REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.     6564             2019 (Arising out of SLP(C) No.28245 of 2018)

THE STATE OF MAHARASHTRA AND  OTHERS            ...Appellants

VERSUS

MAHARASHTRA HYBRID SEEDS  CO. PVT. LTD.         …Respondent

J U D G M E N T

R. BANUMATHI, J.

Leave granted.

2. This  appeal  is  preferred  against  the  judgment  dated

21.02.2018  passed  by  the  High  Court  of  Judicature  at  Bombay,

Nagpur Bench in Writ Petition No.8157 of 2017 in and by which the

High Court  has allowed the writ  petition filed by the respondent-

Company thereby ordering the appellant-authorities to de-seal all

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the godowns of the Company at Dhanora which was sealed by the

appellant-authorities.

3. Brief facts which led to filing of this appeal are as follows:-

Respondent-Company  is  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.  

4. 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

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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

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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.  

5. 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

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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.

6. Learned  counsel  for  the  appellants  Mr.  Katneshwarkar

submitted that no licence was obtained by the respondent-Company

“for storage of seeds” in the godown attached to the processing unit

at Dhanora under the Seeds (Control) Order, 1983 or in Form ‘B’

under  Rule  5  of  the  Maharashtra  Cotton  seeds  (Regulation  of

Supply, Distribution, Sale and Fixation of Sale Price) Rules, 2010. It

was urged that the respondent has been operating seed processing

plant at Dhanora and without obtaining a valid licence for the sale,

the seeds were stored in godown attached to it  for  sale and the

respondent  has thus committed violation of  the provisions of  the

Seeds  Act,  1966  and  the  Seeds  (Control)  Order,  1983.  It  was

submitted that the manner of packing and labelling which contains

details  of  lot  number,  germination,  percentage,  purity,  MRP,  etc.

which is prescribed in Rules 7, 8 and 9 of the Seeds Rules, 1968

indicate  that  the  seeds  were  packed  for  Sale  and  not  for

transportation  as  claimed  by  the  respondent-Company.  Learned

counsel contended that the High Court erred in making a distinction

between “storage for sale” and “storage for transportation” and in

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holding that Company does not need any licence for transportation

of  the  seeds  from the  processing  unit  at  Dhanora.  The  learned

counsel  urged  that  respondent  was  given  permission  by  the

competent authority to undertake the field trial for ‘Ballgard II x RRF

Cotton Hybrid’ (a prohibited seed) in the year 2010 only for a period

of  three years;  but  the respondent had been storing such seeds

illegally  even  after  expiry  of  three  years’  time  period  without

applying for any extension in the provided time period. It was urged

that in exercise of powers under Section 14(1)(e) of the Seeds Act,

1966, competent authority has full authority to seal the godown for

violation of  the provisions of the Seeds Act,  1966 and to keep it

sealed till the report of the samples is received from the laboratory

for testing.  

7. Refuting  the  above  contentions,  Mr.  V.  Giri,  learned senior

counsel appearing for the respondent-Company inter-alia submitted

that the respondent has already obtained seed licences under the

provisions of the Seeds (Control) Order, 1983 and the Maharashtra

Cotton Seeds (Regulation of Supply, Distribution, Sale and Fixation

of  Sale  Price)  Rules,  2010.   It  was  submitted  that  no  separate

licence is required to be obtained for processing the cotton and non-

cotton seeds at Dhanora unit and those processed seeds are stored

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in the godown attached to the processing unit only for the purpose

of  transporting  it  to  different  sale  points  or  storages  meant  for

putting the seed in the network of marketing.  The learned senior

counsel  contended that  the  power  of  seizure  and sealing of  the

godown was not available to the Seed Inspector under Section 14

of the Seeds Act, 1966 as claimed by the appellant authorities and

the High Court rightly directed desealing of the godown attached to

the processing unit at Dhanora and the impugned order warrants no

interference.

8. We  have  carefully  considered  the  submission  of  both  the

counsel  and  perused  the  impugned  judgment  and  the  relevant

provisions and other materials on record. The following points arise

for consideration in this appeal:-

(i) Whether the High Court  was right  in saying that  the

packed seeds kept in Dhanora unit were only meant

for  transportation  and  no  separate  licence  was

required for such storage for transportation?

