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Hemant Agarwal (ha21@rediffmail.com Mumbai : 9820174108)     25 February 2009

CO's CAN SUE POWER SUPPLIERS UNDER CONSUMER LAW, RULES SC

Dear All,
I request the readers to provide case details and complete citation, if available from their sources.  Also kindly oblige & email it to me on "ha21@indiatimes.com" .
This totally changes the defination of Consumer Protection Act and now we can all expect a flood of Consumer cases from corporates.  Kindly retain this as it IS definetly useful for future references.  This has NOW become VERY VERY IMPORTANT.

Keep Smiling ... HemantAgarwal
9820174108 - evenings only)


CO's CAN SUE POWER SUPPLIERS UNDER CONSUMER LAW, RULES SC

THE Supreme Court has ruled that companies engaged in commercial activities can drag their electricity supplier to a consumer forum and seek damages for deficiency in services.

A bench of Justice Markandey Katju and Justice RM Lodha rejected a plea of Karnataka Power Transmission Corporation in which it had said a company using electricity for commercial purpose cannot approach a consumer forum against the utility. The sale of power to a commercial consumer for a commercial purpose was outside the scope of the Consumer Protection Act, 1986, the state utility had argued.

Ashok Iron Works had in 1991 applied an electricity connection, but it approached the district consumer forum after KPTC delayed power supply. The district forum had ruled that the matter was not under the jurisdiction of the Consumer Protection Act.

The private company then approached the Karnataka State Consumer Disputes Redressal Commission, which decided in its favour. This had prompted KPTC to approach the National Consumer Disputes Redressal Commission, which quashed its plea. The utility then moved the apex court.

The apex court, while dismissing KPTC's petition, remanded the matter back to the Consumer Disputes Redressal Forum, Belgaum, to decide whether there was any deficiency in services by the power supplier.

KPTC had claimed that the complaint made by the company was not covered under the consumer law since the company was not a "person" as defined under Section 2(1)(m) and hence, not a consumer as defined under Section 2(1)(d) of the Consumer Protection Act. The state utility had also argued that the private company was not a consumer since it had purchased electricity for a commercial purpose.

However, the apex court said: "While defining a 'person' in Section 2(1)(m), the legislature never intended to exclude a juristic person like a company... It does not appear to us to admit of any doubt that company is a person within the meaning of Section 2(1)(d) read with Section 2(1)(m) and we hold accordingly."

It also said KPTC could be held liable for deficiency in service under the consumer law. "...the provision of facilities in connection with supply of electrical energy is a service. Supply of electricity by the (Karnataka state electricity) Board or for that matter KPTC to a consumer would be covered under Section 2(1)(o) being 'service' and if the supply of electrical energy to a consumer is not provided in time as is agreed upon, then under Section (2)(1)(g), there may be a case for deficiency in service."



Learning

 6 Replies

M. PIRAVI PERUMAL (Advocate & Consumer Rights)     25 February 2009

 


                  IN THE SUPREME COURT OF INDIA


                   CIVIL APPELLATE JURISDICTION


 


                  CIVIL APPEAL NO 1879 OF 2003


 


 


 


Karnataka Power Transmission Corpn. & Anr.                         ... Appellants


 


 


                               Versus


 


Ashok Iron Works Pvt. Ltd.                                                 ... Respondents


 


 


                  CIVIL APPEAL NO 7784 OF 2002


 


 


H.V. Balachandra Rao                            ... Appellant


 


                               Versus


 


 


Karnataka Power Transmission Corpn. & Anr. ... Respondents


 


 


 


                             JUDGEMENT


 


     R.M. Lodha, J.


 


 


 


     These two appeals by special leave, involving common


 


questions, were heard together and are being disposed of by this


 


judgment.





