Promise to purchase produce from farmers must be kept

Krishna Barman and some other farmers had stored their stock of jute at Bhartiya Gramin Bhandar in Bhetaguri, and had pledged it for availing a loan of Rs 50,000, which was equivalent to 60 per cent of its value. A memo issued by the Jute Corporation of India (JCI) mentioned that this stock would be purchased at amounts ranging from Rs 3,800 to Rs 4,200 per quintal. JCI would in turn sell the jute procured from the farmers.

The Corporation later refused to purchase the stock at the agreed rate of Rs 3,800 to Rs 4,200 per quintal, contending that the same jute was being procured at a lower rate of Rs 2,200 per quintal in the Cooch Behar region.

Krishna Barman and nine other farmers filed complaints before the District Forum pointing out that even though JCI was established with the objective of ensuring that farmers do not have to resort to distress sale, the Corporation was not honouring its commitment to buy the jute at the agreed rate.

The case was contested on various legal technicalities. JCI questioned the maintainability of the complaint contending that there was no consumer service provider relationship as there was no commitment to purchase the jute. It claimed that it had merely given a quote regarding the price of jute, which fluctuates from year to year. It stated that the price had subsequently fallen, and the Minimum Support Price (MSP) was Rs 1,600 while the market rate was Rs 2,200 per quintal. JCI alleged that the complaint had been filed merely to avoid repayment of the loan taken against the value of the jute.

The Forum observed that the bank which had advanced the loan had not taken any steps to sell it to JCI, which

had led to a deterioration in the quality of the jute. Even though the farmers suffered a loss due to the bank's negligence, repayment of the loan was being demanded. So, it held that the farmers were consumers entitled to file a consumer complaint.

The Forum observed that there was a deficiency in service on the part of the bank, the storage facility, and JCI. But, it added, there was contributory negligence on the part of the farmers too for failing to sell the jute and repay the loan. The Forum awarded refund of the capital amount of Rs 8,44,965 along with interest at 12 per cent, together with compensation of Rs 10,000 for deficiency in service, and costs of Rs 5,000. It also directed that the jute be sold or auctioned at the best price, and the proceeds be used to clear warehouse rent and repay the loan along with interest.

The West Bengal State Commission upheld the order, and dismissed the appeal. JCI then filed a revision petition. In its order of April 5, 2021, delivered by Justice Deepa Sharma, the National Commission observed that the scope of revision was very much restricted, and it could not go into the factual aspects and merits of the concurrent findings of the District Forum and the State Commission. The National Commission dismissed the revision, holding that JCI was rightly held liable for failing in its obligation to purchase the jute from the farmers.

The writer is a consumer activist