M/S NANDAN BIOMATRIX LTD. versus S.AMBIKA DEVI & ORS. on 6 March 2020

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[2020] 5 S.C.R. 344

SUPREME COURT REPORTS

[2020] 5 S.C.R.

M/S NANDAN BIOMATRIX LTD.

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v.

S.AMBIKA DEVI & ORS.

(Civil Appeal Nos. 7357-7376 of 2010)

BMARCH 06, 2020[MOHAN M. SHANTANAGOUDAR ANDR. SUBHASH REDDY, JJ.]

Consumer Protection Act, 1986 – s.2(d) – The complainant -respondent entered into a tripartite agreement with the appellantCand its franchisee – As per the agreement, the respondent purchased750 kgs of wet musli for sowing from the appellant, at the rate ofRs. 400/- per kg, and cultivated the same in her land – The appellantwas to buy back the produce at a minimum price of Rs. 1000/- perkg from the respondent – The appellant failed to buy back herDproduce – Consequent to which, the respondent lodged a consumercomplaint – The District Forum dismissed the complaint and heldthat the same was not maintainable since the respondent was not a‘consumer’ within the meaning of the Act, 1986 – The StateCommission set aside the order passed by the District Forum andheld that the respondent was a ‘consumer’ under the Act 1986 –EThe National Commission upheld the finding of the State Commission– On appeal, held: It is settled by the Supreme Court in the case ofLaxmi Engineering that an agreement for buy back by the seedCompany of the crop grown by a farmer cannot be regarded as aresale transaction and he cannot be brought out of the scope ofFbeing a ‘consumer’ under the Act, 1986 only on such ground –Even in the instant case, the fact that there was a buy back agreementfor the musli crop would not bring the respondent outside the purviewof the definition of ‘consumer’ by rendering the buybackarrangement a resale transaction or being for a commercial purpose– The respondent had the freedom to sell her produce on the openGmarket as well if she was able to obtain a better price – However,this aspect would not take away from the conclusion that therespondent had entered into an agreement for growing musli cropfor the purpose of earning a livelihood, since an agriculturist wouldalways have to sell his produce in order to earn his livelihood –H

Thus, there is no reason to interfere with the order passed by theNational Commission affirming that the respondent is a ‘consumer’within the meaning of Act, 1986.

Dismissing the appeals, the Court

HELD: 1. Notably, it was emphasized in the case of LaxmiEngineering that the employment of a few persons for the purposeof assistance in the activity carried out by the purchaser wouldnot automatically render the commercial activity as not being forself-employment and for earning his livelihood; rather, this wouldhave to be determined from the facts and circumstances of a givencase. [Para 8.2][351-H; 352-A]

2. In the matter on hand, though the Appellant has soughtto project that the Respondent were cultivating musli on a largescale and with a profit motive, this Court finds itself unable toconclude that the cultivation being undertaken was for a purposeother than for eking out a livelihood through self-employment.[Para 9][352-B]

3. In matters such as the one on hand, the agriculturistbuys the foundation seeds from the seed company, or the companyitself reaches out and requests the farmers to generate the seedsso that it may market the same. By accepting such an offer, andafter purchasing the foundation seeds from the seed company,the agriculturist, with hard labour and sweat, produces seeds tobe marketed by the seed company. Thus, the agriculturist is notreselling any product, but grows his own product by utilizing thefoundation seeds. There cannot be any dispute that theagriculturist has to sell his product in the open market or to theseed company, as the case may be, in order to eke out hislivelihood. In other words, the agriculturist sustains himself byselling his product. This cannot be termed as resale or activity infurtherance of a “commercial purpose” bringing him out of thepurview of the definition of “consumer” under Section 2(d).Rather, it is purely for the purpose of earning his livelihood bymeans of self-employment. [Para 9.1][352-C-E]

4. It is amply evident in the case of Laxmi Engineering thatan agreement for buyback by the seed company of the crop grown A

