Surinder Kumar vs Escorts Ltd.

WHETHER ''commercial purpose'' is a thing apart and distinct from ''agricultural purpose'', is the threshold core question in this complaint.

FOR the limited purpose of disposing of the preliminary jurisdictional objection, it is unnecessary to delve into the facts and merits deeply. It suffices to mention that the primal grievance of the complainant is with regard to the defective supply of an Escort-335 tractor on the 8th of July, 1991. It is the case that the said tractor from its very inception and subsequently suffered from manufacturing and mechanical defects which rendered it a non- standard and non-working machinery. In the reply filed by the opposite party No. 2, the threshold preliminary objection is in the following terms:- "that the present complaint is not maintainable in view of Section 2(1)(d)(i) as the tractor was purchased for commercial purpose." To the same tenor is the stand taken by opposite party No. 1. In the replication filed by the complainant, the preliminary objection has been controverted in the following terms: - "The complainant has never used the tractor for commercial purpose. The tractor has been used and is being used for agricultural operation. The family of the complainant has a holding of 12 acres in village Sheonkra (Tarawari) in District Karnal and the tractor is being used for agricultural operation for self- employment."

Mr. P.S. Chohan, the learned Counsel for the opposite parties has stuck to his guns on the point of the preliminary objection. It was contended that the very fact of the purchase of an equipment like an expensive tractor and the admitted holding of about 12 acres by the complainant would render the purchase thereof as one for a commercial purpose. The submission was that the complainant could not possibly be carrying on the agricultural operation for his mere subsistence but also would be marketing at least some part of his produce. On this premise, the stand is that the complainant is not a consumer because such an agricultural purpose is synonymous with a commercial one.

THERE is no manner of doubt that the issue raised herein has national remifications within the consumer jurisdiction. In sum, the question is whether the vast arena of agricultural purposes (and admittedly in a primarily agricultural country like ours) is outside the pale of the beneficient Consumer Protection Act. This issue therefore, deserves examination in some depth and even at the cost of some prolixity. More so because of some recent serious conflict of views and precedent thereon already. Before entering the thicket of the case law it is indeed necessary and refreshing to examine the question on the language of the statute and upon larger principle. Inevitably one must first advert to the relevant part of the definition of a consumer of goods around which the controversy revolves: "2(1)(d)(i) "Consumer means any person who, buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose: or"

IT seems somewhat elementary that in the particular context of goods obtained for an agricultural purpose, the question of its immediate or approximate re-sale would hardly if ever arises at all. In the light of the underlined words in the definition one has to first recall the authoritative case of I (1991) CPJ 499 (NC), Synco Textiles Pvt. Ltd. v. Greaves Cotton & Company Ltd. Therein, it was pointedly observed by V. Balakrishna Eradi, J. that since re-sale of the goods has been separately and specifically mentioned in the earlier part of the definition clause the words for any commercial purpose'' must be understood as covering cases other than those of the re-sale of the goods. Once the word ''re-sale'' is out of ken, the crucial question which still remains herein is whether the phrase "Commercial purpose" would encompass within it even those goods which are clearly obtained for an agricultural purpose alone. Even though herein, "commercial purpose" has to be viewed independently of the word "resale" yet one cannot be totally oblivious of the larger canon of interpretation that a word or a phrase in a statute does not lie in a vacuum. It necessarily takes its hue from the context in which it is used. The phrase "commercial purpose" in the afore-quoted definition therefore, has to be viewed in the broad language of the definition and equally in the mosaic of the purposes and objects of the Act. The difficulty of giving a precise meaning to a phrase like "commercial purpose" which has a broad connotation are inherent indeed. The complexity of such matters is well-illustrated by the celebrated case of the House of Lords in The Commissioners for Special Purposes of the Income Tax v. John Frederick Pemsel, 1891. Appeal Cases 531. Therein, what fell for consideration was the analogous phrase of charitable purposes." The exhaustive judgment of the Law Lords on the question of its true import are a model of erudition. Of course, it is not possible to indulge in an exercise of that kind herein. It would suffice to mention that in the later Privy Council Judgment of Chester man and Ors. v. Federal Commissioner of Taxation, 1926 Appeal Cases, 128 Lord Wrenbury noticed the competing claims whether "charitable purpose" was to bear its technical meaning as laid out in the statute of Elizabeth or whether it bore its popular meaning which involved the idea of assisting poverty or destitution generally. These two cases highlight the pit-falls and the difficulties, but nevertheless the interpretative exercise cannot possibly be avoided herein.

