Consumer Protection Act — Jurisdiction — Contract containing arbitration clause — Not prevented thereby from filing complaint to consumer forum — Consumer Protection Act, section 12.

The appellant — M/s. National Seeds Corporation Ltd. (NSCL) is a Government of India company. Its main functions are to arrange for production of quality seeds of different varieties in the farms of registered growers and supply the same to the farmers. The respondents are engaged in agriculture/seed production. They filed complaints alleging that they had suffered loss due to failure of the crops/less yield because the seeds sold/ supplied by the appellant were defective. The District Consumer Disputes Redressal Forum allowed the complaints and awarded compensation to the respondents. The appellant contended that the District Forum did not have jurisdiction to entertain complaints as the growers of seeds had entered into a commercial agreement thus not covered by definition of consumer. The National Commission rejected the appellant’s plea that the only remedy available to the respondents was to file a complaint under the Seeds Act, which is a special legislation vis-à-vis the Consumer Act. The appellant challenged the order of the National Commission before the Supreme Court.

The Apex Court observed that though, the Seeds Act is a special legislation enacted for ensuring that there is no compromise with the quality of seeds sold to the farmers and provisions have been made for imposition of substantive punishment on a person found guilty of violating the provisions relating the quality of the seeds, the Legislature has not put in place any adjudicatory mechanism for compensating the farmers/growers of seeds and other similarly situated persons who may suffer loss of crop or who may get insufficient yield due to the use of defective seeds sold/ supplied by the appellant or any other authorised person. No one can dispute that the agriculturists and horticulturists are the largest consumers of seeds. They suffer loss of crop due to various reasons, one of which is the use of defective/ sub- standard seeds. The Seeds Act is totally silent on the issue of payment of compensation for the loss of crop on account of use of defective seeds supplied by the appellant and others ors. who may obtain certificate u/s.9 of the Seeds Act. A farmer who may suffer loss of crop due to defective seeds can approach the Seed Inspector and make a request for prosecution of the person from whom he purchased the seeds. If found guilty, such person can be imprisoned, but this cannot redeem the loss suffered by the farmer.

Section 3 of the Consumer Protection Act declares that the provisions the Consumer Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force. Since the farmers/growers purchased seeds by paying a price to the appellant, they would certainly fall within the ambit of section 2(d)(i) of the Consumer Act and there is no reason to deny them the remedies which are available to other consumers of goods and services. The remedy of arbitration is not the only remedy available to a grower, rather, it is an optional remedy. He can either seek reference to an arbitrator or file a complaint under the Consumer Act. If the grower opts for the remedy of arbitration, then it may be possible to say that he cannot, subsequently, file complaint under the Consumer Act. However, if he chooses to file a complaint in the first instance before the competent Consumer Forum, then he cannot be denied relief by invoking section 8 of the Arbitration and Conciliation Act, 1996.