{"id":208688,"date":"1993-12-07T00:00:00","date_gmt":"1993-12-06T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/india-oil-corpn-vs-consumer-protection-council-on-7-december-1993"},"modified":"2019-03-30T05:45:12","modified_gmt":"2019-03-30T00:15:12","slug":"india-oil-corpn-vs-consumer-protection-council-on-7-december-1993","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/india-oil-corpn-vs-consumer-protection-council-on-7-december-1993","title":{"rendered":"India Oil Corpn vs Consumer Protection Council &#8230; on 7 December, 1993"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">India Oil Corpn vs Consumer Protection Council &#8230; on 7 December, 1993<\/div>\n<div class=\"doc_citations\">Equivalent citations: 1993 SCC  (1) 397, \t  1993 SCALE  (4)620<\/div>\n<div class=\"doc_author\">Author: S Mohan<\/div>\n<div class=\"doc_bench\">Bench: Mohan, S. (J)<\/div>\n<pre>           PETITIONER:\nINDIA OIL CORPN.\n\n\tVs.\n\nRESPONDENT:\nCONSUMER PROTECTION COUNCIL (Mohan, J.)\n\nDATE OF JUDGMENT07\/12\/1993\n\nBENCH:\nMOHAN, S. (J)\nBENCH:\nMOHAN, S. (J)\nVENKATACHALLIAH, M.N.(CJ)\n\nCITATION:\n 1993 SCC  (1) 397\t  1993 SCALE  (4)620\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n<p>The Judgment of the Court was delivered by<br \/>\nMOHAN, J.- Leave granted.\n<\/p>\n<p>2.   This appeal by special leave arises under the following<br \/>\ncircumstances.\tThe first respondent is a voluntary Consumer<br \/>\nOrganisation in Kerala,<br \/>\n+  From\t the judgment and order dated March 17,1993  of\t the<br \/>\nNational Consumer Disputes redressable Commission in R.P.No.<br \/>\n266 of 1992.\n<\/p>\n<p><span class=\"hidden_text\">398<\/span><\/p>\n<p>registered  under  the Scientific, Literary  and  Charitable<br \/>\nSocieties  Registration Act.  Dr P. Kamalasanan,  Ram  Nivas<br \/>\n(Gayathri),  Sasthamcotta  is  a  member  and  Secretary  of<br \/>\nRespondent  1.\tHe  had taken  LPG  connection\tthrough\t M\/s<br \/>\nKarthika Gas Agency who is the authorised distributor of the<br \/>\nappellant.   The  said\tKarthika Gas Agency  is\t the  second<br \/>\nrespondent.\n<\/p>\n<p>3.   The second respondent committed several  irregularities<br \/>\nin  giving  gas connection and in providing refills  of\t LPG<br \/>\ncylinders to him.  The Gas Agency had given more connections<br \/>\nthan   authorised   by\tthe  appellant,\t  the\tIndian\t Oil<br \/>\nCorporation.  That amounted to deficiency in their  service.<br \/>\nThe second respondent is the authorised agent of Indian\t Oil<br \/>\nCorporation.   However,\t the appellant-Corporation  did\t not<br \/>\ntake adequate care to ensure that the agency would not cheat<br \/>\nthe consumers.\tNotwithstanding the fact that the  appellant<br \/>\nwas aware of the misconduct of the second respondent, it did<br \/>\nnot  take  any\teffective  steps  to  put  a  stop  to\t the<br \/>\nirregularities committed by the second respondent.\n<\/p>\n<p>4.   Dr\t Kamalasanan,  the affected consumer,  took  up\t the<br \/>\nmatter\twith the appellant-Corporation.\t It was\t replied  by<br \/>\nthe  Corporation on March 23, 1990 admitting the  fact\tthat<br \/>\nthe irregularities were committed by the second respondent.\n<\/p>\n<p>5.   On January 21, 1987 Dr Kamalasanan paid an amount of Rs<br \/>\n2036.65\t towards the charges for getting an LPG\t connection.