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PETITIONER: EDWARD KEVENTER PVT.  LTD.

       Vs.

RESPONDENT: BIHAR STATE AGRICULTURAL MARKETING BOARD AND OTHERS

DATE OF JUDGMENT:       11/04/2000

BENCH: V.N.Khare, Doraiswami Raju

JUDGMENT:

     V.N.KHARE, J.

     The appellant herein is a company registered under the Indian  Companies’ Act and has its head office and  factory’ outside  the State of Bihar.  The company manufactures fruit drinks  and markets it under the brand name of ’Frooti"  and ’Appy’  in the State of Bihar through its agents.  The Bihar Legislature  has enacted an Act known as ’Bihar Agricultural Produce  Market  Act, I960’ (hereinafter referred to as  the Act).  The object

     of  the Act is to provide better regulation of  buying and  selling of agricultural produce and the arrangement  of market  for  agricultural  produce in the  State  of  Bihar. Under  Section  27 of the Act.  the Market Committee set  up under  the  Act has power to levy and collect market fee  on the  agricultural  produce,  which   are  specified  in  the Schedule  and are bought or sold in the market area.  It  is not  disputed that the entire district of Patna is  declared as  a  market  area.   Section 2(l)(a) of  the  Act  defines agricultural produce which runs as under:

     "  ’Agricultural  produce’ means all  produce  whether processed   or  non-processed,  manufactured   or  not,   of Agriculture,  Horticulture,  Plantation,  animal  Husbandry, Forest, Sericulture, Pisciculture, and includes livestock or poultry as specified in the Schedule ".

     Under Section 39 of the Act, the State Government by a notification  is  empowered to add, amend, or cancel any  of the  items  of the agricultural produce in the  Schedule  as required by Section 2(l)(a) of the Act.  In the Schedule, as contemplated  under  Section  2(l)(a), mango and  apple  are specified  under the caption ’fruits’ as items No.  I and 13 respectively.   The respondents treating ’Frooti’ and ’Appy’ as mango and apple products.  issued a notice dated 28.3.89, requiring the appellant to pay market fee or

     the  products  marketed under the brand name  Frootii’ and  ’Appy’,  failing  which action under the Act  would  be taken.   Under such circumstances, the appellant  challenged the  aforesaid  demand  by means of a  writ  petition  under Article  226  of the Constitution.  However, the  said  writ petition  was  dismissed  and Letters  Patent  Appeal  filed against  the  judgment of the learned Single Judge was  also

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dismissed.   It  is in this way the appellant is  in  appeal before us.

     The  short  question that arises for consideration  in this  case is, whether the products which are ready to serve beverages  under  the  brand name ’Frooti’ and  ’Appy’  fall under  the description of mango and apple, specified in  the Schedule.   The  contention of the learned counsel  for  the appellant  is that, both the fruit drinks are not covered by the  Schedule,  whereas the contention of  the  respondents’ counsel  is  that  the products being the  mango  and  apple juices  are  covered under the item "mango’ and ’apple’,  as specified in the Schedule.

     The  appellant has described the manufacturing process of beverages ’FrotF and ’Appy’ as under:

     "Frooti  and  Appy are fruit drinks and  manufacturing process of both are cumbersome It is alleged that one of 3

     the ingredistlis of Frooti is mango pulp and not mango which  is  procured by the appellant compam as  nw  material from outside agencies.  Similarly, one of the ingredients of Appy is apple concentrate and not apple.  The pulp is first, passed  through  a  filter  and  stored  in  beverage  tank. Similarly  sugar  in proportionate quantih’ is processed  in the  form of.syrup after heating it to a certain temperature and  then cooling it.  Demineralised water is then added  to the  sugar  syrup  to the extent that it attains  a  certain ’brix’  content.   Meanwhile in the beverage tank  requisite amount  of Citric acid.  non alcoholic beverage  base(NABB), other  permitted  additives, sodium citrate, vitamin  C  are added.   Thereafter  the sugar syrup and the mixture in  the beverage   tank  are  mixed   in   proportionate   quantity. Thereafter  the  said mixture is passed through  homogeniser and  crushed at a very high pressure to disintegrate all the fibres,  which  are present in the beverage mixture.   After homogenisatton,  the mixture is then required to be  pa^ised through  pasteuriser  where  it is heated to  a  temperature between  95  to 100 degrees centigrade for killing  all  the bacteria and micro organism, if there be any.  Subsequently, the  said  mixture is passed through a cooling  channel  for cooling  do\vn  to the room temperature and  passed  through pipe  lines  into the steriliser of the tetra  brik  aseptic packaging  machine  for packing the beverage in  tetra  brik packs   of  200ml  size   which  requires  high   technical expertise.   The  paper  -which is used for  the  packaging, consists  of  se\’en  layers  of  materials  which   include aluminum  foil, laminated polythene etc.  for taking care of aseptic^’  e’^uring  high safety and required life  for  the produce.   The  200 ml pack is then packed in the  packaging machine  and which passes through the com’eyor system on way to  the  tray  packing machine, where it is  accumulated  in trays.   The  said tray containing the fruit drink  pack  is then  shrink wrapped by means of the shrink wrapper machine. After  everything  is completed, the fruit drink  packs  are kept  under  incubation  for  a  period  ofse\>en  days  for detection   of  gro\vth  of   any  microorganism  through  a microbiological analysis.  Simultaneously, organoliptic test is  also  conducted for testing the colour and taste of  the beverage.   After  all  that the ’Frooti ’ and ’Appy  ’  are ready for being delivered in the market.