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Aby a farmer cannot be regarded as a resale transaction, and hecannot be brought out of the scope of being a “consumer” underthe 1986 Act only on such ground. Thus, even in the instant case,the fact that there was a buyback agreement for the musli cropwould not bring the Respondent outside the purview of thedefinition of “consumer” by rendering the buyback arrangementBa resale transaction or being for a commercial purpose. This Courthastens to emphasise that the fact situation herein diverges fromMadhusudan to the extent that in the instant case, theRespondent had the freedom to sell her produce on the openmarket if she was able to obtain a better price. However, thisCaspect would not take away from the conclusion that theRespondent had entered into an agreement for growing the muslicrop for the purpose of earning a livelihood, since an agriculturistwould always have to sell his produce in order to earn hislivelihood. [Para 10.1][354-B-D]

DLaxmi Engineering Works v. PSG Industrial Institute(1995) 3 SCC 583 : [1995] 3 SCR 174 – relied on.

Sakthi Sugars Ltd. Orissa v. Sridhar Sahoo, II (1999)CPJ 4 (NC) – held incorrect law.

Wimco Limited v. Ashok Sekhon, II (2008) CPJ 210 (NC)E– distinguished.

Synco Textiles Pvt. Ltd. v. Greaves Cotton and CompanyLtd. (1991) 1 CPJ 499; Oswal Fine Arts v. HMT (1991)1 CPJ 330; Secretary, Consumer Guidance andResearch Society of India v. BPL India Ltd. (1992) 1FCPJ 140 (NC); Rajeev Metal Works v. Mineral & MetalTrading Corporation of India Ltd. (1996) 9 SCC 422 :[1995] 6 Suppl. SCR 118; National Seeds Corpn. Ltd.v. Madhusudan Reddy (2012) 2 SCC 506 : [2012] 2SCR 1065; Fruit and Vegetables Project, New Delhi v.GN. Shankar Reddy, III (1994) CPJ 163 (NC);Narayanrao Chavan v. The National Seeds CorporationLtd. [2012] SCC Online NCDRC 7 – referred to.

Case Law Reference

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 7357-7376 of 2010.

From the Judgment and Order dated 15.04.2009 of the NationalConsumer Disputes Redressal Commission at New Delhi in RP Nos.3334-3353 of 2008.

Raghenth Basant, Ms. Liz Mathew and Ms. Sonali Jain, Advs.for the Appellant.

Santosh Paul, Sr. Adv., Ranjith K. C., Boby Augustine, JoshuaJoseph and Subhranshu Dash, Advs. for the Respondents.

The Judgment of the Court was delivered by MOHAN M. SHANTANAGOUDAR, J.

Civil Appeal No. 7357/2010

1. The instant appeal arises against the order dated 15.04.2009passed by the National Consumer Disputes Redressal Commission, NewDelhi (“the National Commission”), affirming the order dated 28.04.2008of the Kerala State Consumer Disputes Redressal Commission (“theState Commission”) setting aside the order of the District Forum,Kozhikode dismissing the complaint and remanding the matter to theDistrict Forum for disposal on merits.

2. The brief facts leading to this appeal are as follows:

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A2.1 The complainant (the Respondent herein) is a small landholderwho responded to the advertisements issued by the Appellant, a seedcompany, in 2003, regarding buyback of safed musli, a medicinal crop,at attractive prices. She entered into a tripartite agreement dated15.01.2004 with the Appellant and its franchisee M/s Herbz India. Asper the agreement, the Respondent purchased 750 kgs of wet musli forBsowing from the Appellant, at the rate of Rs. 400/- per kg, and cultivatedthe same in her land. The Appellant was to buy back the produce at aminimum price of Rs. 1,000/- per kg from the Respondent. TheRespondent lodged a consumer complaint alleging negligence and breachof contract on the part of the Appellant on the ground that the AppellantCfailed to buy back her produce, leading to the destruction of the greaterpart of the crop.

