Supreme Court of India
M/S. NATIONAL SEEDS CORPORATION LTD.versusM. MADHUSUDHAN REDDY AND ANOTHER
- Citation
- 2012 INSC 29
- Decided
- 16 January 2012
- Disposal
- Dismissed
- Bench
- G S SINGHVI
Holding
Farmers who buy seeds for their own cultivation are consumers under the Consumer Protection Act, and the Act’s remedies are available in addition to any under the Seeds Act, so the District Forums had jurisdiction and the appeals were dismissed.
Summary
Farmers who bought foundation seeds from National Seeds Corporation (NSC) alleged crop failure due to defective seeds and sought compensation under the Consumer Protection Act, 1986. NSC contended that the Seeds Act, 1966 was a special law that exclusively governed seed quality disputes, that the growers were not "consumers" because they purchased seeds for commercial purposes, and that an arbitration clause barred consumer‑forum proceedings. The Supreme Court held that purchasers of seeds for their own cultivation fall within the definition of consumer under s.2(d)(i) of the Consumer Act, and that the Act provides remedies in addition to any under the Seeds Act; the arbitration remedy is optional, not exclusive. The Court also found that the District Forums had validly relied on expert reports and were not required to obtain seed samples for laboratory testing under s.13(1)(c). Consequently, the consumer forums had jurisdiction, their awards of compensation were upheld, and the appeals were dismissed.
Issues considered
- The Seeds Act, 1966, excludes farmers from the ambit of the Consumer Protection Act, 1986.
- Whether growers who purchase seeds for self‑employment are "consumers" under s.2(d)(i) of the Consumer Act.
- Whether an arbitration clause in the seed‑supply agreement bars filing a complaint under the Consumer Act.
- Whether the District Consumer Forums complied with the procedural requirement of s.13(1)(c) to obtain a sample and laboratory test of the seeds.
- The jurisdiction of consumer forums to entertain disputes concerning seed quality.
Legislation cited
- Arbitration and Conciliation Act, 1996s. 8
- Consumer Protection Act, 1986s. 12, s. 13(1)(c), s. 2(d)(i), s. 3
- Protection of Plant Varieties and Farmers' Rights Act, 2011
- Seeds Act, 1966s. 10, s. 11, s. 14(1)(a), s. 14(1)(b), s. 16, s. 20, s. 21, s. 6, s. 7, s. 9
Subjects
consumer protectionseeds actdefective seedscompensationjurisdictionarbitration clauseagricultural lawdefinition of consumersection 13(1)(c)special legislation
Judgment
[2012) 2 S.C.R. 1065
M/S. NATIONAL SEEDS CORPORATION LTD. A
v..
M. MADHUSUDHAN REDDY AND ANOTHER
(Civil Appeal No. 7543 of 2004)
JANUARY 16, 2012
B
[G.S. SINGHVI AND ASOK KUMAR GANGULY, JJ.]
Consumer Protection Act,. 1986:
ss. 12 and 2(d)(i) - Complaints fHed by farmers/growers c
of seeds before the District Forums alleging failure of the
crops/less yield on account of defective seeds supplied by the
Government Company-appellant and praying for award of
compensation - Maintainability of - Held: The Seeds Act is
a special legislation enacted for ensuring that there is no D
compromise with the quality of seeds sold to the farmers and
others and provisions have been made for imposition of
substantive punishment on a person found guilty - However,
there is no provision for compensating the farmers etc. who
may suffer adversely due to loss of crop/less yield on account E
of defective seeds supplied by a person authorised to sell the
seeds - Seeds Act and the Rules do not exclude farmers from
the ambit of the Consumer Act who are otherwise covered by
the wide definition of 'consumer' uls. 2(d)- Since the farmers!
growers purchased seeds by paying a price to the appellant,
they would certainly fall within the ambit of s. 2(d)(i) - They F
cannot be denied the remedies available to other consumers
of goods and services - Thus, the District Forums have the
jurisdiction to entertain the complaints filed by the farmers -
Seeds Act, 1966.
G
s. 3 - Failure of crops/financial /OS$ to farmers/growers
of seeds on account of use of defective seeds sold/supplied
by appellant-Government Company - Appropriate remedy for
the aggrieved farmers/growers - Filing of complaint under the
1065 H
1066 SUPREME COURT REPORTS [2012] 2 S.C.R.
A Act or to apply for arbitration for the alleged breach of the
terms of agreement - Held: An aggrieved farmer/grower is not
remedied by prosecuting the seller/supplier of the se19ds,
since he does not get anything even if the sellerlsupplil3r is
found guilty and sentenced to imprisonment - Thus, the so-
8 called remedy available to an aggrieved farmer/grower to
lodge a complaint with the Seed Inspector for prosecution of
the seller/supplier of the seed cannot but be treated as illusory
and /Je cannot be denied relief under the Consumer Act on
the ground of availability of an alternative remedy - Remedy
c of arbitration is not the only remedy available to a grower,
rather, an optional remedy - He can seek reference to an
arbitrator or file a complaint under the Act - Language of s.3
makes it clear that the remedy available in the Act is in
addition to and not in derogation of the provisions of any other
law for the time being in force - Arbitration - Alternative
0
remedy.
s. 2(d)(i) - Government company entered into an
agreement with selected farmers for growing seeds and the
company was to purchase the entire crop - Complaint by
E farmers alleging sale of defective seeds - Whether a grower
is excluded from the definition of 'consumer' - Held: Evidence
on record shows that the growers had agreed to produce
seeds on behalf of the Government company for the purpose
of earning their livelihood by using their skills and labour -- It
F cannot be said that the growers had purchased the seeds for
resale or for any commercial purpose and they are excluded
from the definition of the term 'consumer' - Since the farmers!
growersI
purchased seeds by paying a price to the appellant,
they would fall within the ambit of s. 2(d)(i) - Remedies
G available to other consumers of goods and services cannot
be denied.
s. 13(1)(c) - Sale of defective seeds to farmers - Award
of compensation to farmers by District Forums - Procedure
prescribed uls. 13(1)(c) - Compliance of - Held: Procedure
H adopted by the District Forum not contrary to s.13(1)(c) -
NATIONAL SEEDS CORPORATION LTD. v. M. 1067
MADHUSUDHAN REDDY
District Forums appointed agricultural experts for ascertaining A
the status of the crops - On basis of the report of experts, the
District Forums were satisfied that the seeds were defective
and thus, did not call upon the complainants to provide
samples of the seeds for getting the same analysed/tested
in an appropriate laboratory - Further the farmers are illiterate s
and they have no idea about the Seeds Act and the Rules
framed thereunder, and the Protection of Plant Varieties and
Farmers' Rights Act, 2011 that after purchasing the seeds for
sowing, he should retain a sample - In the normal course, a
farmer would use the entire quantity of seeds purchased by c
him for the purpose of sowing - Also the Company did not
keep the samples of the varieties of seeds sold/supplied tQ
the farmers - They neither assisted the District Forum by
providing samples of the varieties of seeds sold to the
respondents nor did they collect the samples and got them D
tested in a designated laboratory - Seeds Act, 1966.
s. 2(d) - Definition of consumer - Scope of.
In the instant appeals, appellant-Government
Company was engaged in arranging for production of E
quality seeds of different varieties in farms of registered
growers and supply of the same to farmers. Respondents
in the various appeals were engaged in agriculture/seed
production. The respondents purchased seeds from the
appellant. It is alleged that the respondents suffered loss F
due to failure of the crops/less yield because the seeds
sold/supplied by the appellants were defective. The
respondents filed separate complaints under the
Consumer Protection Act and prayed for award of
compensation. The District Consumer Disputes G
Redressal Forums allowed the complaints and awarded
compensation to the respondents. In number of these
cases, the District Forums appointed Commissioner or
referred the matter to the officers of the Agricultural
Department for their opinion about the quality of seeds
H
1068 SUPREME COURT REPORTS [2012] 2 S.C.R.
A and they submitted the report. The appellants filed
appeals and revisions and the same were dismissed by
the State Consumer Disputes Redressal Forums and the
National Consumer Disputes Redressal Forums
respectively. Therefore, the appellant filed the ins;tant
B appeals.
The appellant. questioned the orders of the Natiional
Commission, the State Commission and the Dis1trict
Forums on the grounds that the District Forums did not
have the jurisdiction to entertain complaints filed by the
C respondents because the issues relating to the quality of
seeds are governed by the provisions contained in the
Seedls Act, 1966 and any complaint about the salE! or
supply of defective seeds can be filed only under the
Seeds Act and not under the Consumer Protection Act,
D 1986; that the District Forums could not have adjudi(fated
upon the complaint's filed by the respondents and
awarded compensation to them without following the
procedure prescribed under Section 13(1)(c) of ;the
Consumer Act; and that the growers of seeds, who had
E entered into agreements with it, are not covered by the
definition of 'consumer' under Section 2(d) of t:he
Consumer Act because they had purchased the seeds for
commercial purpose.
F • Dismissing the appeals, the Court
HIELD: 1.1. An analysis of Sections 6, 7, 9, 10, '11,
14(1)(a) and (b), 16, 20, 21 of the Seeds Act, 1966 shows
that for achieving the object of regulating the quality of
certain seeds to be sold for the purposes of agriculture
G including horticulture, the legislature has made
provisions for specifying the minimum limits of
germination and purity of notified kind or variety of seeds
and the affixation of mark or label to indicate that su<:h
seed conforms to those limits, for restricting sale, etc., of
H any notified kind or variety of seed unless the same is
NATIONAL SEEDS CORPORATION LTD. v. M. 1069
MADHUSUDHAN REDDY
identifiable as to its kind or variety and conforms to the A
minimum limits of germination and purity; grant of
certificate by the certific-ation agency to certain category
of person; revocation of the certificate; appointment of
Seed Analysts and Seed Inspectors with power to the
latter to take sample of any seed of any notified kind or B
variety from any person selling such seed or a producer
of seeds and send the same for analysis by the State
Seed Laboratory or the Central Seed Laboratory. The
Seed Inspector can launch prosecution for violation of
any provision of the Seeds Act or any Rule made c
thereunder. If a person is found guilty then he can ba
punished with imprisonment upto a maximum period of
six months or he can be visited with a penalty of fine upto
Rs.1,000/- or with both. If an offence is committed by a
company, then every person who, at the time of 0
commission of offence was incharge of and was
responsible to the company of the conduct of its business
can be punished. Rule 13 of the Seeds Rules, 1968 casts
a duty on very person selling, keeping for sale, offering
to sell, bartering or otherwise supplying any seed of E
notified kind or variety to keep complete record of each
lot of seeds sold for a period of three years. He is also
required to keep sample of the seed, which can be tested
for determining the purity. [Para 16] [1104-B-G]
1.2. Though, the Seeds Act is a special legislation F
enacted for ensuring that there is no compromise with
the quality of seeds sold to the farmers and others and
provisions have been made for imposition of substantive
punishment on a person found guilty of violating the
provisions relating the quality of the seeds, the legislature G
has not put in place any adjudicatory mechanism for
compensating the farmers/growers of seeds and other
similarly situated persons who may suffer loss of crop or
wlio may get insufficient yield due to use of defective
seeds sold/supplied by the appellant or any other H
1070 SUPREME COURT REPORTS [2012] 2 S.C.R.
A authorised person. No one can dispute that the
agriculturists and horticulturists are the largest
consumers of seeds. They suffer loss of crop due to
various reasons, one of which is the use of defective/sub-
standard seeds. The Seeds Act is totally silent on the
B issue of payment of compensation for the loss of crop
on account of use of defective seeds supplied bl' the
appellant and others who may obtain certificate und~r
Section 9 of the Seeds Act. A farmer who may suffer loss
of crop due to defective seeds can approach the Seed
c Inspector and make a request for prosecution o1' the
person from whom he purchased the seeds. If found
guilty, such person can be imprisoned, but this cannot
redeem the loss suffered by the farmer. [Para 17] [1104-
H; 1105-A-D]
D · 1.3. India is a signatory to the resolution passed by
the General Assembly which is known as Consumer
Protection Resolution No.39/248. With a view to fulfill! the
objectives enshrined in the guidelines adopted by the
General Assembly of the United Nations and keeping in
E view the proliferation of international trade and commerce
and vast expansion of business and trade which resulted
in availability of variety of consumer goods in the market,
the Consumer Protection Bill was introduced to provide
for better protection of the interest of consumers. The
F salie11t features of the Consumer Protection Bill were to
promote and protect the rights of consumers. 'The
preamble to the Consumer Protection Act, 1986 shc>ws
that this legislation is meant to provide for better
protection of the interests of consumers and for that
G purpose to make provision for establishment of
consumer councils and other· authorities for the
settlement of consumer disputes and for matters
connected therewith. [Paras 19, 20] [1106-D-F; 1107-C:-D]
Lucknow Development Authority v. M.K. Gupta (1994) 1
H SCC 243: 1993 (3) Suppl. SCR 615; Fair Air Engineers (P)
NATIONAL SEEDS CORPORATION LTD. v. M. 1071
MADHUSUDHAN REDDY
Ltd. v. N.K. Modi (1996) 6 sec 385: 1996 (4) Suppl. SCR A
820; State of Karnataka v. Vishwabharathi House Building
Coop. Society (2003) 2 SCC 412: 2003 (1) SCR 397; Skypay
Couriers Limited v. Tata Chemicals Limited (2000) 5 SCC
294: 2000 (1) Suppl. SCR 324; Vishwabharthy CCF
s·ecretary, Thirumurugan Cooperative Agricultural Credit B
Society v. M. Lalitha (2004) 1 SCC 305: 2003 (6 ) Suppl.
