Dismissed

M/S. Sai Agrotech F.M.D. (Farm Machinery Division) Thr. Proprietor Devananad R. Dudhe v. the Union of India, Thr. Secretary, Ministry of Agriculture and Farmers Welfare(Goi) and Others

Bombay HC21 Jan 2021WP/1462/2020

Case brief

AI extract

What is this about?

The High Court rejected a writ petition challenging an arbitrary license fee of Rs.25 Lakhs for agricultural technologies. The Court held that fee fixation is a policy matter, lacks a standard formula, and requires judicial deference to technical experts and innovators.

What did the court decide?

Writ petition rejected; interference with quantum of license fee denied.

M/S. Sai Agrotech F.M.D. (Farm Machinery… — Contract and Commercial Disputes | Bombay HC (2021)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH : NAGPUR

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WRIT PETITION NO. 1462 OF 2020

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M/s. Sai Agrotech F.M.D. -- Petitioner vs. The Union of India and others --Respondents

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Mr. R. N. Gughe, Advocate for the Petitioner. Mr. D. P. Jaiswal, Advocate for the Respondent Nos.2 to 4.

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CORAM : NITIN JAMDAR & ANIL S. KILOR, JJ.

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DATED : 21 JANUARY 2021

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P. C. :

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Heard learned counsel for the parties.

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The Petitioner, a proprietary concern, manufactures and deals with agricultural equipment and operates in the field of agriculture and a bio-technology. The Respondent No.2 Indian Council of Agricultural Research (ICAR) carries out research activity under the control of Department of Agricultural Research and Education, Ministry of Agriculture. The Respondent No.3 National Centre for Integrated Pest Management (NCIPM) is established under Respondent No.2. The Respondent No.3 has

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KOLHE

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also delegated some of its functions to Respondent No.4 – a company owned by Department of Agricultural Research.

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Two technologies were developed by the Respondents in Pest Management namely, the “light-trap” safer to beneficial insects and “light-trap for managing insects”, which are a substitute for chemical pesticides. The Respondents had earlier licensed these two technologies exclusively to two companies and when the Petitioner sought them, the Petitioner was informed that technologies cannot be licensed to the Petitioner. The Petitioner filed a Writ Petition No.6324 of 2016 and the Petition was disposed of and a communication was issued by the Respondents on 14 October 2019, calling upon the Petitioner to execute and signed a memorandum. The Memorandum which the petitioner signed expired on 9 December 2019 and thereafter, the Respondents changed their policy and opened the grant of license of non-exclusive basis. The Petitioner, thereafter sought to apply for the licenses in the year 2020, when the Petitioner was informed that the license fee will be Rs.25 Lakhs. The Petitioner, being aggrieved by this stipulation license fee of Rs.25 Lakhs has approached this Court.

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The learned counsel for the Petitioner submitted that the fixation of license fee of Rs.25 Lakhs is entirely arbitrary. He submitted that as per the ICAR Guidelines for Technology

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KOLHE

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Transfer and Commercialization, the Respondents must show a nexus between the license fee fixed and the services rendered. He submitted there is no such nexus demonstrated and such a arbitrarily high fixation of license fee will prohibit the applicants such as the Petitioner from availing of the technology. He submitted that the Respondents being the State instrumentality must act in larger public interest. The learned counsel for Respondents submitted that the license fee for two technologies for the period of 2014 to 2019 was Rs.16,85,400/- and Rs.11,23,599/- respectively, inclusive of taxes and therefore, the license fee now fixed at Rs.25 Lakhs with royalty in the year 2021 is not arbitrary. He has drawn our attention to Clauses 8.3 of the ICAR Guidelines. Reply affidavit is also filed.

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We do not find that fixing the license fees at Rs.25 Lakhs for five years as ex facie drastic or absurd. For the period from 2014 to 2019, the license fee was around Rs.15 Lakhs, though given exclusively for two companies, therefore by the passage of seven years the license fee has been increased to Rs.25 Lakhs which is within reason increase.

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Furthermore, the exact quantum of license fee is a matter of policy for the Respondents. The ICAR Guidelines 8.3 refer to the license fee is to be determined on the judgment of technical expert, producers of technology and business and there is no

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KOLHE

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standard formula or method for assessing work of technology. The cost and pricing of technology is fixed on case to case basis. Therefore, it will be a purely a decision of expert in this field acting as policy makers, as to the rate of license to be charged to use a technology developed. The factors such as what market can bear, cost factors and public interest are to be considered. Deference will have to be given innovators of the technology as to their assessment of what the response will be. If the response is not favorable, it is always open to the innovators and licensors of this technology to change the quantum of the license fees.

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In these circumstances it is not possible for us to interfere with the quantum of the license fee as sought for by the Petitioner in question.

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8. Writ Petition is rejected.

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KOLHE

M/S. Sai Agrotech F.M.D. (Farm Machinery Division) Thr. Proprietor Devananad R. Dudhe v. the Union of India, Thr. Secretary, Ministry of Agriculture and Farmers Welfare(Goi) and Others

Case brief

What is this about?

What did the court decide?

M/S. Sai Agrotech F.M.D. (Farm Machinery Division) Thr. Proprietor Devananad R. Dudhe v. the Union of India, Thr. Secretary, Ministry of Agriculture and Farmers Welfare(Goi) and Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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