IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 08TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE WRIT PETITION NO.14908 OF 2022 (APMC) C/W WRIT PETITION NO.14948 OF 2022 (APMC) WRIT PETITION NO.14950 OF 2022 (APMC) IN WP NO. 14908/2022: BETWEEN: M/S. PARISONS MILLING CO PRIVATE LIMITED, REGISTERED UNDER THE COMPANIES ACT, 1956, NO.6/1183, KUNHIPARI BUILDING, CHEROOTTY ROAD, CALICUT-673 032, (REPRESENTED BY ITS MANAGER LEGAL AND DULY AUTHORIZED SIGNATORY, SMT ROOPA M PAUL) ...PETITIONER (BY SRI GAUTAM SHREEDHAR BHARADWAJ, ADVOCATE) AND: 1. STATE OF KARNATAKA, REPRESENTED BY ITS SECRETARY TO THE GOVERNMENT, DEPARTMENT OF CO-OPERATIVE MULTI-STOREYED BUILDING, BANGALORE-560 001. 2. THE SECRETARY, THE AGRICULTURAL PRODUCE MARKET COMMITTEE, R 2 BAIKAMPADY, MANGALORE-575 011, DAKSHINA KANNADA DISTRICT. 3. THE AGRICULTURAL PRODUCE MARKET COMMITTEE REPRESENTED BY ITS SECRETARY, BAIKAMPADY, MANGALORE-575 011, DAKSHINA KANNADA DISTRICT. ...RESPONDENTS (BY SRI PRINCE ISAC, AGA FOR R1, DR NANDA KISHORE, ADVOCATE FOR R2 AND R3) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DTD 17.11.2021 BEARING NO.KRU.U. MA.SA.MAN/NYA.PRA/03/2021 PASSED BY R2 WHICH IS ANNEXED AS ANNEXURE-A. IN WP NO.14948/2022: BETWEEN: M/S. PARISONS ROLLER FLOUR MILLS PRIVATE LIMITED, NO.6/1183, UNHIPARI BUILDING, CHEROOTTY ROAD, CALICUT-673 032, (REGISTERED UNDER COMPANIES ACT, 1956) (REPRESENTED BY ITS MANAGER LEGAL AND DULY AUTHORIZED SIGNATORY, SMT. ROOPA M. PAUL) ...PETITIONER (BY SRI GAUTAM SHREEDHAR BHARADWAJ, ADVOCATE) AND: 1. STATE OF KARNATAKA, REPRESENTED BY ITS SECRETARY 3 TO THE GOVERNMENT, DEPARTMENT OF CO-OPERATION MULTI-STOREYED BUILDING, BANGALORE-560 001. 2. THE SECRETARY, THE AGRICULTURAL PRODUCE MARKET COMMITTEE, BAIKAMPADY, MANGALORE-575 011, DAKSHINA KANNADA DISTRICT. 3. THE AGRICULTURAL PRODUCE MARKET COMMITTEE, REPRESENTED BY ITS SECRETARY, BAIKAMPADY, MANGALORE-575 011, DAKSHINA KANNADA DISTRICT. ...RESPONDENTS (BY SRI PRINCE ISAC, AGA FOR R1, DR NANDA KISHORE, ADVOCATE FOR R2 AND R3) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DTD 17.11.2021 BEARING NO.KRU.U.MA.SA.MAN/NYA.PRA/01/2021 PASSED BY R-2 VIDE ANNX-A. IN WP NO.14950/2022: BETWEEN: M/S PARISONS FOODS PRIVATE LIMITED, NO.6/1183, KUNHIPARI BUILDING, CHEROOT ROAD, CALICUT - 673032, (REGISTERED UNDER COMPANIES ACT, 1956) REPRESENTED BY ITS MANAGER LEGAL AND DULY AUTHORIZED SIGNATORY SMT ROOPA M PAUL. ...PETITIONER 4 (BY SRI GAUTAM SHREEDHAR BHARADWAJ, ADVOCATE) AND: 1. STATE OF KARNATAKA, REPRESENTED BY ITS SECRETARY TO THE GOVERNMENT DEPARTMENT OF CO-OPERATION, MULTI STORYED BUILDING, BENGALURU - 560001. 2. THE SECRETARY, THE AGRICULTURAL PRODUCE MARKET COMMITTEE, BAIKAMPADY MANGALORE - 575011, DAKSHINA KANNADA DISTRICT. 3. THE AGRICULTURAL PRODUCE MARKET COMMITTEE, REPRESENTED BY ITS SECRETARY, BAIKAMPADY MANGALORE - 575011, DAKSHINA KANNADA DISTRICT. ...RESPONDENTS (BY SRI PRINCE ISAC, AGA FOR R1, DR. NANDA KISHORE, ADVOCATE FOR R2 AND R3) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DTD 17.11.2021 BEARING NO.KRI.U.MA.SA. MAN/NYA.PRA/02/2021 PASSED BY R-2 VIDE ANNX-A. THESE PETITIONS HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 30TH JUNE, 2025 AND COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT PRONOUNCED THE FOLLOWING: CORAM: HON'BLE MR JUSTICE ANANT RAMANATH HEGDE 5 CAV ORDER These three Writ Petitions are filed assailing three different orders dated 17.11.2021, passed by second respondent. The impugned order in each of the petitions is marked at Annexure-A. The petitioner in each of the petitions is different, and the respondents are the same. The questions involved in each petition are the same. Hence all the petitions are clubbed and heard together. Facts in W.P. No.14908/2022 2. In terms of Annexure-A, second respondent has directed the petitioner to pay Rs.73,69,200/-. Out of the said amount, Rs. 18,42,300/- is the market fee at 1.5% on Rs. 12,28,20,000/-, the value of the agricultural produce (11,000 metric tonnes of wheat), and Rs. 55,26,900/- is the penalty. 3. The petitioner M/s. Parisons Milling Company Private Limited is directed to pay the said amount on the premise that the petitioner has sold 11,000 metric tonnes 6 of wheat within the “market area” as defined in the Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966 ( for short ‘Act, 1966’). 4. In terms of the impugned order, second respondent rejected the petitioner's claim that on 28.10.2006, it sold 9,000 metric tonnes of wheat, on “high seas” to its sister concern, M/s Parisons Foods Private Limited. Facts in W.P. No.14950/2022 5. This petition is filed by M/s Parisons Foods Private Limited. In terms of the impugned order dated 17.11.2021, second respondent directed the petitioner, M/s Parisons Foods Private Limited to pay Rs 61,21,568/-, which includes Rs. 15,30,392/- towards 1.5% market fee on Rs 10,20,26,160/-, the value of wheat, and Rs. 45,91,176/- towards penalty. 7 6. The petitioner’s claim is that on 28.10.2006, it purchased 9,000 metric tonnes of Australian wheat from M/s. Parisons Milling Company Private Limited on “high seas’ when the wheat was enroute to Mangalore from Australia is not accepted by 2nd respondent. Facts in W.P.No.14948/2022 7. M/s Parisons Roller Flour Mills Private Limited is the petitioner in W.P.No.14948/2022. Second respondent in terms of impugned order dated 17.11.2021, has directed the petitioner to pay Rs 33,07,351/-, which includes market fee of Rs 8,26,838/-@ 1.5% on Rs 5,51,22,500/- the value of notified agricultural produce, and penalty of Rs 24,80,513/- 8. The petitioner’s claim is that on 31.10.2006, it purchased 5,000 metric tonnes of Australian wheat from M/s AWB India Private Limited on “high seas’ when the wheat was enroute to Mangalore from Australia is not accepted by 2nd respondent. 