(ii) Whether the High Court  was right  in saying that  the

power  of  seizure  and  sealing  the  godown  is  not

available to the Seed Inspector?

9. Seed  is  the  basic  input  for  the  farmer  for  successful

agricultural  production.   Therefore,  it  is  essential  to  maintain  the

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purity  and  quality  of  the  seed  through  various  stages  of  seed

production  till  the  stage  of  sale.   The  Government  of  India  had

brought  out  different  legislations  to  protect  the  quality  of  seeds

namely the Seeds Act,  1966, Seeds Rules, 1968, Seed (Control)

Order,  1983  and  other  policies.   In  order  to  ensure  supply,

distribution and sale of cotton seeds, the State of Maharashtra has

also enacted Maharashtra Cotton Seeds (Regulation of Supply and

Fixation of Sale Prices) Act, 2009 and the rules framed thereunder.

The provisions of Maharashtra Cotton Seeds Act, 2009 are in  pari

materia with the Seeds Act, 1966.   

10. The Preamble of  the Seeds Act,  1966, provides  “An Act to

provide for regulating the quality of certain seeds for sale, and for

matters  connected  therewith”. The  Statement  of  Objects  and

Reasons explains the methodology for achieving the said objective

of regulating the quality of seeds as under:-

“The methods by which the Bill  seeks to achieve the object

are:-

(a) constitution  of  a  Central  Committee  consisting  of

representatives of the Central Government and the State

Government, the National Seeds Corporation and other

interests,  to  advise  those Governments  on all  matters

arising out of the proposed Legislation;

(b) fixing  minimum  standards  of  germination,  purity  and

other quality factors;

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(c) testing  seeds  for  quality  factors  at  the  seed  testing

laboratories  to  be  established  by  the  Central

Government and the State Government;

(d) creating of  seed inspection and certification service in

each  State  and  grant  of  licences  and  certificates  to

dealers in seeds;

(e) compulsory labelling of seed containers to indicate the

quality of seeds offered for sale; and

(f) restricting the export,  import and inter-State movement

of non-descript seeds.”

11. The  business  of  selling,  keeping  for  sale,  offering  to  sell,

bartering or otherwise supplying any seed of any notified kind or

variety  other  than cotton seeds is  regulated by Section 7 of  the

Seeds Act, 1966 and it is controlled by the Seeds (Control) Order,

1983.  As per Section 7 of the Seeds Act, 1966, no person shall,

himself or by any other person on his behalf, carry on the business

of selling, keeping for sale, offering to sell, bartering or otherwise

supplying any seed of any notified kind or variety unless such seed

conforms to the requirements as may be prescribed under Section

7(a) to 7(d) of the Seeds Act, 1966.  

12. Sections  12  and  13  of  the  Seeds  Act  enables  the  State

Government  to  appoint  persons  as  Seed  Analysts  and  Seed

Inspectors.  The State  Governments  including the Government  of

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Maharashtra through their  functionaries of agricultural department

exercises its power to have an effective control over the quality and

quantity  aspects  of  the  agricultural  inputs.   In  the  State  of

Maharashtra,  various officers working at  state level,  district  level,

sub-division level and taluka level are by virtue of their post have

been notified as the Seed Inspectors in terms of Section 13 of the

Seeds Act, 1966.  These Seed Inspectors perform their duties as

Quality Control Inspectors and also exercise powers to regulate the

sale,  export,  import  and  storage  of  the  seeds  relating  to  the

respective provisions 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) Rules, 2010 etc.   

13. Section 14 of the Seeds Act provides for the powers of Seed

Inspector  and  Section  15  of  the  Seeds  Act  provides  for  the

procedure to be followed by the Seed Inspectors in taking samples.

As per the provision under Section 14(1)(c) of the Seeds Act, 1966,

the  Seed  Inspectors  are  empowered  to  search  or  inspect  the

premises  any  time,  where  the  Seed  Inspectors  have  reason  to

believe  that  such  offence  has  been  committed.   As  per  Section

14(1)(d)  of  the Seeds Act,  the Seed Inspector may examine any

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record, register, document or any other material object found in any

place and if he has reason to believe that the record, register, etc.,

may furnish evidence of the commission of an offence punishable

under the Act, he may issue a seizure order in Form IV of the Seeds

Rules, 1968 and seize the records.  As per Section 14(1)(e) of the

Seeds  Act,  1966,  the  Seed  Inspector  can  exercise  such  other

powers as may be necessary for carrying out the purposes of this

Act or any rule made thereunder. Section 14(1)(c), (d) and (e) of the

Seeds Act, 1966 reads as under:-

Powers of Seed Inspector  

14(1).  The Seed Inspector may:-

………..