SCR 659; H.N. Shankara Shastry v. Assistant Director of
Agriculture, Karnataka (2004) 6 SCC 230: 2004 (2) Suppl.
SCR 406; Trans Mediterranean Airways v. Universal Exports
and Anr. (2011) 10 SCC 316 - referred to. c
1.4. In the context of farmers/growers and other
consumer of seeds, the Seeds Act is a special legislation
insofar as the provisions contained therein ensure that
those engaged in agriculture and horticulture get quality
seeds and any person who violates the provisions of the D
Act and/or the Rules is brought before the law and
punished. However, there is no provision in that Act and
the Rules framed thereunder for compensating the
farmers etc. who may suffer adversely due to loss of
crop or deficient yield on account of defective seeds E
supplied by a person authorised to sell the seeds. That
apart, there is nothing in the Seeds Act and the Rules
which may give an indication that the provisions of the
Consumer Act are not available to the farmers who are
otherwise covered by the wide definition of 'consumer' F
under Section 2(d) of the Consumer Act. As a matter of·
fact, any attempt to exclude the farmers from the ambit
of the Consumer Act by implication will make that Act
vulnerable to an attack of unconstitutionality on the
ground of discrimination and there is no reason why the G
provisions of the Consumer Act should be so interpreted.
[Para 23) (1111-H; 1112-A-D]
1.5. The definition of 'consumer' contained in Section
2(d) of the Consumer Act is very wide. Sub-clause (i) of H
1072 SUPREME COURT REPORTS [2012] 2 S.C.R.
A the definition takes within its fold any person who ll>uys
any goods for a consideration paid or promised or partly
paicl and partly promised, or under any system of defE!rred
payment. It also includes any person who uses the gc>ods
though he may not be buyer thereof provided that =;uch
. B use is with the approval of the buyer. The last part of the
definition contained in Section 2(d)(i) excludes a person
who obtains the goods for resale or for any comme·rcial
purpose. By virtue of the explanation which was added
w.e.f. 18.6.1993 by the Consumer Protection (Amendment)
C Act 50 of 1993, it was clarified that the expression
'commercial purpose' used in sub-clause (i) does; not
include use by a consumer of goods bought and used
by him for the purpose of earning his livelihood by means
of self-employment. Since the farmers/growers
purchased seeds by paying a price to the appellant, they
0
would certainly fall within the ambit of Section. 2(d)(i) of
. the Consumer Act and there is no reason to deny tthem
the remedies which are available to other consumers of
goods and services. [Paras 25 and 26] [1113-D-F; 1i114-
E F]
,Kishore Lal v. Chairman, Employees' State Insurance
Corporation (2007) 4 SCC 579: 2007 (6) SCR 139; Spring
Meadows Hospital v, Harjo/ Ahluwalia (1998) 4 SCC 39; State·
of Karnataka v. Vishwabharathi House Building Coop.
F Society (2003) 2 SCC 412: 2003 (1) SCR 397; Secrntary,
Thirumurugan Cooperative Agricultural Credit Society v. M.
Lalitha (2004) 1 sec 305: 2003 (6 ) Suppl. SCR 659;
Lucknow Development Authority v. M.K. Gupta (1994) 1 SCC
243: 1993 (3) Suppl. SCR 615 - referred to.
G
2.1. As regrds the issue whether the growers of
seeds were not entitled to file complaint under the
Consumer Act and the only remtfdy available to them for
the alleged breach of the terms of agreement was to apply
for arbitration, the grievance of a farmer/grower who has
H suffered financially due to loss or failure of crop on
NATIONAL SEEDS CORPORATION LTD. v. M. 1073
MADHUSUDHAN REDDY
account of use of defective seeds sold/supplied by the A
appellant or by an authorised person is not remedied by
prosecuting the seller/supplier of the seeds. Even if such
person is found guilty and sentenced to imprisonment,
the aggrieved farmer/grower does not get anything.
Therefore, the so-called remedy available to an aggrieved B
farmer/grower to lodge a complaint with the concerned
Seed Inspector for prosecution of the seller/supplier of
the seed cannot but be treated as illusory and he cannot
be denied relief under the Consumer Act on the ground
of availability of an alternative remedy. [Para 27 and 28] c
[1114-G-H; 1115-C-E]
2.2. The remedy of arbitration is not the only remedy
available to a grower. Rather, it is an optional remedy. He
can either seek reference to an arbitrator or file a
complaint under the Consumer Act. If the grower opts for D
the remedy of arbitration, then it may be possible to say
that he cannot, subsequently, file complaint under the
Consumer Act. However, if he chooses to file a complaint
in the first instance before the competent Consumer
Forum, then he cannot be denied relief by invoking E
Section 8 of the Arbitration and Conciliation Act, 1996 Act.
Moreover, the plain language of Section 3 of the
Consumer Act makes it clear that the remedy available in
that Act is in addition to and not i,n derogation of the
provisions of any other law for the time being in force. F
[Para 29] [1115-F-H; 1116-A] .
Fair Air Engineers (P) Ltd. v. N.K. Modi (1996) 6 SCC
385: 1996 (4) Suppl. SCR 820; Skypay Couriers Limited v.
Tata Chemicals Limited (2000) 5 SCC 294: 2000 (1) Suppl. G
SCR 324; Trans Mediterranean Airways v. Universal Exports
and Anr. (2011) 10 sec 316 - referred to.
3.1. As regards the issue whether a grower is
excluded from the definition of 'consumer' because the
seeds produced by him are required to be supplied to the H
1074 SUPREME COURT REPORTS [2012] 2 S.C.R.
A appellant, the submission that foundation seeds were
supplied to the growers for commercial purpose and as
such their cases would fall in the exclusion part of' the
definition of 'consumer', cannot be accepted. The
appellant had selected a set of farmers in the area1 for
B growing seeds on its behalf. After e.ntering into
agreements with the selected farmers, the appellant
supplied foundation seeds to them for a price, with an
assurance that within few months they will be abl1e to
earn profit. The seeds sown under the superyision of the
c expert deputed by the appellant. The entire crop was to
be purchased by the appellant. The agreements entEtred
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
0
appellant nor any evidence was produced before any of
the Consumer Forums that the growers had the freedom
to sell the seeds in the open market or to any perison
other than the appellant. Therefore, it is not possiblE! to
E take the view that the growers had purchased the seeds
for resale or for any commercial purpose and they are
excluded from the definition of the term 'consumer'. As
a ma1tter 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 livelihc>od
F by using their skills and labour. [Paras 32 and 33) [1118-
A-B; 1119-C-G]
Laxmi Engineering Works v. P. S. G. Industrial Institute
(1995) 3 SCC 583: 1995 (3) SCR 174 - referred to.
G
3,2. A reading of the plain language of Section 13
(1 )(c) shows that the District Forum can call upon the
complainant to provide a sample of goods if it is satisfiied
that the defect in the goods cannot be determined withc>ut
H proper analysis or test. After the sample is obtained, t.he
NATIONAL SEEDS CORPORATION LTD. v. M. 1075
MADHUSUDHAN REDDY
same is required to be sent to an appropriate laboratory A
for analysis or test for the purpose of finding out whether
the goods suffer from any defect as alleged in the
complaint or from any other defect. In some of these
cases, the District Forums had appointed agricultural
·experts as Court Commissioners and directed them to 8
inspect the fields of the respondents and submit report
about the status of the crops. In one or two cases the
Court appointed Advocate Commissioner with liberty to
him to avail the services of agricultural experts for
ascertaining the true status of the crops. The reports of C
the agricultural experts produced before the District
Forum unmistakably revealed that the crops had failed
because of defective seeds/foundation seeds. After
examining the reports the District Forums felt satisfied
that the seeds were defective and this is the reason why
the complainants were not called upon to provide 0
samples of the seeds for getting the same analysed/
tested in an appropriate laboratory. The procedure
adopted by the District Forum was in no way contrary to
Section 13(1)(c) of the Consumer Act and the appellant ·
cannot seek annulment of well-reasoned orders passed E
by three Consumer Forums on the specious ground that
the procedure prescribed under Section 13(1)(c) of the
Consumer Act. had not been followed. [Para 34] [1119-H;
1120-A-F]
F
3.3. Majority of the farmers in the country remain
illiterate throughout their life because they do not have
access to the system of education. They have no idea
about the Seeds Act and the Rules framed thereunder
and other legislations, like, Protection of Plant Varieties G
and Farmers' Rights Act, 2011. They mainly rely on the
information supplied by the Agricultural Department and
Government agencies, like the appellant. Ordinarily,
nobody would tell a farmer that after purchasing the
seeds for sowing, he should retain a sample thereof so H
1076 SUPREME COURT REPORTS [2012] 2 S.C.R.
A that in the event of loss of crop or less yield on account
of defect in the seeds, he may claim compensation 1from
the seller/supplier. In the normal course, a farmer would
use the entire quantity of seeds purchased by him for the
purpose of sowing and by the time he discovers that the
8 crop has failed because the seeds purchased by him
were defective nothing remains with him which could be
tested in a laboratory. In some of the cases, the
respondents had categorically stated that they had s1own
the e'ntire quantity of seeds purchased from the appellant.
C Therefore, it is na"ive to blame the District Forum for not
having called upon the respondents to provide the
samples of seeds and send them for analysis or tes;t in
the laboratory. (Para 35] (1120-F-H; 1121-A-C]
3.4. There was abject failure on the appellant's part
D to assist the District Forum by providing samples of the.
varieties of seeds sold to the respondents. Rule 1:3(3)
casts a duty on every person selling, keeping for sale,
offering to sell, bartering or otherwise supplying any sieed
of notified kind or variety to keep over a period of three
E years a complete record of each lot of seeds sold except
that any seed sample may be discarded one year after the
entire lot represented by such sample has been disposed
of. The sample of seed kept as part of the complete
record has got to be of similar size_ and if required to be
F tested, the same shall be tested for determining :the
purity. The appellant is a large supplier of seeds to the
farmers/growers and growers. Therefore, it was expected
to keep the samples of the varieties of seeds sold/
supplied to the respondents. Such samples could have
G been easily made available to the District Forums for
being sent to an appropriate laboratory for the purpose
of an;:1lysis or test. Why the appellant did not adopt that
course has not been explained. Not only this, the offic1~rs
of the appellant, who inspected the fields of the
respondents could have collected the samples and got
H
NATIONAL SEEDS CORPORATION LTO. v. M. 1077
MADHUSUOHAN REDDY
them tested in a designated laboratory for ascertaining A
the purity of the seeds and/or the extent of germination,
etc. Why this was not done has also not been explained
by the appellant. These omissions lend support to the
plea of the respondents that the seeds sold/supplied by
the appellant were defective. [Para 36] [1121-D-H; 1122- B
A]
Maharashtra Hybrid Seeds Co. Ltd. v. Alavalapati
Chandra Reddy (1998) 6 SCC 738 - relied on.
N.S.C. Ltd. v. Guruswamy (2002) CPJ 13; E./.D. Parry c
{I) Ltd. v. Gourishankar (2006) CPJ 178; India Seed House
v. Ramjifal Sharma (2008) 3 CPJ 96 - approved.
CCI Chambers Housing Cooperative Society Ltd. v.
Development Credit Bank Ltd. (2003) 7 SCC 233: 2003 (3)
Suppl. SCR 139; lndochem Electronic v. Additional Collector D
of Customs (2006) 3 SCC 721: 2006 (2) SCR 584 - referred.
Case Law Reference:
1996 (4) Suppl. SCR 820 Referred to. Para 6.6,
22, 28 E
2003 (1) SCR 397 Referred to. Para 6.6,
22, 24
2003 (3) Suppl. SCR 139 Referred to. Para 6.6
F
2006 (2 ) SCR 584 Referred to. Para 6.6
1993 (3) Suppl. SCR 615 Referred to. Para 22
2000 (1) Suppl. SCR 324 Referred to. Para 22, 30
2003 (6 ) Suppl. SCR 659 Referred to. Para 22, 24 G
2004 (2) Suppl. SCR 406 Referred to. Para 22
(2011) 10 SCC 316 Referred to. Para 22, 31
2007 (6) SCR 139 Referred to. Para 24 H
1078 SUPREME COURT REPORTS [2012] 2 S.C.R.
A (1998) 4 sec 39 Referred to. Para 24
1995 (3) SCR 174 Referred to. Para 32
(1998) 6 sec 738 · Relied on. Para 391
(2002) CPJ 13 Approved. Para 39
B
(2006) CPJ 178 Approved. Para 39
(2008) 3 CPJ 96 Approved. Para 39
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
C 7543 of 2004.