8 9. The petitioners’ claims are rejected by the respondent-APMC, which held that the petitioners have not produced the original Bills of Entry, agreements for sale and other records. The respondent - committee has also found discrepancies in the value of the goods allegedly purchased and the payments made. The Committee also took the view that the high seas sale agreements, allegedly executed, have not been proved; as they were drawn on Indian stamp papers and not signed on each page. 10. On earlier occasions, the matter was remitted thrice by this Court to the Authority under the Act, 1966, to reconsider the petitioners’ claims relating to “sale on high seas”, i.e., outside the “market area”. On all occasions, the Authority has passed the orders rejecting the petitioners' claims that they sold notified agricultural produce on “high seas”. 11. Though the impugned orders are appealable under the provisions of the Act, 1966, the Writ Petitions are 9 considered on merits, notwithstanding the appellate remedy, given the fact that the dispute relates to the transactions of the year 2006, and despite three remands, it appears that Authority has not decided the controversy by assigning valid reasons except expressing certain doubts about the transactions urged by the petitioners. More than anything else, the petitioners have also raised a jurisdictional question, contending that the Authority under the Act, 1966 has no jurisdiction over the sale transactions in question. 12. In the background mentioned above, this Court has permitted the counsel for the petitioners as well as the respondents to address their contentions on disputed facts, to consider whether the controversy over certain disputed questions of fact can be resolved based on the official records issued and produced by the Customs Department. 13. The details of earlier rounds of Writ Petitions, Writ Appeal and proceedings before the Apex Court in 10 Special Leave Petition may not be necessary for the adjudication of these petitions, as there is no direction or specific findings which bind this Court. On all occasions, it was open remand. 14. Both Sri Gautam Bharadwaj, the learned counsel for the petitioners and Dr Nanda Kishore, the learned counsel for the respondent - Committee extensively argued on the Bills of Entry produced. The original Bills of Entry were not made available. The petitioners submitted that the originals are with the Customs Department. At the same time, petitioners also produced an endorsement issued by the Customs Department stating that the documents (in physical format) are not available, as the transactions are 20 years old. 15. As the cases involve the interpretation of Bills of Entry issued by the Customs Department, to have a better understanding of the process involved before issuing Bills of Entry, this Court felt that the presence of the learned 11 Counsel for the Customs Department, though the Customs Department was not a party to the proceeding, would be of assistance. Hence, the Deputy Solicitor General of India is requested to assist the Court. Sri Shanti Bhushan, learned Deputy Solicitor General of India, has ably assisted the Court and has produced the records maintained by the Customs Department in connection with the sale transactions involved in the petitions. 16. The documents (the printout of certain data available in the computer) filed by the Deputy Solicitor General of India, along with the memo dated 06.06.2025, are taken on record. 17. Learned Deputy Solicitor General of India would also submit that the xerox copies of Bills of Entry produced by the petitioners are Xerox copies of the Bills of Entry issued by the Customs Department. 18. This Court has considered the Writ Petitions in the backdrop of the documents placed before second 12 respondent as well as the documents placed before this Court by the Deputy Solicitor General of India. 19. The questions that arise for consideration are: (a) "Whether M/s Parisons Milling Company Private Limited, the petitioner in W.P.No.14908/2022, establishes that it sold 9000 metric tonnes of notified agricultural commodity (wheat) to M/s Parisons Foods Private Ltd on 28.10.2006 on ‘high seas’ and outside “market area” as defined under the Act, 1966? (b) "Whether M/s Parisons Foods Private Ltd., the petitioner in W.P.No.14950/2022, establishes that it purchased 9000 metric tonnes of notified agricultural commodity (wheat) from M/s Parisons Milling Company Private Limited on 28.10.2006, on ‘high seas’ and outside “market area” as defined under the Act, 1966? (c) "Whether M/s Parisons Roller Flour Mills Pvt. Ltd., the petitioner in W.P.No.14948/2022, establishes that it purchased 5000 metric tonnes of notified 13 agricultural commodity (wheat) from AWB India Private Limited on 31.10.2006 on ‘high seas’ and outside 'market area' as defined under the Act, 1966? The petitioners’ contentions 20. To substantiate the contention that the goods have been sold on high seas, Sri Gautam Bharadwaj, learned counsel for the petitioners has referred to the sale agreements dated 28.10.2006 and 31.10.2006, invoices and bank statements. Reference is also made to Bills of Lading, which, according to the petitioners in all petitions, record first sale transactions in Australia. 21. Referring to the Bills of Entry issued by the Customs Department which reveal the name of the importer, contract number, and other particulars mentioned therein, it is urged that the High Seas sale transactions have taken place on 28.10.2006 and 31.10.2006 and neither the seller nor the buyer is disputing the transactions and the APMC has no jurisdiction to adjudicate on the 14 transactions which have taken place outside the “market area” under the Act,1966. 22. Learned counsel for the petitioners would submit that the original documents were in the custody of the Customs Department, and the Customs Department has endorsed stating that it is not possible to trace the original records. The very fact that the Customs Department has validated the Xerox copies of Bills of Entry means that the non-production of the originals is of little consequence is the submission. 