*THE HON'BLE SRI JUSTICE P.S. NARAYANA +W.P.No.21899 OF 2007 % 28-01-2005 # M/s.Sri Sai Agritech. .. Petitioner And $ The Commissioner of Agriculture, Andhra Pradesh and another .. Respondents <GIST: >HEAD NOTE: ! Counsel for petitioners : Sri S.V.Bhatt ^ Counsel for respondents : G. P. for Agriculture ?CASES REFERRED : 1 (2003) 6 SCC 675 THE HONOURABLE SRI JUSTICE P.S. NARAYANA W.P.No.21899 of 2007 Date: 05 -12 -2007 Between: M/s. Sri Sai Agritech, Plot No.254, Shop No.1, Sri Venkateswara Nilayam, Bhageeratha Colony, Mahabubnagar, rep. by its Proprietor K.Naga Raju Petitioner And The Commissioner of Agriculture, Andhra Pradesh, Hyderabad and another Respondents THE HONOURABLE SRI JUSTICE P.S.NARAYANA W.P.No.21899 of 2007 ORDER: 1. This court ordered notice before admission on 12-10-2007. Counter affidavit is filed. 2. M/s. Sri Sai Agrictech, represented by its proprietor, filed the present writ petition for a writ of Mandamus to declare the Proceedings No. SR Cell (1) 264/2007, dated 04.07.2007 of the second respondent and as confirmed by the first respondent in proceedings dated 18.08.2007, as being illegal, irregular, unreasonable, arbitrary exercise of powers in gross violation of principles of natural justice apart from being contrary to the provisions of the Seeds Act, 1966 (hereinafter in short referred to as ‘the Seeds Act’) and the Seeds (Control) Order, 1983 (hereinafter in short referred to as ‘the Control Order’) and consequently, set aside the same with a further direction to the respondents to restore the licence and renew the same and pass such other orders. 3. Sri S.V.Bhatt, the learned counsel representing the writ petitioner, had taken this court through the affidavit and the counter affidavit and also the relevant clauses of the Control Order and would submit that in view of the facts and circumstances, it is clear that an opportunity of being heard as specified under clause 15 of the Control Order had not been complied with. It would be appropriate to set-aside these orders and give an opportunity to the petitioner to make an application in accordance with law and let the competent authority consider such application not being influenced by the observation, if any made already, in the proceedings in question. The learned counsel had drawn the attention of this court to the relevant clauses of the Control Order and also the relevant provisions of the Seeds Act. 4. Per contra, the learned Government Pleader for Agriculture had taken this court through the contents of the counter affidavit filed by the second respondent and would maintain that in the light of the reasons recorded, this is not a fit case to be interfered with by a writ court. The learned Government Pleader also would maintain that virtually what had been prayed is a writ of certiorari though in the relief column it was specified as a writ of Mandamus and in the light of the facts and circumstances, this is not a fit case where the certiorari jurisdiction to be exercised. 5. Heard the counsel and perused the material placed before this court. 6. It is averred that the petitioner is an agricultural graduate and ventured to start self employment and therefore, started a seeds business in the name and style as M/s. Sri Sai Agritech, plot No.254, Shop No.1, Sri Venkateshwara Nilayam, Bhagiratha Colony, Mahabubnagar. The petitioner obtained a licence from the competent authority-second respondent i.e. the licence to carry on the business of the dealer in seeds vide licence bearing No.83 dated 26.06.2001. As per the licence, the sale premises is Plot No.254, Shop No.1, Sri Venkateswara Nilayam, Bhagiratha Colony, Mahabubnagar. The processing, packing and storage premises for the business is Door No.1-133, Amistapur Village, Bhoothpur Mandal, Mahabubnagar District. 7. It is also stated that the Control Order was issued by the Central Government under the powers conferred by Section 3 of the Essential Commodities Act, 1955. The said Order came into force on 30.12.1983. Clause 3 of the Control Order deals with the dealer to obtain licence and no person shall carry on the business of selling, exporting or importing seeds at any place except under and in accordance with the terms and conditions of the licence granted to him. Clause 6 of the Control Order prescribes that the validity of licence is for a period of three years from the date of its issue and clause 7 of the Control Order deals with the renewal of licence. Form-‘A’ is a form of application to obtain dealers’ licence and this form is under clause 4 of the Control Order. Form-‘B’ deals with the terms and conditions of licence. Form-‘C’ deals with the renewal of licence under clause 7 of the Control Order. 