<br \/>\nThat  included the price of the gas stove and the  necessary<br \/>\ndeposit\t towards  the LPG connection.  On the  said  date  a<br \/>\nconsumer  number  was also accorded for which a\t sum  of  Rs<br \/>\n61.65  was  paid.   Having  regard  to\tthe   irregularities<br \/>\ncommitted  by the second respondent the appellant  suspended<br \/>\nthe  agency.  However, the agency came to be  revived  later<br \/>\non.   The  second  respondent  gave  Dr\t Kamalasanan  a\t new<br \/>\nregistration  for  the connection and  started\tthe  regular<br \/>\nsupply\tof gas cylinder.  Such registration was accorded  on<br \/>\nJune 20, 1988.\tThe registration number was 1624.   Cylinder<br \/>\nwas  supplied  regularly till May 1990.\t When  the  consumer<br \/>\nrequested  for\tregularisation\tof his\tgas  connection\t the<br \/>\nappellant refused the same.  According to the consumer\tthis<br \/>\nwould  amount to a deficiency of service by the\t Indian\t Oil<br \/>\nCorporation,  the appellant since the second  respondent  is<br \/>\nthe  authorised\t agent of the Indian  Oil  Corporation.\t  On<br \/>\nthese  allegations  he\tpreferred  a  complaint\t before\t the<br \/>\nConsumer   Disputes   Redressal\t  Forum,   Kollam   claiming<br \/>\nregularisation\tof his gas connection and a compensation  of<br \/>\nRs 500.\n<\/p>\n<p>6.   The   District   Forum  accepted  the   case   of\t the<br \/>\ncomplainant.   The  appellant-Corporation  was\tdirected  to<br \/>\nregularise the connection given by the second respondent  to<br \/>\nfirst\trespondent   on\t January  21,  1987  and   issue   a<br \/>\nsubscription voucher and also pay Rs 100 as cost.\n<\/p>\n<p>7.   Against the said order, an appeal was filed before\t the<br \/>\nKerala State Consumer Dispute Redressal Commission in Appeal<br \/>\nNo.  32\t of  1991.   By\t order\tdated  June  10,  1992\t the<br \/>\nappellant&#8217;s  plea  that\t there was no  privity\tof  contract<br \/>\nbetween the first respondent and the appellant as per clause<br \/>\n2(g)  of the Consumer Protection Act, 1986 and\tfurther\t the<br \/>\ncomplainant was having<br \/>\n<span class=\"hidden_text\">399<\/span><br \/>\nunauthorised or illegal gas connection and that could not be<br \/>\nregularised,  was not accepted.\t Accordingly the appeal\t was<br \/>\ndismissed.\n<\/p>\n<p>8.   The   revision  filed  before  the\t National   Consumer<br \/>\nDisputes  Redressal Commission, New Delhi also suffered\t the<br \/>\nsame  fate since by an order dated March 17, 1993  the\tsame<br \/>\nwas dismissed.\tHence, the present appeal.\n<\/p>\n<p>9. The contentions on behalf of the appellant are as under:<br \/>\nIt  is\tnot  open to the complainant to\t seek  remedy  under<br \/>\nclause 2(g) of the Consumer Protection Act, 1986 as there is<br \/>\nno  privity  of\t contract between the  complainant  and\t the<br \/>\nappellant-Corporation.\n<\/p>\n<p>10.  A\tperson\tbecomes an LPG customer of  the\t Corporation<br \/>\nonly  on  signing  a  subscription  voucher.   That  voucher<br \/>\ncontains  the terms and conditions governing the loaning  of<br \/>\ngas cylinders and pressure regulator.  Where, therefore, the<br \/>\ncylinder and regulator are possessed without a\tsubscription<br \/>\nvoucher\t it would tantamount to illegal act as\tcontemplated<br \/>\nin  Section 3(2) of Liquefied Petroleum Gas  (Regulation  of<br \/>\nSupply\tand  Distribution)  Order,  1988.   