“S. Ambika Devi entered into a tripartite agreement with M/s. Nandan Biomatrix Ltd. and its franchisee M/s. Herbz India. She purchased 750 kilograms of wet musli at the rate of Rs. 400/- per kilogram. M/s. Nandan Biomatrix Ltd was to buy back the produce at a minimum price of Rs. 1,000/- per kilogram.  

It is relevant to note, the Explanation regarding the meaning of ‘commercial purpose’ was considered for the first time by this Court in Laxmi Engineering Works v. PSG Industrial Institute, (1995) 3 SCC 583. We find ourselves unable to conclude, the cultivation being undertaken was for a purpose other than for eking out a livelihood through ‘self-employment’.

There cannot be any dispute, 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).

The view, a consumer dispute may not arise out of a contractual arrangement, is erroneous since it falls foul of the clear stipulation under Section 2(f). Sakthi Sugars, II (1999) CPJ 4 (NC) cannot be relied upon to argue, a farmer selling his produce cannot under any circumstance amount to a ‘consumer’. In cases where the farmer has purchased goods or availed of services in order to grow produce in order to eke out a livelihood, the said produce being sold back to the seller or service provider or to a third party cannot stand in the way of the farmer amounting to a ‘consumer’.

Though the sway of seed companies over small farmers in India is, as of now, minimal, when agriculturists with such small landholdings do enter into agreements to grow crops on terms dictated by seed companies, it is in the hope of earning some profit to offset the cost of their inputs and generate some income for the household. Needless to say, the success or failure of the crop would make or break the income of the farmer for the entire season. This can result in situations where small and medium scale farmers find themselves trapped in contracts where they buy expensive seeds which turn out to be defective, resulting in a failed season and severe financial hardship. The problem of indebtedness all too often, manifests in the tragedy of suicide. 

The summary redressal available to the farmer under The Consumer Protection Act, 1986 may go a small but crucial way to provide instant relief in a sector which is already facing stress on several counts. To exclude such farmers from the purview of The 1986 Act would be a complete mockery of the object and purpose of the statute. We are alarmed by the growing trend amongst seed companies of engaging in frivolous litigation with farmers, virtually defeating the purpose of speedy redressal envisaged under The 1986 Act. This tendency to resist even the smallest of claims on any ground possible, by exploiting the relatively greater capacity to litigate for long periods of time, amounts to little more than harassment of agriculturists. We discourage such conduct.”

– Hon’ble Justice Mohan M. Shantanagoudar, M/s. Nandan Biomatrix Ltd. v. S. Ambika Devi, [Civil Appeal No. 7357 of 2010].