M/s Nandan Biomatrix Ltd. v. S. Ambika Devi & Ors.
Background
A small farmer (the respondent) responded to a seed company's advertisement and entered into a tripartite agreement to grow "safed musli," a medicinal crop, buying wet musli for sowing from the company, which promised to buy back her harvest at a guaranteed minimum price. When the company failed to buy back her produce, much of her crop was destroyed, and she filed a consumer complaint. The seed company argued she was not a "consumer" under the Consumer Protection Act, 1986, because the arrangement amounted to a "resale" of goods or was for a "commercial purpose," both of which are excluded from the Act's protection.
Decision Breakdown
The Supreme Court held that an agriculturist who grows crops using seeds purchased from a company, and who must sell that produce (to the company or elsewhere) to earn a living, is not engaging in "resale" or a "commercial purpose": she is earning her livelihood through self-employment, which is expressly protected under the Consumer Protection Act's definition of "consumer." The Court disapproved contrary National Commission rulings (like Sakthi Sugars) that treated farmer-sellers as automatically excluded, and emphasized the vulnerability of small farmers dealing with large seed companies. The Court dismissed the seed company's appeal, affirmed that the respondent was a "consumer," and imposed costs on the company for pursuing what it called frivolous litigation on a technical maintainability point rather than addressing the farmer's actual grievance.
Lesson Learnt
A small farmer who buys seeds and sells the resulting harvest back to the seller (or in the open market) to earn a livelihood remains protected as a "consumer" under consumer law, even though money changes hands both ways: agricultural self-employment is not treated as "commercial activity" for this purpose.