Seeds Act.
8] The learned Senior Counsel for the petitioners Shri Rajeev Dhawan has sequenced the relevant dates referring to the Central and the State Acts/Ordinances as under :-
April 1955 : The E. C. Act was enacted with objective to provide, in the interest of general public, for the control of the production, supply and distribution of, and trade and commence in certain commodities.
Under Section 2 (A)-(10) 'cotton seed' is included as an 'essential commodity', w.e.f.
22.12.2009.::: Downloaded on - 27/08/2013 21:17:27 :::
WP.3390.09 14 December, 1966 : The Seeds Act was enacted to provide for regulating the quality of certain seeds for sale, and for matters connected thereto.
Cotton seeds specifically for part of the definition of 'seed' under Section 2(11) of the Seeds Act. It is pertinent to note that certain provisions of the Seeds Act are applicable ig only on the seeds notified under the said Act.
1968 : Seeds Rules are notified under the
provisions of the Seeds Act.
December, 1983 : In exercise of the powers conferred under
Section 3 of the E. C. Act, the Seeds Control
Order was notified.
May 1986 : The Environment Protection Act is enacted to
provide for the protection and improvement of environment and for matters connected therewith.
December 1989 : In exercise of the powers conferred by Sections 6, 8 and 25 of the Environment Act and with a view to protecting the environment, nature and health, in connection with the application of gene ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 15 technology and micro-organisms, the Central Government notified the Environment Rules for the Manufacture, Use, Import, Export and Storage of Hazardous micro-organisms/ Genetically engineered organisms or cells.
BG-I and BG-II cotton seeds are covered under such rules.
April 2006 :
th A report (11 Report) was prepared by the Standing Committee on Food, Consumer Affairs and Public Distribution for examination of the Essential Commodities (Amendment) Bill, 2005.
The said committee came to a conclusion that all unnecessary and redundant restrictions which distort and impede operation of market forces should be removed and based thereon, recommended deletion of cotton seed from the Act, while retaining the power with the Central Government to add, remove or modify any essential commodity in the schedule to the Essential Commodity in the public interest.
July, 2006 : Clause 8-A was introduced under the Seeds ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 16 Control Order, whereby every dealer of seeds was required to ensure that the standards of quality of seeds claimed were to conform to the standards prescribed for the notified kind of variety of seeds under Section 6 of the Seeds Act and any other additional standards relating to size, colour th ig and content of the label as may be specified.
12 July, 2007 : The Essential Commodities (Amendment) Act, 2006 was notified whereby 'cotton seed' was deleted from the Act, 1955. By the amendment, Section 2-A was introduced in the Essential Commodities Act whereby the Central Government retained the power to add/ remove any commodity to/from the said Act in consultation with the State.
23.05.2008 : The first Ordinance was published in the official Gazette.
Respondent No.2 issued a Notification dated 23.05.2008 under S. 10 of the Ordinance fixing the price of BG-I cotton seed at Rs.
650/- per 450 gms packet and of BG-II cotton seed at Rs.750/- per 450 gms packet.
::: Downloaded on - 27/08/2013 21:17:28 :::WP.3390.09 17 22.08.2008 : Respondent No.1 promulgated the Second Ordinance with identical provisions. The first Ordinance was withdrawn vide S. 24.
09.05.2009 : The third Ordinance was promulgated.
10.05.2009 : Impugned Notification issued by the Respondent No.2 under Section 10 of the Ordinance fixing the price of BG-I cotton ig seed at Rs.650/- per 450 grams and of BG-II cotton seed at Rs.750/- per 450 gms.
03.07.2009 : The Ordinance was replaced by the Mah.
Cotton Seed Act on 03.07.2009.
22.12.2009 : The Central Government issued a Notification under Section 2A of the Act bringing cotton seed back into the list of essential commodities for a period of six months. The Seeds Control Order and the Seeds Act became applicable to cotton seeds, as alleged.
14.05.2010 : Impugned Notification dated 14.05.2010 issued by the State under Section 10 of the Act fixing the MRP of BG-I and BG-II cotton seeds at Rs.650/- and 750/- per packet.
18.06.2010 : The Central Government issued a ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 18 Notification extending the period in the Notification dated 22.12.2009 from six months to one year.
22.12.2010 : The Central Government issued a Notification including cotton seeds under the schedule to the Act.
The relevant constitutional provisions :
9] It is necessary to note the various Articles of the Constitution of India as the main arguments of "repugnancy" and "price control" revolve around the same.
The distribution of legislative powers and legislative relations are crystallized in Articles 245 to 255 of the Constitution of India. The relevant for our purpose are Articles 245, 246 & 254 which are as under :-
"245. Extent of laws made by Parliament and by the Legislatures of States. ---(1) Subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 19 State.
(2) No law made by Parliament shall be deemed to be invalid on the ground that it would have extra-
territorial operation.
246. Subject-matter of laws made by Parliament and by the Legislatures of States. -- (1) Notwithstanding anything in clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the "Union List"), (2) Notwithstanding anything in clause (3), Parliament and, subject to clause (1), the Legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the "Concurrent List").
(3) Subject to clauses (1) and (2), the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the 'State List').
::: Downloaded on - 27/08/2013 21:17:28 :::WP.3390.09 20 (4) Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List.
254. Inconsistency between laws made by Parliament and laws made by the Legislatures 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 ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 21 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.
10] The relevant definition is provided in Article 366 as under :-
(12) "goods" includes all materials, commodities, and articles;
11] The relevant entries of Seventh Schedule List II - State List are :-
14. Agriculture, including agricultural education and research, protection against pests and prevention of plant diseases.
27. Production, supply and distribution of goods ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 22 subject to the provisions of entry 33 of List III.
List 3 : Concurrent List :
"33. Trade and commerce in, and the production, supply and distribution of, ---
(a) the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products;
(b) Foodstuffs, including edible oilseeds and oils;
(c) cattle fodder, including oil cakes and other concentrates;
(d) raw cotton, whether ginned or unginned, and cotton seed; and
(e) raw jute.
34. Price control."
Purpose and object of the Mah. Cotton Seed Act/Ordinances :
12] Considering the rival submissions so raised, it is relevant to note the purpose and object and the background behind promulgation of ordinances and the Mah. Cotton Seed Act. Those ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 23 are as under :-
WHEREAS cotton seeds of certain varieties are not notified under section 5 and consequently no sale of such seeds are regulated under section 7 of the Seeds Act, 1966;
AND WHEREAS cotton seed is not an essential commodity within the meaning of the Essential Commodities Act, 1955 as amended by the Essential Commodities (Amendment) Act, 2006;
AND WHEREAS the provisions of the Seeds (Control) Order, 1983 issued under section 3 of the Essential Commodities Act, 1955 are not applicable in so far as they relate to the cotton seeds;
AND WHEREAS there is no provision in the Environment (Protection) Act, 1986 to regulate the supply, distribution and sale of transgenic and genetically modified cotton seed and to control the sale price of such cotton seed in the State;
AND WHEREAS the traders in cotton seed including transgenic cotton seed were exploiting poor farmers by collecting exorbitant prices;
AND WHEREAS a Khariff season was to commence very soon, it had become imperative on the ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 24 part of the State to regulate the supply, distribution and sale of cotton seeds by fixing the sale price in the interests of the farmers in the State;
AND WHEREAS both Houses of the State Legislature were not in session;
AND WHEREAS the Governor of Maharashtra was satisfied that circumstances existed which rendered it necessary for him to take immediate action to regulate the supply, distribution, sale and fixation of sale price of cotton seeds and for the matters connected therewith or incidental thereto, for the purposes hereinafter appearing; and therefore, promulgated the Maharashtra Cotton Seeds (Regulation of supply, distribution, sale th and fixation of sale price) Ordinance, 2009, on the 9 May 2009;
Background behind the price control of the Cotton Seeds in Maharashtra :
13] It is also necessary to note the background behind the notification dated 14.5.2010 under the Maharashtra Cotton Seeds Act, 2009 :-::: Downloaded on - 27/08/2013 21:17:28 :::
WP.3390.09 25 No. Biyane 2010/C.R.38/1A - Whereas, the Government of Maharashtra has received a report from the Commissioner (Agriculture), Commissionerate of Agriculture, Maharashtra State, Pune dated the 3rd May 2010 regarding fixation of the maximum sale price of certain types of cotton seeds under section 10 of the Maharashtra Cotton Seeds (Regulation of supply, distribution, sale and fixation of sale price) Act, 2009 (Mah. XIX of 2009).
