NATH SEEDS PVT. LTD. vs DIRECTORATE OF SEED CERTIFICATION AGENCY M.S.

M/s. Nath Seeds Ltd., Aurangabad, the Government of Maharashtra through the Director, Maharashtra State Seeds Certification Agency, Pune and Seed Dealers of M/s. Nath Seeds Ltd. have preferred 14 appeals against the orders passed by the District Forum, Yavatmal. The orders in all these 82 complaints have been passed on different dates. The District Forum, Yavatmal has passed orders on 26.3.1997 in 30 complaints, in another 30 complaints on 11.4.1997 and in 22 complaints in October, 97. Appeal Nos. 685/97 and 688/97 arose out of the order passed by the Amravati Forum on 23.5.1997. In all these 83 appeals, M/s. Nath Seeds Ltd. have made the State Government as one of the respondents alongwith the original complainants. The State Government has also filed 74 appeals through the Director, Maharashtra State Seeds Certification Agency, Pune arising out of the said orders passed by the District Forum, Yavatmal. By this common order, all these 171 appeals are being disposed of.

IN order to appreciate, it is necessary to mention the facts and circumstances out of which the original complaints arose. The Punjabrao Krishi Vidyapeeth, Akola was engaged in the research and development of high yielding variety of cotton seeds right from the year 1981 with a view to provide high yielding cotton seeds at cheaper rate since cotton is the main cash crop in two Divisions of Vidarbha. IN 1989-90, the University developed hybrid cotton seed known as P.K.V. - Hybrid 3 known as CAHH -468. This variety was found to be more beneficial for the following reasons : (1) There was saving in the labour expenditure since the pollination could take place naturally and not by picking by hands; (2) No paper bags or straw tubes were necessary for effecting pollination or preservation. (3) The Seed Production Process was simple and not complicated; (4) The quantity of male seeds required was much less; (5) The dropping of flowers was much less with the result, there was more yield; (6) And lastly, the production cost per seed came down to Rs. 20/- per kg. as against Rs. 192/- per kg. in other processes.

During the year 1991, a small quantity of this variety seed was produced and since there was a large demand for this variety, knows as CAHH-468 the Seed Production Programme was taken up during the year 1992-93 season by a number of seed producing Companies in the State. Out of them, the appellants Nath Seeds Pvt Ltd., Aurangabad had produced 48.34 quintals of CAHH-468 seeds. For this purpose, under the orders from the Commissioner of Agriculture, dated 31.5.1991, the P.K.V. Akola had supplied parent female line 2 kgs. of CAK 32 A and 1 kg. of CAK 32 B to the appellant M/s. Nath Seeds Ltd. These were seeds of A and B line. Neither the Commissioner (Agriculture); nor the P.K.V., Akola had supplied any male line DHY- 286-I.R. seeds to the appellant Nath Seeds Ltd. The seeds produced by M/s. Nath Seeds Pvt. Ltd. was informally certifed by the State Seed Certification Agency and was released during the sowing season of 1993-94. A large number of agriculturists in Yavatmal, Akola and Amravati Districts had purchased this variety of seeds and sown the same in their fields. There was a very good vegetation growth and the flowering was very heavy. But, subsequently, the flowers dropped down yielding no cotton produce to the agriculturists. Therefore, a large number of complaints were made. The Seed Certification Agency at District, Division and at the State level were involved in the field inspection work since there were complaints on a very large scale from the agriculturists. In this context, it is also necessary to mention that this variety, viz., CAHH, 468 was notified under Section 5 of the Seeds Act on 17.8.1993 i. e. after the sowing season was over. Prior to that, discussions and meetings were held at various levels and the State Level Apex Committee had directed the State Seeds Certification Agency to issue Provisional Seed Certificate in order to enable the seed producing Companies like the appellant Nath Seeds Ltd. to market the seeds produced by them. This was protested by the Seed Certification Agency time and again, But, it had to yield to the decision taken by the Committee headed by the Secretary to the Government in Agriculture Department. The District Committee of Yavatmal, Akola and Amravati had visited the fields and it was found that the complaints were genuine and the cotton plants were not of the variety of CAHH-468. These field visits also revealed that a very large percent of the plants were sterile and did not yield any cotton produce to the complainant- agriculturists.

