Judicial Analysis Court Copy Headnote Facts Arguments Court observation

MAHARASHTRA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, MUMBAI
Hon’ble Mr. Justice A.A. Halbe, President; Mr. G.R. Bedge
& Mrs. Rajyalakshmi Rao, Members
NATH SEEDS PVT. LTD. & ORS.—Appellant
versus
DIRECTORATE OF SEED
CERTIFICATION AGENCY M.S. & ANR.—Respondents
A-216 to 247 of 1997 (Except 217 and 218 of 1997), A-311 to 339 of 1997, A-1639 to 1657 of 1997, A-1553 to 1555 of 1998, A-685 and 688 of 1997; A-108 to 137 of 1997, A-184 to 215 of 1997, A-863 of 1997, A-1609 to 1619 of 1997; A-168 to 176 and A-299 to A-301 of 1997; A-147 and 350 of 1997—Decided on 17.3.1999

Counsel for the Parties :
For the Appellant :Mr. J.M. Baphna, Advocate
For the State Government :Mr. Vikram Pai, Advocate and Mr. Shivarkar, Adm. Officer.
For the Complainant :Mr. S.M. Jain & Mr. Rajput, Advocates.
For the Ajeet Seeds :Mr. R.V. Patil, Advocate.
For the Punjabrao Krishi Vidyapeeth : Dr. Meshram.
For the Dealers 5 :Mr. S.B. Mahalle, Advocate and Mr. Jagdish Wadhwani, Advocates.

The State Government and seed producers are jointly and severally liable for the defective seeds and the resulting losses to the agriculturists, but the financial liabilities squarely lie on the seed producers due to the terms and conditions of the agreement between the parties.

Headnote:
SEEDS ACT, 1966 - SECTION 5 - CERTIFICATION OF SEEDS - DEFECTIVE COTTON SEEDS - LIABILITY OF SEED PRODUCERS AND STATE GOVERNMENT - INTERPRETATION OF AGREEMENT BETWEEN SEED PRODUCERS AND STATE GOVERNMENT - COMPENSATION TO AGRICULTURISTS.
Fact of the Case:

Nath Seeds Pvt. Ltd., Aurangabad, produced 48.34 quintals of CAHH-468 cotton seeds, a hybrid variety developed by Punjabrao Krishi Vidyapeeth, Akola. The seeds were informally certified by the State Seed Certification Agency and released for the 1993-94 sowing season. However, the seeds were found to be defective, resulting in poor crop yield and financial losses for the agriculturists who purchased and sowed them. Numerous complaints were filed with the District Forums of Yavatmal, Akola, and Amravati, leading to several appeals before the State Commission.
Finding of the Court:

1. The State Government and its Seed Certification Agency acted negligently by certifying and releasing non-notified seeds for marketing, in contravention of Section 5 of the Seeds Act, 1966. 2. Nath Seeds Pvt. Ltd. failed to maintain genetic purity and genuineness of the seeds, produced excessive quantities without proper explanation, and did not maintain accurate accounts of the seeds released for marketing. 3. The agreement between Nath Seeds Pvt. Ltd. and the State Government clearly outlined the responsibilities and liabilities of the seed producer, including indemnification of the State Government from any consequential liabilities due to defects in the seeds. 4. The District Forum correctly assessed the compensation to be paid to the agriculturists based on the average yield and prevailing market rates for cotton.
Issues: 1. Whether the CAHH-468 cotton seeds marketed by Nath Seeds Pvt. Ltd. were defective and caused losses to the agriculturists. 2. Whether the State Government and its Seed Certification Agency were liable for the defective seeds and the resulting losses. 3. Whether Nath Seeds Pvt. Ltd. could avoid liability based on the agreement with the State Government. 4. Whether the District Forum erred in its assessment of compensation to the agriculturists.
Ratio Decidendi: 1. The State Government and its Seed Certification Agency were negligent in certifying and releasing non-notified seeds for marketing, which was a clear violation of Section 5 of the Seeds Act, 1966. 2. Nath Seeds Pvt. Ltd. failed to maintain genetic purity and genuineness of the seeds, produced excessive quantities without proper explanation, and did not maintain accurate accounts of the seeds released for marketing, thereby breaching their duty to ensure the quality and genetic purity of the seeds. 3. The agreement between Nath Seeds Pvt. Ltd. and the State Government clearly outlined the responsibilities and liabilities of the seed producer, including indemnification of the State Government from any consequential liabilities due to defects in the seeds. 4. The District Forum correctly assessed the compensation to be paid to the agriculturists based on the average yield and prevailing market rates for cotton, considering the substantial losses suffered by the agriculturists due to the defective seeds.
Final Decision: 1. The appeals filed by the State Government were partly allowed, and the State was directed to pay compensation of Rs. 250/- to each of the complainants in all the appeals. 2. The appeals filed by Nath Seeds Pvt. Ltd. were dismissed, and the company was directed to pay compensation to the agriculturists as ordered by the District Forum, along with interest and costs. 3. The appeals filed by the dealers were also dismissed, and they were directed to refund the cost of the seeds purchased by the complainants with interest.

