Madras High Court
Cardmons Growers Forever Private ... vs The Spices Board on 28 April, 2025
W.P.(MD)Nos.27726 and 26544 of 2024
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
RESERVED ON : 21.01.2025
PRONOUNCED ON : 28.04.2025
CORAM:
THE HONOURABLE MRS.JUSTICE L.VICTORIA GOWRI
W.P.(MD)Nos.27726 and 26544 of 2024
and
W.M.P.(MD)Nos.24717, 24993, 25268, 26327 and 26329 of 2024
and 79 of 2025
W.P.(MD)No.27726 of 2024
Cardmons Growers Forever Private Limited,
Rep. by its Managing Director M.Arumugam,
Door No.17A, New Colony Second Street,
Ward No.33, Bodinayakanur,
Theni District. ... Petitioner
Vs.
1.The Spices Board,
(Ministry of Commerce and
Industry Govt. of India)
Rep. by its Secretary,
Sugandga Bhavan,
NH Bypass, PB No.2277
Palarivattom Post,
Kochi, Kera
2.The Director (Marketing),
Spices Board,
Sugandga Bhavan,
NH Bypass, PB No.2277
Palarivattom Post,
Kochi, Kerala.
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W.P.(MD)Nos.27726 and 26544 of 2024
3.The Assistant Director (Marketing),
Spices Board,
Kurangani Road,
Bodinayakanur,
Theni District.
4.Vandamedu Spices Trading LLP,
Lakshmi Mahal,
Near Scism School,
Bodinayakanur, Theni District. ... Respondents
Prayer : Writ Petition filed under Article 226 of the Constitution of
India, praying this Court to issue a Writ of Mandamus, by directing the
1st to 3rd respondents to forbear the 4th respondent from conducting
private online E-auction on cardamom produces, parallel to 1st
respondent's E-auction proceedings and take legal action against the 4th
respondent and other private E-auctioneers from conducting private E-
auction in cardamom produces, based on the petitioner e-mail
representation dated 18.11.2024.
For Petitioner : Mr.Raja Karthikeyan
For R-1 to R-3 : Mr.K.Govindarajan,
Deputy Solicitor General of
India
For R-4 : Mr.Issac Mohanlal,
Senior Counsel,
Assisted by,
Mr.B.Prasanna Vinoth
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W.P.(MD)Nos.27726 and 26544 of 2024
W.P.(MD)No.26544 of 2024
Idukki District Traditional Cardamom
Producer Co., Ltd.,,
Rep. by its Director,
T.V. Ramkrishnan,
No. 5/25, Aalamarathu Street,
Cumbum,
Theni 625 516. ... Petitioner
Vs.
1.The Spices Board,
(Ministry of Commerce and
Industry Govt. of India)
Rep. by its Secretary,
Sugandga Bhavan,
NH Bypass, PB No.2277,
Palarivattom Post,
Kochi, Kerala.
2.The Director (Marketing),
Spices Board,
Sugandga Bhavan,
NH Bypass, PB No.2277,
Palarivattom Post,
Kochi, Kerala.
3.The Assistant Director (Marketing),
Spices Board,
Kurangani Road,
Bodinayakanur,
Theni District.
4.Kerala Cardamom Trading Company,
D.No. 249, Krishna Nagar,
Ward No. 3,
Bodi - Thevaram Road,
Bodinayakanur,
Theni District. ... Respondents
Prayer : Writ Petition filed under Article 226 of the Constitution of
India, praying this Court to issue a Writ of Mandamus, by directing the
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W.P.(MD)Nos.27726 and 26544 of 2024
1st to 3rd respondents to forbear the 4th respondent from conducting
private online E-auction on cardamom produces, parallel to 1st
respondent's E-auction proceedings and take legal action against the 4th
respondent and other private E-auctioneers from conducting private E-
auction in cardamom produces, based on the petitioner e-mail
representation dated 03.11.2024.
For Petitioner : Mr.Raja Karthikeyan
For R-1 to R-3 : Mr.K.Govindarajan,
Deputy Solicitor General of
India
For R-4 : Mr.B.Saravanan,
Senior Counsel,
Assisted by,
Mr.S.Chandrasekar
ORDER
Two writ petitions are filed by two of the licensed e-auctioneers of
the First Respondent Spices Board, seeking to direct the first to third
respondents to forbear the fourth respondent from conducting private
online e-auction on cardamom produces, parallel to the first
respondent's e-auction proceedings and take legal action against the
fourth respondent and other private e-auctioneers from conducting
private e-auction in cardamom produces, based on the respective
petitioner's e-mail representation dated 03.11.2024 and 18.11.2024
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respectively.
2. The fourth respondent in W.P.(MD)No. 26544 of 2024 is one
Kerala Cardamom Trading Company, having its registered address at
Door No. 249, Krishnanagar, Ward No. 3, Bodi-Thevaram Road,
Bodinayaknur, Theni District. Likewise, the fourth respondent in W.P.