                                                               2


 


 


2.   As   the principal arguments have been       advanced in Civil


 


Appeal No. 1879/2003, we take up the facts of that appeal which


 


are thus, briefly put. M/s Ashok Iron Works Private Limited (for


 


short, `the company') is a Private Limited Company and engaged in


 


the activity of manufacture of iron products. The company applied


 


for the supply of electrical energy (2500 KVA) to the Karnataka


 


Electricity Board (now Karnataka Power Transmission Corporation


 


and hereinafter referred to as `KPTC'). The application made by the


 


Company was cleared by the Single Window agency and supply


 


of electric energy 1500 KVA was sanctioned. The company is said


 


to have deposited an amount of Rs. 8,40,000/- on 1st February,


 


1991 as per demand.         KPTC did not     commence supply of


 


electricity as agreed upon and that necessitated the company to


 


approach Karnataka High Court for a direction to KPTC to supply


 


the sanctioned energy.     On 16th April, 1992,     the High Court


 


directed KPTC to supply electrical energy as per sanction forthwith


 


and subsequently, time for supply of electricity was extended by


 


the High Court upto 21st July, 1992. KPTC raised an additional


 


demand of Rs. 8,38,000/- from the company and further demand in


 


the sum of Rs, 1,34,000/-. The company is said to have deposited


 


the said amount.    However,    the actual supply of     the power





                                                                  3


 


 


commenced      in the month of November, 1992.         The company


 


accordingly filed a complaint under the Consumer Protection Act,


 


1986 (for short, `the Act, 1986') before the Consumer Disputes


 


Redressal Forum,     Belgaum claiming damages in the sum of Rs.


 


99,900/-   for delay in supply of electricity.   The complaint was


 


contested by    KPTC, and,     inter alia, preliminary objection was


 


raised that complaint was not maintainable as the complainant was


 


engaged in commercial activity and electricity being goods; sale of


 


goods to a commercial consumer for a commercial purpose was


 


outside the scope of the Act, 1986.


 


3.     As there were several complaints wherein identical objection


 


pertaining to the maintainability of such complaints was involved, all


 


these complaints were taken up and disposed of together by the


 


District Forum by a common order dated 10th September, 1993.


 


The District Forum was persuaded by the objection raised by the


 


KPTC and it held that the complaints were not maintainable.


 


4.     The company challenged the order of the District Forum in


 


appeal before Karnataka State Consumer Disputes Redressal


 


Commission (for short, `State Commission').      Few other appeals


 


from   the common judgment dated         10th September, 1993 also


 


came to be filed before the State Commission. The State





                                                                    4


 


 


Commission vide its order dated June 15, 1995 set aside the order


 


of the District Forum and held that complaints were maintainable


 


being covered by the definition of "Consumer" under the provisions


 


of the Act, 1986.


 


5.     KPTC challenged the order of the State Commission by filing


 


a revision petition before the          National Consumer Disputes


 


Redressal Commission (for short, "`National Commission").               It


 


appears that initially revision petition was dismissed in default but


 


later on,      on the application of restoration made by KPTC,      the


 


revision petition was restored but it was dismissed in view of its


 


decision dated 23rd November, 2001, in the case of M/s Welmelt


 


Steel Cast Pvt. Ltd. v. Karnataka State Electricity Board.          It is


 


from this order that appeal 1879/2003 by special leave arises.


 


6.    Mr. S.K. Kulkarni, learned counsel for          KPTC made the


 


following submissions before us:


 


      (i)      The complaint by the company before the Consumer


               Forum against KPTC was incompetent and not


               maintainable because the complainant is not a `person'


               under Section 2(1)(m) of the Act, 1986 and as such the


               complainant is not the `consumer' within the opening


               limb of the definition of that expression in Section 2(1)


               (d).


 


 


        (ii)       The complainant is not a `consumer' within the


               definition of Section 2(1)(d)(i) of the Act, 1986 since





                                                                          5


 


 


                   it purchased electrical     energy from the KPTC for


                   commercial production.


 


           (iii)   The complainant's case does not fall within the scope of


                   Section 2(1)(d)(ii) of the Act, 1986. The expression


                   "service" in Section 2(1)(o) cannot be read in a wider


                   sense as it is circumscribed by the word "facilities",


                   thereby limiting the service only to the consumers of


                   facilities in connection with supply of electrical energy.


                   In other words, the dispute relating to sale and supply of


                   electricity does not come within the ambit of "service"


                   under Section 2(1)(o) of the Act, 1986.          If for the


                   arguments' sake, it is treated "service", since it is for


                   commercial purpose, it is excluded from the purview of


                   sub-clause (1)(d)(ii).


