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.
(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?
Apex court held that
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.
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.
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
20
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, in our
view, erred in saying that the seeds packed and labelled are meant
for transportation for which no licence was required
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
23
respondent’s godown at Dhanora which requires the registration of
Genetical Engineering Approval Committee (GEAC).
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
24
treated as a permission to retain GE material even after the
evaluation by GEAC was terminated.
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 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
30
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.
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.
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 respondentCompany thereby ordering the appellant-authorities to de-seal all
1
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
2
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
3
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
4
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
5
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 noncotton seeds at Dhanora unit and those processed seeds are stored
6
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
7
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;
8
(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
9
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
10
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
11
(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
12
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
13
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
14
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 ____________
15
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.
16
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
17
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
18
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.
19
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
20
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. Appellants21
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
22
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
23
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
24
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
25
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
26
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
27
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
28
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
29
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
30
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 incharge. 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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