WHAT then deserves highlighting is the fact that though the import of the phrase "commercial purpose" is momentous within the consumer jurisdiction, the Act has not chosen to define the same. Inevitably one has therefore, to fall back first on the ordinary meaning of the words used in the phrase. This is best highlighted when the two competing phrases are seen in just a position to each other. In the Random House dictionary, the word agriculture'' and ''commerce'' have been given the under- quoted meaning:- Agriculture Commerce 1.The science or art of 1.An interchange of the cultivating land in goods or commodities the raising of crops; espeally on a large tillage husbandry; scale between differ- farming ent countries or bet- 2.The production of ween different parts of crops, live-stock or the same country; poultry, trade, business. It would suffice to also briefly advert to the meaning given to these two words in the Chambers English dictionary: Agriculture Commerce 1. The art or practice 1. Interchange of of cultivating the merchandise on a large land; scale between nations 2. Agriculturist-one or individuals; extended skilled in agriculture, trade or traffic; inter- farmer. course.

APLAIN reading of the meanings attributed to the two words would itself highlight the patent distinction betweet the two to an extent that it would be somewhat wasteful to indulge in an over-elaboration. It would be manifest that the two concepts far from having any thing in common, are indeed things apart and distinct from each other. Without resting one self content with what has been called the dictatorship of dictionaries, one may as well advert to the informed authoritative ennunciation of the phrase in the Encyclopaedia Britannica. Therein, ''agriculture'' is described as follows:- 1.The science or art of cultivating the soil, growing and harvesting crops, and raising livestock; 2.the art of making the land more productive is practiced throughout the world in some areas by methods not far removed from the conditions of several thousands of years ago.

Yet again, as we are construing the phrase in a statute one may also refer to the legal hue of these words broadly given in the Law Lexicon by Mr. Justice T.P. Mukherjee 1989 Edition. Therein, inter-alia the following description thereof has been given:- "Agriculture is the basic idea under-lying the expressions agricultural purpose" and "agricultural operations" and it is pertinent there- fore, to enquire what is the connotation of the term" agriculture". The primary sense in which the term ''agriculture'' is understood is ''agar'' field and ''culture'' cultivation, i.e. the cultivation of the field and that term is under- stood only in that sense, agriculture would be restricted only to cultivation of the land in the strict sense of the term meaning thereby, tilling of the land, sowing of the seeds, planting and similar operations on the land. xx xx xx xx xx Agriculture means physical labour and toil ex-pended on the land with a view to extract the produce springing from it. There may be a variety of activities which may well be styled as agriculture.

ON the other hand, the allied terms of ''commerce'' and ''industry'' have been described in contrast as under: "According to Chamber''s dictionary, "commerce" involves essentially an exchange or buying and selling of commodities, while "industry" involves essentially the manufacture of commodities. There is thus a difference in the connotation of the two terms. But their essential features, namely exchange or buying and selling in the former and manufacture in the other, are different. They are, thus not the same or synonymous."

To avoid overly burdening of this order it is apt to sum up on this aspect. It seems plain that the dictionary meaning; the informed intellectual perspective; and the legal hue of the two concepts ''agriculture'' and ''commerce'' are all a pointer to the conclusion that they are things apart. Indeed, it would be doing plain violence to the language to treat these either as synonymous or even as akin.

VIEWED against a much larger canvass also it is well to recall that in the history of human civilization as man progressed from his tribal and nomadic state to the present one, agriculture is first a vocation that sustained the very life of the community. Its primary emphasis on tilling the land; raising of food crops, and good husbandry were the foundational basis for the transition from the nomadic to the settled society. This alone created the necessary food and other essential where withals which provided adequate sustenance to the very life of the community as such. On the other hand, trade and commerce in same societies followed centuries later. Agriculture was the creation of wealth and crops from the foundational source of the land. It was no mere trading, exchange, or profiteering in commodities. In this broader aspect also it would be perhaps incongruous to label agriculture as either ''trade'' or ''commerce''. The matter may also be viewed from yet another refreshing angle. This is with regard to the long-standing recognition of the distinction between agriculture and ''commerce'' in the Income- tax laws. It is unnecessary to go back to the very first statutes because it is evident that income from the agricultural source was always on a different pedestal from that arising from commerce, industry, trade or other professions or service. It suffices to refer to Section 10 of the present Income-tax Act, 1961. Section 10 thereof reads as under:- ''10. Incomes not included in total Income. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included. 1. agricultural income;"

In view of the above, it needs no great erudition to notice that in the larger perspective, income-tax is levied on all other commercial, professional and industrial activities. However, agricultural income stands in a class apart. This is yet another statutory and meaningful recognition of the difference which sharply divides the concepts of ''agriculture'' on the one hand and ''commerce'' on the other.