It is on account of the failure of cotton crop that several agriculturists approached the District Forum Yavatmal, Akola and Amravati with their complaints. In the orders passed on 26.3.1997,'' the District Forum has ordered the compensation of Rs. 6,000/- per acre on account of loss of cotton produce with interest of 18% from the date of complaint till full payment. The Forum further ordered the refund of the cost of the cotton seeds @ Rs. 160/- per bag with 15% interest from the date of purchase of the seeds till realisation. The District Forum has further ordered the payment of Rs. 5,000/- by way of compensation and cost of Rs. 2,000/- to each complainant. Except the refund of the cost of the cotton seeds, the remaining amounts were to be paid by M/s. Nath Seeds Ltd. and the Government of the Maharashtra through its State Seeds Certification Agency jointly and severally. The dealers were directed to refund the price of the cotton seeds with 18% interest. These orders of the District Forums, Yavatmal and Amarvati are under challenge by M/s. Nath Seeds Ltd., the State Government and the seed dealers as mentioned above. All these appeals arise out of the orders passed by the District Forum, Yavatmal and two by Amravati Forum which relate to one important issue; viz. (1) whether the CAHH-468 variety cotton seeds marketed by the appellant- Nath Seeds Ltd. were defective to hold the appellants responsible for the defects in the said seeds and order the compensation, cost, etc. to the complainants. Since all these 3 types of appeals filed by the Seed Producing Company, the Seed Certification Agency and the dealer pertain to this single point, they are being decided by this common order.

ALL these 171 appeals have been heard together since they involve similar facts and only one important point, viz., the defective cotton seeds of CAHH-468 variety during the sowing season of 1993. At the initial stage, some parties expressed their desire to submit additional information and affidavit at the appellate stage. Therefore, all the parties in all the appeals were permitted to file additional documents and affidavits, if any, at the appellate stage although normally such a request is not entertained. Since there were some comments on the .K. V., Akola, it was also given an opportunity to clarify its position in respect of development of this variety of cotton seed viz. CAHH-468. The written statements, affidavits, written submissions and documents filed by the parties have been taken on record. We have obtained the original records of Complaint No. 413/93 and 39/94 from Yavatmal District Forum. The Government of Maharashtra through the Director, Maharashtra State Seed Certification Agency, Pune (which will be referred to here after as "the State" for the sake of brevity), has challenged the order passed by the District Forum, Yavatmal. The State has filed in all 74 appeals. The grounds in all these appeals are similar. The grounds from (a) to (f) are of routine nature. During the course of arguments and even in the written arguments subsequently submitted by the State in September, 1998 the State has not raised the issue of not affording any fair and reasonable opportunity to the State to lead evidence in support of its contentions. It has also been contended that the experts'' opinion was necessary for the decision of the complaints before the Forum. In fact, in the written arguments submitted on verification by the Assistant Administrative Officer of the appellant State has approached the entire problem in a different manner. Therefore, the grounds mentioned in the appeal memo do not deserve to be considered in detail as they are of routine nature and not seriously contested at the stage of arguments.