(MD)No. 27726 of 2024 is one Vandamedu Spices Trading LLP, having
its registered address at Lakshmi Mahal, near SCISM School,
Bodinayaknur, Theni District.
3. The controversy involved in these writ petitions, lies in a very
narrow compass, that is, whether the traders after purchase of
cardamom from a licensed dealer of cardamom, who had purchased
from the Spice Board auction, could do a secondary sale of cardamom
among traders by further conducting online / e-auction of cardamom,
independent of the Spice Board?.
4. The plea of the learned counsels appearing for the petitioners is
that, the Central Government in exercise of the powers conferred by
Section 38 of the Spices Board Act, 1986, (10 of 1986) and in
supersession of the Cardamom (Licensing and Marketing) Rules, 1977,
has made the Cardamom (Licensing and Marketing) Rules, 1987, for
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regulating the trade in cardamom business. However, private
individuals who neither possess the auctioneer license or the dealer
license as issued by the Spices Board under Rule 4 of the cardamom
(Licensing and Marketing) Rules, 1987, (hereinafter to be mentioned as
Rules, 1987) in Form B are conducting online auction of cardamom
without the approval of the first respondent.
5. Hence, the petitioners have sought for a direction to the
respondents 1 and 2 for taking appropriate action against the respective
4th respondents who have indulged in private online e-auctioning and
conducting trade fair of cardamom to prevent illegal trading carried out
against the provisions of Section 38 of Spices Board Act, 1986, by
submitting their email representation on 03.11.2024 and 18.11.2024
respectively. The inaction on the part of the respondents 1 and 2 have
compelled the petitioners to file these writ petitions. In an earlier
occasion under similar circumstances, two writ petitions in W.P.
(MD)Nos. 6245 and 14199 of 2023 were filed before this Court and
when this Court took up the matter for admission, the learned Deputy
Solicitor General of India, who appeared for the Spices Board submitted
that the Spices Board and the official authorities are strictly
implementing the rules and are also taking action whenever any private
trade has been conducted in violation of the rules. Recording the said
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submission of the learned Deputy Solicitor General of India, this Court
was pleased to close the aforesaid writ petitions by an order dated
22.09.2023. Aggrieved by a similar situation, these writ petitions have
come up before me.
6. The learned counsel for the petitioners Mr.Raja Karthikeyan
claimed that the petitioners are licensed e-auctioneers of the first
respondent Spices Board. The fourth respondents in both the writ
petitions, violating the various mandates of the Cardamom (Licensing
and Marketing) Rules, 1987 and the Spices Board Act, 1986, are
conducting the private online e-auctions, which are not legally
permissible, causing damage to the business of cardamom in the open
market.
7. Being a licensed e-auctioneer, the learned counsel appearing
for the petitioners voiced on behalf of the petitioners to forbear the
fourth respondents from conducting a parallel private online e-auction
as conducted by the Spices Board and pressed for allowing these writ
petitions.
8. The learned Deputy Solicitor General of India for the
respondents 1 to 3 demonstrated the way, in which the auction of
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cardamom is carried out by the Spices Board. The Spices Board
provides two licences, namely auctioneer licence and dealer licence. As
many as 16 auctioneer licences are issued by the Spices Board. As far
as the dealer licence is concerned, somewhere, between 500 to 600
licences are issued from time to time.
9. The holders of auctioneer licence are entitled to procure
cardamom directly from the growers / producers of cardamom. The
persons with dealer licence shall also procure cardamom from the
auctioneer / producers. However, both the category of licencees on
procurement of cardamom should bring the same to the auction centres
run by the Spices Board at Puttady and Bodinayakkanur. Only two
auction centres are run by the Spices Board as on date, across India.
10. On procurement of cardamom from the growers / producers,
a sample of 1½ kg of every procurement has to be produced by the
auctioneers before the auction centres at Puttady and Bodinayakkanur
for display to the dealers for the purpose of assessing the market value
of the product. The samples received at Puttady and Bodinayakkanur
auction centres would be subjected to laboratory test, for verifying,
whether the same is artificially coloured, wherein if any irregularity is
identified, the same would be banned and would not be permitted in the
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auction process. The said exercise would safeguard the traders as well
as the consumers of cardamom from adulteration if any.
11. After subjecting the sample to laboratory test, the respective
samples at Puttady and Bodinayakkanur would be displayed for the
dealers and the dealers will be at liberty to examine the sample
produced in the auction centres and thereafter, a minimum price for
every sample would be fixed by the auctioneer, for whom the particular
auction is slotted on a particular day. After the minimum price fixed by
the auctioneer, the dealers are open to rise their bids for every six
seconds and such auction would be in an online mode, where the
respective bid of the dealers would be made in every six seconds and
the final price would be fixed on reaching the maximum bid.
