REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 7357-7376 OF 2010

M/S NANDAN BIOMATRIX LTD.      …APPELLANT

VERSUS

S. AMBIKA DEVI & ORS.              ….RESPONDENTS

J  U D  G  M  E  N T

MOHAN M. SHANTANAGOUDAR, J.

Civil Appeal No. 7357/2010

The  instant  appeal  arises  against  the  order  dated

15.04.2009  passed  by  the  National  Consumer  Disputes

Redressal Commission, New Delhi (“the National Commission”),

affirming  the  order  dated  28.04.2008  of  the  Kerala  State

Consumer  Disputes  Redressal  Commission  (“the  State

Commission”)  setting  aside  the  order  of  the  District  Forum,

Kozhikode dismissing the complaint and remanding the matter

to the District Forum for disposal on merits.

1

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

2.1 The complainant (the Respondent herein) is a small

landholder who responded to the advertisements issued by the

Appellant,  a  seed  company,  in  2003,  regarding  buyback  of

safed musli, a medicinal crop, at attractive prices. She entered

into a tripartite agreement dated 15.01.2004 with the Appellant

and its franchisee M/s Herbz India. As per the agreement, the

Respondent purchased 750 kgs of wet  musli for sowing from

the Appellant, at the rate of Rs. 400/- per kg, and cultivated the

same in her land. The Appellant was to buy back the produce at

a minimum price of Rs. 1,000/- per kg from the Respondent.

The  Respondent  lodged  a  consumer  complaint  alleging

negligence and breach of contract on the part of the Appellant

on  the  ground  that  the  Appellant  failed  to  buy  back  her

produce, leading to the destruction of the greater part of the

crop.  

2.2 The District Forum dismissed the complaint, and held

that the same was not maintainable since the Respondent was

not  a  “consumer”  within  the  meaning  of  the  Consumer

Protection  Act,  1986  (“the  1986  Act”).  On  appeal  by  the

2

Respondent, the State Commission set aside the order passed

by  the  District  Forum,  holding  that  the  Respondent  was  a

“consumer” under the 1986 Act, and remanded the matter to

the District Forum for disposal on merits. It is this order which

was  impugned before  the  National  Commission  by way of  a

revision petition filed by the Appellant.  

2.3 The National  Commission upheld the finding of the

State  Commission,  holding  that  the  covenants  entered  into

between the parties were in the nature of both sale of product

and rendering of  service,  since the Appellant  had agreed to

provide  wet  musli for  growing  to  the  Respondent,

supplemented  by  technical  support  and  guidance  from  its

franchisee,  and  had  further  agreed  to  insure  the  crop  at

additional cost. Additionally, noting that the Respondent was a

small  landholder  owning about 1-1.5 acres of  land,  who had

started cultivation of musli for eking out a livelihood for herself,

the National Commission held that it could not be said that the

agreement was entered into for the commercial purpose of the

Respondent. The Revision Petition was dismissed with a cost of

3

Rs.  2,500/-  imposed  on  the  Appellant,  payable  to  the

Respondent.

2.4  The instant appeal has been filed against the above

order of the National Commission.

3. Before  us,  learned  Counsel  for  the  Appellant,  Mr.

Raghenth  Basant,  argued  that  the  Respondent  was  not  a

“consumer”  as  defined  under  Section  2(d)  of  the  1986  Act.

Firstly, it was argued that the tripartite agreement envisaged

buyback of musli by the Respondent from the Appellant, which

amounted  to  resale,  which  is  excluded  from the  purview of

Section 2(d). Secondly, it was argued that the cultivation and

sale of musli by the Respondent was for a commercial purpose

and  not  for  the  purpose  of  earning  livelihood,  and  hence

excluded from the purview of Section 2(d).

4. Learned  Counsel  for  the  Respondent,  Mr.  Santosh

Paul, on the other hand, argued that the cultivation of  musli

was not being done on a commercial level, but was purely on a

self-employed basis done by a poor agriculturist for eking out a

livelihood,  and hence such cultivation did  not  fall  within  the

4

meaning  of  “commercial  purpose”  under  the  Explanation  to

Section 2(d) of the 1986 Act.

