REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7543 OF 2004

M/s. National Seeds Corporation Ltd. … Appellant

versus

M. Madhusudhan Reddy and another … Respondents

WITH

Civil Appeal No. 622 of 2012 [arising out of SLP(C) No.32750 of

2009],

Civil Appeal No. 623 of 2012 [arising out of SLP(C) No.35350 of

2009],

Civil Appeal No. 7542 of 2004, Civil Appeal No. 3499 of 2009,

Civil Appeal No. 3498 of 2009, Civil Appeal No. 3596 of 2009,

Civil Appeal No.3598 of 2009, Civil Appeal No. 4509 of 2009,

Civil Appeal No. 4510 of 2009, Civil Appeal No. 4511 of 2009,

Civil Appeal No. 4512 of 2009, Civil Appeal No. 4513 of 2009,

Civil Appeal No. 4514 of 2009, Civil Appeal No. 4515 of 2009,

Civil Appeal No. 4516 of 2009, Civil Appeal No. 4517 of 2009,

Civil Appeal No. 4518 of 2009, Civil Appeal No. 4519 of 2009,

1

Civil Appeal No. 4520 of 2009, Civil Appeal No. 4521 of 2009,

Civil Appeal No. 4522 of 2009, Civil Appeal No. 4962 of 2009,

Civil Appeal No. 4798 of 2009, Civil Appeal No. 4964 of 2009,

Civil Appeal No. 4957 of 2009, Civil Appeal No. 4955 of 2009,

Civil Appeal No. 4954 of 2009, Civil Appeal No. 4963 of 2009,

Civil Appeal No. 4824 of 2009, Civil Appeal No. 4959 of 2009,

Civil Appeal No. 4967 of 2009 and Civil Appeal No. 4704 of 2009.

J U D G M E N T

G. S. Singhvi, J.

1.Leave granted in SLP (C) Nos.32750 of 2009 and 35350 of

2009.

2.Appellant – M/s. National Seeds Corporation Ltd. (NSCL) is

a Government of India company. Its main functions are to

arrange for production of quality seeds of different 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

2

allegation that they had suffered loss due to failure of the

crops/less yield 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 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

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

because the issues relating to the quality of seeds

are governed by the provisions contained in the

3

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 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

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

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

leading to the passing of orders by three Consumer Forums,

which have been impugned in Civil Appeal Nos. 7543 of

4

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 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

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

used the prescribed fertilizer but there was germination only

in 60% seeds and the height of the plants was uneven. The

germination in the remaining 40% plants was slow. Not only

this, flowering did not take place simultaneously. At the

request of the respondents, Area Manager of the appellant

inspected their field on 19.11.1999. He is said to have agreed

that there was less germination and the growth of the plants

5

was uneven, but 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 of the

Consumer Act and prayed for award of compensation of

Rs.1,79,505/- towards the cost of seeds, fertilizer and

pesticides and value of the lost crop with interest at the rate of

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

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

been used for cultivation and there were no rain during the

relevant period. It was also claimed that there was no

6

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

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 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 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 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.

No. Observed % Height of the FlowersStage Remarks

Plants

7

1. 45% 6 feet Flowering and Only two to

grain setting is three rows

in progress of flowers

in head is

setting seed.

(Convex

and

flat heads)

2. 10% 4 feet Flowering and No

the seed setting possibility

is started for further

growth.

3. 20% 6 feet Head dropping No growth

since seed setting is possible

is over.

4. 5% 4 feet Head dropping -do-

since seed setting

is over.

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

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 are concave.

In all the cases I have seen the heads are

not uniform in size. Twenty five percent of

heads which are dropping because of full

maturity are bigger in size while many are of

medium size.

8

I have noticed 0.1% of flowers with

multiple heads.

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 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

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.

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 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.”

(emphasis supplied)

9

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

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 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 29.6.1999 showing the purchase of fertilizers from

Chaitanya Chemicals & Fertilizers, Kurnool and the

photographs showing the unevenness in the plants. On behalf

10

of the appellant, an affidavit was filed along with copies of the

documents mentioned therein.

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. Accordingly, the complaint of the respondents

was allowed and the appellant was directed to pay

Rs.1,00,000/- 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% 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 had taken proper steps for cultivation but did not

get the expected yield due to faulty seeds.

11

5.9 The National Commission rejected the appellant’s

plea that the only remedy available to the respondents was to

file a complaint under the Seeds Act, which is a special

legislation vis-à-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 have decided the complaint without complying with

the mandate of Section 13(1)(c) of the Consumer Act was

negatived by the 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.