 


 


7.         At this stage, it would be appropriate to refer to some of the


 


provisions of the Act, 1986 as were existing at the relevant time in


 


the year 1992 which are relevant for the consideration of the


 


submissions of the learned counsel for KPTC.


 


 


 


8.         Section 2(1)(d) defines "consumer" as follows:-


 


            "Consumer" means any person who, -


 


     (i)           buys any goods for a consideration which has been paid


                   or promised or partly paid and partly promised, or under


                   any system of deferred payment and includes any user


                   of such goods other than the person who buys such


                   goods for consideration paid or promised or partly paid


                   or partly promised, or under any system of deferred


                   payment when such use is made with the approval of


                   such person, but does not include a person who obtain


                   such goods for resale or for any commercial purpose; or





                                                                       6


 


 


 


   (ii)           hires any services for a consideration which has been


                  paid or promised or partly paid and partly promised, or


                  under any system of deferred payment and includes any


                  beneficiary of such services other than the person who


                  hires the services for consideration paid or promised, or


                  partly paid and partly promised, or under any system of


                  deferred payment, when such services are availed of


                  with the approval of the first mentioned person."


 


 


 9.       According to Section2(1)(m), "person" includes :-


 


          "(i)     a firm whether registered or not;


          (ii)     a Hindu undivided family;


          (iii)    a co-operative society;


          (iv)    every other association of persons whether registered


                  under the societies Registration Act, 1860 (21 of 1860)


                  or not."


 


 


 10. Section 2(1)(o) defines "service" thus:


 


              "Service' means service of any description which is made


          available to potential users and includes the provision of


          facilities in connection with banking, financing, insurance,


          transport, processing, supply of electrical or other energy,


          board or lodging or both, entertainment, amusement or the


          purveying a news or other information, but does not include


          the rendering of any service free of charge or under a contract


          of personal service."


 


 


 


re : contention -(i)


 


11.       The question that falls for our determination is: is a private


 


limited company a `person' as contemplated under Section 2(1)(d).





                                                                  7


 


 


The contention of the learned counsel for the KPTC is that persons


 


specified and        enumerated in Section 2(1)(m) are the       only


 


categories of persons covered by       that clause and a company


 


incorporated under the Companies Act is not covered thereunder.


 


The learned counsel would submit that a company is excluded from


 


the definition of `person' since the object of the Act, 1986 is to


 


provide an affordable remedy to individuals or four categories of


 


collectivities   or associations of individuals which may constitute


 


legal entities for     suing or being sued.   According to learned


 


counsel, the companies incorporated were never intended to be


 


covered by Act, 1986 as they could always pursue the ordinary


 


remedy provided in law. The learned counsel also submitted that


 


the word "includes" must be read as "means".       In this regard, the


 


learned counsel placed reliance upon two decisions of this Court


 


namely; (1) The South Gujarat Roofing Tiles Manufacturers


 


Association and Anr. v. The State of Gujarat and Anr. [(1976) 4


 


SCC 601]         (2) Reserve Bank of India    v.   Peerless General


 


Finance and Investment Co. Ltd. and Ors. [(1987) 1 SCC 424)]


 


12.   Lord Watson in       Dilworth   v. Commissioner of Stamps


 


(1899) AC 99 made the following classic statement:





                                                                  8


 


 


      "The word "include" is very generally used in interpretation


clauses in order to enlarge the meaning of words or phrases


occurring in the body of the statute; and when it is so used these


words or phrases must be construed as comprehending, not only


such things as they signify according to their natural import, but


also those things which the interpretation clause declares that they


shall include. But the word "include" is susceptible of another


construction, which may become imperative, if the context of the


Act is sufficient to show that it was not merely employed for the


purpose of adding to the natural significance of the words or


expressions defined. It may be equivalent to "mean and include",


and in that case it may afford an exhaustive explanation of the


meaning which, for the purposes of the Act, must invariably be


attached to these words or expressions."


 


 


 


13.        Dilworth (supra) and few other decisions came up for


 


consideration in Peerless General Finance and Investment Co.Ltd.


