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2022 DIGILAW 651 (AP)

Kaveri Seed Company Limited v. State of Andhra Pradesh

2022-07-15

M.GANGA RAO

body2022
JUDGMENT M. Ganga Rao, J. - All these writ petitions are filed by the petitioner - Kaveri Seed Company Limited against the Award(s) passed by the Chairman, District Level Committee for Award of Compensation, Kurnool District, under Section 7 of the Andhra Pradesh Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Act, 2007 and Rule 28(d) of the AP Cotton Seed Rules, 2007 awarding different amounts to the farmers shown in the annexure to the Award(s). 2. The facts and issues involved in all these writ petitions, the petitioner and the official respondents are one and the same. The unofficial respondents are farmers. Hence, all the writ petitions were heard together and are being disposed of by this common order. 3. Heard learned counsel for the petitioner, learned Government Pleader for Agriculture appearing for official respondents and Sri K. Rathanga Pani Reddy, learned counsel appearing for the unofficial respondents. 4. The petitioner - Ms/Kaveri Seeds Limited is a private limited company. It's case is that it is engaged in the business of seed production, R & D and trading. In the course of business, the petitioner also entered into the business of Hybrid and GM cotton seed production. The petitioner has taken necessary approvals from the Genetic Engineering Approval Committee (GEAC) of the Government of India, Ministry of Science and Technology, Department of Biotechnology. The petitioner is in the business of cotton seed production and sale for a decade and a half. The petitioner sells cotton seeds under the brand name 'Jaadoo BGII' and 'ATM BG II' and other brands to farmers across the Country through distributors/dealers. While the matter stood thus, some of the farmers in Kurnool District, the unofficial respondents, who had purchased cotton seeds of the petitioner company during Kharif 2021 complained to the agriculture authorities. The 3rd respondent, acting on the said complaints received by the farmers, had given a requisition to Acharya N.G. Ranga Agriculture University, LAM, Guntur to appoint a committee and call for a report on the farmers' complaints. The University scientists and agriculture department officials of Kurnool District and employees of the petitioner company participated in the field visits 08.11.2021 and 09.11.2021 to verify the farmers' complaints. The university committee had visited some of the farmers' fields. At that time, each farmer had a different grievance, ranging from germination, non-blooming of bud to falling of bud. The University scientists and agriculture department officials of Kurnool District and employees of the petitioner company participated in the field visits 08.11.2021 and 09.11.2021 to verify the farmers' complaints. The university committee had visited some of the farmers' fields. At that time, each farmer had a different grievance, ranging from germination, non-blooming of bud to falling of bud. After analysing the data and examining relevant issues, the agriculture university scientists gave inspection report dated 15.11.2021 to the 3rd respondent identifying certain reasons for low yield of the crop. The reasons stated in the report are beyond the warranties given by the petitioner on its label. The problems faced by the farmers are basically due to the weather conditions which favoured the build-up of sucking pest population, especially thrips, which transmit the Tobacco Streak Virus (TSV). The farmers had stated that they had been using the petitioner's seeds for the past decade and have never faced any problem. In the entire report no blame was put on the seeds supplied by the petitioner. After submission of the report, the petitioner did not receive any communication from the respondents. The petitioner is also not aware about the reference made to the 4th respondent for determination of compensation. On 28.12.2021 the petitioner company received the order dated 21.12.2021 directing the petitioner company to pay compensation to the farmers who were shown in the annexure to the said award(s)/order(s). Aggrieved by the said award(s)/order(s), the present writ petitions are filed. 5. Learned counsel for the petitioner submits that as per the provisions of the Andhra Pradesh Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Act, 2007 ['the Act' for short], the Controller appointed under Section 3 of the Act has the power to regulate the supply, distribution and sale of cotton seeds. Under Section 4 of the Act, the Controller was empowered to give directions as to the variety, quality or quantity of the cotton seeds to be sold by any person with a license to do so. Under Section 5 of the Act, the Controller has the power to issue a registration to the seed firms. Under Section 7 of the Act, the producer of cotton seeds is obligated to disclose the expected performance of such seed, under given conditions to the Controller. Under Section 5 of the Act, the Controller has the power to issue a registration to the seed firms. Under Section 7 of the Act, the producer of cotton seeds is obligated to disclose the expected performance of such seed, under given conditions to the Controller. If the seed fails to provide the expected performance under such conditions, the Government or the farmer may claim compensation as prescribed. Part VI of the