A person buying goods and using them himself exclusively for the purpose of earning a livelihood would be covered by the definition of “consumer” even if such use is commercial use

The Supreme Court in the matter of M\s Nandan Biomatrix Ltd. vs. S. Ambika Devi & Ors., Civil Appeal Nos. 7357-7376 of 2010 decided on 06.03.2020 held that a person buying goods and using them himself exclusively for the purpose of earning a livelihood by means of self-employment would be covered by the definition of “consumer” within the 1986 Act, even if such use is commercial use.
Facts-
The Respondent (complainant) was a small landholder who entered in a tripartite agreement on 05.01.2004 with the Appellant and its franchisee M/s Herbz India whereby, the Respondent purchased 750 kgs of wet musli for sowing @ Rs. 400/- per kg from the Appellant and cultivated the same in her land. The appellant was to buy back the produce at a minimum price of Rs. 1,000/- per kg from her, which the Appellant failed to do leading to the destruction of the greater part of the crop, hence the complaint.
The District Forum dismissed the complaint holding that the Respondent was not a “consumer” within the meaning of the Consumer Protection Act, 1986 whereas a contrary view was taken by both the State Commission and the National Commission.
The contention of Appellant counsel before the Apex Court was threefold, namely- (1) that the Respondent was not a “consumer” under sec 2(d). (2) the tripartite agreement envisaged buyback of musli which amounted to resale, which is excluded from the purview of sec 2(d). (3) the cultivation and sale of musli by the Respondent was for a commercial purpose and not for the purpose of earning livelihood, and hence excluded from the purview of sec 2(d).
Issue-
Whether the Respondent was excluded from the purview of the definition of “consumer” under sec 2(d).
Ratio-
Reference was made to Laxmi Engineering Works Vs. PSG Industrial Institute (1995)3 SCC 583, in which the Apex Court dealt with the meaning of “commercial purpose” and held that “only persons purchasing goods or availing of services for carrying on activity on a large scale, for the purpose of earning profit, would be excluded from the ambit of the definition of “consumer”. The court also observed that “though the question regarding whether the purpose for which have been bought or services rendered is a “commercial purpose” is to be answered on the facts of each case, a person buying goods and using them himself exclusively for the purpose of earning a livelihood exclusively for the purpose of earning a livelihood by means of self-employment would be covered by the definition of “consumer” within the 1986 Act, even if such use is commercial use.
Coming to the facts of the matter at hand, Hon’ble Court observed that the agriculturist is not reselling any product but grows her own product by utilizing the foundation seeds and sustains herself by selling her product. This cannot be termed as resale or activity in furtherance of a “commercial purpose”, rather it is purely for the purpose of earning her livelihood by means of self-employment.
Referring to the ratio held in National Seeds Corpn. Ltd. vs. M. Madhusudan Reddy, (2012) 2 SCC 506, the Apex Court observed that an agreement for buyback by the seed company of the crop grown by a farmer cannot be regarded as a resale transaction, and he cannot be brought out of the scope of being a “consumer” under the 1986 Act only on such ground.
The Apex Court also took into consideration the view taken by National Commission in Fruit and Vegetable Project, New Delhi v. N. Sankar Reddy, III (1994) CPJ 163 (NC) that a farmer who was selling his produce through an intermediary was not a “consumer” vis-à-vis such intermediary and even if it was presumed that the intermediary had purchased goods in terms of an agreement between the parties, the fact remained that in such transaction, it was the farmer who was a seller, and could not be deemed to be a “consumer” under the 1986 Act.

In the present matter, the Court upheld the decision of the National Commission and imposed a cost on the Appellant to the tune of Rs. 25,000/- payable to the Respondent.