BEFORE THE DISTRICT FORUM: KURNOOL

Present: Sri. T.Sundara Ramaiah , B.Com B.L., President

And

Sri. M.Krishna  Reddy , M.Sc., M.Phil., Male Member

Thursday the 16^th day of September, 2010

C.C. No. 147/08

Between:

1) M/s Pravardhan Seeds Pvt., Ltd., Rep.by its Managing Director,   Sri.K.Morahari Rao, S/o Late Sitarma Rao, Its Authorised Agent M.Gorrepati Peraiah Chowdary, S/o Late Basavaiah, Working asManager Production and Quality Control of M/s Pravardhan Seeds Pvt., Ltd.,

    Having its office D.No.3-4-754, Bagh Lingampalli, Barakatpura Main Road, Hyderabad-500 001.

2) K.Gopal Goud, S/o Ramaiah,

    D.No.2/35, Byramkonda Village, Narayan pet Mandal, Mahaboob Nagar District-509 210.                               …Complainants

          -Vs- 

1.  A.P. State Seed Certification Agency, Represented by its Director, Hyderabad,

    Having its head office at 5-10-193, 1^st Floor, Opp. to Public Guardians, HACA Bhavan, Hyderabad-500 001.

2.  A.P. State Seed Certification Agency, Represented by its Senior Seeds Certification Officer, Kurnool,

    Situating at Office at D.No.76/75, Ragavendra Nagar, Kallur,   Kurnool-518 002

3.  The A.P. State, Represented by the District Collector,

    D.No.5/50, Collector Complex, Kurnool-518 002.                          …Opposite PartieS

                This complaint is coming on this day for orders in the presence  of  Sri. S.Chand Basha , Advocate, for complainant, and Sri. A. Tulasi Raj Gokul and Subramanayam, Advocates for opposite parties No. 1 and 2 and opposite party No. 3 is called absent set ex-parte and upon perusing the material papers on record, the Forum made the following

ORDER

(As per Sri. T.Sundara Ramaiah, President)

C.C. No. 147/08

1.     This complaint is filed under section 12 of C. P. Act, 1986 praying to direct the OPs

(a)    to pay a sum of Rs.3,60,561/- towards damages caused to

the complainants Hybrid NHH – 44 Cotton Seeds,

(b)    to pay interest @ 18% p.a from the date of petition  till  the amount is paid,

( c) to grant damages for truma ,  mental agony a sum of Rs.10,000/- ,   

(d)    to grant costs and such other relief as the Hon’ble Court deems fit and proper in the in the circumstances of the case.  

2. The case of the complainants in brief is as follows:-   The 1^st complainant is a registered incorporated company under Companies Act . It produces, develops agriculture Hybrid Seed and sell the same in the open market. The 2^nd complainant is the authorized farmer of 1^st complainants company. The 1^st complainant took the assistance of 2^nd complainant for production of NHH 44 Cotton Hybrid Seeds. The 2^nd complainant produced NHH 44 cotton hybrid seeds for and on behalf of the 1^st complainant company. The complainants shifted the cotton seeds so produced to OP.No.2 common godown at Kallur, for getting same certified as per Seed Act. The complainants used to pay rents, service charges, etc as demanded by Ops 1 and 2 from time to time for storing NHH 44 Cotton Hybrid Seeds till the certification is over and seeds were duly lifted by the complainants. The Ops 1 and 2 used to insure the seeds kept in the common godown where the hybrid seeds were stored for certification purpose. On 22-06-2007 and 23-06-2007 there were floods in the Handri river , Kallur ,Kurnool District due to which the undelivered NHH 44 Cotton Hybrid Seeds stocks of 1341 packets worth Rs.3.01,725/- of the complainants were sunk , badly damaged and became useless.  The Ops are bound to take much care of the cotton seeds in the godown till the seed was lifted by the complainants. The Ops due to their negligence did not renew the insurance policies. Failed to insure the certified seeds which were in the care and custody of OP.No.2. The Ops failed to deliver the Hybrid cotton seed to the complainants after certification. There was negligence on the part of the Ops 1 and 2 .The complainants requested the Ops 1 and 2 to pay damages. The complainants also got issued legal notice to the Ops to pay damages. Inpsite of several demands the ops did not pay the damages to the complainants. Hence the complaint.              

3.     OP.No.3 remained ex-parte. Ops 1 and 2 filed written version  stating that the complaint is not maintainable .The 1^st complainant  is a private limited company engaged in the business of production and selling of various crop seeds including NHH  44 variety of Hybrid Cotton Seed. The complainants used to avail seed certification services from the Ops 1 and 2 for commercial purpose. The complainants are not consumers as they availed the services of the seed certification from Ops 1 and 2 in respect of the seed which is to be sold in the open market to make business gains. It is a purely commercial activity.  Availing of services for any commercial  purpose by any person is excluded from the meaning of the Consumer U/s 2(1) (d) (ii)  of the Act. The complainants are not the consumers and this forum has no jurisdiction to adjudicate the alleged grievance set out in the complaint.

