2009 (2) TMI 745 - SC - Companies Law

Private Company Deemed 'Consumer' under Consumer Protection Act; Delay in Electricity Supply Constitutes Service Deficiency

KARNATAKA POWER TRANSMISSION CORPN. & ANR. Versus ASHOK IRON WORKS PVT. LTD.

The Court held that a private limited company is considered a 'person' under the Consumer Protection Act. The complainant, despite purchasing electricity ... 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? Held 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. Thus 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. Issues Involved:1. Whether a private limited company is a 'person' under Section 2(1)(m) of the Consumer Protection Act, 1986.2. Whether the complainant is a 'consumer' under Section 2(1)(d)(i) of the Consumer Protection Act, 1986.3. Whether the complainant's case falls within the scope of Section 2(1)(d)(ii) of the Consumer Protection Act, 1986.4. Whether the supply of electricity constitutes a 'service' under Section 2(1)(o) of the Consumer Protection Act, 1986.5. Whether the complaint regarding non-performance of services for consideration is maintainable under the Consumer Protection Act, 1986.Issue-wise Detailed Analysis:Issue 1: Whether a private limited company is a 'person' under Section 2(1)(m) of the Consumer Protection Act, 1986.The Court examined whether a private limited company falls under the definition of 'person' as per Section 2(1)(m) of the Act. It was argued that the term 'person' should be restrictive to the categories enumerated in the section, which includes firms, Hindu undivided families, cooperative societies, and associations of persons. However, the Court held that the definition is inclusive and not exhaustive. The term 'includes' was interpreted to mean that it encompasses a broader range of entities, including companies. The Court referred to the General Clauses Act, 1897, which defines 'person' to include any company or association or body of individuals, whether incorporated or not. Thus, the Court concluded that a private limited company is indeed a 'person' within the meaning of Section 2(1)(d) read with Section 2(1)(m).Issue 2: Whether the complainant is a 'consumer' under Section 2(1)(d)(i) of the Consumer Protection Act, 1986.The Court considered whether the complainant, who purchased electrical energy for commercial production, qualifies as a 'consumer' under Section 2(1)(d)(i). The Court noted that the definition of 'consumer' excludes those who obtain goods for resale or for any commercial purpose. However, the Court emphasized that the company's complaint was centered on the deficiency in service rather than the purchase of goods. Thus, the Court determined that the complainant's case should be evaluated under Section 2(1)(d)(ii) rather than Section 2(1)(d)(i).Issue 3: Whether the complainant's case falls within the scope of Section 2(1)(d)(ii) of the Consumer Protection Act, 1986.The Court examined whether the complainant's case, which pertains to the non-performance of services for consideration, falls within Section 2(1)(d)(ii). The Court highlighted that the provision of facilities in connection with the supply of electrical energy is considered a 'service' under Section 2(1)(o). The definition of 'deficiency' includes any fault, imperfection, shortcoming, or inadequacy in the quality, nature, and manner of performance of a service. The Court concluded that the supply of electricity is a service and any delay in its provision constitutes a deficiency in service, making the complaint maintainable under Section 2(1)(d)(ii).Issue 4: Whether the supply of electricity constitutes a 'service' under Section 2(1)(o) of the Consumer Protection Act, 1986.The Court analyzed whether the supply of electricity falls under the definition of 'service' in Section 2(1)(o). The Court referred to previous judgments that recognized electricity as 'goods' but clarified that the supply of electricity is a service provided to consumers. The Court reiterated that the provision of facilities in connection with the supply of electrical energy is explicitly included in the definition of 'service'. Therefore, the supply of electricity by KPTC to a consumer is covered under Section 2(1)(o) as a 'service'.Issue 5: Whether the complaint regarding non-performance of services for consideration is maintainable under the Consumer Protection Act, 1986.The Court addressed whether the complaint regarding the delay in the supply of electricity is maintainable under the Act. The Court emphasized that the definition of 'service' includes the provision of facilities in connection with the supply of electrical energy. The Court held that if the supply of electricity is not provided within the agreed timeframe, it constitutes a deficiency in service under Section 2(1)(g). Consequently, the complaint is maintainable under the Act.Judgment:1. Civil Appeal No. 1879/2003: The appeal is dismissed. The orders of the National Consumer Disputes Redressal Commission and the Karnataka State Consumer Redressal Commission are affirmed. The complaint is remitted to the District Forum for disposal in accordance with the law.2. Civil Appeal No. 7748/2002: The appeal is allowed. The orders of the National Consumer Disputes Redressal Commission and the Karnataka State Consumer Disputes Redressal Commission are set aside. The appeal is restored to the file of the Karnataka State Consumer Disputes Redressal Commission for disposal in accordance with the law.3. Costs: The parties shall bear their own costs.