8. It is also stated that the petitioner submitted an application for a licence and the same was granted on 26-06-2001 and it was renewed from time to time and it was renewed up to 25.6.2007. 9. It is also stated that on 15.03.2007 at about 12.30 p.m. the Assistant Director of Agriculture, Jedcharla, Mahabubnagar District has conducted the inspection at the petitioner’s processing, packing and storage premises at Door No.1-33, Amistapur, Bhoothpur Mandal, Mahabubnagar District and seized the seeds by conducting a Panchanama and taken sample of seeds of Sindhu Hybrid cotton bulk seed and Dharma bulk seed and sent the samples to the laboratory for testing. The Seed Inspector attached to the office of the Assistant Director, Jedcharla submitted a report in Form No. III pointing out the defects of the seed packets and issued seizure order in Form No. IV and as per the order, five items were seized. 10. Further it is averred that the petitioner submitted a representation to the Commissioner and Director of Agriculture, Hyderabad, with a request to take another sample since the Assistant Director of Agriculture, who has taken the samples has a grudge against the petitioner and accordingly the Commissioner and Director of Agriculture, Hyderabad has issued orders on 31.03.2007 by deputing three officers as special squad. They are Viz., Sri N.S.Saxena, Deputy Director of Agriculture, Sri V.Siva Prasad, Assistant Director of Agriculture, Office of the Commissioner and Director of Agriculture and Sri P.Jaya Krishna and A.O., D.N.A. Finger Printing Laboratory and they have visited the petitioner’s business premises on 01-04-2007 and again taken the samples by conducting a panchanama, which are again sent for testing to the Seed Testing Laboratory, Yemmignur, Kurnool District. 11. Further it is stated that the second respondent vide proceedings dated 30.03.2007 has suspended the licence of the petitioner on the ground that the petitioner is in unauthorized possession of cotton seed stocks. It is alleged that the petitioner was found to be in possession of unlicensed stock of seed of dharma Bt cotton (470 Kgs), Sindu Bt cotton (1300 kgs) cotton seed stocks of M/s.Kisan Biogenes, Raj Bhavan Road, Hyderabad (122 packets) and cotton seed stocks of M/s. Indian Biogene Limited, Hyderabad (46 packets) and therefore, observed that it is violation of clause 3 (1) of the said Control Order, since the licence does not include these varieties/hybrids. It is also observed in the said orders dated 30.03.2007 the petitioner’s firm has involved in deliberate production of genetically modified seed (Bt cotton seed) without permission. Therefore, it is violation of Rule 7(1), 8 and 9 (1) of Rules for the manufacture, use/import/export and storage of hazardous microorganisms or cells 1989 under Environmental Protection Act, 1986. It is also alleged that seed stocks were expired and no proper documents were produced indicating their disposal and it is held that it is violation of clause 8-A of the Control order. 12. Further it is stated that before suspension orders, a show cause notice dated 16.03.2007 was issued and detailed explanation was submitted on 24.03.2007 denying all the allegations and thereafter, the suspension order dated 30.03.2007 was issued. The show cause notice dated 16.03.2007 reads as hereunder: ”SR Cell (1) 937/2004 Commissionarate of Agriculture 16/03/2007 Hyderabad. SHOW CAUSE NOTICE Sub: Seeds-M/s.Sri Sai Agritech, Mahabubnagar- Unauthorized possession of cotton seed stocks-Show Cause Notice –Issued-Regarding. Ref: Inspection of premises of M/s. Sri Sai Agritech, Bhoothpur Mandal, Mahabubnagar district by a special squad from O/o. Commissionerate of Agriculture on 15/3/07. ****** It is brought to the notice of the undersigned that M/s. Sri Sai Agritech, Bhoothpur