* THE HON’BLE SRI JUSTICE V.V.S.RAO THE HON’BLE SRI JUSTICE N.V.RAMANA AND THE HON’BLE SRI JUSTICE P.S.NARAYANA + WRIT PETITION No.24818 of 2008 JUDGMENT: (Per Hon’ble Sri Justice V.V.S.Rao) % 01-05-2009 # Sri Kommisetty Nammalwar & Co ...Petitioner Vs. $ The Agricultural Market Committee, Guntur, Represented by its Secretary and others. ...Respondents ! COUNSEL FOR PETITIONER: Sri Ghanta Rama Rao ^ COUNSEL FOR RESPONDENTS: G.P. FOR Agriculture Sri K.Madhava Reddy <GIST >HEAD NOTE: ? CASES REFERRED: 1. 2000 (4) ALD 253 (DB) 2. (2001) 3 SCC 135 : AIR 2001 SC 931 3. 1990 (Supp) SCC 742 : AIR 1990 SC 2269 4. AIR 1980 SC 1124 5. AIR 1989 SC 1011 6. 1995 Supp (1) SCC 670 7. AIR 2004 SC 1796 : 2004 AIR SCW 792 8. AIR 1977 AP 147 (FB) 9. (1985) 3 SCC 398 : AIR 1985 SC 1416 10. AIR 1986 SC 555 11. (1979) 2 SCC 34 = AIR 1979 SC 193 12. AIR 1988 SC 1883 13. (2001) 7 SCC 358 14. (2002) 3 SCC 722 = AIR 2002 SC 1351 15. (2002) 7 SCC 273 = AIR 2002 SC 3240 16. (2003) 3 SCC 410 = AIR 2003 SC 843 17. (2004) 9 SCC 686 18. (2005) 2 SCC 271 = AIR 2005 SC 648 19. (2006) 3 SCC 434 = AIR 2006 SC 1489 20. (2007) 6 SCC 143 21. (2003) 11 SCC 146 22. (2007) 11 SCC 126 23. (2008) 11 SCC 573 24. (1989) 3 SCC 709 : AIR 1990 SC 123 25. (2005) 4 SCC 530 : AIR 2005 SC 2622 26. 2004 (3) ALD 285 (DB) 27. (1996) 9 SCC 681 28. AIR 1993 Pat 43 : (1992) 2 Pat LJR 253 29. 1875 (1) Ch.D 426 30. AIR 1969 SC 267 31. AIR 1969 SC 634 32. AIR 1975 SC 915 33. (1993) 3 SCC 161 34. (1999) 2 SCC 400 : AIR 1999 SC 738 35. AIR 1985 SC 1293 : 1985 Supp SCC 280 36. AIR 1983 SC 1246 37. (1995) 1 SCC 655 38. AIR 1954 SC 282 39. AIR 1954 SC 400 40. AIR 1954 SC 388 41. AIR 1961 SC 459 42. AIR 1963 SC 966 43. AIR 1965 SC 1107 44. (1980) 1 SCC 416 45. (1981) 4 SCC 391 46. (1983) 4 SCC 353 47. (1986) 1 SCC 722 : AIR 1986 SC 726 48. 1993 Supp (4) SCC 461 THE HON’BLE SRI JUSTICE V.V.S.RAO THE HON’BLE SRI JUSTICE N.V.RAMANA AND THE HON’BLE SRI JUSTICE P.S.NARAYANA WRIT PETITION No.24818 of 2008 JUDGMENT: (Per Hon’ble Sri Justice V.V.S.Rao) INTRODUCTION* Whether ‘ghee’ is a ‘product of livestock’, under the provisions of Andhra Pradesh (Agricultural Produce & Livestock) Markets Act, 1966 (the Act, for brevity) and whether Government Notification vide G.O.Ms.No.286, Agriculture & Cooperation (Mktg-1) Department, dated 05.07.1994 notifying among others, ‘ghee’ as one of the products of livestock for the purpose of regulation of purchase and sale in all notified market areas is not valid? These are the two questions before this Full Bench. The consideration of these two questions involves interpretation of Sections 3 and 4 of the Act. This case, or at least, one question involved in this case, was once decided by a Division Bench of this Court in Gurram Polisetti v Government of Andhra Pradesh[1]. The Division Bench judgment was assailed before the Supreme Court in Civil Appeal No.4484 of 2000 (Guntur District Produ.M.A.Co-op Un.Ltd v Agricultural Market Committee). The apex Court set aside the Judgment of this Court and remitted for fresh hearing. Thereafter, petitioners in remanded matters, withdrew those writ petitions with liberty to file fresh writ petition. This writ petition came to be filed thereafter. A learned single Judge, before whom initially matter was listed, referred writ petition to Division Bench. But, learned Chief Justice directed that the matter be heard by a Full Bench. BRIEF FACT OF THE MATTER The factual background is not disputed by the parties. In exercise of powers under Section 3(3) of the Act, Government issued Notification vide their order in G.O.Ms.No.2095, dated 29.10.1968 (hereafter called, declaration order), notifying twenty (20) areas for the purpose of the Act in respect of agricultural produce, livestock and products of livestock (hereafter cumulatively referred to as ‘market products’) specified in Schedule II thereto. Enumerated under seven (7) groups, like agricultural group, fruit group, vegetable group, fish group, livestock group, poultry group etc, livestock product group was shown as group VI, which includes ‘ghee’ besides raw hides, raw skins, bones, horn and hoof, and hair and wool. In Guntur District, four notified areas were declared. These are (i) Guntur, Sattenapalli Taluks; (ii) Tenali, Repalli Taluks; (iii) Ongole, Bapatla Taluks; and (iv) Narasaraopet, Vinukonda and Palnad Taluks. Three years after declaration order, Government of Andhra Pradesh issued G.O.Ms.No.1066, dated 30.07.1971 (published in A.P. Gazette, 14.10.1971) (hereafter called, market area order), notifying the market area for Guntur and notifying market products, which can be regulated by market committee concerned. Among various items, in this notification, ‘ghee’ was mentioned at Serial No.9. Similar notification was also issued in respect