And whereas, the Government of Maharashtra has also received representations from cotton seed producers and association of farmers regarding fixation of the maximum sale price of certain types of cotton seeds;
And whereas, the Government of Maharashtra also considers it expedient to fix the maximum sale price of certain types of cotton seeds;
And whereas, the Government of Maharashtra for that purpose has considered the increase in the cost of production, processing and other costs of cotton seeds while fixing the maximum sale price;
And whereas, the Government of Maharashtra has also considered the trait value (royalty) component of transgenic cotton seeds while fixing the maximum sale price;
And whereas, the Government of Maharashtra for the purpose has also considered the Monopolies and Restrictive Trade ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 26 th Practices Commission (MRTP Commission) Order dated 11 May 2006, the substantial amount already received by technology provider over the period of seven years in terms of royalty charges from farmers, the fact that there are no further investments every year by the technology provider, the provisions of the Competition Act, 2002 (12 of 2003) which govern the trade, prohibit the abuse of monopoly and discrimination in charging royalty;
And whereas, considering the said aspects the Government of Maharashtra has decided the maximum sale price based on reasonable trait values [Rs.50 (Fifty only) for BG I and other single gene technologies of Seeds and Rs.90 (Ninety only) for BG II per 450g packet], and cost of other relevant components.
Now, therefore, the Government of Maharashtra, in exercise of powers conferred by section 10 of the Maharashtra Cotton Seeds (Regulation of supply, distribution, sale and fixation of sale price) Act, 2009 (Mah. XIX of 2009); and of all other powers enabling it in that behalf, and in supersession of the Government Notification, Agriculture, Animal Husbandry, Dairy Development and Fisheries th Department, No. Biyane. 2009/CR-4/1A, dated the 10 May 2009, hereby fixes the maximum sale price of the varieties of B.T. Cotton Bolgard and Hybrid Cotton Seed for the entire State of Maharashtra, th with effect from 14 May 2010 as follows, namely:-
1. B.T. Cotton Bolgard-1 Fusion Rs.650 per packet of 450 ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 27 B.T. Event 1 including Cry I AC gram + 120 gram Refuge Seeds
2. B.T. Cotton Bolgard-2 Rs.750 per packet of 450 gram + 120 gram Refuge Seeds.
3. Hybrid Cotton Rs.500 per packet of 450 (Non B.T. Cotton) gram.
The Cotton Seed Price fixed from time to time :
S.No Year MRP of BG-I MRP of BG-II Page
1. 2002-2004 Rs.1600-1850 N.A. -
2. 2005 Rs.1250-1450 N.A. -
3. 2006 Rs.750/- (fixed Rs.1360/- 203
vide Executive
Order dated
31.05.2006
4. 2007 Rs.750/- Rs.925/- -
5. 2008 Rs.650/- (fixed Rs.750 (fixed vide 58 (WP
vide the the Notification 2207/2008)
Notification dated 23.05.2008)
dated
23.05.2008)
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6. 2009 Rs.650/- (fixed Rs.750/- (fixed 65
vide Notification vide Notification
dated dated 10.05.2009)
10.05.2009)
7. 2010 Rs.650/- (fixed Rs.750/- (fixed 20 (of WP
vide Notification vide Notification 2493/2010) dated dated 14.05.2010) 14.05.2010) The petitioners have not challenged the subsequent notifications, fixing the controlled price of the cotton seeds by the State of the year 2011, 2012 and even of 2013.
14] The background behind the agitation with regard to the "cotton seed price" in Maharashtra has been in the recital of the notifications and aims and objects of the Maharashtra Seed Act apart from report prepared by the Standing Committee on Food Consumer Affairs Public Distribution for examination of the Essential Commodities (Amendment Bill, 2005). The farmers/intervenors have also while backing the action of the State, elaborated their supportive case in affidavit.
::: Downloaded on - 27/08/2013 21:17:28 :::WP.3390.09 29 The Repugnancy principles applicable to the present case :
The judgments on repugnancy/inconsistency :
15] Both the Counsel have cited various judgments revolving around the concept of repugnancy and principles behind it, based upon various different Acts/Orders, apart from facts and circumstances of those respective cases. The Senior Counsel appearing for the petitioners explained the concepts and principles of repugnancy in depth and also distinguished the cases cited by the State by referring specifically to the Constitution Bench decisions.
Those are as under :-
The basic principles of repugnancy are settled as entailing:
b) Parliaments express or implied intention to cover the field
c) Both legislations covering the same subject matter.
d) Whether both legislations are in direct conflict with each other (Deep Chand v. State of U.P., AIR 1959 SC 648, State of Orissa v. Tulloch, AIR 1964 SC 1284, Thirumurga v. State of Tamil Nadu & Others; (1996) 3 SCC 15, Tika Ramji's case AIR ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 30 1956 SC 676; (1956) SCR 393, ITC v. Agricultural Produce Market Committee, (2002) 9 SCC 232, Belsund Sugar Co. Ltd.
V. State of Bihar, (1999) 9 SCC 620, State of J.K. v. M.S. Farooqi, (1972) 1 SCC 872, Vijay Kumar Sharma v. State of Karnataka, (1990) 2 SCC 562.) 16] The following Constitution Benches considered Tika Ramji :
(a) Calcutta Gas AIR 1962 SC 1044, a Constitution Bench, cited with approval Tika Ramji's case.
(b) In Harakchand's case - (1969) 2 SCC 166, a Constitution Bench, cited Tika Ramji with approval and held that "In Tika Ramji v. State of U.P., the expression 'industry' was defined to mean the process of manufacture or production and did not include raw material used in the industry or the distribution of the products of the industry.
(c) In Tulloch - AIR 1964 SC 1284, a Constitution Bench, referred to Tika Ramji and held as follows :-
"We consider that this submission in relation to the Act before us is without force besides being based on a misapprehension ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 31 of the true legal position. In the first place the point is concluded by the earlier decision of this Court in AIR 1961 SC 459 where the Court said :
"in order that the declaration should be effective it is not necessary that rules should be made or enforced.
All that this required is a declaration by Parliament that it is expedient in the public interest to take the regulation and development on mines under the control of the Union. In such a case the test must be whether the legislative declaration covers the field or not."
The Court further held :
"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 than to the extent of that disobeying the other. The test of legislations containing contradictory provisions is not, however, the only criterion of repugnancy for is a competent legislature with a superior efficacy expressly or impliedly evinces by its legislation and intention to ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 32 cover the whole field, the enactments of other legislature whether passed before or after would be overborne on the ground of repugnancy. Where such is the position, the inconsistency is demonstrated not by a detailed comparison of provisions of the two statues but by the mere existence of the two pieces of legislation. In the present case having regards to the terms of Section 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 framed, there was no inconsistency and no suppression of the State Act. (emphasis added)
(d) ITC (2002) 9 SCC 232, a Constitution Bench refers to Calcutta gas with approval at para 56 and Harakchand at para 67 to conclude by invoking Tika Ram at para 90 that the subject matter of industry does not include sugarcane or raw tobacco.
(e) In Mar Appraem Kuri Co (2012 5 SCALE 266 @ page 292 column 1), a Constitution Bench, after considering Tika Ramji held that "the only question that arose was whether Parliament and the State ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 33 Legislature sought to exercise their powers over the same subject matter or whether the laws enacted by Parliament were intended to be a complete exhaustive code or whether such Acts evinced an intention to cover the whole field This court held that as sugarcane was not the subject matter of the Central Act, there was no intention to cover the whole field and, consequently both the acts could co-exist without repugnancy." (emphasis added).
17] The table below is a fair indication of how the court dealt with the various products in Belsund Sugar :
1 Sugar and Subject matter specifically within the Unions Sugarcane powers. Therefore repugnancy.
2. Vegetable oil Certain aspects (relating to vegetable oil transactions) not included under the Unions statute.
3 Wheat Subject matter not under the Unions power 4 Rice products Subject matter not under the Unions power 5 Mill products Subject matter not under the control of the State 6 Tea Subject matter not wholly within the Unions Control ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 34 It is clear that the subject matter/intention is the test.
18] The judgments which are cited and heavily relied upon by the State are as follows :-
(i) AIR 1956 SC 676 (Tikaramji vs. State of Uttar Pradesh),
(ii) AIR 1959 SC 648 (Deepchand vs. State of Uttar Pradesh),
(iii) (1999) 9 SCC 620 (Belsant Sugar vs. Union of India),
(iv) (2004) 8 SCC 621 (Punjab Dairy Development Board vs. Cepham Milk Specialty Limited),
(v) (1974) 4 SCC 827 (S.K.G. Sugar Limited vs. State of Bihar),
(vi) (2003) 1 SCC 228 (Kanak Gruh Nirman Sahakari Sanstha Narayan Amma),
(vii) (1990) 2 SCC 562 (Vijaykumar vs. State of Karnataka).
In support of the submissions, relevant paras of following Supreme Court Cases have been referred and relied :-
The reliance is placed upon Hoeschet Pharmaceuticals Limited. Vs. State of Bihar, (1983) 4 SCC 45.