From the Judgment & Order dated 24.03.2003 of National
Consumer Disputes Redressal Commission in Revision
Petition No. 508 of 2003. ·
D
WITH
C.A. Nos. 622, 623 of 2012, C.A. Nos. 3498, 3499 of 2009,
C.A. Nos. 3596, 3598, 4509, 4510, 4511, 4512, 4513, 45'14,
4515,4516,4517,4518,4519,4520,4521,4522,4704,47B8,
E 4824, 4954, 4955, 4957, 4959, 4962, 4963, 4964, 4967 of
2009 & C.A. No. 7542 of 2004.
Pallav Shishodia, Sudhir Kulshreshtha, M.Y. Deshmukh,
Sachin Katariya, Rameshwar Prasad Goyal, M.J. Paul, Manoj
F Swarup, Devesh Kumar Tripathi, Ashok Anand, Kamal Mohan
Gupta, Nitin S. Tambwekar, B.S. Sai, K. Rajeev for the
Appellant.
R. Venkataramani, G.N. Reddy, Aljo K. Joseph, Ravi
Shankar, Gouri Karuna Das, Anu Gupta, Shanti Kumar Jaisani,
G Bhakti Pasrija, Sanjeev Kumar Sharma (for Rani Jethmalani),
E.R. Surnathy, Shobha, Sunil Kumar Verma, Ranjith K.C., Abhijit
Sengupta, K. Rajeev, Rohit Kumar Singh, Venkateswara Rao
Anumolu for the Respondents.
H The' Judgment of the Court was delivered by
NATIONAL SEEDS CORPORATION LTD. v. M. 1079
MADHUSUDHAN REDDY
G. S. SINGHVI, J. 1. Leave granted in SLP (C) Nos.32750 A
·of 2009 and 35350 of 2009.
2. Appellant - Mis. National Seeds Corporation Ltd.
(NSCL) is a Government of India company. Its main functions
are to arrange for production of quality seeds of different
8
varieties in the farms of registered growers and supply the
same to the farmers. The respondents own lands in different
districts of Andhra Pradesh and are engaged in agriculture/
seed production. They filed complaints with the allegation that
they had suffered loss due to failure of the crops/less yield C
because the seeds sold/supplied by the appellant were
defective. District Consumer Disputes Redressal Forums,
Kurnool, Mehboob Nagar, Guntur, Khamman and Kakinada
allowed the complaints and awarded compensation to the
respondents. The appeals and the revisions filed by the
appellant were dismissed by the Andhra Pradesh State D
Consumer Disputes Redressal Commission (for short, 'the
State Commission') and the National Consumer Disputes
Redressal Commission respectively.
3. The appellant has questioned the orders of the National E
Commission, which also implies its challenge to the orders of
the State Commission and the District Forums mainly on the
following grounds:
. (a) the District Forums did not have the jurisdiction to
entertain complaints filed by the respondents F
because the issues relating to the quality of seeds
are governed by the provisions contained in the
Seeds Act, 1966 (for short, 'the Seeds Act') and
any complaint about the sale or supply of defective
seeds can be filed only under the Seeds Act and G
not under the Consumer Protection Act, 1986 (for
short, 'the Consumer Act').
(b) the District Forums could not have adjudicated
upon the complaints filed by the respondents and H
1080 SUPREME COURT REPORTS [2012] 2 S.C.R.
A awarded compensation to them without following
the procedure prescribed under Section 13(1 )(c) of
the Consumer Act.
(c) the growers of seeds, who had entered into
agreements with it, are not covered by the definition
B
of 'consumer' under Section 2{d) of the Consumer
Act because they had purchased the seeds for
commercial purpose.
4. For the sake of convenience, we may advert to the facts
C leading to the passing of orders by three Consumer Forums,
wh!ch have been impugned in Civil Appeal Nos. 7543 of 2004,
3499 of 2009 and 4519 of 2009. We may also mention that in
their complaints the respondents had impleaded the officers of
the appellant as parties but for the purpose of this judgment we
D shall only refer to them as the appellant.
Civil Appeal No.7543 of 2004
5.1 Respondents M. Madhusudan Reddy and K.
Rambhupal Reddy claim to have purchased 46 kg. of KBSH-1
E Sunflower seeds from Area Manager of the appellant at
Kurnool. They undertook cultivation by adopting the recognized
modes of preparing the field and irrigation and also USE!d the
· prescribed fertilizer but there was germination only in 60%
seeds and the height of the plants was uneven. The gennination
F in the remaining 40% plants was slow. Not only this, flowering
did not take place simultaneously. At the request cif the
respondents, Area Manager of the appellant inspected their
field on 19.11.1999. He is said to have agreed that them was
less germinatien and the growth of the plants was uneven, but
G declined to give any assurance for payment of compensation.
5.2 Dissatisfied with the response of the Area Manager,
the respondents filed a' complaint under Section 12 c>f the
Consumer Act and prayed for award of compensation of
H Rs.1, 79,505/- towards the cost of seeds, fertilizer and
NATIONAL SEEDS CORPORATION LTD. v. M. 1081
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
pesticides and value of the lost crop with interest at the rate of A
12 per cent per annum by alleging that they did not get the
expected yield because the seeds sold by the appellant were
defective.
5.3 In the reply filed on behalf of the appellant, it was 8
pleaded that the seeds were purchased by respondent no. 1
alone and there was no evidence of joint cultivation by the
respondents. The appellant denied that the seeds were
defective and pleaded that respondent No. 1 did not get the
expected yield because sufficient quantity of seeds had not C
been used for cultivation and there were no rain during the
relevant period. It was also claimed that there was no complaint
from any other farmer, who had purchased the same variety of
seeds.
5.4 By an order dated 1.12.1999 passed in IA No.141 of D
1999, District Forum, Kurnool appointed Shri D. C. Rama Rao,
retired Assistant Director of Agriculture as Commissioner and
directed him to submit a report after inspecting the field of the
respondents. The Commissioner conducted the inspection and
submitted report dated 1.12.1999, the relevant portions of which E
are extracted below -
"The sunflower crop is raised under rainfed conditions. The
soil is black and suitable for the Sunflower Crop. The
cultivation aspects as observed is very satisfactory. The
F
field is clean and free. The variety is said to be KBSJI the
crop may be of 80 days above. Flowering is seen but it is
not uniform. About 55% of the plants have flowers. About
25% of the plants have the head natured and about 10%
of the plants are in the bud stage, while rest of the plants
do not have flowers and there is no possibility for these G
plants to get flower, as they are only 3 feet height and the
crop period to give flowers is over.
The following are the variation, I have noticed.
H
1082 SUPREME COURT REPORTS [2012) 2 S.C.R
A No. Observed % Height of Flowers Remarks
the Plants Stage
1. . 45% 6 feet Flowering and Only two to
grain setting is three rows
in progress of flowers
B in head is
setting seed.
(Conveand
flat heads)
2. 10% 4 feet Flowering and No
c the seed setting possibility
is started for further
growth.
3. 20% 6 feet Head dropping No growth
since seed is possible
D setting is over.
4. 5% 4 feet Head dropping -do-
since seed
setting is over.
E 5. 10% 4 to 6 feet In bud stage Growth can
not be
expected
further.
6. 10% 3 to 4 feet No flowering Growth
is seen. also is
F stunted.
Presence of leaf heairyness is seen in all the items
except item (3) above to a certain extent i.e., 3 to 4 %.
In all the cases I have noticed difference in Head
shape i. e, a few or convex a few a flat and a few an:~
G
concave.
In all the cases I have seen the heads are not unifom1
in size. Twenty five percent of heads which are dropping
because of full maturity are bigger in size while many are
H of medium size.
NATIONAL SEEDS CORPORATION LTD. v. M. 1083
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
I have noticed 0.1 % of flowers with multiple heads. A
There are gaps which are may be due to faulty seed
or may be due to non germination of the seed.
In the heads which are flat and concave are having
three rows of seed setting while in the convex heads the B
filling or setting of seed is satisfactory.
I have also seen two different plots of sunflower
grown adjacent to the plot in question and are exhibiting
uniformity of the plant, in height, size and opening of flower c
etcetra. This is an indication of a standard seed.
Similar uniformity is lacking in the plot in question.
In all the three plots, there prevailed uniform physical and
climatelogical factors.
D
Hence the wide variation in all the aspects as
explained in the earlier paras gives a scope this seed is
not standard up to the mark.
Particularly Hybrid seed be having with such a wide E
variation is not ideal.
From this I estimate the yield may be around 150 to
200 kgs/Ac as against the 600 to 700 kgs/Ac expected
from the variety."
F
(emphasis supplied)
5.5 The appellant filed objections against the
Commissioner's report and claimed that the assessment made
by him was not based on any scientific method and the G
comparison with the adjacent field without having regard to the
nature of soil, water facility etc. was unacceptable. The appellant
also contested the Commissioner's observation regarding
satisfactory nature of cultivation by asserting that as per
Vyavasaya Panchangam of Acharya N. G. Ranga Agriculture
University, Hyderabad, 10 to 12 kgs. seeds were required for H
1084 SUPREME COURT REPORTS [2012] 2 S.C.R.
A one hectare but respondent No.1 had used substantially less
quantity of seeds for his holding of 21.10 acres.
5.6 The respondents filed their affidavits along with copies
of Invoice bill H.No.000691 dated 11.6.1999, No.3 Adangal,
letter dated 6.11.1999 given to the appellant, bill dated
8
29.6.1999 showing the purchase of fertilizers from Chaitanya
Chemicals & Fertilizers, Kurnool and the photographs showing
the unevenness in the plants. On behalf of the appellant, an
affidavit was filed along with copies of the documents
mentioned therein.
c
5.7 The District Forum rejected the appellant's objection
to the Commissioner's report and held that the complainants
(the respondents herein) have succeeded in proving that the
seeds sold to them were defective resulting in loss of crop.
D Accordingly, the complaint of the respondents was allowed and
the appellant was directed to pay Rs.1, 00, 0001- towards loss
of crop and Rs.10,000/- towards the cost of fertilizer, pesticides,.
labour etc. with a stipulation that if the amount is not paid within
one month, the appellant shall be liable to pay interest @ 9%
E per annum.
5.8 The State Commission dismissed the appeal and held
that Commissioner's report was rightly accepted by the District
Forum because the appellant had not produced any evidence
to controvert the findings contained therein that the respondent
F had taken proper steps for cultivation but did not get the
expected yield due to faulty seeds.
, · 5.9 The National Commission rejected the appellant's plea
that the only remedy available to the respondents was to file a
G complaint under the Seeds Act, which is a special legislation
vis-a-vis the Consumer Act, by observing that there is no
provision in that Act for compensating a farmer whose crop may
be adversely affected due to use of defective seeds sold by
the appellant. The argument that the District Forum could not
H have decided the complaint without complying with the mandate
NATIONAL SEEDS CO~PORATION LTD. v. M. 1085
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
of Section 13(1)(c) of the Consumer Act was negatived by the A
National Commission and it was held that the report of the
Commissioner, who was an expert in agriculture, was rightly
relied upon by the District Forum for coming to the conclusion
that the crop had failed due to the use of defective seeds.
B
Civil Appeal No.3499 of 2000
6.1 Respondent P. V. Krishna Reddy is a grower having
land in Khanpur village of Manopad Mandal of Mahabubnagar
District of Andhra Pradesh. He was one of the persons selected
by the appellant in March 2000 for growing 'bitter gourd' seeds. C
The appellant entered into an agreement with the respondent
and assured him that by producing seeds on its behalf he will
get minimum net profit of Rs.38,000/- per acre within a span
of three months. In furtherance of the terms of agreement, the
appellant supplied 5 kgs. of 'bitter gourd' foundation seeds to D
the respondent by charging Rs.1,852.50 towards cost of the
seeds, inspection fee etc. The appellant also appointed a
supervisor and the respondent sowed seeds under his
supervision by spending a sum of Rs.22,470/- towards labour
charges, fertilizers and pesticides. In September, 2000, officials E
of the appellant visited the field of the respondent and others,
who had entered into similar agreements, and rejected the
seeds grown by them on the pretext that the same were not fit
for certification.
F
6.2 On receipt of the inspection report prepared by the
officials of the appellant, the respondent contacted the
Horticulture Officer, who also inspected the field and submitted
a report with the conclusion that the crop had failed because
the seeds were defective. The respondent then filed a complaint
under the Consumer Act and prayed for issue of a direction to G
the appellant to pay compensation of Rs.1,38,322/- with interest
at the rate of 18% per annum and compensation of
· Rs.1,00,000/- by alleging that he had suffered loss because the
foundation seeds supplied by the appellant were defective.