5. Heard  the  counsel  on  either  side  and perused the

record.

6. Clearly, the only aspect for consideration before us is

whether the Respondent was excluded from the purview of the

definition of “consumer” under Section 2(d) of the 1986 Act on

account of the subject transaction amounting to resale or for

being for a commercial purpose.

7. It  would  be  pertinent  to  begin  our  discussion  by

referring to the definition of the term “consumer” under Section

2(d) under the 1986 Act:

“(d) “consumer” means any person who— (i) buys any goods, for a consideration which has

been paid or promised or partly paid and partly promised,  or  under  any  system  of  deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised or under any system of deferred payment  when  such  use  is  made  with  the approval of such person but does not include a  person  who  obtains  such  goods  for resale or for any commercial purpose; or

(ii) hires  or  avails  of  any  services  for  a consideration which has been paid or promised or partly paid and partly promised, or under any

5

system of deferred payment and includes any beneficiary  of  such  services  other  than  the person  who  hires  or  avails  of  the  service  for consideration paid  or  promised,  or  partly  paid and  partly  promised,  or  under  any  system of deferred  payment,  when  such  services  are availed  of  with  the  approval  of  the  first mentioned  person  but  does  not  include  a person who avails of such services for any commercial purposes;

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

8. It is relevant to note that the explanation regarding

the  meaning  of  “commercial  purpose”  was  added  vide  an

amendment in 1993, and was considered for the first time by

this Court  in  Laxmi Engineering Works  v. PSG Industrial

Institute, (1995) 3 SCC 583. In this case, the Court noted that

even prior to the 1993 amendment, the National Commission

had been taking a consistent view that was broadly in accord

with the amended definition, i.e. only persons purchasing goods

or availing of services for carrying on activity on a large scale,

for the purpose of earning profit, would be excluded from the

ambit  of  the  definition  of  “consumer”  [see  Synco  Textiles

6

Pvt. Ltd.  v.  Greaves Cotton and Company Ltd., (1991) 1

CPJ  499;  Oswal  Fine Arts  v. HMT,  (1991)  1  CPJ  330;  and

Secretary, Consumer Guidance and Research Society of

India v. BPL India Ltd., (1992) 1 CPJ 140 (NC)].  

8.1 On  this  basis,  this  Court  affirmed  that  the

amendment was only clarificatory in nature, and that though

the question regarding whether the purpose for which goods

have  been  bought  or  services  rendered  is  a  “commercial

purpose” is to be answered on the facts of each case, a person

buying  goods  and  using  them  himself  exclusively  for  the

purpose of earning a livelihood by means of self-employment

would be covered by the definition of “consumer” within the

1986 Act, even if such use is commercial use. In this regard,

the Court in Laxmi Engineering observed:

“11. ... a person who buys a typewriter or a car and uses  them  for  his  personal  use  is  certainly  a consumer but a person who buys a typewriter or a car  for  typing others’  work for  consideration or  for plying the car as a taxi can be said to be using the typewriter/car  for  a  commercial  purpose.  The explanation  however  clarifies  that  in  certain situations,  purchase  of  goods  for  “commercial purpose” would not yet take the purchaser out of the definition of expression ‘consumer’. If the commercial use is  by the purchaser himself  for  the purpose of earning his livelihood by means of self-employment,