The reliance is placed on the following paras of the said ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 35 Judgments :
Paras 7 to 14, 36 to 42, 64 to 67, 69 and 71. This judgment holds good till date and is subsequently, followed in paras in judgment in compilation given by the State Government which includes -
(1) (2004) SCC 430 -- U.P. Sugarcane Union Federation Vs. U.P. Sugar Mill.(2)
Offshore Holdings (P) Ltd. Vs. Bangalore Development Authority - (2011) 3 SCC 139, Paras 15 to 16, 62 to 76, 92 to 104, Para 114 of the said judgment relates to principle severability.
(3) Girnar Traders Vs. State of Maharashtra, (2011) 3 SCC 1, (4) Rajiv Sharan Vs. State of Uttarakhand (2011) 8 SCC 708, Para 29 to 33, 34, 35 to 45,46 to 49.
19] The principles relied upon by the State are :-
A) The repugnancy must exist as a fact and evincing is not a correct way to decide the issue of repugnancy, especially of the subject matter in question, apart from the respective provisions of the Central as well as the State laws, B) Both the enactments Central as well as State are operative in ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 36 different fields and there is no encroachment and/or inconsistency and/or conflict.
C) Therefore, there was no question of State obtaining assent of the President as contemplated under Article 254(2) as there is no repugnancy, especially when Central Government has not passed any order controlling cotton seed pricing and/or related issues. There is nothing to show their intention to do so till this date.
20] The following judgments cited by the learned Additional Government Pleader for the State Mrs. Bharati Dangre, have been distinguished as under by the learned Senior Counsel appearing for the petitioners :-
(a) Hoescht (1983 4 SCC 45) simply decides that the States taxing power in List II Entry 52 was independent and left unhindered by the order under the Essential Commodities Act, which specifically left room for levy of sales tax by the State.::: Downloaded on - 27/08/2013 21:17:28 :::
WP.3390.09 37
(b) Offshore Holdings (2011 3 SCC 139) is simply a case for the proposition that the Bangalore Planned Development Act under List II entry 5 and 18 is separate from the general Land Acquisition powers under List III, entry 42,
(c) Karunanidhi's case (AIR 1970, 3 SCC) cited in Bharat Hydro (2004 2 SCC 553 at para 27) concerned separate post emergency commissions of enquiry at the Union and State level pertaining to different subject matters. Bharat Hydro itself held that the relevant Central Electricity legislation applied to licenses and is in a different field and did not apply to non licensees.
(d) Punjab Dairy - (2004) 8 SCC 621 while echoing that repugnancy must exist as a fact (para 12) decided that there was no repugnancy between the Central Industrial Development Act, 1951 and the Industrial Regulation Act. The said Act does not contain the power to levy a fee. Admittedly the Central legislation does not levy a fee.
(e) Vijay Sharma's case - (1990) 2 SCC 562 affirms the principles of 'occupied field' operational incompatibility and irreconcilability to conclude that the Karnataka Carriage Act ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 38 and the Motor Vehicles Act, 1988 occupy different fields.
(f) The State has also relied on U.P. Co-operative Cane Union (2004) 5 SCC 430) but failed to point out that Tika Ramji was confined to its facts (para 20 and 21) and to be understood in the context it was made. On this basis, it has been held that on the facts of 1953-54, underlying Tika Ramji, was superseded by the Sugar Control Order, 1966 which allowed the Central Government to fix a minimum price.
(g) At the end of arguments, Rajiv Sarin's case (2011) 8 SCC) was cited in support of the State's propositions. However, the same articulates the dominant intention test rather than the actual conflict test.
"For repugnancy under Article 254 of the Constitution, there is a twin requirement, which is to be fulfilled; firstly, there has to be a "repugnancy" between a Central and State Act; and secondly, the Presidential assent has to be held as being non-
existent. The test for determining such repugnancy is indeed to find out the dominant intention of the both legislations and whether such dominant intentions of both the legislations are alike or different. To put it simply, a provision in one legislation in order to give effect to its dominant purpose may incidentally ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 39 be on the same subject as covered by the provision of the other legislation, but such partial or incidental coverage of the same area in a different context and to achieve a different purpose does not attract the doctrine of repugnancy. In nutshell, in order to attract the doctrine of repugnancy, both the legislations must be substantially on the same subject (emphasis added).
No doubt, the Karunanidhi case is mentioned at para 46 with regard to the application of Pith and Substance test. However, it is in the dominant intention test that has been approved by the Constitution Bench.
21] Entries 14, 27, 64, 65, 66 of List II of the Schedule VII and Entries 18, 33, 34, 46, 47 of List III of Schedule VII have been referred and relied upon to support the source and power of State Legislature.
22] The State Legislature has exclusive power to deal with the ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 40 Entry "Agriculture" which certainly covers all and related aspects of agriculturists/farmers and agricultural based products/goods and including "cotton seeds". The Court, therefore, needs to consider when contentions are raised that the Mah. Cotton Seed Act and notifications are inconsistent and/or repugnant to the other Central law/enactments, all the relevant sources and the competency of the State Legislature to compare with the power and authority of Central Legislature. The Concurrent List itself means that the Parliament has permitted and authorized the State, as well as, Centre to enact relevant laws for the "subjects" and/or "fields" with a condition of no repugnancy and/or no inconsistency. In case of conflicts, the Central Act should prevail. However, that is also subject to the assent of President in case of repugnancy as contemplated under Article 254(2). This itself means there is no total bar and/or prohibition to enact laws by the State Legislature to include the field/subject of Concurrent List. The State Legislature has power to enact laws taking note of relevant entries and the conditions, for the people at large, considering the need and necessity of the State at the relevant ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 41 time, especially when there exists no other conflicting Central laws and/or orders. There is no order issued by the Central Government under Section 3(1) and/or 3(2) of the Essential Commodities Act controlling price of BT cotton seeds. The Seeds Act and the Seed Control Order not actively dealt with and nowhere intended to deal with cotton seed pricing and several other issues like the compensation to farmers for misbranding. The Central Government admittedly, though empowered, has not dealt specifically with these aspects covering the intended welfare of the "farmers" and "cotton seed" and related aspects.
"Subject to" means and includes :
23] Here itself, it is necessary to consider the phrase "subject to" as referred in Articles 245, 246, 254 and Entry 27 of State List.
The Apex Court has made the following observations in Union of India & others .vs. Brigadier P.S. Gill : (2012) 4 SCC 463 :::: Downloaded on - 27/08/2013 21:17:28 :::
WP.3390.09 42 "17. Each word used in the enactment must be allowed to play its role howsoever significant or insignificant the same may be in achieving the legislative intent and promoting legislative object. Although it is unnecessary to refer to any decisions on the subject, we may briefly recount some of the pronouncements of this Court in which the expression "subject to" has been interpreted.
18. In K.R.C.S. Balakrishna Chetty & Sons & Co. v.
State of Madras, this Court was interpreting Section 5 of the Madras General Sales Tax Act, 1939 in which the words "subject to" were used by the legislature. This Court held that the use of words "subject to" had reference to effectuating the intention of law and the correct meaning of the expression was "conditional upon". To the same effect is the decision of this Court in South India Corpn. (P) Ltd. v. Board of Revenue where this Court held that the expression "subject to" conveyed the idea of a provision yielding place to another provision or other provisions to which it is made subject.
19. In State of Bihar v. Bal Mukund Sah this Court ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 43 once again reiterated that the words "subject to the provisions of this Constitution" used in Article 309, necessarily means that if in the Constitution there is any other provision specifically dealing with the topics mentioned in the said Article 309, then Article 309 will be subject to those provisions of the Constitution.
20. ig In B.S. Vadera v. Union of India this Court interpreted the words "subject to the provisions of any Act", appearing in the proviso to Article 309 and observed :
(AIR p.124, para 24), "24. It is also significant to note that the proviso to Article 309, clearly lays down that 'any rules so made shall have effect, subject to the provisions of any such Act'. The clear and unambiguous expressions, used in the Constitution, must be given their full and unrestricted meaning unless hedged in, by any limitations. The rules, which have to be 'subject to the provisions of the Constitution', shall have effect, 'subject to the provisions of any such Act'. That is, if the appropriate legislature has passed an Act, under Article 309, the rules, framed under the proviso, will have effect, subject to that Act; but, in the absence of any Act, of the appropriate legislature, on the ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 44 matter, in our opinion, the rules, made by the President or by such person as he may direct, are to have (full) effect, both prospectively and retrospectively."
21. In Chandavarkar Sita Ratna Rao v. Ashalata S. Guram this Court declared that the words "notwithstanding" is in contradistinction to the phrase "subject to", the latter conveying the idea of a provision yielding place to another provision or other provisions to which it is made subject.
22. There is in the light of the above decisions no gainsaying that Section 30 of the Act is by reason of the use of the words "subject to the provisions of Section 31"
made subordinate to the provisions of Section 31. The question whether an appeal would lie and if so in what circumstances cannot, therefore, be answered without looking into Section 31 and giving it primacy over the provisions of Section 30. That is precisely the object which the expression "subject to the provisions of Section 31" appearing in Section 30(1) intends to achieve".