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

12

gourd’ seeds. 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 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 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.

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

13

filed a complaint under the Consumer Act and prayed for

issue of a direction to 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.

6.3 In the reply filed on behalf of the appellant, the

following objections 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

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)

of the Consumer Act.

14

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 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 Rao, 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 rejected.

The report of the Horticulture Officer was contested 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 purchased the seeds for earning livelihood by self-

employment and not for any commercial purpose and that

availability of remedy 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 relating to quality of the seeds can

15

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

seeds under Ex.A-1 and sowed the seeds in an

extent of 3 acres in his land. He sowed the entire

seeds purchased by him. 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 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

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 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

16

respondent were faulty and the appellant was liable to

compensate him.

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,

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

Indochem Electronic v. Additional Collector of Customs (2006)

3 SCC 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 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

17

appellant’s plea that the District Forum could not have

awarded compensation to the respondents without complying

with Section 13(1)(c) of the Consumer Act was negatived by the

National Commission by observing that after having used all

the seeds for sowing the respondent was not in a position to

provide sample for testing and the report of the Horticulture

Officer was sufficient for proving that the foundation seeds

supplied by the appellant were defective.

Civil Appeal No.4519 of 2009

7.1 The respondent is an agricultural labourer. He

used to take the lands of other farmers on lease and cultivate

the same 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 inspect the field and assess the damages,

but the latter did not respond. He then filed a complaint for

award of compensation of Rs.60,000/- with interest at the rate

18

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 and pleaded that the complaint was liable to be

dismissed because the District Forum was not competent to

decide 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.

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

Commissioner requested the Principal, Agriculture College,

Aswaraopet and Mandal Revenue Officer, Yerrupalem to

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

19

Commissioner. Notice of the date of inspection was given to

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:

“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. 1995 and also 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 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' 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 of

with inferior quality of tomato seeds. I conducted

Panchanama at the field to that effect on 4.1.1996.

20

Number of villagers gathered and they also opined

that the petitioner complainant has sustained heavy

loss this year. 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 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.”

(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 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 complied with Section 13(1)(c) and that

there was violation of the Andhra Pradesh Seeds (Control)

Order, 1983 and held:

21

“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 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

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

make an analysis/test, whichever may be

necessary. In other words, there has to be some

expert opinion to prove the fact. In the present case,

Dr. P. Sesha Reddy had inspected only 9 fields, the

details of which have been given by him in 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. 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 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 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

22

done. We find no substance in this submission. The

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 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 fields of the complainant/respondents 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 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 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)

8.Factual matrix of other cases is substantially similar except

that some of the respondents had purchased Castor seeds

while others had purchased Chilli seeds. In a number of

cases, the District Forums appointed Commissioner or

23

referred the matter to the officers of the Agriculture

Department for their opinion about the quality of seeds and

ordered payment 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 seeds sold/supplied to the respondents and made a

prayer before the District Forum that the same may be got

tested/analysed in an appropriate laboratory.

10.Learned counsel for the appellant argued that the impugned

orders are liable to be set aside because the District 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 legislation enacted for regulating the quality of

seeds and if the respondents had any grievance about the

quality of the seeds then the only remedy available to them

24

was to either file an application under Section 10 of the

Seeds Act or to approach the concerned Seed Inspectors for

taking action under Section 19 read with Section 21 of that

Act. They further argued that even if the complaints filed by

the respondents under the 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 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 have non-suited them in view of Section 8 of

the Arbitration and Conciliation Act, 1996. An ancillary

argument made by the learned 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.

25

11.Learned counsel for the respondents supported the

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 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 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 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

26

the reports of the Court Commissioners and other evidence

for recording findings that the seeds sold/supplied by the

appellant 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 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. Learned counsel also submitted that

the appellant could have produced 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 Seeds Act

is a special legislation vis-à-vis the Consumer Act and the

District Forums could not have entertained and decided

27

the complaints filed by the respondents because they could

seeks 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 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, 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

in the 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 are-

(a)Constitution of a Central Committee consisting

of representatives of the Central Government

and the State Government, the National Seeds

Corporation and other interests, to advise

28

those Governments on all matters arising out

of the proposed Legislation;

(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 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;

(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.”