AP Cotton Seed Rules, 2007 ['the Rules', for short] deals with compensation to farmers. Rule 28 deals with the procedure for handling complaints lodged by the farmers. The complaint should be vis-a-vis concerning the warranties given by the producer on the label. A District Level Committee would be constituted to deal with the farmers' complaints. The committee would consist of the Joint Director, Agriculture, as Chairman, a scientist and representative of farmers would be the committee members. Thus, as per the above Rule, a District Level Committee shall be constituted for assessment and evaluation of crop losses sustained by the farmer, only for the following four conditions: a) Poor germination - complaint has to be raised within 10 days after sowing. b) susceptibility to bollworm and other pests and diseases as claimed by seed producer-complaint has to be raised immediately after noticing the incidence. c) Genetic impurity - complaint has to be raised within 15 days from the date of 50% flowering or at appropriate stage. d) Non-adaptability - complaint has to be raised at an appropriate stage of crop. In the case on hand, the farmers, who are said to have lodged their complaints with the agriculture department, did not give complaint within the time specified under Rule 28 of the Rules. Even copies of the complaints were not furnished to the petitioner and no remarks were called for and no opportunity of hearing was given. The compliance report dated 12.11.2021 submitted by the Director of Research, ANGRAU, Lam, Guntur, to the 3rd respondent demonstrate that the alleged crop loss does not fall in any of the above said categories to burden the petitioner with any liability. The compliance report dated 12.11.2021 submitted by the Director of Research, ANGRAU, Lam, Guntur, to the 3rd respondent demonstrate that the alleged crop loss does not fall in any of the above said categories to burden the petitioner with any liability. The petitioner company sold more than 14,17,214 packets of Jaadoo BG-II cotton hybrid and 10,64,175 packets of ATM BG-II cotton hybrid during the Kharif, 2021 season across the Country and more particularly the company sold 2,99,703 packets of Jaadoo BG II Cotton hybrid and 24,104 packets of ATM BG-II hybrid company in Andhra Pradesh. Except in these particular parts of the District, no such complaints were made to the knowledge of the petitioner. 6. The procedure contemplated under Rule 29 was not followed while awarding the compensation. While looking into a farmer's complaint, the representative of seed producer and complainant farmer will be called for field inspection and hearings of committee. The District Level Committee, after examining the complaint, field verification report of the District Level Committee and hearing the seed producer, shall decide the rate of compensation. These kinds of safeguards were made in the Rules as the award is punitive. The same were breached in every respect. The 4th respondent passed the impugned award(s) awarding compensation to farmers, without putting the petitioner company on notice. The impugned award(s) does not determine the issues particular to respective farmers. The award(s) does not attribute any fault with the seeds supplied by the petitioner and if the warranties given by the petitioner company on its product labels were incorrect or failed. The award(s) are contrary to the report given by the agriculture university scientist. The said report is relied only to the extent of crop loss. No effort is made to enquire whether such crop loss is only in the fields in which the petitioner company seeds were planted or in the region where different varieties of seeds were used by farmers. The petitioner company was never put on notice before passing the impugned award(s). Except referring the scientific reports, no reasons were given in the award(s) for arriving at the conclusion. 7. The petitioner company was never put on notice before passing the impugned award(s). Except referring the scientific reports, no reasons were given in the award(s) for arriving at the conclusion. 7. Though it is stated in the impugned award(s) that in case aggrieved with the award(s) the aggrieved party may approach the appellate authority under Rule 29 of the Rules, since there is no determination of issues and no issues were attributed to the product of the petitioner and no reasons were given, the petitioner approached this Court. Further, as on date of filing of the writ petitions the appellate authority is not constituted. In support of his contentions, learned counsel for the petitioner relied on the decisions in Messrs. Mahabir Prasad Santosh Kumar v. State of UP and others [ 1970(1) SCC 764 ], Oryx Fisheries Private Limited v. Union of India and others [ (2010) 13 SCC 427 ] and Institute of Chartered Accountants of India v. L.K. Ratna and others [ (1986) 4 SCC 537 ]. 