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2.2 The District Forum dismissed the complaint, and held that thesame was not maintainable since the Respondent was not a “consumer”within the meaning of the Consumer Protection Act, 1986 (“the 1986DAct”). On appeal by the Respondent, the State Commission set asidethe order passed by the District Forum, holding that the Respondent wasa “consumer” under the 1986 Act, and remanded the matter to the DistrictForum for disposal on merits. It is this order which was impugned beforethe National Commission by way of a revision petition filed by theAppellant.E

2.3 The National Commission upheld the finding of the StateCommission, holding that the covenants entered into between the partieswere in the nature of both sale of product and rendering of service,since the Appellant had agreed to provide wet musli for growing to theRespondent, supplemented by technical support and guidance from itsFfranchisee, and had further agreed to insure the crop at additional cost.Additionally, noting that the Respondent was a small landholder owningabout 1-1.5 acres of land, who had started cultivation of musli for ekingout a livelihood for herself, the National Commission held that it couldnot be said that the agreement was entered into for the commercialGpurpose of the Respondent. The Revision Petition was dismissed with acost of Rs. 2,500/- imposed on the Appellant, payable to the Respondent.

2.4 The instant appeal has been filed against the above order ofthe National Commission.

3. Before us, learned Counsel for the Appellant, Mr. RaghenthHBasant, argued that the Respondent was not a “consumer” as defined under Section 2(d) of the 1986 Act. Firstly, it was argued that the tripartiteagreement envisaged buyback of musli by the Respondent from theAppellant, which amounted to resale, which is excluded from the purviewof Section 2(d). Secondly, it was argued that the cultivation and sale ofmusli by the Respondent was for a commercial purpose and not for thepurpose of earning livelihood, and hence excluded from the purview ofSection 2(d).

4. Learned Counsel for the Respondent, Mr. Santosh Paul, on theother hand, argued that the cultivation of musli was not being done on acommercial level, but was purely on a self-employed basis done by apoor agriculturist for eking out a livelihood, and hence such cultivationdid not fall within the meaning of “commercial purpose” under theExplanation 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 whetherthe Respondent was excluded from the purview of the definition of“consumer” under Section 2(d) of the 1986 Act on account of the subjecttransaction amounting to resale or for being for a commercial purpose.

7. It would be pertinent to begin our discussion by referring to thedefinition of the term “consumer” under Section 2(d) under the 1986Act:

“(d) “consumer” means any person who—

(i) buys any goods, for a consideration which has been paid orpromised or partly paid and partly promised, or under anysystem of deferred payment and includes any user of suchgoods other than the person who buys such goods forconsideration paid or promised or partly paid or partly promisedor under any system of deferred payment when such use ismade with the approval of such person butdoes not includea person who obtains such goods for resale or for anycommercial purpose; or

(ii) hires or avails of any services for a consideration which hasbeen paid or promised or partly paid and partly promised, orunder any system of deferred payment and includes anybeneficiary of such services other than the person who hiresor avails of the service for consideration paid or promised, or A

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partly paid and partly promised, or under any system ofdeferred payment, when such services are availed of withthe approval of the first mentioned person but does notinclude a person who avails of such services for anycommercial purposes; A

Explanation.— For the purposes of this clause, “commercialpurpose” does not include use by a person of goods boughtand used by him and services availed by him exclusively forthe purposes of earning his livelihood by means of self-employment” (emphasis supplied)

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C8. It is relevant to note that the explanation regarding the meaningof “commercial purpose” was added vide an amendment in 1993, andwas considered for the first time by this Court in Laxmi EngineeringWorks v. PSG Industrial Institute, (1995) 3 SCC 583. In this case, theCourt noted that even prior to the 1993 amendment, the NationalCommission had been taking a consistent view that was broadly in accordDwith the amended definition, i.e. only persons purchasing goods or availingof services for carrying on activity on a large scale, for the purpose ofearning profit, would be excluded from the ambit of the definition of“consumer” [see Synco Textiles Pvt. Ltd. v. Greaves Cotton andCompany Ltd., (1991) 1 CPJ 499; Oswal Fine Arts v. HMT, (1991) 1ECPJ 330; and Secretary, Consumer Guidance and Research Societyof India v. BPL India Ltd., (1992) 1 CPJ 140 (NC)].

