Case: THE STATE OF MAHARASHTRA Vs. MAHARASHTRA HYBRID SEEDS CO. PVT. LTD

3. Brief facts which led to filing of this appeal are asis a registered Company under the Companies Act and is engaged in the business of research, production, processing, marketing and sale of variety of Hybrid seeds. According to the respondent-Company, they have already obtained seeds licences under the provision of the Seeds (Control) Order, 1983 and the Maharashtra Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Rules, 2010 and that they are having licence for the storage and sale of such seeds in the State of Maharashtra. According to the respondent, the processing of cotton and non-cotton seeds of different varieties is done by the respondent in its processing unit/plant situated at Dhanora. All such processed seeds are then stored in the storage attached to the processing unit at the godown at Dhanora for being transported to different places.Case of the appellant is that the respondent not having a valid licence for the processing unit at Dhanora has committed gross violation of the provisions of the mandate of the Seeds Act, 1966, Seeds Rules, 1968, Seeds (Control) Order, 1983 and the provisions of the Maharashtra Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Act, 2009. On 08.12.2017, local police inspected the godown of the respondent located at Dhanora and noticed suspected seeds of various kinds stocked and the police informed the concerned authorities of the agricultural department. On 09.12.2017, the Seed Inspector inspected the respondent?s godown at Dhanora and noticed huge quantity of seeds of various kinds stocked in random stakes in various godowns along with seeds suspected as Roundup Ready Flex (RRF) Hybrid Cotton. The Plant In-Charge was informed to furnish the Seed Inspector the information about crop wise, variety wise and lot wise stock details of the seeds along with stake details in various godowns. It is stated that on 10.12.2017, Plant In-Charge submitted the details of crop wise, variety wise and lot wise quantity out of the total stock of seeds in the godown. According to the appellant, the details so furnished were incomplete and indeterminate. The appellant alleges that the Plant In-Charge did not cooperate towards the written instruction of the Seed Inspector on the same day. The Seed Inspector therefore issued a notice to the respondent-Company on 15.12.2017 informing the Plant Manager that the appellant Company does not have the licence for storage or sale of the seeds in Dhanora unit and that it has come to their knowledge that the activity of sale is being carried out by respondent in their godown at Dhanora. In the show-cause notice, the respondent was asked to provide certain documents and informed that in case of non-supply of the documents, the godown and the entire premises at Dhanora would be sealed. The appellants claim that respondent did not produce the documents and accordingly, the godown was sealed by executing a panchnama to prevent further violation of the provisions.Aggrieved by the sealing of the Dhanora godown, respondent filed Writ Petition No.8157 of 2017 before the High Court of Judicature at Bombay, Nagpur Bench. The High Court vide interim order dated 22.12.2017 directed the appellant-authorities to open the sealed godown after taking a prima facie view and held that since the requisite sample of the seeds has already been taken and no purpose would be served in keeping the storage sealed. The High Court held that packed and labelled seeds were kept in Dhanora unit only for further transportation and no separate licence was required to be obtained for storage of seeds in the godown attached to respondent?s processing unit at Dhanora for such transportation. The High Court further held that the power of sealing was not available to the appellant-authorities, especially to seal the storage and keep it sealed indefinitely or till the report of the samples is received from the laboratory. Being aggrieved, the appellant-State of Maharashtra has preferred this appeal.

Court's reasoning:
19. By combined reading of the above provisions of the Seeds (Control) Order, 1983 and Form ‘B?, it is clear that for obtaining licence, the applicant has to furnish ?place for storage? and ?place for sale?. The dealer?s licence is obtained in Form ‘A?. Note 1 of Form ‘A? states that ?where the business of selling/exporting/importing seeds is intended to be carried on at more than one place, a separate licence should be obtained for each such place.? The object of the licences and such requirements to carry on the business of ?sale of seeds? and ?storage of seeds? at specific places as mentioned in the licence is that the locations of sale and storage of seeds be known to the Seed Inspector and be subject to the inspection and operation of the related laws.Admittedly, the respondent has no licence for its godown at Dhanora either as ?storage of seeds? or ?sale of seeds?.Respondent has obtained licence only under the Factories Act for its Dhanora unit. Admittedly, the respondent does not have licence in Form ‘B? of Seeds (Control) Order, 1983 to carry on the business of ?dealer in seeds? in Dhanora. The only activity legally permissible to be conducted by the respondent at Dhanora processing plant is ?processing of seed?. During inspection, it was noticed that packaging and labelling machines were kept and respondent was carrying out the operations of ?packaging and labelling? in Dhanora unit. For any activity of labelling and packaging of the seeds and storing the same, the respondent is required to obtain separate licence under the Seeds Rules, 1968 and the Maharashtra Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Rules, 2010. In the absence of such licence, the activity of labelling and packaging qua the seeds and the cotton seeds carried out at Dhanora godown by the respondent is illegal.From the search of the godown at Dhanora and also from the statement of the authorized signatory of the respondent, it was found that the respondent was not only carrying out the activity of seed processing at Dhanora