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 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

29

under the Act. Section 4(1) empowers the Central

Government to 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 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 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. Sections 8-A to 8-E provide for

establishment of the Central Seed Certification Board and

30

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

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 9 or 10

can file an appeal under Section 11. Under Section 12, the

State Government is empowered to issue notification for

appointment of Seed Analysts and define the area of 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

the Seed 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

31

Laboratory. Section 19 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, 7, 9, 10, 11, 14(1)(a)

and (b), 16, 19, 20 and 21 of the Seeds Act, which have

bearing on the decision of the first question raised by the

appellant are reproduced below -

“6. Power to specify minimum limits of

germination and purity, etc. –

The Central Government may, after consulting with

the Committee and by notification in the Official

Gazette, specify –

(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 under Cl.(a) and the particulars

which such mark or label may contain.

7.Regulation or sale of seeds of notified kinds

or varieties –

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 –

(a) such seed is identifiable as to its kind or variety;

32

(b) such seed conforms to the minimum limits of

germination and purity specified Cl.(a) of Section 6;

(c) the container of such seed bears in the

prescribed 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.

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 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 shall be accompanied by such fees as may be

prescribed.

(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 conditions as

may be prescribed.

Provided that such standards shall not be

lower than the minimum limits of germination and

purity specified for that seed under Cl. (a) of Sec.6.

10. Revocation of certificate - If the certification

agency is satisfied, either on a reference made to it

in this behalf or otherwise, that-

33

(a) the certificate granted by it under section 9 has

been obtained by misrepresentation as to an

essential fact; 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,

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 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 decision is communicated to him and on

payment of such fees as may be prescribed, prefer

an appeal to such authority as 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 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.

(3) Every order of the appellate authority under this

section shall be final.

34

14. Powers of Seed Inspector. - (1) The Seed

Inspector may-

(a)take samples of any seed of any notified kind or

variety from-

(i) any person selling such seed; or

(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 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, 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 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 the samples

mentioned in clause (a) or 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 the sample under its own seal to the

35

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.

(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 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.

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

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-

(i) for the first offence with fine which may

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

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 provisions of this Act or

the rules made thereunder, the seed in respect of

36

which the contravention has been committed may

be forfeited to the Government.

21. Offences by companies. - (1) Where an offence

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 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 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 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

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 firm or other association of individuals; and

(b)“director”, in relation to a firm, means a partner in

the firm.”

37

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 of the Rules, which are also relevant for deciding the

first question are reproduced below:

“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 date upto 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.

(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 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 for determining the

purity.

38

23.Duties of a Seed Inspector. – In addition to

the 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) 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 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 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 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 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 shall thereupon

submit the report of his findings as soon as possible

to the competent authority.

39

(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 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

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., 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 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

40

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 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, 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 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

41

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 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 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-

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

42

imprisoned, but this cannot redeem the loss suffered by the

farmer.

18.At this stage, we may notice the background in which 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 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

adequate protection for their population as

consumers.

(b)To facilitate production and distribution

patterns responsive to the needs and desires of

consumers.

(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

43

national and international levels which

adversely affect consumers.

(e)To facilitate the development of independent

consumer groups.

(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 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

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 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:

44

(a)the right to be protected against marketing of

goods 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;

(c)the right to be assured, wherever possible,

access 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;

(e)the right to seek Redressal against unfair trade

practices or unscrupulous exploitation of

consumers, and

(f)right to consumer education.

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 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,—

45

(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 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 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;

Explanation.—For the purposes of sub-clause (i),

‘commercial purpose’ does not include use by a

consumer of goods bought and used by him

exclusively for the purpose of earning his livelihood,

by means of self-employment; (The explanation was

substituted w.e.f. 15.3.2003 by Consumer

Protection (Amendment) Act 62, 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 time being in force or

under any contract, express or implied, or as is

46

claimed by the trader in any manner whatsoever in

relation to any goods.”

21.Section 3 declares that the provisions the Consumer 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 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 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,—

(a)refer a copy of the admitted complaint, within

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

47

extended period not exceeding fifteen days as

may be granted by the 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 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 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

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 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 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

carrying out the necessary analysis or test in

relation to the goods in question;

(e)the District Forum shall remit the amount

deposited to its credit under clause (d) to the

48

appropriate laboratory to enable it to carry out

the analysis or test mentioned in clause (c) and

on receipt of the 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;

(f)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 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 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.”

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 Limited v. Tata Chemicals Limited (2000) 5 SCC

294, State of Karnataka v. Vishwabharathi House Building

Cooperative Society (supra), CCI Chambers Cooperative

49

Housing Society Limited v. Development Credit Bank

Limited (supra), Secretary, Thirumurugan Cooperative

Agricultural Credit Society v. M. Lalitha (2004) 1 SCC 305,

H.N. Shankara Shastry v. Assistant Director of Agriculture,

Karnataka (2004) 6 SCC 230 and Trans Mediterranean

Airways v. Universal Exports and another (2011) 10 SCC

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 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 (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 for

the settlement of consumer disputes and

matters connected therewith. In Section 3 of

50

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.