8. The 3rd respondent - Joint Director of Agriculture filed counter on her behalf and on behalf of respondents 1, 2 & 4 inter alia stating that during kharif 2021, 1899 farmers complained to the District Level Committee against the inferior quality of Jaadoo BG-II and the district level committee awarded compensation to the said farmers in 16 mandals in Kurnool District. Farmers of Basapuram, G. Hosalli and Hanavalu villages of Adoni Mandal in Kurnool District complained several times during the 4th week of October 2021 to the Joint Director of Agriculture, Kurnool and the Joint Director of Agriculture, Kurnool requested the Associate Director of Research (ADR), Regional Agricultural Research Station (RARS), Nandyal to depute team of scientists on 30.09.2021. Company representatives were also informed to attend the field visits along with scientist team. ADR, RARS has deputed team of scientists and accordingly the team has conducted field inspection on 01.10.2021 and submitted their report. Along with agriculture scientists and department officials, Karunakar Reddy, Sales Officer of the petitioner company visited complaint farmers' fields on 01.10.2021. Company representatives were also informed to attend the field visits along with scientist team. ADR, RARS has deputed team of scientists and accordingly the team has conducted field inspection on 01.10.2021 and submitted their report. Along with agriculture scientists and department officials, Karunakar Reddy, Sales Officer of the petitioner company visited complaint farmers' fields on 01.10.2021. In the visited cotton fields, the characters of the hybrids of seeds of the petitioner company are in agreement to the expressed traits but as per the crop cutting experiments of cotton crop are under progress in Kurnool District being done scientifically by both the Department of Planning and agriculture and the date of the current situation reveals that in the same climatic situation i.e., rainfed condition, most of the other cotton hybrids grown in Kurnool District have shown significantly good yield compared to Jaadoo and ATM hybrid of the petitioner company which can be interpreted because of heterogeneity, more susceptibility to sucking pests especially thrips and other related issues of hybrids of petitioner company. The plea of the petitioner that reasons mentioned in farmers compensation proceedings/university report were beyond warranties given by the petitioner is false and in the first report furnished by the team of scientists it was clearly evident that due to heterogeneity, farmers have suffered a yield loss of more than 50%. After submission of report by the team of scientists, on 15.11.2021, the same was also furnished to the petitioner and in response to the observations made during the field visit, the petitioner's authorized signatory has offered their explanation to the Collector & District Magistrate, Kurnool, on 23.12.2021, and has also participated in all the District Level Committee hearing proceedings conducted from 18.12.2021 to 19.12.2021 for award of compensation to complaint farmers. Therefore, the contra contention of petitioner that it did not receive any communications from the respondents is far from truth. The District Level Committee was formed as per the guidelines stipulated and field inspections were conducted as per the procedure laid down along with petitioner's representatives. All the inspection and field verification reports were made available to the petitioner. DLC hearing proceedings were done in the presence of petitioner's company representative for awarding compensation to the affected farmers and finally compensation proceedings orders were issued to the petitioner. The petitioner was given enough opportunity of being heard at various levels before passing the impugned award(s). All the inspection and field verification reports were made available to the petitioner. DLC hearing proceedings were done in the presence of petitioner's company representative for awarding compensation to the affected farmers and finally compensation proceedings orders were issued to the petitioner. The petitioner was given enough opportunity of being heard at various levels before passing the impugned award(s). Both the inspection reports furnished by the team of scientists on 12.10.2021 and 15.11.2021 reiterates the fact that the hybrids of the petitioner company i.e., Jaadoo and ATM have shown lesser vigor and expression, observed heterogeneity in comparison with other cotton hybrids in the vicinity, higher level of incidence of pest and diseases and concluded that though the crop growth is in accordance to traits expressed as per label, there is a marked variation in number of picked bolls and number of young bolls, which are very much less in these hybrids of the petitioner compared to other hybrids grown in same climatic conditions, which clearly indicates that the said hybrids have shown increased level of susceptibility to pests and diseases compared to other prominent hybrids grown in the vicinity. Hence the complaints lodged by the farmers, inspection reports submitted in Form 'O' and Form 'N' and award of compensation to farmers are justifiable and within the purview of the existing Acts and Rules in force. 