7

such purchaser of goods is yet a ‘consumer’. In the illustration  given  above,  if  the  purchaser  himself works on typewriter or plies the car as a taxi himself, he does not cease to be a consumer. In other words, if the buyer of goods uses them himself, i.e., by self- employment, for earning his livelihood, it would not be treated as a “commercial purpose” and he does not cease to be a consumer for the purposes of the Act. The explanation reduces the question, what is a “commercial  purpose”,  to  a  question  of  fact  to  be decided in the facts of each case. It is not the value of the goods that matters but the purpose to which the  goods  bought  are  put  to.  The  several  words employed  in  the  explanation,  viz.,  “uses  them  by himself”, “exclusively for the purpose of earning his livelihood” and “by means of self-employment” make the intention of Parliament abundantly clear, that the goods bought must be used by the buyer himself, by employing himself  for  earning his  livelihood.  A few more illustrations would serve to emphasise what we say. A person who purchases an auto-rickshaw to ply it himself on hire for earning his livelihood would be a consumer.  Similarly,  a  purchaser  of  a  truck  who purchases it for plying it as a public carrier by himself would  be  a  consumer.  A  person  who  purchases  a lathe machine or other machine to operate it himself for earning his livelihood would be a consumer. (In the  above  illustrations,  if  such  buyer  takes  the assistance of one or two persons to assist/help him in operating  the  vehicle  or  machinery,  he  does  not cease to be a consumer.) As against this a person who  purchases  an  auto-rickshaw,  a  car  or  a  lathe machine or  other  machine to be plied or  operated exclusively  by  another  person  would  not  be  a consumer. This  is  the  necessary  limitation  flowing from the expressions “used by him”, and “by means of  self-employment”  in  the  explanation.  The ambiguity  in  the  meaning  of  the  words  “for  the purpose of earning his  livelihood” is  explained and

8

clarified by the other two sets of words.” (emphasis supplied)

8.2 Notably, it was emphasized that the employment of a

few persons for the purpose of assistance in the activity carried

out  by  the  purchaser  would  not  automatically  render  the

commercial activity as not being for self-employment and for

earning his livelihood; rather, this would have to be determined

from the facts and circumstances of a given case.  

9. In  the  matter  on  hand,  though  the  Appellant  has

sought to project that the Respondent were cultivating musli on

a large scale and with a profit motive, we find ourselves unable

to  conclude that  the  cultivation  being  undertaken was  for  a

purpose  other  than  for  eking  out  a  livelihood  through  self-

employment.  

9.1 In matters such as the one on hand, the agriculturist

buys  the  foundation  seeds  from  the  seed  company,  or  the

company  itself  reaches  out  and  requests  the  farmers  to

generate  the  seeds  so  that  it  may  market  the  same.  By

accepting such an offer,  and after purchasing the foundation

seeds  from  the  seed  company,  the  agriculturist,  with  hard

labour and sweat, produces seeds to be marketed by the seed

9

company. Thus, the agriculturist is not reselling any product,

but grows his own product by utilizing the foundation seeds.

There cannot be any dispute that the agriculturist has to sell his

product in the open market or to the seed company,  as the

case may be, in order to eke out his livelihood. In other words,

the  agriculturist  sustains  himself  by selling his  product.  This

cannot  be  termed  as  resale  or  activity  in  furtherance  of  a

“commercial purpose” bringing him out of the purview of the

definition of “consumer” under Section 2(d). Rather, it is purely

for  the  purpose  of  earning  his  livelihood  by  means  of  self-

employment.  

9.2 Contrary to what the Appellant has sought to impress

upon us, we find that cases such as these cannot be compared

to  activities  undertaken by  industrial  concerns,  for  example,

where the employment  of  raw materials  to  produce finished

goods for sale has also been held by this Court to amount to

resale or being for a commercial purpose [see  Rajeev Metal

Works  v. Mineral & Metal Trading Corporation of India

Ltd., (1996) 9 SCC 422].

10

9.3 Indeed, in the matter on hand, the Respondent is a

housewife who has undertaken agricultural activity on land of

1-1.5 acres for the purpose of increasing her household income,

and would perhaps not have undertaken the growing of musli if

the Appellant had not assured a profitable price for buyback of

the  crop.  Of  course,  we  cannot  base our  conclusion  on  any

surmise or conjecture in this regard. At the same time, in our

opinion, the fact that such profitable price was guaranteed by

the  Appellant  cannot  now be  relied  upon  to  argue  that  the

activity was undertaken by the Respondent for a “commercial

purpose”, so as to exclude the same from the purview of the

1986 Act.  

10. We particularly find the argument untenable that the

tripartite  agreement  would  amount  to  resale  by  virtue  of

containing  a  buyback  clause,  and  would  hence  exclude  the

Respondent from the ambit of the definition of “consumer”. In

this regard, we find it relevant to refer to the decision of this

Court  in  National  Seeds Corpn.  Ltd.  v. M.  Madhusudan

Reddy,  (2012)  2  SCC  506,  where  this  Court  was  seized  of

appeals  arising out  of  consumer  complaints  filed by farmers

11

engaged  in  agriculture  and  seed  production,  who  had

purchased  seeds  from  the  National  Seeds  Corporation  Ltd.