 


and this     Court summarized     the legal position that    inclusive


 


definition by the Legislature is used; (one) to enlarge the meaning


 


of words or phrases so as to take in the ordinary, popular and


 


natural sense of the words and also the sense which the statute


 


wishes to attribute to it; (two) to include meaning about which there


 


might be some dispute; (three) to bring under one nomenclature all


 


transactions possessing certain similar features but going under


 


different names.


 


14.   It    goes without saying that interpretation of      a word or


 


expression must depend on the text and the context. The resort of





                                                                      9


 


 


the word `includes' by the Legislature often shows the intention of


 


the Legislature that it wanted to give extensive and enlarged


 


meaning to such expression. Sometimes, however, the context


 


may suggest that word `includes' may have been designed to mean


 


"means".     The setting, context and object of an enactment may


 


provide sufficient guidance for interpretation of word `includes' for


 


the purposes of such enactment.


 


15.   Section 2(1)(m) which enumerates four categories namely,


 


(i) a firm whether registered or not; (ii) a Hindu undivided family; (iii)


 


a co-operative society; and (iv) every other association of persons


 


whether registered under the Societies Registration Act, 1860 (21


 


of 1860) or not while defining        `person' cannot be held to be


 


restrictive and confined to these four categories as it is not said in


 


terms that `person' shall mean one or other of the things which are


 


enumerated, but that it shall `include' them.


 


16.   The General Clauses Act, 1897 in Section 3(42) defines


 


`person':


 


      "Person shall include any company or association or body of


      individuals whether incorporated or not."





                                                                    10


 


 


17.   Section 3 of the Act, 1986 upon which reliance is placed by


 


learned counsel for KPTC provides that the provisions of the Act


 


are in addition to and not in derogation of any other law for the


 


time being in force.        This provision instead of helping the


 


contention of KPTC would rather suggest that the access to the


 


remedy provided to the Act of 1986 is an addition to the provisions


 


of any other law for the time being in force. It does not in any way


 


give any clue to restrict the definition of the `person'.


 


18.   Section 2(1)(m),     is beyond all questions, an interpretation


 


clause, and must have been intended by the Legislature to be taken


 


into account in construing the expression `person' as it occurs in


 


Section 2(1)(d).    While defining `person' in Section 2(1)(m), the


 


Legislature never intended to exclude a juristic            person like


 


company.     As a matter of fact,      the four categories by way of


 


enumeration mentioned therein is indicative, categories (i), (ii) & (iv)


 


being unincorporate and category (iii) corporate, of its intention to


 


include body     corporate as well as body        un-incorporate.   The


 


definition of   `person' in Section 2(1)(m) is inclusive and        not


 


exhaustive. It does not appear to us to admit of any doubt that





                                                                     11


 


 


company is a person within the meaning of Section 2(1)(d) read


 


with Section 2(1)(m) and we hold accordingly.


 


re: contention - (ii) and (iii)


 


19.     In CST v. M.P. Electricity Board, Jabalpur; case 1969 (2)


 


SCR 939, this Court held that electricity is `goods'.    In the case of


 


State     of   Andhra      Pradesh   v.   National   Thermal     Power


 


Corporation; (2002) 5 SCC 203, the Constitution Bench approved


 


the observations made in M.P. Electricity Board to the extent that


 


electrical energy can be          transmitted, transferred, delivered,


 


possessed, etc., but did not agree with the observation             that


 


electrical energy can be stored.     The Constitution Bench held that


 


significant characteristic of electrical energy is that its generation or


 


production coincides almost instantaneously with its consumption.


 


In the case of Indian Aluminium Co. v. State of Kerala; (1996) 7


 


SCC 637, the characteristics of electrical energy were noticed by


 


this Court thus, ".....continuity of supply and consumption starts


 


from the moment the electrical energy passes through the meters


 


and sale simultaneously takes place as soon as meter reading is


 


recorded.      All the three steps or phases (i.e. sale, supply and


 


consumption) take place without any hiatus. It is true that from the





                                                                    12


 


 


place of generating electricity, the electricity is supplied to the sub-


 


station installed at the units of the consumers through electrical


 


high-tension transformers and from there electricity is supplied to


 


the meter...."