H
1086 SUPREME COURT REPORTS [2012] 2 S.C.R.
A 6.3 In the reply filed on behalf of the appellant, the following
objEictions were taken to the maintainability of the complaint:
(i) that in view of the arbitration clause contained in the
agreement, the only remedy available to the respondent was
to apply for arbitration and the District Forum did not have the
8
jurisdiction to entertain the complaint
(ii) that the respondent had entered into an agreement for
commercial production of the seeds and, as such, he cannot
be treated as a 'consumer' within the meaning of Section 2(d)
C of the Consumer Act.
On merits, it was pleaded that Shri M. V. Narsimha Rao,
Seed Officer of NSC Kurnool had advised the respondent and
other growers to remove off-types and diseased plants, which
D were liable to be rejected but the growers ignored his advice.
It was then averred that during their visit on 8.9.2000, Shri M.
V. Narsimha Rae-, Shri M. V. Sudhakar and Area Manager,
NSCL, Kurnool found 7% off-types seeds which were more than
the prescribed standards and, therefore, their crops were
E rejected. The report of the· Horticulture Officer was contEisted
on the premise that the respondent did not get the seeds tested
in any government laboratory.
6.4 District Forum, Mahabubnagar overruled the
objections of the appellant by observing that the respondent had
F purchased the seeds for earning livelihood by self-employment
and not for any commercial purpose and that availability of
remeidy by way of arbitration does not operate as a bar to the
entertaining of a complaint filed under the Consumer Act. The
District Forum also referred to the appellant's plea that issue
G relating to quality of the seeds can be determined only by
getting the samples tested in a laboratory and rejected the
same by making the following observations:
"The complainant purchased 5 kgs of bitter gourd s1~eds
under Ex.A-1 and sowed the seeds in an extent of 3 acres
H
NATIONAL SEEDS CORPORATION LTD. v. M. 1087
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
in his land. He sowed the entire seeds purchased by him. A
At the time of sowing, he might not have known that he
had to keep back some seeds out of the seeds
purchased by him as sample in the event of his
approaching Forum if the seed crop was ultimately
rejected by NSC. As all the seeds were sowed, he could B
not have taken out any seeds from the soil and produce
them before the District Forum for following the procedure
contemplated under Section 13(1) of C.P. Act. In those
circumstances, the sample of seeds could not be sent
to the appropriate Laboratory for analysis as c
contemplated under Section 13 of C.P. Act by the District
Forum."
(emphasis supplied)
6.5. The District Forum also opined that the appellant had D
failed to substantiate its assertion that the respondent had not
removed off types and diseased plants despite the advice
given by the Seed Officer by observing that no evidence had
been produced in that regard. The District Forum finally
concluded that the foundation seeds supplied to the respondent E
were faulty and the appellant was liable to compensate him.
r
6.6 The State Commission dismissed the appeal filed by
the appellant and confirmed the order passed by the District
Forum. The National Commission considered the objections
raised by the appellant to the maintainability of the complaint,
F
referred to the judgments of this Court in Fair Air Engineers
(P) Ltd. v. N.K. Modi (1996) 6 SCC 385, State of Karnataka
v. Vishwabharathi House Building Coop. Society (2003) 2
SCC 412, CCI Chambers Housing Cooperative Society Ltd.
v. Development Credit Bank Ltd. (2003) 7 SCC 233 and G
lndochem Electronic v. Additional Collector of Customs
(2006) 3 sec 721 and held that the complaint filed by the
respondent was maintainable because the jurisdiction of the
consumer forums is in addition to other remedies which may
be available to him. The National Commission further held that H
1088 SUPREME COURT REPORTS [2012] 2 S.C.R.
A the respondent is covered by the definition of 'consumer'
contained in Section 2(d) of the Consumer Act because he did
not purchase the seeds for any commercial purpose. The
appellant's plea that the District Forum could not have awairded
compensation to the respondents without complying with
B Section 13(1)(c) of the Consumer Act was negatived by the
National Commission by observing that after having use1d all
the Heeds for sowing the respondent was not in a position to
provide sample for testing and the report of the Hortic1J1lture
Officer was sufficient for proving that the foundation seeds
c.supplied by the appellant were defective.
Civil Appeal No.4519 of 2009
7.1 The respondent is an agricultural labourer. He usc~d to
take the lands of other farmers on lease and cultivate the same
D for his livelihood. He purchased tomato seeds from the.
appellant in the name of the landowners. When the respondent .
noticed that there was no yield from the plants, he approached
the appellant's Manager at Vijayawada and requested him to
insp1~ct the field and assess the damages, but the latter did not
E respond. He then filed a complaint for award of compensation
of Rs.60,000/- with interest at the rate of 12% per annum by
alleging that he had suffered loss because the seeds sold by
the appellant were defective.
7.2 The appellant controverted the claim of the respondent
F and pleaded that the complaint was liable to be dismitssed
because the District Forum was not competent to decidEi the
issue relating to the quality of seeds. It was also pleaded that
the. crop had failed because while sowing the seeds the
respondent did not take necessary precaution.
G
7.3 By an order dated 27.12.1995, District Forum,
Khammam appointed Shri A. Jeevan Babu, Advocate~ as
Commissioner to inspect the field of the respondent and
estimate the loss, if any, sustained by him. The Advocate
H Commissioner requested the Principal, Agriculture College,
NATIONAL SEEDS CORPORATION LTD. v. M. 1089
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
Aswaraopet and Mandal Revenue Officer, Yerrupalem to A
depute an expert and an Administrative Officer of
Peddagopavaram and Yerrupalem to assist him. The Principal
deputed Shri P. Sesha Reddy, Associate Professor and the
M.R.O. deputed two executive officers to assist the Advocate
Commissioner. Notice of the date of inspection was given to B
the appellant but no one appeared on its behalf on the
appointed day. After conducting inspection with the assistance
of Shri P. Sesha Reddy and other officers, the Advocate
Commissioner submitted report dated 31.1.1996, the relevant
portions of which are extracted below: c
"The field and the tomato fruits were examined by me and
the Agriculture Officer and all the persons. The petitioner
was also present, who told that he purchased the tomato
seeds from the opposite party/respondent as usual and
transplanted the same in the month of Sep. t995 and also D
manured and applied pesticides as previous. The plants
were sown at a distance of 3 feets from each plant. The
tomato trees were grown upto 3 to 5 feets height, but no
progress in the tomato fruits. The tomato fruits are small
just like small bolls. There is no saleable value in the E
market for the said tomato fruits. The Agrl. Associate
Professor Sri P . Seshi Reddy has collected the. earth in
the field and also trees along with the tomato fruits for
testing purpose. On enquiry the petitioner told regarding
the mode of cultivation that he adopted in sowing 'Naru' F
applying manure and pesticides. The petitioner
complainant told that he was purchasing the tomato seeds
from National Seeds Corporation Ltd., Vijayawada since
more than 5 years and he sustained heavy loss this year
due to non-production of the tomato yield since he supply G
of with inferior quality of tomato seeds. I conducted
Panchanama at the field to that effect on 4.1.1996.
Number of villagers gathered and they also opined that the
petitioner complainant has sustained heavy loss this year.
H
1090 SUPREME COURT REPORTS [2012] 2 S.C.R.
A He has shown empty tomato seeds packet, which is
available with him. Sri P. Sesha Reddy, Associate
Professor, Agrl. College, Aswaraopet has sent a report
which is being submitted herewith. He opined that the
seed 'Pusa Early Dwarf' supplied by, NSC, Vijayawada
B to the farmers of Yerrupalem and Pedergopalem villages
may not be true type and crop failure to yield true type
may be due to defective seed. I returned back to
Khammam on 4-1-1996 at 9-30 p.m. by passengers
train."
c (emphasis supplied)
7.4 The District Forum considered the material produced
before it including the Commissioner's report, allowed the
complaint of the respondent and directed the appellant to pay
D him Rs.36,200/-. The State Commission and the National
Commission approved the conclusion recorded by the District
Forum that the respondent had suffered loss because the seeds
sold by the appellant were defective. The National Commission
dealt with the appellant's plea that the District Forum had not
E complied with Section 13(1)(c) and that there was violation of
the Andhra Pradesh Seeds (Control) Order, 1983 and hHld:
"It is well settled by now that under Section 13 of the
·Consumer Protection Act, 1986 (hereinafter referred to as
'the Act' for short}, the burden to prove the deficiency, if
F any, on the part of the respondent, is on the complainant.
Section 13(1 )(c) provides that where a complainant .
alleges a defect in the goods which cannot be determined
without proper analysis or test of the goods, the District
Forum shall obtain a sample of the goods from the
G complainant, seal it and authenticate it in the manner
prescribed and refer the sample so sealed to the
appropriate laboratory along with a direction to mak1e an
analysis/test, whichever may be necessary. In other words,
there has to be some expert opinion to prove the fact. In
H the present case, Dr. P. Sesha Reddy had inspected only
NATIONAL SEEDS CORPORATION LTD. v. M. 1091
MADHUSUDHAN REDDY [GS. SINGHVI, J.]
9 fields, the details of which have been given by him in A
his Report and which have been referred to in the earlier
paragraph. He did not inspect the fields of other
respondents. His Report is relevant insofar as the
respondents in Revision Petitions Nos. 131, 135, 136,
137, 140, 142, 143 and 150 of 2003 are concerned. B
Insofar as respondents in the other 12 Revision Petitions,
i.e., Revision Petition NoS:132, 133, 134,138, 139, 141,
144, 145, 146, 147, 148 and 149 of 2003 are concerned,
they have failed to produce any expert opinion to show that
the seeds did not germinate in their fields because the c
seeds supplied were defective.
Learned Counsel for the petitioner raised another objection
that under the Seeds Control Order, 1983, the Divisional
Officer, Seeds alone is competent to inspect and report
about the causes of failure of the crop. It was submitted D
that Revision Petition Nos. 131, 135, 136, 137, 140, 142,
143 and 150 of 2003 are liable to be dismissed as the
defects cannot be determined without analysis or tests,
which the respondents in these Revision Petitions failed
to get done. We find no substance in this submission. The E
Seeds Control Order, 1983 issued under G.O.M.s No. 97
F&A FP(2) dated 11.02.1985 does not debar any other
agency from conducting an enquiry into the causes of
failure of crop other than the officers mentioned therein. In
the present case, it is at the instance of the District Forum F
that a Report was got from a Local Commissioner through
Dr. P. Sesha Reddy, the expert who inspected the fields
of 8 respondents and not others.
The petitioners had not sent their representatives to the G
fields of the complainanUrespondents in spite of their
making representations to that effect. Petitioner failed to
take any step on the representations/complaints received
from the respondents. The Report submitted by the Expert
can certainly be taken into consideration even if there was H
1092 SUPREME COURT REPORTS [2012] 2 S.C.R.
A .no analysis of the seeds from a laboratory. Non- .
.examination of the seeds from the laboratory is not fatal
to the case of the complainants whose fields were
.inspected by Dr. P. Sesha Reddy regarding which he gave
an opinion as an expert. Nothing stopped the petitioner
B .from sending the sample seeds for analysis to a
· laboratory. There is no explanation as to why it could not
.. send the seeds for analysis."
(emphasis supplied)
C 8. Factual matrix of other cases is substantially similar
except that some of the respondents had purchased Castor
seeds whi!e others had purchased Chilli seeds. In a number of
cases, the District Forums appointed Commissioner or referred
the matter to the officers of the Agriculture Department for their
D opinion about the quality of seeds and ordered payme~nt of
compensation by relying upon their reports.
· 9. We may also mention that in none of these cases, the
appellant had offered to produce samples of the variety of the
E seeds sold/supplied to the respondents and made a prayer.
before the District Forum that the same may be got te~sted/
analysed in an appropriate laboratory.
10. Learned counsel for the appellant argued tha1t the
impugned orders are liable to be set aside because the District
F Forums did not have the jurisdiction to entertain the complaints
filed by the respondents and the State and National
Commissions committed grave error by brushing aside the
appellant's objections to the maintainability of the complaints.
Learned counsel emphasized that the Seeds Act is a special
G legislation enacted for regulating the quality of seeds and if the
respondents had any grievance about the quality of the seeds
theni the only remedy available to them was to either fiile an
application under Section 10 of the Seeds Act or to approach
the concerned Seed Inspectors for taking action under Si~ction
H 19'read with Section 21 of that Act. They further argued that
NATIONAL SEEDS CORPORATION LTD. v. M. 1093
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
even if the complaints filed by the respondents under the A
. Consumer Act are held to be maintainable, the finding recorded
by the District Forums that the seeds sold/supplied by the
appellant were defective is liable to be set aside because the
procedure prescribed under Section 13(1 )(c) of the Consumer
Act was not followed. Learned counsel relied upon Section 8 B
of the Arbitration and Conciliation Act, 1996 and argued that
in view of the arbitration clause contained in the agreements
entered between the appellant and the growers, the latter could
have applied for arbitration and the Consumer Forums should
1ave non-suited them in view of Section 8 of the Arbitration and c
:onciliation Act, 1996. An ancillary argument made by the
iearned counsel is that the growers of seeds cannot be treated
as 'consumer' within the meaning of Section 2(d) because they
had purchased seeds for commercial purpose.