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 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 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.”

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 and/or the Rules is brought before the

law and punished. However, there is no provision in that

51

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 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 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.

24.In Kishore Lal v. Chairman, Employees’ State Insurance

Corporation (2007) 4 SCC 579, this Court was called upon

to consider 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 compensation by

52

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 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. Harjol Ahluwalia (1998) 4 SCC 39,

State of Karnataka v. Vishwabharathi House Building

Cooperative Society (supra), Secretary, Thirumurugan

Cooperative Agricultural Credit Society v. M. Lalitha (supra)

and observed:

“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 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 would not be barred and the

53

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 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 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 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 Court referred to the

54

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 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

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

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 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 replaced

and repaired whereas the other may be

required to be compensated by award of the

just equivalent of the value or damages for

loss.”

(emphasis supplied)

55

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 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

for arbitration. According to the learned counsel for the

appellant, if the growers had applied for arbitration then in

terms 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 that the only remedy

available to the farmers and growers who claim to have

suffered loss on account of use of defective seeds

56

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.

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/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 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 available to

a grower. Rather, it is an optional remedy. He can either

57

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 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 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 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 give 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 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,

58

the Act purports to operate in derogation of the

provisions of the Arbitration Act. Prima facie,

the contention appears to be plausible 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 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 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 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 the Act and by operation of Section 3

thereof, we are of 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 the parties.

The reason is that the Act intends to relieve

59

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

adjudication of the disputes would be

otherwise those given in the Act.”

(emphasis supplied)

30.In Skypay Couriers Limited v. Tata Chemicals Limited

(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 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.”

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 any other statute. It

does not extinguish the remedies under

another statute but provides an additional or

alternative remedy.”

60

32.The aforementioned judgments present a clear answer 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 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 of the definition of

‘consumer’. In the first blush, this argument appears

attractive but on a deeper examination, we do not find any

merit in it. The expression “any commercial purpose” was

considered in Laxmi 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:

“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,

61

(i) a person who buys any goods for consideration; it

is immaterial whether 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; (iii) but does not include a person

who buys 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

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 transactions especially

buying and selling of merchandise, on a large scale”

(Concise Oxford Dictionary). The 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)(i) of 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)(i) by Ordinance/Amendment Act,

1993.”

33. What needs to be emphasized is that the appellant had

selected a set of farmers in the area for growing seeds on its

62

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 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 the 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 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

63

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 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, 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 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

64

true status of the crops. The reports of 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 samples of the seeds for getting the same

analysed/tested in an 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 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

system of education. They have no idea about the Seeds Act

and the Rules framed thereunder and other legislations,

65

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. Ordinarily, nobody would tell a farmer that after

purchasing the seeds for sowing, he should retain a sample

thereof so that in 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 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

naïve to blame the District Forum for not having called

upon the respondents to provide the samples of seeds and

send them for analysis or test in the laboratory.

66

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 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 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. 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 has not

been explained. Not only this, the officers of the appellant,

67

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 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. Alavalapati

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

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

68

acre in addition to the cost of 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, this Court 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:

“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 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 sent for analysis. Moreover, if the

opposite parties have 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

69

application for sending the seeds to any 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 accord sent the seeds for analysis by an

appropriate laboratory.

* * *

It is clear from the letter of the Agricultural

Officer that the 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 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 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) CPJ 13,

E.I.D. 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

70

relating to non-compliance of Section 13(1)(c) in the context

of the complaints made by the farmers that their crops had

failed 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 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 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

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 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 Respondent/Complainant, this

71

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 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/Complainant

should have kept portion of seeds purchased by him

to be used for sampling purposes, is not only

unsustainable in law but to say the least, is very

unbecoming of a leading Public Sector Seed

Company to expect this arrangement.”

In the second case, the National Commission took cognizance

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 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 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-

72

standard/defective, the 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.”

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 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

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. Alavalapati

Chandra Reddy (supra) and in our view the proposition laid

down in those cases represent the correct legal position.

73

40.In the result, the appeals are dismissed. The appellant

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.

...……..….………………….…J.

[G.S. Singhvi]

………..….………………….…J.

[Asok Kumar Ganguly]

New Delhi,

January 16, 2012.

74