 


20.   Recently, this Court in the case of Southern Petrochemical


 


Industries Co. Ltd. v. Electricity Inspector & ETIO and Others ;


 


(2007) 5 SCC 447, made following pertinent observations:


 


      "149. It may be that electricity has been considered to be


      "goods" but the same has to be considered having regard to


      the definition of "goods" contained in clause (12) of the Article


      366 of the Constitution of India. When this Court held


      electricity to be "goods" for the purpose of application of sales


      tax laws and other tax laws, in our opinion, the same would


      have nothing to do with the construction of Entry 53 of List II


      of the Seventh Schedule of the Constitution of India."


 


 


21.   Section 49 of The Electricity (Supply) Act, 1948 makes the


 


following provision:


 


      [49. Provision for the sale of electricity by the Board to


      persons other than licensees. - (1) Subject to the


      provisions of this Act and of regulations, if any made in this


      behalf, the Board may supply electricity to any person not


      being a licensee upon such terms and conditions as the


      Board thinks fit and may for the purposes of such supply


      frame uniform tariffs.


 


      (2) In fixing the uniform tariffs, the Board shall have regard to


      all or any of the following factors, namely:-


 


            (a) the nature of the supply and the purposes for


            which it is required;





                                                                         13


 


 


 


(b)   the co-ordinated development of the supply and distribution of


      electricity within the State in the most efficient and economical


      manner, with particular reference to such development in areas not


      for the time being served or adequately served by the licensee;


 


                  (c)   the simplification and standardization of methods


                        and rates of charges for such supplies;


 


                  (d)   the extension and cheapening of supplies of


                        electricity to sparsely developed areas.


 


            (3) Nothing in the foregoing provisions of this section shall


            derogate from the power of the Board, if it considers it


            necessary or expedient to fix different tariffs for the supply of


            electricity to any person not being a licensee, having regard to


            the geographical position of any area, the nature of the supply


            and purpose for which supply is required and any other


            relevant factors.


 


            (4) In fixing the tariff and terms and conditions for the


            supply of electricity, the Board shall not show undue


            preference to any person.]


 


 


 


      22.      Whether the supply of electricity by KPTC to a consumer


 


      is sale and purchase of goods within the meaning of Section 2(1)(d)


 


      (i) of the Act, 1986?   We do not think so. Although title of Section


 


      or marginal note speaks of "the sale of electricity by the Board to


 


      persons other than licensees" but the marginal note or title of the


 


      Section cannot afford any legitimate aid to the construction of


 


      Section. Section 49 speaks of supply of electricity to any person


 


      not being a licensee upon said terms and conditions as a Board





                                                                   14


 


 


thinks fit and for the purpose of such supply free uniform tariffs.


 


This   Court   has   already   held   in   Southern   Petrochemical


 


Industries (supra) that supply does not mean sale.        As a matter


 


of fact, the company has brought its case to be covered by Section


 


2(1)(d)(ii) and not 2(1)(d)(i) as the dispute raised by the company


 


is with regard to non-performance of the services for consideration


 


within time frame. For the purposes of the maintainability of the


 


complaint, therefore, what is important to be seen is whether there


 


is deficiency in service within the meaning of Section 2(1)(d)(ii).


 


Under Section 2(1)(o) of the Act, 1986, `service' means service of


 


any description which is made available to potential users and


 


includes the provision of facilities in connection with supply of


 


electrical or other energy. "Deficiency" under Section 2(1)(g)


 


means any fault, imperfection, shortcoming or inadequacy in the


 


quality, nature and manner of performance which is required to be


 


maintained by or under any law for the time being in force or has


 


been undertaken to be performed by a person in pursuance of a


 


contract or otherwise in relation to any service. As indicated in the


 


definition of `service', the provision of facilities in connection with


 


supply of electrical energy is a service. Supply of electricity by the


 


Board or for that matter KPTC to a consumer would be covered





                                                                       15


 


 


under Section 2(1)(o) being `service' and if the supply of electrical


 


energy to a consumer is not provided in time as is agreed upon,


 


then under Section (2)(1)(g), there may be a case for deficiency in


 


service.