THE appellant State has submitted that the P.K.V., Akola had developed CAHH-468 (PKV-HY 3) in the year 1989-90. THE seed was cheaper as compared to PKV-HY2 variety of cotton seed. In the year 92-93, the foundation seed production programme of CAHH-468 was undertaken in the State on a large scale. THEre were complaints regarding the seed produced and marketed by Nath Seeds, Ajit Seeds and Ramchandra Patil Society of Aurangabad. It is admitted by the State that the seeds marketed by these three agencies were found to be defective and prosecution under Section 420 of the Indian Penal Code was launched against them. It is further admitted by the State that a review was taken by Mahatma Phule Agriculture University in 1994 regarding the seeds produced in the year 1993. It was observed that the tests conducted by the PKV on their experimental fair were not proper and that genetic purity was not properly inspected and verified by the Seed Certifying Officers viz. Sarvashri J.B. eshmukh, C.G. Uttarwar and G.V. Nanoti against whom the departmental enquiries have been ordered and charge-sheets have been served on them. It is further submitted by the State that it is the duty of the seed producers to ensure the purity of the seed and this is binding on them and that they are supposed to maintain true and accurate accounts of the seed released for marketing. It is mentioned in its submission that 16 lots of 1033 bags were released for sale in favour of Nath Seeds against which Nath Seeds have sold out 1298 bags i.e. . they have sold out 265 bags in excess of the bags finally released by the Seed Certification Agency. In Akola District alone, 131 excessive bags were sold to the agriculturists. It is further admitted by the State that on certain bags, Nath Seeds Co. had affixed their own seal and it did not bear the seal of Seed Certification Agency. THE State has further revealed that Nath Seeds, Aurangabad had purchased 2 kgs. of CAK-32 A and 1 kg. of CAK-32 B from the PKV as per the allotment order of the Commissioner (Agriculture) on 31.5.1991. Nath Seeds, Aurangabad had not purchased the male seeds from the PKV. It is further revealed by the State that Nath Seeds had purchased 30 kgs. of female and 56.10 kgs. male foundation seeds from Ajit Seeds, Aurangabad. It is also revealed that Nath Seeds had produced 274 excessive bags of male foundation seeds as compared to the total quantity of female seeds purchased by them from the PKV, Akola. Nath Seeds, Aurangabad have admitted that they have purchased male parent seeds from Ajit Seeds, Aurangabad and, therefore, at the instance of Nath Seeds, Ajit Seeds were also called upon to submit their say. It has been apprehended by the State that Nath Seeds might have produced their own female seeds to match the quantity of excessive male seeds purchased by them from Ajit Seeds and might have produced defective seeds without ringing these facts to the notice of the Seed Certification Agency. It is submitted by the State that it is the legal and moral responsibility of the seeds producers to maintain the quality and genetic purity of the seeds. It is further submitted that Nath Seeds have marketed cotton- seed of C AHH-468 variety on a large scale during the sowing season of 1993 and they must have earned a minimum profit of Rs. 8 lakhs. It is emphatically submitted that it is the legal responsibility of the seed producers to maintain the purity as per the specifications laid down by the breeder. THE State has submitted a statement of the complaints received in respect of Nath Seeds, Ajit Seeds and Ramchandra Patil Cooperative Society. THEre were 424 complaints against Nath Seeds, 98 against Ajit Seeds, and 26 against Ramchandra Patil Cooperative Society. All these complaints were enquired into and the names of these complainants have been tabulated by the Director of Agriculture. THEre is an important document in the form of a Confidential Enquiry Report by the Commissioner (Agriculture) Maharashtra State. This report was submitted on 1st November, 1994 to the State Government after a comprehensive enquiry into all the aspects of the serious occurrence which had affected very large number of agriculturists in 8 Districts of Aurangabad and Amravati Revenue Divisions. According to this report, 453 samples of this variety of seeds viz. CAHH-468 were collected from Akola, Yavatmal, Amravati and Aurangabad Districts. THEy were sent to the Director, Seed Certification Agency, Pune. All these samples were taken up for testing on the selected 453 plots and a Committee of Experts was appointed to monitor these plots. THEse experts visited these plots periodically, made note of the observations and gave a final technical opinion based on the results. It is shocking to see that out of these 453 samples only 2 samples passed the test and 451 samples failed. THEy did not conform to the specifications and test of genetic purity of the variety of seed as laid down by the Scientists of PKV, Akola. 6 experts have attested these results and it is an important document which fully goes against the submissions being made by the State Government as well as Nath Seeds, Ajit Seeds, and other seed producers. The most important factor of all these appeals pertains to the informal certification of the said variety of cotton seeds by the Seed Certification Agency of the State. Right from the District level agency upto the level of the Chairman of the State Level Committee, everybody was fully aware of the legal requirements that unless a particular variety of seeds is modified under Section 5 of the Seeds Act, 1966, no certification can be done by the said Agency. This is contrary not only to the standing orders of the Government of India but also against the mandatory provisions of the Seeds Act. This fact was known at all levels right in the year 1991 and particularly from July, 1992 when it was brought to the notice of the State Level Apex Committee that the Seed Certification Agency has already issued instructions to the Seed Certification Officers in the State not to register the names of the seed producers since this variety was not duly notified by the Government of India. This is clear from the various letters issued by the Director of the said agency. The first one being of 3rd June, 1992. In the second part of this letter, there is a mention of provisional notification. On careful perusal of the Section 5 of the Seeds Act, it is seen that it does not provide for any provisional or informal notification of any variety of seeds. The fact remains that the State Government and all the Agricultural Universities in the State were aware of these legal requirements and this question was further discussed at the meeting of the Apex Committee on 4th July, 1992. This was repeated by the officers right upto November, 1992 and . January, 1993. The letter of 19.1.1993 specifically mentions that no tags should be attached to the bags which have not been notified. In spite of all this, it was decided to certify the seeds and also to release them on the pretext that, there was a heavy demand for this variety of cotton seed viz. CAHH-468. The Confidential Report of the Agriculture Commissioner makes another startling and shocking disclosure that at the time when the State Government was making all-out efforts to get this variety notified by the Central Government, the Andhra Pradesh Government had stopped production of this variety CAHH- 468 as it had found upto 50% impotent plants not yielding any cotton to the cultivators. Therefore, there is a reason to believe that the Seed Certification Agency of the State was aware of . the ban put by the A.P. Government and yet it mananged to get the variety provisionally notified for a period of 2 years on 17.8.1993. This means that the seeds were produced by the producers, they were certified by the Seed Certification Agency, they were released for marketing and were sold to the agriculturists and it is thereafter that the much awaited notification was issued on 17.8.1993. By this act, the State Government has managed to regularise the actions taken by it and its agency and the seed producers and dealers much to the detriment of the gullible agriculturists. This was clear contravention of Section 5 of the Seeds Act. Marketing of seeds was totally prohibited before Notification. The various documents produced by the appellant State Government are self-explanatory and it is not necessary to go into the further interpretation of the law and requirements of the law. It is an admitted fact that the State has acted in a great hurry and haste and permitted the non- notified defective seeds to enter the market. Obviously, a large number of agriculturists were affected and there was hue and cry and the issue was raised in both the Houses of the State Legislature, Government had to appoint a High Level Committee and its findings are shocking as mentioned above. The net result is that 3 officers of the State Seed Certification Agency have been proceeded against with a departmental enquiry and the State Government claims that it is the liability of M/s. Nath Seeds Private Ltd., Ajit Seeds and other seeds producers to compensate the complainants in terms of Clause No. 1 of the Agreement made on 6.8.1992. It is a comprehensive agreement and all the liabilities and responsibilities have been accepted by the Nath Seeds Pvt. Ltd., Aurangabad. The State has submitted before this Commission that it has started disciplinary action against the erring officers who were responsible for issuing certificate even in respect of defective seeds and who have failed in their duties to properly inspect and observe the various characteristics of the crops in the seed producers'' fields. It is submitted by the State that the Seed Certification Officers are not present all the time on the farms and in the seed processing units of the seed producing Companies. It is not possible for the Seed Certification Agency to ensure cent percent purity of the seeds although a Certificate is issued by them. Therefore, the financial losses and liabilities, if any, have to be met by the seed producing Agencies/Companies. The second submission of the State Government is that since in accordance with the terms and conditions of the agreement made on 6.8.1992, the entire liabilities are to be borne by Nath Seeds Pvt. Ltd., the order made by the District Forum holding the State Government jointly responsible alongwith the seed producing Company should be set aside and the State Government be discharged from the liabilities. In view of their own revealing records, the State Government has not defended its grounds enumerated in their appeal-memos. It is further submitted that the Seed Certification Agency functions like a catalytic agent between the seed producers and the agriculturists in the public interest and recovers nominal fees for certification and there is no consideration paid to the State Government paid either by the Seed Company or by the agriculturists and, therefore, the agriculturists are not the consumers vis-a-vis the State Government and, therefore, the State Government is not liable to compensate the loss suffered by the agriculturists, if any. An attempt has been made to minimize the seriousness of the problem by making a statement that this was a very small amount of seeds as compared to the total quantity of seeds sold in the State. It is very difficult to accept such a proposition when hundreds of agriculturists who solely depend upon the agriculture as their sole source of livelihood and particularly on a cash crop like cotton in Amravati and Aurangabad Divisions. Their own report reveals that the percentage of the impotent and non-yielding plants was to the extent of 60% to 80% on many plots during the test. We can imagine the agony of the agriculturists who would have expected substantial yield by sowing this variety of cotton seeds. We have perused the charge sheets served on the 3 delinquent officers which show that these officers have failed in their primary duties and have given incorrect certificate. An attempt has been made that the genetic characteristics of this variety were not revealed by the Scientists of the PKV, Akola. This allegation has been refuted by the PKV. In its submission, the PKV has contended that all the characteristics of this variety were known to all the officers because the variety was developed in the year 1991 and some seeds were produced in the season of 1991. The PKV has further submitted that Nath Seeds Pvt. Ltd. purchased only the female parent seeds from the PKV and the male parent seeds were not purchased. The Nath Seeds have not denied this fact. On the other hand, they have made a submission before the Commission that they had purchased the male and some female parent seeds from Ajit Seeds, Aurangabad. Therefore, the blame put on the PKV according to us is baseless and the certifying officers whose functions are statutory under the Seeds Act and the agency cannot escape from their responsibility. The adverse comments made by Rahu Krishi Vidyapeeth on the Scientists of PKV are baseless.

