KRISHI UTPADAN MANDI SAMITI, ALLAHABAD versus M/S. BAIDYANATH AYURVED BHAWAN (P) LTD. AND ANR.

Citation: [2011] 11 S.C.R. 1176 · Decided: 11-08-2011 · Supreme Court of India · Bench: P. SATHASIVAM · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
[2011] 11 S.C.R. 1176 
KRISHI UTPADAN MANDI SAMIT!, ALLAHABAD 
v. 
MIS. BAIDYANATH AYURVED BHAWAN (P) LTD. AND 
ANR. 
(Civil Appeal No. 8963 of 2003) 
AUGUST 11, 2011 
[P. SATHASIVAM AND DR. B.S. CHAUHAN, JJ.] 
Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 
C (the Act 1964) - s.9 - Respondent-company purchased 
specified agriculture produce in bulk within the market area 
and used it in manufacturing commercial product - Whether 
respondent-company was exempt from obtaining licence u/ 
s. 9(2) of the Act 1964 - Held: Sale of specified agricultural 
D produce from any place in the market area is prohibited 
unless the person concerned has a licence - The statute 
provides for an exception of having a licence or from paying 
the market fee if sale of agricultural produce is made to a 
person for his "domestic consumption" in "retail sale" -
E "Domestic consumption" under the Act 1964 has to be given 
a very restricted and limited meaning i.e. for personal use of 
the purchaser, for consumption by the family and not for 
commercial and industrial activities - Purchase of agricultural 
produce in bulk cannot be termed to have been made for 
F "domestic consumption"- As respondent-company buys 
specified agricultural produce from the market area which is 
not meant for domestic consumption, the company is required 
to take license uls. 9(2) of the Act 1964 - U. P. Krishi Utpadan 
Mandi Niyamavali, 1965 (the Rules 1965) - Rule 70. 
G 
Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 
(the Act 1964) - Object of - Stated. 
Respondent no.1-company manufactures Ayurvedic 
medicines including Chawanprash. For manufacturing 
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1176 
KRISHI UTPADAN MANDI SAMIT!, ALLAHABAD v. BAIDYANATH 1177 
AYURVED BHAWAN (P) LTD. 
Chawanprash the said respondent purchases certain 
A 
agricultural produce e.g. Gur, Amala and Ghee etc. and 
uses the same as raw material. 
The appellant served a notice calling upon 
respondent no.1 for taking a licence under Section 9 of 8 
the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 
(the Act 1964) as it was purchasing and processing the 
aforesaid agricultural produce in its ordinary course of 
business. Respondent no. 1 replied that it was not 
required to take licence as it was not doing any business 
C 
in' the sale or purchase of agricultural produce. The 
appellant issued notice to respondent no.1 for personal 
appearance. Respondent no.1 did not comply with the 
said notice, whereafter the appellant filed complaint Case 
in the court of Special Judicial Magistrate against 
respondent no.1, alleging violation of the statutory D 
provisions of the Act 1964. Respondent no.1 filed writ 
petition before High Court for quashing of the complaint 
Case. The High Court aJlowed the writ petition holding 
that respondent no.1 had been using the agricultural 
produces after buying for inter_nal purpose i.e. for. E 
consumption in its factory for manufacturing the end 
product and not for further transferringthe agricultural 
produces to someone else and thus, respondent no. 1 
was not required to take licence under Section 9 of the 
~1~. 
F 
In the instant appeal the question which arose for 
consideration was: Whether the specified agriculture 
produce purchased by Respondent No. 1 within the 
market area and used in manufacturing a commercial 
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product could be held to be for domestic consumption 
and thereby would exempt it from obtaining !icence 
under Section 9(2) as also from levy and payment of 
market fee under Section 17(iii)(b} of the Act 1964. 
. H 
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1178 
SUPREME COURT REPORTS 
[2011] 11 S.C.R. 
A 
Allowing the appeal, the Court 
HELD: 1. The Uttar Pradesh Krishi Utpadan Mandi 
Adhiniyam, 1964 (the Act 1964) was enacted with the 
object to regulate the sale and purchase of the specified 
agricultural produce in market area and to curb down the 
B unfair trade practices prevalent in the old market system 
within the State of Uttar Pradesh. The object of the Act 
was to reduce the multiple trade charges, levies and 
exactions charged from the producer-seller; to provide 
for the verification of accurate weights and scales and to 
C ensure that the producer-seller is not denied his 
legitimate dues. Further to provide amenities to the 
producer-seller in the market and for providing better 
storage facilities, to stop inequalities and unauthorised 
charges and levies from the producer-seller and to make 
D adequate arrangements for market intelligence with a 
view to posting the 

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