M/S. NATIONAL SEEDS CORPN. LTD. VS
M.MADHUSUDHAN REDDY & ANR.
ON
16 JANUARY, 2012 SUPREME COURT
GROUNDS FOR CHALLENGING THE ORDER OF NATIONAL
COMMISSION,STATAE COMMISSION AND DISTRICT FORUM
AND
SUPREME COURT’S OBSERVATIONS
GROUND-1
Order 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:
1. 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 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').
“
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 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.”
SUPREME COURT
HELD ON THE POINT - 1
Supreme court
while dealing with both the above
objections referred to number of judgements by the apex court including Fair
Air Engineers Pvt. Ltd. And Anr. v. N.K. Modi reported in (1996) 6 SCC 385,
State of Karnataka v. Vishwabharthi House Building Coop. Society and Others
reported in (2003) 2 SCC 412, CCI Chambers Coop. Hsg. Society Ltd. v.
Development Credit Bank Ltd. reported in (2003) 7 SCC 233 and Indochem
Electronic and Another v. Additional Collector of Customs, A.P. reported in
(2006) 3 SCC 721. It has been observed by the Supreme Court in all these cases
that the Courts have to consider that the Consumer Protection Act, 1986 confers
additional jurisdiction upon Consumer Forums and not their exclusion.
Further,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.
Further, the salient features of the Consumer
Protection Bill were to promote and protect the rights of consumers
(b) the right
to be informed about the quality, quantity, potency, purity, standard and price
of goods t(a) the right to be protected against marketing of goods which are
hazardous to life and property;
o 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.
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
GROUND-2
2.
Another issue raised in this case was about the arbitration clause in
the agreement and it was contested by the defending party that matter can be
heard by the arbitrator only :
“ in view of the arbitration clause contained in the
agreements under Section 8 of the Arbitration and Conciliation Act, 1996
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”
SUPREME COURT
HELD ON THE POINT -2
Supreme court rejected the argument extended by the
respondant and relied upon the views expressed by the apex court in its earlier
orders in the matter of Secretary, Thirumurugan Cooperative Agricultural Credit
Society v. M. Lalitha (Dead) Through Lrs. And Others reported in (2004) 1 SCC 305,wherein it was held that the
existence of Arbitration Clause in agreement is no bar to the entertainment of
the complaint by the Consumer Forum, which is an additional remedy under the
Consumer Protection Act, 1986. The remedy provided under the Consumer
Protection Act, 1986 is in addition to the provisions of any other law unless
there is a clear bar,
GROUND-3
3. 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.
SUPREME COURT
HELD ON THE POINT :3
While checking with the facts of the case ,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.Hence it is observed
by the court that farmer is not expected to keep some samples with the presumption that they may need the
same for legal battle .The necessary things to be considered are the inspection
carried out by the inspectors about the quality of soil and method adopted by
the farmer while sowing the seeds which were found satisfactory.
GROUND-4
4. 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.
SUPREME COURT
HELD ON THE POINT :4
Respondants have raised the question of commercial
purpose of the farmers stating that crops were meant for re-sale.The actual
facts found are that the appellant had selected a set of farmers in the area
for growing seeds on their 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 .Hence on this
very point also ,court rejected the argument of respondants .
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