12. Thereafter, the successful bidder / dealer would procure the
particular consignment, and only the successful dealer is open to trade
the same across the country with the strength of the sale certificate
issued by the Spices Board. That apart, the money fetched from the
dealers after auction should be paid by the auctioneer within a period of
ten days to the cardamom growers / producers, for which, the
auctioneer will have to give a bank guarantee as per the demand of the
Spices Board in terms of Rule 10 of the Cardamom (Licensing and
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Marketing) Rules, 1987. The purpose for receiving the bank guarantee
from the auctioneer licensees is that, incase of default by the auctioneer
to pay the auction amount to the growers within a period of ten days,
the bank guarantee (bg) would be enhanced and the same will be paid
by the Spices Board to the growers. In such a way, both the fruits of
the agricultural produce of the growers of the cardamom as well as the
quality of the cardamom is ensured by the Spices Board.
13. It is seen that, as per the Cardamom (Licensing and
Marketing) Rules, 1987, only the holders of the auctioneer licence could
conduct auction of cardamom at Puttady and Bodinayakkanur auction
centres run by the Spices Board and the successful bidders of the
auction, holding the dealer licence could further sell the cardamom to
various traders across the country.
14. The Deputy Solicitor General of India appearing for the
respondents 1 to 3 further submitted that, the fourth respondent is
neither an auctioneer nor a dealer and hence, he has no authority to
conduct any auction on cardamom as per the rules governing the
Spices Board and hence, he should be prosecuted and the
Superintendent of Police, Theni District, has to be impleaded and has to
be directed to take action as against the fourth respondent.
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15. Per contra, the learned senior counsel appearing for the
fourth respondent, on the basis of the counter affidavit, submitted that,
the petitioner being an auction purchaser is a broker or commission
agent in broker system, in which auctioneers will sell the cardamom for
commission and their remuneration would be commissioned, which
they fetch from every auction. But the fourth respondent is neither an
auctioneer nor a dealer, but he is conducting trade. The fourth
respondent purchase cardamom from the traders along with invoices at
a price and selling it to various other buyers. The fourth respondent is
selling their own stocks at a price quoted by the buyers. The practice
followed by the fourth respondent did not involve any commission
agency such as brokers and the same is done in a transparent manner
for both the buyers as well as the sellers. The learned counsel also
categorically contended that the fourth respondent never conducted any
auction and only conducted a trade of cardamom and he is marketing
the same only under the TNGST norms.
16. Interestingly, as many as five impleading petitions have been
filed in this petition by various stakeholders. W.M.P.(MD)No.26329 of
2024 has been filed by a registered cardamom planter of the Spices
Board in order to safeguard the interest of the licensed auctioneer.
W.M.P.(MD)No.79 of 2025 has been filed by another registered
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cardamom grower and a licensed dealer of the Spices Board. W.M.P.
(MD)No. 26327 of 2024 is also filed by a registered cardamom planter of
the Spices Board who has filed this impleading petition to safeguard the
interest of the licensed auctioneer and all these impleading petitioners
sail with the writ petitioners herein.
17. Per contra W.M.P.(MD)No. 25268 of 2024 is filed by the
proprietor of one Yuva Spices, a registered firm with GST registration
number who bats for the right of secondary sale of cardamom and its
trade. W.M.P.(MD)No.24993 of 2024 is filed by the proprietor of
M/s.Sonali Exports who claim to be a trader who purchase cardamom
from the licensed auctioneers through Spices Board and thereafter who
sell the produce obtained from the auction through private e-trade.
18. W.M.P.(MD)No. 24717 of 2024 has been filed by the fourth
respondent in W.P.(MD)No. 27726 of 2024 to vacate the interim
injunction passed by this Court on 19.11.2024 pending these writ
petitions.
19. The learned senior counsels Mr.Isaac Mohanlal, Mr.Ajmal
Khan, Mr.Saravanan and the learned counsel Mr.Prasanna Vinoth
categorically submitted their submissions justifying the case of the
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fourth respondents as well as the right of private individuals to
undertake the trade of cardamom in a secondary level and their
arguments are crystallized as follows:
(i) The fourth respondents' right to conduct trade fairs without
inviting producers / planters / estate owners of cardamom but only
inviting the cardamom traders is protected under Article 19(1)(g) of the
constitution which guarantees the fundamental right of trade
occupation and business. Though the right of trade occupation and
business can be restricted or regulated by a legislative law made by the
parliament or by the state legislatures, the same cannot take away the
right of secondary sale or secondary trade of cardamom. The prohibition
stipulated by the Spices Board Act, 1986, read with the Cardamom
(Licensing and Marketing) Rules, 1987, is only in respect of the first
time primary sale and not for the secondary sales.
