Case Note & Summary
The case involves a dispute between M/s Nandan Biomatrix Ltd., a seed company, and S. Ambika Devi, a small landholder. In 2003, the appellant advertised a buyback scheme for safed musli, a medicinal crop. The respondent entered into a tripartite agreement on 15.01.2004 with the appellant and its franchisee M/s Herbz India. She purchased 750 kgs of wet musli for sowing at Rs. 400 per kg and cultivated it on her land. The appellant agreed to buy back the produce at a minimum of Rs. 1,000 per kg. The respondent alleged that the appellant failed to buy back her produce, causing destruction of most of the crop. She filed a consumer complaint. The District Forum dismissed the complaint, holding she was not a 'consumer' under the Consumer Protection Act, 1986. The State Commission reversed, holding she was a consumer, and remanded for merits. The National Commission upheld the State Commission, noting the agreement involved both sale and service, and the respondent was a small landholder cultivating for livelihood. The appellant appealed to the Supreme Court. The Supreme Court considered whether the respondent was excluded from the definition of 'consumer' under Section 2(d) due to resale or commercial purpose. The court analyzed the definition, including the Explanation added in 1993, and relied on Laxmi Engineering Works v. PSG Industrial Institute. It held that the respondent was not engaged in resale but grew her own product using foundation seeds. The cultivation was for earning livelihood by self-employment, not for commercial purpose. The court dismissed the appeal, affirming the orders of the State and National Commissions, and upheld the cost of Rs. 2,500 imposed on the appellant.
Headnote
A) Consumer Protection - Definition of Consumer - Section 2(d) Consumer Protection Act, 1986 - Resale - The respondent, a small landholder, purchased foundation seeds from the appellant under a tripartite agreement for buyback of produce. The court held that the agriculturist grows his own product using foundation seeds and sells it to eke out livelihood, which does not amount to resale. The transaction is not for resale but for self-employment and livelihood. (Paras 9-9.1) B) Consumer Protection - Commercial Purpose - Explanation to Section 2(d) Consumer Protection Act, 1986 - Self-employment - The respondent cultivated safed musli on 1-1.5 acres of land for earning livelihood by self-employment. The court held that such cultivation is not for a commercial purpose as it is exclusively for earning livelihood by means of self-employment, following Laxmi Engineering Works v. PSG Industrial Institute. (Paras 8-9.2)
Issue of Consideration
Whether the respondent is excluded from the definition of 'consumer' under Section 2(d) of the Consumer Protection Act, 1986 on account of the transaction amounting to resale or being for a commercial purpose.
Final Decision
The Supreme Court dismissed the appeal, affirming the orders of the State Commission and National Commission. The court held that the respondent is a 'consumer' under Section 2(d) of the Consumer Protection Act, 1986, and the matter is remanded to the District Forum for disposal on merits. The cost of Rs. 2,500 imposed by the National Commission on the appellant is upheld.
Law Points
- Definition of consumer
- commercial purpose
- resale
- self-employment
- livelihood
- Consumer Protection Act
- 1986