8.1 On this basis, this Court affirmed that the amendment wasonly clarificatory in nature, and that though the question regarding whetherthe purpose for which goods have been bought or services rendered is aF“commercial purpose” is to be answered on the facts of each case, aperson buying goods and using them himself exclusively for the purposeof earning a livelihood by means of self-employment would be coveredby the definition of “consumer” within the 1986 Act, even if such use iscommercial use. In this regard, the Court in Laxmi Engineeringobserved:

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“11. ... a person who buys a typewriter or a car and uses themfor his personal use is certainly a consumer but a person whobuys a typewriter or a car for typing others’ work for considerationor for plying the car as a taxi can be said to be using the typewriter/car for a commercial purpose. The explanation however clarifiesHthat in certain situations, purchase of goods for “commercial purpose” would not yet take the purchaser out of the definition ofexpression ‘consumer’. If the commercial use is by the purchaserhimself for the purpose of earning his livelihood by means of self-employment, such purchaser of goods is yet a ‘consumer’. In theillustration given above, if the purchaser himself works ontypewriter or plies the car as a taxi himself, he does not cease tobe a consumer. In other words, if the buyer of goods uses themhimself, i.e., by self-employment, for earning his livelihood, it wouldnot be treated as a “commercial purpose” and he does not ceaseto be a consumer for the purposes of the Act. The explanationreduces the question, what is a “commercial purpose”, to a questionof fact to be decided in the facts of each case. It is not the valueof the goods that matters but the purpose to which the goodsbought are put to. The several words employed in the explanation,viz., “uses them by himself”, “exclusively for the purpose of earninghis livelihood” and “by means of self-employment” make theintention of Parliament abundantly clear, that the goods boughtmust be used by the buyer himself, by employing himself forearning his livelihood. A few more illustrations would serve toemphasise what we say. A person who purchases an auto-rickshaw to ply it himself on hire for earning his livelihood wouldbe a consumer. Similarly, a purchaser of a truck who purchases itfor plying it as a public carrier by himself would be a consumer. Aperson who purchases a lathe machine or other machine to operateit himself for earning his livelihood would be a consumer. (In theabove illustrations, if such buyer takes the assistance of one ortwo persons to assist/help him in operating the vehicle or machinery,he does not cease to be a consumer.) As against this a personwho purchases an auto-rickshaw, a car or a lathe machine orother machine to be plied or operated exclusively by another personwould not be a consumer. This is the necessary limitation flowingfrom the expressions “used by him”, and “by means of self-employment” in the explanation. The ambiguity in the meaning ofthe words “for the purpose of earning his livelihood” is explainedand clarified by the other two sets of words.” (emphasis supplied)

8.2 Notably, it was emphasized that the employment of a fewpersons for the purpose of assistance in the activity carried out by thepurchaser would not automatically render the commercial activity as notbeing for self-employment and for earning his livelihood; rather, this would A

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Ahave to be determined from the facts and circumstances of a givencase.

9. In the matter on hand, though the Appellant has sought to projectthat the Respondent were cultivating musli on a large scale and with aprofit motive, we find ourselves unable to conclude that the cultivationBbeing undertaken was for a purpose other than for eking out a livelihoodthrough self-employment.