which  had turned out  to  be  defective,  leading  to  below par

germination.  Some  of  these  farmers  had  entered  into

agreements  whereby  they  purchased  foundation  seeds  from

the seed company and agreed to grow seeds and sell  them

back to the company for profit. The company had rejected the

grown seeds for being unfit for certification. While dealing with

the question of whether a farmer would be excluded from the

definition of “consumer” because the seeds produced by him

were required to be supplied back to the seed corporation that

supplied the foundation seeds, this Court,  taking note of the

elaboration  on  the  scope  and  ambit  of  the  expression

“commercial  purpose” as undertaken in  Laxmi Engineering

(supra), observed as follows:

“73. What  needs  to  be  emphasised  is  that  the appellant had selected a set of farmers in the area for growing seeds on its  behalf.  After entering into agreements with the selected farmers, the appellant supplied foundation seeds to them for a price,  with an assurance that within a few months they will be able to earn profit. The seeds were sown under the supervision of the expert deputed by the appellant. The  entire  crop  was  to  be  purchased  by  the appellant. The agreements entered into between the

12

appellant and the growers clearly postulated supply of  the  foundation  seeds  by  the  appellant  with  an assurance that the crop will be purchased by it. It is neither  the pleaded case of  the appellant  nor  was any evidence produced before any of the Consumer Forums that the growers had the freedom to sell the seeds in the open market or to any person other than the appellant. Therefore, it is not possible to take the view that the growers had purchased the seeds for resale or for any commercial purpose and they are excluded from the definition of the term “consumer”. As a matter of fact, the evidence brought on record shows that the growers had agreed to produce seeds on behalf of the appellant for the purpose of earning their livelihood by using their skills and labour.”

10.1 It is amply evident from the above that an agreement

for  buyback  by  the  seed  company  of  the  crop  grown  by  a

farmer  cannot  be  regarded  as  a  resale  transaction,  and  he

cannot  be  brought  out  of  the  scope  of  being  a  “consumer”

under the 1986 Act  only on such ground.  Thus,  even in  the

instant case, the fact that there was a buyback agreement for

the  musli crop  would  not  bring  the  Respondent  outside  the

purview  of  the  definition  of  “consumer”  by  rendering  the

buyback  arrangement  a  resale  transaction  or  being  for  a

commercial  purpose.  We  hasten  to  emphasise  that  the  fact

situation herein diverges from Madhusudan to the extent that

in the instant case, the Respondent had the freedom to sell her

13

produce on the open market if she was able to obtain a better

price. However, as we have already mentioned, in our opinion,

this aspect would not take away from the conclusion that the

Respondent  had entered into  an  agreement  for  growing the

musli crop  for  the  purpose of  earning  a  livelihood,  since  an

agriculturist would always have to sell his produce in order to

earn his livelihood.  

11. It  is  pertinent  to  note  at  this  juncture  that  the

Appellant has sought to rely on several decisions rendered by

the National Commission in order to argue that the Respondent

cannot be regarded as a “consumer” under the 1986 Act, and

we find it necessary to advert to the same below.

12. The  Appellant  has  referred  to  Synco  Textiles

(supra), a case decided before the 1993 amendment, where the

National  Commission  opined  that  large  scale  commercial

activities would be excluded from the purview of the definition

of  “consumer”.  It  was  held  that  a  person  purchasing  a

generator  used  for  generating  electricity,  to  be  used  in  an

industrial  concern  producing  oil  on  a  large  scale,  would  not

amount to a “consumer”, since the generator was being used

14

for an activity directly intended to generate profit.  This view

was upheld in  Laxmi Engineering (supra) by this Court, and

we see no reason to depart from the same. At the same time,

the said decision cannot come to the rescue of the Appellant as

the  facts  in  Synco clearly  indicated  that  the  generator

purchased was employed for production that was geared for a

commercial  purpose,  and  had  nothing  to  do  with  the

agricultural sector and the status of a farmer as a “consumer”.