9. Learned Government Pleader for Agriculture reiterated the averments in the counter and has drawn the attention of this Court to the report given by the team of scientists, Section 7 of the Act, Rules 27, 28 of the Rules and other provisions of the Act and the Rules and submits that the Act and the Rules were passed to regulate the supply, distribution and sale of transgenic and genetically modified cotton seed and control the sale price of such cotton seed in Andhra Pradesh and the said Act also deals with for the matters connected there with or incidental thereto. As per Rule (c) of Rule 28 of the Rules, the Seed Inspector have inspected all the complaint farmer fields and furnished the inspection reports in Form N and in Form O to the District Level Committee and all the inspection reports furnished by the seed inspector were also made available to the staff of the petitioner company who in turn have participated in all the proceedings of DLC on 18.12.2021 and 19.12.2021 before awarding compensation to the farmers. The complaints lodged by the farmers are within the purview of the warranties given by the petitioner on its label as all the farmers complained loss of crop yield due to pest incidence and improper crop stand. The impugned award(s) has been passed as per the Form Q duly referring to all the scientific reports and therefore, it cannot be said that no reasons are given. Though there is effective alternative of appeal against the impugned award(s), petitioner without availing the said remedy, approached this Court. The writ petitions are liable to be dismissed. 10. Learned counsel appearing for the unofficial respondents while reiterating the averments in the counter filed by the unofficial respondents submitted that the writ petitioner only filed the report given by the scientist of Guntur and not the report given by the scientist of Nandyal wherein it is specifically stated about the defect of the seed and loss of the yield by more than 50%. In fact the loss of yield is 90%. The material papers filed along with the counter of 3rd respondent reveals about the participation of the representatives of the petitioner company at all levels. All the varieties of cotton seeds except Jaadoo BG-II gave an average yield of 12 to 15 quintals in the vicinity, whereas the unofficial respondents could not get even two quintals also and compensation awarded is only for three quintals. In fact the affected farmers are entitled for the compensation on par with the yield of other cotton varieties in the vicinity. Though the affected farmers are entitled for the compensation for 12 quintals, the 4th respondent only granted compensation for 3 quintals. The said compensation is meager. No farmer will complain about the quality of the seed if he gets the normal yield. Since the seed totally failed, farmers gave a complaint. Though the affected farmers are entitled for the compensation for 12 quintals, the 4th respondent only granted compensation for 3 quintals. The said compensation is meager. No farmer will complain about the quality of the seed if he gets the normal yield. Since the seed totally failed, farmers gave a complaint. The petitioner company is making huge profits in thousands of crores by selling the seeds to farmers and when the seed is found defective and meager compensation is granted after following the procedure and giving opportunity, a statutory and moral duty is cast upon them to pay the said meager compensation awarded. 11. Having considered the facts and circumstances of the case, rival submissions of the learned counsel for both sides and on perusal of the material record, this Court found that the writ petitions are filed questioning the award(s) passed by the 4th respondent stating that the said award(s) is/are bereft of any reasons and in violation of principles of natural justice and in contravention of the provisions of the Act and the Rules and that no purpose would be served even though appeal is preferred and that even the appellate authority does not exist. However, learned Assistant Government Pleader produced copy of G.O. Rt. No. 946 dated 26.07.2017 whereby the appellate authority to conduct hearing of appeals received from the aggrieved parties was constituted. When there is an efficacious alternative remedy available to the petitioner, this Court generally would not exercise its jurisdiction under Article 226 of the Constitution. Further, this Court found that disputed questions of fact do arise for consideration of this Court in the process of adjudication of the lis which requires enquiry and expertise in the particular field. Therefore, without going into merits of the case, in the interests of justice, this Court felt it appropriate to dispose of the writ petition giving liberty to the petitioner to avail the effective remedy of appeal under the provision of Rule 29 of the Rules. 12. Therefore, without going into merits of the case, in the interests of justice, this Court felt it appropriate to dispose of the writ petition giving liberty to the petitioner to avail the effective remedy of appeal under the provision of Rule 29 of the Rules. 12. Accordingly, the Writ Petitions are disposed of giving liberty to the petitioner to avail the effective remedy of appeal(s) under the provision of Rule 29 of the Rules, within a period of four weeks from the date of receipt of a copy of this order and on the petitioner filing such appeal(s), the appellate authority is directed to consider the same on its own merits and pass reasoned order(s) as per the provisions of the Act and the Rules made thereunder, without reference to any delay, as expeditiously as possible preferably within a period of eight weeks from the date of filing the appeal(s) and communicate the same to the petitioner. Till such time, the respondents shall not initiate any coercive steps for recovery of the amount under impugned award(s). If the petitioner fails to file the appeal(s) as directed by this Court, the respondents are at liberty to execute the impugned award(s). There shall be no order as to costs. 13. As a sequel, miscellaneous applications pending, if any, shall stand closed.