of Ongole Market Area vide G.O.Ms.No.976, dated 16.07.1971. It appears, Andhra Pradesh Agmark Ghee Packers’ Association, made a representation to delete ‘ghee’ from market area order. This was considered favourably and Government issued order being G.O.Ms.No.448, dated 29.03.1972 (hereafter called, deletion order) deleting ‘ghee’ from respective market area orders. By reason of deletion order, ‘ghee’ ceased to be a product of livestock in relation to Guntur and Ongole market areas, which means that market committees of these areas, could no more regulate sale or purchase of ghee nor levy market fee. It may be mentioned that when once an agricultural produce or products of livestock is/are notified, no person shall purchase, sale, store without obtaining a licence granted by the market committee (Section 7) and it shall be competent market committee to levy fees on such product (Section 12). Be that as it may, Government of Andhra Pradesh issued Notification vide their order in G.O.Ms.No.286, Agriculture & Cooperation (Mktg-I) Department, dated 05.07.1994 (hereinafter ‘impugned order’ or ‘revised order’), for the purpose of regulation of market products under Section 4(4) of the Act, by all Agricultural Market Committees (AMCs) in the State. The said notification reads as under. NOTIFICATION In exercise of the powers conferred by sub-section (4) of Section 4 of the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966 (Act 16 of 1966) and in supercession of all the G.Os., issued on the subject of Agricultural Produce, Livestock and products of Livestock and flowers, the Governor of Andhra Pradesh hereby directs that all the notified markets shall regulate the purchase and sale of all the notified agricultural produce, livestock and products of Livestock issued in Schedule-II to the G.O.Ms.No.2095, Food and Agriculture (Agrl.,) Department, dated 29.10.1968 and flowers issued in Schedule to G.O.Ms.No.610, Food and Agriculture Department, dated 21.10.1978 respectively as amended from time to time. As noticed supra, from the date of deletion order till the issue of impugned order, market fee was not levied on ‘ghee’ nor traders in ghee were required to obtain licence. After earlier writ petitions were dismissed as withdrawn, Guntur Agricultural Market Committee (GMC), first respondent herein, issued notice, dated 12.02.2007, under Section 7(1) of the Act to petitioner – proprietary concern engaged in ghee business, directing him to obtain licence for doing business in notified area, failure of which would entail in criminal prosecution under Sections 7(1), 12 (1) read with Section 23(1) of the Act. GROUNDS OF CHALLENGE Sri Ghanta Rama Rao, learned counsel for petitioner made the following submissions. A reading of definition of ‘livestock’[2] and ‘products of livestock’[3] in Sections 2(v) and 2(xv) respectively would show that ‘ghee’ is not a product of livestock as it is not directly extracted from livestock but it is extracted from product of a livestock i.e., butter or cream. Though cows, buffaloes, goats and sheep are defined as livestock, unless and until a product is directly derived from the livestock, it cannot be treated as a product of livestock. There ought to be direct link between the livestock and product of livestock and a further extraction from the product of livestock cannot be treated as a product of livestock for the purpose of the Act. Insofar as the second question is concerned, learned counsel submits that the impugned order, which is of general nature was issued without application of mind and a general notification without therebeing separate notification with respect to each notified market area under Section 4(4) for the purpose of the Act does not enable a market committee to regulate a market product or to levy market fees. Such notification for each AMC can only be issued after complying with the conditions precedent contemplated under Sections 3(2), 4(1) and 4(3) of the Act. Every one of these steps or conditions are indispensable and no notification under Section 4(4) of the Act in respect of AMC can be issued without first establishing market within the notified area and providing facilities in such market for carrying business in a market product. Alternatively, at all times unless and until facilities are provided for marketing ghee, GMC cannot regulate sale, purchase or storage of ‘ghee’. Learned counsel relied on decisions of this Court as well as Supreme Court to which a reference is made at appropriate place. Respondents’ Contentions Learned Government Pleader for Cooperation, Agriculture and Marketing and learned standing counsel for Guntur Agricultural Market Committee submit that there is no bar for the Government to issue general notification under