9.1 In matters such as the one on hand, the agriculturist buys thefoundation seeds from the seed company, or the company itself reachesout and requests the farmers to generate the seeds so that it may marketCthe same. By accepting such an offer, and after purchasing the foundationseeds from the seed company, the agriculturist, with hard labour andsweat, produces seeds to be marketed by the seed company. Thus, theagriculturist is not reselling any product, but grows his own product byutilizing the foundation seeds. There cannot be any dispute that theagriculturist has to sell his product in the open market or to the seedDcompany, as the case may be, in order to eke out his livelihood. In otherwords, the agriculturist sustains himself by selling his product. This cannotbe termed as resale or activity in furtherance of a “commercial purpose”bringing him out of the purview of the definition of “consumer” underSection 2(d). Rather, it is purely for the purpose of earning his livelihoodEby means of self-employment.

9.2 Contrary to what the Appellant has sought to impress upon us,we find that cases such as these cannot be compared to activitiesundertaken by industrial concerns, for example, where the employmentof raw materials to produce finished goods for sale has also been heldFby this Court to amount to resale or being for a commercial purpose [seeRajeev Metal Works v. Mineral & Metal Trading Corporation ofIndia Ltd., (1996) 9 SCC 422].

9.3 Indeed, in the matter on hand, the Respondent is a housewifewho has undertaken agricultural activity on land of 1-1.5 acres for theGpurpose of increasing her household income, and would perhaps nothave undertaken the growing of musli if the Appellant had not assured aprofitable price for buyback of the crop. Of course, we cannot base ourconclusion on any surmise or conjecture in this regard. At the sametime, in our opinion, the fact that such profitable price was guaranteedby the Appellant cannot now be relied upon to argue that the activity H

was undertaken by the Respondent for a “commercial purpose”, so asto exclude the same from the purview of the 1986 Act.

10. We particularly find the argument untenable that the tripartiteagreement would amount to resale by virtue of containing a buybackclause, and would hence exclude the Respondent from the ambit of thedefinition of “consumer”. In this regard, we find it relevant to refer tothe decision of this Court in National Seeds Corpn. Ltd. v. M.Madhusudan Reddy, (2012) 2 SCC 506, where this Court was seizedof appeals arising out of consumer complaints filed by farmers engagedin agriculture and seed production, who had purchased seeds from theNational Seeds Corporation Ltd. which had turned out to be defective,leading to below par germination. Some of these farmers had enteredinto agreements whereby they purchased foundation seeds from theseed company and agreed to grow seeds and sell them back to thecompany for profit. The company had rejected the grown seeds forbeing unfit for certification. While dealing with the question of whethera farmer would be excluded from the definition of “consumer” becausethe seeds produced by him were required to be supplied back to theseed corporation that supplied the foundation seeds, this Court, takingnote of the elaboration on the scope and ambit of the expression“commercial purpose” as undertaken in Laxmi Engineering (supra),observed as follows:

“73. What needs to be emphasised is that the appellant hadselected a set of farmers in the area for growing seeds on itsbehalf. After entering into agreements with the selected farmers,the appellant supplied foundation seeds to them for a price, withan assurance that within a few months they will be able to earnprofit. The seeds were sown under the supervision of the expertdeputed by the appellant. The entire crop was to be purchased bythe appellant. The agreements entered into between the appellantand the growers clearly postulated supply of the foundation seedsby the appellant with an assurance that the crop will be purchasedby it. It is neither the pleaded case of the appellant nor was anyevidence produced before any of the Consumer Forums that thegrowers had the freedom to sell the seeds in the open market orto any person other than the appellant. Therefore, it is not possibleto take the view that the growers had purchased the seeds forresale or for any commercial purpose and they are excluded from A

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Athe definition of the term “consumer”. As a matter of fact, theevidence brought on record shows that the growers had agreedto produce seeds on behalf of the appellant for the purpose ofearning their livelihood by using their skills and labour.”