ORDER

Mr. G.R. Bedge, Member—M/s. Nath Seeds Ltd., Aurangabad, the Government of Maharashtra through the Director, Maharashtra State Seeds Certification Agency, Pune and Seed Dealers of M/s. Nath Seeds Ltd. have preferred 14 appeals against the orders passed by the District Forum, Yavatmal. The orders in all these 82 complaints have been passed on different dates. The District Forum, Yavatmal has passed orders on 26.3.1997 in 30 complaints, in another 30 complaints on 11.4.1997 and in 22 complaints in October, 97. Appeal Nos. 685/97 and 688/97 arose out of the order passed by the Amravati Forum on 23.5.1997. In all these 83 appeals, M/s. Nath Seeds Ltd. have made the State Government as one of the respondents alongwith the original complainants. The State Government has also filed 74 appeals through the Director, Maharashtra State Seeds Certification Agency, Pune arising out of the said orders passed by the District Forum, Yavatmal. By this common order, all these 171 appeals are being disposed of.

2. In order to appreciate, it is necessary to mention the facts and circumstances out of which the original complaints arose.

The Punjabrao Krishi Vidyapeeth, Akola was engaged in the research and development of high yielding variety of cotton seeds right from the year 1981 with a view to provide high yielding cotton seeds at cheaper rate since cotton is the main cash crop in two Divisions of Vidarbha. In 1989-90, the University developed hybrid cotton seed known as P.K.V. - Hybrid 3 known as CAHH -468. This variety was found to be more beneficial for the following reasons :

(1) There was saving in the labour expenditure since the pollination could take place naturally and not by picking by hands;

(2) No paper bags or straw tubes were necessary for effecting pollination or preservation.

(3) The Seed Production Process was simple and not complicated;

(4) The quantity of male seeds required was much less;

(5) The dropping of flowers was much less with the result, there was more yield;

(6) And lastly, the production cost per seed came down to Rs. 20/- per kg. as against Rs. 192/- per kg. in other processes.

3. During the year 1991, a small quantity of this variety seed was produced and since there was a large demand for this variety, knows as CAHH-468 the Seed Production Programme was taken up during the year 1992-93 season by a number of seed producing Companies in the State. Out of them, the appellants Nath Seeds Pvt Ltd., Aurangabad had produced 48.34 quintals of CAHH-468 seeds. For this purpose, under the orders from the Commissioner of Agriculture, dated 31.5.1991, the P.K.V. Akola had supplied parent female line 2 kgs. of CAK 32 A and 1 kg. of CAK 32 B to the appellant M/s. Nath Seeds Ltd. These were seeds of A and B line. Neither the Commissioner (Agriculture); nor the P.K.V., Akola had supplied any male line DHY- 286-I.R. seeds to the appellant Nath Seeds Ltd. The seeds produced by M/s. Nath Seeds Pvt. Ltd. was informally certifed by the State Seed Certification Agency and was released during the sowing season of 1993-94. A large number of agriculturists in Yavatmal, Akola and Amravati Districts had purchased this variety of seeds and sown the same in their fields. There was a very good vegetation growth and the flowering was very heavy. But, subsequently, the flowers dropped down yielding no cotton produce to the agriculturists. Therefore, a large number of complaints were made. The Seed Certification Agency at District, Division and at the State level were involved in the field inspection work since there were complaints on a very large scale from the agriculturists. In this context, it is also necessary to mention that this variety, viz., CAHH, 468 was notified under Section 5 of the Seeds Act on 17.8.1993 i. e. after the sowing season was over. Prior to that, discussions and meetings were held at various levels and the State Level Apex Committee had directed the State Seeds Certification Agency to issue Provisional Seed Certificate

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