JYOTI MARKETING And PROJECTS LTD. vs M. PANDIAN

-THE complainants, who are respondents herein, are brothers. THEy are living in a joint family alongwith their father. THE family owns seven acres of land which are cultivable only by lift irrigation by motor pump set. THEy purchased a Jyoti Unit Built pump, type 75 HL 3 A2 5.5. K.W./7.5 H.P. from appellant No. 1, i.e., M/s. Jyoti Marketing & Projects Limited, Madras (for short Marketing Agent) through the local dealer, M/s. Chittibabu Agencies (who were made respondent No. 3 in the complaint but have not been impleaded by the appellants in this appeal). THE pump set failed to work even on the first day of its installation. THE complainants took the said pump set to the local dealer for repairing it. THE local dealer after testing it said that the Motor of the pump set was defective and had a manufacturing defect. THE Marketing Agent was informed about the condition of the pump set. THEy informed the local dealer to send the pump set to M/s. Mahabir Export & Import Company (P.) Limited (now appellant No. 2 and who were respondent No. 1 in the complaint and hereinafter referred to as Manufacturers), who were the Manufacturers of the pump set. THEy also promised that they would arrange to provide a replacement of the pump set immediately. THE local dealer delivered the pump set at the Ambur office of the carrier (who had been arrayed as respondent No. 4 in the original complaint but has not now been impleaded in this appeal) for transporting it to Ghaziabad where the factory of the Manufacturer is situated. In July 1989, it was learnt that the pump set was still lying at the office of the carrier at Bangalore, for it could not be transported to Ghaziabad for want of form No. 31. In spite of reminders the Manufacturers did not send form No. 31. THE pump set was therefore, returned by the Bangalore office of the carrier to its place of booking i.e. Ambur and it is still lying there. THE Marketing Agent also failed to give the replacement of the pumpset. THE complainants, were thus unable to use the pump set ever since it was purchased and could not cultivate their seven acres of land for the last three years preceding the complaint. THE complainants, thus claimed compensation of Rs. 1,50,000/- in addition to the refund of the price of the pumpset which is Rs. 6,292.11/-. THE loss was estimated at Rs. 50,000/- for each of the years for which the complainants could not cultivate their land, i.e., for the years 1988-89,1989-90 and 1990-91.

THE local dealer, did not contest the com-plaint. THE carrier filed a counter reply to the complaint stating that for want of form No. 31, they could not transport the consignment to Ghaziabad (which is in another State). THE defective pump set was lying at their office and could be delivered back on payment of freight and demurrage charges. The appellants, i.e., the Marketing Agent (appellant No. 1) and the Manufacturers (appellant No. 2) contested the claim petition and filed a joint counter reply. They averred that there was no manufacturing defect in the pump set and in fact it was damaged by the complainants by tampering with it and by wrong handling. It was, however, admitted that the Marketing Agent through the local dealer (M/s. Chittibabu Agencies) had advised the complainants to return the pump set to the Manufacturers for replacement but pleaded that as the complainants had failed to return the pump set, they were not entitled to replacement. It was also averred that the complainants were not "Consumers" as defined in the Consumer Protection Act, 1986, as the purchase of the pump set had been made for a commercial purpose, i.e., for irrigation of sugar cane cash crops and selling it in the market

After considering the evidence, the State Commission found that the complainant had purchased the pump set for agricultural purpose and therefore, it could not be said that its purchase was for a commercial purpose and hence the complainants were "Consumers". It was further held that as the pump set was not replaced within the warranty period, therefore, There was deficiency in the rendering of service by the Manufacturers as well as by the Marketing Agent and the local dealer. About the pump set, it was held that it was grossly defective. The State Commission further held that on account of the non-replacement of the pump set, the complainants were unable to irrigate their land for three years. A nominal compensation @ Rs. 5,000/- per year was considered as just and proper to meet the ends of justice. It was also held that the carrier was not at all liable as he was not at fault. In the result the State Commission has ordered: (i) The Manufacturers, Marketing Agent and the local dealer will deliver a new pump set of similar make as was the defective one within 15 days after the receipt of the Order; (ii) The above parties would also pay to the complainant a sum of Rs. 15,000/- as compensation for loss of irrigation during the last three years; (iii) The local dealer shall take delivery of the pump set lying at the office of the carrier at Ambur on payment of freight charges only; (iv) The new pump set would be delivered to the complainants at their place free of any transport charges; (v) The said parties will pay Rs. 300/- as costs to the complainants;

The complaint as against the carrier was dismissed.