NATH Seeds Pvt. Ltd. have made an attempt to explain under what circumstances the defective seeds might have come to be produced. Dr. Patil, in his affidavit submitted before the Commission, has explained the reasons and circumstances which are probably responsible for the defective seeds but the end result in colossal loss of the poor farmers. The State Commission is not interested in knowing the circumstances and reasons for the production of the defective seeds. The Commission is satisfied that the seeds marketed by NATH Seeds Pv.t. Ltd. and also by Ajit Seeds, Aurangabad were defective. Ajit Seeds have submitted that they are not responsible for the defective seeds produced by NATH Seeds Pvt. Ltd. Their contention is not at all acceptable to the Commission so long as the seeds have been proved to be defective on the field tests conducted by the Committee of Experts at the State level at Pune by taking out as many as 453 samples. The submission of NATH Seeds also does not help them by contending that they had purchased male seeds from Ajit Seeds, Aurangabad since it is their responsibility to maintain the genetic purity of the seeds marketed by them. The submission of the appellants Seed Producers that two or three cash memos are not in the names of complainants and their complaints ought to have been rejected by the Forum cannot be accepted because the receipts are in the name of brothers and near relations and it was found during the field inspection that the said complainants had sown the alleged seeds and they did not get cotton yield. This is a matter of facts and the Forum has rightly allowed those complaints. They are the potential users.

