Partial Crop Failure Due to Mixed Factors: Supreme Court Reduces Compensation and Sets Aside Finding of Deficiency in Service Against Seed Seller

Held: The Supreme Court held that the findings of complete deficiency in service recorded by the District Forum and affirmed by the NCDRC were unsustainable in light of the Investigation/Inspection Report dated 09.10.2013, which indicated that only 50% of the pods were completely developed while the remaining pods were semi-developed, and that excess rainfall had also contributed to shortfall in yield. The Court ruled that the loss suffered by the farmers was attributable to mixed causes, including natural factors (vis major) and partial seed issues, and therefore full liability could not be imposed on the seed producer and distributor. The finding of deficiency in service was accordingly set aside and the compensation was modified.

Summary: The respondents-farmers had purchased groundnut seeds (TAG 37A variety) from the appellants in June 2013 and later complained of substandard seeds leading to crop failure over approximately 250 bighas of land. An official committee constituted by the Deputy Director (Agriculture), Alwar, conducted inspection and submitted a report dated 09.10.2013. The report recorded that on physical verification, about 50% of the pods were completely developed while the remaining were semi-developed, and that excessive rainfall during July–August had caused abnormal vegetative growth, leading to possible 40–50% shortfall in yield for the said variety. The District Forum allowed the complaints and awarded compensation; the State Commission set aside that order; the NCDRC restored the District Forum’s order. Before the Supreme Court, the appellants contended that there was no deficiency and that shortfall was due to natural causes. The Court examined the inspection report in detail and observed that although there was semi-development of pods affecting market price, there was no total failure of crop and rainfall was a contributing factor. It concluded that fastening entire liability on the appellants was not justified.

Decision: The Supreme Court partly allowed the appeals, set aside the findings of deficiency in service recorded by the District Forum and sustained by the NCDRC, and directed that 50% of the compensation amount deposited by the appellants pursuant to interim order dated 02.08.2021 be released to the respondent-farmers along with accrued interest, while the remaining 50% with accrued interest be refunded to the appellants. The appeals were allowed in part and parties were directed to bear their own costs. Pending applications stood disposed of.