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INDIA BUSINESS WORLD - 1st FEBRUARY - TO - 15th FEBRUARY - 2009
COS CAN SUE POWER SUPPLIERS UNDER CONSUMER LAW, RULES SC
THE Supreme Court has ruled that companies engaged in commercial activities can drag their electricity supplier to a consumer forum and seek damages for deficiency in services.
A bench of Justice Markandey Katju and Justice RM Lodha rejected a plea of Karnataka Power Transmission Corporation in which it had said a company using electricity for commercial purpose cannot approach a consumer forum against the utility. The sale of power to a commercial consumer for a commercial purpose was outside the scope of the Consumer Protection Act, 1986, the state utility had argued.
Ashok Iron Works had in 1991 applied an electricity connection, but it approached the district consumer forum after KPTC delayed power supply. The district forum had ruled that the matter was not under the jurisdiction of the Consumer Protection Act.
The private company then approached the Karnataka State Consumer Disputes Redressal Commission, which decided in its favour. This had prompted KPTC to approach the National Consumer Disputes Redressal Commission, which quashed its plea. The utility then moved the apex court.
The apex court, while dismissing KPTC’s petition, remanded the matter back to the Consumer Disputes Redressal Forum, Belgaum, to decide whether there was any deficiency in services by the power supplier.
KPTC had claimed that the complaint made by the company was not covered under the consumer law since the company was not a ‘person’ as defined under Section 2(1)(m) and hence, not a consumer as defined under Section 2(1)(d) of the Consumer Protection Act. The state utility had also argued that the private company was not a consumer since it had purchased electricity for a commercial purpose.
However, the apex court said: "While defining `person’ in Section 2(1)(m), the legislature never intended to exclude a juristic person like a company... It does not appear to us to admit of any doubt that company is a person within the meaning of Section 2(1)(d) read with Section 2(1)(m) and we hold accordingly."
It also said KPTC could be held liable for deficiency in service under the consumer law. "...the provision of facilities in connection with supply of electrical energy is a service. Supply of electricity by the (Karnataka state electricity) Board or for that matter KPTC to a consumer would be covered 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."
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