10.1 It is amply evident from the above that an agreement forBbuyback by the seed company of the crop grown by a farmer cannot beregarded as a resale transaction, and he cannot be brought out of thescope of being a “consumer” under the 1986 Act only on such ground.Thus, even in the instant case, the fact that there was a buybackagreement for the musli crop would not bring the Respondent outsidethe purview of the definition of “consumer” by rendering the buybackCarrangement a resale transaction or being for a commercial purpose.We hasten to emphasise that the fact situation herein diverges fromMadhusudan to the extent that in the instant case, the Respondent hadthe freedom to sell her produce on the open market if she was able toobtain a better price. However, as we have already mentioned, in our Dopinion, this aspect would not take away from the conclusion that theRespondent had entered into an agreement for growing the musli cropfor the purpose of earning a livelihood, since an agriculturist would alwayshave to sell his produce in order to earn his livelihood.

11. It is pertinent to note at this juncture that the Appellant hasEsought to rely on several decisions rendered by the National Commissionin order to argue that the Respondent cannot be regarded as a“consumer” under the 1986 Act, and we find it necessary to advert tothe same below.

12. The Appellant has referred to Synco Textiles (supra), a caseFdecided before the 1993 amendment, where the National Commissionopined that large scale commercial activities would be excluded fromthe purview of the definition of “consumer”. It was held that a personpurchasing a generator used for generating electricity, to be used in anindustrial concern producing oil on a large scale, would not amount to a“consumer”, since the generator was being used for an activity directlyGintended to generate profit. This view was upheld in Laxmi Engineering(supra)by this Court, and we see no reason to depart from the same. Atthe same time, the said decision cannot come to the rescue of the Appellantas the facts in Synco clearly indicated that the generator purchased wasemployed for production that was geared for a commercial purpose, andHhad nothing to do with the agricultural sector and the status of a farmeras a “consumer”.

13. However, the same cannot be said with regard to the decisionin Sakthi Sugars Ltd., Orissa v. Sridhar Sahoo, II (1999) CPJ 4 (NC).In this case, the respondent farmer had entered into an agreement withthe appellant corporation for financial assistance, agreeing to sell thesugarcane crop grown by him to it. The corporation, in turn, had agreedto help the farmer get a loan from specified sources for a diesel pumpset and dug-well. In 1991-92, the farmer obtained inadequate output inhis crop. In his complaint, he alleged that this was because he was unableto irrigate his field properly because of the lack of a dug-well and pumpset, and that he had been unable to procure a loan in this regard becauseof the failure of the appellant to deposit margin money for the same.

13.1 The National Commission, following the view taken in Fruitand Vegetable Project, New Delhi v. N. Sankar Reddy, III (1994)CPJ 163 (NC) that a seller could not take the benefit of the 1986 Act,held that the farmer was not a “consumer” since he was selling hisproduce to the opposite party. It was also held that in any case, the issueof specific performance emanating from a contract between the partiescould not be the subject matter of a consumer dispute. The Appellant inthe instant case has referred to this reasoning adopted by the NationalCommission to substantiate its case. However, for reasons discussedbelow, we are of the considered view that the proposition of law expressedin Sakthi Sugars is incorrect.

13.2 To begin with, a perusal of the decision in Sankar Reddy,which was relied upon in Sakthi Sugars, shows that in that case, theNational Commission had held that a farmer who was selling his producethrough an intermediary was not a “consumer” vis-à-vis suchintermediary. The complainant therein was a horticulturist who was sellinghis produce to an intermediary for further sale. One of the consignmentshad been rejected by the intermediary for non-adherence with standardspertaining to quality and packaging, but in view of the perishable natureof the goods, the complainant requested the intermediary for help indisposal, who arranged for the sale of the consignment through anauthorized commission agent for a specified price. The complaint wasfiled alleging that the intermediary had failed to pay the complainant theentire amount promised. On these facts, the National Commission hadheld that while obliging with the request of the complainant, theintermediary was acting only as an agent, and that too only in order tominimize the loss that the complainant would have suffered if the A

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Aconsignment remained unsold, without receiving any consideration. Thus,it could not be said that the intermediary had undertaken to render aservice for consideration.