(ii) Already four trade fairs have been successfully conducted by
the respondents and the proposed trade fair which is challenged before
this Court in these writ petitions are the fifth one. After the completion
of primary sale, the traders who bought cardamom through licensed
auctioneers in the auction centers run by the Spices Board, the same
need to be marketed throughout the country or maybe throughout the
world. Only for the said purpose, the respondents herein are organizing
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a fair wherein spaces are provided for all the licensed dealers to come
and display so that all will have a look and they can test the quality,
quantity and price and they can do the marketing and only for that
limited purpose, the trade fair is likely to be conducted and that cannot
be restricted or prohibited. Making it clear that the fourth respondents
are not involving in any primary sale but they are fully indulged in
dealing with the licensed traders who are going to do only second or
fourth or fifth sale and not at all primary sale.
(iii) The business of cardamom involves four stakeholders wherein
the first player would be the cardamom growers and the estate owners.
The second player being the licensed auctioneers, the third player would
obviously be the licensed dealers. The fourth respondents are those who
have procured cardamom from the licensed dealers and all those
persons are the consumers who are engaged in the secondary sale of
cardamom as the fourth player and their business cannot be restricted
or prohibited in the absence of any specific provision which restricts the
secondary sale. Thus, the e-auction for the conduct of secondary sale by
organizing trade fairs which are proposed to be done by the fourth
respondents are protected under Article 19 (1) (g) of the Constitution of
India. As long as there is no allegation that the fourth respondents are
purchasing cardamom directly from the growers there cannot be any
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case as against the fourth respondents which would prohibit them from
engaging in the business of cardamom for the conduct of secondary
sales through any mode of marketing.
20. Heard the learned counsel for the petitioner Mr. Raja
Karthikeyan, Mr. Herold Singh and Mr. Ashwin Rajasimman on behalf
of the writ petitioners and the impleading petitioners who sail along
with the writ petitioners. Heard the learned senior counsel Mr.Isaac
Mohanlal, learned senior counsel Mr. Saravanan, learned senior
counsel Mr. Ajmal Khan and the learned counsel Mr. Prasanna Vinoth
for the fourth respondents and the impleading petitioners who sail with
the fourth respondents, the learned Deputy Solicitor General of India,
Mr. Govindarajan, who appear on behalf of the respondents 1 to 3 and
carefully perused the materials available on record.
Analysis:
21. The Spices Board in India grants licenses to traders engaged
in cardamom / spices. The same serves as a regulatory authority and
the Spices Board safeguards the farmer's interest by ensuring that they
receive fair prices for the produce and guarantees the supply of high
quality spices to consumers. To achieve fair pricing and eliminate the
exploitation of middleman, the Spices Board conducts e-auctions which
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help farmers' secure better returns. Section 2 (e) of the Spices Board
Act, 1986, defines the term “dealer”: dealer means a dealer in spices.
Section 2 (j) of the Spices Board Act, 1986, defines “owner” as follows:
2. (j) “owner” in relation to any land planted with cardamom
plants, includes - (i) any agent of the owner; and
(ii) a mortgagee, lessee or other person in actual possession
of the land;
22. Section 2 (l) and 2 (m) of Spices Board Act, 1986, (herein after
to be mentioned as Act, 1986) defines registered estate and registered
owner as follows:
(l) “registered estate” means an estate in respect of which
an owner is registered under sub-section (1) of section 8 and
includes any estate in respect of which an owner is required to
be registered under the provisions of that sub-section;
(m) “registered owner” means an owner of a registered
estate which has been or is registered or is required to be
registered under sub-section (1) of section 8;
23. Chapter II of the Act, 1986, provides for the constitution of
Spices Board and its functions. The functions of the Spices Board is
enumerated under Section 7 of the Act, 1986, and the same is
extracted as follows:
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“7. (1.) The Board may:-
(i) develop, promote and regulate export of spices;
(ii) grant certificate for export of spices and register brokers
therefore;
(iii) undertake programmes and projects for promotion of
export
of spices;
(iv) assist and encourage studies and research for
improvement of processing, quality, techniques of grading and
packaging of spices;
(v) strive towards stabilisation of prices of spices for export;
(vi) evolve suitable quality standards and introduce
certification of quality through “Quality Marking” for spices for export;
(vii) control quality of spices for export;
(viii) give licences, subject to such terms and conditions as
may be prescribed, to the manufacturers of spices for export;
(ix) market any spice, if it considers necessary, in the interest
of promotion of export;
(x) provide warehousing facilities abroad for spices;
(xi) collect statistics with regard to spices for compilation and
publication;
(xii) import, with the previous approval of the Central
Government, any spice for sale, and
(xiii) advise the Central Government on matters relating to
import and export of spices.