23. It is also urged that the agreements evidencing the sale transactions, though signed on shore, will not invalidate the sale transactions that have taken place on the high seas. 24. It is also urged that the bank statements which are produced pursuant to the order passed by the Court evidence the transactions. Minor mismatches in the value of the goods transported from Australia, and sold on high 15 seas, and the amount paid have to be understood as payment towards interest on account of belated payment. The respondent-APMC’s contentions 25. Dr Nanda Kishore, the learned counsel for the respondent-APMC would point out to the discrepancies in the said Bill of Entry dated 02.11.2006. It is urged that in one Bill of Entry, the name of the importer is shown as M/s Parisons Milling Company Pvt. Ltd., and in another Bill of Entry, the name of the importer is AWB India. Thus M/s. Parisons Foods Private Ltd. and M/s Parisons Roller Flour Mills Ltd. cannot contend that the agricultural produce, i.e., wheat, was sold on 28.10.2006 and 31.10.2006 on the high seas. It is urged that if at all the sale transactions have taken place on 28.10.2006 and 31.10.2006, the Bills of Entry cannot record the names of petitioner - M/s Parisons Milling Company Pvt. Ltd. and AWB India as importers and entry should reflect only M/s Parisons Foods Pvt. Ltd. as importer in one of the Bills of Entry, and M/s Parisons Roller Flour Mills Ltd. as importer in another Bill of Entry. 16 Since the names of entities that purchased the goods in Australia are mentioned in the Bills of Entry, it is to be understood that the high seas transactions have not taken place, is the submission. 26. Learned counsel for the respondent-Committee would also urge that the value of goods in the invoices between M/s Parisons Milling Co. Pvt. Ltd, and AWB Geneva, and AWB International and AWB India if compared with the invoices in the names of M/s Parisons Foods Private Limited and M/s Parisons Roller Flour Mills Pvt. Ltd respectively, do not tally with each other. 27. In addition, it is also urged that agreements for sale are not signed on the high seas and are allegedly signed in India, and this undisputed fact also points to the fact that the transactions have taken place in India and not on the high seas. 28. Learned counsel for the respondent-APMC would also urge that the payments pointed out by the petitioners 17 are made after the respondent-APMC conducted the raids in the premises of M/s Parisons Foods Pvt. Ltd and M/s Parisons Roller Flour Mills Pvt. Ltd. and this also would demonstrate that a high seas transaction has not taken place. 29. It is also submitted that original documents are not produced despite sufficient opportunity being granted to the petitioners. In the absence of any such original documents, APMC is justified in holding that the alleged transaction on the high seas is not genuine. 30. Learned Counsel for APMC also urged that Bills of Entry would only mean that certain goods are imported from Australia, and it is not the conclusive proof of the alleged high seas sales transactions. The high seas transactions must be independently established with acceptable materials, and the petitioners failed to prove the high-seas sale transactions, is the submission. 18 31. In the alternative, it is urged that even if alleged agreements for sale dated 28.10.2006 and 31.10.2006 are held to be valid, the sale transactions are not complete, as the condition for transfer of right and title agreed in the agreement, i.e., endorsement in the Bills of Lading, by the seller in favour of the buyer, is admittedly not made. Thus there is no sale on high-seas and since the seller and buyers are claiming that sale has taken place, and as the notified goods are seized within the “market area”, it must be deemed that the sale took place within the “market area”. Analysis 32. The Court has considered the records and judgments cited. From the materials placed on record and the contentions raised, the following factors appear to be not in dispute: (a) M/s Parisons Milling Co. Pvt. Ltd. entered into a contract on 25.08.2006 with Australian Wheat Board Geneva to purchase 11000 metric tonnes of wheat to 19 import the same to India. This fact is supported by Contract No.608047, between AWB Geneva, and M/s Parisons Milling Co. Pvt. Ltd. The contract, as mentioned above, refers to 10,000 metric tonnes, with a 10% variation depending on the vessel's capacity. (b) AWB Geneva entered into a contract on 22.10.2006 with AWB India for the sale of 5000 metric tonnes of wheat to import the same to India. The Bill of Lading number 6, dated 22.10.2006, supports this fact. (c) On 22.10.2006, 11000 metric tonnes of wheat left from the shores of Geraldton, Australia, for Mangalore, India. The document dated 22.10.2006, refers to Bills of Lading Nos.2, 3 and 4, dated 22.10.2006. (This is recorded in invoice No.608047 generated by the seller AWB, Geneva in favour of M/s Parisons Milling Co. Pvt. Ltd.) (d) The Bill of Lading No.2 is issued on 22.10.2006 in respect of 9000 metric tonnes of wheat under the caption 20 "AUSTWHEAT BILL". The contract number referred to is 608047. (e) The Bill of Lading No.3 is issued on 22.10.2006 in respect of 1000 metric tonnes of wheat under the caption "AUSTWHEAT BILL". The contract number referred to is 608047. (f) The Bill of Lading No.4 is issued on 22.10.2006 in respect of 1000 metric tonnes of wheat under the caption "AUSTWHEAT BILL". The contract number referred to is 608047. (g) Invoice dated 31.10.2006 refers to sale of 5000 metric tonnes of wheat by AWB India Pvt. Ltd. to M/s Parisons Roller Flour Mills Pvt. Ltd. (h) On 02.11.2006, a Bill of Entry was issued by the Customs authorities in Mangalore in favour of M/s Parisons Foods Pvt. Ltd. for 9000 metric tonnes of wheat; 21 (i) On 02.11.2006, a Bill of Entry was issued by the Customs authorities in Mangalore in favour of M/s Parisons Roller Flour Mills Pvt Ltd, recording the import of 5000 metric tonnes of wheat. (j) On the date of the agreements, some payments in respect of alleged sale is said to have been made; however, the rest of the payments are said to have been made only after the goods were seized by the