Back
SUPREME COURT OF INDIA
M.N. Venkatachaliah, CJI. and Mr. S. Mohan, J.
INDIAN OIL CORPORATION—Appellant
versus
CONSUMER PROTECTION COUNCIL, KERALA AND ANR.—Respondents
Civil Appeal No. 7330 of 1953 (Arising out of SLP (C) No. 9440 of 1993) —Decided on 7.12.1993
CONSUMER PROTECTION ACT, 1986 - LPG CONNECTION - UNAUTHORIZED CONNECTION - REGULARIZATION - PRIVITY OF CONTRACT - DEFICIENCY IN SERVICE - LIQUEFIED PETROLEUM GAS (REGULATION OF SUPPLY AND DISTRIBUTION) ORDER, 1988 - SEC. 3(2) - CONSUMER PROTECTION ACT, 1986 - SEC. 2(G) - L.P.G. DISTRIBUTORSHIP AGREEMENT - CLAUSE 17 - RELATIONSHIP BETWEEN OIL CORPORATION AND DISTRIBUTOR - PRINCIPAL TO PRINCIPAL BASIS - SUBSCRIPTION VOUCHER - IMPORTANCE - POSSESSION OF LPG CYLINDER - UNAUTHORIZED - NO PRIVITY OF CONTRACT - NO DEFICIENCY IN SERVICE - COMPLAINT NOT MAINTAINABLE.
Fact of the Case:
The respondent, a voluntary consumer organization, filed a complaint before the Consumer Disputes Redressal Forum, Kollam, alleging deficiency in service by the appellant, Indian Oil Corporation, due to irregularities committed by its authorized distributor, Karthika Gas Agency. The respondent had taken an LPG connection through Karthika Gas Agency and faced issues with gas supply and refills. Despite the appellant's knowledge of the irregularities, it did not take effective steps to stop them. The respondent sought regularization of the gas connection and compensation.
Finding of the Court:
The court held that there was no privity of contract between the respondent and the appellant, as per Clause 2(g) of the Consumer Protection Act, 1986. The respondent failed to furnish a subscription voucher, which is essential to establish an authorized connection. The court also noted that the appellant had informed the respondent about the unauthorized acts of the distributor and had taken action by canceling the distributorship. The court found that the possession of an LPG gas cylinder by the respondent was not proved to be authorized and that the respondent could not foist a contract on the appellant based on an unauthorized connection.
Issues: 1. Whether there was privity of contract between the respondent and the appellant. 2. Whether the respondent had an authorized LPG connection. 3. Whether the appellant was liable for the irregularities committed by its authorized distributor. 4. Whether the respondent was entitled to regularization of the gas connection and compensation.
Ratio Decidendi: 1. The court interpreted Clause 2(g) of the Consumer Protection Act, 1986, and held that there was no privity of contract between the respondent and the appellant. 2. The court relied on Section 3(2) of the Liquefied Petroleum Gas (Regulation of Supply and Distribution) Order, 1988, and held that possession of an LPG cylinder without a subscription voucher amounted to an illegal act. 3. The court analyzed Clause 17 of the L.P.G. distributorship agreement and concluded that the relationship between the appellant and the distributor was on a principal-to-principal basis, negating any agency relationship. 4. The court emphasized the importance of a subscription voucher as evidence of an authorized connection and held that the respondent's failure to produce one precluded any claim against the appellant.
Final Decision: The court allowed the appeal, set aside the judgments of the lower authorities, and held that the complaint was not maintainable before the Consumer Forum due to the absence of privity of contract and deficiency in service.
Mr. S. Mohan, J.—Leave granted.
This appeal by special leave arises under the following circumstances :
1. The first respondent is a voluntary Consumer Organisation in Kerala, registered under the Scientific, Literary and Charitable Societies Registration Act. Dr. P. Kamalasanan Ram Nivas (Gayathri) Sasthamcotta is a member and Secretary of the 1st respondent. He had taken L.P.G. Connection through M/s. Karthika Gas Agency who is the authorised distributor of the appellant. The said Karthika GasAgency is the 2nd respondent.
2. The 2nd respondent committed several irregularities in giving gas connection and in providing refills of L.P.G. cylinders to him. The Gas Agency had given more connections than authorised by the appellant, the Indian Oil Corporation. That amounted to deficiency in their service. The 2nd respondent is the authorised Agent of Indian Oil Corporation. However, the appellant-Corporation did not take adequate care to ensure that the Agency would not cheat the consumers. Notwithstanding the fact that the appellant was aware of the misconduct of the 2nd respondent, it did not take any effective steps to put a stop to the irregularities committed by the 2nd respondent.
3. Dr. Kamalasanan, the affected consumer, took up the matter with the appellant-Corporation. It was replied by the Corporation on 23rd of March, 1990 admitting the fact that the irregularities were committed by the 2nd respondent.
4. On 21st January, 1987, Dr. Kamalasanan paid an amount of Rs. 2,036.65 towards S the charges for getting an L.P.G. connection. That included the price of the gas stove and the necessary deposit towards the L.P.G. connection. On the said date a consumer number was also accorded for which a sum of Rs.. 61.65 was paid. Having regard to the irregularities committed by the 2nd respondent the appellant suspended the agency. However, the agency came to be revived later on. The 2nd respondent gave Dr. Kamalasanan a new registration for the connection and started the regular supply of gas cylinder. Such registration was accorded on 20th June, 1988. The registration number was 1624. Cylinder was supplied regularly till May, 1990. When the consumer requested for regularisation of his gas connection the appellant refused the same. According to the consumer this would amount to a deficiency of service by the Indian Oil Corporation the appellant since the 2nd respondent is the authorised Agent of the Indian Oil Corporation. On these allegations he preferred a complaint before the Consumer Disputes Redressa! Forum, Kollam claiming regularisation of this gas connection and a compensation of Rs. 500/-.
5. The District Forum accepted the case of the complainant. The appellant-Corporation was directed to regularise the connection given by the 2nd respondent to 1st respondent on 21.1.1987 and issue a subscription voucher and also pay Rs. 100/- as costs.
6. Against the said order, an appeal was filed before the Kerala State Consumer Disputes Redressal Commission in Appeal No. 32 of 1991. By order dated 10th June, 1992 the appellant’s plea that there was no privity of contract between the 1st respondent and the appellant as per Clause 2(g) of the Consumer Protection Act 1986 and further the complaint was having unauthorised or illegal gas connection and that could not be regularised, was not accepted. Accordingly the appeal was dismissed.
7. The revision filed before the National Consumer Disputes Redressal Commission, New Delhi also suffered the same fate since by an order dated 17th of March, 1993 the same was dismissed. Hence the present appeal.
8. The contentions on behalf of the appellant are as under : It is not open to the complainant to seek remedy under Clause 2(g) of the Consumer Protection Act, 1986 as there is no privity of contract between the complainant and the appellant-Corporation.
9. A person becomes an L.P.G. customer of the Corporation only on signing a subscription voucher. That voucher contains the terms and conditions
AI
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
