Dismissing an appeal in M/s National Seeds Corporation Ltd v M Madhusudhan Reddy & Another, the Supreme Court held that there was nothing in the Seeds Act, 1966, and the Seeds Rules, 1968, that would indicate that the provisions of the Consumer Protection Act, 1986, are not available to farmers “who are otherwise covered by the wide definition of ‘consumer’ under section 2(d) of the Consumer Act”.
The two-judge bench of the Supreme Court also held that the remedy of arbitration is optional and despite the presence of an arbitration clause, a consumer is free to seek remedies before a consumer forum.
National Seeds Corporation had challenged orders of the National Consumer Commission that upheld the maintainability of consumer complaints filed by farmers under the Consumer Protection Act. National Seeds had argued that in view of the arbitration clause contained in the supply agreement, the only remedy available to the farmers was to apply for arbitration.
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The complaints had been filed by Reddy, a landowner from Andhra Pradesh who was engaged in agriculture and seed production, and other farmers. They sought compensation towards the cost of seeds, fertilizer and pesticides and value of a crop lost as a result of inferior seeds sold by National Seeds.
National Seeds had argued that the farmers and growers who claimed to have suffered loss on account of use of defective seeds sold and supplied by the company should have filed complaints with seed inspectors for action under the Seeds Act.
However, the court pointed out that the 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”.
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The legislative and regulatory update is compiled by Nishith Desai Associates, a Mumbai-based law firm. The authors can be contacted at nishith@nishithdesai.com. Readers should not act on the basis of this information without seeking professional legal advice.