(c)  enter  and  search  at  all  reasonable  times,  with  such

assistance, if any, as he considers necessary, any place in

which he has reason to believe that an offence under this Act

has  been  or  is  being  committed  and  order  in  writing  the

person in  possession of  any seed in  respect  of  which the

offence has been or is being committed, not to dispose of any

stock of such seed for a specific period not exceeding thirty

days or,  unless the alleged offence is such that the defect

may be removed by the possessor of  the seed,  seize the

stock of such seed;  

(d)   examine  any  record,  register,  document  or  any  other

material  object found in  any place mentioned in clause (c)

and seize the same if he has reason to believe that it may

furnish evidence of the commission of an offence punishable

under this Act; and

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(e)   exercise  such  other  powers  as  may  be  necessary  for

carrying  out  the  purposes  of  this  Act  or  any  rule  made

thereunder.

14. As per Section 14(5) of the Seeds Act, 1966 the provisions of

the Code of Criminal Procedure shall, so far as may be, apply to

any  search  or  seizure  under  this  Section  as  they  apply  to  any

search  or  seizure  made under  the  authority  of  a  warrant  issued

under Section 98 of the said Code.  

15. Section 15 of the Seeds Act stipulates the duties of the Seed

Inspector.   As per  Section 15(1)  of  the Seeds Act,  whenever  an

Inspector intends to take sample of any seed of any notified kind or

variety for analysis, he shall give notice of such intention in writing in

Form IV of the Seeds Rules, 1968 to the person from whose seed

lots he intends to take samples. He shall, as far as possible, call not

less than two persons to be present  at  the time when he draws

sample(s) and take their signatures in Form VIII of the Seeds Rules,

1968.  In terms of Section 15(2) of the Seeds Act, 1966, the Seed

Inspector shall divide the representative sample drawn, into three

equal and identical parts and (a) deliver one sample to the person

from  whom  it  has  been  taken;  (b)  send  another  sample  in  the

prescribed manner for analysis to the Seed Analysts for the area

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within  which  such  sample  has  been  taken;  and  (c)  retain  the

remaining sample in the prescribed manner for production in case

any legal proceedings are taken or for analysis by the Central Seed

Laboratory under sub-section (2) of Section 16 of Seeds Act, 1966,

as the case may be. Section 15(5) of the Seeds Act provides for the

safeguards regarding the seizure of the stock, record, register, etc.

and after seizure of such record, register and other documents, he

shall as soon as may be, inform the Magistrate and take his orders

as to the custody thereof.

16. Rule 23 of Seeds Rules, 1968 provides for the “duties of a

Seed Inspector” in addition to the duties specified by the Seeds Act.

As per  Rule 23(a)  of  the Seeds Rules,  the Seed Inspector  shall

inspect as frequently as may be required by certification agency all

places used for growing storage or sale of any seed of any notified

kind or variety.  As per Rule 23(e) of  the Seeds Rules,  the Seed

Inspector shall maintain a record of all inspections made and action

taken by him in the performance of his duties including the taking of

samples and the seizure of stocks and submit copies of such record

to the Director of Agriculture or the certification agency as may be

directed in this behalf. Rule 23(g) of the Seeds Rules enables the

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institution of the prosecutions in respect of any breaches of the Act

or the Rules.  

Seeds (Control) Order, 1983

17. The inclusion of seeds as an essential commodity item under

the  Essential  Commodities  Act,  1955  has  brought  the  Seeds

(Control)  Order.  In  terms  of  the  Seeds  (Control)  Order,  1983,  a

person carrying on the business of selling, exporting and importing

of seeds needs to obtain a licence. The licence provided to a seed

dealer remains valid only for three years from the date of its issue

which can be later  renewed. The seed dealer  has to display the

stock position (opening and closing) on daily basis along with the list

indicating prices or rates of different seeds.  

