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landmark judgment, the National Consumer Disputes Redressal

Posted on 22 December 2008 by AEJAZ AHMED

Court

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION



Brief

In a landmark judgment, the National Consumer Disputes Redressal Commission, New Delhi, has directed the Union Ministry of Petroleum and Ministry of Consumer Affairs to ensure that all LPG marketing companies issue necessary instructions to distributors to provide to deliveryman proper weighing scale for the purpose of weighing LPG cylinder in the presence of customers, before delivery.



Citation

Consumer Protection Council, Rourkela V/S Indian Oil Corporation Ltd & OTHERS, ORIGINAL PETITION NO. 224 OF 2001 , Dated the 16th August, 2007



Judgement

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
ORIGINAL PETITION NO. 224 OF 2001

Consumer Protection Council, Rourkela
C/66, Sector-2, Rourkela-769 006, Orissa
(A Voluntary Consumer Organization,
Registered under the Societies Registration Act,
Regn. No. SGD-617-103/87-88, represented through
its Secretary, Sri B. Vaidyanathan) ... Complainant(s)

Vs.

1.Indian Oil Corporation Ltd.,
Represented through Chairman,
Indian Oil Corporation Ltd.,
Regd. Office: ‘Indian Oil Bhavan’,
G-9, Ali Yavar Jung Marg, Bandra (East),
Mumbai – 400 051.

2. General Manager (LPG-MO)
‘Indian Oil Bhavan’,
G-9, Ali Yavar Jung Marg, Bandra (East),
Mumbai – 400 051.

3. Sr. Manager (LPG)
Orissa State Office,
Indian Oil Corporation Ltd. (MD),
304, Bhoi Nagar, Janpath,
Bhubaneswar – 751 022

4. Sri H.S. Dua
Area Manager
Indian Oil Corporation Ltd. (Marketing Division),
Indane Area Officer, Aloke Bharati (3rd Floor),
Sahid Nagar,
Bhubanewar – 751 007

5. Sri B. Mintz
Asstt. Manager (LPG)
Indian Oil Corporation Ltd.
HIG-B/19, Phase III, Chhend,
Rourkela – 769 015.

Government of India represented through
6. Director
Legal Metrology, Govt. of India,
Deptt. of Consumer Affairs,
Krishi Bhavan, New Delhi

7. Dy. Director
Legal Metrology, Govt. of India
Deptt. of Consumer Affairs,
Regional Reference Standards Laboratory, Khandagiri,
Bhubanewar, Orissa.

8. Addl. Secretary
Department of Consumer Affairs
Ministry of Consumer Affairs & Public Distribution,
Krishi Bhawan,
New Delhi

Govt. of Orissa, represented by
9. The Controller, Legal Metrology
Govt. of Orissa,
Food, Supplies & Consumer Welfare Department,
Bhubaneswar

and

10. Secretary,
M/s. R.W.C.C.S. Ltd.,
C/o Sahayog LPG (Indane) Distributor
Big Shop No. 28, Big Market, Sector 18,
Rourkela – 769 003 ..… Opposite Parties

BEFORE:
HON’BLE MR. JUSTICE K.S. GUPTA, PRESIDING MEMBER
HON’BLE MR. JUSTICE S.N. KAPOOR, MEMBER

For the Complainant : MR. B. Vaidyanathan, Auth.
Representative

For the IOC : Mr. S.K. Sharma with Mr. Harish Puri and
Mr. Ujjwal Banerjee, Advocates

For O.P. No. 9 : Ms. Kirti Mishra, Advocate

For the U.O.I. : Mr. Vikas Singh, Addl. Solicitor General

Dated the 16th August, 2007

ORDER

PER JUSTICE S. N. KAPOOR, MEMBER

Case of the Complainant Council:

The Consumer Protection Council, Rourkela, a voluntary organisation, has filed this complaint against the Indian Oil Corporation through its Chairman, General Manager (LPG-MO), Sr. Manager (LPG), Sri H.S. Dua, Area Manager, Sri B. Minz, Asstt. Manager (LPG), Director, Legal Metrology, Govt. of India, Deptt. of Consumer Affairs, Dy. Director, Legal Metrology, Govt. of India, Deptt. of Consumer Affairs, Bhubaneswar, Addl. Secretary, Govt. of India, Deptt. of Consumer Affairs & Public Distribution, the Controller, Legal Metrology Govt. of Orissa, Bhubanewar, through The Controller, Legal Metrology, Govt. of Orissa, Food, Supplies & Consumer Welfare Deptt., Bhubaneswar and Secretary, M/s. R.W.C.C.S. Ltd., C/o Sahayog LPG (Indane) Distributor, Rourekela.
The case of the Council is that the opposite party Nos. 1 to 10 are concerned with the distribution of the LPG Gas cylinder. One of the consumers approached the Council in the first week of June, 2000 and complained that the Indane LPG refill received by him was short by 10 kgs. so. The Secretary, M/s. R.W.C.C.S. Ltd. the gas dealer of IOC, Rourkela even after being informed failed to give the replacement of the cylinder. The consumer could weigh the same as he was in possession of spring balance. Copy of the complaint of the consumer was Annexure 1. The complainant Council talked to the representative of opposite party No.10 regarding the said complaint who agreed to replace the cylinder. But in the 2nd week of June, 2000, the aforesaid consumer again informed the Council’s office that the replacement refill cylinder which he received was short by 1 kg. but he had accepted the same. Disturbing information was received that Indane LPG cylinders were being under-weighed and being aware that the consumers had no facility to weigh the same, consumers were being taken for ride.

A survey was conducted by the Voluntary Organization of the Council covering between 14th to 21st June, 2000 by visiting 48 households as per Annexure 2. The survey revealed:

1. As against the net weight of 14.2 kgs. of LPG, the consumers on an average were getting only 12.74 kgs. (10.3% are 1.46 kg. less);
2. Only 12.5% of the refill cylinders weighed were within the tolerance range of 150 gms. or less, as prescribed in 2nd Schedule of the Standards of Weights & Measures (Packaged Commodities) Rules;
3. Consumers were losing on an average Rs.24/- per refill of Indane as per the price prevailing at that time.
Seeing the huge collective financial loss of consumers and the need to tackle the problem, the Complainant Council wrote to the Director (Legal) Metrology, Govt. of India, Deptt. of Consumer Affairs with its copy to the Chairman, I.O.C. After certain communications, a joint survey was undertaken and it commenced with Sri. B. Panda, Jt. Secretary of the Complainant Council and Opposite Party No. 5, Sri B. Mintz, Asstt. Manager (LPG), Indian Oil Corporation Ltd., Rourkela. 18 samples were taken from weighment. On 24th July, 2000, Opposite party No. 5 Mr. Mintz Asstt. Manager (LPG), IOC Ltd. left the survey abruptly. A copy of the joint survey format with 18 readings has been furnished at Annexure-IV. The joint survey revealed:
1. As against the net weight of 14.2 Kg. of LPG, the consumers on an average were getting only 12.59 kg. (11.3% are 1.61 kg. less);
2. Only 22.2% of the refill cylinders weighed were within the tolerance range of 150 gms. error, as prescribed in the 2nd Schedule of the Packaged Commodities Rules, 1977;
3. Consumers were losing on an average Rs.25.50 per refill of Indane as per the prices existing at that time.
A letter was received from the General Manager, IOC, Orissa State Office informing that every thing was fine and that the joint survey utilising the spring balance was not correct though the opposite party No. 5, Sri B. Mintz, Asstt. Manager (LPG) never objected for utilising the spring balance as its reliability was checked with Standard Weights and was found error free. Despite letter sent to Director, Legal Metrology, Govt. of India, Deptt. of Consumer Affairs, once again informed the developments and soliciting his clarification regarding usage of spring balance, but no reply had been received. The Chairman, General Manager and Sr. Manager (LPG) of opposite parties, Orissa were repeatedly requesting to the Council to visit their LPG Bottling Plant at Balasore, in Orissa as they were keen to impress that everything was proper at their end. However, the visit was arranged on 26th August, 2000 between 12.30 to 2.00 PM. The Secretary of the Complainant Council was taken from Bhubaneswar to Balasore by the Area Manager, Mr. H.S. Dua of IOC for verifying methodology of refilled LPG Cylinders for correct weighment of LPG Cylinders.
In the complaint, the bottling process was explained as below:

"Refilling Process in Brief:

The empty refills after preparation (Water Wash, Inspection, etc.) are sent to the Carousel Machine. The Carousel Machine has 24 platforms to hold and fill 24 refill Cylinders continuously. The platforms which are located in a circle in the Carousel Machine, keep moving at the rate of 1 Revolution Per Minute (a sketch of the Carousel Machine is furnished at Annexure-VII) and the operator is required to adjust the tare weight of the refill on the gauge provided on the machine by rotating the knob provided for the purpose. The tare weight of the refills (empty cylinders) vary by as much as 2.5 kg. (say, from 14.8 kg. to 17.3 kg.) Hence, the operator is required to rotate the knob to set the tare weight within a span of 2.5 seconds so as to cope up with the speed of the rotating machine.