Insofar  as\t  Dr<br \/>\nKamalasanan had failed to furnish a subscription voucher  he<br \/>\ncannot\traise  any claim as against the appellant.   In\t the<br \/>\ninstant case there is no deficiency of service.\t On such  an<br \/>\nenquiry\t it  was  found that M\/s  Karthika  Gas\t Agency\t has<br \/>\ncommitted several irregularities.  Alternative\tarrangements<br \/>\ncame  to be made through another dealer.  Where\t the  second<br \/>\nrespondent,   Karthika\t Gas  Agency  has   issued   several<br \/>\nunauthorised  connections which would amount to\t a  criminal<br \/>\nbreach\tof  trust,  no\tliability can  be  fastened  on\t the<br \/>\nappellant.\n<\/p>\n<p>11.  Clause 17 of the LPG distributorship agreement  clearly<br \/>\npostulates the distributor to act as principal and not as an<br \/>\nagent.\t In fact, the complainant was informed under  letter<br \/>\ndated  March 23, 1990 as to the correct position.  In  these<br \/>\ncircumstances, if there is no legal obligation to regularise<br \/>\nthe connection the complaint ought to have been thrown\tout.<br \/>\nThe authorities below erred in their approach.\n<\/p>\n<p>12.  In\t opposition  to this, the learned  counsel  for\t the<br \/>\nrespondent  would contend that the subscription\t voucher  is<br \/>\nnot  the  sole\tevidence to establish the  existence  of  an<br \/>\nauthorised  connection.\t  Possession of\t LPG  gas  cylinder,<br \/>\npressure   regulator  and  regular  supply  and\t refill\t  of<br \/>\ncylinders  would  constitute enough  evidence  to  establish<br \/>\nconsumer-ship since no other person can possess these  items<br \/>\nas  they  are monopoly items available\twith  LPG  producing<br \/>\ncompanies only.\n<\/p>\n<p>13.  The letter dated December 8, 1989 establishes the\tfact<br \/>\nthat  the  appellant was aware of the unauthorised  acts  of<br \/>\ndealer from 1989 onwards.  Where for the unauthorised act of<br \/>\nsecond\trespondent his agency came to be  terminated,  there<br \/>\nwas no justification whatever to revive the same.   Besides,<br \/>\nhow  the  appellant allowed the second\trespondent  to\tgive<br \/>\ncontinuous   supply  of\t gas  cylinder\tis  not\t  explained.<br \/>\nTherefore,  the\t presumption  is  that\tthe  appellant\t had<br \/>\nratified the unauthorised acts of the respondent.\n<\/p>\n<p>14.  In order to decide this question it is necessary for us<br \/>\nto look at clause 1 (a) of Ex.\tR-2.  That is the memorandum<br \/>\nof agreement between Indian Oil<br \/>\n<span class=\"hidden_text\">400<\/span><br \/>\nCorporation  and M\/s Karthika Gas Agency.  That\t establishes<br \/>\nthe   relationship  between  Indian  Oil  Corporation,\t the<br \/>\nappellant  and\tKarthika Gas Agency as\tdistributor  of\t the<br \/>\nCorporation,  on  principal to\tprincipal  basis.  (emphasis<br \/>\nsupplied) Clause 17 of the agreement is as under:\n<\/p>\n<blockquote><p>\t      &#8220;In all contracts or engagements entered\tinto<br \/>\n\t      by the Distributor with the customers for sale<br \/>\n\t      of  LPG  and\/or the sale\tand\/or\tinstallation<br \/>\n\t      and\/or\trepairs\t  of\tappliances    and\/or<br \/>\n\t      connections thereof with LPG cylinders (filled<br \/>\n\t      or  empty)  and\/or  refills  and\/or   pressure<br \/>\n\t      regulators   and\/or  attached  equipment\t the<br \/>\n\t      Distributor  shall  act and  shall  always  be<br \/>\n\t      deemed