 


23.   Learned counsel for KPTC relied upon an order of this Court


 


in the case of SDO, Electricity and Anr. v. B.S. Lobana; (2005) 6


 


SCC 280 in support of his contention that in the matter such as


 


present one, the Consumer Forum is not an appropriate forum. We


 


are afraid no such absolute proposition as canvassed by                the


 


learned counsel is discernible from the said order. The said order


 


is confined to its own facts which is clear from paragraph 3 that


 


reads thus:


 


      " The respondent has filed written submissions. We have


      perused the same. In the facts and circumstances of the


      case, we are of the view that instead of moving the District


      Forum, the respondent should have moved an application


      under section 26(6) of the Electricity Act, 1910 (for short " the


      Act") for referring the matter to the Electrical Inspector."


 


 


 


24.    Learned counsel urged that the definition `service' is of


 


limited nature and is limited to the providing facilities in connection


 


with electricity. According to him, the facility is an expression which


 


facilitates the supply of electricity to an installation and the definition





                                                                    16


 


 


of service does not cover supply of electricity. This contention of


 


the learned counsel is founded on         erroneous assumption that


 


supply of electricity is a sale of electricity and the use of expression


 


`supply' is synonym for `sale'.     We have already noticed above,


 


which we need not repreat, that supply of electricity to a consumer


 


by KPTC is not sale of electricity. The expression `supply' is not


 


synonym for `sale'.    We reiterate what has been stated by this


 


Court in Southern Petrochemical Industries Co. Ltd. (supra) that


 


supply does not mean sale. The expression `but does not include


 


a person who avails of such services for any commercial purpose'


 


inserted in Section 2(1)(d)(ii)     by the Act 62 of 2002 is not


 


applicable in the facts and circumstances of the present case since


 


the controversy relates to the period prior to amendment.


 


25.   In what we have discussed above, the complaint made by


 


the company before the District Forum cannot be said to be not


 


maintainable and we hold, as we must, that complaint is


 


maintainable.


 


26.   In so far as Civil Appeal No. 7784/2002 is concerned, the


 


complainant (appellant herein)      is a sole proprietor of     Techno


 


Batteries which is a battery charging unit.         According to the


 


complainant, for the power supplied by Karnataka Electricity Board





                                                                  17


 


 


(now `KPTC' ) charges payable are        under "Power-Tariff, L.T.-5"


 


but in the Bill dated 6th March, 1990, a sum of Rs. 22,628.40 was


 


demanded as "Audit Short Claim" on the ground that the charges


 


payable for the consumption of electricity by the complainant are


 


under Tariff-Schedule L.T.-3 and not L.T. -5.      The complainant


 


moved the District Forum at Bangalore challenging the demand.


 


The District Forum allowed the complaint vide its order dated 22nd


 


February, 1994.    KPTC preferred an appeal before         the State


 


Commission. The State Commission by its Order dated 19th June,


 


1997 allowed the appeal on the ground that the complainant was


 


not a consumer within the meaning of Section 2(1)(d) of the Act,


 


1986 and consequently, it set aside the order of the District Forum.


 


Aggrieved by the order of the State Commission, the complainant


 


preferred Revision before the National Commission. The Revision


 


Application came to be dismissed as the complainant was not


 


present and also because the National Commission was satisfied


 


with the order passed by the State Commission.           This appeal


 


arises from the Order dated 1st December, 2000, passed by the


 


National Commission.


 


27.   In view of the discussion already made by us above while


 


dealing with contentions (ii) and (iii) in Civil Appeal No. 1879/2003,





                                                                    18


 


 


it has to be held that the complaint by H.V. Balchandra Rao is


 


covered under Section 2(1)(d)(i)(ii) of the Act, 1986.


 


28.   For the foregoing reasons:


 


      (1)        Civil Appeal No. 1879/2003           is dismissed; the


 


                 order dated 7th October, 2002 passed by National


 


                 Consumer Disputes Redressal Commission and


 


                 the   Order    of        Karnataka   State   Consumer


 


                 Redressal Commission passed on 15th June, 1995


 


                 are affirmed      and,    accordingly,    the complaint


 


                 stands remitted to District Forum for its disposal in


 


                 accordance with law.


 


      (2)        Civil Appeal No. 7748/2002 is allowed and the


 


                 Order dated 1st December, 2000 passed by


 


                 National      Consumer         Disputes      Redressal


 


                 Commission and the Order dated 19th June, 1997


 


                 passed by Karnataka State Consumer Disputes


 


                 Redressal Commission are set aside. Appeal No.