(2) The Board may also:-
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(i) promote co-operative efforts among growers of cardamom;
(ii) ensure remunerative returns to growers of cardamom;
(iii) provide financial or other assistance for improved methods
of cultivation and processing of cardamom, for replanting cardamom
and for extension of cardamom growing areas;
(iv) regulate the sale of cardamom and stabilisation of prices of
cardamom;
(v) provide training in cardamom testing and fixing grade
standards of cardamom;
(vi) increase the consumption of cardamom and carry on
propaganda for that purpose;
(vii) register and licence brokers (including auctioneers) of
cardamom and persons engaged in the business of cardamom;
(viii) Improve the marketing of cardamom;
(ix) collect statistics from growers, dealers and such other
persons as may be prescribed on any matter relating to the
cardamom industry; publish statistics so collected or portions thereof
or extracts therefrom;
(x) secure better working conditions and the provision and
improvement of amenities and incentives for workers; and
(xi) undertake, assist or encourage scientific, technological and
economic research.”
24. Chapter III of the Act, 1986, provides for the registration of
owners of cardamom estate and the same is extracted as follows:
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“REGISTRATION OF OWNERS OF CARDAMOM ESTATES
8. Registration of owners of cardamom estates:
(1) Every owner of land planted with cardamom plants,
whether such land is comprised in one estate or more than one
estate, shall, before the expiration of one month from the date on
which he first became owner of such estate or estates, apply to the
registering officer appointed in this behalf by the State Government
to be registered as an owner in respect of each estate owned by
him;
Provided that the State Government may, for sufficient
reasons, extend the time-limit for registration by such period as it
thinks fit.
(2) Registration once made shall continue to be in force until it
is cancelled by the registering officer.
9. Power of State Government to make rules:
(1) The State Government may, by notification in the Official
Gazette, make rules to carry into effect the provisions of section 8.
(2) Without prejudice to the generality of the foregoing power, such
rules may prescribe the form of the application for registration and
for cancellation of registration, the fee payable on such applications,
the particulars to be included in such application the procedure to be
followed in granting and cancelling registration, the registers to be
kept by registering officers and the supply by registering officers of
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information to the Board.
10.Returns to be made by registered owners:
(1) A registered owner shall furnish returns to the Board in such
form, at such times and in such manner as may be prescribed.
(2) The Board may authorize an officer to visit any estate at any time
to verify the accuracy of any return made under this section or to
ascertain the productive capacity of the estate.”
25. Chapter IV of the Act, 1986, Section 11, provides for the
certificate for export of spices and the same is extracted as follows:
“CERTIFICATE FOR EXPORT OF SPICES
11.No person to export spices without certificate:
Save as otherwise provided in this Act, no person shall, after
the commencement of this Act, commence or carry on the business of
export of any spice except under and in accordance with a certificate.
Provided that a person carrying on the business of export of
spices immediately before the commencement of this Act, may
continue to do so for a period of three months from such
commencement; and if he has made an application for such
certificate with the said period of three months till the disposal of
such application.
Explanation: The reference in this section to the
commencement of this Act shall be construed in relation to any spice
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added to the Schedule by notification under the proviso to clause (n)
of section 2 as reference to the date with effect from which such spice
is added to the Schedule.”
26. Chapter V of Act, 1986, elaborates the power of the Central
Government to control the price and distribution of cardamom and
Section 16 and 17 of the Act, 1986, is extracted as follows:
“CONTROL BY THE CENTRAL GOVERNMENT
16.Power to control price and distribution of cardamom:
(1) The Central Government may, by order notified in the
Official Gazette, fix in respect of cardamom of any discription
specified therein (a) the maximum price or the minimum price, or
the maximum and minimum prices, which may be charged by a
grower of cardamom or cardamom dealer, wholesale or retail,
whether for the Indian market or for export; and
(b) the maximum quantity which may in one transaction be
sold to any person.
(2) Without prejudice to the generality of the powers
conferred by sub-section (1), any order made thereunder may
provide-
(a) for requiring persons engaged in the production, supply or
distribution of, or trade and commerce in cardamom to maintain and
produce for inspection such books, accounts and records relating to
their business and to furnish such information relating thereto as
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may be specified in the order; and
(b) for such other matters; including in particular the entering
and search of premises, vehicles, vessels and aircraft, and seizure
by a person authorised to make such search of cardamom in the
respect of which such person has reason to believe that a
contravention of the order has been, is being or is about to be
committed.
17.Power to prohibit or control import of Cardamom:
The Central Government may, by order publish in the official
Gazette, make provision for prohibiting, restricting or otherwise
controlling the import of cardamom, either generally or in specified
classes of cases.”
27. Under Chapter VII of the Act, 1986, Section 38, emphasizes
the power of the Central Government to make rules to carry out the
purposes of Act, 1986, by notification in the official gazette. In exercise
of the powers conferred by section 38 of the Spices Board Act, 1986 (10
of 1986) and in supersession of the Cardamom (Licensing and
Marketing) Rules, 1977, the Central Government made the “Cardamom
(Licensing and Marketing) Rules, 1987”. Rule 2 of Rules, 1987, deals
with the definition clause and the same is extracted as follows.