This process of setting the tare weight is obviously prone for human error due to:


1. Very short time which is available to the operator for making the adjustment.
2. Watching the rotary movement of the machine constantly can result in enormous strain to the eyes as well as to the mind; and
3. The tare weight at times is not legible on the refill and hence error in reading the same.
In the Carousel Machine if the tare weight is not set correctly, then the refill could take more or less LPG depending on whether the error is setting the tare weight is positive or negative. Hence, after the Carousel Machine, the filled Cylinders are individual tested in an on-line electronic Weighing Machine. Here again the process is done manually. The operator has to note the weight stencilled on the refill and cross check with the digital display of the Weighing Machine, when a refill is selected for weighment. In this machine (Electronic Weighing Machine) the no load reading is set as (-) 14.2 kg. so that when a refill is weighed it displays the weight of the empty refill (tare weight). So whenever the variation is beyond acceptable levels the operator instructs his colleague standing nearby to divert the cylinder for weight adjustment. Then the concerned operator diverts the Cylinder for weight adjustment. The whole process has to be completed within 2.5 seconds so that there is no hold up in the line.
Thus the whole process of filling and checking of the weighment involving unreliable and cumbersome manual operations is inherently error prone and cannot ensure appropriate quantity to the consumers."

6 refills were got checked by the Secretary of the complainant and 3 were found under weighed by 0.5 kgs to 1 kg. By letter dated 30th August, 2000, the Council informed the Director, Legal Metrology, Govt. of India, Deptt. of Consumer Affairs, Chairman, IOC as well as others and requested the Director, Legal Metrology and others to take appropriate action about this problem so that the consumers might get right quantity of LPG in the Indane refills. Repeated and persistent requests initially did not bring about any desired result. Ultimately, the Secretary of the Council raised these issues during the Central Consumer Protection Council Meeting held on 8th November, 2000.The representatives of the Ministry of Petroleum & Natural Gas who were present in the meeting assured that they would do the needful.

The complainant Council once again did a random survey of weight of LPG refills in the Rourkela Steel Township, during April-June, 2001. The summary of the Survey Report is as under:

Total number of refills weighed/No. of households covered – 56
No. of refills found within the tolerance range of (-) 150 gms. – 18 (32.1%)
No. of refills found beyond the permissible error of (-) 150 gms. - 38 (67.9%)

On the aforesaid basis, the Council found that in asmuchas 67.9% of refills were found under-weighed to the tune of 0.89 kg. The overall refills found under weighed by 0.54 kg. resulting in a loss of about Rs.10/- per refill to the consumer at the present rate of Rs.253/- per refill, sold at Rourkela. Balasore Bottling Plant was producing about 25,000 refills per day. Thus, assuming 300 working days per year, the Bottling Plant is producing 75,00,000 refills per year. Thus the plant was inflicting a loss of Rs.7.5 crores (Rs. 10 x 75,00,000) on the consumers per year. The estimate of LPG bottling plants in the country was about 100 and as per the Manager of the Balasore Bottling Plant, all the plants worked on similar technology and process. IOC alone would be getting unduly enriched to the tune of Rs.750 crores per year. Similarly, Bharat Petroleum and Hindustan Petroleum must also be getting unduly enriched if they were running similar bottling plants.

In the light of the aforesaid facts to get the grievance redressed, the complainant Council ultimately filed a complaint on 26.6.2001 seeking following reliefs:

a. Immediately make necessary changes in their bottling plants and Carousel Machines so that they may fill right quantity of LPG in the refills;
b. Check the weight of each of the Indane LPG refill at the doorstep of the household, in presence of the consumer, before they are delivered to the consumer so as to ensure that 14.2 kg. of LPG is delivered, till the requisite changes are made in their Bottling Plants;
c. Pay a sum of Rs.5,000/- to each of the 104 consumers listed in this petition;
d. Pay 1% of the amount unduly collected in a year from the consumers through under-weighment, from across the country, to the Complainant Council, so that it may use the fund for doing more such surveys, studies and consumer protection activities;
e. Pay the Complainant Council a sum of Rs.50,000/- towards the cost of this petition; and
f. Any other orders deemed necessary;
Case of I.O.C.:
The Chairman, IOC and other officials of the IOC, opposite party Nos. 1 to 5 filed their joint reply and contested the matter inter alia on the following preliminary objections:

"Firstly, I submit that impleading of several officers of IOC, including its Chairman and its other high officials apart from other who have no part to play and when there are no allegations made against them in the complaint not any relief is claimed against them, is without any justification which make the complainant misconceived and bad for misjoinder of parties.

