LAXMI AGRICULTURE SEED STORE vs DHOOP SINGH

THIS Revision Petition is against a common order dated 20.8.1993 passed in Appeal Nos. 263, 274 to 277 and 279of 1993 by the District Forum, Hissar. Those appeals were in the nature of cross appeals preferred by the Complainants and Opposite Parties.

THE facts are that six separate complaints were preferred before the District Fourm, Hissar by the present respondents (hereinafter referred to as the Complainants). It was the common case of the Complainants that they have purchased Sunflower hybrid Mega 363 Seed from M/s. Laxmi Agricultural Seed Store (now Revision Petitioner). The common grievance of all the Complainants was that the said Seeds did not at all germinate despite the fact that they were shown in well prepared fields according to the instructions given in the relevant brochure of the Supplier. According to the Complainants that was due to the supply of sub-standard, inferior and defective quality of seeds. The matter was brought to the notice of Agriculture Department and other authorities in the State and it was acknowledged that as a matter of fact the seed was defective. Shri Harish Mehta, one of the Complainants, is in Government service and he is posted as the Circular Agricultural Officer. According to him the Hansi based Laxmi Agriculture Seed Store had widely distributed printed material about the prospects and better yield of the said Seed. Relying upon said assurances the Complainant and his brothers had purchased Sunflower seeds from the said Dealer which was sown as per instructions contained in distributed pamphlets. However, there was hardly any germination. Consequently, he had suffered heavy financial loss. Shri Mulkh Raj Mehta one of the other Complainants had pleaded that he had returned 7kg. seeds to the Dealer who refunded the price thereof and admitted the poor quality of the seeds. The Dealer� present Revision Petitioner herein contested those complaints. It was pleaded that they were not liable for the loss because as a matter of fact the seed is imported from Australia by M/s.Omega Agriculture Seed, Bombay and the supplier thereof was Omega Agro, New Delhi as well as the Zamindara Sewa Centre, Shahabad Markanda. The objection was that non-joining of these parties was fatal to the case. It was, however, admitted that the Sunflower seed was sold to the Complainants but in sealed packets as supplied to them by M/s. Zamindara Sewa Centre. The whole blame for the sub-standard and inferior quality of Seed was sought to be shifted to the importers as well as the distributor. It was also denied that agricultural fields were properly prepared or that the requisite amount of fertiliser etc. was put in by the Complainants.

IN the complaints filed before the District Forum in addition to the present petition which was added as Opposite Party No. 1, Omega Agriculture Seed (India) Limited, 40 Bank Street, Fort Bombay, Omega Agro Pvt. Ltd., New Delhi and M/s. Zamindara Sewa Centre, Shahabad had also been arrayed as Opposite Parties Nos. 2 to 4 respectively. As noticed earlier Omega companies had imported and supplied the seeds in question. In a detailed judgment the District Forum found that the seeds were defective. The operative part of the order of the District Forum runs as follows: (A) (i) Laxmi Agriculture Seed Store would refund the amount of Rs. 22,200/- to Mehta Brothers as already directed by Haryana Government vide letter dated 17.3.1993. (ii) This agency would also refund Rs. 1200/- to Dhup Singh and further Rs. 5700/- to Mulakh Raj Mehta. (B) (i) Omega A.G. Bombay and Omega Agro, New Delhi would pay the amount of Rs. 64,000/- to Mehta Brothers as calculated at the rate of Rs. 1500/-per acre for 37 acres. The area has been calculated at the rate of 2.2. kg. seed per Killa and quantity of seed purchased by them is 74 kg. (ii) These Companies would further pay the amount of Rs. 3,000/-to Dhup Singh at the rate of Rs. 1500/-Killa. He had purchased only 4 kg. seed and had sown the same in 2 Killas. These companies are also liable to make the payment of Rs. 13,500/- to Mulkh Raj at the rate of Rs. 15,00/- per Killa for 9 Killas since he had sown 19 kg. seed in 9 Killas calculated at the rate of 2.2. kg. seed per Killa.

