A) Abstract / Headnote

This case revolved around the classification of ghee as a “product of livestock” under the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966 (the Act). The legal questions focused on whether the 1994 government notification, which categorized ghee as a product of livestock for regulatory purposes, complied with procedural requirements under the Act. The Supreme Court upheld the validity of the notification, declaring that ghee logically and legally qualifies as a livestock product. The Court also clarified procedural requirements under Sections 3 and 4 of the Act and addressed the issue of market fees levied on ghee. It dismissed the appeals, upholding the Andhra Pradesh High Court’s majority decision.

Keywords: Ghee, livestock product, Andhra Pradesh Markets Act, market fee, unjust enrichment.

B) Case Details

i) Judgement Cause Title: Sangam Milk Producer Company Ltd. v. The Agricultural Market Committee & Ors.

ii) Case Number: Civil Appeal No. 6493 of 2014

iii) Judgement Date: March 5, 2024

iv) Court: Supreme Court of India

v) Quorum: Justice Sudhanshu Dhulia and Justice S.V.N. Bhatti

vi) Author: Justice Sudhanshu Dhulia

vii) Citation: [2024] 3 S.C.R. 174

viii) Legal Provisions Involved:

• Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966, Sections 2(v), 2(xv), 3, 4, and 12.

ix) Judgments Overruled: None explicitly overruled.

x) Case Related to Law Subjects: Agricultural law, administrative law, regulatory compliance, and commercial law.

C) Introduction and Background of Judgment

The Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966, was designed to regulate the purchase and sale of agricultural produce, livestock, and livestock products in specified market areas. Under the Act, the government issued a 1994 notification declaring ghee as a product of livestock, making it subject to regulation and the levy of market fees. Producers of livestock products challenged this notification on procedural and substantive grounds.

D) Facts of the Case

1. The Act aimed to regulate agricultural produce and livestock markets in Andhra Pradesh. Ghee was initially notified as a livestock product in 1968 and regulated in specific areas.
2. In 1971, ghee was removed from the regulated list in certain market areas but reintroduced in 1994 through a general notification.
3. The 1994 notification faced legal challenges on two fronts:
   • Substantive: Whether ghee qualifies as a product of livestock under the Act.
   • Procedural: Whether due process, as mandated under Section 3 of the Act, was followed before issuing the notification.
4. The Andhra Pradesh High Court upheld the notification by a majority, leading to the present appeals before the Supreme Court.

E) Legal Issues Raised

1. Whether ghee is a “product of livestock” under the Act.
2. Whether the 1994 notification complied with procedural requirements of the Act, particularly Section 3.

F) Petitioner/Appellant’s Arguments

1. Substantive Argument: Ghee is not a direct product of livestock but a derivative of milk and hence cannot be categorized as a livestock product under the Act.
2. Procedural Argument: The government failed to follow the procedure outlined in Section 3 of the Act, which mandates public consultation and publication of a draft notification.
3. Market Fee Issue: Market Committees did not provide sufficient facilities, which invalidates the levy of market fees on ghee.

G) Respondent’s Arguments

1. Definition of Livestock Product: Ghee is a derivative of milk, which is undeniably a product of livestock, making it a “product of livestock” under Section 2(xv).
2. Procedural Compliance: The 1994 notification was issued under Section 4 of the Act, not Section 3, and hence did not require prior public consultation or draft notification.
3. Market Fee Justification: Facilities were provided, and appellants benefitted from the regulated market infrastructure, justifying the imposition of fees.

H) Related Legal Provisions

1. Section 2(v): Definition of “livestock” includes cows and buffaloes.
2. Section 2(xv): “Products of livestock” are those notified by the government under the Act.
3. Section 3: Provides for draft notifications and public consultation for declaring notified areas.
4. Section 4: Empowers the government to establish market committees and notify market areas.
5. Section 12: Authorizes market fees on the sale and purchase of notified products.

I) Judgment

a. Ratio Decidendi

1. Ghee is logically a product of livestock as it is derived from milk, a primary livestock product. The Court affirmed the Andhra Pradesh High Court’s reasoning that even derivative products qualify as “products of livestock.”
2. Section 4 does not mandate the procedural requirements of Section 3. The 1994 notification was validly issued under Section 4.
3. The imposition of market fees was justified as appellants benefitted from market facilities.

b. Obiter Dicta

1. Derivative products like ghee remain within the ambit of livestock products despite undergoing processing.
2. Market fees ensure equitable distribution of benefits and discourage unjust enrichment.

c. Guidelines

1. Notifications under Section 4 do not require public consultation or draft publication.
2. Derivative products can be regulated as primary products under agricultural laws.

J) Conclusion & Comments

The judgment clarifies the legal definition of livestock products and procedural distinctions between Sections 3 and 4 of the Act. It reinforces the state’s regulatory authority while ensuring equitable obligations for market participants.

K) References

a. Important Cases Referred

1. Kommisetty Nammalwar & Co. v. Agricultural Market Committee, Tenali (2009) SCC OnLine AP 317.
2. Park Leather Industry (P) Ltd. v. State of U.P. (2001) 3 SCC 135.
3. Kishan Lal v. State of Rajasthan, AIR 1990 SC 2269.

b. Important Statutes Referred

1. Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966.