ORISSA LIFT IRRIGATION CORP. LTD VS BIRAKISHORE ROUT

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

NATIONAL CONSUMER DISPUTES
REDRESSAL COMMISSION, NEW DELHI
Hon’ble Mr. Justice V. Balakrishna Eradi, President;
Mrs. A.S. Vijayakar, Member; Mr. Y. Krishan, Member;
Mr. Brijendra Singh, Member.
ORISSA LIFT IRRIGATION CORP. LTD & ORS.—Appellants
versus
BIRAKISHORE ROUT & ORS.—Respondents
and
BIRAKISHORE ROUT & ORS.—Appellants
versus
ORISSA LIFT IRRIGATION CORP. LTD. & ORS.—Respondents
First Appeal No. 65 of 1990 and 70 of 1991—Decided on 8.5.1991

Counsel for the Parties :
For the Appellant :M/s Biswanath Rath & Associates, Advocates.
For the Respondent: None.

Headnote:(i) Consumer Protection Act, 1986 - Sections 2(1)(m)(iv) and 2(1)(d) - Locus standi of Association of persons as consumers - Agreement to supply water with each individual cultivator - All cultivators jointly and sevarally responsible - Negligence in water supply All cultivators clubbing claim and filing joint petition in State Commission - Whether permissible? (Yes)
       Held: That the agreement was with the cultivators jointly and it is not open to the LICL now to urge that the cultivators cannot join together to club their claims Il11d file a complaint jointly before the State Commission. (para 8)
       Held also: It is in the interest of providing protection to consumers that any association of person, whether registered under the Society Registration Act or not are deemed to be a person and therefore a consumer under section 2(i)(d) of the Act (para 18)
       An association of persons to have loc us standi as a consumer, it is necessary that all the individual persons forming the Association must be consumers under Section 2(i)(d) of the Act, that they must have purchased any goods or hired a service for consideration; they must have purchased the same goods or hired the same service from the same party, and more or less over· the same period in short they should have a common cause of action.
       (para19)
       Held finally: The State Commission was therefore justified in rejecting this preliminary objection of the LICL regarding the locus standi of the complainants and the jurisdiction of the State Commission both with reference to the agreement executed by the LICL with the cultivators and the provisions of the Consumer Protection Act
       (page 20)
       (ii) Contract Act, 1972 - Section S6 Frustration of contract - Contract to supply water to cultivators - Clause 6 containing force majeure clause - Failure of electricity due to burning of transformer - Negligence of opposite party to set it right in reasonable time - Whether clause 6 of the agreement can give protection for this negligence? (No) (Para 21) Arrangement between LICL and the State Electricity Board regarding transformer cannot reduce the responsibility of LICL
       (Para 23)
       (iii) Consumer Protection Act, 1986 Section 3 - Act not in derogation of other laws - Agreement containing arbitration clause Complaint filed in Consumer Forums Whether entertainable? (Yes)
       Held: The Consumer Protection Act is in addition to the other laws in force and therefore it was not necessary for the complainants to seek redress through arbitration by the Collector.
       (para 24)
       (iv) Consumer Protection Act, 1986 Section 2(1)(d) - Consumer - Water to be supplied by LICL to cultivators for irrigation - Whether water was being supplied for commercial purpose and thus cultivators cease to be consumers? (No) (Para 24)
       (v) Consumer Protection Act, 1986 - Section 14(d) - Water not supplied due to power break down - Water supplied when there was electricity-State Commission ordered refund of all the water charges for the entire period of contract - Whether correct (No, the refund has to be limited for the period when water supply remained suspended) (Para 25)
       IMPORTANT POINT
       Consumers who have a common cause of action can form an association and file a joint complaint before Consumer Forum.

ORDER

Y. Krishan, Member—In appeal No. 65 of 1990 the appellant (Orissa Lift Irrigation Corporation Ltd. & Ors.) have appealed against die order of 6th of August, 1990 of the State Consumer Disputes Redressal Commission, Orissa, Cuttack.

2. The farmers listed as respondents 1 to 39 had entered into an agreement with the appellant for supplying water for irrigation of certain crops from the 9th November, 1989, for the agricultural season then commencing. Water was to be supplied by the Corporation on payment of the water rates specified in the agreement

3. Supply of water for irrigation was commenced on 9th of November, 1989 but was discontinued from the 8th November, 1989 due to failure of electricity as the transformer had got burnt The transformer was replaced on 17th January; thereafter the electricity supply and the supply of water were restored.

4. The State Commission came to the conclusion that the Lift Irrigation Corporation had not taken adequate and timely steps to rectify the power breakdown resulting from the transformer being burnt and as such there has been negligence in rendering service to the respondents in terms of the agreement, which caused damage to crops. Consequently it had granted reliefs to the respondent complainants by way of refund of water rates paid by them and also by way of damages at the rate of Rs. 250/- per area mentioned in the agreement.

5. The appellants have challenged the order of State Commission on the following grounds : —

(i) The agreement to supply water was with each individual cultivator but the complaint was made by 39 of the cultivators jointly by combining the claims of 41 individuals. By this device, the value of service hired viz. the amount paid as water rates by each individual was “inflated”, the claim of each individual could not exceed Rs. 1 lakh which would be in the jurisdiction of the District Forum, whereas by clubbing the claim of various individuals, the value of services was raised to more than Rs. 1 lakh thereby bringing the complaint within the jurisdiction of the State Commission.

The appellant has observed that “the complaint is not within the pecuniary jurisdiction of the Hon’ble State Commission as number of individuals joining together and adding their separate and independent claims with different causes of action and different amounts claimed, cannot confer jurisdiction on the State Commission. None of the complainants have claimed the damages or compensation exceeding Rs. one lakh”.

(ii) The failure to supply water was caused by factors beyond the control of the Corporation as the transformer of the. Electricity Board was burnt out. The agreement for supply of water contains a force majeure clause which absolves the corporation of liability arising from such a breakdown.

(iii) That the parties had agreed that in case of any differences arid disputes, the same shall be referred to the Collector for decision which would be binding on the parties. Hence, according to the appellants, the complaint cannot be entertained by the State Commission.

(iv) That the water supply was being used for commercial purpose of agriculture and as such the farmers were not consumers as defined in the Consumer Protection Act.

(v) That the transformer belonged to Orissa State Electricity Board and that it was the duty of the OSEB to replace the transformer and restore the supply of electricity. The OLIC could have resumed the supply of water/only after the Electricity Board had restored the electricity and therefore the OLIC could not be held responsible for the loss, if any, caused to sthe farmers due to power breakdown.

6. The State Commission in its order held that Lift Irrigation Corporation Limited rendered the service of supply of water to the agricultural lands of the complainants against consideration, that the complainants were consumers under the Consumer Protection Act and that the dispute came within the jurisdiction of the State Commission. It observed that “we would have nor

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