Sarvaraya Textiles Ltd. , Kakinada v. Agricultural Market Committee, Kakinada
2009-12-08
R.SUBHASH REDDY
body2009
DigiLaw.ai
ORDER This Review Miscellaneous Petition is filed by the petitioner in W.P.No. 7832 of 1989, seeking review of the order, dated 11-07-1995, passed in the said writ petition. 2. The petitioner is a Public Limited Company, incorporated under the Indian Companies Act, 1913. It manufactures cotton yarn by purchasing ginned cotton. As one of the mills of the petitioner Company is situated within the notified area of the respondent-Agricultural Market Committee, Kakinada, the petitioner has obtained licence from the said Market Committee up to the year 1987-88, but thereafter, it did not seek renewal of licence. When notices were issued by the respondent-Market Committee to get renew the licence, and for production of account books of the petitioner-Company, they approached this Court by filing a writ petition in W.P.No.7832 of 1989, seeking directions by way of Mandamus, restraining the respondents from demanding for renewal of licence as prescribed under Section 7(1) of the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966. 3. This Court, while dismissing the writ petition in W.P.No. 7832 of 1989, by an order dated 11-07-1995, has taken the view that as much as the petitioner is undertaking the processing of the notified commodity i.e. cotton, to manufacture yarn, as such, the provision under Section 7(1) of the A.P. (Agricultural Produce and Livestock) Markets Act, 1966 will apply to the petitioner, which obligates to take licence for such activity. 4. Heard Sri C. Kondadaram, learned Senior Counsel appearing for the petitioner Company and Sri K. Madhava Reddy, learned Standing Counsel appearing for the respondent-Market Committee. 5. In this review petition, it is submitted by the learned Senior Counsel Sri C.Kondaram, that the petitioner purchases ginned cotton, which is not a notified commodity as per Schedule-II of the A.P. (Agricultural Produce and Livestock) Markets Act, 1966. He contends that inasmuch as the purchase of ginned cotton is not for the purpose of trading but the same is for the purpose of manufacturing of yarn, there is no need to take any licence. It is submitted that as the said aspects were not taken into consideration, and in view of the errors apparent on the face of the order, dated 11-07-1995, passed by this Court in W.P.No.7832 of 1989, it is a fit case to entertain this review application.
It is submitted that as the said aspects were not taken into consideration, and in view of the errors apparent on the face of the order, dated 11-07-1995, passed by this Court in W.P.No.7832 of 1989, it is a fit case to entertain this review application. In support of his argument, the learned counsel has relied on the judgments in; (1) Orient Paper and Industries Ltd. v. State of M.P. (1) 2007 (7) SCJ 438= (2006) 12SCC468, (2) Krishi Utpadan Mandi Samiti v. Pilibhit Pantnagar Beej Ltd. (2) 2003 AIR SCW 6696, I.T.C. Zeneea Ltd. v. Government of A.P. (3) 2000 (5) ALT 427 (D.B.) and (4) Srinivasa Hatcheries v. Agricultural Market Committee, Poosapatirega (4) 2003 (1) ALT (Crl.) 74 (A.P) = 2002 (6) ALD 640 . 6. On the other hand, it is submitted by Sri K. Madhava Reddy, learned Standing Counsel appearing for the respondent Market Committee, that the petitioner is purchasing the cotton and is processing the same in the notified Market Committee area, as such, it is obligatory on the part of the petitioner to take licence under Section 7(1) of the Act. It is submitted by him that as cotton kapas, lint and waste cotton are already notified, it cannot be said that the petitioner is not dealing in the notified item. 7. Before the respective contentions of the learned counsel for the parties are considered, I deem it appropriate to briefly refer to some of the provisions of the Act, which will have a bearing on the issue involved in this case. A perusal of the Statement of Objects and Reasons of the A.P. (Agricultural Produce and Livestock) Markets Act, 1966, shows that the said legislation is intended to regulate buying and selling of agricultural produce, livestock and products of livestock and the establishment of markets in connection therewith. As per Section 7(1) of the Act, no person shall, within a notified area, set up, establish or use, or continue or allow to be continued, any place for the purchase, sale, storage, weighment, curing, dressing or processing of any notified agricultural produce or products of livestock or for the purchase or sale of livestock except under and in accordance with the conditions of the licence granted to him by the Market Committee.
As per Section 7(3) of Act, the licence granted under Section 7(1) of the Act shall be in such form and subject to the payment of such fees, as may be prescribed. Further, as per the proviso to Section 7(3), no fee shall be charged for grant of licence to a person merely for curing, pressing or processing any notified agricultural produce or products of livestock. Further, as per Section 7 (2) of the Act, the licensing provision under Section 7(1) of the Act is not applicable to a person purchasing the notified agricultural produce, livestock or products of livestock for his own domestic consumption. 8. So, from a reading of the above said provisions, it is clear that a distinction is drawn between the person who purchases the notified commodity for the purpose of trading, and the person who is purchasing the notified commodity for his own consumption and the person who is purchasing it for the purpose of .mere processing. 9. In the instant case, the petitioner contends that he purchases the ginned cotton for the purpose of manufacturing yarn. Though it is the submission of the learned counsel that ginned cotton is not a notified item, but from Schedule-II of the Notification issued under Section 3 of the Act, at Serial No.25, cotton kapas, lint and cotton waste are notified. It is further clear from the Telugu version of the notification notifying as 'pratti', 'Doodi' etc. Cotton kapas is nothing but the shell containing the cotton along with seed. Lint, as notified, is a fine material of the cotton. The ginned cotton is nothing but the cotton after separating seeds from it. As translated in Telugu in the notification, cotton is also notified by notifying it as 'Doodi'. In view of the said notification notifying the above said products, the petitioner, who is a purchaser of ginned cotton, is a person purchasing the notified commodity under the provisions of the A.P. (Agricultural Produce and Livestock) Markets Act, 1966, and processing the same in the notified area. As such, the contention of the learned counsel for petitioner that ginned cotton is not a notified item, cannot be accepted. When the cotton kapas, lint and even the cotton waste are notified, and further, 'Doodi', a comprehensive meaning of these words is notified in Telugu in the schedule, it is clear that it includes the ginned cotton also.
