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SUPREME COURT OF INDIA
MOHAN M. SHANTANAGOUDAR, R. SUBHASH REDDY, JJ.
M/S NANDAN BIOMATRIX LTD. – APPELLANT
VERSUS
S. AMBIKA DEVI & ORS. – RESPONDENTS
Civil Appeal Nos. 7357-7376 of 2010
Decided on : 06-03-2020
Consumer Protection Act, 1986 – Section 2(d) – Agriculture – Seeds – Alleged negligence and breach of contract on part of Appellant on the ground that Appellant failed to buy back her produce, leading to destruction of greater part of crop – Appellant has sought to project that Respondent were cultivating Musli on a large scale and with a profit motive – In such matters, agriculturist buys foundation seeds from seed company, or company itself reaches out and requests farmers to generate seeds so that it may market the same – By accepting such an offer and after purchasing foundation seeds from seed company, agriculturist, with hard labour and sweat, produces seeds to be marketed by seed company – Agriculturist is not reselling any product, but grows his own product by utilizing foundation seeds – Agriculturist sustains himself by selling his product – This cannot be termed as resale or activity in furtherance of a “commercial purpose” bringing him out of purview of definition of “consumer” under Section 2(d) – Rather, it is purely for the purpose of earning his livelihood by means of self-employment – Cases such as these cannot be compared to activities undertaken by industrial concerns – Respondent is a housewife who has undertaken agricultural activity on land of 1-1.5 acres for the purpose of increasing her household income and would perhaps not have undertaken growing of Musli if Appellant had not assured a profitable price for buyback of crop – Fact that such profitable price was guaranteed by Appellant cannot now be relied upon to argue that activity was undertaken by Respondent for a “commercial purpose”, so as to exclude the same from purview of 1986 Act – No reason to interfere with order passed by National Commission affirming that Respondent is a “consumer” within meaning of 1986 – Appeal dismissed. (Paras 9, 9.1,9.2, 9.3, 10.1, 13.6 and 17)
Facts of the Case:
Instant appeal arises against the order dated 15.04.2009 passed by the National Consumer Disputes Redressal Commission, New Delhi, affirming the order dated 28.04.2008 of the Kerala State Consumer Disputes Redressal Commission setting aside the order of the District Forum, Kozhikode dismissing the complaint and remanding the matter to the District Forum for disposal on merits. Only aspect for consideration is whether Respondent was excluded from the purview of definition of “consumer” under Section 2(d) of the 1986 Act on account of subject transaction amounting to resale or for being for a commercial purpose.
Findings of the Court:
Tendency to resist even the smallest of claims on any ground possible, by exploiting the relatively greater capacity of seed companies to litigate for long periods of time, amounts to little more than harassment of agriculturists. To discourage such conduct in the future by the Appellant as well as other seed corporations, we deem it fit to impose costs on Appellant.
Result : Appeal dismissed.
In consumer protection law, a farmer purchasing foundation seeds or availing services from a seed company to cultivate a crop like safed musli, with an agreement for buyback, qualifies as a "consumer" under the definition in Section 2(d) of the Consumer Protection Act, 1986, as the activity is for earning livelihood through self-employment rather than resale or commercial purpose.[judgement_subject][judgement_act_referred] (!) (!) (!) (!)
The exclusion from "consumer" status for goods obtained for resale or commercial purpose does not apply where an agriculturist uses purchased seeds to grow their own produce through labor, even if sold back to the provider or in the market, when done to sustain livelihood on small landholdings. (!) (!) (!) (!) (!)
Cultivation by a small landholder (1-1.5 acres), such as a housewife supplementing household income based on assurances of profitable buyback, is not deemed a commercial purpose excluding consumer status, as it aligns with self-employment for livelihood. (!) (!) (!) (!)
A tripartite buyback agreement involving purchase of wet musli seeds, technical support, and guaranteed repurchase does not constitute resale by the farmer, who instead produces a new crop; the farmer remains a consumer when availing goods and services. (!) (!) (!) (!) (!)