13.3 It is relevant to note that from the order of the NationalCommission, no material is forthcoming to the effect that the parties hadBentered into an agreement whereby the intermediary agreed to render aservice to the farmers regarding the further sale of their produce.Additionally, the National Commission found that even if it was presumedthat the intermediary had purchased goods in terms of an agreementbetween the parties, the fact remained that in such transaction, it wasthe farmer who was a seller, and could not be deemed to be a “consumer”Cunder the 1986 Act.

13.4 It is evident that in Sakthi Sugars, there was a clearagreement between the farmer and the corporation for the latter to renderfinancial assistance by way of help in procuring a loan, which amountedto the rendering of a service, a deficiency in which would give rise to aDcause of action under the 1986 Act. Thus, the farmer was not purely aseller and was also availing of services from the corporation. In thisrespect, reliance on Sankar Reddy may not have been proper.

13.5 We also find that the view that a consumer dispute may notarise out of a contractual arrangement is erroneous since it falls foul ofEthe clear stipulation under Section 2(f) of the 1986 Act that a deficiencyin service may arise out of “any fault, imperfection, shortcoming orinadequacy in the quality, nature and manner of performance whichis required to be maintained by or under any law for the time beingin force or has been undertaken to be performed by a person inFpursuance of a contractor otherwise in relation to any service”.

13.6 In view of the above, we find that Sakthi Sugars cannot berelied upon to argue that a farmer selling his produce cannot under anycircumstance amount to a “consumer” under the 1986 Act. As we havediscussed supra, in cases where the farmer has purchased goods orGavailed of services in order to grow produce in order to eke out a livelihood,the fact that the said produce is being sold back to the seller or serviceprovider or to a third party cannot stand in the way of the farmeramounting to a “consumer”.

14. The Appellant has also referred to the decision of the NationalCommission in Wimco Limited v. Ashok Sekhon, II (2008) CPJ 210H

(NC). In this case, the complainant had purchased 1800 poplar transplantsfor a corporation on a large scale for growing trees and selling themback to the corporation. The National Commission referred to its priordecision in Synco Textiles (supra) and the decision of this Court in LaxmiEngineering (supra), for the principle that the “self-employment”exception to the “commercial purpose” clause was applicable only whenthe goods bought by the buyer were used by the buyer himself byemploying himself for earning his livelihood. It was held that the plantingof 1800 trees on a 9-acre field, and that too for resale, could not be saidto be on a self-employment level and without a commercial purpose.Thus, the complainant was held to not be a consumer within the 1986Act. We find that this decision is clearly distinguishable since it is evidentfrom the facts therein that the trees were being grown for a “commercialpurpose”, which is not the case here.

15. Finally, we may refer to the decision in Prithviraj NarayanraoChavan v. The National Seeds Corporation Ltd., [2012] SCC OnLineNCDRC 7, cited by the Appellant. This was also a case involving buybackof seeds produced with the help of foundation seeds provided by theseed company. The seed company had approached farmers to participatein its seed production programme for a variety of jute, and were assureda certain minimum procurement price per quintal of seed produced. Thearea under cultivation was withdrawn from the certification of the seedcompany due to poor germination of crop, leading to heavy losses forthe farmers, based on which consumer complaints were filed.

15.1 The State Commission in Prithviraj had adopted the viewtaken in Sakthi Sugars (supra)that a seller could not be treated as aconsumer, to hold that since the complainants therein had entered into abuyback transaction, they were acting as sellers and hence could not betreated as consumers. This view was upheld by the National Commission,which also placed reliance upon the decision in Wimco (supra).

15.2 As we have already noticed, we find ourselves unable toagree with the view taken in Sakthi Sugars. Moreover, for reasonsexpressed already, and particularly in view of the decision of this Courtin Madhusudan (supra), we find that the National Commission inPrithviraj erred in holding that entering into a buyback transaction wouldpreclude a farmer from taking benefit as a “consumer” under the 1986Act.