WE have carefully perused voluminous correspondence mady by the State with the Field Officers and also the three important reports. The first report of 6.10.1994 has been submitted by 6-Member Expert Committee. This Committee has gone into all the aspects of the problem. It has been specifically mentioned that the seeds released for marketing were defective and that proper observation and verification was not carried out by the officers responsible for certifying the seeds. They have given the details of all the 453 samples and their findings on having actual field tests on 453 plots selected by Director of the Seed Certification Agency. There is another confidential report dated 22.12.1993 addressed to the Director of the said Agency by the Divisional Seed Certification Officer, Amravati Division, Amravati. In this confidential report, it has been mentioned that 560 bags of seed of 8 lots were released for Amravati District. It was found during the course of the enquiry that the bags of two lots out of the 8 lots were not at all sold out in the Amravati District. On the other hand, bags of 10 other lots were sold out in that District. It was also found during the course of the enquiry that wrong delivery memos were prepared and they were issued. Further no accurate accounts of the delivery memos, lot numbers and number of bags were maintained by the dealers and there were serious discrepancies. This enquiry further reveals that the colour of bags, the tags and the rubber-stamps on some seed bags sold in Amravati District were found to be different. On some bags, the lot number was scored out and another lot number was written. Similarly, Serial Numbers of the tags were also tampered with. It has been further reported that the seal on these tags was of Nath Seeds Company Private Limited and some tag Numbers viz., 2088,2689,2918 on the unsealed bags were also put by the Company and not by the Certifying Agency. Even the papers used for preparing the tag was also found to be different from the paper used by the Government Agency and the letter ''O'' On the tags was also found to be different from the lettering used by the Seed Certifying Agencies. The Divisional Officer further reports that he alongwith his officers had personally visited every field and found that only 20% to 40% seed was found to be genuine and the rest were not CAHH 468 cotton seeds quality. While concluding, the Divisional Officer, Seed Certification Agency, Amravati has categorically stated that the defects in the plants were mainly due to the use of DHY 286-R. This apprehension has been subsequently confirmed by the experiments conducted by the 6 Member Experts'' Committee on 453 plots at Pune under their personal supervision. The third important document is the Enquiry Report of the Commissioner (Agriculture), M.S., Pune also submitted on 1st November, 1994 to the State Government. All the correspondence, various tests reports and these three reports prove beyond any shadow of doubt that the CAHH 468 cotton seed certified and released for marketing during the sowing season of 1993 was defective. In this respect, the position of the P.K.V., Akola has been vindicated by the admission of the Nath Seeds Pvt. Ltd., that they had not purchased all the seeds from P.K.V., Akola and that they had purchased some male and female parent seeds from Ajit Seeds, Aurangabad. This has been admitted by both the parties and also by the State. The adverse comments made by the Rahuri Agriculture University about the incorrect recording of observation by the P.K. V., Akola are not substantiated. On the other hand, scientifically the seed developed by the P.K. V., Akola does not suffer from any genetic defects or impurity. It is the wrong mis-matching of the male and female parent seeds by the Seed Producers which has resulted in the production of defective seeds. The submission made by the P.K.V., Akola is very clear and no blame can be put on that University.

