COMMISSIONER AND DIRECTOR OF AGRICULTURE GOVERNMENT OF ANDHRA PRADESH Vs. TROPICAL AGRO SYSTEMS INDIA LTD

JUDGEMENT

(1.) Aggrieved by the judgment dated 28-8-1998 allowing the Writ Petition No.19522 of 1998 quashing the impugned order dated 27-6-1998, this appeal is preferred by the Commissioner and Director of Agriculture, Government of Andhra Pradesh.

(2.) The respondent is a company engaged in the business of manufacture and sale of insecticide with its Registered Office at Chennai. It is registered with the Central Board of Insecticides and is having a valid and subsisting Registration Certificate, issued under Section 9 of the Insecticides Act, 1968, (Central Act 46 of 1968) (for short 'the Act'). It has also obtained a licence under Section 13 of the Act for manufacture of the permitted insecticides. Intending to carry on business in Andhra Pradesh viz., supply of insecticides, the respondent approached the several dealers in the State for stocking, storing, exhibiting and selling of the products manufactured by it. In accordance with the insistance of the appellant, the respondent applied for the issuance of "Principal Certificate", which was granted by the appellant for the year 1997. According to the respondent, by letter dated 5-1-1998 he requested renewal of the said certificate for the subsequent year 1998. The appellant, however, without granting renewal, issued a show-cause notice on 27-3-1998 alleging that 5 samples of products manufactured by the respondents were tested and found misbranded at the State Testing Laboratory, out of which one sample was confirmed as misbranded by the Central Insecticides Laboratory and that in the circumstances the respondent show cause as to why the 'principal certificate' be not refused renewal. The respondent by a reply dated 6-4-1998 denied the allegation. The respondent alleged that without considering its explanation, the appellant issued orders dated 27-6-1998 declaring to renew the 'principal certificate' and directed the respondent to remove the entire stock in the State of Andhra Pradesh immediately. Aggrieved thereby the respondent filed the writ petition.

(3.) On an analysis of the Insecticides Act, 1968 and the Inspecticides Rules, 1971, the learned single Judge found that the 'principal certificate' in terms of the statutory Rules is a certificate obtained from the principal (manufacturer) by the dealer, which he has to file before the licencing authority in terms of Rule 10 of the Rules, when he desires to obtain a licence to deal with the insecticides manufactured by the principal and no dealership licence would be given unless such certificate from the principal is obtained. Learned single Judge also found that once the certificate is given to the dealer, the licencing authority will consider his case for issuance of licence and once such a licence is granted by the licencing authority, there is no question of revocation of the certificate issued by the principal, by the licencing authority. The provisions of Rule 10 of the Rules were considered by the learned single Judge to rightly come to the conclusion that the certificate issued by the principal can be suspended, revoked or canceled by the principal and not by the licencing authority, who can grant a licence for dealership under Rule 10, but cannot after grant of such licence cancel the certificate issued by the principal in favour of the dealer. Learned single Judge rightly came to the conclusion that once a licence is granted after acting upon the certificate, he has no authority in law to cancel the certificate issued by the principal. Learned single Judge, also held, and rightly in our view, that no prejudice would be caused to the State or to the public interest inasmuch as if there is an unscrupulous dealer violating the laws or dealing with substandard or misbranded products, the licencing authority may as provided under Rule 10(5) of the Rules, refuse to grant/renew licence, which includes the power to cancel the licence also, if there are valid reasons for so doing and in accordance with law. Learned single Judge also found that Section 14 of the Act empowers revocation, suspension and amendment of the licence which provision adequately empowers safeguarding of public interest if the facts of the case so warrant.