District Forum erred in dismissing complaint on maintainability grounds; State and National Commissions correctly held complainant as consumer and remanded for merits, affirmed by Supreme Court. (!) (!) (!) (!)
Seed companies' tendency to litigate small claims on technical grounds like consumer status, prolonging disputes against agriculturists, is discouraged; costs imposed on appellant (Rs. 25,000 per appeal) for such conduct. (!) [1000646800016]
Agricultural activities on small scale, involving purchased inputs like seeds with company support, fall under consumer protection for speedy redressal against deficiencies, especially given farmers' vulnerabilities. (!) (!) (!)
JUDGMENT :
Mohan M. Shantanagoudar, J.
Civil Appeal No. 7357/2010
The instant appeal arises against the order dated 15.04.2009 passed by the National Consumer Disputes Redressal Commission, New Delhi ("the National Commission"), affirming the order dated 28.04.2008 of the Kerala State Consumer Disputes Redressal Commission ("the State Commission") setting aside the order of the District Forum, Kozhikode dismissing the complaint and remanding the matter to the District Forum for disposal on merits.
2. The brief facts leading to this appeal are as follows:
2.1 The complainant (the Respondent herein) is a small landholder who responded to the advertisements issued by the Appellant, a seed company, in 2003, regarding buyback of safed musli, a medicinal crop, at attractive prices. She entered into a tripartite agreement dated 15.01.2004 with the Appellant and its franchisee M/s Herbz India. As per the agreement, the Respondent purchased 750 kgs of wet musli for sowing from the Appellant, at the rate of Rs. 400/- per kg, and cultivated the same in her land. The Appellant was to buy back the produce at a minimum price of Rs. 1,000/- per kg from the Respondent. The Respondent lodged a consumer complaint alleging negligence and breach of contract on the part of the Appellant on the ground that the Appellant failed to buy back her produce, leading to the destruction of the greater part of the crop.
2.2 The District Forum dismissed the complaint, and held that the same was not maintainable since the Respondent was not a "consumer" within the meaning of the Consumer Protection Act, 1986 ("the 1986 Act"). On appeal by the Respondent, the State Commission set aside the order passed by the District Forum, holding that the Respondent was a "consumer" under the 1986 Act, and remanded the matter to the District Forum for disposal on merits. It is this order which was impugned before the National Commission by way of a revision petition filed by the Appellant.
2.3 The National Commission upheld the finding of the State Commission, holding that the covenants entered into between the parties were in the nature of both sale of product and rendering of service, since the Appellant had agreed to provide wet musli for growing to the Respondent, supplemented by technical support and guidance from its franchisee, and had further agreed to insure the crop at additional cost. Additionally, noting that the Respondent was a small landholder owning about 1-1.5 acres of land, who had started cultivation of musli for eking out a livelihood for herself, the National Commission held that it could not be said that the agreement was entered into for the commercial purpose of the Respondent. The Revision Petition was dismissed with a cost of Rs. 2,500/- imposed on the Appellant, payable to the Respondent.
2.4 The instant appeal has been filed against the above order of the National Commission.
3. Before us, learned Counsel for the Appellant, Mr. Raghenth Basant, argued that the Respondent was not a "consumer" as defined under Section 2(d) of the 1986 Act. Firstly, it was argued that the tripartite agreement envisaged buyback of musli by the Respondent from the Appellant, which amounted to resale, which is excluded from the purview of Section 2(d). Secondly, it was argued that the cultivation and sale of musli by the Respondent was for a commercial purpose and not for the purpose of earning livelihood, and hence excluded from the purview of Section 2(d).
4. Learned Counsel for the Respondent, Mr. Santosh Paul, on the other hand, argued that the cultivation of musli was not being done on a commercial level, but was purely on a self-employed basis done by a poor agriculturist for eking out a livelihood, and hence such cultivation did not fall within the meaning of "commercial purpose" under the Explanation to Section 2(d) of the 1986 Act.
5. Heard the counsel on either side and perused the record.
6. Clearly, the only aspect for consideration before us is whether the Respondent w
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