Section 4(4) of the Act superseding all earlier marketwise notifications in respect of existing notified areas. When such power is exercised, all market committees can only regulate the sale and purchase of those notified market products and every time such market products are deleted or included for the purpose of regulation, there is no necessity to issue separate marketwise notification. Pointing out the scheme of Sections 3 and 4 of the Act, they would urge that inviting objections at the stage of Sections 4(1), 4(3) and 4(4) of the Act, compatible with principles of natural justice is not warranted nor called for within the scope of the provisions of the Act. According to them, Sections 3(3) and 4(4) of the Act would operate in different spheres and serve different purposes. They submit that Notification issued under these provisions is a one- time exercise of declaring notified areas or notified market area and every time market products are varied, there is no necessity to invite objections. They submit that when legislature specifically does not contemplate procedure as envisaged under Section 3(2) of the Act with reference to exercise of power under Sections 4(1), 4(3) and 4(4) of the Act, the Court cannot read any such procedure into the Act. They point out that though in respect of Ongole and Guntur Market Committees, deletion order was issued in respect of other market areas, 1968 declaration order issued remained intact and ‘ghee’ was never deleted from its Schedule II. Deriving assistance from Section 13 of Andhra Pradesh General Clauses Act, 1891, they contend that the power conferred under Section 4(4) of the Act includes power to include or exclude from list of products for the purpose of regulation without resorting to procedure contemplated under Section 4(3) of the Act. Lastly, they would urge that levy of market fee on a notified market product is not subject to quid pro quo and therefore, the petitioner cannot press the same for invalidating the impugned Government Order. They also relied on various authorities. A reference is made to these at appropriate place. IN RE POINT NO.1 ‘Ghee’ is not defined in the Act. It can be regulated under the Act if it can fall within the definition of ‘notified agricultural produce or livestock or products of livestock’[4] or within the definition of ‘products of livestock’ as defined in Section 2(x) and Section 2(xv) of the Act. The word or phrase used in the enactment is ordinarily defined by the Act itself. In case the legislature does not define, the Court has to look to General Clauses Act. If it is silent, meaning of the word as explained by decisions of Court of Record is the best guide. In case all these are not available, there is no bar to refer to dictionaries and understand meaning of word or phrase as generally understood by persons dealing with such a thing. As per Section 2(v) ‘livestock’ means, ‘cows, buffalos, bullocks, bulls, goats and sheep and includes poultry, fish and such other animals as may be declared by the Government by notification to be livestock for the purpose of the Act’. As per Section 2(xv) ‘products of livestock’ means ‘such products of livestock as may be declared by the Government by notification to be products of livestock for the purpose of this Act’. Thus, though the legislature used the word ‘means’ while defining ‘livestock’ and ‘products of livestock’, the phrase ‘such other … as may be declared by Government by notification’ appearing in both these definitions would show that the legislature conferred the power of defining words on Government. Not only the animals mentioned in Section 2(v) and not only the products of livestock defined in Section 2(xv), but all such animals and all such products of livestock as may be declared by notification are to be treated as livestock and/or products of livestock, as the case may be. If cows and buffalos are livestock, what are the products of ‘cows and buffalos’, whether only raw hides, raw skins, bones, horns and hoof, hair and wool of cows, buffaloes, goat, sheep etc., are products of livestock? Learned counsel for petitioner vehemently contends that ‘ghee’ cannot be treated as a product of cow or buffalo. Therefore, it is necessary to explain as to what are milk (buffalo or cow) or dairy products as understood by general public and those who engage in business of milk products. ‘Milk’, ‘curd’, ‘butter’, ‘butter milk’ and ‘ghee’ are traditional milk products in India. In modern times, other products like icecream, kulfi, kalakand, kova, srikand, gulab jamoon and a large varieties of sweets, chhana products (used for preparation of Rasgulla) became popular as modern products of milk. India is the largest producer of milk. As much as 46% of milk produced in