        There is no deficiency of service relating to the job of certification availed by the complainants. The Ops can not be held responsible for the loss sustained by the complainants due to vismajor. The claim of damages for such loss can not be adjudicated by the consumer Forum. The complainants did not pay any kind of charges towards rents and insurance for stocking the seed lot in the godown on the date of stocking of their seed lot. In the present case the seed test report and grow out test report was communicated to the complainants by way of displaying on notice board in the office of the OP.No.2 on 18-04-2007 and 17-05-2007 respectively. The complainants shifted the seed lots after seed processing to the godown of the Ops exclusively for the purpose of facilitating the Ops to draw samples for the purpose of conducting the above said two tests and not for storage as alleged by the complainants. By way of abundant caution, the ops insured the stocks in the godowns to cover the damages that may be incurred due to various reasons. The seed lot is stocked in the godwon only to avoid tampering of seed lots after drawing of sample and until the tagging is done. The claim  of the complainants that the Ops are responsible to safeguard , protect and insure the seed lot of the complainants and until they lift the lot from the godown is wholly baseless, and incorrect.  The Ops 1 and 2 are not responsible for the seed lot once the result of the two tests i.,e seed test and grow out test are communicated , as since the complainants are responsible for taking their seed lots immediately after communication of the result of  grow out  test which  in  the  instant  case  is   communicated  on 17-05-2007 . In the case of NHH 444 Hybrid cotton seeds the time period prescribed for completion of certification job from the date of seed sampling of tagging is 90 days. Insurance is done by the Ops for the period of 90 days. In the present case the complainants shifted their yield to  the  godwon  of  the Ops on 23-02-2007 and samples were drawn from the said seed lot on 23-02-2007 for the purpose of conducting the two tests mentioned above.  The Ops are not responsible to insure the godwon and the stocks contained beyond a period of 90 days since it is the responsibility of the complainants to lift the stocks by taking necessary steps to pack the seed lots at their own costs. The complainants deliberately did not lift the seed lot by getting  the same packed since the said variety of cotton has lost its demand in the market by the time the results of tests were communicated. The complainant is not a consumer within the meaning of Sec. 2(1) (d) (ii) of the Act. There is no deficiency of service on the part of the Ops .The forum has no jurisdiction to grant relief prayed for and that the complaint is liable to be dismissed.

4.     On behalf of the complainants no documents are marked. The sworn affidavit of the complainants is filed. On behalf of the opposite parties Ex.B1 to B6 are marked and sworn affidavit of Ops 1 and 2 is filed.     

5.     The points that arise for consideration are    

(i)     whether the complainants are consumers within the meaning of  Sec. 2(1)(d) (ii) of the Act?

(ii)    whether there is deficiency of service  on the part of the Ops 1 and 2.

(iii)    Whether the complainants are entitled to the relief as prayed for ?

1. To what relief?

6.     Both sides filed common written arguments.

7. Points No.1  :-  Admittedly the complainants produced NHH 44 Cotton Hybrid Seed during the Kharif season 2006-2007. The complainants shifted the seed lots after seed processing to the godown of the Ops 1 and 2 in the year 2007 for the purpose of facilitating the Ops to draw the samples for the purpose of conducting the seed test and grow out test. Admittedly the seed lots shifted to the godown of the ops were drowned in Handri River floods on 22-06-2007 and 23-06-2007. The main contention of Ops is that the complainants availed services of Ops for commercial purpose, that the complainants are not consumers within the meaning of Sec. 2(1) (d) (ii) of the Act and that the complainants are not entitled to any relief as prayed for. In the light of the facts it has to be decided as to whether the complainants are the consumers within the meaning of Sec. 2(1) (d) (ii) of the Act.

8.     Sec. 2(1) (d) (ii) of the Act reads as under :- “hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person  who ‘ hires or avails of the  services for consideration  paid or promised ,  or partly paid and partly promised,  or under any system of deferred  payment , when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purposes.”

9.     The explanation provided under Sec. 2(1) (d) of the Act reads as under :

Explanation: For the purposes of this clause , “commercial purpose” does not include use by a person of goods bought and used by him and services  availed by him exclusively for the purposes of earning his livelihood by means of self –employment” .

10.    Sec. 14 (1) (d) of the Act provides that the Forum under the Act can direct payment of compensation awarded by it to the consumer for any loss or injury suffered by the consumer due to the negligence of the Ops .