Secondly, no defects have been pointed out and no case is made out for alteration and or change in the Bottling Procedure being followed, complainant is without merit and deserved to be dismissed.

Thirdly, no amount as alleged have been received directly or indirectly by the answering opposite parties, therefore, the prayer for payment of compensation and / or costs to the complainant or any one else does not arise.

Fourthly, keeping in view the allegations made in the complaint the complainant is not a ‘consumer’ and is not entitled to maintain the complaint.

Fifthly, in any event, the allegations in the complaint are vague and lack in material and relevant particulars and no cause of action is made out to maintain the complaint.

But on facts, they denied the allegations made by the Complainant Council in respect of the following:

A. The speed of the rotation of the carousal is 72 seconds per rotation as against one minute per rotation as stated by the petitioner.
B. Sufficient time is available to the operator for adjusting the tare weight at Carousal filling machine.
C. The Operator engaged for tare weight setting at Carousal machine is duly relieved and rotated to allow him to have rest at regular intervals.
D. Tare weight are stencilled on body of Cylinders as well as inside surface of one of the vertical stay of Valve Protection ring of cylinder. Moreover during inspection of empty cylinders prior to their bottling, tare weights are prominently marked on the cylinders in case tare weights are found to be illegible. Accordingly chances of error in reading tare weight of cylinders are avoided.
It was claimed that with a view to making the process of segregation of under weighed cylinders more understandable, three numbers of cylinders were under filled and allowed to pass through to the on line weighing scale so that the petitioner could see how such under filled cylinders are detected, rejected and segregated for correction. Hence, the observation of the complainant that three out of six cylinders checked were underweight is nothing but a clever manipulation of the facts and hence should be rejected.
In short, the shortcomings alleged by the Complainant Council were denied and according to them their team checked 25 filled cylinders by the stationery platform type electronic check scale which they had brought with them for the inspection. The result of the inspection was found to be satisfactory on 13th October, 2000.

In this regard, they (GM, IOC) also relied upon the measures suggested to the Under Secretary, Govt.of India, Ministry of Energy,(Deptt. of Petroleum), Shastri Bhavan, New Delhi about use of weighing balance which reads as under:

"We are fully in agreement about protecting the interest of consumers in respect of delivering correct quantity of product. However, equipping the deliverymen with portable spring balance would not serve the desired purpose. Portable spring balances cannot be depended upon to give accurate weight, especially with passage of time and that too for weighing LPG cylinders whose gross weight would be around 30/32 kgs. The Oil Industry has, however, taken measures to have weighing scales provided in distributors’ godown, where every filled cylinder is required to be weighed for correct weight before despatch to customers. Moreover, Oil Companies have an arrangement to replace cylinders found to be underweight so that the distributors are not put to loss and are not induced to pass on underweight cylinders to consumers on this account."

It was further submitted that:

"As per the prevailing policy and the practice in vogue in the industry distributors are obliged to by way of special instructions to carry out checks of the filled cylinders received as to their weight while unloading the trucks and to carry out hundred percent pre-delivery checks of the cylinders as to their weight and serviceability prior to leaving the distributor’s godown for the consumer’s premises. It is submitted that all care and attention is taken by IOC to ensure that there is no deficiency in the supplies made to the consumers…."

Interim order dated 4.12.2002:

Seeing the high stake of consumers, this Commission passed following order dated 4.12.2002:

"Heard the parties. Main point made by the Complainant is that the Carousel Machine installed in the filling plant itself, needs to checked to ascertain its capability to deliver correct weight. In view of the controversy involved, we request Director, IIT Kharagpur, West Bengal to nominate appropriate Faculty Member to visit the LPG Filling plant at Balasore (Orissa) and report on the following issue:

"Whether the existing Carousel Machine and its working system is capable of delivering the correct weight of 14.2 Kgs. of LPG."