IT may be mentioned here that originally only Laxmi Agriculture Seed Store was made party in the complaint. However, as soon as the said Opposite Party disclosed before the District Forum that the seeds were imported and supplied by Omega Companies they were impleaded as parties. Feeling aggrieved by the order of the District Forum, Laxmi Agriculture Seed Store preferred an appeal before the State Commission while Omega Agro Pvt. Ltd. and Omega India Ltd., Bombay jointly preferred one appeal. The Complainants also preferred four separate appeals praying for enhancing the compensation. The State Commission did not find force in any of those appeals and dismissed all the appeals.

IT appears that Omega Companies who are importers of the seeds have since paid the compensation as ordered by the District Forum. Only Laxmi Agriculture Seed Store has come before us by way of this revision. The main argument is that the Complainants did not come within the ambit of the definition of the ''consumer'' as defined in the Consumer Protection Act. It was pointed out that all of them have sizeable holdings and were not marginal farmers dependent upon only on the land for their existence. It was also submitted that the growing of Sunflower crop was primarily commercial crop and therefore it should be held that the seed was purchased for commercial purpose. The State Commission relying upon its own exhaustive order reported as Surender Kumar v. M/s. Escorts Ltd. and Anr., 1(1993) CPJ 438. after consideration of the various orders passed by this Commission held: "From the aforesaid conspectus of the relevant precedent, the language of the statute and upon larger principle, it would emerge that Parliament has clearly employed the phrase "commercial purpose" in its generic sense. It would appear that "agriculture'' is a genus distinct from ''commerce, and consequently "commercial purpose" and agricultural, purpose are genetically different. The core issue is whether a plainly agricultural purpose can be labelled as a "commercial, one? In our view, it cannot be so." It was further remarked in that case. "Perhaps in the end of one may with consideration poetic license borrow the analogy of Kipling''s famous couplet, to conclude, that agriculture is agriculture, and commerce is commerce, the twain shall never meet. In the light of the aforesaid somewhat exhaustive discussion, the answer to the question posed at the outset has necessarily to be rendered in the affirmative. It is held that "commercial purpose" is a thing apart and distinct from a "agricultural purpose" under the Act."