IT is unnecessary to burden this order with the mass of case law which has arisen around the concepts of "agricultural income" under the Income-tax Act or the taxation thereof as a profession or calling. IT may perhaps suffice to refer to the Division Bench judgment in ''Sankaranarayana Pillai v. Execute Officer, Panchayat Board, Avikudi, AIR 1966 (Mad) 262. therein, what fell for consideration was whether agriculture was a profession or a calling to bring it within the ambit of taxation. The Division Bench held as under ; "Agriculture means physical labour and toil expended on the land with a view to extract the produce springing from it. Can it be said that agriculture is a calling? IT may be that agriculture is an occupation, in a certain sense, but not, in our opinion, a profession or calling. While saying this we are having in mind the basic sense in which "agriculture" is used, namely cultivation of the soil. In this context, we may mention that merely because a cultivator markets or sells his produce to get a price, that activity cannot be regarded as falling outside the scope of agriculture and attracting profession tax."

THE decks are now clear for adverting somewhat pointedly to precedent within the consumer jurisdiction. However, before adverting to individual cases, it may be noticed that in the larger perspective precedent has now veered away from an overly technical or extended meaning of the phrase "commercial purpose". It bears recalling that the National Commission in Synco Textiles Pvt. Ltd. v. Greaves Cotton Company Ltd. (supra), decided on the 6th of April, 1990 by majority took a somewhat strict view that the purchase of generating set as a stand-by arrangement for a factory manufacturing edible oil was for a commercial purpose. Mr. Y. Krishan, Member however in a forceful & brilliant dissent took the view that generating sets purchased by the appellant for running the oil mill in the event of a break down would not invest the purchase with ''commercial purpose''. Much water seems to have flown under the bridges since that decision as is evident from I (1992) CPJ 140 (NC), THE Secretary Consumer Guidance and Research Society of India v. M/s. B.P.L. India Ltd., decided nearly two years latter i.e. on 28th January, 1992. THErein the earlier cases of Oswal Fine Arts v. H.M.T. Madras and Western India State Motors v. Sobhag Mat Meena & Ors. (F.A. No.l2 of l989) were explained and the view taken was that even where goods are obtained for a patiently profit making purchase they would not be within the mischief of the exclusion clause unless they satisfied the two further tests. Firstly that such goods must have been purchased for being used in some profit-making activity engaged in on a large scale. Secondly, that there should be a close and direct nexus between the purpose of the purchased goods and the profit making activity. In the result it was held that the purchase of a photo copier by a person mainly for making profit there from was not one for a commercial purpose under the definition. This latest ennunciation of the law in the Secretary Consumer Guidance & Research Society of India v. M/s. B.P.L. India Ltd. (supra) is thus a clear pointer that even where goods are obtained directly for a profit motive, they may still not be within the phrase of a "commercial purpose". Pride of place herein must be given to the recent ennunciation in I (1992) CPJ 337 (NC), M/s. Jyoti Marketing Projects Ltd. & Ors. v. M. Pandian &. Ors. Therein, in the specific context of the purchase of a Pump set for irrigation of crops, a patently agricultural purpose, it was observed as under: "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 was purchased owns in all only seven acres of land. There- fore, 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 has no proximate nexus with the ultimate produce or price of the crop. The crop depends upon various factors like seed, fertilizer, pest-control etc. If the seed is bad then there will not be good crop. More-over, practically most of the produce from the land comes to the market. Hence, we hold the the complainant falls within the term "consumer" as defined in the said Act."