13. However, the same cannot be said with regard to the

decision in  Sakthi Sugars Ltd.,  Orissa  v. Sridhar Sahoo,

II  (1999) CPJ 4 (NC). In this case, the respondent farmer had

entered into an agreement with the appellant corporation for

financial assistance, agreeing to sell the sugarcane crop grown

by him to it. The corporation, in turn, had agreed to help the

farmer get a loan from specified sources for a diesel pump set

and  dug-well.  In  1991-92,  the  farmer  obtained  inadequate

output in his crop. In his complaint, he alleged that this was

because he was unable to irrigate his field properly because of

the lack of a dug-well  and pump set,  and that he had been

15

unable to procure a loan in this regard because of the failure of

the appellant to deposit margin money for the same.  

13.1 The National Commission, following the view taken in

Fruit  and  Vegetable  Project,  New  Delhi  v. N.  Sankar

Reddy, III (1994) CPJ 163 (NC) that a seller could not take the

benefit  of  the  1986  Act,  held  that  the  farmer  was  not  a

“consumer” since he was selling his produce to the opposite

party. It was also held that in any case, the issue of specific

performance emanating from a contract between the parties

could not  be the subject  matter  of a  consumer dispute.  The

Appellant  in  the  instant  case  has  referred  to  this  reasoning

adopted by the National Commission to substantiate its case.

However,  for  reasons  discussed  below,  we  are  of  the

considered  view  that  the  proposition  of  law  expressed  in

Sakthi Sugars is incorrect.  

13.2 To begin with, a perusal of the decision in  Sankar

Reddy, which was relied upon in Sakthi Sugars, shows that in

that case, the National Commission had held that a farmer who

was  selling  his  produce  through  an  intermediary  was  not  a

“consumer”  vis-à-vis  such  intermediary.  The  complainant

16

therein was a horticulturist who was selling his produce to an

intermediary  for  further  sale.  One  of  the  consignments  had

been  rejected  by  the  intermediary  for  non-adherence  with

standards pertaining to quality and packaging, but in view of

the perishable nature of the goods, the complainant requested

the intermediary for help in disposal, who arranged for the sale

of the consignment through an authorized commission agent

for a specified price. The complaint was filed alleging that the

intermediary  had  failed  to  pay  the  complainant  the  entire

amount promised. On these facts, the National Commission had

held that while obliging with the request of the complainant,

the intermediary was acting only as an agent, and that too only

in order to minimize the loss that the complainant would have

suffered if the consignment remained unsold, without receiving

any  consideration.  Thus,  it  could  not  be  said  that  the

intermediary  had  undertaken  to  render  a  service  for

consideration.  

13.3 It  is  relevant  to  note  that  from  the  order  of  the

National Commission, no material is forthcoming to the effect

that the parties had entered into an agreement whereby the

17

intermediary  agreed  to  render  a  service  to  the  farmers

regarding the further  sale  of  their  produce.  Additionally,  the

National Commission found that even if it was presumed that

the  intermediary  had  purchased  goods  in  terms  of  an

agreement between the parties, the fact remained that in such

transaction, it was the farmer who was a seller, and could not

be deemed to be a “consumer” under the 1986 Act.

13.4 It is evident that in Sakthi Sugars, there was a clear

agreement  between  the  farmer  and  the  corporation  for  the

latter to render financial assistance by way of help in procuring

a  loan,  which  amounted  to  the  rendering  of  a  service,  a

deficiency in which would give rise to a cause of action under

the 1986 Act. Thus, the farmer was not purely a seller and was

also availing of services from the corporation. In this respect,

reliance on Sankar Reddy may not have been proper.  