18. As  per  Clause  2(c)  of  the  Seeds  (Control)  Order,  1983,

“Dealer”  means  a  person  carrying  on  the  business  of  selling,

exporting or importing seeds, and includes an agent of a dealer.”

As per Clause 3 of the Seeds (Control) Order, 1983, no person can

carry on the business of selling, exporting or importing seeds at any

place except under and in accordance with the terms and conditions

of licence granted to him in Form ‘B’ under Clause 5 of the said

order. As per Clause 4 of the Seeds (Control) Order, 1983, “Every

person desiring to obtain a licence for selling, exporting or importing

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seeds shall  make an application in duplicate in Form ‘A’ together

with a fee of rupees fifty for licence to licensing authority.”  Clause 5

of  the  Seeds  (Control)  Order,  1983  states  that  “The  licensing

authority  may,  after  making such enquiry  as it  thinks fit,  grant  a

licence in Form ‘B’ to any person who applies for it under clause

4……..When the licensing authority  refuses to grant  licence to a

person who applies for it under clause, he shall record his reasons

for doing so.”  Licence to carry on the business of a dealer in seeds

is granted as per Form ‘B’ of the Seeds (Control) Order, 1983 which

reads as under:-

FORM ‘B’ (See clause 5)

LICENCE TO CARRY ON THE BUSINESS OF A DEALER IN SEEDS

Licence No.____________ Date:  

Subject to the provisions of the Seeds (Control) Order, 1983 and to the  terms  and  conditions  of  this  Licence  Shri/M/s __________________  is hereby granted licence to sell, export, import and store for the said purposes of seeds.

2. The  liencee  shall  carry  on  the  aforesaid  business  at _____________                         

(Place  for  storage  and  place  for  sale)  ___________  (Tehsil  or District)  

__________________

Date: _____________

Seal:

Licensing Authority State of ____________

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Terms and conditions of licence

(i) The licence shall be displayed at a prominent and conspicuous place in a part of the business premises open to the public.

(ii) The holder of the licence shall comply with the provisions of the Seeds  (Control)  Order,  1983  and  the  notifications  issued thereunder and for the time being in force.

(iii) This licence comes into force with immediate effect and shall be valid  upto  ____________  unless  previously  cancelled  or suspended.

(iv) The holder of the licence shall from time to time report to the licensing authority any change in the premises where he carries on his business of sale, export, import or storage for the said purposes of seeds.

(v) The  licencee  shall  give  every  facility  to  the  licensing authority or any other officer acting under his Authority for the purpose of inspecting his stock in any shop, depot or godown or other place/places used by him for the purpose of storage, sale or export of seeds. [emphasis added]

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.

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20. In terms of the Seeds (Control) Order, 1983, the respondent is

having “licence for sale” at three places namely:– (i) Plot No.301,

Chinar Heights, Pune, Maharashtra; (ii) Akola Z.P. Primary Teachers

Cooperative Credit  Society Building,  Akola;  and (iii)  B4,  Industrial

Estate,  Taluka  Jalna,  Maharashtra.   The  respondent  also  has

licences  for  storage  in  three  places  namely:–  (i)  B4,  Industrial

Estate, Taluka Jalna, Maharashtra; (ii) Survey No.164 3c 2b 4b 1c 4,

Taluka  Haveli,  Pune,  Maharashtra;  and  (iii)  C/o  M/s  Ambar

Corporation Plot  No.TA81,  Godown No.2,3,4  Mide,  Taluka Akola,

Maharashtra.  The respondent is obligated to conduct business of

“sale of seeds” and “storage of seeds” only at the places as

mentioned  in  the  licence  so  that  the  locations  of  sale  and

storage as mentioned in the licence obtained by the respondent

is subject to the operation of the related laws.   

21. Admittedly, the respondent has no licence for its godown at

Dhanora either as “storage of seeds” or “sale of seeds”.  Case of

the respondent is that Dhanora plant is only a processing unit where

they are carrying on only processing of seeds and the seeds are

stored only for the purpose of processing the seeds and there is no

requirement  under  the Seeds Act,  1966 and the Seeds (Control)

Order, 1983 for obtaining the licence.  The word “processing” is

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explained in  Rule 2(j)  of  the Seeds Rules,  1968 which reads as

under:-

“2. Definitions: -  

…….

j.  “Processing” means cleaning, drying, treating, grading and

other operations which would change the purity and germination

of the seed and thus requiring re-testing to determine the quality

of  the  seed,  but  does  not  include  operations  such  as

packaging and labelling.”