authorities under the Act, 1966. (k) The payments said to have been made after the goods are intercepted do not exactly match with the value of the goods said to have been sold as reflected in the invoice. (l) Insofar as the transaction between M/s Parisons Milling Company Private Ltd. and M/s Parisons Foods Private Ltd. covered in Bill of Entry No.217539 in the name of M/s Parisons Foods Private Ltd. for 9000 Metric Tonnes of wheat, the invoice number mentioned is 608047 and the 22 invoice date is 22.10.2006. However, in the invoice generated for sale between M/s Parisons Milling Company Private Ltd and M/s Parisons Foods Private Ltd. dated 28.10.2006, the number is 01/PMCL. There is a mismatch to this effect. (m) In the Bill of Lading No.6 reflecting transaction between AWB International Ltd. and AWB India Pvt. Ltd., there is no reference contract Number. The Invoice dated 31.10.2006 raised by AWB India Pvt. Ltd. in favour of M/s Parisons Roller Flour Mills Pvt. Ltd. does not refer to the Bill of Lading No.6. (n) The Bill of Entry in favour of M/s Parisons Roller Flour Mills Pvt. Ltd. refers to invoice No.608069 dated 22.10.2006 and does not refer to the invoice between AWB India and M/s Parisons Roller Flour Mills Pvt. Ltd. is dated 31.10.2006. (o) In both Bills of Lading relating to 9000 Metric Tonnes and 5000 Metric Tonnes of Wheat, only the names 23 of M/s Parisons Milling and Australian Wheat Board, India, are mentioned, and no other entity is mentioned. (p) There is no endorsement in favour of the buyer in the said Bills of Lading. 33. The petitioner M/s Parisons Milling Co. Pvt. Ltd. has produced the agreement dated 28.10.2006. The perusal of the agreement mentioned above reveals that on 28.10.2006, the petitioner M/s Parisons Milling Co. Pvt. Ltd. agreed to sell 9000 metric tonnes of Australian premium white wheat to M/s Parisons Foods Pvt. Ltd., Calicut. The agreement also refers to the Bill of Lading No.2 dated 22.10.2006. 34. The agreement dated 31.10.2006 is relating to sale transaction of 5,000 metric tonnes of wheat between Petitioner M/s Parisons Roller Flour Mills Private Limited and AWB India Private Limited. 24 35. The respondent-Committee seriously disputes this agreement dated 28.10.2006. Likewise, the agreement dated 31.10.2006 between AWB India Pvt. Ltd. and M/s Parisons Roller Flour Mills Pvt. Ltd. is also disputed. In the alternative, it is also urged that even if the agreements are accepted, as valid, the alleged high-seas sales have not been established in view of Clause No.9 of the agreement dated 28.10.2006 and Clause No.13(a) of the agreement dated 31.10.2006. 36. Referring to Clauses No.9 and 13(a), learned counsel for the respondent-Committee would urge that right and title of the goods referred to in the agreement are transferred only by endorsing so in favour of the buyer in the Bill of Lading. Admittedly, there is no endorsement by M/s Parisons Milling Company. Pvt. Ltd., and AWB India, the sellers, on the respective Bills of Lading, in favour of the respective buyers. Since there is no such endorsement as stipulated on the Bills of Lading, there is no sale on high seas, is the submission. 25 37. At this juncture, it is also necessary to refer to Section 4 of the Sale of Goods Act, 1930 (for short, 'Act, 1930') which reads as under: " 4. Sale and agreement to sell.—(1) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part- owner and another. (2) A contract of sale may be absolute or conditional. (3) Where, under a contract of sale, the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell. (4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled, subject to which the property in the goods is to be transferred." 26 38. From Section 4 of the Act, 1930, it is evident that the contract of sale may be absolute or conditional. The sale takes place when property in goods is transferred by the seller to the buyer. It is also apparent that under the contract of sale, if the property in goods is transferred from the seller to the buyer, the contract is referred to as a 'sale'. 39. If the transfer of the property in goods is to take place at a future time, or is subject to some other condition, to be fulfilled thereafter, the contract is called an 'agreement to sell'. 40. The agreement to sell becomes a sale when the conditions in the agreement providing for sale are fulfilled. 41. Section 5 of the Act, 1930 also relevant for the purpose. "5. Contract of sale how made.—(1) A contract of sale is made by an offer to buy or sell goods for a price and the acceptance of such offer. The contract may provide for the 27 immediate delivery of the goods or immediate payment of the price or both, or for the delivery or payment by instalments, or that the delivery or payment or both shall be postponed. (2) Subject to the provisions of any law for the time being in force, a contract of sale may be made in writing or by word of mouth, or partly in writing and partly by word of mouth or may be implied from the conduct of the parties." 42. On perusal of Section 5 of the Act, 1930 following can be noticed. (i) To constitute a contract of sale-, (a) there must be an offer to buy or sell the goods, (b) there must be an acceptance of the offer to buy or sell the goods, (c) offer and acceptance must be for a price. (ii) The delivery of goods, or payment of price may be- (a) Immediate or deferred, (b) full or in instalments (iii) The contract of sale may be- (a) in writing or oral 28 (b) partly in writing and partly oral (c) implied from the conduct. 43. Section 5 as noticed above, allows certain degree of flexibility when it comes to delivery and payment. It does not insist the contract to be in writing. Apart from a contract in writing, a contract can be oral, partly oral and partly in writing. The above conditions, subject of course, to any other law in force, applicable at the time of contract. 