“2.Definitions.- In these rules, unless the context otherwise
requires :-
(a)"Act" means the Spices Board Act, 1986;
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(b)"auctioneer" means a person engaged in the business of
conducting cardamom auctions;
(c)"Dealer" means a person engaged in the business of
purchasing and selling of cardamom but does not include any
auctioneer or exporter ;
(d)"Form" means a form appended to these rules ;
(e)"Person" means an individual and includes company, firm,
society and any other association or body of individuals, whether
incorporated or not.”
28. The conditions to carry on business in cardamom is
enumerated under Rule 3 of Rule, 1987, and the same is extracted as
follows:
“3.Conditions to carry on business in cardamom:-
(1) No person shall carry on business as auctioneer or dealer
of cardamom except under and in accordance with the terms and
conditions of a licence issued under these rules and such other
instructions as may be issued, from time to time, by the Board for the
development of the cardamom industry.
(2) No producer of cardamom shall sell his produce otherwise
than through a Licensed auctioneer or to a dealer licensed to
purchase cardamom from producers:
Provided that the Board may, if it is satisfied that to ensure
remnuerative returns to growers, it is necessary to route all
cardamom through auctions, require producers to sell their produce
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to the licensed dealers through auctions alone.”
29. Licensing of persons to carry on business of cardamom is
enumerated under Rule 4 of Rule, 1987, and the same is extracted as
follows:
“4. Licensing of persons to carry on business of cardamom.-
(1) Any person desiring to carry on business as auctioner or
dealer in any year may apply in Form A to the Board for a license:
Provided that separate applications shall be necessary where
a person desires to be licensed in more than one capacity:
Provided further that separate license shall be necessary for
an auctioneer in respect of each centre if he desires to conduct
auctions in more than one centre.
(2) Every application shall be accompanied by a fee of Rs.100
by a crossed demand draft or postal order drawn payable to the
Spices Board at Cochin.
(3) The Board may, if it is satisfied as to the suitability of the
appellant, issue a license to him in Form B.”
30. The validity of license is dealt with by Rule 6 of Rule, 1987,
and the same is extracted as follows:
“6.Validity of license.- The license shall normally be valid for a
period of three years:
Provided that the Board may issue a license for a shorter
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period for reasons to be recorded in writing.”
31. For the purpose of this case it is necessary to extract the
various Forms provided under Rules, 1987. Any person desiring to carry
on business as auctioneer or dealer should apply in Form A and the
same is extracted as follows:
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32. The Spices Board if satisfied as to the suitability of applicant
shall issue license to the applicant as dealer or auctioneer in Form B
and the same is extracted as follows:
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33. Every licensed dealer should maintain a register in the format
given under Form E of the Rules, 1987. The monthly statement of a
licensed dealer should be sent to the board in the format enumerated
under Form F and the same are extracted as follows:
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34. The Spices Board for the purpose of striving towards
stabilization of prices of spices for export and evolving suitable quality
standards has introduced certification of quality through quality
marketing for spices and has also introduced measures to control
quality of spices for export by giving licenses subject to the terms and
conditions as prescribed under the marketing Rules. The licensing
marketing and conditions to carry on business in cardamom is fully
dealt with by the Cardamom (Licensing and Marketing) Rules, 1987.
Rule 3 which provides for the conditions to carry on business in
cardamom do not distinguish between the term 'dealer' and 'trader'. On
the other hand, it makes it clear that, it is only after the scrutiny of the
suitability of the applicants, who have made an application for license
under Rule 4 in Form A, the Spices Board would issue a license to the
applicants whoever had succeeded in the selection process in Form B
as 'auctioneer' or 'dealer'. Only those licensees could carry on business
in cardamom either as 'auctioneer' or as 'dealer' of cardamom. Nowhere
in the entire scheme of trade of cardamom enumerated under Rules
1987, the term 'trader' is either defined or the 'role of a cardamom
trader' is envisaged.
35. The term dealer is defined under Section 2 (e) of the Spices
Board Act, 1986, and section 2 (c) of the Rules, 1987. That apart,
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Section 2 (b) of the Central Sales Tax Act, 1956, defines dealer as
follows:
(b) "dealer" means any person who carries on (whether
regularly or otherwise) the business of buying, selling, supplying or
distributing goods, directly or indirectly, for cash or for deferred
payment, or for commission remuneration or other valuable
consideration, and includes—
(i) a local authority, a body corporate, a company, any co-
operative society or other society, club, firm, Hindu undivided family
or other association of persons which carries on such business;
(ii) a factor, broker, commission agent, del credere agent, or any
other mercantile agent, by whatever name called, and whether of the
same description as hereinbefore mentioned or not, who carries on the
business of buying, selling, supplying or distributing, goods belonging
to any principal whether disclosed or not; and
(iii) an auctioneer who carries on the business of selling or
auctioning goods belonging to any principal, whether disclosed or not
and whether the offer of the intending purchaser is accepted by him or
by the principal or a nominee of the principal.