Mandal, Mahabubnagar district is found possessed the following stocks of seed in the processing, packing and storage premises of M/s.Sri Sai Agritech located at Door No.1- 133, Amistapur (V), Bhoothpur Mandal, during the inspection of the premises vide reference cited. Seed stocks for which license is not issued: Dharma Bt cotton-470 Kgs, Sindhu Bt cotton-1300 Kgs. Cotton seed stocks of M/s.Kisan Biogenes, Rajbhavan Road, Hyderabad- 122 packets, Cotton seeds stocks of M/s .Indian Biogene Ltd., Hyderabad-46 packets. Seed stocks with expiry of validity: Cotton-Dharma-420 packets, Cotton-Sindhu-340 packets, Sunflower-Rahul-288 packets, jowar-Bapuji-21 quintals. In this connection, it is informed that centralized seed license bearing no;83 Valid up to ; 25\6\2007, granted to M/S Sri Sai Agritech, Mahabubnagar does not include above said Bt cotton hybrids and cotton varieties of M/S kisan Biogenes, Rajbhavan Road. Hyderabad and M/S Indian Biogene Ltd, Hyderabad and these 2 firms are also not licensed in the state to produce and market seed. Hence, possession of such seed stocks is a violation of Clause 3 (1) of Seeds (Control) Order , 1983. Further, it is established that the firm has involved in deliberate production of genetically modified seed (Bt cotton seed) without following the procedures laid down by GEAC (Genetic Engineering Approval Committee) and seeking the permission from GEAC and keeping the licensing authority absolutely uninformed which is a violation of Rule 7(1), 8 and 9(1)of Rules for the Manufacture, Use/Import/Export and storage of Hazardous Microorganisms/Genetically Engineered Organisms or Cells, 1989 under Environmental Protection Act ,1986. Besides, it is found that seed stocks of Cotton were expired and no proper documents were produced indicating their disposal, which is viewed as intention of the firm for sale of the expired seed, thus it is a violation of Clause 8 (A) of Seeds (control) Order, 1983 that attracts suitable action under Clause 15 (b) of Seeds (Control) Order, 1983.. In view of the above contraventions, M/S Sri Sai Agritech, Mahabubnagar is directed to show the cause, why the licence should not be cancelled or suspended under Clause 15 (b) of seeds (control) order, 1983 by the licensing authority , for the violations committed by the firm. The explanation of the firm should reach this office within a period of 7 days from the date of receipt of this Show-Cause notice and in case of non-receipt of explanation within stipulated period, it is construed that M/S.,Sri Sai Agritech,Mahabubnagar has nothing to say and the action will be initiated under the provisions of seed laws, without any further notice. Sd/-D.Rushendranath Licensing Authority & Addl. Director of Agriculture II” 13. The order of suspension dated 30-03-2007 reads as hereunder: “Proceedings of the Licensing Authority and Addl. Director of Agriculture II, Office of the Commissioner & Director of Agriculture, Andhra Pradesh,Hyderabad. SR Cell (1) 264/2007 Dt.30/03/2007 Sub: Seeds-M/s.Sri Sai Agritech, Mahabubnagr, Unauthorized possession of cotton seed stocks- Opportunity of being heard given- Explanation found unsatisfactory-Licence suspended- Orders issued-Regarding. Ref: 1)Inspection of premises of M/s. Sri Sai Agritech, Bhoothpur Mandal Mahabubnagar district by a special squad from O/o. Commissionerate of Agriculture on 15/3/07. 2)Show-Cause notice issued to M/s.Sri Sai Agritech, Bhoothpur Mandal, Mahabubnagar District vide letter No.SR Cell (1) 937/2004 dated 16//3/07. 3) Reply to M/s.Sri Sai Agritech, Bhoothpur Mandal,Mahabubnagar to the show cause notice dated 24/3/07. ******* Through the reference 2nd cited, a show cause notice was issued to M/s.Sri Sai Agritech, Bhoothpur Mandal, Mahabubnagar since the firm is found to possess the unlicensed stocks of seed of Dharma Bt cotton (470 kgs). Sindhu Bt cotton (1300 kgs), cotton seed stocks of M/s. Kisan Biogenes, Rajbhavan Road, Hyderabad (122 packets). Cotton seed stocks of M/s. Indian Biogene Ltd, Hyderabad (46 packets) in the processing, packing and storage premises of M/s.Sri Sai agritech located at Door No.1-133, Amistapur (V), Bhoothpur Mandal, during the inspection of the premises vide reference 1st cited which is a violation of Clause 3 (1) Seeds (Control) Order, 1983 since the centralized seed licence bearing No.83 valid up to 25/6/2007 granted to M/s. Sri Sai Agritech, Mahabubnagar does not include these varieties/hybrids. Based on this, it is also evident that the firm has involved in deliberate production of genetically modified seed (Bt cotton seed) without following the procedures laid down by GEAC (Genetic Engineering Approval Committee) and seeking the permission from GEAC and keeping the licensing authority absolutely uninformed which is a violation of Rule 7(1), 8 and 9 (1) of Rules for the Manufacture, Use/Import/Export and Storage of Hazardous Microorganisms/Genetically Engineered Organisms or Cells, 1989 under Environmental Protection Act, 1986. Besides, it is found that seed stocks of Cotton Dharma (420 packets), Cotton Sindhu (340 packets), Sunflower Rahul (288 packets), Jowar Bapuji (21 quintals) were expired and no proper documents were produced indicating their disposal, which is viewed as intention of the firm for sale of the expired seed, thus it is a violation of Clause 8A of Seeds (Control) Order, 1983 that attracts suitable action under Clause 15 (b) of Seeds (Control) Order, 1983. In reply to the show cause notice furnished by the firm vide reference 3rd cited is analyzed and found unsatisfactory and unmaintainable. ORDER: Keeping in view of the above facts and the unsatisfactory reply furnished by M/s. Sri Sai Agritech, Bhoothpur Mandal, Mahabuibnagar vide reference 3rd cited, it is observed that the reply is found unmaintainable and unconvincing, thus the charges of violations have been established and found liable for action under Clause 15 (b) of Seeds (Control) Order, 1983. Therefore, the Centralized Seed License bearing No.83 valid up to 25/6/2007 granted to M/s. Sri Sai Agritech, Bhoothpur Mandal, Mahabubnagar by Licensing Authority is hereby suspended till further orders, under Clause 15 of Seeds (Control) Order, 1983, after giving an opportunity of being heard as per the procedure. Licensing Authority & Addl. Director of Agriculture II.” 14. It also stated that it appears the Assistant Director of Agriculture, the Seed Testing Laboratory, Rajendernagar, Hyderabad, has submitted an analytical report on 4.4.2007 and as per the report, the cotton seed samples, which were drawn from dharma and sindhu varieties, were found the presence of Bt protein. The second respondent, who is licensing authority also vested with the powers either to suspend or cancel the licence, in gross violation of principles of natural justice has passed the orders dated 4.7.2007 cancelling the licence of the petitioner. The said order reads as hereunder: “Proceedings of the Licensing Authority and Addl. Director of Agriculture II, Office of the Commissioner & Director of Agriculture, Andhra Pradesh, Hyderabad. SR Cell (1) 264/2007 Date:04-07-2007 Sub: Seeds ( Control ) Order, 1983- M/s .Sri Sai Agritech, Mahabubnaar- Unauthorized possession of cotton seed stocks- Opportunity of being heard given- Explanation found unsatisfactory- Conformation of presence of Bt protein through analytical results- License cancelled- Orders issued- Regarding. Ref: 1) Inspection of premises of M/s. Sri Sai Agrtech, Bhoothpur Mandal, Mahabubnagar district by a special squad from O/o. Commissionerate of Agriculture on 15/3/07. 2) Show–Cause notice issued to M/s. Sri Sai agritech, Bhoothpur Mandal, Mahabubnagar district vide letter No.SR Cell (1) 937/2004 dated 16/3/2007. 3) Reply of M/s. Sri Sai Agritech, Bhoothpur Mandal, Mahabubnagar to the show cause notice dated 24/3/2007. 4) Proceedings of the Licensing Authority and Addl. Director of Agriculture II, O/o. Commissionerate of Agriculture vide proceedings No .SR Cell (1) 264/2007, dated 30/3/2007. 