44. Coming to the agreements in question, the conditions relating to time and place of payment are not stipulated in writing. In other words, it appears that the parties appear to have arrived at some understanding for deferred payments, as it is noticed that both seller and buyer claim that the agreed price is paid and received later. The ‘agreement of sale’ does not stipulate the condition that sale is complete only on payment of price agreed. 45. The Bills of Lading without “endorsement” by the seller in favour of the buyer for having transferred the 29 rights and title to the goods, if interpreted holding that there is no concluded sale in favour of the buyer, the respondent-Committee does not get the jurisdiction to impose market fee and penalty. The reason is the APMC will have the authority to impose a market fee only if the sale transaction takes place within the market area. However, M/s Parisons Foods Private Limited and M/s Parisons Roller Flour Mills Private Ltd. have asserted that they have purchased the wheat on high seas, from M/s Parisons Milling Company Pvt. Ltd and AWB India respectively. The APMC also contends that the sale has taken place. The dispute is relating to place of sale. 46. Under the Act, 1966, when the notified agricultural produce is found in the possession of a person who is not a consumer, and who is a trader, then the person has to establish as to why he is not liable to pay the market fee on the notified agricultural produce. 47. The Court has to consider whether the high seas sale transaction is established without endorsement on the 30 Bills of Lading in favour of the purchaser - M/s Parisons Foods Pvt. Ltd. and M/s Parisons Roller Flour Mills Pvt. Ltd, and despite payments made after seizure of agricultural produce from the alleged buyers. 48. The stipulation in the agreement for sale is that the right and title in the goods is transferred on endorsement made in the Bill of Lading by the seller in favour of the buyer. 49. It is relevant to notice that the stipulation referred to in Clauses No.9 and 13(a) in the agreements referred to above relating to endorsement on the Bill of Lading are not stipulations prescribed under the Statute, but are the stipulations in the agreements agreed upon by the parties. 50. If the agreement for sale stipulates a certain condition to define when the sale is concluded, then ordinarily the sale is concluded on fulfilment of such condition. However, if the parties waive any of such 31 stipulation or condone the breach and proceed further to conclude the transaction agreed, and if such waiver is not prohibited in law, and if such waiver does not violate any of the mandatory stipulation in law, in such an event, there can be a ‘sale’ despite non-fulfilling such condition or stipulation. 51. At this juncture, it is necessary to refer to Section 12 of the Act, 1930, which reads as under: "12. Condition and warranty.—(1) A stipulation in a contract of sale with reference to goods which are the subject thereof may be a condition or a warranty. (2) A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated. (3) A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated. 32 (4) Whether a stipulation in a contract of sale is a condition or a warranty depends in each case on the construction of the contract. A stipulation may be a condition, though called a warranty in the contract." 52. Section 12 of the Act, 1930, deals with stipulations in a contract of sale of goods. Under the said provision, a stipulation in the contract may be a “condition” or a “warranty”. 53. Broadly speaking, if the stipulation is imposed as a main purpose of the contract, then it is a “condition”. If there is a breach of condition, then the party aggrieved may repudiate the contract. 54. If the stipulation is collateral to the main purpose, then it is a “warranty”, and breach of “warranty” does not enable the aggrieved party to repudiate the contract or the goods. 33 55. Section 12(4) of the Act, 1930 clarifies as to whether a stipulation is a “condition” or “warranty” depends on the construction of the contract. Said sub-section also clarifies that the “warranty” may amount to a “condition”, though it is termed as “warranty” in the agreement. In other words, nomenclature of the stipulation in the agreement is not the criterion to decide whether the stipulation is a condition or a warranty. 56. At this juncture, it is necessary to refer to Clauses 9 and 13(a) of the agreements for sale dated 28.10.2006 and 31.10.2006 and other relevant clauses in the agreement for sale dated 31.10.2006. 57. Now the Court has to refer to Clauses No.9 and 13(a) of the agreements. Clause No.9 of the said agreement dated 28.10.2006 reads as under: "9. Delivery: All the rights and title of the above goods are transferred to the Buyer by the seller endorsing the above Bills of Lading in favour of the said Buyer." 34 Clause No.13(a) of the agreement dated 31.10.2006 reads as under: "Title of the goods will be unconditionally and constructively transferred in buyers favour on the execution of this agreement and on endorsement of the bill(s) of lading in the buyer's favour". 58. It is also necessary to refer to other relevant Clauses in the agreement dated 31.10.2006 which are slightly different from the contents of the agreement dated 28.10.2006. The relevant clause of the agreement dated 31.10.2006 are extracted below: "The "Seller" hereby confirm having sold to the "Buyer" and the "Buyer" hereby confirm having bought from the "Seller" on High Seas Sales basis (the sale in the course of import under Section 5(2) of the C.S.T Act) on the following terms and conditions: 35 59. The remaining clauses of the agreement dated 31.10.2006 which are necessary for adjudication of the case are in tabular format. xxxxx Xxxxx 10.Delivery and clearance: As the goods are sold on "high seas sale" basis under this agreement, all formalities for taking delivery and payment of customs duty and related clearance charges of goods will be arranged by the buyer at their cost. "Seller" shall sign/ endorse in favour of "Buyer" the bill (s) of lading and other necessary documents for the clearance of goods by the "Buyer" 60. It is noticed that the agreement dated 28.10.2006 does not incorporate any specific clause to indicate that the title of the goods has been transferred on the date of the agreement itself. 