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.
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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
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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
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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
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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
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(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).
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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:
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"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
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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."
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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
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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
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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;
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(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
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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
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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
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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
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(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,
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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.
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................................J.
(MARKANDEY KATJU)
.................................J.
(R.M. LODHA)
New Delhi
February 9, 2009