India is consumed as liquid milk. Be that as it is, cow or buffalo milk when pasteurized has shelf life from 12 to 24 years. Therefore, since ages, milk is preserved by souring with aid of lactic cultures. The first of such resultant products developed is curds or yogurt (dahi) obtained by fermenting milk. It is an important item in Indian food. Dahi when subjected to churning yields butter (makkhan) and buttermilk as by-product buttermilk. The shelf life of dahi is two days whereas that of butter is a week. By simmering unsalted butter in a pot until all water is boiled, ghee is obtained which has shelf life of more than a year in controlled conditions[5]. ‘Ghee’ at least as of now is not synthesized. Ghee is a natural product derived ultimately from milk. So to say, milk is converted to dahi, then butter and then ghee is obtained by boiling butter. Scientifically or common sense point of view, even though ghee is not directly obtained from milk (which is certainly a product of cow/buffalo), it is certainly a product of a product of livestock i.e., cow or buffalo. It would be rather illogical or irrational to say that ghee is not a milk/dairy product or to say that it is not a product of livestock. Ghee is certainly a product of livestock. It is, therefore, to be seen whether ghee comes within the definition of product of livestock or within the meaning of notified product of livestock. Section 2(x) and 2(xv) of the Act used the plural ‘products of livestock’. The legislative intention is very clear that not only a product of livestock like milk (when notified by the Government), butter etc., are products of livestock but even derivative items (derived from a product of livestock) are intended to be product of livestock for the purpose of the Act. We are convinced that the term ‘ghee’ has to be interpreted on the basis of expression ‘products of livestock’ as defined in Section 2(xv) of the Act. Whatever products are declared as such by the Government by notification, they become products of livestock for purposes of the Act. I n Park Leather Industry (P) Limited v State of U.P.[6], Supreme Court considered the question whether the term ‘hides and skins’ includes ‘tanned leather’ which can be subjected to market fee under U.P.Krishi Utpadan Mandi Adhiniyam, 1964 (U.P. Act). It was contended that hides and skins in ‘raw’ condition are different from ‘tanned’ condition. Reliance was placed on various decisions arising under Sales Tax laws, which made distinction among various products derived or produced from the similar raw product. The Supreme Court rejected such argument and held that the meaning of a market product has to be understood on the basis of the expression of agricultural produce as defined in Section 2(a) of the U.P.Act. A perusal of Section 2(a) of the said Act makes it clear that an agricultural product would be a product which is specified in the Schedule or one which is admixture of two or more items and would also include any such item in a processed form. In our view it makes no difference, for the purposes of the said Act, that the item concerned is a different commodity from the one which is included in the Schedule. It is possible that by virtue of an admixture of two or more items or by virtue of processing a different commodity or item may come into existence. Even though a different commodity may come into existence, it would still be an “agricultural produce”. This is best illustrated by sugarcane which is in Schedule A Item VIII at Serial No. 14. From sugarcane, “rab” and “gur” are manufactured. They are already different commodities or items. Yet they are all included. The specific inclusion of items like “gur, rab, shakkar, khandsari and jaggery” is to make it clear that merely because it becomes a different item or commodity it is not excluded. (emphasis supplied) In Kishan Lal v State of Rajasthan[7], Rajasthan Agricultural Produce Market Act, 1961, was challenged on various grounds inter alia on the ground that Section 40 thereof confers excess power on State Government to amend or include any item of agriculture produce in the Schedule to the Act. Rejecting the plea that Section 40 is excessive delegation of legislative power, the apex Court observed. Fallacy of the submission is apparent as it was in complete disregard of definition of the word “agricultural produce” in the Act which includes all produce whether agricultural, horticultural, animal husbandry or otherwise as specified in the Schedule. The legislative power to add or include and define a word even artificially, apart, the definition which is not exhaustive but inclusive neither excludes any item produced in mill or factories nor it confines its width to produce from soil. If that be the construction