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,

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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  

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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  

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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  

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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  

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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  

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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

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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.

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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)

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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  

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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.  

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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  

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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  

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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.  

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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  

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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  

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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  

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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  

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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  

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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.

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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:

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“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  

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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  

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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  

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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.   

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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  

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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  

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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  

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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  

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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  

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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  

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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;

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(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-

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(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.

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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  

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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.”  

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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.

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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.  

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(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  

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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  

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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  

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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  

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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:

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(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,—

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(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  

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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  

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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  

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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  

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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  

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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  

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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  

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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)

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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  

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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  

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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,  

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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.”

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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,  

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(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  

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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  

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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  

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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,  

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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.

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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,  

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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  

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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  

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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  

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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  

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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-

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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.  

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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.  

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