to have acted as a principal and not as<br \/>\n\t      an agent or on account of the Corporation, and<br \/>\n\t      the Corporation shall not in any way be liable<br \/>\n\t      in  any  manner in respect of  such  contracts<br \/>\n\t      and\/or  engagements and\/or in respect  of\t any<br \/>\n\t      act   or\t omission  on  the   part   of\t the<br \/>\n\t      Distributor, his servants, agents and  workmen<br \/>\n\t      in   regard   to\tsuch   installation,   sale,<br \/>\n\t      distribution,    connections,    repairs\t  or<br \/>\n\t      otherwise.  The Distributor shall be bound  to<br \/>\n\t      inform  the  customers  in  writing  of\tthis<br \/>\n\t      provision,  through correspondence or  at\t the<br \/>\n\t      time of enrollment, of the customer.&#8221;\n<\/p><\/blockquote>\n<p>15.  Thus,  it\tis  clear that the relationship\t is  one  of<br \/>\nprincipal   to\tprincipal  basis.   The\t reliance   by\t the<br \/>\nauthorities  below  that the  circumstances,  documents\t and<br \/>\nconduct\t of parties proved the relationship as of  principal<br \/>\nand  agent  is difficult to understand.\t This is a  case  in<br \/>\nwhich the second respondent Karthika Gas Agency has given an<br \/>\nunauthorised  connection.   If\tit was\ta  legal  connection<br \/>\nnothing\t would\thave  been  easier  than  to  produce\ttile<br \/>\nsubscription voucher.  Such a voucher as rightly pointed out<br \/>\nby  the learned counsel for the appellant, is important\t and<br \/>\nwill bind the appellant-Corporation.  The authorities  below<br \/>\nhave  not given due importance to  the\tsubscriptionvoucher.<br \/>\nSection 3(2) of the LPG Control Order reads as under:<br \/>\n&#8220;No  person  shall  possess or use liquefied  petroleum\t gas<br \/>\nfilled in cylinder  or\tin bulk form unless he has  received<br \/>\nsupply thereof from a distributor or from an Oil Company.&#8221;\n<\/p>\n<p>16.  The possession of an LPG gas cylinder by Dr Kamalasanan<br \/>\nin  this  case\thas  not  been\tproved\tto  be\t authorised.<br \/>\nTherefore, on the strength of obtaining possession by  means<br \/>\nof  an unauthorised connection it is not open to  the  first<br \/>\nrespondent to foist a contract on the Corporation.\n<\/p>\n<p>17.  The letter dated March 23, 1990 to Dr Kamalasanan is as<br \/>\nunder:<\/p>\n<pre>\n\"Indian Oil Corporation Limited\n\t      LPG : 104\t\t   23-03-1990\n\t      Dr P. Kamalasanan\n<\/pre>\n<p>\t      Consumer Protection Council of Kerala<br \/>\n\t      TC 5\/96, Perurkada,<br \/>\n\t      Trivandrum 695 005.\n<\/p>\n<p>\t      Dear Sir,<br \/>\n\t      Sub:  LPG distribution at Karunagapally.\n<\/p>\n<p><span class=\"hidden_text\">\t      401<\/span><\/p>\n<p>\t      We make reference to your letter dated January<br \/>\n\t      8,  1990\ton the subject.\t On  enquiry  it  is<br \/>\n\t      understood  that\tM\/s Karthika  Gas  Agencies,<br \/>\n\t      Karunagapally,   has  released  a\t number\t  of<br \/>\n\t      cylinders\t and  regulators  unauthorisedly  to<br \/>\n\t      various persons in Karunagapally.\t It is\talso<br \/>\n\t      understood that for such releases a receipt in<br \/>\n\t      the  name of the Karthika Gas Enterprises\t has<br \/>\n\t      been  issued and not in the name\tof  Karthika<br \/>\n\t      Gas   Agencies,\twho   are   our\t  authorised<br \/>\n\t      distributors.   