Nath Seeds Pvt. Ltd., being the important party in all these appeals have submitted vehemently that the District Forum has not properly conducted the enquiry and no financial liability can be saddled on them as the seeds have been duly certified to be genuine by the competent State Agencies. The learned Counsel for the Nath Seeds Pvt. Ltd. could not establish before us as to how the seed purchased by them from Ajeet Seeds, Aurangabad has resulted into production of defective seeds. They have submitted an affidavit of Dr. Patil in support of their contentions. Dr. Patil''s affidavit does not in any way help Nath Seeds Pvt. Ltd., because the 6 Member Experts'' Committee has visited regularly sites of as many as 453 samples of the same variety and could find only 2 samples passing the test and the rest have failed. Mr. Kalaspurkar in his submission made to the Commission has produced a xerox copy of the public statement issued by the Nath Seeds Pvt. Ltd., Aurangabad. It was printed and made public for the information of the agriculturists. In this statement, they have indirectly admitted that the CAHH 468 cotton seeds have been found to be defective. It is mentioned therein that one defect has been noticed. The wording used in para 4 is as under. "xxx xxx xxx xxx xxx"

IN view of the voluminous documentary evidence and the admissions made by the State and the Public Statement issued by the Nath Seeds Pvt. Ltd., it is clear that the seeds sold to the complainants in these districts were defective and they did not yield cotton produce and the original complainants have suffered losses. IN such a case, where the end results viz. not forming any cotton bolls and not yielding any cotton by itself proves the defect in the seeds. It was not necessary for any individual agriculturist to get the sample examined separately. Further, the lengthy oral evidence of Shri Deshmukh recorded by the District Forum, Yavatmal is also self- explanatory. Shri Deshmukh''s silence on important questions is more eloquent than his other statements. The representatives of the respondent /agriculturists in the appeals filed by the State, have vehemently argued that the Government own documentary evidence is clearly contrary to the submissions filed by the Government and also Nath Seeds Pvt. Ltd., and, therefore, there is no reason to interfere with the order passed by the District Forum. A technical point was raised by the Seed Producers that each complainant is expected to get the seed sample tested by an independent laboratory under the provisions of the C.P. Act. IN the instant bunch of appeals as many as 453 samples were collected from two Revenue Divisions and they were tested under the supervision of 6 Experts at the Headquarters of Directorate of Seed Certification Agency, Pune on 453 separate plots. IN view of such mass scale testing done by the competent Authorities to satisfy themselves, it is not necessary to shift the burden on the complainants about the testing of seeds. On the other hand, we feel that it was the duty of the Seed Producers to discharge this onus and they failed to discharge this onus. We, therefore, reject the objection raised in this regard. On careful consideration of the entire documentary evidence and the oral evidence of Shri Deshmukh, it is clear that the State has faulted on the following grounds, viz.- (1) It decided to certify the CAHH 468 cotton seed without prior notification under Section 5 by the Government of India; (2) There is no provision in the said Act to issue a provisional notification and, therefore, the post facto notification by the Government of India does not absolve the State Government/Seed Producing Companies; (3) The decision of the State Level Committee to issue informally Seed Certificates was illegal; (4) Having taken the responsibility upon itself, the State has not performed its duties in certifying the non-notified seeds diligently and carefully with the result that defective seeds were released for marketing.

AS regards Nath Seeds Pvt. Ltd., we can not resist from arriving at the following findings, viz.- (1) They did not take care and caution to maintain the genetic purity and genuineness of the seed. They produced disproportionately large quantity of seeds and there is no satisfactory explanation; (2) They have not maintained the accurate accounts of the seeds released for marketing, lot-wise and tag number-wise; (3) Confidential enquiries have revealed that they have used their own seals, tag numbers and different cloth for preparing additional bags of seeds not certified by the State Agency; (4) They have tampered with lot numbers, serial numbers of the tags and have sold 265 bags in excess of the quantity released by the competent agency. This happened in one or two districts. They were authorised to sell seeds in the State of Maharashtra and Gujarat and must have sold many more excessive bags. Thus, there is every reason to believe that Nath Seeds Pvt. Ltd., have not approached the State Commission with clean hands.