11.    The burden is on the complainant to establish that he is a consumer as defined Sec. 2(1) (d) (ii) of the Act. According Sec. 2(1) (d) (ii) of the Act a person who avails services for any commercial purpose would not fall within the ambit of consumer. If the service is availed for any commercial purpose, the person availing the services will not be a consumer and consequently complaint will not be maintainable. But a person who avails services for any commercial purpose exclusively for his livelihood by means of self employment is a consumer. In the present case it is not the case of the complainants that they sought the services of the Ops for commercial purpose. It is also not the case of the complainants that they availed services of the Ops exclusively for the purpose of earning livelihood by means of self employment.

12.    It is the case of the Ops that the activity of the complainants  is commercial in nature and that they availed the services of Ops 1 and 2 for carrying their commercial activity . It is argued by the learned counsel appearing for the complainant that the complainants produce cotton seed, and that the production of seed by agriculturist is not a commercial activity. The learned counsel appearing for the complainant in support of his contention that the agriculture is not a commercial activity relied on the following decisions.

1. 1957 AIR SC  768
2. IV (2008) C.P.J. 34
3. III (1999) C.P.J.10
4. IV(2004) C.P.J.181
5. II (2007) C.P.J.369
6. IV (2005) C.P.J.474  

13.    In the 1^st decision cited above at para No. 49  it is observed that the definition of agriculture would exclude all cultivation  of fibrous plants such as cotton, jute etc., In the 2^nd decision cited at  para No. 10 it is observed that the agriculture  as an economic activity can be and is being practiced for commercial purpose . The learned Judge in said decision also opined that the  purchase of sun follower seeds by the complainants was for a commercial purpose and as such no complaint was maintainable before the consumer forum. The decisions cited by the  learned counsel appearing for the complainants  have no bearing on the point to be decided except the decision No. 3 cited above. It is not the case of the complainants that they are agriculturist and that they depend on agriculture for their livelihood.  It is no where mentioned in the complaint that the complaints are agriculturists and that their livelihood is mainly on agriculture. In the complaint filed by the complainants it is stated that the 1^st complainant produces, develops hybrid seed through the 2^nd complainant and sells the same in open market. Admittedly during the pendency of the complainant the Ops served interrogatories  on the complaint. For question No. 10 that after certification of seeds and packing do you sell the seeds in the open market under your brand name , the complainants gave a positive reply. Therefore the contention of the learned counsel appearing for the complainants that the complainants are agriculturists and that the agriculture is not a commercial activity can not be accepted. Raising of crops by a farmer in his land  for his livelihood is not a commercial activity. In the present case the complainants are doing business of selling cotton seed in the open market after getting certification from the Ops 1 and 2. Admittedly cotton crop is a commercial  crop. The 1^st complainant  through the 2^nd complainant  produced the cotton seed  for the purpose of selling the same in the   market for profits.

14.    In the present case the complainant shifted the cotton lots to the godown of the Ops for the purpose of certification. The said stock was damaged due to floods occurred on 22-06-2007 , 23-06-2007 . The seed certification is wanted in order to enable the seed producing companies to market the seed produced by them for profit . Admittedly the complainants  wanted to sell the cotton seed after certification by the Ops in the open market. The complainants are entrepreneur by profession carrying on business of selling the seeds in open market. The complainants availed  the service of the Ops for commercial activity . The services of Ops 1 and 2 hired by the complainant have nexus with profit making activity by the complainant.

15.    The learned counsel appearing for the Ops relied on a decision reported in (1955) 3  Supreme Court Cases 583 .In the above said decision the Apex Court observed as follows:-  “Immediate purpose  as distinct from the ultimate purpose of purchase, the sale in the same form or after conversion and a direct nexus with profit or loss would be the determinants of the character  of a transaction – whether it is of “commercial Purpose’ or not. Thus buyers of goods or commodities for “self consumption” in economic activities in which they are engaged would be consumers  as defined in the Act ”.    In another decision reported in 1991 2 CPR 355         it is held that purchasers of seed to raise crops for sale on commercial basis are not consumers under Sec.2(1)(d) of C.P.Act, 1986. In the present case the complainants produced the Hybrid Variety of Cotton seed to sell in the open market after cerification from the Ops 1 and 2. The services hired by the complainants  have direct nexus  with the profit making activity by the complainant .

6.     In the decision citied by the e learned counsel appearing for the  complainant  reported in IV (2008) CPJ 34 also the Delhi  State Commission held that the commercial purpose is one when persons  hires/avails service for trading / selling that service further to earn profit. In the present case also the complainants hired the services of certification of seed in order to sell the said seed in the open market to make profit. The activity of the complainants in the present case is a commercial activity i.e, to produce the hybrid cotton seed through growers and sell the same in the open market  after certification by the Ops . The complainants are not the tillers  of spoil .On the other hand  they are entrepreneurs doing business  in seed. In the process of their activity they engaged the service of the Ops 1 and 2 in order to sale their seed in the open market  for a better price.  The complainants are not only the producers of hybrid cotton seed but also the traders engaged in sale of the hybrid seed after certification by the complainants. The complainants availed the services of the Ops for consideration for commercial purpose. The persons who avail the services for any commercial purpose are excluded from the definition of the consumer.  In the light of the facts and  the evidence available on record we have no hesitation to whole complainants are not the consumers within the meaning of Sec.2(1)(d) (ii) of C.P.Act and that complaint is not maintainable.