 


                 168/1994 is restored to the file of Karnataka State


 


                 Consumer Disputes Redressal Commission for its


 


                 disposal in accordance with law.


 


      (3)        The parties shall bear their own costs.





                                                 19


 


 


 


 


                   ................................J.


                      (MARKANDEY KATJU)


 


 


 


 


                   .................................J.


                                  (R.M. LODHA)


 


New Delhi


February 9, 2009





 

M. PIRAVI PERUMAL (Advocate & Consumer Rights)     25 February 2009

I HAVE ALSO UPLOADED THE ENTIRE JUDGEMENT IN OUR FILE SECTION FOR PERUSAL OF OUR LCI MEMBERS.

Manish Singh (Advocate)     25 February 2009

Dear Members,


the said judgment does not make a person a consumer who avails the services for commercial purposes after 15-03-03 wherein an amendment to the section 2(d)(ii) was made and notified including the term" but does not include a person who avails such services for any commercial purposes".


if the matter pertains to the period before the abovesid date, this ruling shall apply otherwise not.

PALNITKAR V.V. (Lawyer)     25 February 2009

Thanks friends.

RAKHI BUDHIRAJA ADVOCATE (LAWYER AT BUDHIRAJA & ASSOCIATES SUPREME COURT OF INDIA)     05 March 2009

Thanx 4 d valueable information.

Hemant Agarwal (ha21@rediffmail.com Mumbai : 9820174108)     15 July 2009

Dear All,

This is in continuing context, to the original post.

Keep Smiling ..... Hemant Agarwal

 

 "Times of India", Mumbai Edition on July 15, 2009, page no. 11

Can a company be treated as a person?

 

Subject: Is remedy under the Consumer Protection Act available to a corporate entity?

 

Backdrop: Can a company file a complaint under the Consumer Protection Act (CPA)? And would it be entitled to get the same reliefs as an individual ? These interesting issues have been decided in by the Supreme Court in two separate cases.

 

Case Study 1: Karnataka Power Transmission Corporation had challenged the
maintainability of a consumer complaint by a company alleging deficiency in service in respect of supply of electricity. It claimed that a company could not be a consumer under the Consumer Protection Act. After having lost right from the District Forum to the National Commission, it approached the Supreme Court which has now finally and authoritatively laid down the law on the subject.

 

   The main arguments of the Corporation were: (a). Under the CPA, a “person” can file a consumer complaint. A company cannot be termed a person, so it company cannot approach the consumer fora. (b). the dispute pertains to sale of electricity, and the court have interpreted electricity to be goods and not a service; and (c). since the electricity is being used for commercial purpose, it is outside the purview of the CPA.

 

   Under the CPA, the definition of person “includes” a firm, a Hindu Undivided Family, a co-operative society and an association of persons. The Corporation claimed that the word “includes” should be construed as “means”, and since a company is not listed under the definition, a company cannot file a consumer complaint. Rejecting this argument, the Court held that the word “include” means the list is illustrative and not exhaustive. The intent of the legislature has to be considered. Under the General Clauses Act, a company is also a person. The definition has to be interpreted widely.

 

   Accordingly, it was held that a company can also be a consumer entitled to file a complaint under the CPA.

 

   The next argument about electricity being goods was also rejected by the court, holding that electricity may be goods for the purpose of Sales Tax but under the CPA it is defined to be a service. Hence the exclusion clause would not be applicable, and a complaint for deficiency in service would be maintainable. [Civil Appeal No. 1879 of 2003 and 7784 of 2002 decided on February 9,.2009]


Case Study 2: Can a company claim compensation for mental tension and harassment? This issue came up before the Supreme Court in a different case, which held that a claim for mental harassment by a company is wholly misconceived, untenable, and legally not permissible. It is only a natural person who can claim damages for mental harassment and not a corporate entity. [Civil Appeal No. 6527 of 2002 decided on May 29, 2009]

Impact: Service providers would do well do address the grievances of their consumers, rather than waste time and money fighting their own customers on technicalities and law points.  
 


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