then all items of animal husbandry shall stand excluded. It further overlooks expanse of the expression “or otherwise as specified in the Schedule”. Nor switch over from indigenous method of producing anything to scientific or mechanical method changes its character. … Even in Halsbury’s Laws of England, 4th Edn. vol. 1, para 1414, the word agricultural produce for purposes of agricultural marketing schemes is understood as, including “any product of agriculture or horticulture and any article of food or drink wholly or partly manufactured or derived from any such product and fleeces (including all kinds of wool) and the skins of animals”. (emphasis supplied) As already noticed, the terms ‘livestock’ and ‘products of livestock’, are not defined in restrictive sense. Not only those animals defined as livestock, but all such other animals as may be declared by the Government by notification to be such are to be treated as livestock. Similarly, all such ‘products of livestock’ as may be declared by the government by notification are to be treated as products of livestock for the purpose of the Act. By reason of Section 2(x) when once a notification is issued under Section 3(3) of the Act, declaring market products, by reason of Section 2(v) and 2(xv), all products of cows, buffalo, bullocks, bulls, goats etc., shall have to be treated as products of livestock for the purpose of the Act. Here we may refer to Ram Chandra Kailash Kumar v State of U.P.,[8], Dineshchandra Jamnadas Gandhi v State of Gujarat[9], Sita Devi v State of Bihar[10] and I.T.C.Limited v Person Incharge, Agriculture Market Committee, Kakinada[11]. In Ram Chandra Kailash (supra), traders in U.P., challenged levy of market fee under U.P.Krishi Utpadan Mandi Adhiniyam Act, 1964. Writ petitions were dismissed by Allahabad High Court. On appeal, before Supreme Court, questions were whether market fee could be levied both on paddy and rice, whether market fee is payable on ‘ghee’ by the producer/trader or purchaser, and whether the market fee could be levied on hides and skins, timber or Catechu (katha), paper, kirana goods, tobacco, vegetables etc. Dealing with question as to who is liable to pay the market fee in respect of paddy and rice, hides and skins, ghee or khoya, Constitution Bench held: As for example, under Group D “Animal Husbandry Products”, milk has been omitted although it is to be found in the schedule appended to the Act. From milk can be prepared ghee or khoya and Items 1 and 2 in Group D are the said articles. … In relation to the transactions of ghee we had two types of dealers before us — (1) a dealer who purchases milk or cream from the villagers and others and manufactures ghee in his plant and (2) a dealer who purchases such ghee from the manufacturer of ghee and sells it to another trader in the same market area. The first dealer will be liable to pay market fee because he is the producer of ghee within the meaning of the Act and at the same time a trader in ghee also. When he sells ghee to another dealer in ghee who is simply a dealer then under sub-clause (3) of Section 17(iii)(b) the manufacturing dealer will be liable to pay market fee to the market committee on the transaction of ghee. But he will be entitled to pass on the burden to his purchaser. Apropos the market committee, however, the liability will be of the manufacturing dealer. If milk, butter or cream would have been included in the notification then the charging of fee in relation to the first transaction of sale and purchase of such commodities would have been attracted in the light of the principle of law we have enunciated above with reference to paddy and rice. (emphasis supplied) The above observations of Supreme Court would support our conclusion that all animal husbandry products are products of livestock, if they are so declared under Section 3(3) read with Section 2(xv) of the Act. Merely because, ghee is a derivative product from another dairy product, its inclusion in Schedule II of declaration order cannot be faulted. When legislature has endowed power of defining and declaring products of livestock to them, Court cannot find fault if Government in their wisdom choose to declare a product as a ‘product of livestock’. In Sita Devi (supra), Supreme Court considered the scope of Section 2(1)(a) of Bihar Agricultural Products Market Act, 1960, which defined ‘agricultural produce’ as to include all produce whether processed or non-processed of agriculture, horticulture, animal husbandry, specified in Schedule to the enactment. The question was whether market committee can levy market fee on buffalos, bullocks and cows bought and sold in weekly market. The High Court of Patna held that cattle is an agricultural produce for the purpose