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REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

    CIVIL APPEAL NO. 1746 OF 2010

BRITANNIA INDUSTRIES LTD.                ...APPELLANT(S)

                               VERSUS

BOMBAY AGRICULTURAL PRODUCE MARKETING COMMITTEE  & ANR.        ….RESPONDENT(S)

WITH

CIVIL APPEAL NO. 1747 OF 2010

J U D G M E N T

R. BANUMATHI,J.

1. The issue involved in these appeals is the interpretation

of the term  “Agricultural Produce” (Section 2(1)(a) of the Act)

contained  in  the  Maharashtra  Agricultural  Produce  Marketing

(Regulation) Act, 1963.

2. The  appellant  filed  the  writ  petition  seeking  the

following declarations:

(i) The  Maharashtra  Agricultural  Produce Marketing (Development) and Regulation Act, 1963 is not applicable to sugar, cashew nuts, refined oil, vanaspati and dry fruits purchased by the appellant.

(ii) The  notification  dated  25.09.1987  is illegal and utra vires to the extent that it adds the above items to the Schedule of the Act.

(iii) The bulk sugar purchased by the appellant is directly from the Sugar mills located outside the market area of the first respondent is not

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covered by the provisions of the Act.

3. During the pendency of the writ petition, before the High

Court, the appellant gave up the challenge in respect of “cashew

nuts” and other “dry fruits”.

4. The question falling for consideration in these appeals

is whether the provisions of the Maharashtra Agricultural Produce

Marketing (Regulation) Act, 1963 (Marketing Act) are applicable to

the products “edible oil”, “Vanaspati” and “sugar”?

5. We have heard Mr. Jawahar Lal, learned counsel appearing

on  behalf  of  the  appellant  as  well  as  Mr.  Vikramjit  Banerjee,

learned  Additional  Solicitor  General  appearing  on  behalf  of

Respondent No. 1 - Agricultural Market Committee.

6. Section 2(1)(a) of the Maharashtra Agricultural Produce

Marketing (Regulation) Act, 1963 defines “agricultural produce” as

under:-

2(1).   In  this  Act,  unless  the  context  otherwise requires:- (a)   “agricultural  produce”  means  all  produce  (whether processed  or  not)  of  agriculture,  horticulture,  animal husbandry, apiculture, pisciculture and forest specified in the Schedule.

Section 2(1)(a) of the Maharashtra Agricultural Produce Marketing

(Regulation) Act, 1963 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.  

7. As pointed out by the High Court, “sugarcane” has been

separately listed under Item VI in the Schedule along with Gul and

Sugar and thus the intention of the Legislature is to treat sugar

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as  a  produce  of  sugarcane,  which  is  a  separate  agricultural

produce.  The High Court rightly held that sugar is a produce of

agriculture coming into being in a processed form from sugarcane

and the absence of the word “manufacture” in the definition of

“agricultural produce” under Section 2(1)(a) of the Act would not

in any way affect the status of sugar as being an agricultural

produce under the Act.

8. Admittedly, “sugarcane” has been separately listed under

Item VI in the Schedule along with Gul and Sugar and hence, the

Committee  has  the  power  of  enforcing  its  statutory  right  under

Section  31  of  the  Marketing  Act  to  levy  market  fees  on  the

marketing of sugar in its market area.

9. So far as “sugar” is concerned, the High Court rejected

the contention of the appellant by holding that sugar was included

in the Schedule of the Act originally and it came to be deleted

from Item VI by a notification dated 13.04.1982 and it is not as if

for  the  first  item  that  sugar  is  included  in  the  agricultural

produce by notification dated 25.09.1987. After referring various

process involved in bringing out the sugar, the High Court has held

that the sugar is an “agricultural produce” within the meaning of

Section 2(1)(a) of the Act. The High Court also held that the

intention of the Legislature is to treat sugar as produce of “sugar

cane” as it is added along with other items. The High Court held

that the absence of word “manufacture” would not affect the status

of sugar as being an agricultural produce within the meaning of

Section 2(1)(a) of the Act.

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10. So  far  as  the  “edible  oil” and  the  “Vanaspati”  are

concerned,  the  High  Court  has  held  that  they  are  agricultural

produce within the meaning of Section 2(1)(a) of the Act.

11. So  far  as  “Vanaspati” is  concerned,  the  High  Court

referred to entire process as to how “Vanaspati” is produced from

“edible  oils” and  that  “edible  oils” are  subject  to  various

processes  and  the  end  product  of  all  these  processes  is

“Vanaspati”.  The High Court held that the production of dalda or

Vanaspati from edible oils is thus the result of the edible oils

undergoing all these processes which convert edible oils to a new

entity called  “Vanaspati”.  Thus, the High Court concluded that

“Vanaspati” is nothing but Hydro Generated Refined Edible Oil and

is an agricultural produce within the meaning of Section 2(1)(a) of

the Marketing Act.