The aforesaid majority view gains greater significance because it has been rendered in the face of a strong dissent by Y. Krishan, Member, holding on the basis of Synco Textiles Pvt. Ltd. v. Greaves Cotton & Company Ltd. (supra) that such a purchase was for a commercial purpose. There is no gainsaying the fact that the dissenting judgment expresses a diametrically opposite view in holding as under: "I have no doubt that production of commercial crops per se is commercial activity. Besides modem agriculture is essentially commercial agriculture and as such, agriculture is a commercial activity. Any purchase by a farmer for the purposes of better farming is clearly a purchase for commercial purpose."

ALL that deserves highlighting in the context of the aforesaid conclusion is the fact that this view has been in terms rejected by the majority in the National Commission, which has set its face firmly against the total exclusion of agriculture from the consumer jurisdiction. However, in this context, it is refreshing to recall the incisive dissent of Y. Krishan, Member himself in Synco Textiles Pvt. Ltd. v. Greaves Cotton & Company Ltd. (supra). Therein, he approved and agreed with the following contention raised before the National Commission and rested his final conclusion thereon:- "The appellant has also pressed the point that the power generated from the generating sets is not for resale but consumption for purposes of production. He is cited the case of an agriculturist purchasing a tractor for producing commercial crops or for growing food grains for the market but he is and has been treated as a ''consumer'' of the tractor as defined in Sec. 2(l)(d)(i) and that as a purchaser of generating sets for the oil mill, he is not different. In fact, the very wide meaning given by the State Commission to "commercial purpose" would exclude buyers of seeds, say of cotton, as cotton seeds are used for production of cotton, thread and cloth-all for a commercial purpose at; different stages."

THE somewhat analogous case of the National Commission in I (1992) CPJ 327 (NC), M/s. Indra Fabricators & Ors. v. M/s. Pine Apple Marketing Co-op. Society Ltd., then merits attention. THErein, 1,500 Pine-apple cultivators had formed a Co- operative Society with the object of promoting the cultivation, marketing and processing of the Pineapple and its products and had set up a pine-apple processing unit. THE society purchased a boiler for the said processing unit which was the bone of contention on the ground of being defective. Before the National Commission, the argument was forcefully raised that the purchase of the. boiler was for a commercial purpose. This was categorically rejected in the following terms: "THE learned Counsel for the appellants also argued that the boiler was purchased by the Society for "commercial purpose, therefore, the Society will not fall within the definition of "consumer" as defined in Section 2(1)(d)(i) of the Act. This argument was not raised before the State Commission. Moreover, if about 1500 pineapple growers form a society and set up a processing unit, it cannot be said that they are engaged in large scale commercial activity."

It would emerge from the above that even in the context of growing a cash crop like pine-apple and an allied industry of a processing plant therefor, the apex Commission has taken the view that the purchase of boiler was not for a commercial purpose. This being so, ordinary agricultural activity of raising crops from land with agricultural machinery would obviously be at even a lower pedestral. Brief notice may also be taken of the view expressed by the Karnataka State Commission in I (1992) CPJ 248, Maharashtra Hybrid Seeds Co. Ltd. & Anr. v. R.S. Bannimatti & Anr. Therein, it was held that the sale of Bajra foundation seed to the agriculturists did not come within the mischief of the exclusion class of commercial purpose. In all fairness, reference may be made to a somewhat contrary view of the Madhya Pradesh State Commission in I (1992) CPJ 173, M.P. Rajya Beej Evam Farm Vikas Nigam v. Anand Pratap Singh & Ors., where a somewhat similar sale of soyabeen seeds was held to be hit by the mischief of the commercial purpose exclusion. These cases illustrate the divergence of views within the consumer jurisdiction. But a reference to the two judgments would indicate that the matter was not considered in any depth nor the various perspectives of the broad issue were presented before them by the learned Counsel.

BEFORE parting with precedent one must refer to the National Commission''s concluding and virtually conclusive observations in the words of Balkrishna Eradi, J. in The Secretary, Consumer Guidance and Research Society of India v. Mis. B.P. L. India, Pvt. Ltd. (supra). "Thus cases of persons who purchase goods or even machinery for self-employment purpose without engaging in any trading or manufacturing business on a large scale for purpose of profit making will not fall within the scope of the exclusion clause in the statutory definition in Section 2(l)(d)(i) and hence such persons are consumer entitled to protection under the Act."

IT would be somewhat obvious that the aforesaid ratio will cover on all fours a purchase of machinery for an agricultural purpose by a farmer for his self-employment, on the land owned by him. 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.