For carrying out this agreement the nominee of the IIT, Khargpur may establish contact with Mr. Ajit Kumar Majumdar, Deputy Manager Law, Office of IOC, resident of 275-A, Shahid Nagar, Bhubneshwar as also Mr. B. Vaidanathan, Consumer Protection Council, C-66, Sector 2, Rourkela – 769 006, Orissa and visit the filling plant at a mutually convenient date and time to carry out the necessary examination of the equipment.

For this initial fee is fixed at Rs.10,000/- plus Travel expenses (actual) to be paid by IOC.

Report of the expert of IIT be send directly to this Commission in a sealed cover by 31st March, 2003."

Summary of Report of Dr. R.K. Shah:

Prof. & Head, Department of Chemicals Engineering, Dr. R.K. Saha after checking 303 samples in the presence of both the parties, gave the report that "11% of the cylinders have been found under weight as under:

Under weight in gms. No. of cylinders
200 to 300 gms 19
350 to 500 gms 12
550 to 1000 gms 03
Beyond 1000 gms 01

It is evident from the above that 19 cylinders out of 35 cylinders i.e. 54% use under filled in the range of 50 to 150 gms from the stipulated lower limit of 150 gms. only 12 cylinders out of 35 (i.e. 34%) are under filled in the range of 200 gms to 350 gms from the stipulated limit.

Objections by I.O.C. against Dr. Shah’s Report:

It was contended by the IOC that all the underweight cylinders and report was placed to be perused. The report given by Dr. R.K. Shah of IIT Kharagpur was confined to under weighed cylinders without taking note of over weighed cylinders. It was contended by the IOC that the Correction Unit in the plant was capable of correcting about 100 cylinders per hour with the average magnitude of under/over-weighment of 500 gms. It was also pointed out in the objection to the report that even without looking 44% of the cylinders after filling the carousel were found to be over weight. Magnitude of overweight is given below:

Over weighment in cylinders No. of cylinders
200 gms 36 Nos.
250 to 300 gms. 30 Nos.
350 to 500 gms. 52 Nos.
550 to 1000 gms 12 Nos.
Beyond 1000 Gms. 01 No.

On this basis, it was submitted that the results were satisfactory and above facts and figures were ample evidence regarding the quality of cylinders filled and despatched from the plant. In addition, it was pointed out that the Director (Legal Metrology), Govt. of India and Dy. Director (Legal Metrology) from Bhubneswar conducted inspections at the plant on 13.10.2000 and they took the cylinder ready for despatch on random basis and in their inspection it was found to be satisfactory. They were constantly monitoring the quality of cylinders at the plant and they were regularly conducting inspections. Copies of inspection reports dated 11.9.00, 14.11.00, 31.07.00, 22.12.00, 9.01.01, 18.01.01, 19.02,01, 13.03.01, 30.04.01, 15.05.01, 26.06.01 and 10.08.01 have been annexed.

There is a letter of Mr. R.K. Nayak, Deputy Director, Legal Metrology of the Govt. of India, Deptt. of Consumer Affairs, Bhubneswar, Orissa dated 27th October, 2000 and he made a request to the Controller, Legal Metrology, Govt. of Orissa, Bhubneswar to instruct the Asstt. Controller at Rourkela to go into details of individual cases and check the gas cylinders by using working standard balance and weights.

Appointment and Recommendations of Committee
to Identify Problems relating to short filling:

Recommendations of the Committee:

The Committee set up by the Deptt. of Consumer Affairs, made the following recommendations for adoption uniformly by all the companies in the best interest of consumers:

"LPG bottling plant:


i) The filling and operation procedure adopted in various bottling plants vary considerably. It is suggested that a standard procedure should be prepared as guidelines and adopted in all plants.
ii) Tare weight of the cylinder. A large variation in the tare weight of the cylinders have been observed [15.5 kg to 18.5 kg] in comparison to the tolerance on net content permitted for the product; namely, ? 150 g on 14.2 kg. One of the main reasons for this large variation is due to variation in the steel sheet used for making the cylinder, it is desirable to control the tare weight of the cylinder to a closer tolerance at the filling points. This could be done by either controlling the sheet metal of the cylinders appropriately or provide for a provision for adjustment of the tare weight of the cylinder to bring it within the suggested permissible limits. It is suggested that the variation in the tare weight of the cylinder should be restricted to 17 kg ? 500 g. A check weigher with the least count of 20 g should be introduced before the cylinder enters the filling station to remove cylinders whose variation in the weight is significant. This should be adopted in all plants as a basic requirement before the cylinders enter the filling point.
iii) The system of washing and air drying of the cylinder before filling should be adopted uniformly in all plants.
iv) The tare weight indication on the cylinders in not legible in many cases. It is recommended that the better method of printing the tare weight should be adopted, like screen printing etc.
v) The method of tare neutralization adopted in the Plant needs urgent consideration. In the mechanical plants the tare adjustment is done by an operator. The smallest division of measurement made in the plants is 100 g. While adjusting the knob for tare neutralization an operator gets 2.5 seconds only [Carousal machine with 24 fills nozzles making 1 rotation every 65 seconds] to turn the knob and with in a few minutes of operation fatigue sets in resulting in large error as high as 30-40%, even though the operators are rotated every 30-40 minutes. The same problem as stipulated for manual tare neutralization has been observed in case of electronically operated machine also. It is therefore necessary that the tare be neutralized automatically by a suitable weight reader in the filling system. This should be achieved in all the plants over a period of 2 years. Till this arrangement is made, it is recommended that the following procedure be adopted immediately in all the plants.
a) in mechanical Plants: The tare neutralization may be done by a operator not more than 15 minutes and 100% filled cylinders shall pass through a check weigher having feast count of at least 20 g.
b) In electronic plants, the data of fare weight shall be purchased by an operator before filling and shall be cross checked by another operation punching the same data after filling so the wrongly punched data cylinders could be isolated on the Check Weigher.
vi) Each of the filling machines is subjected to frequent adjustment and the variation observed is quite high, variation as high as 400 g to 500 g is said to have been noticed. It is recommended that the filling platform machine should be of suitable with 50 least count of class till accuracy, prescribed under the Standards of Weights and Measures (General) Rules, 1987 for efficiently operating in the fixed tolerance limits.
vii) Data should be available in all the plants on the quantity actually filled in each cylinder, the average quantity filled in the cylinder, the quantity received in the plant and utilized during the operation of the 8 hourly shift. It shall be ensured that the average quantity filled shall be equal to or more than 14.2 kg. 5 kg. or 19 kg. net, as the case may be.
viii) The procedure adopted for calibration of the platform machines used in the Carousel should be documented for uniform adoption in all filling plants.
ix) The check weighing machine installed in the system should have a least count of 20 g belonging to class III accuracy so that the under filled or over filled cylinders could be detected and removed from the line.
x) The correction for the under filled cylinders should be done to ensure net content equal to nominal value as above.
xi) Every plant should have an automatic leak detection system installed on line. The leak detection tolerance may be ? 0.5 g per hour. A record should be kept on the rejection rate and the rejection should be kept below 10/6000 [per shift].
xii) The filled cylinder sealing arrangement: A plastic seal or an aluminium seal is applied to cover the valve of the cylinder. The plastic is sealed with hot air at 225? C. However, it was noted that the plastic seal could be easily duplicated in the market as the seals are bring supplied only by local manufacturers. The cost of the seal is only about 40 paise per unit. Similarly the aluminium seal can be easily applied on the cylinders at any level before it reaches the consumers and hence some arrangement should be made to ensure that the tampering of seal is not possible before delivery to the consumers.

Transportation of LPG cylinder:

xiii) The mode of transportation of the filled cylinders is a weak link which should be attended immediately. At present the filled cylinders are left to care of the transporter. This has left a big loop hole in the system. Though a system for checking 10% of the cylinders received through the lorries and returning the under filled cylinders in the same lorry is existing in some areas, its actual operation is seldom effective for various reasons. Uniform procedure of sealing the lorry carrying the filled cylinders should be adopted. The key for the lorry should be made available only with the dealer and then the dealer should be held responsible for any short delivery. The time of departure of the filled lorry and its reaching at the delivery point should be monitored. Centralised monitoring system should be created so that movement of each lorry could be automatically recorded.
Storage and distribution at Agents premises:
xiv) Godown checking should be done by joint team of different departments like Legal Metrology, Civil Supplies, company field officers and police if necessary. A target should be set for such inspection.
xv) The use of gadgets like Bansuri, etc. has been reported widely. The gadgets were also demonstrated to the Committee members. Cases of filling the cylinder with 1-2 kg. of water to displace LPG gas has been reported from many parts of the country. The water remains in the cylinder continuously making short filling when sent for refilling. Stringent penalty should be levied for detection of the usage of such gadgets and also for the water filled cylinders under Essential Commodities Regulation Act (ECRA).
xvi) The computerised system of billing adopted is a good arrangement to track the records easily. This system should be adopted all throughout the country uniformly. The time of consumer registration of the refill cylinder and the time of delivery should invariably be monitored to minimise malpractice in between the godown and the consumer.