This itself means that the State Legislature is empowered to enact ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 45 laws even if it falls within the ambit of Concurrent List. However, it is "subject to" the Central enactment's provisions. The State, therefore, is competent to enact the laws after taking note of above provisions.
The State Legislature, therefore, if enacts laws for the respective State based upon the need and to achieve the object revolving around the State conditions and in the interest of particular class or community, in the present case consumer/farmer/agriculturist the issue of repugnancy and/or inconsistency even if any, need to be tested on the basis of actual comparisons of the respective provisions of Central as well as State enactments. The comparison itself requires the existence of two conflicting laws. There cannot be comparison in the air and/or based upon presumption and assumption, especially when we are dealing with the Act and/or the Seeds Act and/or the Environment Act and the orders made thereunder, if any. There are various Acts/Orders for one subject like "the seeds" or "the commodities".
To test the repugnancy two or more laws in question must ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 46 be in existence for the comparison :
24] We are inclined to observe that for actual and physical comparison and to accept the contentions revolving around the repugnancy and/or inconsistency, we have to take note of all the possible resources, as well as, other provisions of the Constitution of India and also the settled provision of law that the enactments either Central and/or State are presumed to be valid and intra vires. The heavy burden lies upon the other side to show that there exists repugnancy and/or inconsistency and/or the State Legislature cannot encroach upon the alleged central occupied field. Therefore, the scheme and object of respective Central Acts are required to be compared to decide the contention so raised, as in fact done by the learned Senior Counsel appearing for the petitioners.
25] The Articles so read and referred above and for purpose of interpreting any provisions of the Constitution of India, the Court is required to consider all other related provisions of the Constitution of ::: Downloaded on - 27/08/2013 21:17:28 ::: WP.3390.09 47 India itself while interpreting particular enactment and/or laws specifically when it comes to the issue of distribution of legislative powers. As per Article 245, "subject to the provisions of this Constitution", the Parliament is empowered to make laws for the whole or any part of territory of India and the State Legislature for the whole or any part of the State. The exclusive powers and/or the ig th concurrent power have been enumerated in the VII Schedule.
Therefore, either Central and/or State Legislature while making the law is required to consider the other provisions of the Constitution.
We are inclined to observe, therefore, that the respective State or Central policy, the welfare of the people at large considering the need and demand of the time including all the aspects as enumerated in the various Articles of the Constitution including Directive Principles of State Policy just cannot be overlooked.
Article 39 deals with principles of policy to be followed by the State. In this background, we have to consider the existing provisions of the impugned Ordinance/Act and the notification issued thereunder by the State of Maharashtra.::: Downloaded on - 27/08/2013 21:17:28 :::
WP.3390.09 48 The cotton seed control price - unoccupied field :
26] Admittedly, as noted above, there is no specific cotton seed price control order and/or enactment enacted by the Central Government as contemplated under Entry 34 of Concurrent List under Schedule VII and the Central Acts in question. It is relevant to note that "price control" is a separate entity though Centre is empowered to enact laws of Entry 33 and also the State because of Entry 27 List II but subject to Entry 33. These concepts are different, yet the Act though empowered and/or in a given case, to enact controlling laws including of cotton seed but not yet enacted and/or control the cotton seed pricing in any part of India and especially for the State of Maharashtra. The field is unoccupied but the demand and necessity from the point of view of the State of Maharashtra prevail and relevant. It is necessary to note here that under the Essential Commodities Act, various goods are included by specific products/goods like sugar, oil seed and many others even in Section 3 itself. The cotton seed is definitely not mentioned in any of these ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 49 provisions except by amendment "cotton seed" as brought back in the Schedule from the year 2009. The cotton seed was under the purview of Act earlier also but the entry was deleted. There was lacuna and, therefore, the State enacted the Ordinances to control the situation and demand in the interest of farmers at large. The Central Government till this date has not enacted any provisions to control the cotton seed prices. The plain reading of Section 3 of the Act itself provides that the Central Government is required to form its "opinion" to enact laws and/or orders to regulate the products/goods as fall within the ambit of the Act and now in view of Section 2A the "cotton seeds" also. Therefore, considering the entries and the power given to the State Legislature to enact laws but subject to Entry 33, and as there is no law or Control Order covering the cotton seed pricing as required under Section 3 of the Act, the vacuum so filled in by the State Legislature, in no way can be stated to be inconsistent and/or repugnant to the Central Acts in question.
27] As noted, various drugs, fertilizers, foodstuffs, including ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 50 edible oil, yarn, petroleum and petroleum products, raw jute and jute textile, seeds of food crops and seeds of fruits and vegetables, seeds, cattle fodder and jute seeds including cotton seeds are under the ambit of the concept "essential commodities". The Central Government has all the time made specific provisions including various orders revolving around those essential commodities, so also the respective States by various Control Orders. The areas and/or the subjects in part, if not covered and/or controlled and/or regulated, it is permissible for the respective States to have their own controlling laws/regulations as permitted and provided in view of the constitutional entries so read and referred above. The Central Government if failed to take decision and/or decided, though temporarily not to control and/or make any provision, there is no bar and/or embargo upon the State to legislate and/or make appropriate provisions for controlling and/or regulating the untouched aspects of the commodities like "cotton seeds". We are inclined to observe that this is not a matter of mere question of discretionary regulation but it is a question of achieving the purpose and object to regulate cotton ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 51 seed pricing in the State of Maharashtra. When we talk about repugnancy and/or inconsistency and/or occupied field, in our view, it should be clearly notified. There is no question of waiting for discretion and/or direction for or against to use and utilize the other permissible power of the State in the interest of farmer and/or agriculturist and/or such other related person. There is no question of taking away the respective field/subjects outside the control of the Union. Both can run together. Admittedly, there was no such cotton price control regulation under the Central Acts when the first Ordinance was enacted by the State. The position till this date is not disturbed by the Union by enacting specific provisions to control the cotton seed price. The mandate of Central Acts and considering the specific commodities mentioned and as specific provisions/control orders are not in existence covering the respective and necessary aspects in respect of the pricing, the requirement of specific provisions for cotton seeds price control, in our view, was necessary.
The situation cannot be in vacuum and/or subject to exercise of alleged discretionary power. We are not inclined to accept the ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 52 submission that to enact and/or make provisions for price controlling is a discretionary power of the Central Government. Section 3 itself contemplates to form opinion based upon the material available to impose and/or make respective price controlling regulations with appropriate machineries and powers to the respective agencies/ officers, especially considering the constitutional entries so referred above. The State is under an obligation to play its role to control the cotton seeds price and/or such related aspects based upon the material available with them. If there is no material and/or conscious decision is taken not to interfere with the State legislation and/or allow the respective State to continue to take charge and to do necessary things for controlling cotton seeds price, though cotton seed as essential commodity is brought in the Schedule of the Essential Commodities Act and as this part of the subject/field is unoccupied, the submission that this ignores the subject matter is unacceptable. It is necessary to note that when we talk about "subject" and/or "field"
as contemplated under the respective entries, it is always referring to various facets of the same subjects. It is settled that wide and ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 53 amplified meaning needs to be given to the respective subjects. It cannot be restrictive specifically when the Court needs to consider the various other provisions of the Constitution of India as well as specific provisions of the Central Acts. The words 'essential commodities' itself show that various goods/commodities have been specifically included and accordingly specific provisions have been made to regulate various aspects of the same commodities. Section 3 of Essential Commodities Act itself defines and covers certain commodities but not the cotton seeds specifically. It is also clear that every aspect of the subject and/or respective entries have not been specifically dealt with exhaustively under the Central Acts. There are various Price Control Orders enacted specifically from time to time by Central as well as State Governments considering the specific entry "price control" and other entries. We are inclined to observe that the Essential Commodities Act itself has source of Entry No. 33 List III.
Still there are various Price Control Orders enacted for the same commodities. The crux is every subject/field has various facets and dimensions. The Central, as well as, State Government, therefore, ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 54 are entitled to enact laws and/or provisions to cover it by Central law and/or by State legislation and/or regulations/orders.
