M/S NANDAN BIOMATRIX LTD.versusS.AMBIKA DEVI & ORS.

344                      [2020]REPORTS
               SUPREME COURT    5 S.C.R. 344               [2020] 5 S.C.R.


A                     M/S NANDAN BIOMATRIX LTD.
                                        v.
                           S.AMBIKA DEVI & ORS.
                     (Civil Appeal Nos. 7357-7376 of 2010)
B                              MARCH 06, 2020
                 [MOHAN M. SHANTANAGOUDAR AND
                      R. SUBHASH REDDY, JJ.]
             Consumer Protection Act, 1986 – s.2(d) – The complainant -
      respondent entered into a tripartite agreement with the appellant
C
      and its franchisee – 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. 1000/- per
      kg from the respondent – The appellant failed to buy back her
D     produce – Consequent to which, the respondent lodged a consumer
      complaint – 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 Act, 1986 – The State
      Commission set aside the order passed by the District Forum and
      held that the respondent was a ‘consumer’ under the Act 1986 –
E
      The National Commission upheld the finding of the State Commission
      – On appeal, held: It is settled by the Supreme Court in the case of
      Laxmi Engineering that an agreement for buy back by the seed
      Company of the crop grown by a farmer cannot be regarded as a
      resale transaction and he cannot be brought out of the scope of
F     being a ‘consumer’ under the Act, 1986 only on such ground –
      Even in the instant case, the fact that there was a buy back agreement
      for the musli crop would not bring the respondent outside the purview
      of the definition of ‘consumer ’ by rendering the buyback
      arrangement a resale transaction or being for a commercial purpose
      – The respondent had the freedom to sell her produce on the open
G
      market as well if she was able to obtain a better price – However,
      this aspect would not take away from the conclusion that the
      respondent had entered into an agreement for growing musli crop
      for the purpose of earning a livelihood, since an agriculturist would
      always have to sell his produce in order to earn his livelihood –
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 M/S NANDAN BIOMATRIX LTD. v. S.AMBIKA DEVI & ORS.                    345


Thus, there is no reason to interfere with the order passed by the    A
National 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 Laxmi
Engineering that the employment of a few persons for the purpose      B
of assistance in the activity carried out by the purchaser would
not automatically render the commercial activity as not being for
self-employment and for earning his livelihood; rather, this would
have to be determined from the facts and circumstances of a given
case. [Para 8.2][351-H; 352-A]                                        C
      2. In the matter on hand, though the Appellant has sought
to project that the Respondent were cultivating musli on a large
scale and with a profit motive, this Court finds itself unable to
conclude that the cultivation being undertaken was for a purpose
other than for eking out a livelihood through self-employment.        D
[Para 9][352-B]
       3. In matters such as the one on hand, the agriculturist
buys the foundation seeds from the seed company, or the company
itself reaches out and requests the farmers to generate the seeds
so that it may market the same. By accepting such an offer, and       E
after purchasing the foundation seeds from the seed company,
the agriculturist, with hard labour and sweat, produces seeds to
be marketed by the seed company. Thus, the agriculturist is not
reselling any product, but grows his own product by utilizing the
foundation seeds. There cannot be any dispute that the
agriculturist has to sell his product in the open market or to the    F
seed company, as the case may be, in order to eke out his
livelihood. In other words, the 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 the
purview of the definition of “consumer” under Section 2(d).           G
Rather, it is purely for the purpose of earning his livelihood by
means of self-employment. [Para 9.1][352-C-E]
      4. It is amply evident in the case of Laxmi Engineering that
an agreement for buyback by the seed company of the crop grown
                                                                      H
346            SUPREME COURT REPORTS                      [2020] 5 S.C.R.