22. According to the appellants, when the initial  inspection was

conducted by the Seed Inspector in the godown of the respondent

situated at Dhanora, huge quantity of seeds of various kinds were

stocked in  random stakes in  various godowns.   Roundup Ready

Flex (RRF) Hybrid Cotton seeds were also found stocked in various

godowns.   It  is  stated  that  the  quantity  and  kinds  of  specific

seed/variety  could  not  be  assessed  and  categorized  easily  to

undertake the seed sampling for  quality  analysis  and hence,  the

plant in-charge was immediately informed to furnish the information

about crop wise, variety wise and lot wise stock details of the seeds

along  with  the  stock  details  in  various  godowns.   Case  of  the

appellants is that the plant in-charge did not cooperate towards the

written instructions of the Seed Inspector on the same day.  It  is

stated that on 10.12.2017, the plant in-charge submitted details of

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crop wise, lot wise and variety wise quantity out of the total stock of

seeds in godown; but the same was not godown wise and stake

wise  which  according  to  the  appellants  was  incomplete  and

indeterminate to the Seed Inspector to proceed further.  According

to  the  appellants  on  15.12.2017,  a  warning  letter  was  issued

towards sealing of the godown in the presence of the police.  As

seen from the counter filed before the High Court in the writ petition,

these documents  have been produced before  the High Court  as

annexures.

23. Case  of  the  appellants  is  that,  on  search  of  respondent’s

godown at Dhanora, it was found to have many lots of seeds were

“packed” and “labelled” there.  According to the appellants, at the

time of inspection, photographs taken by appellant No.3 show that

there  were  labelling  and  packaging  machines  installed  by  the

respondent  at  its  Dhanora  processing  plant  and  also  the  huge

quantity  of  finished  products  packed  and  labelled  were  found

stored. In the counter affidavit filed before the High Court, it is stated

that the authorized signatory of the respondent present at Dhanora

plant has submitted a signed document dated 10.12.2017 stating

that the packed seeds stocked at Dhanora is ready for dispatch and

standard seeds stock is available there to be packed for sale.   

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24. 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.  

25. 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

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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.  

26. 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-

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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 packed seeds.

27. Let  us  make  a  brief  reference  to  the  Maharashtra  Cotton

Seeds (Regulation of Supply, Distribution, Sale and Fixation of Sale

Price) Act, 2009 which is in pari materia of Seeds Act, 1966 insofar

as the cotton seeds. Section 5 of the Maharashtra Cotton Seeds

(Regulation of Supply, Distribution, Sale and Fixation of Sale Price)

Act,  2009  deals  with  grant  of  licence  for  cotton  seeds.   Every

person,  who  has  obtained  licence  under  Section  11  of  the

Maharashtra  Cotton  Seed  Act,  2009,  shall  sale  cotton  seeds  in

accordance with the requirement of the Maharashtra Cotton Seed

Rules,  2010.  As per Section 12(1) of  Maharashtra Cotton Seeds

(Regulation of Supply, Distribution, Sale and Fixation of Sale Price)

Act, 2009, no person shall sale or keep in his possession for sale

any  cotton  seed  which  is  misbranded.   Section  7(2)  of  the

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Maharashtra Cotton Seeds (Regulation of Supply, Distribution, Sale

and Fixation of Sale Price) Act, 2009 provides for the entry, search

any premises and draw samples, detain or seize the stock of seeds,

if he has reason to believe that any person dealing in trade of cotton

seed has contravened any of the directions issued by the Controller

or that the quality of the cotton seed supplied by such person is of

suspicion nature or that any person is about to commit an offence in

respect of cotton seed. The proforma Form ‘A’ specified under Rule

4  of  the  Maharashtra  Cotton  Seed  Rules,  2010  requires  to

specifically  mention  the  place  of  business  as  place  of  sale  and

place  of  storage.  Form  ‘B’  specified  under  Rule  5  of  the

Maharashtra Cotton Seed Rules, 2010 consist of specific terms and

condition Nos.3 and 4 mandates the licence holder to inform the

controller  any  change  in  the  place  where  he  is  carrying  on  the

business of sale or storage of cotton seed.   