As such, the contention of the learned counsel for petitioner that ginned cotton is not a notified item, cannot be accepted. When the cotton kapas, lint and even the cotton waste are notified, and further, 'Doodi', a comprehensive meaning of these words is notified in Telugu in the schedule, it is clear that it includes the ginned cotton also. As such, the submission of learned counsel for petitioner that ginned cotton is not a notified item, cannot be accepted. The further submission of the learned senior counsel for petitioner that the petitioner-Company purchases the notified commodity for its own purpose but not for the purpose of trading, as such, it is not required to take licence under the Act, also cannot be accepted. From a comprehensive reading of various provisions which are already referred above, coupled with the objective of legislation, it is clear that the Act is intended to regulate the notified products within the notified area of the Market Committee. As the petitioner-Company is processing ginned cotton within the notified area for the purpose of producing yarn, the provision under Section 7(1) of the Act is applicable to it, and therefore, the plea of the petitioner that it need not require to take licence, cannot be accepted. 10. Now, coming to the judgments relied upon by the learned Senior Counsel appearing for the petitioner, in the case of Orient Paper and Industries Ltd. (1 supra), the Hon'ble Supreme Court has held that when the agricultural produce, namely, bamboo, is brought under an agricultural market area by the manufacturer of paper for the end-use of manufacture of paper and not for the purpose of processing, such notified agricultural produce is not covered by the provisions of M.P. Krishi Upaj Mandi Adhiniyam, 1972. But, from a reading of the said judgment, it is clear that in the said case, the industry was not undertaking any processing, but was using the notified produce for the purpose of manufacture of end-produce by manufacturing paper, as such, it was held that it is not exigible to market fee. 11. In the case of Krishi UtpadanMandi Samiti (2 supra), the question, which arose for consideration was, whether the market fee can be levied on the purchase of wheat by the seed processing unit to process and convert the same into certified seed and by treating it chemically.
11. In the case of Krishi UtpadanMandi Samiti (2 supra), the question, which arose for consideration was, whether the market fee can be levied on the purchase of wheat by the seed processing unit to process and convert the same into certified seed and by treating it chemically. The Hon'ble Supreme Court has held that market fee cannot be levied on such commodity. 12.1n the case of I.T.C. Zeneca Ltd. (3 supra), a Division Bench of this Court held that when the original edible produce is processed chemically and made non-edible and sold separately, the same is also exigible to market fee, if they are specified separately in the schedule. 13. In the case of Srinivesa Hatcheries (4 supra), a learned Single Judge of this Court, while dealing with a criminal petition, quashed such criminal proceedings initiated against the petitioner on the ground' that chicks were not notified in the notification as livestock. 14. As, admittedly the petitioner in this case is undertaking the processing of notified item for the purpose of manufacture of yarn, the aforesaid judgments relied upon by the learned counsel for petitioner would not render any assistance in support of his argument that the petitioner-Company is not liable to take license as contemplated under Section 7(1) of the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966. As the petitioner Company is undertaking the activity of processing of a notified item within the market area, it is liable to obtain licence. If petitioner is not a trader and is merely undertaking the activity of processing, it may be that it is not liable to pay licence fee as contemplated under Section 7(3) of the Act, but even then, Section 7(1) of the Act is to be applied to the petitioner for the purpose of obtaining licence. From the objective of enactment also, it is clear that the regulatory power is conferred on the authorities whenever a person is dealing in notified commodities, and inasmuch as such regulation is permissible only by grant of licence, the petitioner is liable to take licence. The business of the petitioner-Company is that it purchases the cotton and manufactures yarn, and the product, which the petitioner manufactures from the cotton, also cannot be said to be the end product of cotton.
The business of the petitioner-Company is that it purchases the cotton and manufactures yarn, and the product, which the petitioner manufactures from the cotton, also cannot be said to be the end product of cotton. It is to the common knowledge that the yarn will be further used for the purpose of making cloth, and in that view of the matter, the plea of the petitioner that iL is not liable to take licence, cannot be accepted in view of the admitted position that it purchases cotton and processes such cotton in order to convert it into yarn. In any event, I do not find any error apparent on the face of the record, so as to review the order, dated 11-07-1995, passed in W.P.No.7832 of 1989. 15. For the aforesaid reasons, the review petition is devoid of merit and it is accordingly dismissed. No order as to costs.