Purchase of foundation seeds for production of hybrid seeds to be sold back to the supplier is a commercial purpose, and the purchasers are not 'consumers' under the Consumer Protection Act, 1986.

Headnote:
CONSUMER PROTECTION ACT, 1986 - SECTION 2(1)(D) - SALE OF FOUNDATION SEEDS FOR PRODUCTION OF HYBRID SEEDS - COMMERCIAL PURPOSE - INTERPRETATION - COMPLAINANTS NOT CONSUMERS - NO JURISDICTION OF CONSUMER FORA.
Fact of the Case:

Complainants, agriculturists, purchased foundation seeds from the appellants for growing hybrid seeds to be sold back to the appellants. The crops failed due to inadequate release of pollens from the male flowers, resulting in financial loss to the complainants. They filed complaints before the consumer fora alleging defective seeds and seeking compensation.
Finding of the Court:

The National Commission held that the complainants were not 'consumers' under the Consumer Protection Act, 1986, as they purchased the foundation seeds for a commercial purpose, i.e., to generate profit by selling the hybrid seeds back to the appellants. The purchase was not for consumption or use in a small venture for a living.
Issues: 1. Whether the complainants purchased the foundation seeds for a commercial purpose? 2. Whether the complainants proved that the failure of crops was due to defective foundation seeds?
Ratio Decidendi: 1. The expression 'commercial purpose' in Section 2(1)(d) of the Consumer Protection Act excludes persons who purchase goods for resale or for large-scale profit-making activities. 2. The complainants failed to prove that the foundation seeds were defective by not following the proper procedure under the Seeds Act, 1966, and the Seeds (Amendment) Rules, 1974, for testing the seeds.
Final Decision: The appeals were allowed, the judgments and orders of the District Forum were set aside, and the complaints were dismissed.

ORDER

K.R. Ramaswamy Iyengar, Member—The allegations made in complaint are as follows: —

The complainants are agriculturists of Holalu Village in Bellary District and Haranagiri Village in Dharwar District. They grow various agricultural produce including hybrid seeds. The opponents are engaged in the supply of foundation seeds to various crops. The Opponent No. 1 which is a branch of Opponent No. 2 sold Bajra foundation seeds bearing Code No. B-276 to the complainants for the purposes of raising Bajra Hybrid seeds. The complainants sowed the seeds in their irrigated lands in accordance with the direction and instructions given by the opponents and their representatives and raised the crops by spending Rs. 2,500/- per acre. The seeds were sown in the second week of June, 1990 and the crops became ripe for harvesting in the third week of September, 1990. But it was found that due to inadequate release of pollens from the male flowers, there was complete failure of grain setting in the female earheads. As a result of which the yield was less than one quintal per acre as against not less that 12 quintals per acre, if there had been sufficient release of pollens. The inadequate yield was entirely due to the defective pollen seeds sold by the opponents (appellants) to the complainants. Because of the supply of defective foundation seeds, the complainants could raise only 80 kgs. per acre instead of 12 quintals per acre and they have suffered financial loss. The complainants have also suffered mental agony and injury. The complainants have therefore, claimed compensation for loss of profit as well as mental agony.

2. Complainants from Holalu Village have also urged that their crops had been seen by the Agricultural Assistant, Holalu Circle, who found that sufficient pollens had not been released from the male flowers causing crop damage and a Certificate had been issued by the Agricultural Asst. Director, Hoovinahadagali on 13.9.1990 stating that failure was due to inadequate release of pollens in male earheads, which was due to impure and imperfect seeds.

3. The opponents (appellants) have denied the allegations in the complaint and have further contended that the complainants are not consumers as defined under the Consumer Protection Act, 1986, as they purchased the foundation seeds for production of hybrid seeds and re-sale to the company and as such, it was for a commercial purpose and hence the Forum has no jurisdiction to try the complaints.

4. The District Forum, Dharwar, allowed the complaints and directed the opponents to pay to each of the complainants various amounts of compensation towards financial loss and towards mental agony and also to pay the costs. Hence, the opponents have filed this appeal.

5. The learned Counsel for the appellants urged before us that as admittedly the foundation seeds were purchased by the complainants for growing hybrid seeds which were to be sold back to the appellants, the sale of the foundation seeds would be for a commercial purpose ad therefore the complainants would not be consumers within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986 and the Forum & Commission have no jurisdiction to entertain the complaints. Secondly, he urged that the complainants have not proved that the foundation seeds were defective, as no reliance can be placed on the Certificate given by the Asst. Director of Agriculture, in the absence of the Laboratory testing of the samples which could only prove whether the seeds were defective or not.

6. The points for consideration in this appeal would be:

(1) Whether the complainants purchased the foundation seeds for a commercial purpose?

(2) Whether the complainants have proved that the failure of the crops in their fields was due to the supply of defective foundation seeds by the opponent

(3) What reliefs?

Point No. 1 :— The expression ‘commercial purpose’ has not been defined in the Consumer Protection Act. This question came up for consideration before th

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