61. Clauses No.9 and 13(a) in the respective agreements would indicate that rights and title over the 36 consignment would be transferred in favour of the buyer on the seller endorsing on the Bill of Lading in favour of the buyer. 62. The plain reading of Clauses No.9 and 13(a) indicate that the endorsement on the Bill of Lading is a condition for transfer of right and title over the goods. In other words, if there is no endorsement on the Bill of Lading by the seller in favour of the buyer, then the ‘sale’ is not complete and it is still an ‘agreement for sale’. 63. If Clauses No. 9 and 13(a) are held to be a condition, then under Section 12(3) of the Act, 1930, the seller has the right to repudiate the contract. However, the right to repudiate the contract is not a mandate to repudiate the contract. Breach of contract gives a right or action, or cause of action, to the party to the contract. Still, the discretion is with the aggrieved party to take recourse to action as advised in law or to waive the right by taking no action, or to 37 bargain for better terms, or he may still proceed with the contract, condoning the breach by the other party. If the party chooses to proceed with the contract, despite the breach by the other party, the contract remains alive till the transaction is concluded or terminated in any other manner provided under law. 64. For the above-mentioned reasons, the Court is of the view that, even if the endorsement on the Bill of Lading is treated as a condition of transfer, the absence of endorsement does not invalidate the contract since, no action is taken by the aggrieved party to repudiate the contract. Thus, the Court is of the view that second sale (beyond the jurisdiction of Australia) indeed has concluded without the endorsement by the seller as the parties are at ad idem. Both buyer and seller are asserting that the sale of wheat has taken place. And even if the APMC contends that a sale has taken place. The only difference is that, buyer and seller contend that the sale has taken place on high 38 seas. APMC contends that the sale is within the market area. 65. For the reasons recorded, the Court is of the view that the sales under scrutiny are valid without the endorsement on the Bills of Lading by the seller in favour of the buyer. However, the question is when and where the sales are concluded, i.e., whether the sales took place on “high seas” or “within the market area”. 66. Referring to Clause No.10 of the agreement dated 28.10.2006, learned counsel for the petitioners urged that the sale had taken place on 28.10.2006 on the high seas. Said clause reads as under: "10.Import Duty & Clearing Charges: In view of the disposal of goods on HIGH SEAS SALE BASIS, the Buyer shall arrange clearing of the goods from the Customs, at his sole risk and responsibility. The entire clearing expenses, Viz. Customs Duty, Insurance, Clear charges, Demurrage, Octroi, etc. will be borne by the 39 buyer and paid directly to Customs & for Clearing and Forwarding Agents." (Emphasis supplied) 67. Clause No.10 of the agreement dated 28.10.2006 indicates that the right and title are transferred to the buyer. 68. Clause No.9 of the agreement dated 28.10.2006, as already noticed, stipulates endorsement in the Bill of Lading in favour of the buyer, by the seller, to transfer the right and title in the goods. Clause No.9 starts with the heading “Delivery”. The remaining part of the clause deals with the transfer of right and title. Perhaps the expression” Delivery” refers to the transfer (delivery) of all rights, including possession and title. And the condition is endorsement in the Bill of Lading. 69. Clause No.10 refers to the obligation of the buyer with reference to all duties and charges payable. It imposes a complete burden on the buyer. The said clause incorporates the expression: 40 “In view of disposal of goods on HIGH SEAS SALE BASIS”. 70. A reading of the said expression with other obligations cast on the buyer may indicate that all the right and title is transferred to the buyer. However, such an interpretation renders Clause No.9 otiose. Clause No. 10 could have been interpreted to hold that all the rights and the title are transferred to the buyer had there been an endorsement in the Bill of Lading in favour of the buyer. Since no such endorsement is found in the Bill of Lading, the Court has to hold that the agreement, if at all, was entered on the high seas; it remained an agreement for sale till further steps were taken in furtherance of the agreement. 71. Thus, Clause No.10 is to be construed as an obligation cast on the buyer on the sale and transfer of right and title to the goods and not before. This interpretation will not render Clause No.9 redundant, and both clauses co-exist. 41 72. Likewise, the clause in the agreement for sale dated 31.10.2006, extracted in paragraph No.58 indicates that the sale transaction is complete. However, clause No.13(a) extracted in the paragraph No.57 supra, incorporated in the agreement would reveal that the sale transaction is subject to endorsement on the Bill of Lading by the seller in favour of the buyer. The clause No.10 under the caption 'Delivery and Clearance' also incorporates the condition that the seller shall sign/endorse in favour of the buyer for clearance of goods by the buyer. Though clause No.10 could be interpreted to say that said endorsement is only required for the purpose of clearance before the Customs Authority, clause No.13(a) is very specific and provides for transfer of title of goods by way of an endorsement. If the Court holds that the sale transaction is complete by referring to the clause in the first page of the agreement extracted above, the remaining clauses incorporating the condition for sale, particularly the clause relating to endorsement on the Bills of Lading would 42 become redundant. Such an interpretation is not permissible in the facts and circumstances of the case. If the agreement is read as a whole, it can be concluded that the sale is complete on endorsement in the Bill of Lading. And for the reasons already recorded in the circumstances of this case, the Court holds that the sale transaction is complete on delivery of Bill of Lading. 