13.5 We also find that the view that a consumer dispute

may not arise out of a contractual arrangement is erroneous

since it falls foul of the clear stipulation under Section 2(f) of

the 1986 Act that a deficiency in service may arise out of “any

fault, imperfection, shortcoming or inadequacy in the quality,

18

nature  and  manner  of  performance  which  is  required  to  be

maintained by or under any law for the time being in force or

has  been  undertaken  to  be  performed  by  a  person  in

pursuance of a contract or otherwise in relation to any service”.

13.6 In view of the above,  we find that  Sakthi Sugars

cannot be relied upon to argue that a farmer selling his produce

cannot under any circumstance amount to a “consumer” under

the 1986 Act. As we have discussed supra, in cases where the

farmer has purchased goods or availed of services in order to

grow produce in order to eke out a livelihood, the fact that the

said produce is being sold back to the seller or service provider

or  to  a  third  party  cannot  stand  in  the  way  of  the  farmer

amounting to a “consumer”.

14.  The Appellant has also referred to the decision of the

National Commission in Wimco Limited v. Ashok Sekhon, II

(2008)  CPJ  210  (NC).  In  this  case,  the  complainant  had

purchased 1800 poplar transplants for a corporation on a large

scale  for  growing  trees  and  selling  them  back  to  the

corporation.  The  National  Commission  referred  to  its  prior

decision  in  Synco Textiles  (supra)  and the  decision  of  this

19

Court in Laxmi Engineering (supra), for the principle that the

“self-employment”  exception  to  the  “commercial  purpose”

clause  was  applicable  only  when  the  goods  bought  by  the

buyer were used by the buyer himself by employing himself for

earning his  livelihood.  It  was held  that  the planting of  1800

trees on a 9-acre field, and that too for resale, could not be said

to  be on a  self-employment  level  and without  a commercial

purpose. Thus, the complainant was held to not be a consumer

within  the  1986  Act.  We  find  that  this  decision  is  clearly

distinguishable since it  is evident from the facts therein that

the trees were being grown for a “commercial purpose”, which

is not the case here.  

15. Finally,  we may refer  to  the decision in Prithviraj

Narayanrao Chavan  v. The National Seeds Corporation

Ltd., [2012] SCC OnLine NCDRC 7, cited by the Appellant. This

was also a case involving buyback of seeds produced with the

help of foundation seeds provided by the seed company. The

seed  company  had  approached  farmers  to  participate  in  its

seed  production  programme for  a  variety  of  jute,  and  were

assured a certain minimum procurement price per quintal  of

20

seed produced. The area under cultivation was withdrawn from

the certification of the seed company due to poor germination

of crop, leading to heavy losses for the farmers, based on which

consumer complaints were filed.

15.1 The State Commission in Prithviraj had adopted the

view taken in Sakthi Sugars (supra) that a seller could not be

treated as  a  consumer,  to  hold  that  since  the  complainants

therein  had  entered  into  a  buyback  transaction,  they  were

acting as sellers and hence could not be treated as consumers.

This view was upheld by the National Commission, which also

placed reliance upon the decision in Wimco (supra).  

15.2 As we have already noticed, we find ourselves unable

to agree with the view taken in Sakthi Sugars. Moreover, for

reasons  expressed  already,  and  particularly  in  view  of  the

decision of this Court in Madhusudan (supra), we find that the

National  Commission  in  Prithviraj erred  in  holding  that

entering into a buyback transaction would preclude a farmer

from taking benefit as a “consumer” under the 1986 Act.  

16. Before we part with this matter, we feel constrained

to note that the Indian agricultural scenario, today, is in a very

21

imperilled state.  Agriculturists  have  to  deal  with  serious

environmental concerns like topsoil depletion, contamination of

food, water and soil due to toxic fertilizers and pesticides, and

the vagaries  of  the  weather,  which  are  becoming more and

more severe and unpredictable as the climate deteriorates. In

some parts  of  the country,  such as  Punjab,  pesticides  being

used are toxic enough to have led to unprecedented incidence

of  diseases  like  cancer.  The  mechanization  of  farms  has

undoubtedly led to many advances in the food security of the

country, but this has come at a grave cost.  