5) Analytical report of ADA, Seed Testing Laboratory, Rejendernagar vide RoC No.931/06, dated 4/4/2007. ***** Through the reference 2nd cited, a show cause notice was issued to M/s. Sri Sai Agritech, Bhoothpur Mandal, Mahabubnagar district since the firm is found to possess the unlicensed stocks of seed of Dharma Bt cotton (470 Kgs), Sindhu Bt. Cotton (1300 kgs), cotton seed stocks of M/s. Kisan Biogenes, Raj Bhavan Road, Hyderabad, an unlicensed dealer (122 packets), cotton seed stocks of M/s. Indian Biogene Ltd, Hyderabad, an unlicensed dealer (46 packets) in the processing, packing and storage premises of M/s.Sri Sai Agritech located at Door No.1-133, Amistapur (V), Bhoothpur Mandal, during the inspection of the premises vide reference 1st cited which is a violation of Clause 3(1) of Seeds (Control) Order, 1983 since the centralized seed license bearing No.83, valid up to 25/6/2007, granted to M/s. Sri Sai Agritech, Mahabubnagar does not include above mentioned varieties/hybrids. Further, through a self declaration dt.15/3/2007 made by the Managing Director of M/s.Sri Sai agritech, Bhoothpur Mandal, Mahabubnagar district, it is confessed by him that varieties viz., Dharma and Sindhu are Bt. Cotton seed. Based on this, it is also established that the firm has involved in deliberate production of genetically modified seed (Bt cotton seed) without following the procedures laid down by GEAC (Genetic Engineering Approval Committee) and seeking the permission from GEAC and keeping the licensing authority absolutely uninformed which is a violation of Rule 7(1), & 8 and 9(1) of Rules for the Manufacture, Use/Import/Export and Storage of Hazardous Microorganisms/Genetically Engineered Organisms or Cells, 1989 under Environmental Protection Act, 1986. Besides, it is found that seed stocks of cotton-Dharma (420 packets), cotton-Sindhu (340 packets), Sunflower-Rahul (288 packets), Jowar-Bapuji (21 quintals) were expired and no proper documents were produced by the firm indicating their disposal, which is viewed as intention of the firm for sale of expired seed stocks, thus it is violation of clause 8A of seeds (Control) Order, 1983 that attracts suitable action under clause 15(b) of seeds (Control) Order,1983. The reply to the show cause notice furnished by the firm vide reference 3rd cited is examined and found unsatisfactory and unmaintainable. Accordingly, the centralized seed license bearing No.83 valid up to 25/6/2007 granted to the firm was suspended vide reference 4th cited. Through the reference 5th cited, the ADA, Seed Testing Lab, Rajendranagar has furnished the analysis report for cotton seed samples drawn from Dharma and Sindhu varieties and conformed the presence of Bt protein to an extent of 90% seeds as positive in Dharma variety where as 100% seeds are positive for Bt protein in case of Sindhu variety, which has further established the violation of said rules under Environmental Protection Act, 1986. ORDER: Keeping in view of the above facts and the unacceptable reply furnished by M/s. Sri Sai Agritech, Bhoothpur Mandal, Mahabubnagar district vide reference 3rd cited, it is found that the reply is unmaintainable and unconvincing, thus the charges of violations of Seed laws and Environmental Protection Act have been established which attract actions under Clause 15 (a) and (b) of Seeds (Control) Order, 1983. Therefore, the Centralized Seed License bearing No.83 valid up to 25/6/2007 granted to M/s. Sri Sai Agritech, Bhoothpur Mandal, Mahabubnagar district by Licensing Authority and suspended earlier vide reference 4th cited, is hereby cancelled under Clause 15 of Seeds (Control) Order, 1983. Licensing Authority & Addl. Director of Agriculture II” 15. It is also stated that the orders dated 4.7.2007 issued by the second respondent demonstrates that it is a prejudged order inasmuch as he refers to the show cause notice dated 16.3.2007 which was issued prior to suspending the licence and also refers to the reply given by the petitioner to show cause notice on 24.03.2007 which is also prior to the suspension order dated 30.03.2007. The suspension order dated 30-03-2007 was based on the show cause notice and the explanation submitted by the petitioner and the said explanation submitted to the show cause notice for suspension cannot be treated as an explanation for cancellation of the licence giving go-by to the procedure. It is also stated that the said order was made in violation of principles of natural justice. Since the impugned orders dated 4.7.2007 were passed cancelling the licence referring to the analytical report dated 4.4.2007 submitted by the Assistant Director, Seed Testing Laboratory, Rajendranagar. It is the minimum obligation to observe the principles of natural justice on the part of the