Delivery to Consumer’s point:

xvii) Random checking should also be done of the delivery boys to prevent malpractice.
xviii) Only balances which have been verified by Weights and Measures authorities should be permitted to be used for demonstrating the net weight to the consumers at delivery point. The balances shall be periodically verified. In view of the importance, such balances should be verified very 6 months instead of 1 year.
xix) The introduction of special rubber tube "Suruksha" by one of the Oil companies for connecting the cylinder with the stove is a safety arrangement in the interest of consumers and should be used by all consumers. Wide publicity should be given to this arrangement.
xx) One of the reasons for shortage in the cylinder is due to the price difference between 14.2 kg. domestic cylinder rates and 19 kg. commercial cylinder rates. It is proposed that the Government subsidy could be brought down so that it becomes less attractive to divert the domestic cylinders for commercial use. To understand the problem of diversion it is suggested that a record of the 19 kg. cylinders returning for refilling could be compiled in various regions and watch kept."

The Deptt. of Consumer Affairs constituted the Committee to identify problems relating to short filling of LPG domestic cylinders informed through their reply that the report of the Committee constituted in September, 2003 was sent to all the Members of the Committee on 4.2.2005 including the Ministry of Petroleum & Natural Gas. A letter was also written at the level of Secretary, Consumer Affairs on 3.2.2005 to the Secretary, Ministry of Petroleum & Natural Gas to finalise the plan of action, as proposed in the report. A reminder had been sent at the level of Addl. Secretary to Ministry of Petroleum & Natural Gas on 13.4.2006 to expedite action on the report.

This Commission, however, by order dated 19.10.2005 felt desirable that in order to decide the issue raised in this complaint effectively, notice be issued to the Ministry of Petroleum and Natural Gas. Accordingly, notices were issued to the Ministry of Petroleum & Natural Gas and the Ministry of Consumer Affairs along with copies of the complaint, written version filed by the Opposite parties, report of the IIT Kharagpur, report filed on 26.7.05 as also report of Project Development India Ltd.

This Commission also directed the opposite parties (IOC) to issue advertisement as inserted by Hindustan Petroleum by way of temporary measure informing consumers that every deliverymen is to carry weighing scale and consumer was given option of checking the weight of the cylinder by the deliverymen at the door step. Indian Oil Corporation Ltd. was also directed to ensure that weighing scale was made available to all deliverymen who would give delivery of domestic cylinders to the customers only after weighing them in the presence of consumers with effect from 1.11.2005.

It is submitted by the Ld. Counsel and the Learned Additional Solicktor General that recommendation of the Committee have been fully complied with wherever possible. It is submitted that the major recommendations was to the following facts:

1. Oil Marketing Companies (OMCs for short) have undertaken installation of with electronic filling systems replacing old carousels/unit filling systems which had outlived their useful life and were difficult to maintain. OMCs had also decided to provide electronic carousel systems in all future plants.

2. The Companies converting/upgrade existing mechanical filling systems to electronic wherever the performance is not satisfactory. As of now 58 Nos. of OMC bottling plants are with electronic carousel systems and balance 120 plants would be provided with electronic filling systems on need basis in a phased period of four years.

3. As regards to standard procedures the LPG bottling plants are adopting the standard operating practices as per OISD (Oil Industry Safety Directorate), CCOE stipulations and other statutory rules.

4. As regards transportation of cylinders to plant and to godowns, as per Mr. Nangia’s report, the filled cylinders loaded in a truck will be accessible from outside even if the truck is sealed due to caging arrangement provided. Hence, even with provision of sealing the possibility of malpractice cannot be eliminated. However, OMCs monitor the transporter’s track record based on feed back from distributors and take necessary actions as per contract terms for violations/malpractices.

5. In regard to godown checking after receipt and storage of cylinders, Mr. Nagia in his report has stated that OMC were carrying random inspection at distributors godowns and were taking actions as per MDG (Marketing Discipline Guidelines) wherever malpractices are observed.