A     by a farmer cannot be regarded as a resale transaction, and he
      cannot be brought out of the scope of being a “consumer” under
      the 1986 Act only on such ground. Thus, even in the instant case,
      the fact that there was a buyback agreement for the musli crop
      would not bring the Respondent outside the purview of the
      definition of “consumer” by rendering the buyback arrangement
B
      a resale transaction or being for a commercial purpose. This Court
      hastens to emphasise that the fact situation herein diverges from
      Madhusudan to the extent that in the instant case, the
      Respondent had the freedom to sell her produce on the open
      market if she was able to obtain a better price. However, this
C     aspect would not take away from the conclusion that the
      Respondent had entered into an agreement for growing the musli
      crop for the purpose of earning a livelihood, since an agriculturist
      would always have to sell his produce in order to earn his
      livelihood. [Para 10.1][354-B-D]
D           Laxmi 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 Company
            Ltd. (1991) 1 CPJ 499; Oswal Fine Arts v. HMT (1991)
            1 CPJ 330; Secretary, Consumer Guidance and
            Research Society of India v. BPL India Ltd. (1992) 1
F           CPJ 140 (NC); Rajeev Metal Works v. Mineral & Metal
            Trading 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] 2
            SCR 1065; Fruit and Vegetables Project, New Delhi v.
G           N. Shankar Reddy, III (1994) CPJ 163 (NC);
            Narayanrao Chavan v. The National Seeds Corporation
            Ltd. [2012] SCC Online NCDRC 7 – referred to.



H
 M/S NANDAN BIOMATRIX LTD. v. S.AMBIKA DEVI & ORS.                        347


                        Case Law Reference                                A
[1995] 3 SCR 174                     relied on               Para 8
(1991) 1 CPJ 499                     referred to             Para 8
(1991) 1 CPJ 330                     referred to             Para 8
(1992) 1 CPJ 140 (NC)                referred to             Para 8       B
[1995] 6 Suppl. SCR 118              referred to             Para 9.2
[2012] 2 SCR 1065                    referred to             Para 10
(1999) CPJ 4 (NC)                    held incorrect law      Para 13
                                                                          C
(1994) CPJ 163 (NC)                  referred to             Para 13.1
(2008) CPJ 210 (NC)                  distinguished           Para 14
      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 7357-
7376 of 2010.
      From the Judgment and Order dated 15.04.2009 of the National        D
Consumer 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.
                                                                          E
      Santosh Paul, Sr. Adv., Ranjith K. C., Boby Augustine, Joshua
Joseph and Subhranshu Dash, Advs. for the Respondents.
      The Judgment of the Court was delivered by
      MOHAN M. SHANTANAGOUDAR, J.
      Civil Appeal No. 7357/2010                                          F

       1. 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,         G
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:

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348            SUPREME COURT REPORTS                          [2020] 5 S.C.R.


A            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
B
      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
C     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
D     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.
E
             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
F     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
G     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
H     Basant, argued that the Respondent was not a “consumer” as defined
 M/S NANDAN BIOMATRIX LTD. v. S.AMBIKA DEVI & ORS.                               349
         [MOHAN M. SHANTANAGOUDAR, J.]

under Section 2(d) of the 1986 Act. Firstly, it was argued that the tripartite   A
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
                                                                                 B
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                C
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 was excluded from the purview of the definition of                D
“consumer” under Section 2(d) of the 1986 Act on account of the subject
transaction amounting to resale or for being for a commercial purpose.
       7. It would be pertinent to begin our discussion by referring to the
definition of the term “consumer” under Section 2(d) under the 1986
Act:                                                                             E
       “(d) “consumer” means any person who—
       (i)   buys any goods, for a consideration which has been paid or
             promised or partly paid and partly promised, or under any
             system of deferred payment and includes any user of such
             goods other than the person who buys such goods for                 F
             consideration paid or promised or partly paid or partly promised
             or under any system of deferred payment when such use is
             made with the approval of such person but does not include
             a person who obtains such goods for resale or for any
             commercial purpose; or
                                                                                 G
       (ii) hires or avails of any services for a consideration which has
            been paid or promised or partly paid and partly promised, or
            under any system of deferred payment and includes any
            beneficiary of such services other than the person who hires
            or avails of the service for consideration paid or promised, or
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350             SUPREME COURT REPORTS                           [2020] 5 S.C.R.