11. Learned counsel for the respondents supported the D
impugned orders and argued that the District Forums did not
commit any illegality by entertaining the complaints filed under
the Consumer Act because the Seeds Act and the Rules
framed thereunder do not contain any provision for
compensating a farmer whose crop is lost or who does not get E
the expected yield if the seeds sold/supplied by the appellant
are defective. Learned counsel submitted that the remedy
available under the Consumer Act is in addition to other
remedies available to a consumer and the complaints filed by
the respondents under that Act cannot be held as barred merely F
because they could also approach the Seed Inspector for
taking action under Section 19 read with Section 21 of the
Seeds Act. Learned counsel further argued that the growers of
seeds are covered by the definition of consumer because they
had agreed to undertake cultivation of seeds on behalf of the F
appellant for earning livelihood. On the issue of non compliance
of Section 13(1 )(c) of the Consumer Act, learned counsel
submitted that the District Forums had rightly relied upon the
reports of the Court Commissioners and other evidence for
recording findings that the seeds sold/supplied by the appellant H
1094 SUPREME COURT REPORTS [2012] 2 S.C.R.
A were defective. Learned counsel emphasized that the
respondents had used the entire quantity of seeds purchased
by them for sowing and they had not retained samples by
anticipating loss of crop or less yield. Learned counsel pointed
out that the Commissioners had inspected the fields of the
B respondents and recorded categorical findings that the farmers
had suffered losses because the seeds supplied by the
appellant were defective and the District Forums did not
commit any illegality by relying upon their reports. Lea1rned
counsel also submitted that the appellant could have produced
c samples of the seeds sold/supplied to the respondents and get
them tested to prove that the same were not defective, but no
such! step was taken by it.
12. We shall first consider the question whether the S1eeds
Act is a special legislation vis-a-vis the Consumer Act and the
D District Forums could not have entertained and decided the
complaints filed by the respondents because they could sieeks
redressal of their grievance regarding the quality of seeds sold
by the appellant by lodging complaint with the concerned Seed
Inspectors with a request for taking action under Section 19
E read with Section 21 of the Seeds Act.
13. With a view to increase agricultural production in the
country, the Central Government felt the necessity of regulating
the quality of certain seeds to be sold for the purpose of
agriculture including horticulture and for achieving that object,
F Parliament enacted the Seeds Act. The Statement of Objects
and Reasons enshrined in the Bill, which led to the enactment
of the Seeds Act read as under:
"In the interest of increased agricultural production ini the
G country, it is considered necessary to regulate the quality
.of certain seeds, such as seeds of food crops, cotton
seeds, etc., to be sold for purpose of agriculture (including
horticulture).
The method by which the Bill seeks to achieve this object
H are-
NATIONAL SEEDS CORPORATION LTD. v. M. 1095
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
(a) Constitution of a Central Committee consisting of A
representatives of the Central Government and the
State Government, the National Seeds Corporation
and other interests, to advise those Governments
on all matters arising out of the proposed
Legislation; B
(b) fixing minimum standards of germination, purity and
other quality factors;
(c) testing seeds for quality factors at the seed testing
laboratories to be established by the Central C
Government and the State Governments;
(d) creating seed inspection and certification service
in each State and grant of licences and certificates
to dealers in seeds; D
(e) compulsory labelling of seed containers to indicate
the quality of seeds offered for sale, and
(f) restricting the export, import and inter-State
movement of non-descript seeds." E
14. Section 2 of the Seeds Act contains definitions of
various terms including "Central Seed Laboratory",
"Certification Agency", "Committee", "Seed", "Seed Analyst",
"Seed Inspector" and "State Seed Laboratory". Section 3 casts
F
a duty on the Central Government to constitute a Committee
called the Central Seed Committee to advise it and the State
Governments on matters arising out of the administration of the
Act and to carry out other functions assigned to it by or under
the Act. Section 4(1) empowers the Central Government to G
establish a Central Seed Laboratory or declare any seed
laboratory as the Central Seed Laboratory to carry out the
functions entrusted to such laboratory by or under the Act.
Section 4 (2) contains similar provisions for establishment of
State Seed Laboratories by the State Government. Section 6
empowers the Central Government to issue a notification, after H
1096 SUPREME COURT REPORTS (2012] 2 S.C.R.
A consulting the Committee constituted under Section 3 and
specify the minimum limit of germination and purity with respect
to any seed of any notified kind or variety and the mark or label
to indicate that such seed conforms to the minimum limit of
germination and purity. Section 7 regulates the sale of seeds
B of notified kinds or varieties. Under Section 8, the State
.· Government can establish a certification agency for the! State
to carry out the functions entrusted to such agency by or under
the Act. This power can also be exercised by the Central
Government in consultation with the State Government. S1:lctions
c 8-A to 8-E provide for establishment of the Central Seed
Certification Board and appointment of other Committees by
the Board. Section 9(1) provides for grant of certificate by
certification agency to any person selling, keeping for sale,
offering to sell,. bartering or otherwise supplying any seed of any
notified kind or variety. Sections 9(2) and 9(3) contain the
0
procedure for grant of certificate. Section 10 provides for
revocation of the certificate granted under Section 9. Any
person aggrieved by an order made under Sections ~I or 10
can file an appeal under Section 11. Under Section ·12, the
State Government· is empowered to issue notification for
E appointment of Seed Analysts and define the area <)f their
jurisdiction. Similar provision is contained in Section 13 for
appointment of Seed Inspectors. The powers of the Seed
Inspector are enumerated in Section 14. Section 15(1) contains
the procedure which is required to be followed by th•~ Seed
F Inspector for taking samples. In terms of Section 15(2)(b), the
sample taken by the Seed Inspector is required to be sent to
the Seed Analyst for the purpose of analysis. Section 16 lays
down the procedure for submission of the report by the State
Seed Laboratory and Central Seed Laboratory. Section 19
G specifies the acts which can be punished with an imprisonment
upto six months or with fine of Rs.1,000/- or with both. :Section
21 deals with offences by the companies. Sections 6, i', 9, 10,
11, 14(1)(a) and (b), 16, 19, 20 and 21 of the Seeds Aci, which
have bearing on the decision of the first question raised by the
H appellant are reproduced below -
NATIONAL SEEDS CORPORATION LTD. v. M. 1097
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
"6. Power to specify minimum limits of germination A
and purity, etc. -
The Central Government may, after consulting with the
Committee and by notification in the Official Gazette,
specify- B
(a) the minimum limits of germination and purity with
respect to any seed of any notified kind or variety;
(b) the mark or label to indicate that such seed conforms
to the minimum limits of germination and purity specified C
under Cl.(a) and the particulars which such mark or label
may contain.
7. Regulation or sale of seeds of notified kinds or
varieties -
D
No person shall, himself or by any other person on his
behalf, carry on the business of selling, keeping for sale,
offering to sell, bartering or otherwise supplying any seed
of any notified kind or variety, unless -
E
(a) such seed is identifiable as to its kind or variety;
(b) such seed conforms to the minimum limits of
germination and purity speeified Cl.(a) of Section 6;
(c) the container of such seed bears in the prescribed F
manner the mark or label containing the correct particulars
thereof specified under Cl.(b) of Section 6; and
(d) he complies with such other requirements as may be
prescribed. G
9. Grant of certificate by certification agency - (1) Any
person selling, keeping for sale, offering to sell, bartering
or otherwise supplying any seed of any notified kind or
variety may, if he desires to have such seed certified by
the certification agency, apply to the certification agency H
1098 SUPREME COURT REPORTS [2012] 2 S.C.R.
A for the grant of a certificate for the purpose.
(2) Every application under sub-section (1) shall be made
in such form, shall contain such particulars and shaH be
accompanied by such fees as may be prescribed.
B (3) On receipt of any such application for the grant of a
certificate, the certification agency may, after such enquiry
as it thinks fit and after satisfying itself that the seed to
which the application relates conforms to the prescribed
standards grant a certificate in such form and on such
c conditions as may be prescribed.
Provided that such standards shall not be lower than
1
the minimum limits of germination and purity specified for
· .. that seed under Cl. (a) of Sec.6.
D 10. Revocation of certificate - If the certification ag1:!ncy
is satisfied, either on a reference made to it in this bohalf
or otherwise, that-
(a) the certificate granted by it under section 9 has been
E obtained by misrepresentation as to an essential fac:t; or
(b) the holder· of the certificate has, without reasonable
cause, failed to comply with the conditions subject to which
the certificate has been granted or has contravened any
of the provisions of this Act or the rules made thereunder,
F
then, without prejudice to any other penalty to which the
holder of the certificate may be liable under this Act, the
certification agency may, after giving the holder of the
certificate an opportunity of showing cause, revoke! the
G certificate.
11. Appeal - (1) Any person aggrieved by. a decision of a
certification agency under Section 9 or Section 10, may, .
within thirty days from the date on which the decisicJn is
H communicated to him and on payment of such fees as
.,
NATIONAL SEEDS CORPORATION LTD. v. M. 1099
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
may be prescribed, prefer an appeal to such authority as A
may be specified by the State Government in this behalf:
Provided that the appellate authority may entertain an
appeal after the expiry of the said period of thirty days if it
is satisfied that the appellant was prevented by sufficient
8
cause from filing the appeal in time.
(2) On receipt of an appeal under sub-section (1 ); the
appellate authority shall, after giving the appellant an
opportunity of being heard, dispose of the appeal as
expeditiously as possible. C
(3) Every order of the appellate authority under this section
shall be final.
14. Powers of Seed Inspector. - (1) The Seed Inspector D
may-
(a) take samples of any seed of any notified kind or
variety from-
(i) any person selling such seed; or E
(ii) any person who is in the course of conveying, delivering
or preparing to deliver such seed to a purchaser or a
consignee; or
(iii) a purchaser or a consignee after delivery of such seed F
to him;
(b) send such sample for analysis to the Seed Analyst for
the area within which such sample has been taken ·
16. Report of Seed Analyst. - (1) The Seed Analyst shall, G
as soon as may be after the receipt of the sample under
sub-Section (2) of Section 15, analyse the sample at the
State Seed Laboratory and deliver, in such form as may
be prescribed, one copy of the report of the result of the
analysis to the Seed Inspector and another copy thereof H
11100 SUPREME COURT REPORTS [2012] 2 S.C.R.
A to the person from whom the sample has been taken.
(2) After the institution of a prosecution under this Act, the
accused vendor or the complainant may, on payment of
the prescribed fee, make an application to the Court for
sending any of th.e samples mentioned in clause (a) or
B
clause (c) of sub-Section (2) of Section 15 to the Central
Seed Laboratory for its report and on receipt of the
application, the Court shall first ascertain that the mark and
the seal or fastening as provided in clause (b) of sub-
section (1) of Section 15 are intact and may then despatch
c the sample under its own seal to the Central Seed
Laboratory which shall thereupon send its report to the
Court in the prescribed form within one month from the date
of receipt of the sample, specifying the result of the
analysis.
D
(3) The report sent by the Central Seed Laboratory under
sub-Section (2) shall supersede the report given by the
Seed Analyst under sub-Section (1).
(4) Where the report sent by the Central Seed Laboratory
E
under sub-Section (2) is produced in any proceedings
under Section 19, it shall ~not be necessary in such
proceeding to produce any sample or part thereof taken
for analysis.
F 19. Penalty. - If any person-
(a) contravenes any provision of this Act or any rule
made thereunder; or
(b) prevents a Seed Inspector from taking sample
G under this Act; or
(c) prevents a Seed Inspector from exercising any
other power conferred on him by or under this Act,
he shall, on conviction, be punishable-
H
NATIONAL SEEDS CORPORATION LTD. v. M. 1101
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
(i) for the first offence with fine which may A
extend to five hundred rupees, and
(ii) in the event of such person having been
previously convicted of an offence under this
section, with imprisonment for a term which 8
may extend to six months, or with fine which
may extend to one thousand rupees, or with
both.
20. Forfeiture of property - When any person has been
convicted under this Act for the contravention of any of the C
provisions of this Act or the rules made thereunder, the
seed in respect of which the contravention has been
committed may be forfeited to the Government.
21. Offences by companies. - (1) Where an offence D
under this Act has been committed by a company, every
person who at the time the offence was committed was in
charge of, and was responsible to the company for the
conduct of the business of the company, as well as the
company, shall be deemed to be guilty of the offence and E
shall be liable to be proceeded against and punished
accordingly:
Provided that nothing contained in this sub-section shall
render any such person liable to any punishment under this
Act if he proves that the offence was committed without F
his knowledge and that he exercised all due diligence to
prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1 ),
where an offence under this Act has been committed by a G
company and it is proved that the offence has been
committed with the consent or connivance of, or is
attributable to any neglect on the part of, any director,
manager, secretary or other officer of the company, such
director, manager, secretary or other officer shall also be H
1102 SUPREME COURT REPORTS [2012] 2 S.C.R.
A deemed to be guilty of that offence and shall be liable to
be proceeded against and punished accordingly.