28] It can be elaborated further that the State List relating to "agriculture" itself has various facets and there are various other related entries in the Central, as well as, State Lists. This in no way can be stated to be impermissible and/or occupied field. It is clear that the Parliament has permitted to have different and separate enactments and/or provisions to control production, supply and distribution of such commodities including price control regulations from time to time. This itself means and permissible either for the Central, as well as, for the State to have different provisions and/or regulations/orders on the same subjects to achieve different purpose and objects. The commodities like sugarcane foodstuffs, edible oil, raw cotton, raw jute that are specifically mentioned in Section 3 of the Act, which is in the Central Act, various Price Control Orders are engaged specifically to cover the aspect of price control or such commodities. We are inclined to observe that there are various parts ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 55 and parcels of the same subjects, specially under the Central Acts in question, which are required to be looked into and/or controlled to achieve the constitutional goal by the respective State, as well as, by the Centre. The restrictive meaning and/or interpretation to such entries in our view will frustrate the purpose and object and the constitutional power so given to the respective States. It is made clear that we are in no way curtailing and/or restricting the power of Central Government to enact a proper and/or regulate Cotton Seed Price Control Regulations and/or orders. As there is a clear vacuum and the field is unoccupied for want of specific regulations/orders, the gap so filled by the State by enacting the impugned State Act and the notifications, in no way be stated to be repugnant and/or inconsistent.
It is well within the purview and power as contemplated and provided under the respective entries, as well as, the Central Acts.
The specific State provisions :
29] It is also necessary to note that the compensation ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 56 provisions related to misbranding and/or spurious and/or substandard qualities of the cotton seeds as provided under the State Act and related machineries to implement the same even otherwise are not covered by any of the Central provisions. The submission that compensation is also covered by various Central Acts like Consumer Protection Act, 1986 and the Contract Act, in our view, is also unacceptable. The general provisions though available but considering the object and purpose of State legislation, the machinery that was provided in no way can be stated to be in conflict with any other Central Act. It is relevant to note that respective machineries and the provisions to achieve the object of the particular State Act and/or orders related to the special aspects of the same subjects, cannot be compared with the similar provisions of other Central, as well as, State Acts. Both are required and need to be different and separate to control and regulate various aspects as intended. Those machineries/officers may not be in a position to control, govern and regulate unless specifically directed, by every aspect of regulations. The decisions in respect of cotton seeds of the ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 57 other States like Madhya Pradesh and/or Gujarat and/or Andhra Pradesh so referred and cited cannot be said to be the binding precedent in view of the peculiar facts and circumstances and power given to the respective States to enact and/or control and regulate the respective commodities based upon the situation and condition of the respective States for the respective crops and/or agricultural products. We are inclined to observe that the State of Maharashtra need to control and regulate particular commodities and/or products like cotton seed in view of the situation prevailing then and/or now.
The price fixing itself as recorded is yearly phenomenon and not permanent. This itself means regular and constant survey and collection of materials considering the rights of traders/producers, as well as, of the agriculturists/farmers apart from, agriculture land, as well as, the climate/weather conditions of the State. For the reasons so recorded above, we are not inclined to accept the submissions based upon the decisions given by the other High Courts of the States as those are distinguishable on facts and the provisions of law then existing.::: Downloaded on - 27/08/2013 21:17:29 :::
WP.3390.09 58 Similar machinery/mechanism - no repugnancy :
30] All the Central Acts in question have provided various provisions and machineries to regulate and control every aspects which are necessary for control, production, supply, distribution, confiscation of essential commodities and procedure to be followed before imposing penalty and award punishment based upon respective defaults/offences. The provisions of appeal and also power to recover certain amount/fine are provided. To regulate quality of certain seeds for sale and the matters connected, Seeds Act also prescribes and provides various mechanisms and machineries. Specific powers have been provided under the Act to the concerned authorities as required. This Act also covers the aspect of defaults, actions, penalties, fine, appeal, offences, confiscation and forfeiture of properties in cases. The Rules are also made accordingly for the connected purpose. There are specific provisions for checking, controlling the varieties of the seeds including seeds laboratory, Central as well as State. The term "seed" covers ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 59 "cotton seeds also".
The Seeds Control Order is under Section 3 of the Essential Commodities Act and not under the Seeds Act. This covers provisions regarding dealers enforcement authorities, licence and various related aspects.
31] This itself shows that though seeds are covered by the Seeds Act, yet the Seeds Control Order has been issued by notification under Section 3 of the Act. This means that Essential Commodities Act itself permits to have different regulatory orders for the same subjects. When the Seeds Act was enacted, the Essential Commodities Act was already in field.
32] It is relevant to note here that under the Environment Act, the Rules are framed as noted above to control and check various aspects covering the quality of the seeds, though there exists Central legislation as well as respective Orders covering the field "seeds".
After going through the Environment Act as well as the Rules so ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 60 framed including the Circular so issued, it is again clear that the purpose to be achieved by the authorities even under this Act and Rules framed, the need is totally different. We are inclined to observe that all these Central Acts and the Rules made thereunder have a different foundation based upon respective aims, object and purpose to be achieved. The word "seeds" are the essential commodities and/or specific commodities incorporated under the E. C. Act including the cotton seed and that itself is not sufficient to accept the case of the petitioners that the field/subject is occupied. Therefore, the mechanism and/or machineries and/or respective authorities/ officers and the provisions made under the respective Acts giving them the powers which in our view in no way sufficient to disregard the machinery mechanism so provided under the Mah. Cotton Seed Act. The different machineries and mechanism so provided and the respective officers/officials, just cannot act and/or take any action as provided under the Central as well as State Acts or Orders unless specifically empowered. All officers/authorities need to act on the basis of powers so imposed as are provided under the respective ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 61 provisions. We are inclined to observe that the different mechanism/powers and/or jurisdiction so given to the officers under the particular enactments/orders which need not be equated with the powers/ jurisdiction and authority given under the State Act.
33] As noted the Mah. Cotton Seed Act/Ordinances in question are to regulate the supply, distribution, sale and fixation of sale price of cotton seeds and for the matters connected therewith and/or incidental thereto. This itself means and requires the State to constitute special authorities/officials/officers to do all necessary things which are required to achieve the object and purpose of the Act. The appointment, function of Controller and Seed Inspector, Seed Analyst with specific powers and jurisdiction in our view is requirement of the State Act itself. When Act provides that such authorities/officers are subject to the control of the State Government and they have to act as per the provisions and the powers so prescribed, to say that the machineries/mechanism provided under the Central Act are sufficient and/or empowered to control these ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 62 facets as provided under the State Act is also unacceptable. To say further that the Central Act machineries and/or Rules and mechanism are sufficient to control the officers/officials who are specifically empowered under the Act to regulate and control the price of cotton seeds in the State of Maharashtra is also unacceptable. It is practically impossible and it will create definite complication for want of authority as well as the jurisdiction. Therefore, we are inclined to hold that the mechanism or machineries and/or modes available under the Central Acts and/or Orders made thereunder and the mechanism and modes so mentioned in the State Act are not in any way in contravention and/or contrary and/or inconsistent and/or repugnant to the provisions of Central Acts/Orders. We are inclined to observe that there is no conflict whatsoever and on the contrary, it is a requirement to have different machineries and mechanisms for the Central and the State Acts/Rules.
34] Though there are Central Acts, it is permissible and accordingly, there are various State amendments even in the Central ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 63 Act. Special Sections/Clauses have been permitted to be incorporated by the respective States under the Central Acts. The constitutional entries and other provisions, therefore, themselves recognize the power of State to frame various control orders in addition to the Central Control Orders in existence. This itself means it is recognized and permissible to have respective enactment/laws even by the State though power to enact laws is also with the Central Government. The constitutional entries in question itself permit the respective States to have their laws, rules, regulations "subject to"
the Central entries. The Constitution itself permits State to enact laws/orders though same field is occupied and/or covered as contended with regard to the production, supply, distribution and trade and commerce of commodities. We are inclined to observe, therefore, that the one subject/field and specially of Concurrent List, if any, and/or even otherwise has various facets and dimensions and for that as recorded above, it is permissible for the respective States to have their own enactment/control orders. This is also for the reason that the respective States have their own sources of State ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 64 enactments as provided in the State List under Schedule VII. This itself means that they are under obligation to take care of these subjects under respective facets of the same subjects. There cannot be any dispute that this subject agriculture and related facets are covered and falls within ambit of various other entries of Union List, Concurrent List as well as State List. Therefore, to say that once the agriculture falls within the ambit of State List, there is no question of looking into any other entries and/or no one else and enact the law is also unacceptable and especially when the State Government considering the situation, facts and circumstances of the respective States and as there was vacuum with regard to the cotton seeds regulation of supply and distribution of sale and fixation of sale price by the Central Government by specific orders and/or regulations, exercise their power and invoke the sources apart from Concurrent List entry, the specific entries of the State List, we see there is no conflict at all. Both can run together at this moment and especially for want of specific enactments/orders by the Central Government. We are inclined to observe here again that the Article 245 itself provides ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 65 to the extent of laws made by Parliament and by the Legislature of the State.
35] Section 3 nowhere specifically dealt with "cotton seed" as other goods/products are mentioned specifically in the said Section itself. We are inclined to observe that the inclusion in the Schedule itself is not the reason and a sort of embargo for the State of Maharashtra to enact respective provisions to control cotton seed price.