     A  perusal of Section 2(i)(a) unambiguously shows that the  agricultural  produce  which are to be covered  by  the

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sweep  of  the  Act necessarily has to be specified  in  the Schedule.   If any agricultural produce is not specified  in the  Schedule,  it  goes beyond the purview of the  Act  and respondent has no power to levy fee on such produce.  In the Schedule  under  caption ’fruits" mango and apple have  been specified  as agricultural produce.  We further find in  the Schedule  that under caption ’cereals’ wheat is specified at item  No.  3, whereas ’wheat atta’ ’sujji" and ’maida’ which are  the products of wheat are separately specified at  item Nos.   14,  15  and 16, respectively.  This shows  that  the agricultural  produce ’wheat’ has been treated as a separate agricultural   produce  as  compared  to  its  own   product manufactured  out  of  ’wheat’ namely,  ’atta’,  ’sujji  and ’maida’.   ’Atta  ’sujji’  and  ’maida’  are  basically  the agricultural  products of ’wheat’.  Similarly, the  Schedule shows  that  under the caption ’Animal  Husbandry  Product’, milk  excluding  liquid  milk is specified at item  No.   19 whereas  ’butter’, ’ghee\ ’cream’, ’chena’ and ’khoya’ which are  manufactured  out of milk are separately  specified  at item  Nos.   7,8,16,17 and 19 respectively.   Under  caption ’miscellaneous’,  ’mango  pickles’ is specified at item  No. IS.

     ’Mango  pickles’  is  a product of mango, which  is  a fruit;   and specified in Schedule but ’mango pickles’  have been specified separately.  This shows basic ingredients may be  the same but the end product which is known  differently is  treated as a separate item.  It is true that Trooti’ and "Appy"  are  manufactured  out  of   mango  pulp  and  apple concentrate, but after the mango pulps and apple concentrate are  processed and beverages are manufactured, the  products become  entirely  different items and the fruits  mango  and apple  loose  their  identity.  In  common  parlance,  these beverages  are no longer known as mango and apple as fruits. In  other  words,  after  processing mango  pulp  and  apple concentrate,  although the basic character of the mango pulp and  apple concentrate may be present in beverages, but  the end  products are not fruits i.e.  mango and apple which are specified in the Schedule.  Our views also find support from a  Constitution Bench decision of this Court in the case  of Belsund  Sugar Co.  Ltd.  Vs.  State of Bihar & Ors.   [1999 (9) SCC, 620] wherein it was held that Lactodex and Raptakos which  are  baby foods do fall under the  description  milk, specified   in  the  Schedule  of   the  Act.   Under   such circumstances,  we find that the products like ’Frooti’  and ’Appy’ which are ready to serve beverages not

     being specified in the Schedule are not covered by the term agricuitural produce, as defined in Section 2(1 )(a) of the Act.

     Learned  Additional  Solicitor  General then  cited  a decision  of this Court in the case of Krishi Utpadan  Mandi Samifri and another vs.  M/s.  Shankar Industries xid others [1993  Supp.  (3) SCC 361(11)] for the proposition that  the meaning  of  ’agriculture produce’ in the definition is  not restricted  to any products of agriculture specified in  the Schedule,  but also include such items which come into being in  the  processed form, and has strongly relied para 12  of the said decision, which reads as under:

     "  We have considered the arguments advanced on behalf of’  the  parties and have perused the record.  A perwal  of the definition of agriculture produce under Section 2 (a) of the  Act  show’s  that  apart   from  items  of  produce  of

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agriculture,    horticulture,     viticulture,    piculture, sericulture.   pisciculture,  animal husbandry or forest  as are  specified  in  the  Schedule,  the  definition  further ’includes  admixture  of’  two  or   more  such  items’  and thereafter  it  further  ’includes taking any such  item  in processed form ’ and again for the third time the words used are  ’and further includes gur, rab, shakkar, khandsari  and jaggery  ’ It is a well settled rule of interpretation that where  the legislature uses the words ’means’ and ’includes’ such  definition  is to be given a wider meaning and is  not exhaustive  or restricted to the items contained or included in  such  definition.   Thus the  meaning  of  ’agricultural produce’  in  the abwe definition is not restricted  to  any products of agriculture as specified in the Schedule hut

     also  includes  such  items which come into  being  in processed  forn:  and further includes such items which  are called as gur.  rab.  shakhar, khandsarl and jaggery’.  "

     We  are  of the view that the said decision is  wholly inapplicable  to  the  present controversy.   In  the  Uttar Pradesh Act, the agricultural produce is defined as under:

     "  Section  2(a)  ’agricultural produce ’  means  such items  of produce of agriculture, horticulture, viticulture, apiculture,  sericulture, pisciculture, animal husbandry  or forest  as  are  specified  in the  Schedule,  and  includes admixture  of  two or more of such items, and also  includes any  such item in processed form, and further includes  gur, rah, shakkar.  khandsari and jaggery’.  "

     The  controversy in the case of Krishi Utpadan  Samiti (supra), was whether gur-lauta and raskat and rabgolawat and salawat,  which  are products of molasses, are  agricultural produce.   This  Court while interpreting words "means’  and ’includes’  used  in  the definition, was of the  view  that these  words  have to be given wider meaning  and  processed item  of a good specified in Schedule would be  agricultural produce.   In  U.P.   Act, the definition  of  ’agricultural produce’  provided  that any processed item of  a  specified good is an agricultural produce.  Such is not the definition of 8

     ’agricultural  produce’ in the Bihar Act with which we are concerned in the present case.

     For  the reasons aforestated.  we are of the view that the  product ’Frooti" and ’Appy’ not being specified in  the Schedule,  the respondent had no authroty to demand any  fee from   the  appellant  on   marketing  the  said   products. Consequently,  the  order and judgment of the High Court  is set  aside  and  the appeal is allowed.  There shall  be  no order as to costs.