Explanation. - For the purpose of this section,-
(a) "company" means any body corporate and includes a
B firm or other association of individuals; and ·
(b) "director", in relation to a firm, means a partne!r in the
firm."
C 15. In exercise of the power vested in it under Section 25
of the Seeds Act, the Central Government framed the Seeds
Rules, 1968 (for short, 'the Rules'). Rules 13, 23(a) to (d), (g)
and 23...:.A ofthe Rules, which are also relevant for deciding the
first question are reproduced below:
D "13. Requirements to be complied with by a person
carrying on the business referred to in Section 7 -
(a) No person shall sell, keep for sale, variety, after the date
recorded on the container, mark or label as the dab: upto
E · which the seed may be expected to retain the germination
not less than that prescribed under Cl.(a) of Section 6 of
the Act.
. (2) No person shall alter, obliterate or deface any mark or
.. label attached to the container of any seed.
F
(3) Every person selling, keeping for sale, offering to sell,
bartering or otherwise supplying any seed of notified kind
or variety under Section 7, shall keep over a period of three
years a complete record of each lot' of seed sold except
G that any seed sample may be discarded one year after the
entire lot represented by such sample has been disposed
of. The sample of seed kept as part of the complete record
shall be as large as the size notified in the Official Gazette.
This sample, if required to be tested, shall be tested only
H for determining the purity. '
NATIONAL SEEDS CORPORATION LTD. v. M. 1103
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
23. Duties of a Seed Inspector. - In addition to the A
duties specified by the Act the Seed Inspector shall. -
(a) inspect as frequently as may be required by
certification agency all places used for growing, storage
or sale of any seed of any notified kind or variety;
B
(b) satisfy himself that the conditions of the certificates
are being observed;
(c) procedure and send for analysis, if necessary,
samples of any seeds, which he has reason to suspect are c
being produced stocked or sold or exhibited for sale in
contravention of the provisions of the Act or these rules;
(d) investigate any complaint, which may be made to him
in writing in respect of any contravention of the provisions D
of the Act or these rules;
(g) institute prosecutions in respect of breaches of the
Act and these rules; and
23-A. Action to be taken by the Seed Inspector if a E
complaint is lodged with him. - (1) If farmer has lodged
a complaint in writing that the failure of the crop is due to
the defective quality of seeds of any notified kind or variety
supplied to him, the Seed Inspector shall take in his
possession the marks or labels,· the seed containers and F
a sample of unused seeds to the extent possible from the
complaintant for establishing the source of supply of seeds
and shall investigate the causes of the failure of his crop
by sending samples of the lot to the Seed Analyst for
detailed analysis at the State Seed Testing Laboratory. He G
shall thereupon submit the report of his findings as soon
as possible to the competent authority.
(2) In case, the Seed Inspector comes to the conclusion
that the failure of the crop is due to the quality of seeds
supplied to the farmer being less than the minimum H
1104 SUPREME COURT REPORTS [2012] 2 S.C.R.
A standards notified by the Central Government, he shall
launch proceedings against the supplier for contravention
of the provisions of the Act or these Rules."
16. An analysis of the above reproduced provisions shows
that for achieving the object of regulating the quality of certain
8
seeds to be sold for the purposes of agriculture including
horticulture, the legislature has made provisions for specifying
the minimum limits of germination and purity of notified kind or
variety of seeds and the affixation of mark or label to indicate
that such seed conforms to those limits, for restricting sale, etc.,
C of any notified kind or variety of seed unless the same is
identifiable as to its kind or variety and conforms to the
minimum limits of germination and purity; grant of certificate by
the certification agency to certain category of person;
revocation of the certificate; appointment of Seed Analysts and
D Seed Inspectors with power to the latter to take sample of any
seed of any notified kind or variety from any person selling such
seed or a producer of seeds and send the same for analysis
by the State Seed Laboratory or the Central Seed Laboratory.
The Seed Inspector can launch prosecution for violation of any
E provision of the Seeds Act or any Rule made thereunder. If a
person is found guilty then he can be punished with
imprisonment upto a maximum period of six months or he can
be visited with a penalty of fine upto Rs.1,000/- or with both. If
an offence is committed by a company, then every person who,
F at the time of commission of offence was incharge of and was
responsible to the company of the conduct of its business can
be punished. Rule 13 of the Rules casts a duty on very person
selling, keeping for sale, offering to sell, bartering or otherwise
supplying any seed of notified kind or variety to keep complete
G record of each lot of seeds sold for a period of three years.
He is also required to keep sample of the seed, which can be
tested for determining the purity.
17. Though, the Seeds Act is a special legislation enacted
for ensuring that there is no compromise with the quality of
H
NATIONAL SEEDS CORPORATION LTD. v. M. 1105
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
seeds sold to the farmers and others and provisions have been A
· made for imposition of substantive punishment on a person
found guilty of violating the provisions relating the quality of the
seeds, the legislature has not put in place any adjudicatory
mechanism for compensating the farmers/growers of seeds
and other similarly situated persons who may suffer loss of crop B
or who may get insufficient yield due to use of defective seeds
sold/supplied by the appellant or any other authorised person.
No one can dispute that the agriculturists and horticulturists are
the largest consumers of seeds. They suffer loss of crop due
to various reasons, one of which is the use of defective/sub- c
standard seeds. The Seeds Act is totally silent on the issue of
payment of compensation for the loss of crop on account of use
of defective seeds supplied by the appellant and others who
may obtain certificate under Section 9 of the Seeds Act. A
farmer who may suffer loss of crop due to defective seeds can [
approach the Seed Inspector and make a request for
prosecution of the person from whom he purchased the seeds.
If found guilty, such person can be imprisoned, but this cannot
redeem the loss suffered by the farmer.
18. At this stage, we may notice the background in which E
the Consumer Act was enacted and its salient features. The
General Assembly of the United Nations after extensive
discussion and negotiations among Governments and taking
into account the interest and needs of consumers in all
countries, particularly those in developing countries, adopted F
the draft guidelines submitted by the Secretary General to the
Economic and Social Council (UNESCO) in 1983. The
objectives of these guidelines are:
(a) To assist countries in achieving or maintaining G
adequate protection for their population as
consumers.
(b) To facilitate production and distribution patterns
responsive to the needs and desires of consumers.
H
1106 SUPREME COURT REPORTS [2012] 2 S.C.R.
A (c) To encourage high levels of ethical conduct for
those engaged in the production and distribution of
goods and services to consumers.
(d) To assist countries in curbing abusive business
practices by all enterprises at the national and
B
international levels which adversely affect
consumers.
(e) To facilitate the development of independent
consumer groups.
c
(f) To further international cooperation in the field of
consumer protection.
(g) To encourage the development of market conditions
which provide consumers with greater choice at
D lower prices.
19. India is a signatory to the resolution passed by the
General Assembly which is known as Consumer Protection
Resolution No.39/248. With a view to fulfill the objectives
E enshrined in the guidelines adopted by the General Assembly
of the United Nations and keeping in view the proliferation of
international trade and commerce and vast expansion of
business.and trade which resulted in availability of variety of
consumer goods in the market, the Consumer Protection Bill
F was introduced to provide for better protection of the interest
of consumers. The salient features of the Consumer Protection
Bill were to promote and protect the rights of consumers such
as:
(a) the right to be protected against marketing of goods
G which are hazardous to life and property;
(b) the right to be informed about the quality, quantity,
potency, purity, standard and price of goods to
protect the consumer against unfair trade practices;
H
NATIONAL SEEDS CORPORATION LTD. v. M. 1107
MADHUSUDHAN REDDY [G.S. SINGHVI, J)
(c) the right to be assured, wherever possible, access A
to an authority of goods at competitive prices.
(d) the right to be heard and to be assured that
consumers interests will receive due consideration
at appropriate forums;
B
(e) the right to seek Redressal against unfair trade
practices or unscrupulous exploitation of
consumers, and
(f) right to consumer education. c
20. The preamble to the Act shows that this legislation is
meant to provide for better protection of the interests of
consumers and for that purpose to make provision for
establishment of consumer councils and other authorities for the
settlement of consumer disputes and for matters connected D
therewith. Section 2 of the Consumer Act contains definitions
of various terms. Clauses (d) and (f) thereof read as under:
"2. (d) 'consumer' means any person who,-
E
(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 consideration paid or promised or partly paid or partly
F
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
(ii) hires or avails of any services for a consideration which G
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 services for consideration
paid or promised, or partly paid and partly promised, or H
1108 SUPREME COURT REPORTS [2012] 2 S.C.R.
A 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 purpose;
Exp/anation.-For the purposes of sub-clause (i),
8
'commercial purpose' does not include use by a consumer
of goods bought and used by him exclusively for the
purpose of earning hi~ livelihood, by means of self-
employment; (The explanation was substituted w.e.f.
15.3.2003 by Consumer Protection (Amendment) Act 62,
c 2003)
(f) 'defect' means any fault, imperfection or shortcoming
in the quality, quantity, potency, purity or standard which
is required to be maintained by or under any law for the
D time being in force or under any contract, express or
implied, or as is claimed by the trader in any manner
whatsoever in relation to any goods."
21. Section 3 declares that the provisions the Consumer
E Act shall be in addition to and not in derogation of the
provisions of any other law for the time being in force. Section
9 provides for establishment of the Consumer Forums at the
District, State and National level. Section 11 relates to
jurisdiction of the District Forum. Section 12 prescribed the
manner in which the complaint can be filed before the District
F Forum and the procedure required to be followed for
entertaining the same. Once the complaint is admitted, the
procedure prescribed under Section 13 is required to be
followed by the District Forum. Sub-section (1) of Section 13,
which lays down the procedure to be followed after admission
G of the complaint reads as under:
"13. Procedure on admission of complaint. - (1) The
District Forum shall, on admission of a complaint, if it
relates to any goods,-
H
NATIONAL SEEDS CORPORATION LTD. v. M. 1109
MADHUSUDHAN REDDY [GS. SINGHVI, J.]
(a) refer a copy of the admitted complaint, within A
twenty-one days from the date of its admission to
the opposite party mentioned in the complaint
directing him to give his version of the case within
a period of thirty days or such extended period not
exceeding fifteen days as may be granted by the 8
District Forum;
(b) where the opposite party on receipt of a complaint
referred to him under clause (a) denies or disputes
the allegations contained in the complaint, or omits
or fails to take any action to represent his case
c
within the time given by the District Forum, the
District Forum shall proceed to settle the consumer
dispute in the manner specified in clauses (c) to (g);
(c) where the complaint alleges a defect in the goods D
which cannot be determined without proper
analysis or test of the goods, the District Forum shall
obtain a sample of the goods from the complainant,
seal it and authenticate it in the manner prescribed
and refer the sample so sealed to the appropriate E
laboratory along with a direction that such laboratory
make an analysis or test, whichever may be
necessary, with a view to finding out whether such
goods suffer from any defect alleged in the
complaint or from any other defect and to report its F
findings thereon to the District Forum within a
period of forty-five days of the receipt of the
reference or within such extended period as may
be granted by the District Forum;
(d) before any sample of the goods is referred to any G
appropriate laboratory under clause (c), the District
Forum may require the complainant to deposit to
the credit of the Forum such fees as may be
specified, for payment to the appropriate laboratory
for tarrying out the necessary analysi:. ~r test in H
1110 SUPREME COURT REPORTS [2012] 2 S.C.R.
relation to the goods in question;
(e) the District Forum shall remit the amount deposited
to its credit under clause (d) to the appropriate
laboratory to enable it to carry out the analysis or
test mentioned in clause (c) and on receipt of the
B
report from the appropriate laboratory, the District
Forum shall forward a copy of the report along with
such remarks as the District Forum may feel
appropriate to the opposite party;
c (n if any of the parties disputes the correctness of the
findings of the appropriate laboratory, or disputes
the correctness of the methods of analysis or test
adopted by the appropriate laboratory, the District
Forum shall require the opposite party or the
D complainant to submit in writing his objections in .
regard to the report made by the appropriate
laboratory;
(g) the District Forum shall thereafter give a reasonable
opportunity to the complainant as well as the
E
opposite party of being heard as to the correctness
or otherwise of the report made by the appropriate
laboratory and also as to the objection made in
relation thereto under clause (f) and issue an
appropriate order under section 14."