16.1 Practices  such  as  crop  diversification  and  rotation,

which are crucial to species diversity and thus to maintain soil

health and ensure farm security, and are in-built in traditional

forms of farming, are under threat from the increasing inroads

being  made into  the  Indian  farm by  corporates  of  all  sizes,

which come with the promise of increased yields and attractive

returns. This is true with regard to the sale of seeds as well,

even though Indian law protects plant material including seeds

from patentability.

22

16.2 Most  Indian  farmers  own  only  small  landholdings,

which require expensive inputs such as irrigation,  electricity,

seeds, fertilizer, and pesticide, but do not generate sufficient

output to cover the costs of the same. Though the sway of seed

companies over small farmers in India is, as of now, minimal,

when agriculturists with such small landholdings do enter into

agreements  to  grow  crops  on  terms  dictated  by  seed

companies, it is in the hope of earning some profit that would

offset the cost of their inputs and generate some income for

the household. Often, the crops require the intensive usage of

labour and mechanization. Therefore, agreements such as the

one in the instant case often guarantee technical and financial

assistance to the farmer in order to be able to discharge his

end of the deal. Needless to say, the success or failure of the

crop would make or  break the income of  the farmer for  the

entire  season.  This  can  result  in  situations  where  small  and

medium  scale  farmers  find  themselves  trapped  in  contracts

where they buy expensive seeds which turn out to be defective,

resulting in a failed season and severe financial hardship. The

problem  of  indebtedness  further  worsens  the  plight  of  the

23

farmer, and, all too often, manifests in the tragedy of suicide.

Farmer suicides are indeed a systemic issue that has persisted,

and perhaps worsened, over the last few decades.  

16.3 The summary redressal available to the farmer under

the 1986 Act may go a small but crucial way to provide instant

relief  in  a  sector  which  is  already  facing  stress  on  several

counts.  Undoubtedly,  farmers  faced  with  grievances  against

seed companies, may, in suitable cases, opt for other remedies

such as a civil suit, relief under the Seeds Act, 1966 (the reform

of which has been under process for some time), and so on. But

excluding such farmers from the purview of the 1986 Act would

be  a  complete  mockery  of  the  object  and  purpose  of  the

statute.  

16.4 We are alarmed by the growing trend amongst seed

companies  of  engaging  in  frivolous  litigation  with  farmers,

virtually defeating the purpose of speedy redressal envisaged

under 1986 Act.  In the instant case, the Appellant contested

the farmers’  claims before consumer fora on the preliminary

point of maintainability right up to this Court, compelling small

agriculturists such as the Respondents to spend unnecessarily

24

on litigation in order to secure relief for themselves, amounting

to a sum which probably exceeds even the quantum of relief

claimed. This tendency to resist even the smallest of claims on

any  ground  possible,  by  exploiting  the  relatively  greater

capacity of seed companies to litigate for long periods of time,

amounts  to  little  more  than harassment  of  agriculturists.  To

discourage such conduct in the future by the Appellant as well

as other seed corporations, we deem it fit to impose costs on

the Appellant  

17. Thus, we find no reason to interfere with the order

passed  by  the  National  Commission  affirming  that  the

Respondent is a “consumer” within the meaning of the 1986

Act,  and  dismiss  the  instant  Appeal.  The  concerned  District

Forum shall hear and decide the complaints within a period of

three months from the date of receipt of this judgment. Costs

are  imposed  on  the  Appellant  to  the  tune  of  Rs.  25,000/-

payable to the Respondent.

Civil Appeal Nos. 7358-7376/2010

18. These  appeals  arise  out  of  facts  similar  to  Civil

Appeal No. 7357/2010. Hence, they are dismissed in terms of

25

the order passed in the said appeal. It is made clear that the

cost of Rs. 25,000/- is to be paid by the Appellant in each of

these appeals, to be divided equally amongst the respondents

in each appeal.

…..…………..............................J. (MOHAN M. SHANTANAGOUDAR)

.……………………………...............J.     (R. SUBHASH REDDY)

New Delhi; March 06, 2020

26