73. Since, there is nothing on record to show that the endorsement is made on the Bills of Lading and it is delivered to the sellers on high seas, the Court is of the view that the sales are not completed on the high seas. It could have been held to have been completed, if the seller had made a statement and established that the Bill of Lading, though not endorsed, was handed over to the buyer on the high seas to conclude the sale transaction by waiving the condition relating to endorsement on the Bill of Lading. If so, the Court could have accepted that the sellers and buyers have waived the stipulation relating to endorsement, as the delivery of the Bill of Lading constitutes transfer of 43 possession and title. This is so because delivery of the Bill of Lading is a recognised mercantile practice to deliver the title in goods. However, such a plea is not found. 74. It is not the case of the sellers that the Bills of Lading were handed over on high seas, though the sellers might have impliedly said so, having taken a stand that the sale was concluded on high seas. However, the following circumstances would suggest that the Bills of Lading are delivered on shore in India. (a) There is no material to hold that the Bills of Lading were delivered on high seas, as it is not the case that the buyers or the sellers that buyers had their representative to take the delivery of the Bills of Lading in the ship on high seas. (b) The agreements for the sale of goods were drawn and signed in India and not on the high seas, though the agreements are dated (28.10.2006 and 31.10.2006) when the ship was allegedly on the high seas. 44 (c) Bills of Entry under the Customs Act have to be filled and submitted by the person who seeks customs clearance as an importer or person for whose benefit the goods are imported. Buyers have claimed that they have purchased the goods on the high seas. It is also the claim of the buyers that they have presented the Bills of Lading to the Customs Department in Mangalore. Thus, the Court has to hold that the buyers have presented the Bills of lading to the Customs department at Mangalore. In other words, the Bills of Lading appear to have been handed over to the buyers or their representatives in Mangalore port as the delivery of Bills of Lading on high seas is not established and more than anything else, it is not pleaded that Bills of Lading have been handed over on high seas. (d) For want of endorsement on the Bills of Lading, which is a condition precedent for transfer of right and title and for want of plea and proof for delivery 45 of Bills of Lading on high seas, the Court has to hold that the Bills of Lading were delivered on shore at Mangalore to the buyers, and the buyers have presented the same along with Bills of Entry. (e) As per the definition of the “importer” as found in Section 2(26) of the Customs Act, 1962, the purchaser of goods, before the goods are cleared for consumption by the Customs Department, is also an importer. The Customs officials need not verify whether the sale transaction took place on high seas to treat the transaction as import for the purpose of levying the customs duty. All that the customs officials are required is to see whether the sale transaction in respect of imported goods has taken place before it is cleared by the Customs Department. (f) Importer does not necessarily mean that he purchased the goods in a foreign land or international water or on high seas, but may also 46 include the person who purchased the goods in Indian Territory before the imported goods are cleared by the Customs department. Thus, the Bill of Entry in the name of the buyer is not necessarily a conclusive proof of a high seas sale agreement. (g) The Bills of Entry do not refer to the agreements for sale dated 28.10.2006 and 31.10.2006. (h) The names of the original importers are still shown as importers along with the buyers. 75. Learned counsel for the petitioners has relied on the judgment of the Apex Court in Indian Nut Products and Others vs Union of India and Others1 to contend that the authority under the Act is required to apply the mind while passing the orders in exercise of administrative action and the orders passed based on irrelevant grounds are liable to be set-aside. 1 (1994)4 SCC 269 47 76. The ratio could have been applied if the Court is considering the case for remand. However, the petitioners have urged that the matters be decided on merits as the petitioners have raised the jurisdictional question as well. Hence, the ratio in the aforementioned judgment does not apply to these cases. 77. Reliance is also placed on the judgment of the Apex Court in APMC, Yashwanthapura through its Secretary vs Selva Foods through its Managing Partner2 to contend that in case the notified agricultural produce is imported from outside the State for the purpose of cleaning and processing, without selling, there cannot be any liability to pay the market fee under Section 65. It is relevant to notice that the petitioners have never contended that there is no sale by the original importer. It is not their case that M/s Parisons Foods Pvt. Ltd. and M/s Parisons Roller Flour Mills Pvt. Ltd. were in possession of the notified 2 (2022)3 SCC 313 48 produce only for the purpose of processing without there being any sale. 78. All the petitioners asserted the sale transaction with a rider that the sale transaction has taken place outside the market area. Hence, the said judgment does not apply to the facts of the case. 79. The judgment in Gujarat Ambuja Exports Ltd. and Another vs State of Uttarakhand and others 3 is also on the question of liability to pay market fee in case the agricultural produce is not sold and enters the market area only for the purpose of storage and processing. Hence, the said judgment also does not apply to the facts of the case. 80. Reliance is also placed on the judgment of the co-ordinate bench of this Court in ITC Ltd. vs State of Karnataka and Others4. 