F
. 22. The scope and reach of the Consumer Act has been
considered in large number of judgments - Lucknow
Development Authority v. M.K. Gupta (1994) 1 SCC 243, Fair
Air Engineers (P) Ltd. v. N. K. Modi (supra), Skypay Couriers
G Limited v. Tata Chemicals Limited (2000) 5 SCC 294, State
of Karnataka v. Vishwabharathi House Building Cooperative
Society (supra), CC/ Chambers Cooperative Housing Society
Limited v. Development Credit Bank Limited (supra),
Secretary, Thirumurugan Cooperative Agricultural Credit
H Society v. M. Lalitha (2004) 1 SCC 305, H.N. Shankara
NATIONAL SEEDS CORPORATION LTD. v. M. 1111
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
Shastry v. Assistant Director of Agriculture, Karnataka (2004) A
6 SCC 230 and Trans Mediterranean Airways v. Universal
Exports and another (2011) 1O sec 316. However, we do not
consider it necessary to discuss all the judgments and it will
be sufficient to notice some passages from the judgment in
Secretary, Thirumurugan Cooperative Agricultural Credit B.
Society v. M. Lalitha (supra). In that case, the 2-Judge Bench
noticed the background, the objects and reasons, and the
purpose for which the Consumer Act was enacted, referred to
the judgments in Lucknow Development Authority v. M. K.
Gupta (supra), Fair Air Engineers Private Limited v. N. K. Modi c
(supra) and proceeded to observe as under:
'The preamble of the Act declares that it is an Act to
provide for better protection of the interest of consumers
and for that purpose to make provision for the
establishment of Consumer Councils and other authorities D
for the settlement of consumer disputes and matters
connected therewith. In Section 3 of the Act in clear and
unambiguous terms it is stated that the provisions of the
1986 Act shall be in addition to and not in derogation of
the provisions of any other law for the time being in force. E
From the Statement of Objects and Reasons and the
scheme of the 1986 Act, it is apparent that the main
objective of the Act is to provide for better protection of
the interest of the consumer and for that purpose to provide F
for better redressal, mechanism through which cheaper,
easier, expeditious and effective redressal is made
available to consumers. To serve the purpose of the Act,
various quasi-judicial forums are set up at the district,
State and national level with wide range of powers vested G
in them. These quasi-judicial forums, observing the
principles of natural justice, are empowered to give relief
of a specific nature and to award, wherever appropriate,
compensation to the consumers and to impose penalties
for non-compliance with their orders."
H
1112 SUPREME COURT REPORTS [2012] 2 S.C.R.
A 23. It can thus be said that in the context of farmers/growers
and other consumer of seeds, the Seeds Act is a special
legislation insofar as the provisions contained therein ensure
that those engaged in agriculture and horticulture get quality
seeds and any person who violates the provisions of the Act
B and/or the Rules is brought before the law and punished.
However, there is no provision in that Act and the Rules framed
thereunder for compensating the farmers etc. who may suffer
adversely due to loss of crop or deficient yield on account of
defective seeds supplied by a person authorised to sell the
c seeds. That apart, there is nothing in the Seeds Act and the
Rules which may give an indication that the provisions of the
Consumer Act are not available to the farmers who are
otherwise covered by the wide definition of 'consumer' under
Section 2(d) of the Consumer Act. As a matter of fact, any
attempt to exclude the farmers from the ambit of the Consumer
0
Act by implication will make that Act vulnerable to an attack of
unconstitutionality on the ground of discrimination and there is
no reason why the provisions of the Consumer Act should be
so interpreted.
E 24. In Kishore Lal v. Chairman, Employees' State
Insurance Corporation (2007) 4 SCC 579, this Court was
called upon to corisider the question whether a person
(appellant) who got his wife treated in ESI dispensary could file
a complaint under the Consumer Act for award of
F compensation by alleging negligence on the part of the doctors
in the dispensary. The District Forum, the State Commission
and the National Commission declined relief to the appellant
on the ground that the medical services provided in ESI
dispensary were gratituous. This Court referred to Sections 74
G and 75 of the Employees State Insurance Act, 1948, the
definition of the 'consumer' contained in Section 2(d) of the
Consumer Act, referred to the judgments in Spring Meadows
Hospital v. Harjo/ Ahluwalia (1998) 4 SCC 39, State of
Karnataka v. Vishwabharathi House Building Cooperative
H Society (supra), Secretary, Thirumurugan Cooperative
NATIONAL SEEDS CORPORATION LTD. v. M. 1113
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
Agricultural Credit Society v. M. Lalitha (supra) and observed: A
"The trend of the decisions of this Court is that the
jurisdiction of the Consumer Forum should not and would
not be curtailed unless there is an express provision
prohibiting the Consumer Forum to take up the matter 8
which falls within the jurisdiction of civil court or any other
forum as established under some enactment. The Court
had gone to the extent of saying that if two different fora
have jurisdiction to entertain the dispute in regard to the
same subject, the jurisdiction of the Consumer Forum C
would not be barred and the power of the Consumer
Forum to adjudicate upon the dispute could not be
negated."
25. The definition of 'consumer' contained in Section 2(d)
of the Consumer Act is very wide. Sub-clause (i) of the D
definition takes within its fold any person who buys any goods
for a consideration paid or promised or partly paid and partly
promised, or under any system of deferred payment. It also
includes any person who uses the goods though he may not
be buyer thereof provided that such use is with the approval of E
the buyer. The last part of the definition contained in Section
2(d)(i) excludes a person who obtains the goods for resale or
for any commercial purpose. By virtue of the explanation which
was added w.e.f. 18.6.1993 by the Consumer Protection
(Amendment) Act 50 of 1993, it was clarified that the F
expression 'commercial purpose' used in sub-clause (i) does
not include use by a consumer of goods bought and used by
him for the purpose of earning his livelihood by means of self-
employment. The definition of 'consumer' was interpreted in
Lucknow Development Authority v. M.K. Gupta (supra). The G
Court referred to the dictionary meanings of the word
'consumer', definition contained in Section 2(d) and proceeded
to observe:
"It is in two parts. The first deals with goods and the other
with services. Both parts first declare the meaning of goods H
1114 SUPREME COURT REPORTS [201.2) 2 S.C.R.
A and services by use of wide expressions. Their ambit is
further enlarged by use of inclusive clause. For instance,
it is not only purchaser of goods or hirer of services but
even those who use the goods or who are beneficiaries
· of services with approval of the person who purchased the
B . goods or who hired services are included in it. The
legislature has taken precaution not only to define
'complaint', 'complainant', 'consumer' but even to mention
; in detail what would amount to unfair trade practice by
giving an elaborate definition in clause (r) and even to
c define 'defect' and 'deficiency' by clauses (f) and (g) for
, which a consumer can approach the Commission. The Act
thus aims to protect the economic interest of a consumer
as understood in commercial sense as a purchaser of
goods and in the larger sense of user of services. The
common characteristics of goods and services are that
D
they are supplied at a price to cover the costs and
generate profit or income for the seller of goods or
provider of services. But the defect in one and deficiency
in other may have to be removed and compensated
differently. The former is, normally, capable of being
E replaqed and repaired whereas the other may be required
to be compensated by award of the just equivalenfof the
value or damages for loss."
(emphasis supplied)
F
.26. Since the farmers/growers purchased seeds by paying
a price to the appellant, they would certainly fall within the ambit
of Section 2(d)(i) of the Consumer Act and there is no reason
to deny them the remedies which are available to other
G consumers of goods and services.
27. The next question which needs consideration is
whether the growers of seeds were not entitled to file complaint
under the Consumer Act and the only remedy available to them
for the alleged breach of the terms of agreement was to apply
H for arbitration. According to the learned counsel for the
NATIONAL SEEDS CORPORATION LTD. v. M. 1115
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
appellant, if the growers had applied for arbitration then in terms A
of Section 8 of the Arbitration and Conciliation Act the dispute
arising out of the arbitration clause had to be referred to an
appropriate arbitrator and the District Consumer Forums were
not entitled to entertain their complaint. This contention
represents an extension of the main objection of the appellant B
that the only remedy available to the farmers and growers who
claim to have suffered loss on account of use of defective seeds
sold/supplied by the appellant was to file complaints with the
concerned Seed Inspectors for taking action under Sections 19
and/or 21 of the Seeds Act. c
28. The consideration of this issue needs to be prefaced
with an observation that the grievance of a farmer/grower who
has suffered financially due to loss or failure of crop on account
of use of defective seeds sold/supplied by the appellant or by
an authorised person is not remedied by prosecuting the seller/ D
supplier of the seeds. Even if such person is found guilty and
sentenced to imprisonment, the aggrieved farmer/grower does
not get anything. Therefore, the so-called remedy available to
an aggrieved farmer/grower to lodge a complaint with the
concerned Seed Inspector for prosecution of the seller/supplier E
of the seed cannot but be treated as illusory and he cannot be
denied relief under the Consumer Act on the ground of
availability of an alternative remedy.
29. The remedy of arbitration is not the only remedy F
available to a grower. Rather, it is an optional remedy. He can
either seek reference to an arbitrator or file a complaint under
the Consumer Act. If the grower opts for the remedy of
arbitration, then it may be possible to say that he cannot,
subsequently, file cpmplaint under the Consumer Act. However, G
if he chooses to file a complaint in the first instance before the
competent Consumer Forum, then he cannot be denied relief
by invoking Section 8 of the Arbitration and Conciliation Act,
1996 Act. Moreover, the plain language of Section 3 of the
Consumer Act makes it clear that the remedy available in that H
'1116 SUPREME COURT REPORTS [2012} 2 S.C.R.
A Act is in addition to and not in derogation of the provisions of
any other law for the time being in force. In Fair Air Engineers
(P) Ltd. v. N.K. Modi (supra), the 2-Judge Bench interpreted
that section and held as under:
"the provisions of the Act are to be construed widely to giv~'
B
effect to the object and purpose of the Act. It is seen that
Section 3 envisages that the provisions of the Act are in
addition to and are not in derogation of any other law in
force. It is true, as rightly contended by Shri Suri, that the
words "in derogation of the provisions of any other law for
.c the time being in force" would be given proper meaning
and effect and if the complaint is not stayed and the parties
are not relegated to the arbitration, the Act purports to
operate in derogation of the provisions of the Arbitration
Act. Prima facie, the contention appears to be plausible
D but on construction and conspectus of the provisions of the
Act we think that the contention is not well founded.
Parliament is aware of the provisions of the Arbitration
Act and the Contract Act, 1872 and the consequential
remedy available under Section 9 of the Code of Civil
E Procedure, i.e., to avail of right of civil action in a
competent court of civil jurisdiction. Nonetheless, the Act
provides the additional remedy.
It would, therefore, be clear that the legislature intended to
F provide a remedy in addition to the consentient arbitration
which could be enforced under the Arbitration Act or the
civil action in a suit under the provisions of the Code of
Civil Procedure. Thereby, as seen, Section 34 of the Act
does not confer an automatic right nor create an automatic
embargo on the exercise of the power by the judicial
G
authority under the Act. It is a matter of discretion.
Considered from this perspective, we hold that though the
District Forum, State Commission and National
Commission are judicial authorities, for the purpose of
Section 34 of the Arbitration Act, in view of the object of
H
NATIONAL SEEDS CORPORATION LTD. v. M. 1117
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
the Act and by operation of Section 3 thereof, we are of A
the considered view that it would be appropriate that these
forums created under the Act are at liberty to proceed with
the matters in accordance with the provisions of the Act
rather than relegating the parties to an arbitration
proceedings pursuant to a contract entered into between B
the parties. The reason is that the Act intends to relieve
the consumers of the cumbersome arbitration proceedings
or civil action unless the forums on their own and on the
peculiar facts and circumstances of a particular case,
come to the conclusion that the appropriate forum for c
adjudication of the disputes would be otherwise those
given in the Act."
(emphasis supplied)
30. In Skypay Couriers Limited v. Tata Chemicals Limited D
(supra) this Court observed:
"Even if there exists an arbitration clause in an agreement
and a complaint is made by the consumer, in relation to a
certain deficiency of service, then the existence of an E
arbitration clause will not be a bar to the entertainment of
the complaint by the Redressal Agency, constituted under
the Consumer Protection Act, since the remedy provided
under the Act is in addition to the provisions of any other
law for the time being in force. n
F
31. In Trans Mediterranean Airways v. Universal Exports
(supra) it was observed: ·
"In our view, the protection provided under the CP Act to
consumers is in addition to the remedies available under G
any other statute. It does not extinguish the remedies under
another statute but provides an additional or alternative
remedy."