36] Section 3 itself provides that for controlling the price at which the essential commodities may be brought or sold (Section 3(2)
(ii), the Central Government may by order provide and/or enact regulatory enactment/control order, but it is subject to opinion of Central Government which should be necessary or expedient. Till this date, if there is no such order and/or enactment made and issued by the Central Government by invoking provisions of the E. C. Act and/or order, it means that for the reasons disclosed and/or ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 66 undisclosed they have not decided to enact such law which is necessary to deal with cotton seeds at least after the amendment of the year 2009. There was vacuum between the period of deletion as well as addition of the cotton seed under the Central Act. The uncertainty even that of Central Government to deal with and/or not to deal with the cotton seed price specifically, as required even under the E. C. Act, the State itself cannot overlook the respective obligations and the sources so provided to enact specific cotton seed laws/Act based upon the various entries and specifically when there is no prohibition even by the Central Act to do so. We are inclined to observe that the constitutional entries and the Central Acts themselves permit the State Government for cotton seed control pricing. In our view, this cannot be stated to be of any sort of encroachment upon the power and/or authority of the Central Government to deal with unoccupied subject/field.
37] The learned Senior Counsel appearing for the petitioners has read and referred various provisions of Central as well as State ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 67 Acts by providing detailed chart in support of their submission of repugnancy or inconsistency and for the legislative competence.
There is no specific constitutional challenge to the provisions of the Act except on the challenge of above foundation. There is no serious dispute with regard to the present position of cotton seed in view of the lastly amended provisions of Schedule of Essential Commodities Act. The comparison, therefore, is with the Central Act versus the State Act. Article 254 itself shows that if any provisions of law made by the Legislature of a State is repugnant to any provisions of law made by Parliament which Parliament is competent to enact or to any provisions of an existing law with respect to one of the matters enumerated in the Concurrent List, then subject to proviso to Clause 2, law made by Parliament and whether passed before or after the law made by the Legislature of the State to the extent of the repugnancy be void. Article 254(2) further permits State Legislature to enact laws and to make any provisions. However, it is subject to the assent of the President and that enactment shall prevail in the respective State. This itself means and considering the facts and ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 68 circumstances of the present case and especially the provisions of E. C. Act and the related constitutional entries, we are inclined to observe that the competency of Parliament to enact the law as sought to be contended in the present case, with regard to the cotton seed, itself is not sufficient to accept the submission of repugnancy on the foundation of "evinces its intention". The fact of comparison between two Acts is sufficient to observe that it is very essential to compare the provisions of two Acts in question for the Court to decide whether there exists any repugnancy and/or inconsistency. Therefore, we are inclined to observe that the repugnancy or inconsistency must exist in facts to decide the said issues and/or conflict in facts to decide the said issues and/or conflict, if any. The question is if it is permissible and had permitted the State if enacts particular provisions as though Parliament is competent to enact but not enacted special provisions for controlling the cotton price in Maharashtra or in any part of India, the vacuum so filled by the State restricting to price control, supply and production, equal distribution of cotton seed in the State of Maharashtra, in our view is permissible unless and until the ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 69 Parliament or Centre enacts particular law.
38] The Supreme Court judgments so cited and referred by both the parties revolving around these articles as well as these entries and the law so laid down in our view is based upon the respective Acts, provisions and circumstances. The relevant principles/observations so referred and relied by the parties are already noted above. The factual background and the relevant Act so referred and relied itself means that the Court needs to consider the respective provisions of the Act/enactments. We are in the present case dealing with the Central Acts as well as State Acts/Ordinances so referred above. We are inclined to observe that the provisions and purpose of E. C. Act as well as Seeds Act and the Environment Act and Rules have different purpose to achieve and so also related Mah.
Cotton Seed Act in question. The reasons so recorded in the present case are based upon the provisions of those Acts as well as the entries so referred above, which itself according to us, permits and empowers the State Government to enact appropriate Laws/orders to ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 70 handle and/or cover the situation which admittedly till this date is vacuum not enacting the Special Law "for controlling the cotton prices".
39] Additional factor in the present case is these specific provisions with regard to the compensation for providing and/or for supplying the cotton seeds of low standard/spurious/sub-standard seeds by the producer and/or supplier of the same. The modes and machinery so prescribed to achieve that object cannot be dissected from the main provision itself. The provision for prosecution under this Act against the vendor and/or producer and/or related person has to be on the foundation of other specifically provided provisions of the Act. Admittedly, there is no such provision prescribed and/or provided under the Central Acts in question. The compensation, the penalty and/or fine therefore, including forfeiture of property and all related aspects in our view just cannot be controlled and/or regulated by the Central Act unless specifically empowered and/or enacted.
The fixation and/or assessment of cotton price in Maharashtra as ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 71 direct connection with the supply/distribution/sale of cotton seeds and all matters connected therewith. The fixation of cotton seeds price and the interest of farmers vested of various varieties of cotton seeds including fixation of maximum sale-price while following the procedure so prescribed under Section 10 is also nowhere provided under the Central Acts. We are therefore inclined to observe here again that merely because some mechanism or modes are provided in the Central Acts that itself cannot be the reason except the facet of repugnancy established in view of the specific provisions and mechanism so provided under the State Act to achieve the goal as announced by the State Government. The aspect of licence for vendor and/or provision of misbranding and related penalty just cannot be dissected from this Act only because the aspect of quality of seeds and/or supply and/or production and/or distribution of cotton seeds or also as referred above and as contended fall within the ambit of all the Central Acts. The State Special Acts and its provisions and its policy are not challenged and still intact. We are inclined to hold that the Mah. Cotton Seed Act is valid and so also the ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 72 notifications of cotton seeds pricing issued thereunder.
40] Price Fixation and the Law :
The learned Senior Counsel appearing for the petitioners on this issue read and referred the following judgments and the principles :-
(i) The price fixation must satisfy the Wednesbury principles of Reasonableness, i.e. take relevant facts into account while excluding irrelevant ones :
(a) In Union of India v. Cynamide India Ltd. (1987) 2 SCC 720 at para
4 :
"4. ... Price fixation is neither the function nor the forte of the court". We concern ourselves neither with the policy nor with the rates. But we do not totally deny ourselves the jurisdiction to enquire into the question, in appropriate proceedings, whether relevant considerations have gone in and irrelevant considerations kept out of the determination of the price.
(b) In Gupta Sugar Works (1987) Supp SCC 476, the Court observed ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 73 at para 4 :
"4. ... The court is not concerned with any individual case or any particular problem. The court only examines whether the price determined was with due regard to considerations provided by the statute. And whether extraneous matters have been excluded from determination."
(c) Barium Chemicals Ltd. v. Company Law Board - 1966 Supp SCR 311 at page 359-60.
"...Even if (the statutory order) is passed in good faith and with the best of intention to further the purpose of the legislation which confers the power, since the authority has to act in accordance with and within the limits of that legislation, its order can also be challenged if it is beyond those limits or is passed on grounds extraneous to the legislation or if there are no grounds all for passing it or if the grounds are such that no one can reasonably arrive at the opinion or satisfaction requisite under the legislation.
In any one of these situations it can well be said that the authority did not honestly form its opinion or that in forming it, it did not apply its mind to the relevant facts." (emphasis added) ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 74 41] The price fixed must be fair :
(a) In Union of India v Cynamide India limited (supra) the following was cited with approval from the Constitution Bench decision in the Meenakshi Mills case :
"The cost of production, a reasonable return to the producer of the commodity are to be taken into account.
The producer must have an incentive to produce. The fair price must be fair not only from the point of view of the consumer but also from the point of view of the producer.
In fixing prices, a price line has to be held in order to give preference or predominant consideration to the interest of the consumer or the general public over that of the producers in respect of essential commodities. The aspect of ensuring availability of the essential commodities to the consumer equitably and at fair price is the most important consideration.
The producer should not be driven out of his producing business. He may have to bear loss in the same way as he does when he suffers losses on account of economic forces operating in the business.
...........Therefore any restriction in excess of what would be necessary in the interest of general public or to remedy the ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 75 evil has to be very carefully considered so that the producer does not perish and the consumer is not crippled."
(b) Premier Automobiles v. Union of India (1972) 4 SCC (Notes) 1 declares the broad principle :
"The very concept of fair price which can be fixed under Section 18G takes in all the elements which make it 'fair' for the consumer leaving a reasonable margin of profit to the manufacturer without which no one will engage in any manufacturing activity" (First Finding, pp. 1) This case was based partly on agreement between the parties and partly on concessions made at the Bar.
(c) Gupta Sugar Works v. State of U.P. (1987) Supp SCC 476 :
"11. .... the interest of the industry as a whole cannot be left out. It is also required to be borne in mind. The levy price of sugar should ensure reasonable return to the industry."