licensing authority to put the petitioner on notice about the report received and call for his explanation giving independent reasons to show cause as to why the licence of the petitioner shall not be cancelled. Absolutely, without issuing any notice and opportunity based on the report of the Assistant Director of Agriculture dated 4.4.2007, the licence of the petitioner was cancelled. It is also stated that after the first panchanama conducted by the Assistant Director of Agriculture, Rajandranagar, on the representation of the petitioner, the first respondent had sent three officers as special squad to conduct inspection of the stocks in his premises and who have also drawn the samples and sent the same for testing before the laboratory and the special squad sent the seed samples to the Seed Testing Laboratory at Yemmiganoor, Kurnool District and as per the said report, there is no Bt protein in the seed samples. Therefore, the licensing authority ought to have waited for the report of the Seed Testing Laboratory, Yemmiganoor, which was sent by the special squad came from the Commissioner’s office and therefore, the findings arrived at by the licensing authority are bad in law. 16. Further aggrieved by the orders of the licensing authority in cancelling the licence of the petitioner by order dated 4.7.2007, the petitioner preferred an appeal before the first respondent under clause 16 of Control Order. Clause 16 dealing with the appeal reads as hereunder: “Appeal:- Any person aggrieved by an order:- (a) refusing to grant, amend or renew the licence for sale, export or import of seeds; (b) suspending or cancelling any licence, may within sixty days from the date of the order, appeal to such authority as the State Government may specify in this behalf, and the decision of such authority shall be final: Provided that an application for appeal shall accompany an appeal fee of rupees fifty.” 17. It is stated that in the grounds of appeal, it was categorically stated by the petitioner that there are two different reports with regard to the presence of Bt protein in the samples drawn from the petitioner’s business premises and both the reports are contra to each other. So far as the allegation with regard to presence of stocks belonging to M/s. Kisan Biogene, Raj Bhavan Road, Hyderabad, and M/s. Indian Biogene Limited, Banjarahills, Hyderabad, it was stated that the seed stocks do not belong to the petitioner and the transporter by inadvertently has unloaded the seed stocks at petitioner’s office premises, though they do not belong to him and also produced the way bill of M/s. New Famous Transport Company and which discloses that the said stocks belong to consignee M/s.K.Naga Raju, Hyderabad. Therefore, the petitioner requested the appellate authority to hold that the petitioner has not violated the conditions of licence as alleged by the licensing authority. With regard to the allegation of having seed stocks with expiry date i.e. Dharma cotton seed expired on 14.01.2007, Sindhu on 14.01.2007, and Sunflower (Rahul) on 4.12.2006 and the petitioner has got time for revalidation after conducting germination test till june,2007 and since the inspection took place only on 15.03.2007, there was ample time for the petitioner to subject the seeds for germination test till June,2007 since normally the seed will be sold only during the months of June and July of every year and requested the appellate authority to exonerate the petitioner from the misconceived allegations and set aside the orders of licensing authority dated 04.07.207. But unfortunately the appellate authority passed orders on 18.8.2007 confirming the orders of the licensing authority i.e, the appellate authority has upheld the cancellation of the petitioner’s licence and since the petitioner is left with no other alternative remedy, the same is challenged by way of writ petition. 18. The said order dated 18.08.2007 reads as hereunder: “ The appellate authority has carefully examined the appellants written appeal, Defense Counsel’s additional appeal and arguments taken place in the appellate authority meeting vis-à-vis licensing authority’s counter arguments and arrived at following conclusions: i. The appellate authority ignore the issues related to