The Supreme Court upheld the decision of the Full Bench of Andhra Pradesh High Court holding that ghee is a product of livestock under the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966 (the Act).

In 1968, the Andhra Pradesh Government labelled ghee as a livestock product under Section 3(3) of the Act but took it off the list in 1972. However, in 1994, it re-included ghee in the list of regulated products through a general notification for all notified markets in the state.

A Full Bench of the Andhra Pradesh High Court upheld the validity of the 1994 notification, holding that it was issued under Section 4, not Section 3 of the Act, and affirmed ghee as a livestock product. The High Court explained that ghee was derived out of milk by undergoing a process, yet it remained a product of livestock, for the purposes of the Act and payment of a “market fee”.

The Supreme Court firstly had to determine whether ghee constituted a product of livestock under the provisions of The Act; secondly, it had to determine whether the Government notification of 1994 was published after due compliance with the procedure contemplated under the provisions of the Act.

Justice Sudhanshu Dhulia and Justice S.V.N. Bhatti observed, “There is a basic difference between the notification which has to be made under Section 3 of the Act and the notification which has to be made subsequently under Section 4 of the Act…A perusal of Sections 3 and 4 of the Act clearly shows that whereas a draft notification is mandatory under Section 3 and so is the hearing of objections to the draft notification, there is no similar provision under Section 4 of the Act.

Sr. Advocate Ajit Bhasme represented the appellant, while AOR D. Bharathi Reddy appeared for the respondents.

The argument that ghee is not a product of livestock is baseless, and bereft of any logic…Undisputedly, ghee is a product of milk which is a product of the livestock,” stated the Court.

The Court remarked that no prior hearing or publication of the draft notification was required under Section 4 of the Act. The 1994 notification falls under Section 4, not Section 3, so the argument of non-compliance with Section 3 was “totally misconceived.”

Consequently, the Court held that “there was nothing wrong in the 1994 notification and the challenge to the notification has rightly been turned down by the Full Bench of the Andhra Pradesh High Court.

The Court further stated that the argument that the Market Committees must be restrained from collecting market fees prior to the date of the High Court Judgment could not be accepted while addressing the issue of unjust enrichment.

Accordingly, the Supreme Court dismissed the appeals and upheld the decision of the Andhra Pradesh High Court.

Cause Title: Sangam Milk Producer Company Ltd. v. The Agricultural Market Committee & Ors. (Neutral Citation: 2024 INSC 174)


Appellant: Sr. Advocate Ajit Bhasme; AOR Rupesh Kumar, Sanjay Kumar Visen and Tatini Basu; Advocates Pankhuri Shrivastava, Neelam Sharma, Aryaman Sharma, Mukesh Kumar Pandey, Parth Sarathi, Himani Bhatnagar, Byrapaneni Suyodhan, Kumar Shashank and Bharat J Joshi

Respondents: AOR D. Bharathi Reddy, Guntur Prabhakar and Sahil Bhalaik; Advocates Tushar Giri, Siddharth Anil Khanna, Sewa Singh and Gulshan Jahan

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