"12. ...this Court found the levy price reasonable even from ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 76 the point of view of the industry. This Court took into consideration the liberty reserved to manufacturers to sell freely 50 per cent of the sugar manufactured and also 100 per cent of the produce by second and third processes.
This Court was of opinion that by such a free sale the industry could get reasonable return." (pr.11-12, pp.
481).
42] Over-classification :
In A.S. Iyer v. Balasubramanyam & Ors, AIR 1987 SC 452, the Court held :
"The doctrine of classification is only a subsidiary rule evolved by courts to give a practical content to the said doctrine. Overemphasis on the doctrine of classification or an anxious and sustained attempt to discover some basic for classification may gradually and imperceptibly deprive the Article of its glorious content. That process would inevitably end in substituting the doctrine of classification for the doctrine of equality; the fundamental right to equality before the law and the equal protection of the laws may be replaced by the doctrine of classification."::: Downloaded on - 27/08/2013 21:17:29 :::
WP.3390.09 77 43] Proportionality and reasonableness :
In Teri Oat Estate (P) Ltd. V/s U.T. Chandigarh (2004) 2 SCC 130 it was held :
"49. Ever since 1952, the principle of proportionality has been applied vigorously to legislative and administrative action in India. While dealing with the validity of legislation infringing fundamental freedoms enumerated in Article 19(1) of the Constitution of India, this Court had occasion to consider whether the restrictions imposed by legislation were disproportionate to the situation and were not the least restrictive of the choices. In cases where such legislation is made and the restrictions are reasonable; yet, if the statute concerned permitted administrative authorities to exercise power or discretion while imposing restrictions in individual situations, question frequently arises whether a wrong choice is made by the administrator for imposing the restriction or whether the administrator has not properly balanced the fundamental right and the need for the restriction or whether he has imposed the least of the restrictions or the reasonable quantum of restrictions, etc. ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 78 In such cases, the administrative action in our country has to be tested on the principle of proportionality, just as it is done in the case of main legislation. This, in fact, is being done by th courts. Administrative action in India affecting the fundamental freedom has always been tested on the anvil of the proportionality in the last 50 years even though it has not been expressly stated that the principle that is applied is the proportionality principle." (Emphasis supplied).
The principle of proportionality is now well settled. In the matter titled Chairman, All India Railway Rec. Board and Anr. V. K. Shyam Kumar and Ors. (2010) 6 SCC 614 it was held that :
"Proportionality, requires the Court to judge whether action taken was really needed as well as whether it was within the range of courses of action which could reasonably be followed. Proportionality is more concerned with the aims and intention of the decision-maker and whether the decision-maker has achieved more or less the correct balance or equilibrium. Courts entrusted with the task of judicial review has to examine whether decision taken by the authority is proportionate, i.e. well balanced and ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 79 harmonious, to this extent court may indulge in a merit review and if the court finds that the decision is proportionate, it seldom interferes with th decision taken and if it finds that the decision is disproportionate i.e. if the court feels that it is not well balanced or harmonious and does not stand to reason it may tend to interfere"
The Pricing of quality cotton seeds :
44] The modern technology and related use of it at national and international level is definitely in the interest of people at large.
The use of technology for producing good quality of seeds or all varieties and the related expenses of the producers/manufacturers of those seeds are also relevant factor. In the present case, we are concerned with the cotton seeds and its various varieties, but when it comes to the obligation of the respective States, considering the need and situation at given point of time from the point of view of farmers/ agriculturists and considering their constitutional obligations apart from the State Government polices, the balance need to be struck ::: Downloaded on - 27/08/2013 21:17:29 ::: WP.3390.09 80 even by taking note of representations from cotton seeds producers/ traders. There is no challenge to the fact that from time to time the State is fixing the maximum sale price of certain types of cotton seeds after taking note of increase in the costs of production, processing and other costs of cotton seeds. This also includes trait value, royalty components of transgenic cotton seeds. The "price control" is always a matter of discussion and deliberation for all the essential commodities and even otherwise. Based upon the existing law, authorities/board/bodies/committees are formed to consider the various aspects to fix the minimum or maximum sale price of certain types of cotton seeds. The various litigations are also referred by the parties under the competitive Act. The technology changes so also the time and requirement and therefore, the fixation of price is a matter of annual phenomenon. Admittedly, it is not permanent. As recorded above, every year cotton seeds prices have been changed/fixed based upon the material available at the relevant time.
Admittedly, the petitioners have challenged cotton seeds prices up to the year 2010. These are the matters revolving around the ::: Downloaded on - 27/08/2013 21:17:30 ::: WP.3390.09 81 same order. The petitioners have not challenged subsequent notifications fixing the cotton price/rate by the State specifically of the year 2011, 2012 and even of 2013. This factor of non-filing and not challenging of subsequent notifications in our view is also relevant factor which goes against the petitioners or at least to the extent that the submission revolving around non-consideration of their representation including the trait value/royalty which certainly changes from time to time, year to year and all related aspects including the cost of production, processing which are relevant while fixing maximum sale price just cannot be tested in the petition of the year 2008/2010. Admittedly, based upon the earlier notifications everybody had acted upon. There was no stay of these notifications at any point of time.
45] This also means that there is no material which required to be retested by them so far as subsequent notification and the price so fixed by the State of Maharashtra. There is nothing on record to show except by averments made in the year 2010, that the State of ::: Downloaded on - 27/08/2013 21:17:30 ::: WP.3390.09 82 Maharashtra failed to consider the basic principles/ingredients as available and/or contemplated under Section 10 of the State Act.
46] It is settled unless specifically challenged and the same is supported by material, contra-material and/or proved material. The decision taken by the State and/or such authority and fixed price just cannot be reassessed and/or reverified and/or no fresh opinion can be given by the Court under Article 226 of the Constitution of India.
The judicial review in this regard is quite restricted though there is no total bar, but to interfere and/or take fresh decision and/or direct State Government and/or authority to reconsider, the aspects of fixing of prices, the material and/or information, contra-information must be sufficient to interfere with the decision taken by the authority. We are inclined to observe here that there are always various factors apart from material so placed and/or put forward by the producers/ manufacturers/suppliers/distributors of cotton seeds. In a given case, the Government considering the conditions of the farmers of the State and various other aspects may give priority and/or inclined to fix the ::: Downloaded on - 27/08/2013 21:17:30 ::: WP.3390.09 83 minimum and maximum sale price of cotton seeds. It is not the case even if we go to the averments made in the petitions that the Government has not at all taken note of the ingredients so mentioned and/or contemplated under Section 10. The requirement to place all theses materials at appropriate stage by the concerned parties and to get the information collected from other resources by the State Government is also a factor which just cannot be gone into at the stage of the proceedings revolving around the earlier notifications and the price so fixed.
47] The learned Senior Counsel appearing for the petitioners has read and referred the averments made by them and so also the respondents revolving around the price fixing aspects and specially covering the elements as mentioned in Section 10. From the reading of the averments so made, we are inclined to observe that the State while fixing the price had definitely taken note of the representation and the material so placed on record by the petitioner and/or such related persons. The State had also collected various information ::: Downloaded on - 27/08/2013 21:17:30 ::: WP.3390.09 84 which was necessary to check and control and understand the market position covering the profit ratio of the producers as well as requirement and necessity of controlling of the price of cotton seed. It is not the case even of the petitioners that they have taken unilateral decisions in all these matters. The submission about the details/ materials so provided including of the trait value which is nothing but the aspect of penalty based upon the agreements related to intellectual property laws covering the national and international rules and regulations.
48] It is clear that fixation of price is an executive action but subject to the policy and the laws. To provide machineries and authorities/jurisdiction and the principles to be followed before fixing the price should always have a foundation of law. There cannot be any dispute with regard to this that the price must be fair, reasonable and in proper form considering the interest of producer, manufacturer and the consumers/farmers/agriculturists. The petitioners themselves read and referred the material and the related chart to show how from ::: Downloaded on - 27/08/2013 21:17:30 ::: WP.3390.09 85 time to time prices were fixed. The submission that the State has failed to consider the data submitted and have fixed the cotton seed price reducing the trait value through a public sector undertaking is nothing but, going into the exclusive power given to the State Government to assess, fix and compute the price. The State is under obligation as recorded above to consider the interest of the producer/manufacturer but at the same stroke the interest of consumer. In such situation, as alleged no justification is given to the trait value and/or other material and by doing comparison of other countries, in our view, is also not sufficient to overlook the decision making power and authority of the Government in this regard. It is made clear that the State Government is also under obligation to consider the submissions and the material placed by the parties. It is also subject to other material placed available from their resources.