17 Points 2 and 3:  Admittedly the complainants shifted the hybrid cotton lots to the common godown  of the OP.No.2 for the purpose of certification of the seed. The said cotton hybrid lots were damaged in the floods that  occurred on 22-06-2007 , 23-06-2007 . It is submitted by the learned counsel appearing for the  complainant that the ops did not certify the seed within the  time, and that there was deficiency of service  on the part  of the Ops 1 and 2 . The word deficiency is defined in Sec. 2(1) (g) as follows: - any fault,  imperfection, short coming or inadequacy in the quality , nature and manner  or performance  which is required  to be maintained by or under any law for the  time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.” 

18.    Admittedly the Ops 1 and 2 collected fees from the complainants for certification of the seed.  In the interrogatories filed by them Ops 1 and 2 it is stated that the formal charges were collected by the Ops for certification of seeds sought by the complainant. Therefore it can be said that he Ops 1 and 2 agreed to certify the seed of the complainant after collecting the required fees including the godown charges. It is argued by the learned counsel appearing for the complainant that the Ops did not certify the cotton seed of the complainants  till  the seed was damaged in floods. According to the Ops that after receiving the results of the seed test and grow out tests they certified  the seed of the complainants and  that complainants failed to take delivery of their seed after tagging and packing. On behalf of the Ops Ex.B2 copy of the processing register is marked. In Ex.B2 the columns No.18 to 28 are not filled up. No certification number is found in Ex.B2. The date on which seed tags were issued to the complainant is also not mentioned. Had OP completed certification of the seed lots of the complainant he would have mentioned certificate number and date in column No. 18 of Ex.B2. Ex.B2 is not signed by the certifying officer. In the absence of the relevant entries in Ex.B2 it can not be said that the job of certification of cotton seed was done by the Ops. There is also no material to show that the results of seed test and grow out test were communicated to the complainants immediately. No document is filed by the Ops evidencing that the test reports were exhibited on the notice board in the office of  Op.No.2 or near  the godown.   

19.    The learned counsel appearing for the complainant relied on the following decisions in support of his contention that  there is deficiency of service  on the part of the Ops

1. 2007 (ii) CPJ 35 NC
2. 2008 (iv) CPJ 34 DELHI
3. 1995 BCR (Consumer) (4) Page 161
4. 1993 BCR (Consumer)  (3) page 54
5. 1993 BCR (consumer) (3) page 37
6. 2004 AIR JARKHAND PAGE 101
7. 2008 (2) CPJ 322 NC

In the above said decisions   it was observed that there was deficiency of service on the part of the Ops. There is no dispute.

20.    The Ops did not place any material on record to show that after receiving the test results they informed the complainants to take back the cotton seed and that the complainants wontenly did not shift the stock from the godown as there was no demand for the seed in the market during the relevant period. As already stated  there is no material  to show that the Ops certified the cotton seed before it was damaged. There is deficiency of service  on the part of the Ops . Admittedly the cotton seed lots of the complainants were damaged in floods when the said cotton lots were under the control of Ops. There is deficiency of service on the part of the Ops.

21.    Point No:-4  In view of our findings on points 1 and 2 the complainant  is not maintainable. The complaint is dismissed.

22.    In the result the complaint is dismissed. In the circumstances without costs.

Dictated to the stenographer, transcribed by her, corrected and pronounced by us in the open bench on this the 16^th day of September, 2010.

MALE MEMBER                                                              PRESIDENT      

APPENDIX OF EVIDENCE

Witnesses Examined

For the complainant : Nil            For the opposite parties : Nil

List of exhibits marked for the complainant:- Nil

List of exhibits marked for the opposite parties:  

Ex.B1.       Photo copy of Application Form NO.1

Ex.B2.       Photo copy of Extract of Processing Register,

Dt. 22-02-07

Ex.B3.       Photo copy of Intimation of result of seed test,

dt. 17-04-07.

Ex.B4.       Photo copy of Intimation of result of grow out test, dt. 17-05-07.

Ex.B5.       Photo copy of Circular NO.SCA/C/GB-83/2002-2003, dt.27-01-2003

Ex.B6.       Photo copy of Insurance policy, Dt. 20-02-2007.

        Sd/-                                                                  Sd/-

MALE MEMBER                                                            PRESIDENT

// Certified free copy communicated under Rule 4 (10) of the

A.P.S.C.D.R.C. Rules, 1987//

Copy to:-

Complainant and Opposite parties

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