It is also necessary to consider the comprehensive agreement entered by the Nath Seeds Pvt. Ltd., in August, 1992 with the State. They have undertaken all the responsibilities and liabilities and have indemnified the State Government from any consequential liabilities that may arise due to the defects and impurities in the seeds, etc. In view of the clear cut terms and conditions laid down in the agreement, Nath Seeds Pvt. Ltd. cannot claim that they are not liable for any losses caused to the agriculturists because the State Government Agency has certified the seeds and that they have only marketed those seeds released by the State. As against this, the State submits that its Agency is only a facilitator and it can not undertake the entire responsibility of all the stages in the processing unit. The Seed Producing Company is expected to take all the precautions at every stage and it is their responsibility because the representative of the Certifying Agency cannot be present at all times and all the points to supervise each and every activity of processing the seeds. At the instance of the parties, we have obtained the original records in Complaint No. 413/93 & No. 39/94 from Yavatmal Forum. We have carefully studied the records. We find chat the Forum has not faulted on any legal points. It has given fair and reasonable opportunities to all the parties. It is a clear case of confession by the State and indirectly admission by Nath Seeds Pvt. Ltd. The District Forum, Yavatmal has followed the procedure properly and has taken a correct view in view of the documentary evidence produced by the State Government. There is a contributory negligence on the part of the State Agency and complete negligence on the part of the Nath Seeds Pvt. Ltd., in maintaining the genetic purity of the seeds.

AS regards the yield of cotton per hectare, the documentary evidence has been produced before the Commission. It is in form of printed literature. Dr. Meshram who is a Senior Scientist of P.K. V., Akola has also given his opinion. Shri Deshmukh in his oral evidence have also admitted that the yield per acre of such variety of cotton CAHH-468 will not be less that 6 quintals per acre. In fact, Dr. Meshram''s estimate is still higher. But the District Forum has taken the average yield per acre and, according to us, that view is perfectly fair and reasonable. AS regards the rate per acre assumed by the District Forum, the same appears to be lower than the Monopoly Procurement Rate determined by the Cotton Federation. However, in the absence of detailed evidence regarding the cost of cultivation, labour etc. and also the grades of cotton and the different rates for different grades of cotton fixed by the Cotton Federation, we find Rs. 1,000 /- per quintal as fair and reasonable. Shri Deshmukh has admitted in his evidence that the rate of cotton per quintal was not less than Rs. 1,000/- in that season. In view of the large number of complaints and in view of the difference in the quality of the soil and rate of fluctuations in the yield per hectare, it is reasonable to assume 6 quintals per acre as the yield and also pay for it @ Rs. 1,000/- per quintal on an average basis ignoring the various grades of cotton.

BOTH the State as well as the Nath Seeds Pvt. Ltd., having admitted the defects in the seeds, have made an attempt to avoid the liability on account of the loss caused to the agriculturists. The State has vehemently argued that since it functions as facilitator and catalytic agent between the seed producers and the agriculturists and since the seed producers have indemnified the State from such liabilities due to the defects in the seeds, the seed producers must be held liable for payment of compensation. Nath Seeds Pvt. Ltd., on the other hand, argued forcefully to the effect that they depend solely on the certificate issued by the State Agencies and since all the bags were duly arranged batch-wise and tag numbers were tied to each bag, the financial liabilities should be fastened on the State inspite of terms and conditions of the agreement. The submissions of the seed dealers, however, are not acceptable because of the observations made above. It is the bounden duty of seed producers to ensure the genetic purity of the seeds and they must have in house testing arrangements in order to prevent any mishap that may take place in the seed processing operations. The terms and conditions of the agreements filed with the State Government are so clear that there is no room for us to draw any inference for saddling entire financial liability on the State Government. There is a third group of appeals filed by the dealers. The District Forum has ordered the Cotton seed dealers also, to refund the price of the seed alongwith the interest. In respect of manufactured goods, if there is any manufacturing defect, it is the manufacturer who is held liable. But, in respect of goods like seeds, the dealers can not absolve themselves of their own responsibility. The seed dealer is expected to verify whether a particular variety is certified by the competent agency. This is so because no dealer can manufacture a Maruti Car or a Godrej Refrigerator or BPL TV or such article at his level. If there is an imitation, there are laws to deal with such imitations. But, in respect of seeds, in addition to the seed producers, dealers will have to be held responsible because they are capable of substituting the seed, tampering the bags, using the old bags etc. Therefore, in the cases of manufactured goods, the law is well settled that for any manufacturing defects in the goods, the manufacturer shall be held responsible. But in respect of the seeds, the same principle, according to us, cannot be made applicable. Dealers cannot invoke "warranty" principle. Therefore, the view taken by the District Forum in respect of dealers also deserve to be upheld and we see no reason to interfere with the findings in view of the large scale loss caused to hundreds of agriculturists and the discrepancies and malpractices mentioned in the confidential report of the Divisional Seed Certification Officer, Amravati.