This  appears to\tbe  a  clear<br \/>\n\t      unauthorised action entailing criminal  breach<br \/>\n\t      of  trust.   However, insofar as\twe  are\t not<br \/>\n\t      provided with a valid document such as receipt<br \/>\n\t      of subscription voucher issued by M\/s Karthika<br \/>\n\t      Gas   Agencies   who   are   our\t  authorised<br \/>\n\t      distributors  we may not be in a\tposition  to<br \/>\n\t      take   any   action   in\t regularising\t the<br \/>\n\t      connection.\n<\/p>\n<p>\t      In  regard  to the supply of  refills  we\t are<br \/>\n\t      taking   up  the\tmatter\tsuitably  with\t our<br \/>\n\t      Manager, Trivandrum to further streamline\t the<br \/>\n\t      existing, arrangement of supplies ex Haripad.<br \/>\n\t      Thanking you,<br \/>\n\t      Yours faithfully,<br \/>\n\t      for INDIAN OIL CORPN.  LTD.,<br \/>\n\t       sd\/-\n<\/p>\n<p>\t      Area Manager&#8221;\n<\/p>\n<p>18.  This  puts the position beyond doubt.  It\tshould\thave<br \/>\nmade  the consumer aware of his legal rights.\tFurther,  in<br \/>\nthis  case for the unauthorised acts of\t second\t respondent,<br \/>\nits distributorship came to be cancelled.  The fact that  it<br \/>\nwas revived is of no consequence if due regard is to be\t had<br \/>\nto  clause  17\tof the agreement which\thas  been  extracted<br \/>\nabove.\tSection 2(g) of the  Consumer Protection Act  states<br \/>\nas follows:\n<\/p>\n<p>\t      &#8220;(g)    &#8216;deficiency&#8217;    means    any    fault,<br \/>\n\t      imperfection, shortcoming or inadequacy in the<br \/>\n\t      quality,\tnature\tand  manner  of\t performance<br \/>\n\t      which is required to be maintained by or under<br \/>\n\t      any  law\tfor the time being in force  or\t has<br \/>\n\t      been undertaken to be performed by a person in<br \/>\n\t      pursuance\t of  a\tcontract  or  otherwise\t  in<br \/>\n\t      relation to any service;&#8221;\n<\/p>\n<p>19.  Insofar as there is no privity of contract between\t the<br \/>\nappellant and the consumer no &#8216;deficiency&#8217; as defined  under<br \/>\nSection\t 2(g) (quoted above) arises.  Therefore, the  action<br \/>\nitself\tis not maintainable before the Consumer Forum.\t For<br \/>\nall  these  reasons,  we  set aside  the  judgments  of\t the<br \/>\nauthorities   below.   Civil  Appeal  will  stand   allowed.<br \/>\nHowever, in the circumstances of the case there shall be  no<br \/>\norder as to costs.\n<\/p>\n<p><span class=\"hidden_text\">402<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India India Oil Corpn vs Consumer Protection Council &#8230; on 7 December, 1993 Equivalent citations: 1993 SCC (1) 397, 1993 SCALE (4)620 Author: S Mohan Bench: Mohan, S. (J) PETITIONER: INDIA OIL CORPN. Vs. RESPONDENT: CONSUMER PROTECTION COUNCIL (Mohan, J.) DATE OF JUDGMENT07\/12\/1993 BENCH: MOHAN, S. (J) BENCH: MOHAN, S. (J) VENKATACHALLIAH, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-208688","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>India Oil Corpn vs Consumer Protection Council ... on 7 December, 1993 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/india-oil-corpn-vs-consumer-protection-council-on-7-december-1993\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"India Oil Corpn vs Consumer Protection Council ... on 7 December, 1993 - Free Judgements of Supreme Court &amp; 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