Case: Edward Keventer Private Limited Vs. Bihar State Agricultural Marketing Board and Others

1. The appellant herein is a company registered under the Indian Companies Act and has its head office and factory outside the State of Bihar. The Company manufactures fruit drinks and markets it under the brand names of "Frooti" and "Appy" in the State of Bihar through its agents. The Bihar Legislature has enacted an Act known as "the Bihar Agricultural Produce Market Act, 1960"(hereinafter referred to as "the Act"). The object of the Act is to provide better regulation of buying and selling of agricultural produce and the arrangement of market for agricultural produce in the State of Bihar. Under Section 27 of the Act, the Market Committee set up under the Act has power to levy and collect market fee on the agricultural produce, which are specified in the Schedule and are bought or sold in the market area. It is not disputed that the entire district of Patna is declared as a market area.Under Section 39 of the Act, the State Government by a notification is empowered to add, amend, or cancel any of the items of the agricultural produce in the Schedule as required by Section 2(1)(a) of the Act. In the Schedule, as contemplated under Section 2(1)(a), mango and apple are specified under the caption "fruits" as Items 1 and 13 respectively. The respondents treating "Frooti" and "Appy" as mango and apple products, issued a notice datedrequiring the appellant to pay market fee on the products marketed under the brand names "Frooti" and "Appy", failing which action under the Act would be taken. Under such circumstances, the appellant challenged the aforesaid demand by means of a writ petition under Article 226 of the Constitution. However, the said writ petition was dismissed and letters patent appeal filed against the judgment of the learned Single Judge was also dismissed. It is in this way the appellant is in appellant before us

Court's reasoning:
It is true that "Frooti" and "Appy" are manufactured out of mango pulp and apple concentrate, but after the mango pulp and apple concentrate are processed and beverages are manufactured, the products become entirely different items and the fruits, mango and apple, lose their identity. In common parlance, these beverages are no longer known as mango and apple or as fruits. In other words, after processing mango pulp and apple concentrate, although the basic character of the mango pulp and apple concentrate may be present in beverages, but the end products are not fruits i.e. mango and apple which are specified in the Schedule. Our views also find support from a Constitution Bench decision of this Court in the case of Belsund Sugar Co. Ltd. v. State of Bihar wherein it was held that Lactodex and Raptakos which are baby foods do fall under the description milk, specified in the Schedule of the Act. Under such circumstances, we find that the products like "Frooti" and "Appy" which arebeverages not being specified in the Schedule are not covered by the term agricultural produce, as defined in Section 2(1)(a) of the ActLearned Additional Solicitor General then cited a decision of this Court in the case of Krishi Utpadan Mandi Samiti v. Shankar Industries for the proposition that the meaning of "agriculture produce" in the definition is not restricted to any products of agriculture specified in the Schedule, but also includes such items which come into being in the processed form, and has strongly relied on para 12 of the said decision, which reads as under : (SCC p. 364, para 12)"12. We have considered the arguments advanced on behalf of the parties and have perused the record. A perusal of the definition of agricultural produce under Section 2(a) of the Act shows that apart from items of produce of agriculture, horticulture, viticulture, apiculture, sericulture, pisciculture, animal husbandry or forest as are specified in the Schedule, the definition further includes admixture of two or more such items and thereafter it further includes taking any such item in processed form and again for the third time the words used are and further includes gur, rab, shakkar, khandsari and jaggery. It is arule of interpretation that where the legislature uses the words means and includes such definition is to be given a wider meaning and is not exhaustive or restricted to the items contained or included in such definition. Thus the meaning of agricultural produce in the above definition is not restricted to any products of agriculture as specified in the Schedule but also includes such items which come into being in processed form and further includes such items which are called as gur, rab, shakkar, khandsari and jaggery." *5. We are of the view that the said decision is wholly inapplicable to the presentthe U.P. Act, the definition of "agricultural produce" provided that any processed item of a specified good is an agricultural produce. Such is not the definition of "agricultural produce" in the Bihar Act with which we are concerned in the present case7. For the reasons aforestated, we are of the view that the products "Frooti" and "Appy" not being specified in the Schedule, the respondent had no authority to demand any fee from the appellant on marketing the said products.