FEELING aggrieved with the Order of the State Commission, the Marketing Agent (appellant No. 1) and the Manufacturers (appellant No. 2) have come to this Commission in appeal. As noticed earlier, the local dealer has not been made party to this appeal nor he has filed any separate appeal against the Order of the State Commission. Before we proceed further, we mention here that the Manufacturers as well as the Marketing Agent did not dispute before the State Commission that the pump set supplied by the Marketing Agent to the complainant through the local dealer was defective. Otherwise also there is ample proof vide letters dated 5.10.1988 and 28.10.1988 written by the local dealer Marketing Dealer. In the former letter it was written that after operation of one week, coil of the motor of the pump set was burnt out and the same was re-moulded and completely changed with control units and the starter was also replaced and after operation of 10 days the motor again burnt out. The local dealer also requested the Marketing Agent to give the replacement of the pump set at an early date. In the latter''s letter, the local dealer also informed the Marketing Agent that when the motor was opened and inspected it was found that the rotor was defective and that there was manufacturing defect in the starter and due to it the winding burnt out. Vide letter dated 23.11.1988, the Marketing Agent instructed the local dealer that as the rotor of the pump set was defective, the pump set be sent to the Manufacturers in Ghaziabad and also held out that they would arrange a replacement of the pump set immediately. Hence, it is clearly established that there was a manufacturing defect in the pump set.

THE pump set could not be delivered back to the Manufacturers because the carriers could not take it to Ghaziabad since form No. 31 was not issued by the Manufacturers or the Marketing Agent. THE Marketing Agent through the local dealer asked the carriers to carry it to U.P. border from where the factory people would take it away. THE carrier refused to adopt this clandestine course. THE carrier, thus had no other option but to return the pump set to their Ambur office and ask the local dealer to take it back on payment of freight and demurrage charges. THE pump set was still lying at the office of the carrier on the date the Order was passed by the State Commission. THErefore, it cannot be said that the complainants are at fault in not returning the pump set to the Manufacturers. The liability of the Manufacturers and the Marketing Agent to replace the pump set with a new pump set of the same type, free from any defect, to the complainants was conceded before the State Commission. The main thrust of the arguments of the learned Counsel for the appellants was that the pump set had been purchased by the complainants for irrigating sugar cane cash crop and, therefore, it must be held that the said purchase had been made for a commercial purpose and hence, the complainants are not "Consumers" and consequently, their complaint is not maintainable under the Consumer Protection Act, 1986. This argument has to be rejected for various reasons. First of all, as mentioned earlier, the joint family for the benefit of which the pump set was purchased owns in all only seven acres of land. Therefore, to earn their living in a better way the family wanted to irrigate their sugar cane cash crop by lift irrigation and for that purpose they had purchased a pump set. It has been repeatedly held by this Commission that when a person buys any article for consideration to use it for some self employment in order to earn his own livelihood, the purchase is not for a commercial purpose. The other reason is that the irrigation of the land by the pump set had no proximate nexus with the ultimate produce or price of the crop. The crop depends upon various factors like seed, fertilisers, pest control etc. If the seed is bad then there will not be good crop. Moreover, practically most of the produce from the land comes to the market. Hence, we hold that the complainant falls within the term "Consumer" as defined in the said Act. For the foregoing reasons, we do not find any force in the present appeal and dismiss the same with cost, which we quantify at Rs. 1,000/-.

Y. Krishan, Member The limited but important question that needs to be considered in this case is whether the cultivation of cash crops, nay, more generally speaking, whether agriculture itself, can be deemed to be a commercial activity.