32. The aforementioned judgments present a clear answer
H
1118 SUPREME COURT REPORTS (2012) 2 S.C.R.
A to the appellant's challenge to the impugned orders on the
ground that the growers had not availed the remedy of
arbitration. An ancillary point which· may not detain us for long
but needs consideration is whether a grower is excluded from
the definition of 'consumer' because the seeds produced by
s him are required to be supplied to the appellant. The argument
of the learned counsel for the appellant is that the foundation
seeds were supplied to the growers for commercial purpose
and as such their cases would fall in the exclusion part oUbe
definition of 'consumer'. In the first blush, this argument appears
c attractive but on a deeper examination, we do not find any merit
in it. The expression "any commercial purpose" was considered
in Lax mi Engineering Works v. P. S. G. Industrial Institute
(1995) 3 SCC 583. The two-Judge Bench referred to the
amended definition of 'consumer' contained in Section 2 (d)
and observed:
0
"Now coming back to the definition of the expression
·'consumer' in Section 2(d), a consumer means insofar as
is relevant for the purpose of this appeal, (1) a person who
buys any goods for consideration; it is immaterial whether
E the consideration is paid or promised, or partly paid and
partly promised, or whether the payment of consideration
is deferred; (ii) a person who uses such goods with the
approval of the person who buys such goods for
consideration; (iit) but does not include a person who buys
F such goods for resale or for any commercial purpose. The
expression 'resale' is clear enough. Controversy has,
however, arisen with respect to meaning of the expression
"commercial purpose". It is also not defined in the Act. In
the absence of a definition, we have to go by its ordinary
G meaning. 'Commercial' denotes "pertaining to commerce"
(Chamber's Twentieth Century Dictionary); it means
"connected with, or engaged in commerce; mercantile;
having profit as the main aim" (Collins English Dictionary)
whereas the word 'commerce' means "financial
H transactions especially buying and selling of merchandise,
'.
NATIONAL SEEDS CORPORATION LTD. v. M. 1119
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
on a large scale" (Concise Oxford Dictionary). The A
National Commission appears to have been taking a
consistent view that where a person purchases goods "with
a view to using such goods for carrying on any activity on
a large scale for the purpose of earning profit" he will not
be a 'consumer' within the meaning of Section 2(d)(t) of B
the Act. Broadly affirming the said view and more
particularly with a view to obviate any confusion - the
expression "large scale" is not a very precise expression
- Parliament stepped in and added the explanation to
Section 2(d)(t) by Ordinance/Amendment Act, 1993." c
33. What needs to be emphasized 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 few months they will be able to earn D
profit. The seeds sown under the supervision of the expert
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 lhe E
crop will be purchased by it. It is neither the pleaded case of
the appellant nor any evidence was 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 F
growers had purchased the seeds for resale or for any
commercial purpose and they are excluded from 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 G
livelihood by using their skills and labour.
34. We shall now deal with the question whether the District
Forum committed a jurisdictional error by awarding
compensation to the respondents without complying with the H
1120 SUPREME COURT REPORTS [2012] 2 S.C.R.
A procedure prescribed under Section 13(1 )(c). A reading of the
plain language of that section shows that the District Forum can
call upon the complainant to provide a sample of goods if it is
satisfied that the defect in the goods cannot be determined
without proper analysis or test. After the sample is obtained,
B the same is required to be sent to an appropriate laboratory
for analysis or test for the purpose of finding out whether the
goods suffer from any defect as alleged in the complaint or from
any other defect. In some of these cases, the District Forums
had appointed agricultural experts as Court Commissioners
c and directed them to inspect the fields of the respondents and
submit report about the status of the crops. In one or two cases
the Court appointed Advocate Commissioner with liberty to him
to avail the services of agricultural experts for ascertaining the
true status of the crops. The reports of the agricultural experts
D produced before the District Forum unmistakably revealed that
the crops had failed because of defective seeds/foundation
seeds. After examining the reports the District Forums felt
satisfied that the seeds were defective and this is the reason
why the complainants were not called upon to provide samples
of ,the seeds for getting the same analysed/tested in an
E appropriate laboratory. In our view, the procedure adopted by
the District Forum was in no way contrary to Section 13(1)(c)
of the Consumer Act and the appellant cannot seek annulment
of well-reasoned orders passed by three Consumer Forums on
the specious ground that the procedure prescribed under
F Section 13(1)(c) of the Consumer Act had not been followed.
35. The issue deserves to be considered from another
angle. Majority of the farmers in the country remain illiterate
throughout their life because they do not have access to the
G system of education. They have no idea about the Seeds Act
and the Rules framed thereunder and other legislations, like,
Protection of Plant Varieties and Farmers' Rights Act, 2011.
They mainly rely on the information supplied by the Agricultural
Department and Government agencies, like the appellant.
H Ordinarily, nobody would tell a farmer that after purchasing the
NATIONAL SEEDS CORPORATION LTD. v. M. 1121
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
seeds for sowing, he should retain a sample thereof so that in A
the event of loss of crop or less yield on account of defect in
the seeds, he may claim compensation from the seller/supplier.
In the normal course, a farmer would use the entire quantity of
seeds purchased by him for the purpose of sowing and by the
time he discovers that the crop has failed because the seeds B
purchased by him were defective nothing remains with him
which could be tested in a laboratory. In some of the cases,
the respondents had categorically stated that they had sown the
entire quantity of seeds purchased from the appellant.
Therefore, it is na'ive to blame the District Forum for not having c
called upon the respondents to provide the samples of seeds
and send them for analysis or test in the laboratory.
36. It may also be mentioned that there was abject failure
on the appellant's part to assist the District Forum by providing
samples of the varieties of seeds sold to the respondents. Rule D
13(3) casts a duty on every person selling, keeping for sale,
offering to sell, bartering or otherwise supplying any seed of
notified kind or variety to keep over a period of three years a
complete record of each lot of seeds sold except that any seed
sample may be discarded one year after the entire lot E
represented by such sample has been disposed of. The sample
of seed kept as part of the complete record has got to be of
similar size and if required to be tested, the same shall be
tested for determining the purity. The appellant is a large
supplier of seeds to the farmers/growers and growers. F
Therefore, it was expected to keep the samples of the varieties
of seeds sold/supplied to the respondents. Such samples could
have been easily made available to the District Forums for
being sent to an appropriate laboratory for the purpose of
analysis or test. Why the appellant did not adopt that course G
has not been explained. Not only this, the officers of the
appellant, who inspected the fields of the respondents could
have collected the samples and got them tested in a designated
laboratory for ascertaining the purity of the seeds and/or the
extent of germination, etc. Why this was not done has also not H
1122 SUPREME COURT REPORTS [2012] 2 S.C.R.
A been explained by the appellant. These omissions lend support
to the plea of the respondents that the seeds sold/supplied by
the appellant were defective.
37. In Maharashtra Hybrid Seeds Co. Ltd. v. Alava/apati
B Chandra Reddy (1998) 6 SCC 738, this Court did not decide
the issue relating to the alleged non-compliance of Section
13(1)(c) of the Consumer Act, but approved the reasoning of
the State Commission which found fault with the appellant for
not taking steps to get the seeds tested in an appropriate
C laboratory. In that case, the respondent had complained that the
sunflower seeds purchased by him did not germinate because
the same were defective. The complaint was contested by the
appellant on several grounds. The District Forum allowed the
complaint and declared that the respondent was entitled to
compensation @ Rs.2,000/- per acre in addition to the cost of
D the seeds. The State Commission rejected the objection of the
appellant that the District Forum had not collected the sample
of the seeds and sent them for analysis or test for determining
the quality. The National Commission summarily dismissed the
revision filed by the appellant. In paragraph 4 of the judgment,
E this iCourt extracted the finding recorded by the State
Commission for upholding the order of the District Forum and
declined to interfere with the award of compensation to the
respondent. The relevant portions of paragraph 4 are
reproduced below:
F
'Thus, it is clear that it is on the permit granted by the
Agricultural Officer that the complainants purchased seeds
from the opposite parties and that the same Agricultural
Officer visited the land and found that there was no
germination. In view of the letter written by the Agricultural
G
Officer to the opposite parties to which they sent no reply,
it is clear that the same seeds that were purchased from
the opposite parties were sown and they did not
germinate. In view of the aforesaid letter of the Agricultural
Officer, the District Forum felt that the seeds need not be
H
NATIONAL SEEDS CORPORATION LTD. v. M. 1123
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
sent for analysis. Moreover, if the opposite parties have A
disputed that the seeds were not defective they would have
applied to the District Forum to send the samples of
' "
seeds from the said batch for analysis by appropriate
laboratory. But the opposite parties have not chosen to
file any application for sending the seeds to any B
laboratory. Since it is probable that the complainants
have sown all the seeds purchased by them, they were
not in a position to send seeds for analysis. In these
circumstances, the order of the District Forum is not
vitiated by the circumstance that it has not on its own c
accord sent the seeds for analysis by an appropriate
laboratory.
***
It is clear from the letter of the Agricultural Officer that the D
opposite parties in spite of their promise, never visited the
fields of the complainants. The opposite parties did not
adduce any material to show that the complainants did not
. manure properly or that there is some defect in the field.
In the absence of such evidence and in view of the conduct E
of the opposite parties not visiting the fields and having
regard to the allegation in the complaint that there were
rains in the month of September 1991 and the
complainants sowed the seeds, it cannot be said that
there is any defect either in the manure or in the F
preparation of the soil for sowing sunflower seeds."
(emphasis supplied)
38. Reference can usefully be made to the orders of the
National Commission in N. S. C. Ltd. v. Guruswamy (2002) G
CPJ 13, EJD. Parry (I) Ltd. v. Gourishankar (2006) CPJ 178
and India Seed House v. Ramjilal Sharma (2008) 3 CPJ 96.
In these cases the National Commission considered the issue
relating to non-compliance of Section 13(1)(c) in the conteXt of
the complaints made by the farmers that their crops had failed H
1124 SUPREME COURT REPORTS [2012] 2 S.C.R.
A due to supply of defective seeds and held that the District
Forum and State Commission did not commit any error by
entertaining the complaint of the farmers and awarding
compensation to them. In the first case, the National
Commission noted that the entire quantity of seeds had been
B sown by the farmer and observed:
"There is no doubt in our mind that where complainant
alleges a defect in goods which cannot be determined
without proper analysis or test of the goods, then, the
sample need to be taken and sent to a laboratory for
c analysis or test. But, the ground reality in the instant case
is that reposing faith in the seller, in this case the leading
Public Sector Company dealing in seed production and
sale, the petitioner sowed whole of the seed purchased
by him. Where was the question of any sample seed to
D be sent to any laboratory in the case? Whatever the
Respondent/Complainant had, was sown. One could have
appreciated the bonafides better, if sample from the crop
was taken during the visit of Assistant Seed Officer of
Petitioner - N.S.C. and sent for analysis. Their failure is
E unexceptionable. In our view, it is the Petitioner Company
which failed to comply with the provisions of Section 13
(c) of the Act. By the time, complainant could be filed even
this opportunity had passed. If the Petitioner Company was
little more sensitive or alert to the complaint of the
F Respondent/Complainant, this situation might not have
arisen. Petitioner has to pay for his insensitivity. The
Respondent/Complainant led evidence of State's
agricultural authorities in support who made their
statements after seeing the crop in the field. The onus
G passes on to the Petitioner to prove that the crop which
grew in the field of the complainant was of 'Arkajyothi' of
which the seed was sold and not of 'Sugar Baby', as
alleged. He cannot take shelter under Section 13 (c) of the
CP Act. Learned -Counsel's plea that Respondent/
H Complainant should have kept portion of seeds purchased
NATIONAL SEEDS CORPORATION LTD. v. M. 1125
MADHUSUDHAN REDDY [G.S. SINGHVI, J.]
by him to be used for sampling purposes, is not only A
unsustainable in law but to say the least, is very
unbecoming of a leading Pubiic Sector Seed Company to
expect this arrangement."
In the second case, the National Commission took cognizance
B
of the objection raised by the appellant that the procedure
prescribed under Section 13(1 )(c) of the Consumer Act had not
been followed and observed:
'Testimony of the complainant would show that whatever
seed was purchased from respondent No. 2 was sown by C
him in the land. Thus, there was no occasion for
complainant to have sent the sample of seed for testing
to the laboratory. It is in the deposition of Jagadish Gauda
that after testing the seed the petitioner company packed
and sent it to the market. However, the testing report of D
the disputed seed has not been filed. Since petitioner
company is engaged in business of sunflower seed on
large scale, it must be having the seed of the lot which was
sold to complainant. In order to prove that the seed sold
to complainant was not sub-standard/defective, the E
petitioner company could have sent the sample for testing
to the laboratory which it failed to do. Thus, no adverse
inference can be drawn against complainant on ground of
his having not sent the sample of seed for testing to a
laboratory." F
In the third case, the National Commission held:
"Holding in favour of the complainant, the National
Commission stated that, "it is not expected from every
buyer of the seeds to set apart some quantity of seeds for G
testing on the presumption that seeds would be defective
and he would be called upon to prove the same through
laboratory testing. On the other hand a senior officer of the
Government had visited the field and inspected the crop
and given report under his hand and seal, clearly certifying H
1126 SUPREME COURT REPORTS [2012] 2 S.C.R.
A that the seeds were defective."
39. The .reasons assigned by the National Commission in
the aforementioned three cases are similar to the reasons
assigned by the State Commission which were approved by
this Court in Maharashtra Hybrid Seeds Company Ltd. v.
8
Alavalapati Chandra Reddy (supra) and in our view the
proposition laid down in those cases represent the correct legal
position.
40. In the result, the appeals are dismissed. The appellant
C shall pay cost of Rs.25,000/- to each of the respondents. The
amount of cost shall be paid within a period of 60 days from
today.
N.J . Appeals dismissed.
. .
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