Now, coming to the important factor regarding the financial liabilities of the State and the seed producers, we have considered the agreements made by the Seed Producers with the State Government very carefully. In fact, the agreement is really one-sided and it is decidedly in favour of State which stands indemnified by the Seed Producers. In view of these terms and conditions, although both the State and Nath Seeds Pvt. Ltd. are jointly and severally responsible for the defective seeds and the loss caused to the agriculturists, the financial liabilities squarely lie on the Nath Seeds Pvt. Ltd. Therefore, the compensation/damages ordered by the District Forum will have to be borne by the Nath Seeds Pvt. Ltd., Aurangabad. As regards the State Government, as observed above, there were omissions and commissions and contributory negligence on the part of the State Government. It is not enough to start departmental enquiries against the defaulting officers, the State Government has also to shoulder some responsibilities for its contributory negligence. We, therefore, order that the State Government shall pay compensation of Rs. 250/- to each of the original complainants in all the appeals filed by the State Government and Nath Seeds Pvt. Ltd. Rest of the compensation has to be paid by Nath Seeds Pvt. Ltd., Aurangabad alongwith the interest, cost, etc.

ALL the dealers in their appeal-memos as well as in the written arguments, have submitted that they have sold the CAHH-468 cotton seed bags in tact and none of the complainants has made any allegation of tampering with the bags. It is submitted that they relied on the Certificate attached with the bag issued by the State Agency and that the dealer being neither manufacturer nor producers of the seed should not be held liable for any loss suffered by the complainants/ agriculturists. The dealers as well as Nath Seeds Pvt. Ltd., have raised a legal point inasmuch as they have submitted that the purchase of cotton seeds is for commercial purpose and, therefore, the District Forum ought not to have entertained these complaints. It has been forcefully submitted by the learned Counsel for the dealers and also Nath Seeds Pvt. Ltd. that the cotton crop is a cash crop and the purchase of the seeds was for commercial purpose and as such the original complaints deserve to be dismissed and the appeals be allowed. In this respect, Mr. Rajput and Mr. Jain, the learned Counsel for the respondents/complainants/agriculturists have cited the authorities before us to the effect that the purchase of seeds and particularly cotton seed is not for commercial purpose. It is already well settled by the National Commission that purchase of seed is not for commercial purpose. Therefore, this submission can not be accepted and the complaints were rightly entertained by the District Forum. In fact, the National Commission has held in its various judgments that purchase of high yielding seeds for raising cash crops is not a commercial purpose. The dealers have further questioned the average yield assumed by the District Forum and have contended that the complainants have not produced the green cards provided to them by the Cotton Federation in support of their claims. This question is not relevant to the dealers because they have been held liable only to the extent of cost of the seeds by the District Forum. The District Forum has ordered the refund of the price of the cotton seed with interest and, therefore, the other points raised by the dealers are not relevant to their cases. It is the fundamental duty of the dealer to ascertain the genuineness of the seeds which they are selling to the agriculturists and atleast they must satisfy themselves about the notification of the variety by the Government of India under the Seeds Act, 1966 and that the seeds should be certified by the competent agency of the State Government. Further, they are bound to maintain accurate accounts of the seed bags as per the lot numbers and the serial numbers of the tags and they are expected to maintain seals infact. In the instant cases particularly before us, we have already found that the Government of India had not notified the variety CAHH 468 prior to the sale of these seeds although the Seed Certification Agency has issued the so-called informal certificates. Under these circumstances, it is necessary to hold the dealers also liable atleast to the extent of the cost of the seeds which they have recovered from the purchasers. We do not find any force in the appeals made by the dealers. In view of the above deliberations and findings, the following order is passed : (i) All the 74 appeals filed by the Director of Seed Certification Agency, Maharashtra State, Pune are partly allowed. The Directorate is ordered to pay the compensation of Rs. 250/- to each of the complainants in all the appeals decided under this order. (ii) All the 83 appeals filed by Nath Seeds Pvt. Ltd., Aurangabad are dismissed. The appellant M/s. Nath Seeds Ltd., are directed to at the rate of pay Rs. 6,000/- per acre as ordered by the Forum alongwith 18% interest from the date of complaint till the date of full payment alongwith the compensation of Rs. 5,000/-and cost of Rs. 2,000/- to each complainant/ respondent. (iii) All the 14 appeals filed by the dealers also are dismissed. The liability of the dealers is restricted to the refund of the cost of the seeds purchased by each complainant/respondent with 15% interest from the date of purchase till the date of payment. (iv) No order as to costs.

Ordered accordingly.