3 (2016)3 SCC 601 4 2005 SCC Online Kar 86 49 81. On going through the aforementioned judgments, this Court is of the view that the questions raised in the present petitions are not addressed in the said judgments. 82. In the present case, the question is whether the petitioners are required to pay market fee on the premise that the sale transaction has taken place within the market area. The judgment in ITC supra, deals with the question relating to payment of market fee in respect of goods for which the market fee is already levied and later, the said agricultural produce is processed after payment of market fee. 83. The Court has come to the conclusion that the agreements dated 28.10.2006 and 31.10.2006 relied on by the petitioners are the "agreements to sell" with certain conditions incorporated therein subject to fulfilment of which the "sale" gets concluded. The Court also held that the endorsement on the Bill of Lading is the condition precedent for "concluding the sale" though not complied, 50 the sales have taken place consequent to delivery of Bills of Lading. Accordingly, the Court has held that the Bills of Lading are submitted to the Customs Department at Mangalore by M/s Parisons Foods Private Ltd. and M/s Parisons Roller Flour Mills Private Limited. The delivery of Bills of Lading in favour of the purchasers resulted in sale of goods in the facts of the present case, as it is not pleaded that Bills of Lading were handed over on high seas. 84. In addition, it is pleaded in the petitions that the purchasers submitted Bills of Entry (law also requires the importer to submit Bill of Entry), the logical inference would be that Bills of Lading are delivered at Mangalore. In such circumstances, the Court has to hold the sale is completed within the market area (port in Mangalore) and not on high seas. It is not the case of the petitioners that the port in Mangalore is not a 'notified market area' within the meaning of the 'market area' under the Act, 1966. 85. Under the Act, 1966, the buyer of a 'notified agricultural produce' has to pay the market fee. Section 65 51 of the Act, 1966 also mandates the seller to collect the market fee from the buyer of a 'notified agricultural produce' and remit the same to the Committee under the Act, 1966. 86. This being the position, the petitioner in Writ Petition No.14908/2022 - M/s Parisons Milling Company Pvt. Ltd. which has sold 9000 Metric Tonnes of wheat to M/s Parisons Foods Pvt. Ltd. was required to collect the market fee and remit it to the respondent-Committee. However, that is not done. The buyer M/s Parisons Foods Private Limited has not paid the market fee and the primary liability to pay the market fee is that of the buyer. The Committee has imposed liability on the seller M/s Parisons Milling Company Private Ltd. and the buyer - M/s Parisons Foods Private Ltd. Such doubly levy is impermissible. 87. Learned counsel for the respondent-Committee also fairly admitted that such double levy is impermissible. 52 88. Thus, the order dated 17.11.2021 marked at Annexure - A in Writ Petition No.14908/2022 has to be set- aside by clarifying the position that the petitioner in Writ Petition No.14908/2022 is required to pay market fee and penalty in respect of 9000 metric tonnes of wheat ordered to be paid in terms of order dated 17.11.2021 marked at Annexure - A in Writ Petition No.14950/2022 filed by M/s Parisons Foods Private Ltd. 89. It is also made clear that petitioner in Writ Petition No.14908/2022 viz., M/s Parisons Milling Company Private Ltd. and the petitioner in Writ Petition No.14950/2022 i.e., M/s Parisons Foods Private Limited are jointly and severally liable to pay the market fee and penalty imposed in terms of Annexure - A dated 17.11.2021 in writ Petition No.14950/2022. 90. Since, the primary liability to pay the market fee is that of the buyer and the seller has the responsibility to collect the market fee from the buyer and remit it to the Committee under the Act, 1966, in case M/s Parisons Milling 53 Company Private Ltd. makes payment of market fee and penalty in terms of order dated 17.11.2021 marked at Annexure - A in Writ Petition No.14950/2022, then, M/s Parisons Milling Company Private Ltd. is entitled to recover the same from M/s Parisons Foods Private Limited. 91. Hence, the following: ORDER (a) Writ Petition No.14908/2022 is allowed- in-part holding that the petitioner M/s Parisons Milling Company Private Limited is liable to pay the market fee and penalty imposed in terms of the order dated 17.11.2021 marked at Annexure - A in Writ Petition No.14950/2022 filed by M/s Parisons Foods Private Limited with a right to recover the said amount from M/s Parisons Foods Private Limited - petitioner in Writ Petition No.14950/2022. (b) Since, the order is passed directing payment of market fee and penalty as referred to above, the order at Annexure - A in Writ Petition No.14908/2022 directing payment of market 54 fee and penalty of 11000 metric tonnes of wheat is quashed. (c) Writ Petition No.14950/2022 filed by M/s Parisons Foods Private Limited is dismissed holding that the petitioner M/s Parisons Foods Private Limited is liable to pay the amount as determined in terms of Annexure - A dated 17.11.2021 marked in Writ Petition No.14950/2022, to the respondent-APMC. (d) The respondent-APMC is at liberty to recover the market fee and penalty imposed on 9000 metric tonnes of wheat in terms of order dated 17.11.2021 marked at Annexure - A in Writ Petition No.14950/2022 either from Parisons Milling Company Private Limited or from Parisons Foods Private Limited or both as the liability is joint and several. (e) Writ Petition No.14948/2022 is dismissed. Sd/- (ANANT RAMANATH HEGDE) JUDGE brn/chs/gvp