IN this case two brothers, who are respondents herein, owning seven acres of land and growing sugar cane crop, had purchased a motor pump set of 7.5 H.P. from the appellant for lift irrigation of the land being cultivated by them. They also claimed that they were earning an income of Rs, 50,000/- per year by the cultivation of sugarcane. The short point, therefore, is whether the purchase of the pumpset, which failed to work from the first day of its installation, can be deemed to be a purchase for commercial purpose as contended by the appellants. If the answer to this question is in the affirmative, then, the respondents would cease to be "consumer" as defined in the Consumer Protection Act, 1986. The appellants have contended that the words "for any commercial purpose" in Sec. 2(1)(d)(i) are wide enough to take in all cases where goods are purchased for being used in any activity directly intended to generate profits.

The State Commission, however, in its Order rejected this contention. They observed: "The fact that sugarcane raised in fields are sold for manufacture of sugar cannot render the operation of cultivation as anything but agricultural. Even paddy crops raised are ultimately sold in the form of paddy and it would be ridiculous to contend that agricultural operations raising paddy is cormmercial in nature. We, therefore, hold that the pumpset has been purchased by the complainants only for agricultural operations and not for any commercial activity. They are, therefore, consumers well within the meaning of Section 2(1)(d)(i) of the Act."

The appellants, as already stated, have challenged this finding of the State Commission in their appeal. I have given considerable thought to this matter.

I am of the view that the decision of the State Commission that agriculture as such is not a commercial activity is not tenable, keeping in view the character of present day agricultural operations, the volume of production and the income generated or capable of being generated through agricultural activity. I have no doubt that production of commercial crops per se is a commercial activity. Besides, modern agriculture is essentially commercial agriculture and as such agriculture is a commercial activity. Any purchase by a farmer for the purpose of better farming is clearly a purchase for commercial purpose.

IN the state of primitive economy, agriculture was essentially subsistence farming: crops were grown for self-consumption and there was little surplus production for marketing. Even, however, at the stage of primitive economy, cash crops such as cotton, jute, tea, coffee etc. were crops grown for marketing and, therefore, involved commercial activity. In primitive economy, the technology employed in farming was also primitive mostly human labour and animal power. As a result of mechanisation of agriculture, there was surplus food production beyond the necessities of the farmers, which necessitated marketing of the surplus produce. But agriculture has been revolutionized in the 20th century by the application of modern technology: Use of high yielding, disease and pest resistant seeds, application of chemical fertilisers, pesticides and weedicides and use of early maturing seeds etc. In consequence, there has been a phenomenal increase in the yield of crops. The Green Revolution in India in the field of wheat production is the best example of technological change in agriculture: from subsistence farming, agriculture has become commercial farming: from production for self-consumption now there is production for the market of the agricultural commercial surplus. The procurement operations of the Pood Corporation, Jute Corporation, Cotton Corporation etc. are a concrete evidence of commercialization of agriculture. The application of modern technology has also facilitated shift to the production of non-food or cash crop inasmuch as the food requirements of population can be met by intensive agriculture of relatively smaller area of land. In short, the increased agriculture output can no longer be absorbed within agriculture itself. Both food and non-food crops have to be marketed like nonagricultural goods. In other words, those engaged in agriculture are also engaged in trading or commercial activities. In consequence, profit has become the guiding principle in farm management. No wonder that often modern agriculture is described as Agro-business.

THE second point that needs to be considered is whether, in this particular case, the respondents are engaged in agriculture for the purpose of making a bare living. Considering that the respondents themselves have claimed that they expected an income of Rs.50,000/- per annum (the material on record contains no details whether this income is net or gross) is itself an index of the fact that the agricultural operations in this case cannot be deemed to be for bare subsistence or for just making a living by the respondents. In other words, by applying the means or income test also, the respondents are engaged in a commercial activity intended to generate profits.

I, therefore, uphold that the contention of the appellant that the respondents were engaged in a commercial activity and the purchase of the defective pumpset was for the purpose of trade or commerce. In the light of the majority Order in the case of Synco Textiles Pvt. Ltd. v. Greaves Cotton & Co. Ltd. First Appeal No. 22 of 1989, I (1991) CPJ 499 (NC), therefore, hold that the respondent complainants cannot be deemed to be consumers as defined under the Consumer Protection Act, 1986. The appeal, therefore, succeeds. The Order of the State Commission is set aside. There is no order as to costs. Appeal allowed.