Explanation I— Every person who acts as an agent, in any
State, of a dealer residing outside that State and buys, sells, supplies,
or distributes, goods in the State or acts on behalf of such dealer as—
(i) a mercantile agent as defined in the Sale of Goods Act, 1930
(3 of 1930), or
(ii) an agent for handling of goods or documents of title relating
to goods, or
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(iii) an agent for the collection or the payment of the sale price
of goods or as a guarantor for such collection or payment,
and every local branch or office in a State of a firm registered outside
that State or a company or other body corporate, the principal office or
headquarters whereof is outside that State, shall be deemed to be a
dealer for the purposes of this Act.
Explanation 2— A Government which, whether or not in the
course of business, buys, sells, supplies or distributes, goods, directly
or otherwise, for cash or for deferred payment or for commission,
remuneration or other valuable consideration, shall except in relation
to any sale, supply or distribution of surplus, un-serviceable or old
stores or materials or waste products or obsolete or discarded
machinery or parts or accessories thereof, be deemed to be a dealer
for the purposes of this Act;]
36. The Black's Law Dictionary, 10th Edition1, defines the term
“trader” as follows:
A “trader” is defined as a (1).A merchant; a retailer; one who buys goods to
sell them at a profit. (2). Someone who sells goods substantially in the form in
which they are bought; one who has not converted them into another form of
property by skill and labor. (3). Someone who, as a member of a stock exchange,
buys and sells securities on the exchange floor either for brokers or on his or her
own account. (4). Someone who buys and sells commodities and commodity futures
for others or for his or her own account in anticipation of a speculative profit.
1 Page 1074
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37. The scheme of licensing, marketing and conditions to carry on
business in cardamom as enumerated under Act, 1986, and Rules,
1987, do not distinguish between the auctioneer/dealer and trader.
More particularly, the term 'trader' is not at all defined in either the Act
or in the Rules, but it is only the term 'auctioneer' and 'dealer' which
has been defined in the aforesaid Act and Rules. Rule 3 makes it clear
that, a business of cardamom at the first instance, in any manner can
be carried on only by a licensed auctioneer or a licensed dealer and that
no producer of cardamom shall sell his produce otherwise through a
licensed auctioneer or to a licensed dealer and the same provides that
the entire cardamom grown should be routed through the auctions
conducted in the auction centers of the Spices Board through
auctioneers procured by licensed dealers. Even if the licensed dealers
are not prohibited from procuring cardamom directly from the growers /
estate owners, they could channel the same for sale only by submitting
the same before the auction center through auctioneers for conduct of
auction.
38. Thus, it is needless to state that the primary sales of the
cardamom should be done by the licensed auctioneers by procuring the
same from the growers directly. The dealers are also similarly entitled to
procure cardamom from the growers directly. However, the cardamom
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procured could be sold only in the auction centers which are situated at
Puttady and Bodinayakanur by submitting the procured cardamom for
auction through the licensed auctioneers. Obviously, it is the licensed
dealers who could participate in the aforesaid auctions after the fixation
of minimum price for the cardamom displayed for auction by the
auctioneer and thereafter, the dealers are open to rise their bids and
finalize the price of the cardamom displayed for auction.
39. It is only for these licensed dealers the trade of the procured
cardamom across the country is open, with the strength of the sale
certificate issued by the Spices Board. Any trader purchasing any
consignment of spices from these licensed dealer should be
accompanied with the sales certificate issued by the Spices Board to the
registered dealer concerned from whom the trader has purchased
cardamom. The trader in turn cannot conduct secondary trade 'by
conducting secondary e-auction', since the same is contrary to the
procedure mandated under Rule 3 of Rules, 1987, which provides for
the conditions to carry on business in cardamom. Rule 3 specifically
prohibits anyone other than a licensed auctioneer or licensed dealer of
cardamom who has obtained a license from the Spices Board in Form B
in terms of Rule 4 of Rules, 1987, to carry on business as 'auctioneer' or
'dealer' of cardamom.
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40. Hence, the right to conduct 'auction' for the purpose of
carrying on business of cardamom in 'any form' is permitted only for
those licensed auctioneers under Rules, 1987. No other private
individuals could conduct auction in any form for the purpose of
carrying out the business of cardamom. When the scheme of carrying
on the business of cardamom as envisaged in Act, 1986, and Rules,
1987, is conspicuously silent as to the right of the traders who are
engaged in secondary sales of cardamom, the said Act and Rules should
be interpreted in such a way as to give effect to the scheme of the Act.