12. In  Champak Lal H. Thakkar v. State of Gujarat  (1980) 4

SCC 329, this Court held as under:-

“11. …..Oil will remain oil if it retains its essential properties  and merely  because it  has been  subjected to certain processes would not convert it into a different substance. In other words, although certain additions have been made to and operations carried out on oil, it will still  be  classified  as  oil  unless  its  essential characteristics have undergone a change so that it would be a misnomer to call it oil as understood in ordinary parlance……”

Relying upon  Champak Lal case, the High Court held that oil will

remain oil even if it has been subject to certain processes and

held  that  “edible  oil”  is  an  “agricultural  produce”  within  the

meaning of Section 2(1)(a) of the Marketing Act.

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13. We fully agree with the conclusion of the High Court that

“edible oil”, “Vanaspati” and “sugar” would fall within the meaning

of Section 2(1)(a) of the Marketing Act – agricultural produce.  We

do  not  find  any  good  ground  warranting  interference  with  the

findings  of  the  High  Court  that  “edible  oil”,  “Vanaspati”  and

“sugar” are agricultural produce within the meaning of Section 2(1)

(a) of the Marketing Act.

14. Contention of the appellant is that it procures sugar

from the sugar mills which are located beyond the limits of the

market area of respondent No.1 and therefore, the said transactions

do  not  take  place  within  the  market  area  so  as  to  empower

respondent No.1 to levy market fees under Section 31 of the Act

read with Rule 5 of the Rules on the sugar produced from outside

the market area.

15. Section  13(1A)(a)  of  the  Act  states  that  the  area

comprising Greater Bombay and Turbhe Village in Thane Taluka of

Thane District or such areas as may be specified by the State

Government by notification in the Official Gazette from time to

time, shall be deemed to be a market area called the Bombay Market

Area and respondent No. 1 is the Market Committee for that area.

16. Insofar as the contention of the appellant that the appellant

is not a buyer within the meaning of Section (2)(1)(ca) as bulk

sugar is purchased from outside the market area, the High Court

observed:

“Unless the sugar procurement is done by the  petitioner-company  within  the  area  of Greater  Mumbai  and  Turbhe  Village  of  Thane Taluka  of  Thane  District  or  any  other  area

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notified by the Government of Maharashtra to be a part of the market area of respondent No. 1, it  cannot  levy  market  fees  on  sugar.   The respondent No. 1 has no power to levy market fees under Section 31 of the Act on the entire quantity of sugar that arrives within its market area on the procurement made by the petitioner- company and directly from the sugar factories which  are  located  within  the  market  area  of respondent No. 1. It is, therefore, necessary that  the  petitioner-company  places  before  the respondent No. 1 all its record to show that sugar  was  procured/purchased  from  the  places outside the market area of respondent No. 1 and if the respondent No. 1 on a verification is satisfied, to that extent the respondent No. 1 shall  have  no  authority  to  levy  market  fees under Section 1 of the Act. This is an issue which will have to be examined by the Market Committee afresh and it is imperative for the petitioner-company  to  submit  all  the  records before  the  respondent  No.  1  for  such  a verification  and  this  should  be  done  at  the earliest possible.  We have no doubt in our mind that  the  respondent  No.  1-  Market  Committee shall  have  powers  to  levy  market  fees  under Section 31 of the Act only on the quantity of sugar  that  has  been  purchased/procured  within its market area and it cannot levy market fees on the entire sugar quantity that is received by the petitioner-company……...”

17. Mr.  Vikramjit  Banerjee,  learned  Additional  Solicitor

General, submitted that as per direction of the High Court, if the

appellant is able to produce relevant documents, Respondent No. 1

shall consider the same by passing appropriate orders.

18. The  relevant  bills  and  other  documents  filed  by  the

appellant insofar as alleged  purchase of sugar from outside the

market area (Section 2(1)(i)) shall be considered as expeditiously

as possible. It is stated by the learned counsel for the appellant

that  the  issue  is  concerned  only  limited  to  the  period  from

01.07.1988 to 03.03.2004.

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19. We make it clear that the direction of the High Court in

approaching the concerned Authority is restricted only to sugar.

2o. The appeals are, accordingly, dismissed.

…………………………………………………………...J. [R.BANUMATHI]

NEW DELHI ………………………………………………………...J. 24TH JANUARY, 2019 [R. SUBHASH REDDY]