IMPORTANT POINT
Farmers purchasing foundation seeds from NSCL growing entire crop to and selling entire crop back to NSCL are consumer under Consumer Protection Act, 1986 and entitled to its protection.

Headnote:(a) Seeds Act, 1966 – Section 9 – Special legislation for ensuring quality of seeds – Provides for action against person supplying defective seeds – Does not provide for compensating the suffering farmers/growers of seeds. (Para 17)
       (b) Consumer Protection Act, 1986 – Section 2(d) – Farmers/Growers – Consumers of NSCL – Seeds Act is a special Act for ensuring quality of seeds – For that purpose providing punishment to persons violating provisions of the act and the Rules framed thereunder – No provision for compensating consumers suffering from defective seeds – Farmers being consumer of NSCL its provisions are available to them. (Para 23, 26)
       (1994) 1 SCC 243; (1996) 6 SCC 385; (2000) 5 SCC 294; (2003) 2 SCC 412; (2003) 7 SCC 233; (2004) 1 SCC 305; (2004) 6 SCC 230; (2011) 10 SCC 316; (2007) 4 SCC 579; (1998) 4 SCC 39 – Relied upon
       (2006) 3 SCC 721 – Referred
       (c) Consumer Protection Act, 1986 – Section 3 r/w section 8, Arbitration and Conciliation Act, 1996 and section 19 and 21, Seeds Act – Financial loss suffered by farmers on account of defective seeds not remedied by punishment to the person concerned – Arbitration is an optional remedy in addition to Act 1986. (Para 29)
       (1996) 6 SCC 385; (2000) 5 SCC 294; (2011) 10 SCC 316 – Relied upon
       (d) Consumer Protection Act, 1986 – Section 2(d) – Consumer – NSCL selecting for growing seeds on its behalf – Supplying foundation seeds for price with assurance of profit – Seeds sown under expert guidance of NSCL – Entire crop to be purchased by NSCL – No freedom to sale seeds in open market – Farmers purchasing foundation seeds from NSCL for livelihood – Farmers are consumers of NSCL. (Para 33)
       (1995) 3 SCC 583 – Relied upon
       (e) Consumer Protection Act, 1986 – Section 13(1)(c) – District Forums obtaining reports of Agricultural experts in some cases – Satisfied with the reports – Normally farmers use all seeds and do not keep samples – Even NSCL not assisting District Forum by supplying sample of seeds – District Forum not calling for samples – Entertaining the complaints – No infirmity. (Para 34 to 36)
       (1998) 6 SCC 738; (2002) CPJ 13; (2006) CPJ 178; (2008) 3 CPJ 96 – Relied upon
       Facts of the case:
       The respondents own lands in different districts of Andhra Pradesh and are engaged in agriculture/seed production. They filed complaints with the allegation that they had suffered loss due to failure of the crops/less yield because the seeds sold/supplied by M/s. National Seeds Corporation Ltd. (the appellant) were defective.
       District Consumer Disputes Redressal Forums, Kurnool, Mehboob Nagar, Guntur, Khamman and Kakinada allowed the complaints and awarded compensation to the respondents.
       The appeals and the revisions filed by the appellant were dismissed by the Andhra Pradesh State Consumer Disputes Redressal Commission and the National Consumer Disputes Redressal Commission respectively.
       Finding of the Court:
       There is no infirmity in impugned judgment.
       Result: Appeals dismissed.

JUDGMENT

G. S. Singhvi, J.-Leave granted in SLP (C) Nos.32750 of 2009 and 35350 of 2009.

2. Appellant - M/s. National Seeds Corporation Ltd. (NSCL) is a Government of India company. Its main functions are to arrange for production of quality seeds of different varieties in the farms of registered growers and supply the same to the farmers. The respondents own lands in different districts of Andhra Pradesh and are engaged in agriculture/seed production. They filed complaints with the allegation that they had suffered loss due to failure of the crops/less yield because the seeds sold/supplied by the appellant were defective. District Consumer Disputes Redressal Forums, Kurnool, Mehboob Nagar, Guntur, Khamman and Kakinada allowed the complaints and awarded compensation to the respondents. The appeals and the revisions filed by the appellant were dismissed by the Andhra Pradesh State Consumer Disputes Redressal Commission (for short, `the State Commission') and the National Consumer Disputes Redressal Commission respectively.

3. The appellant has questioned the orders of the National Commission, which also implies its challenge to the orders of the State Commission and the District Forums mainly on the following grounds:

(a) the District Forums did not have the jurisdiction to entertain complaints filed by the respondents because the issues relating to the quality of seeds are governed by the provisions contained in the Seeds Act, 1966 (for short, `the Seeds Act') and any complaint about the sale or supply of defective seeds can be filed only under the Seeds Act and not under the Consumer Protection Act, 1986 (for short, `the Consumer Act').

(b) the District Forums could not have adjudicated upon the complaints filed by the respondents and awarded compensation to them without following the procedure prescribed under Section 13(1)(c) of the Consumer Act.

(c) the growers of seeds, who had entered into agreements with it, are not covered by the definition of `consumer' under Section 2(d) of the Consumer Act because they had purchased the seeds for commercial purpose.

4. For the sake of convenience, we may advert to the facts leading to the passing of orders by three Consumer Forums, which have been impugned in Civil Appeal Nos. 7543 of 2004, 3499 of 2009 and 4519 of 2009. We may also mention that in their complaints the respondents had impleaded the officers of the appellant as parties but for the purpose of this judgment we shall only refer to them as the appellant.

Civil Appeal No.7543 of 2004

5.1 Respondents M. Madhusudan Reddy and K. Rambhupal Reddy claim to have purchased 46 kg. of KBSH-1 Sunflower seeds from Area Manager of the appellant at Kurnool. They undertook cultivation by adopting the recognized modes of preparing the field and irrigation and also used the prescribed fertilizer but there was germination only in 60% seeds and the height of the plants was uneven. The germination in the remaining 40% plants was slow. Not only this, flowering did not take place simultaneously. At the request of the respondents, Area Manager of the appellant inspected their field on 19.11.1999. He is said to have agreed that there was less germination and the growth of the plants was uneven, but declined to give any assurance for payment of compensation.

5.2 Dissatisfied with the response of the Area Manager, the respondents filed a complaint under Section 12 of the Consumer Act and prayed for award of compensation of Rs.1,79,505/- towards the cost of seeds, fertilizer and pesticides and value of the lost crop with interest at the rate of 12 per cent per annum by alleging that they did not get the expected yield because the seeds sold by the appellant were defective.

5.3 In the reply filed on behalf of the appellant, it was pleaded that the seeds were purchased by respondent no. 1 alone and there was no evidence of joint cultivation by the respondents. The appellant denied that the seeds were defective and pleaded that respondent No.

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2012 Supreme(SC) 44

IMPORTANT POINTFarmers purchasing foundation seeds from NSCL growing entire crop to and selling entire crop back to NSCL are consumer under Consumer Protection Act, 1986 and entitled to its protection.

Cases Referred (15)

IMPORTANT POINT
Farmers purchasing foundation seeds from NSCL growing entire crop to and selling entire crop back to NSCL are consumer under Consumer Protection Act, 1986 and entitled to its protection.