A                 partly paid and partly promised, or under any system of
                  deferred payment, when such services are availed of with
                  the approval of the first mentioned person but does not
                  include a person who avails of such services for any
                  commercial purposes;
B                 Explanation.— For the purposes of this clause, “commercial
                  purpose” does not include use by a person of goods bought
                  and used by him and services availed by him exclusively for
                  the purposes of earning his livelihood by means of self-
                  employment” (emphasis supplied)
C            8. It is relevant to note that the explanation regarding the meaning
      of “commercial purpose” was added vide an amendment in 1993, and
      was considered for the first time by this Court in Laxmi Engineering
      Works v. PSG Industrial Institute, (1995) 3 SCC 583. In this case, the
      Court noted that even prior to the 1993 amendment, the National
      Commission had been taking a consistent view that was broadly in accord
D     with the amended definition, i.e. only persons purchasing goods or availing
      of services for carrying on activity on a large scale, for the purpose of
      earning profit, would be excluded from the ambit of the definition of
      “consumer” [see Synco Textiles Pvt. Ltd. v. Greaves Cotton and
      Company Ltd., (1991) 1 CPJ 499; Oswal Fine Arts v. HMT, (1991) 1
E     CPJ 330; and Secretary, Consumer Guidance and Research Society
      of India v. BPL India Ltd., (1992) 1 CPJ 140 (NC)].
             8.1 On this basis, this Court affirmed that the amendment was
      only clarificatory in nature, and that though the question regarding whether
      the purpose for which goods have been bought or services rendered is a
F     “commercial purpose” is to be answered on the facts of each case, a
      person buying goods and using them himself exclusively for the purpose
      of earning a livelihood by means of self-employment would be covered
      by the definition of “consumer” within the 1986 Act, even if such use is
      commercial use. In this regard, the Court in Laxmi Engineering
      observed:
G
            “11. ... a person who buys a typewriter or a car and uses them
            for his personal use is certainly a consumer but a person who
            buys a typewriter or a car for typing others’ work for consideration
            or for plying the car as a taxi can be said to be using the typewriter/
            car for a commercial purpose. The explanation however clarifies
H           that in certain situations, purchase of goods for “commercial
 M/S NANDAN BIOMATRIX LTD. v. S.AMBIKA DEVI & ORS.                              351
         [MOHAN M. SHANTANAGOUDAR, J.]

      purpose” would not yet take the purchaser out of the definition of        A
      expression ‘consumer’. If the commercial use is by the purchaser
      himself for the purpose of earning his livelihood by means of self-
      employment, such purchaser of goods is yet a ‘consumer’. In the
      illustration given above, if the purchaser himself works on
      typewriter or plies the car as a taxi himself, he does not cease to
                                                                                B
      be a consumer. In other words, if the buyer of goods uses them
      himself, i.e., by self-employment, for earning his livelihood, it would
      not be treated as a “commercial purpose” and he does not cease
      to be a consumer for the purposes of the Act. The explanation
      reduces the question, what is a “commercial purpose”, to a question
      of fact to be decided in the facts of each case. It is not the value      C
      of the goods that matters but the purpose to which the goods
      bought are put to. The several words employed in the explanation,
      viz., “uses them by himself”, “exclusively for the purpose of earning
      his livelihood” and “by means of self-employment” make the
      intention of Parliament abundantly clear, that the goods bought
                                                                                D
      must be used by the buyer himself, by employing himself for
      earning his livelihood. A few more illustrations would serve to
      emphasise what we say. A person who purchases an auto-
      rickshaw to ply it himself on hire for earning his livelihood would
      be a consumer. Similarly, a purchaser of a truck who purchases it
      for plying it as a public carrier by himself would be a consumer. A       E
      person who purchases a lathe machine or other machine to operate
      it himself for earning his livelihood would be a consumer. (In the
      above illustrations, if such buyer takes the assistance of one or
      two persons to assist/help him in operating the vehicle or machinery,
      he does not cease to be a consumer.) As against this a person
                                                                                F
      who purchases an auto-rickshaw, a car or a lathe machine or
      other machine to be plied or operated exclusively by another person
      would not be a consumer. This is the necessary limitation flowing
      from the expressions “used by him”, and “by means of self-
      employment” in the explanation. The ambiguity in the meaning of
      the words “for the purpose of earning his livelihood” is explained        G
      and clarified by the other two sets of words.” (emphasis supplied)
       8.2 Notably, it was emphasized that the employment of a few
persons for the purpose of assistance in the activity carried out by the
purchaser would not automatically render the commercial activity as not
being for self-employment and for earning his livelihood; rather, this would    H
352             SUPREME COURT REPORTS                            [2020] 5 S.C.R.


