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?

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

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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?
  8. 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.
  9. 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.”
  10. 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,
  11. 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,
  16. 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.
  17. 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
  18. 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.
  19. 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.
  20. 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]

  1. 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
  2. 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.
  3. 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.”
  4. 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.
  5. 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
  6. 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.
  7. 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.
  8. 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.
  9. 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.
  10. 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.
  11. 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.
  12. 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.
  13. 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.
  14. 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.
  15. 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.
  16. 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.
  17. 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.
  18. 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.
  19. 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.
  20. 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
    32