The Spices Board Act, 1986, is an Act to provide for the constitution of a
Board for the development of export of spices and for the control of
cardamom industry including the control of cultivation of cardamom
and matters connected therewith. When the object of the Spices Board
Act, 1986, itself is exclusively for the purpose of control of cardamom
industry including the control of cultivation of cardamom, safeguarding
the livelihood of cardamom cultivators, the various provisions of the Act
and the rules made thereunder for the purpose of regulating the
licensing, marketing and conditions of business in cardamom should be
interpreted in a manner which would not defeat the object of the Spices
Board Act, 1986. Since the Act, 1986, and Rules, 1987, do not define
the term trader, but only the terms 'auctioneer' and 'dealer' and in the
absence of any clause enumerating for the regulation of secondary trade
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of cardamom procured from the licensed dealers, the legislative casus
omissus cannot be filled by judicial interpretation to justify the trade
fair which is intended to be conducted by the fourth respondents in an
unfair manner defeating the scheme of business of cardamom envisaged
under the Act, 1986, and Rules, 1987. In the absence of a definite
definition for the term “trader” the 4th respondent under the said term
cannot seek any 'right of auction' or conducting e-trade fair
unauthorisedly, without the permission of the Spices Board.
41. The Honourable Apex Court in a similar interpretation of
Section 6 of the Land Acquisition Act, 1894, in the case of
Padmasundar Rao (dead) and others .vs. State of Tamil Nadu and
others2, by judgment dated 13.03.2002, has dealt with a case of casus
omissus and the relevant portion of the same which is applicable to the
facts and circumstances of this case is extracted as follows:
“12.The rival pleas regarding rewriting of statute and
casus omissus need careful consideration. It is well-settled
principle in law that the Court cannot read anything into a
statutory provision which is plain and unambiguous. A statute
is an edict of the legislature. The language employed in a
statute is the determinative factor of legislative intent. The first
22002 (3) SCC 355
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and primary rule of construction is that the intention of the
Legislation must be found in the words used by the Legislature
itself. The question is not what may be supposed and has been
intended but what has been said. "Statutes should be construed
not as theorems of Euclid". Judge Learned Hand said, "but
words must be construed with some imagination of the
purposes which lie behind them". (See Lenigh Valley Coal Co. v.
Yensavage 218 FR 547). The view was reiterated in Union of
India and Ors. v. Filip Tiago De Gama of Vedem Vasco De Gama
(AIR 1990 SC 981).
13. In Dr. R Venkatchalam and Ors. etc. vs. Dy. Transport
Commissioner and Ors. etc. (AIR 1977 SC 842) it was observed
that Courts must avoid the danger of a priori determination of the
meaning of a provision based on their own preconceived notions
of ideological structure or scheme into which the provision to be
interpreted is somewhat fitted. They are not entitled to usurp
legislative function under the disguise of interpretation.
14. While interpreting a provision the Court only interprets
the law and cannot legislate it. If a provision of law is misused
and subjected to the abuse of process of law, it is for the
legislature to amend, modify or repeal it, if deemed necessary.
[See Rishabh Agro Industries Ltd. vs. P.N.B. Capital Services
Ltd. (2000 (5) SCC 515)]. `The legislative casus omissus cannot
be supplied by judicial interpretative process. ......
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15. Two principles of construction - one relating to casus
omissus and the other in regard to reading the statute as a
whole appear to be well settled. Under the first principle a
casus omissus cannot be supplied by the Court except in the
case of clear necessity and when reason for it is found in the
four corners of the statute itself but at the same time a casus
omissus should not be readily inferred and for that purpose all
the parts of a statute or section must be construed together and
every clause of a section should be construed with reference to
the context and other clauses thereof so that the construction to
be put on a particular provision makes a consistent enactment
of the whole statute.”
42. Fully fortified by the aforesaid judgment in the instant case,
the claim of the fourth respondents is that, their right to conduct e-
auction and secondary sales of cardamom after having procured
cardamom from the licensed dealer, according to their own whims and
fancies is protected under 19(1)(g) of the Constitution of India and
insisting for conducting the e-trade fair is too unfair since the same is
prohibited under Rule 3 of Rules 1987. Accordingly, the fourth
respondents in both the writ petitions or any private individuals are
prohibited from conducting e-auction privately in cardamom produces
in future in any manner.
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43. Accordingly, the writ petitions are allowed. No costs. In view of
the same, connected miscellaneous petitions are closed.
28.04.2025
NCC : Yes / No
Index : Yes / No
Internet : Yes
Sml
To
1.The Spices Board,
(Ministry of Commerce and
Industry Govt. of India)
Rep. by its Secretary,
Sugandga Bhavan,
NH Bypass, PB No.2277
Palarivattom Post,
Kochi, Kera
2.The Director (Marketing),
Spices Board,
Sugandga Bhavan,
NH Bypass, PB No.2277
Palarivattom Post,
Kochi, Kerala.
3.The Assistant Director (Marketing),
Spices Board,
Kurangani Road,
Bodinayakanur,
Theni District.
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L.VICTORIA GOWRI, J.,
Sml
W.P.(MD)Nos.27726 and 26544 of 2024
28.04.2025
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