Year-wise actions taken by OMCs as per MDG for the last three years against the distributors for supplying for supplying underweight cylinders to customers are given below for the information:

2003 - 60
2004-05 - 67
2005-06 - 58

6. OMCs have already implemented the system of demonstrating the net weight to the consumers with 80% of the distributors, as per Mr. Nangia’s report.

As per submissions made, the Ld. Addl. Solicitor General, Mr. Vikas Singh, so far as the bottling plants are concerned, the investment of huge amount of more than 250 crores was likely to be involved for modernisation. For about 120 bottling plants and 145 number of filling systems were required to be modernized as per the recommendations of the Committee.

Ld. Addl. Solicitor also submitted that considering the limited availability of vendors, huge investment involved oil companies have planned to modernize the bottling plants in a phased manner in next four years. The anxiety of this Commission in regard to supply of LPG cylinders to consumers, would not only depend upon the steps which have been taken by the Ministry of Petroleum as well as marketing Companies ensuring that steps are being taken at various stages.

Having heard the Secretary of the Consumer Council and the Counsel for the parties and Learned Addl. Solicitor General, it is felt, while seeing the loss which is being caused to the customer a sum of Rs. 250 crores is just one third of the amount of unjust enrichment, if this Commission goes by the estimate of the Complainant Council. But at the same time, this Commission cannot afford to cause any dislocation in distribution system by closing some units and to start modernisation without making any alternative arrangements for supply during that period. Though we are accepting the submission about period of modernising bottling plants in next four years but we still believe, not just expressing merely a pious hope that Ministry of Petroleum and Natural Gas would ensure modernisation at the earliest possible time without making it a prestige issue of not completing modernisation before four years. It may be mentioned that if it is done earlier, it would be assuring consumers that not only the Ministry of Consumer Affairs but also the Ministry of Petroleum and Natural Gas cares about the consumers.

However, seeing the averments made in para 4 about the verification of weight and measures for demonstrating the net weight to the consumers at delivery points, we have already issued directions to the IOC that weighing scales shall be made available to the deliverymen to enable them to give delivery of the domestic cylinders to the consumers after only weighing them in the presence of the customer/consumer and this direction was issued and is being incorporated in this order, for this appears to be only way to stop source of pilferage of LPG and unauthorised sale of pilfered LPG in the light of the advertisement made by Hindustan Petroleum which gave an option of checking the weight of the gas cylinder at the door steps of the consumers virtually guarantying that the cylinder carried the right weight of the gas without there being any pilferage.

The Ministry of Petroleum may also deem it desirable issue appropriate similar directions to other all LPG Marketing Companies on the same lines, particularly, in the light of the averments made in para 4.

The Ministry, of Petroleum may further deem it proper to advise all marketing Companies to ensure that the deliverymen should be trained personnel to advise the consumers about the safety measures required to be taken to avoid any explosion of gas cylinder, and that in case the appropriate caution card containing ‘Safety tips’ is not readily available at the residence etc. of the consumer, he should provide a caution card for taking necessary precautions to use the gas cylinder, particularly, when the gas starts leaking from the gas cylinder. Several accidents, which have taken place, have happened on account of lack of proper precautions due to lack of awareness of consumer as well as the deliverymen. All the Marketing Companies are also responsible in terms of Section 3 of the Essential Commodities Act, 1955 read with Section 3(2) of the LPG (Regulation of Supply and Distribution) Order dated 26.4.2000. The distributor thus has been registered and granted licence first under public distribution system, under an authorisation from the Government Oil Company.

We decide the complaint with the following directions:

1. The Ministry of Petroleum is given four years time as prayed for, in terms of the submissions and our observations mentioned hereinabove.

2. The Ministry of Petroleum as well as the Ministry of Consumer Affairs shall ensure that all Marketing Companies do issue necessary instructions that the Distributors will provide to deliveryman proper weighing scale for the purpose of weighing LPG Gas Cylinder in the presence of customers and they will give it due publicity by publishing the same in the vernacular language of each and every State as well as in English and Hindi in newspapers apartment from giving similar type of advertisement in TV for information of the consumers.

We direct the Indian Oil Corporation to pay a sum of Rs.50,000/- to the Complainant-Council to meet the expenses incurred by it in protecting the interest of consumers and to continue to protect the interest of the consumers, within a period of four weeks.

The complaint is decided accordingly.

……….……………………J
(K.S. GUPTA)
PRESIDING MEMBER
……….……………………J
(S.N. KAPOOR)
MEMBER




Tags :- landmark judgmentnational consumer disputes redressal




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