This Commission has also held that purchase of seed for the purpose of agriculture is not a purchase of an article for commercial purpose. Reference can be made to the order passed by this Commission in Revision Petition No. 499 of 1993, titled Managing Director, National Seeds Corporation v. Prem Parkash Jain, decided on 28th March, 1994. We do not find any illegality or irregularity in the exercise of jurisdiction by the State Commission. Accordingly we dismiss this Revision Petition with costs which we assess at Rs. 1,000/- to be paid equally to the various Complainants. Y. Krishan, Member I have been of the view that purchase and sale of seeds of commercial crops is, on the face of it, sale of goods for a commercial purpose and therefore, would not fall under the Provisions of the Consumer Protection Act. In addition, I have been of the view that agriculture can no longer be treated as different from industry and commerce. Agriculture has ceased to be subsistence economy. With mechanisation and use of fertilisers, insecticides, pesticides and hybrid seeds, agriculture has emerged as an industry in which production is organised for the market and not for maintenance and self-consumption by the persons engaged in this industry. I am aware that I am in minority in holding this view but this case provides a fresh significant material to reinforce my views in the matter and justifies a fresh examination of the matter. 2. In this case, it would be seen from the order of the State Commission that, among the Complainants, one was an Advocate of considerable standing while the others were of equal stature as Dy. District Attorney and Circle Agricultural Officer. All of them have sizeable holdings and were in no way marginal farmers depending only on the land for their existence. Irrespective, therefore, of the general question whether agriculture can be deemed to be a commercial and industrial activity, it is evident that the Complainants, in this case, are absentee landlords and for .them agriculture is essentially a commercial activity for augmenting their income. 3. The question whether agriculture is and can be in the nature of a commercial activity has been examined in depth by the State Commission of Haryana in Surender Kumar v. M/s. Escorts Ltd. and Anr. 1(1993) CPJ 438. On the basis of the meaning of the words "agriculture" and "commerce" in standard dictionaries and Encyclopaedia Britanica, the State Commission, speaking through its President, has observed that "agriculture" and "commerce" are two entirely distinct and distinguishable activities. Hence "commercial purpose" cannot appertain to agriculture. In agriculture the primary purpose is not buying and selling as in the case of commerce nor manufacturing as in the case of an industry. The State Commission was of the view that "agriculture, and N commerce, are things apart; agriculture consists of raising of crops and good husbandry to provide the sustenance for the life of a community. It is not mere trading, exchange or profiteering in commodities and that in a broader aspect it would be incongruous to label agriculture either as trade or commerce. 4. The State Commission has further referred to the distinction between ''agriculture, and ''commerce'' in the Income Tax laws to support its point of view. According to the Income Tax Act in computing the total income for the purpose of tax, agricultural income cannot be included. The State Commission has therefore, observed that in the larger perspective income tax is levied on all other commercial and professional and industrial activities but agricultural income stands in a class apart. Therefore, "this is yet another statutory and meaningful recognition of the difference which sharply divides the concepts of ''agriculture'' on I the one hand and ''commerce'' on the other". 5. There is no doubt that ''agriculture'' and commerce'' are distinct and distinguishable economic activities. "Commercial purpose" is an adjectival phrase denoting the purpose of an activity and can appertain to any form of economic activity, agriculture, commerce, trade or industry. Many persons practice medical profession. By no stretch of imagination, medical profession can be called "commerce" but there is no doubt that medical profession is also being practiced for a commercial purpose as would be evident from the running of many hospitals and nursing homes. Likewise, educational institutions are not any form of commerce. But many private educational institutions are being run for a "commercial purpose". 6. In my previous orders already cited above, I have mentioned commercialisation of agriculture as a consequence of modern, scientific farming of economic holdings. In fact IADP (Intensive Agriculture Development Programme) is intended to develop agriculture from subsistence farming into commercial farming. Agricultural production is produced for the market. 7. As regards the distinction between agricultural and non-agricultural incomes for the purposes of income tax, the Act makes a distinction not because of agricultural income stands in a class apart to be distinct from income from commercial, professional and industrial activities but because agricultural income tax is a State subject in the Constitution. Agricultural income has to be excluded from the purview of income tax by virtue of Entry 82 of List of the Seventh Schedule to the Constitution. Under Entry No. 46 of List II of the Seventh Schedule it is open to the States to impose tax on agricultural income. In other words, agricultural income is also liable to income tax but not under the Income Tax Act made by the Union Government. In short, agricultural income, in principle, is as much liable to income tax as non-agricultural income; only the authorities levying the income tax on such incomes are different.

IN fact many States in India levy taxes on agricultural incomes even though the leviable tax is low and the levy is nominal. In the context of mobilisation of resources Planning Commission have been recommending taxation of agricultural income; progressive agricultural income tax is considered a necessity to secure larger investible and marketable surpluses from agriculture. In this connection, it would be relevant to recall that the Government of India appointed the K.N. Raj Committee on taxation of agricultural wealth and income which submitted its report in 1972 recommending levy of tax on agricultural holdings. Agricultural incomes have not been taxed as in the case of non-agricultural incomes because of resistance from the States.

FACTUALLY , therefore, agriculture as an economic activity can be and is being practiced for "commercial purpose". The fact that agricultural income is excluded from the purview of Income Tax Act is not a test to decide whether agriculture is a totally different form of activity void of any ''commercial purpose''. In view of this, I am of the opinion that the purchase of Sunflower Seeds by the complainants was for a ''commercial purpose'' and as such no complaint was maintainable before the Consumer Forums. In the result, there was wrongful exercise of jurisdiction by the District Forum and the State Commission. The Revision Petition is allowed and the orders of the State Commission and the District Forum are set aside. There is no order as to costs.