28. Case of  the  appellants  is  that  the  respondent  has  violated

Section  12(2)(g)  of  Maharashtra  Cotton  Seeds  (Regulation  of

Supply, Distribution, Sale and Fixation of Sale Price) Act, 2009 by

keeping  in  their  possession  the  cotton  seeds  for  sale  which  is

misbranded. According to the appellants,  reliable information was

received  that  the  genetically  modified  seed  material  of  Roundup

Ready  Flex  (BGII  RR  Flex)  Cotton  Hybrid  are  available  at

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respondent’s godown at Dhanora which requires the registration of

Genetical  Engineering Approval  Committee (GEAC).   It  is  in  this

context, the search was conducted in the respondent’s premises on

the  basis  of  verified  information  and  inspection  was  undertaken.

Respondent  stocked  genetically  modified  seed  of  RRF  Hybrid

Cotton for  which the approval  of  Genetical  Engineering Approval

Committee (GEAC) is required.   According to the appellants,  the

respondent did not submit the valid subsisting permission granted to

them by GEAC for  the stock of  “Roundup Ready Flex (BGII  RR

Flex) Cotton Hybrid” kept at Dhanora godown.  The respondent 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

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treated  as  a  permission  to  retain  GE  material  even  after  the

evaluation by GEAC was terminated.   

29. 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.   

30. The High Court held that under Section 14 of the Seeds Act,

power  of  sealing was not  available  to the appellants  to  seal  the

storage of  seeds at  Dhanora and such action on the part  of  the

appellants is in breach of the procedure prescribed under Section

15  of  the  Seeds  Act.  The  High  Court  further  held  that  if  on

examination, the report of the analysts disclose “misbranding”, the

penalty can be imposed or the offences can be registered for that

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purpose as provided under the provisions of the Seeds Act but there

is  no power vested in  the appellants to seal  the godown and to

continue to keep it sealed indefinitely or till the report of the samples

is received from the laboratory. The correctness of the findings of

the High Court that the Seed Inspector does not have the power to

seal the godown till the report of the samples is received from the

laboratory, has to be examined in the light of the various provisions

of the Seeds Act, 1966, Seeds Rules, 1968, Seeds (Control) Order,

1983,  Maharashtra  Cotton  Seeds  (Regulation  of  Supply,

Distribution,  Sale  and  Fixation  of  Sale  Price)  Act,  2009 and the

Maharashtra Cotton Seeds (Regulation of Supply, Distribution, Sale

and Fixation of Sale Price)  Rules, 2010.   

31. As  discussed  earlier,  Section  14(1)(c)  of  the  Seeds  Act

empowers  the  Seed Inspector  to  enter  and  search  any  place  in

which he has reason to believe that an offence under the Act has

been  or  is  being  committed.  Section  14(1)(e)  of  the  Seeds  Act

empowers the Seed Inspector to exercise such powers as may be

necessary for carrying out the purpose of the Act or any rule made

thereunder.  Clause 13(d) of the Seeds (Control) Order, 1983 also

provides that the Seed Inspector may seize or detain any seed in

respect of which he has reason to believe that a contravention of

the  Order  has  been  committed  or  is  being  committed.   As  per

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Section 14(3) of the Seeds Act, the power conferred upon the Seed

Inspector includes power to break-open any premises where any

seed of the notified kind or variety may be kept for sale in case, the

owner or any person in occupation of the premises, in spite of being

present, refuses to open the door even upon the request made by

the Inspector and also to break-open any container in which any

seed  of  any  notified  kind  or  variety  may  be  contained.   As  per

Section 15(5) of the Seeds Act, 1966, when Seed Inspector seizes

any record,  register,  documents or  any other material,  he should

inform the Magistrate and take his order for which he can use Form

IV.   