The Wednesbury principles -- Reasonableness and proportionality, thus cannot be utilized only at the instance of the petitioners, manufacturers and/or producers of the cotton seeds. The same principles in our view are also required to be extended ::: Downloaded on - 27/08/2013 21:17:30 ::: WP.3390.09 86 from the perspective of the farmers and the consumers. The decision therefore if taken by the State Government just cannot be interfered with only at the instance of petitioners now at this stage of the proceedings, specifically when their notifications and the cotton prices so fixed at the relevant time have been actually acted upon by all. We are inclined to observe that as there is no subsequent challenge to the notifications, it also means that the State Government subsequent to the impugned notifications/price so fixed, might have considered the respective submissions/ representations made by the petitioners and similarly situated persons from time to time every year. The present notification/current notifications cannot be tested on the basis of the averments made in the year 2010 based upon the then existing information on record. Those notifications must have achieved their purpose and therefore, the same just cannot be gone into or interfered with. Taking into consideration the reasons so recorded, no case is made out to interfere with the price so fixed by the State of Maharashtra from time to time till this date.::: Downloaded on - 27/08/2013 21:17:30 :::
WP.3390.09 87 49] This, in no way, to conclude that the petitioners and the similarly placed persons are totally debarred from raising the plea and placing supporting material on record to justify their case or submission to re-fix the prices of B.G.-I and B.G.-II cotton seeds in question in future. The concerned respondents and their authorities are also under obligation to see the interest of both the parties though there is no specific provision that while passing or fixing the price, it is desirable that the concerned respondents/authorities to disclose their sources/information/material which according to them are necessary to fix the prices. This is certainly taking into consideration experts and/or other sources/material and to achieve the socio-economic goals of the country. The situation should not be that in the guise of controlling the prices including of cotton seeds, the commercial world and/or related industry should be compelled to close it down for want of reasonable profit and/or margin of profit. The interest of State and/or Central Government should be to see that everybody earns and/or able to survive in this world of competition and technology, specifically when the State Act in question as well as Central Act itself ::: Downloaded on - 27/08/2013 21:17:30 ::: WP.3390.09 88 now made compulsory to provide and/or supply the good quality seeds including cotton seeds to every consumer. The consequences are provided if the producers/traders consumer and the farmer failed to take care of these provisions while providing and/or selling and/or distributing the cotton seeds. The producer and/or manufacturer should not be punished and/or compelled to produce low quality cotton seeds to compromise with the priced so fixed by the Government from time to time. The commercial market can run only if proper encouragement and relevant provisions are made to cover the interest of all including commercial interest of the producers. The ultimate decision is always of the State Government that to cover and take into consideration every aspect so placed by the manufacturer as well as agriculturist/farmer and/or experts. It is desirable to have due discussion and/or negotiation in advance. The experts are available at all sources for every party even for due deliberation and fixing of such fair price.
50] The learned Senior Counsel appearing for the petitioners ::: Downloaded on - 27/08/2013 21:17:30 ::: WP.3390.09 89 have also cited few Gujarat judgments which were based upon the then existing provisions of law and as the situation of the State at the relevant time. For the reasons so recorded in the present judgment, we are inclined to hold that the enactment of ordinances and the notifications by providing the reasons behind it cannot be disturbed and/or declared void and/or repugnant, based upon the judgments/decisions given by the other High Courts. The decisions so given, in our view, have not taken into consideration the reasons so provided by the State of Maharashtra as well as the reasons so recorded and discussed in the present matter. The two Gujarat views based upon different situations even otherwise are not sufficient to accept the case of the petitioners as it is contended and as prayed basically on the basis of the averments made in the year 2010.
51] The notification/clarification even of State of Andhra Pradesh, in our view, is of no assistance as every State has power to take decision based upon their existing provisions as well as ::: Downloaded on - 27/08/2013 21:17:30 ::: WP.3390.09 90 situation. The notification/clarification so given making some portion of the Act valid and/or accepting some portion to be repugnant, is not acceptable, in view of the decisions/reasons so given by us in the present case. Basically then it refers to the facts and circumstances and situation of State of Maharashtra. Every State has its own power and authority to enact the law, then this itself is a decision and/or enactment made by the State of Maharashtra cannot be tested and/or challenged merely because the State of Andhra Pradesh has considered certain provisions to be repugnant of alleged similarly placed laws.
52] The submission revolving around Section 2A of the Essential Commodities Act as well as Section 8A of the Seeds Control Order for the reasons so recorded above is also of no assistance to the petitioners.
53] We are not inclined to accept the submission of intervenors attributing the malafides to the Union of India and its ::: Downloaded on - 27/08/2013 21:17:30 ::: WP.3390.09 91 authorities merely because they have not engaged and/or made any provisions for cotton seeds controlled prices. For the reasons so recorded, there may be clear decision and/or reason while permitting the State of Maharashtra to proceed to enact the particular Act or enactment on the untouched subject, like controlling the prices of cotton seeds has even appeared in the affidavit filed by the Central Government. The allegations made against the petitioners are also unacceptable for the above reason and also for the fact as everybody including the producer has right to ask for reasonable/fair price for their products, specifically when there is no denial to the fact of use of no technology and the various agreements which are required to be entered into with the foreign country, manufacturers and/or technology providers. The respective licences/sub-licences and their priority and related aspects and the increasing costs of production along with other various factors if according to them not taken care of by the State, they are entitled to raise and test the decisions of the State including and certain executive decisions like fixing of cotton price.::: Downloaded on - 27/08/2013 21:17:30 :::
WP.3390.09 92 Conclusion :
54] Taking overall view of the matter, for the reasons so recorded above, in the present facts and circumstances, we are not inclined to accept the case of the petitioners. The undisputed position on record that the prices of B.G.-I cotton seeds have fallen from Rs.
1850/- in the year 2002 to Rs.650/- in the year 2008 -10 and B.G.-II cotton seeds from Rs.1350/- to Rs.750/- in the year 2008-11 just cannot be overlooked. The agitation so made and the grounds so raised no way can be stated to be malafide and are based upon the alleged cross-border parties and/or circumstances. It is also necessary to note that the State itself has increased price of seeds for the year 2011 onwards to Rs.830/- for B.G.-I and Rs.930/- for B.G.-II.
This may be in view of the representations so made and/or submissions and/or material placed by the petitioners and/or related companies of the seed producers and/or manufacturers. Therefore, the State is definitely performing their part in taking a decision of prices based upon the material as well as situation available at the relevant time. This decision has been taken after taking into ::: Downloaded on - 27/08/2013 21:17:30 ::: WP.3390.09 93 consideration Section 10 as well as constitutional goal they want to achieve. We are inclined to observe that the Act as well as notification so issued is well within the frame-work of law and it is valid.
55] The submission that the E. C. Act is itself a complete Code and therefore, there is no question of looking into any provisions, is not acceptable for the reason so recorded. The State Act in question as recorded is dealing with cotton price control aspect and related aspect of compensation, misbranding which is certainly different and as admitted there is no specific provision under the Central Act.
Therefore, there is no question of submission of conflicting provisions and or applying the theory of severability.
56] In our view, both Central Act as well as State Act in question can co-exist. The encroachment even if any in view of the definition of the seeds covering the cotton seeds in no way can be said to be fatal and/or repugnant and/or inconsistent as the Central Act is silent with regard to this aspect of controlling price of cotton.::: Downloaded on - 27/08/2013 21:17:30 :::
WP.3390.09 94 57] The situation upto 2010 till the "cotton seed" was brought within the ambit of E.C. Act was different. There was admittedly vacuum. The challenge of repugnancy and/or occupied field prior to these dates is unsustainable and cannot be compared with the subsequent period. The constitutional challenge revolving around the repugnancy and/or price fixation even revolving around the subsequent period for the reasons so recorded is also unacceptable, especially at this stage of the matter, so also the issue for the cotton price control after lapse of 3 to 5 years, on the basis of the situation and the averments of the earlier years. There is no total bar for judicial review even for any kind of price fixation but scope and jurisdiction is quite limited, depends upon the facts and circumstances of the case, apart from the object and intent of the Acts.
Cotton seed - commercialization :
58] Both the Governments must consider the various facets of industrialization simultaneously while dealing with fixing the price of any commodities. The Government is required to encourage "inverd ::: Downloaded on - 27/08/2013 21:17:30 ::: WP.3390.09 95 investment" to give "sweeteners" and "subsidies" to develop industrialization and commercialization in various parts of the country including for the big multi-national industries and factories, considering the modern technology and globalization. We have to consider the socio-economic situation for future development and progress from all sides. The price control theory needs to be utilized considering the poor class farmers/agriculturists and the rich class farmers/ agriculturists. The price may not be equal for all - depends upon the situation of the State climate, weather and land quality, including the potentiality of the land to grow particular type of crops or seeds and/or other commodities. All in all no case for any reliefs.
Resultant Order :
59] For the above reasons, Writ Petition Nos 3390/2009, 2207/2008 & 2493/2010 are dismissed. The interim orders granted on 27.6.2008 and 10.6.2010 are also stand vacated.
Rule stands discharged. There will be no order to costs.
J. JUDGE JUDGE.
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