In the ultima ratio one must hearken back to the hallowed cannon of construction that even where two well-matched views are possible one must tilt for an interpretation which aids or advances the larger purpose of the whole statute. There is no manner of doubt that the beneficent Consumer Protection Act was primarily intended to bring under its umbrella the hapless class of consumers for whom the resort to the ordinary, expensive; and protracted process of law; was virtually impossible. Perhaps in this context, the rural agricultural consumer deserves the highest pre-eminence and consideration. The end result of a contrary view that all agriculture is "commercial" can lead to no other result except that of ousting the vast class of persons self-employed in the agricultural field from the very pale of consumer jurisdiction. That is a consummation which must necessarily be avoided. It appears to us that taking the extreme view that today all agriculture is per-se commercial (which in terms stands rejected by the majority in The Secretary Consumer Guidance and Research Society of India v. M/s. B.P.L. India Pvt. Ltd. (supra) would with one stroke obliterate by an interpretative exercise the benefits of the consumer jurisdiction to the largest class of agricultural consumers which (in our considered view) the legislature undoubtedly wished to extend. With the greatest respect, and deference the labelling of "agriculture" as ''commerce'' or treating them as synonymous terms would lead to gravely un-savoury results in the nascent consumer jurisdiction.

IN the penultimate part, it is worthy of notice that the intellectual tests of large scale commercial activity, or of a direct nexus of the goods to the profit-making activity are difficult if not impossible to apply in the context of a plainly agricultural purpose. IN view of the land ceiling laws now inflexibly in force all over the country, large holdings and Zamindaris are now a matter of history alone. INdeed in many cases the evil is that of marginal farming or un-economic family holdings. What has to be labelled as large-scale in such agriculture? What yardstick or barometer is to be employed precisely in every case in which objections of this nature are raised? INdeed herein, the matter would become somewhat totally empyrical, which would remind one of the classic addage in the English Law that equity lay in the Chancellor''s foot. As has been shown above by the conflict of precedent in the various State Commissions, virtually the same activity is either labelled as large-scale or small scale for self-employment. These tests become unsatisfactory if not whimsical in their actual application. IN the agricultural field, the question whether the purchased machinery has a direct nexus with the profit making activity is indeed a ticklish and slippery one. Would the identical agricultural equipment when purchased by one agriculturist be for a commercial purpose whilst the same if purchased by another agriculturist would be otherwise, is again problematical. Indeed the finer nuances of the intellectual tests of a direct nexus; large or small scale commercial activity; or the perceived intent of the purchaser to make profit or otherwise; all break down in actual application on the ground realities of rough hewn agricultural fields. Therefore, one must conclude that for the agricultural purpose the basic and the gut test is the genetic question whether the activity is primarily agricultural in nature or not so. That should be the lone pole-star from guiding the Redressal Agencies to a conclusion over the turbulent waters of the exclusion clause of "commercial purpose".

YET again what deserves highlighting is the fact that in actual practice the question of the goods having been obtained for a commercial purpose or otherwise is a threshold question at the very portals of the consumer jurisdiction as is evident in the present case. The agriculturist consumer may be pitted against the large manufacturing corporations (as herein) or even multi-national makers of such equipment. The moment an objection of an alleged commercial purpose is taken in the agricultural context, the recalcitrant opposite party would ipso facto be entitled to show against the consumer that either his activity is a large scale one, or the machinery has a direct nexus for the profit making, and the intent of the purchaser is primarily commercial. In such a situation, the question of the size of the holding of the purchaser; the joint or individual nature thereof; the number of the members of the family; the nature of the crops thereon, whether they are cash crops or food crops, the rotation and the crop pattern over the holding; and the modus of marketing the same, can all the contentious issues, even before the agricultural consumer is allowed to enter the merits of the case. All these matters require evidence and if allowed to be raised, as they must be, they would side-track and derail the consumer dispute into collateral channels. In a summary and expeditious jurisdiction of the present kind, issues of this nature if allowed to be agitated at the very threshold would virtually pose an impassable barrier for the hapless agricultural consumer battering in vain at the closed doors of the Redressal Agencies for relief. Perhaps in the end 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 an "agricultural purpose" under the Act. Once it is held as above, it necessarily follows that the stand of the opposite parties must be rejected. The preliminary jurisdictional objection is consequently dismissed. The complaint will now proceed for its trial on merits. Preliminary objection dismissed.