32. 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. In terms of Section 14(1)(c) of the Seeds Act,

1966, Clause 13(d) of the Seeds (Control) Order, 1983 and Section

7(2)  of  the  Maharashtra  Cotton  Seeds  (Regulation  of  Supply,

Distribution, Sale and Fixation of Sale Price) Act, 2009, the Seed

Inspector is empowered to enter and search any premises,  draw

samples, seize or detain the stock of the seeds in respect of which

he has reason to believe that a contravention of the provisions of

the Act has been committed or is being committed.  Under Rule 23

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of the Seeds Rules, 1968, Seed Inspector can issue and stop sale

order in case the seed in question contravenes the provision of the

relevant Act and Rules (Form III). The Seed Inspector is empowered

to enter and search any premises or break-open the door or any

container, to examine any records, register, documents of the seed

dealer and also to seize the seeds stock(s) and/or records.  

33. There  is,  of  course,  no  express  provision  empowering  the

Seed Inspector to seal any place, where there is contravention of

the provisions of  the Act.  But  Section 14(1)(e)  of  the Seeds Act

confers wide powers upon Seed Inspector to  “exercise such other

powers as may be necessary for carrying out the purposes of the

Seeds Act  or  any rule  made thereunder”.  Rule 13 of  the Seeds

Rules provides for the requirements to be complied with by a person

carrying  on  the  business  as  referred  to  under  Section  7  of  the

Seeds Act.  Since the Seed Inspector is to ensure that the person

who obtained licence is carrying on business in accordance with the

provisions of the Act, in case of non-compliance with the provisions

of  the  Seeds Act  and  the  Seeds Rules,  in  rare  and  exceptional

cases, the Seed Inspector has power to seal the premises where

the exigencies of the situation require such sealing to carry out the

purposes of the Seeds Act or the Seeds Rules thereunder. Such

power  to  seal  the  place  is  deemed to  be  vested  with  the  Seed

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Inspector  in  terms of    Section 14(1)(e)  of  the Seeds Act  which

empowers the Seed Inspector  to  exercise such other  powers as

may be necessary for carrying out the purposes of the Act or any

rule  made  thereunder.   The  provisions  of  Seeds  Act,  1966  and

Seeds Rules,  1968 provide for  various safeguards that  the Seed

Inspector  does  not  exceed  his  authority.   In  view  of  various

safeguards  provided  under  the  Seeds  Act,  1966  and  other

provisions  in  case  the  Seed  Inspector  proceeds  to  exercise  his

powers for sealing the godown, it is necessary to ensure necessary

safeguards so that the Seed Inspector does not exceed his authority

or misuse his power.

34. The  sine qua non  of Section 14(1)(c) of the Seeds Act -“to

enter and search in places at all reasonable times” is that the Seed

Inspector must have  “reason to believe that an offence under the

Seeds Act has been or is being committed”.  The expression “has

reason to believe that an offence under the Seeds Act has been or

is being committed….” implies a belief arrived at after consideration

of  the  available  materials  with  the  sense  of  responsibility.  For

entering and search of any place, the statute stipulates “reason to

believe  that  an  offence  under  the  Act  has  been  or  is  being

committed”,  “Reason to believe”  means that the belief must have

been arrived at judicially after considering all the materials and on

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prima-facie satisfaction of the authority concerned. Section 26 of the

Penal  Code  defines  that  “a  person  is  said  to  have  “reason  to

believe” a thing, if he has sufficient cause to believe that thing but

not otherwise.”  Since the  “sealing of  premises”  is  a drastic  step,

such power can be exercised only in rare and exceptional cases

and only on satisfaction of the Seed Inspector that such power of

sealing is necessary to carry out the purposes of the Seeds Act or

the rules made thereunder.

35. The 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

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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.   

36. 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.

37. The  finding  of  the  High  Court  that  seeds  were  stored  in

Dhanora unit and no licence was required for storage of seeds for

31

transportation is set aside.  The finding of the High Court that the

Seed Inspector does not have the power to seal the godown and

seizure is not in consonance with the provisions of the Seeds Act,

1966, Seeds Rules, 1968 and Seed (Control) Order, 1983 and the

same is liable to be set aside.  In compliance of the order of the

High Court dated 22.12.2017, the authorities have already desealed

the Dhanora unit of the first respondent and no further direction is

necessary in this regard.

38. In the result, the impugned judgment of the High Court is set

aside and the appeal is allowed.

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

………………………..J.                                                                  [A.S. BOPANNA]

New Delhi; August 22, 2019

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