A     have to be determined from the facts and circumstances of a given
      case.
             9. In the matter on hand, though the Appellant has sought to project
      that the Respondent were cultivating musli on a large scale and with a
      profit motive, we find ourselves unable to conclude that the cultivation
B     being undertaken was for a purpose other than for eking out a livelihood
      through self-employment.
             9.1 In matters such as the one on hand, the agriculturist buys the
      foundation seeds from the seed company, or the company itself reaches
      out and requests the farmers to generate the seeds so that it may market
C     the same. By accepting such an offer, and after purchasing the foundation
      seeds from the seed company, the agriculturist, with hard labour and
      sweat, produces seeds to be marketed by the seed company. Thus, the
      agriculturist is not reselling any product, but grows his own product by
      utilizing the foundation seeds. There cannot be any dispute that the
      agriculturist has to sell his product in the open market or to the seed
D     company, as the case may be, in order to eke out his livelihood. In other
      words, the 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 the purview of the definition of “consumer” under
      Section 2(d). Rather, it is purely for the purpose of earning his livelihood
E     by 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 activities
      undertaken by industrial concerns, for example, where the employment
      of raw materials to produce finished goods for sale has also been held
F     by this Court to amount to resale or being for a commercial purpose [see
      Rajeev Metal Works v. Mineral & Metal Trading Corporation of
      India Ltd., (1996) 9 SCC 422].
             9.3 Indeed, in the matter on hand, the Respondent is a housewife
      who has undertaken agricultural activity on land of 1-1.5 acres for the
G     purpose of increasing her household income, and would perhaps not
      have undertaken the growing of musli if the Appellant had not assured a
      profitable price for buyback of the crop. Of course, we cannot base our
      conclusion on any surmise or conjecture in this regard. At the same
      time, in our opinion, the fact that such profitable price was guaranteed
      by the Appellant cannot now be relied upon to argue that the activity
H
 M/S NANDAN BIOMATRIX LTD. v. S.AMBIKA DEVI & ORS.                            353
         [MOHAN M. SHANTANAGOUDAR, J.]

was undertaken by the Respondent for a “commercial purpose”, so as            A
to exclude the same from the purview of the 1986 Act.
       10. We particularly find the argument untenable that the tripartite
agreement would amount to resale by virtue of containing a buyback
clause, and would hence exclude the Respondent from the ambit of the
definition of “consumer”. In this regard, we find it relevant to refer to     B
the decision of this Court in National Seeds Corpn. Ltd. v. M.
Madhusudan Reddy, (2012) 2 SCC 506, where this Court was seized
of appeals arising out of consumer complaints filed by farmers engaged
in agriculture and seed production, who had purchased seeds from the
National Seeds Corporation Ltd. which had turned out to be defective,
leading to below par germination. Some of these farmers had entered           C
into agreements whereby they purchased foundation seeds from the
seed company and agreed to grow seeds and sell them back to the
company for profit. The company had rejected the grown seeds for
being unfit for certification. While dealing with the question of whether
a farmer would be excluded from the definition of “consumer” because          D
the seeds produced by him were required to be supplied back to the
seed corporation that supplied the foundation seeds, this Court, taking
note of the elaboration on the scope and ambit of the expression
“commercial purpose” as undertaken in Laxmi Engineering (supra),
observed as follows:
                                                                              E
      “73. What needs to be emphasised is that the appellant had
      selected a set of farmers in the area for growing seeds on its
      behalf. After entering into agreements with the selected farmers,
      the appellant supplied foundation seeds to them for a price, with
      an assurance that within a few months they will be able to earn
      profit. The seeds were sown under the supervision of the expert         F
      deputed by the appellant. The entire crop was to be purchased by
      the appellant. The agreements entered into between the appellant
      and the growers clearly postulated supply of the foundation seeds
      by the appellant with an assurance that the crop will be purchased
      by it. It is neither the pleaded case of the appellant nor was any      G
      evidence produced before any of the Consumer Forums that the
      growers had the freedom to sell the seeds in the open market or
      to any person other than the appellant. Therefore, it is not possible
      to take the view that the growers had purchased the seeds for
      resale or for any commercial purpose and they are excluded from
                                                                              H
354             SUPREME COURT REPORTS                           [2020] 5 S.C.R.


