Case: Edward Keventer Pvt.Ltd Vs. Bihar State Agrl.Mkt.Board

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 name of `Frooti and `Appy in the State of Bihar through its agents. The Bihar Legislature has enacted an Act known as `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. Section 2(1)(a) of the Act defines agricultural produce which runs asproduce means all produce whether processed ormanufactured or not, of Agriculture, Horticulture, Plantation, animal Husbandry, Forest, Sericulture, Pisciculture, and includes livestock or poultry as specified in the Schedule.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 No. 1 and 13 respectively. The respondents treating `Frooti and `Appy as mango and apple products, issued a notice dated 28.3.89, requiring the appellant to pay market fee on the products marketed under the brand name `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 appeal before us.

Court's reasoning:
5. A perusal of Section 2(1)(a) unambiguously shows that the agricultural produce which are to be covered by the sweep of the Act necessarily has to be specified in the Schedule. If any agricultural produce is not specified in the Schedule, it goes beyond the purview of the Act and respondent has no power to levy fee on such produce. In the Schedule under caption `fruits mango and apple have been specified as agricultural produce. We further find in the Schedule that under caption `cereals wheat is specified at item No. 3, whereas `wheat atta `sujji and `maida which are the products of wheat are separately specified at item Nos. 14, 15 and 16, respectively. This shows that the agricultural produce `wheat has been treated as a separate agricultural produce as compared to its own product manufactured out of `wheat namely, `atta, `sujji and `maida. `Atta, `sujji and `maida are basically the agricultural products of `wheat. Similarly, the Schedule shows that under the caption `Animal Husbandary Product, milk excluding liquid milk is specified at item No. 10 whereas `butter, `ghee, `cream, and `khoya which are manufactured out of milk are separately specified at item Nos. 7, 8, 16, 17 & 19 respectively. Under caption `miscellaneous, `mango pickles is specified at items No. 18 `Mango pickles is a product of mango, which is a fruit; and specified in Schedule but `mango pickles have been specified separately. The shows basic ingredients may be the same but the end product which is known differently is treated as a separate item. It is true `Frooti and `Appy are manufactured out of mango pulp and apple concentrate, but after the mango pulps and apple concentrate are processed and beverages are manufactured, the products become entirely different items and the fruits mango and apply loose their identity. In common parlance, these beverages are no longer known as mango and apple as fruits. In other words, after processing manago 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 & Ors., 1999(9) SCC, 620 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 are ready to serve beverages not being specified in the Schedule are not covered by the term agricultural produce, as defined in Section 2(1)(a) of theare of the view that the said decision is wholly inapplicable to the present controversy.The controversy in the case of Krishi Utpadan Samiti (supra), was whetherand raskat and rabgolawat and salawat, which are products of molasses, are agricultural produce. This Court while interpreting word `means and `includes used in the definition, was of the view that these words have to be given wider meaning and processed item of a good specified in Schedule would be agricultural produce. In 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 case.