godown; but also carrying on operations of ?packing? and ?labelling? etc. As per Rule 2(j) of Seeds Rules, 1968, ?processing? does not include operations such as ?packaging? and ?labelling?. The activities of the respondent like packaging, pricing and labelling of various seeds at Dhanora plant therefore cannot be said to be falling within the meaning of ?processing? under Rule 2(j) of the Seeds Rules, 1968. The High Court erred in brushing aside the materials produced before the High Court and the huge quantity of seeds of various kinds found to have been stocked in random stake in various godowns of Dhanora unit. When the authorised signatory present in the Dhanora plant is said to have submitted the signed document dated 10.12.2017 stating that packed seeds stocked at the unit were ready for dispatch and the seeds are packed for sale, the High Court, in our view, erred in saying that the seeds packed and labelled are meant for transportation for which no licence was required.As pointed out earlier, as per Rule 2(j) of the Seeds Rules, 1968, ?processing? does not include operations such as packaging and labelling and this significant aspect was not kept in view by the High Court. As the respondent claims that Dhanora plant is only a processing unit, the respondent cannot carry on the activities of packaging, selling, pricing, labelling of various seeds under pretext of processing. Unless the licence is obtained for the Dhanora unit where huge quantity of seeds was found stocked, it cannot be subject to inspection with respect to related laws. Appellants- authorities rightly observed that the respondent has contravened the provisions of clause 3 of the Seeds (Control) Order, 1983 and Section 11 of the Maharashtra Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Act, 2009 and Maharashtra Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Rules, 2010. The High Court erred in drawing the distinction between ?storage for sale? and ?storage for transportation? and holding that no licence was required for transportation of packedrespondent has produced the document dated 24.06.2010 stating that the respondent has got the permission from GEAC to undertake confined BRL II field trial of ?Bollgard II × Roundup Ready Flex (BGII RR Flex) Cotton Hybrid? ; the said permission granted by GEAC was only for a period of three years. The respondent has not produced the permission granted by GEAC beyond 2013. As per the guidelines issued by GEAC in this regard towards conducting confined field trials of regulated genetically engineered (GE) plant, GE materials should have been burnt or specific permission from GEAC is required to keep it with them. The permission obtained by the respondent in the year 2010 to undertake field trial of ?Bollgard II × Roundup Ready Flex (BGII RR Flex) Cotton Hybrid? cannot be treated as a permission to retain GE material even after the evaluation by GEAC was terminated.The respondent has only obtained the licence under the Factories Act. For labelling and packaging of cotton seeds, the respondent was required to have a separate licence granted under Section 11 of the Maharashtra Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Act, 2009 and Rule 4 of the Maharashtra Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale Price) Rules, 2010. Without such licence, the activity of labelling and packaging carried out at Dhanora godown by the respondent was illegal. This was all the more so, when the respondent stocked RRF Cotton Hybrid. The High Court erred in brushing aside the material brought before the High Court as to the alleged storing of ?Roundup Ready Flex (BGII RR Flex) Cotton Hybrid? at Dhanora godown.By a conjoint reading of Sections 14 and 15 of the Seeds Act and Rule 23 of the Seeds Rules, 1968 and various other provisions, it is clear that the Seed Inspector is conferred with wide powers coupled with duties.There is, of course, no express provision empowering the Seed Inspector to seal any place, where there is contravention of the provisions of theThe Seed Inspector must be satisfied or has reason to believe that an offence under the Act has been committed or is being committed and that exercise of such power of sealing is necessary for carrying out the purposes of the Act or the rules made thereunder. Since the exercise of power to seal in exceptional circumstances is only to carry out the purposes of the Act or the rules made thereunder, it is necessary that before the Seed Inspector proceeds to take action of sealing the premises, he has to record grounds for his belief as to how and in what manner the provisions of the Seeds Act and the rules made thereunder have been contravened and how mere search and seizure may not be sufficient to prevent further contravention. The grounds for his belief so recorded in writing has to be forthwith communicated to the Magistrate in terms of Section 15(5) of the Seeds Act, 1966 and also to their immediate official superior. This would ensure that the Seed Inspector does not exceed his authority or that power to seal is not misused.In the present case, since the respondent was found to have stocked genetically modified seed of RRF Hybrid Cotton which may include transgenic varieties, for which the approval of Genetical Engineering Approval Committee is required, is also not submitted by the respondent. In that view, the authorities searched and inspected the godown but the seed material lying there in a voluminous stock was not appropriately segregated/staked and also the information was not furnished to inspection team by plant in- charge. Despite constant follow-up in writing and through oral instructions, the plant in-charge did not provide stock position of seeds as expected by the Seed Inspector and also not submitted the certified copy of licence having permission to stock the seeds at godown located at Dhanora. The respondent?s godown was sealed by 07:00 pm on 15.12.2017 after giving sufficient opportunity. In such facts and circumstances of the case, the action of the Seed Inspector and the authorities in sealing the plant at Dhanora cannot be said arbitrary.