A           the definition of the term “consumer”. As a matter of fact, the
            evidence brought on record shows that the growers had agreed
            to produce seeds on behalf of the appellant for the purpose of
            earning their livelihood by using their skills and labour.”
             10.1 It is amply evident from the above that an agreement for
B     buyback by the seed company of the crop grown by a farmer cannot be
      regarded as a resale transaction, and he cannot be brought out of the
      scope of being a “consumer” under the 1986 Act only on such ground.
      Thus, even in the instant case, the fact that there was a buyback
      agreement for the musli crop would not bring the Respondent outside
      the purview of the definition of “consumer” by rendering the buyback
C     arrangement a resale transaction or being for a commercial purpose.
      We hasten to emphasise that the fact situation herein diverges from
      Madhusudan to the extent that in the instant case, the Respondent had
      the freedom to sell her produce on the open market if she was able to
      obtain a better price. However, as we have already mentioned, in our
D     opinion, this aspect would not take away from the conclusion that the
      Respondent had entered into an agreement for growing the musli crop
      for the purpose of earning a livelihood, since an agriculturist would always
      have to sell his produce in order to earn his livelihood.
            11. It is pertinent to note at this juncture that the Appellant has
E     sought to rely on several decisions rendered by the National Commission
      in order to argue that the Respondent cannot be regarded as a
      “consumer” under the 1986 Act, and we find it necessary to advert to
      the same below.
             12. The Appellant has referred to Synco Textiles (supra), a case
F     decided before the 1993 amendment, where the National Commission
      opined that large scale commercial activities would be excluded from
      the purview of the definition of “consumer”. It was held that a person
      purchasing a generator used for generating electricity, to be used in an
      industrial concern producing oil on a large scale, would not amount to a
      “consumer”, since the generator was being used for an activity directly
G     intended to generate profit. This view was upheld in Laxmi Engineering
      (supra) by this Court, and we see no reason to depart from the same. At
      the same time, the said decision cannot come to the rescue of the Appellant
      as the facts in Synco clearly indicated that the generator purchased was
      employed for production that was geared for a commercial purpose, and
H     had nothing to do with the agricultural sector and the status of a farmer
      as a “consumer”.
 M/S NANDAN BIOMATRIX LTD. v. S.AMBIKA DEVI & ORS.                            355
         [MOHAN M. SHANTANAGOUDAR, J.]

        13. However, the same cannot be said with regard to the decision      A
in Sakthi Sugars Ltd., Orissa v. Sridhar Sahoo, II (1999) CPJ 4 (NC).
In this case, the respondent farmer had entered into an agreement with
the appellant corporation for financial assistance, agreeing to sell the
sugarcane crop grown by him to it. The corporation, in turn, had agreed
to help the farmer get a loan from specified sources for a diesel pump
                                                                              B
set and dug-well. In 1991-92, the farmer obtained inadequate output in
his crop. In his complaint, he alleged that this was because he was unable
to irrigate his field properly because of the lack of a dug-well and pump
set, and that he had been unable to procure a loan in this regard because
of the failure of the appellant to deposit margin money for the same.
       13.1 The National Commission, following the view taken in Fruit        C
and 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 his
produce to the opposite party. It was also held that in any case, the issue
of specific performance emanating from a contract between the parties         D
could not be the subject matter of a consumer dispute. The Appellant in
the instant case has referred to this reasoning adopted by the National
Commission to substantiate its case. However, for reasons discussed
below, we are of the considered view that the proposition of law expressed
in Sakthi Sugars is incorrect.
                                                                              E
       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, the
National Commission had held that a farmer who was selling his produce
through an intermediary was not a “consumer” vis-à-vis such
intermediary. The complainant therein was a horticulturist who was selling
his produce to an intermediary for further sale. One of the consignments      F
had been rejected by the intermediary for non-adherence with standards
pertaining to quality and packaging, but in view of the perishable nature
of the goods, the complainant requested the intermediary for help in
disposal, who arranged for the sale of the consignment through an
authorized commission agent for a specified price. The complaint was          G
filed alleging that the intermediary had failed to pay the complainant the
entire amount promised. On these facts, the National Commission had
held that while obliging with the request of the complainant, the
intermediary was acting only as an agent, and that too only in order to
minimize the loss that the complainant would have suffered if the
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356             SUPREME COURT REPORTS                            [2020] 5 S.C.R.