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A16. Before we part with this matter, we feel constrained to notethat the Indian agricultural scenario, today, is in a very imperilled state.Agriculturists have to deal with serious environmental concerns like topsoildepletion, contamination of food, water and soil due to toxic fertilizersand pesticides, and the vagaries of the weather, which are becomingmore and more severe and unpredictable as the climate deteriorates. InBsome parts of the country, such as Punjab, pesticides being used aretoxic enough to have led to unprecedented incidence of diseases likecancer. The mechanization of farms has undoubtedly led to manyadvances in the food security of the country, but this has come at agrave cost.C

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16.1 Practices such as crop diversification and rotation, whichare crucial to species diversity and thus to maintain soil health and ensurefarm security, and are in-built in traditional forms of farming, are underthreat from the increasing inroads being made into the Indian farm bycorporates of all sizes, which come with the promise of increased yieldsDand attractive returns. This is true with regard to the sale of seeds aswell, even though Indian law protects plant material including seeds frompatentability.

16.2 Most Indian farmers own only small landholdings, whichrequire expensive inputs such as irrigation, electricity, seeds, fertilizer,Eand pesticide, but do not generate sufficient output to cover the costs ofthe same. Though the sway of seed companies over small farmers inIndia is, as of now, minimal, when agriculturists with such smalllandholdings do enter into agreements to grow crops on terms dictatedby seed companies, it is in the hope of earning some profit that wouldoffset the cost of their inputs and generate some income for the household.FOften, the crops require the intensive usage of labour and mechanization.Therefore, agreements such as the one in the instant case often guaranteetechnical and financial assistance to the farmer in order to be able todischarge his end of the deal. Needless to say, the success or failure ofthe crop would make or break the income of the farmer for the entireGseason. This can result in situations where small and medium scalefarmers find themselves trapped in contracts where they buy expensiveseeds which turn out to be defective, resulting in a failed season andsevere financial hardship. The problem of indebtedness further worsensthe plight of the farmer, and, all too often, manifests in the tragedy ofsuicide. Farmer suicides are indeed a systemic issue that has persisted,Hand perhaps worsened, over the last few decades.

16.3 The summary redressal available to the farmer under the1986 Act may go a small but crucial way to provide instant relief in asector which is already facing stress on several counts. Undoubtedly,farmers faced with grievances against seed companies, may, in suitablecases, opt for other remedies such as a civil suit, relief under the SeedsAct, 1966 (the reform of which has been under process for some time),and so on. But excluding such farmers from the purview of the 1986 Actwould be a complete mockery of the object and purpose of the statute.

16.4 We are alarmed by the growing trend amongst seedcompanies of engaging in frivolous litigation with farmers, virtuallydefeating the purpose of speedy redressal envisaged under 1986 Act. Inthe instant case, the Appellant contested the farmers’ claims beforeconsumer fora on the preliminary point of maintainability right up to thisCourt, compelling small agriculturists such as the Respondents to spendunnecessarily on litigation in order to secure relief for themselves,amounting to a sum which probably exceeds even the quantum of reliefclaimed. This tendency to resist even the smallest of claims on any groundpossible, by exploiting the relatively greater capacity of seed companiesto litigate for long periods of time, amounts to little more than harassmentof agriculturists. To discourage such conduct in the future by the Appellantas well as other seed corporations, we deem it fit to impose costs on theAppellant

17. Thus, we find no reason to interfere with the order passed bythe National Commission affirming that the Respondent is a “consumer”within the meaning of the 1986 Act, and dismiss the instant Appeal. Theconcerned District Forum shall hear and decide the complaints within aperiod of three months from the date of receipt of this judgment. Costsare imposed on the Appellant to the tune of Rs. 25,000/- payable to theRespondent.

Civil Appeal Nos. 7358-7376/2010

18. These appeals arise out of facts similar to Civil Appeal No.7357/2010. Hence, they are dismissed in terms of the order passed inthe said appeal. It is made clear that the cost of Rs. 25,000/- is to be paidby the Appellant in each of these appeals, to be divided equally amongstthe respondents in each appeal.

Ankit Gyan

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