M/S NANDAN BIOMATRIX LTD. versus S.AMBIKA DEVI & ORS.

Citation: [2020] 5 S.C.R. 344 · Decided: 06-03-2020 · Supreme Court of India · Bench: MOHAN M. SHANTANAGOUDAR · Disposal: Dismissed

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Judgment (excerpt)

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SUPREME COURT REPORTS
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M/S NANDAN BIOMATRIX LTD.
v.
S.AMBIKA DEVI & ORS.
(Civil Appeal Nos. 7357-7376 of 2010)
MARCH 06, 2020
[MOHAN M. SHANTANAGOUDAR AND
R. SUBHASH REDDY, JJ.]
Consumer Protection Act, 1986 – s.2(d) – The complainant -
respondent entered into a tripartite agreement with the appellant
and its franchisee – As per the agreement, the respondent purchased
750 kgs of wet musli for sowing from the appellant, at the rate of
Rs. 400/- per kg, and cultivated the same in her land – The appellant
was to buy back the produce at a minimum price of Rs. 1000/- per
kg from the respondent – The appellant failed to buy back her
produce – Consequent to which, the respondent lodged a consumer
complaint – The District Forum dismissed the complaint and held
that the same was not maintainable since the respondent was not a
‘consumer’ within the meaning of the Act, 1986 – The State
Commission set aside the order passed by the District Forum and
held that the respondent was a ‘consumer’ under the Act 1986 –
The National Commission upheld the finding of the State Commission
– On appeal, held: It is settled by the Supreme Court in the case of
Laxmi Engineering that an agreement for buy back by the seed
Company of the crop grown by a farmer cannot be regarded as a
resale transaction and he cannot be brought out of the scope of
being a ‘consumer’ under the Act, 1986 only on such ground –
Even in the instant case, the fact that there was a buy back agreement
for the musli crop would not bring the respondent outside the purview
of the definition of ‘consumer’ by rendering the buyback
arrangement a resale transaction or being for a commercial purpose
– The respondent had the freedom to sell her produce on the open
market as well if she was able to obtain a better price – However,
this aspect would not take away from the conclusion that the
respondent had entered into an agreement for growing musli crop
for the purpose of earning a livelihood, since an agriculturist would
always have to sell his produce in order to earn his livelihood –
[2020] 5 S.C.R. 344
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Thus, there is no reason to interfere with the order passed by the
National Commission affirming that the respondent is a ‘consumer’
within the meaning of Act, 1986.
Dismissing the appeals, the Court
HELD: 1. Notably, it was emphasized in the case of Laxmi
Engineering that the employment of a few persons for the purpose
of assistance in the activity carried out by the purchaser would
not automatically render the commercial activity as not being for
self-employment and for earning his livelihood; rather, this would
have to be determined from the facts and circumstances of a given
case. [Para 8.2][351-H; 352-A]
2. In the matter on hand, though the Appellant has sought
to project that the Respondent were cultivating musli on a large
scale and with a profit motive, this Court finds itself unable to
conclude that the cultivation being undertaken was for a purpose
other than for eking out a livelihood through self-employment.
[Para 9][352-B]
3. In matters such as the one on hand, the agriculturist
buys the foundation seeds from the seed company, or the company
itself reaches out and requests the farmers to generate the seeds
so that it may market the same. By accepting such an offer, and
after purchasing the foundation seeds from the seed company,
the agriculturist, with hard labour and sweat, produces seeds to
be marketed by the seed company. Thus, the agriculturist is not
reselling any product, but grows his own product by utilizing the
foundation seeds. There cannot be any dispute that the
agriculturist has to sell his product in the open market or to the
seed company, as the case may be, in order to eke out his
livelihood. In other words, the agriculturist sustains himself by
selling his product. This cannot be termed as resale or activity in
furtherance of a “commercial purpose” bringing him out of the
purview of the definition of “consumer” under Section 2(d).
Rather, it is purely for the purpose of earning his livelihood by
means of self-employment. [Para 9.1][352-C-E]
4. It is amply evident in the case of Laxmi Engineering that
an agreement for buyback by the seed company of the crop grown
M/S NANDAN BIOMATRIX LTD. v. S.AMBIKA DEVI & ORS.
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[2020] 5 S.C.R.
by a farmer cannot be regarded as a resale transaction, and he
cannot be brought out of the scope of being a “consumer” under
t

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