A     consignment remained unsold, without receiving any consideration. Thus,
      it could not be said that the intermediary had undertaken to render a
      service for consideration.
             13.3 It is relevant to note that from the order of the National
      Commission, no material is forthcoming to the effect that the parties had
B     entered into an agreement whereby the intermediary agreed to render a
      service to the farmers regarding the further sale of their produce.
      Additionally, the National Commission found that even if it was presumed
      that the intermediary had purchased goods in terms of an agreement
      between the parties, the fact remained that in such transaction, it was
      the farmer who was a seller, and could not be deemed to be a “consumer”
C     under the 1986 Act.
             13.4 It is evident that in Sakthi Sugars, there was a clear
      agreement between the farmer and the corporation for the latter to render
      financial assistance by way of help in procuring a loan, which amounted
      to the rendering of a service, a deficiency in which would give rise to a
D     cause of action under the 1986 Act. Thus, the farmer was not purely a
      seller and was also availing of services from the corporation. In this
      respect, reliance on Sankar Reddy may not have been proper.
             13.5 We also find that the view that a consumer dispute may not
      arise out of a contractual arrangement is erroneous since it falls foul of
E     the clear stipulation under Section 2(f) of the 1986 Act that a deficiency
      in service may arise out of “any fault, imperfection, shortcoming or
      inadequacy in the quality, nature and manner of performance which
      is required to be maintained by or under any law for the time being
      in force or has been undertaken to be performed by a person in
F     pursuance of a contract or otherwise in relation to any service”.
             13.6 In view of the above, we find that Sakthi Sugars cannot be
      relied upon to argue that a farmer selling his produce cannot under any
      circumstance amount to a “consumer” under the 1986 Act. As we have
      discussed supra, in cases where the farmer has purchased goods or
G     availed 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 service
      provider or to a third party cannot stand in the way of the farmer
      amounting to a “consumer”.
          14. The Appellant has also referred to the decision of the National
      Commission in Wimco Limited v. Ashok Sekhon, II (2008) CPJ 210
H
 M/S NANDAN BIOMATRIX LTD. v. S.AMBIKA DEVI & ORS.                               357
         [MOHAN M. SHANTANAGOUDAR, J.]

(NC). In this case, the complainant had purchased 1800 poplar transplants        A
for a corporation on a large scale for growing trees and selling them
back to the corporation. The National Commission referred to its prior
decision in Synco Textiles (supra) and the decision of this Court in Laxmi
Engineering (supra), for the principle that the “self-employment”
exception to the “commercial purpose” clause was applicable only when
                                                                                 B
the goods bought by the buyer were used by the buyer himself by
employing himself for earning his livelihood. It was held that the planting
of 1800 trees on a 9-acre field, and that too for resale, could not be said
to be on a self-employment level and without a commercial purpose.
Thus, the complainant was held to not be a consumer within the 1986
Act. We find that this decision is clearly distinguishable since it is evident   C
from the facts therein that the trees were being grown for a “commercial
purpose”, which is not the case here.
        15. Finally, we may refer to the decision in Prithviraj Narayanrao
Chavan v. The National Seeds Corporation Ltd., [2012] SCC OnLine
NCDRC 7, cited by the Appellant. This was also a case involving buyback          D
of seeds produced with the help of foundation seeds provided by the
seed company. The seed company had approached farmers to participate
in its seed production programme for a variety of jute, and were assured
a certain minimum procurement price per quintal of seed produced. The
area under cultivation was withdrawn from the certification of the seed
company due to poor germination of crop, leading to heavy losses for             E
the farmers, based on which consumer complaints were filed.
       15.1 The State Commission in Prithviraj had adopted the view
taken in Sakthi Sugars (supra) that a seller could not be treated as a
consumer, to hold that since the complainants therein had entered into a
buyback transaction, they were acting as sellers and hence could not be          F
treated 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 to
agree with the view taken in Sakthi Sugars. Moreover, for reasons
expressed already, and particularly in view of the decision of this Court        G
in Madhusudan (supra), we find that the National Commission in
Prithviraj erred in holding that entering into a buyback transaction would
preclude a farmer from taking benefit as a “consumer” under the 1986
Act.
                                                                                 H
358             SUPREME COURT REPORTS                           [2020] 5 S.C.R.


A            16. Before we part with this matter, we feel constrained to note
      that the Indian agricultural scenario, today, is in a very imperilled state.
      Agriculturists have to deal with serious environmental concerns like topsoil
      depletion, contamination of food, water and soil due to toxic fertilizers
      and pesticides, and the vagaries of the weather, which are becoming
      more and more severe and unpredictable as the climate deteriorates. In
B
      some parts of the country, such as Punjab, pesticides being used are
      toxic enough to have led to unprecedented incidence of diseases like
      cancer. The mechanization of farms has undoubtedly led to many
      advances in the food security of the country, but this has come at a
      grave cost.
C            16.1 Practices such as crop diversification and rotation, which
      are crucial to species diversity and thus to maintain soil health and ensure
      farm security, and are in-built in traditional forms of farming, are under
      threat from the increasing inroads being made into the Indian farm by
      corporates of all sizes, which come with the promise of increased yields
D     and attractive returns. This is true with regard to the sale of seeds as
      well, even though Indian law protects plant material including seeds from
      patentability.
              16.2 Most Indian farmers own only small landholdings, which
      require expensive inputs such as irrigation, electricity, seeds, fertilizer,
E     and pesticide, but do not generate sufficient output to cover the costs of
      the same. Though the sway of seed companies over small farmers in
      India is, as of now, minimal, when agriculturists with such small
      landholdings do enter into agreements to grow crops on terms dictated
      by seed companies, it is in the hope of earning some profit that would
      offset the cost of their inputs and generate some income for the household.
F     Often, the crops require the intensive usage of labour and mechanization.
      Therefore, agreements such as the one in the instant case often guarantee
      technical and financial assistance to the farmer in order to be able to
      discharge his end of the deal. Needless to say, the success or failure of
      the crop would make or break the income of the farmer for the entire
G     season. This can result in situations where small and medium scale
      farmers find themselves trapped in contracts where they buy expensive
      seeds which turn out to be defective, resulting in a failed season and
      severe financial hardship. The problem of indebtedness further worsens
      the plight of the farmer, and, all too often, manifests in the tragedy of
      suicide. Farmer suicides are indeed a systemic issue that has persisted,
H     and perhaps worsened, over the last few decades.
 M/S NANDAN BIOMATRIX LTD. v. S.AMBIKA DEVI & ORS.                               359
         [MOHAN M. SHANTANAGOUDAR, J.]

       16.3 The summary redressal available to the farmer under the              A
1986 Act may go a small but crucial way to provide instant relief in a
sector which is already facing stress on several counts. Undoubtedly,
farmers faced with grievances against seed companies, may, in suitable
cases, opt for other remedies such as a civil suit, relief under the Seeds
Act, 1966 (the reform of which has been under process for some time),
                                                                                 B
and so on. But excluding such farmers from the purview of the 1986 Act
would be a complete mockery of the object and purpose of the statute.
        16.4 We are alarmed by the growing trend amongst seed
companies of engaging in frivolous litigation with farmers, virtually
defeating the purpose of speedy redressal envisaged under 1986 Act. In
the instant case, the Appellant contested the farmers’ claims before             C
consumer fora on the preliminary point of maintainability right up to this
Court, compelling small agriculturists such as the Respondents to spend
unnecessarily on litigation in order to secure relief for themselves,
amounting to a sum which probably exceeds even the quantum of relief
claimed. This tendency to resist even the smallest of claims on any ground       D
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 the
Appellant
                                                                                 E
      17. Thus, we find no reason to interfere with the order passed by
the National Commission affirming that the Respondent is a “consumer”
within the meaning of the 1986 Act, and dismiss the instant Appeal. The
concerned District Forum shall hear and decide the complaints within a
period of three months from the date of receipt of this judgment. Costs
are imposed on the Appellant to the tune of Rs. 25,000/- payable to the          F
Respondent.
       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 in             G
the said appeal. It is made clear that the cost of Rs. 25,000/- is to be paid
by the Appellant in each of these appeals, to be divided equally amongst
the respondents in each appeal.


Ankit Gyan                                                  Appeals dismissed.   H