CASE ANALYSIS

KARANATAKA POWER TRANSMISSION

CORPORTION V ASHOK IRON WORKS PRIVATE
LIMITED

Submitted to Submitted by
Bhavan Sharma SANDRA RENJI
(19213241 )
FACT
On 16 – 4 – 1992, the high court directed KPTC to supply electrical energy as per sanction
forthwith and subsequently, time for supply of electricity was extended by the high court up
to 21 – 7 – 1992. KPTC raised an additional demand of Rs. 838000 from company and
further demand in the sum of Rs. 134000. The company is said to have deposited the said
amount. However, the actual supply of the power commenced in the month of November
1992.
Ashok Iron works Pvt Ltd manufactures iron products. It applied to Karnataka power
Transmission corporation KPTC for the supply of electrical energy and paid the amount
840000 demanded by KPTC for such supply. And KPTC did not commence the supply of
electricity for 6 hours so Ashok Iron works filed a complaint with the Karnataka High court.
Having obtained an order in its favour, Ashok Iron works complied with a further monetary
demand by KPTC but the corporation failed to commence the supply of electricity on time.
Accordingly, Ashok Iron works filed a complaint under the act claiming damages for the
delay in the supply of electricity. KPCT contested the claim on the grounds that as Ashok
Iron works was engaged in commercial activity and electricity constituted goods under the
act. The claim was invalid as the sale of goods to a commercial consumer for a commercial
purpose falls outside the scope of the act. The district court held in favour of KPTC. Ashok
Iron works appealed to the state commission. Which rules in its favour. Holding that the
compliant was valid as Ashok Iron works was covered by the definition of a consumer under
the act. On appeal,1mnj9pk’;[ol8km;l7,ulkp the national commission dismissed the
application , and KPTC further appealed to the supreme court.
ISSUES
1. Ashok Iron works was not a person under section 2(1)(m) of the act
2. Ashok Iron works was not a consumer under section 2(1)(d) of the act
3. Whether a dispute relating to the sale and supply of electricity dose not come within
the ambit of service under section 2(1)(o) of the act.
Finding that the a company constituted a person under act the supreme court held that
section2(1) (m) is inclusive and not exhaustive. Moreover , although the court held that
the supply of electricity was in on way in no way a sale and purchase of goods under
section 2(1) (d) of the act , if found that the supply of electricity to a consumer is indeed a
service as defined in section 2(1) (0) of the act. In arriving at this conclusion .the court
was guided by its previous decision in southern petrochemical industries Co Ltd v
electricity inspector & ETIO.
The term ‘person’ includes
(1) A firm whether registered or not .
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 (2) a Hindu undivided family
(3) a cooperative society; or
(4) every other association of person whether registered under the societies registration
act 1860 (21 1860)
“The term ‘consumer’ means any person who

1. buys any goods for a consideration which has been paid or promised or party
promised or under any system of deferred payment and included any user of such
goods other than the person who buys such goods for consideration paid or promised
or partly promised. Or under any system of deferred payment . when such use is made
with the approval of such person . but does not include a person who obtains such
goods for resale or for any commercial purpose or
2. hires or avails of any services for a consideration which has been paid or promised or
partly paid and partly promised. Or under any system of deferred payment and
includes any beneficiary of such services other than the person who hires or avails of
the services for consideration paid or promised or partly paid and partly promised. Or
under any system of deferred payment. When such services are availed of with the
approval of the first mentioned person but does not include a person who avails of
such services for any commercial purpose.
3. The term ‘service ‘means service of any description which is made available to
potential users and includes but not limited to the provision of facilities in connection
with banking , financing insurance , transport , processing supply of electrical or other
energy board or lodging or both [housing construction] entertainment amusement or
the purveying of news or other information but dose not include the rendering of any
service free of charge or under a contract of personal service.
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JUDGEMENT

These two appeals by special leave, involving common questions, were heard together and
are being disposed of by this judgment.
As the principal arguments have been advanced in Civil Appeal No. 1879/2003, we take up
the facts of that appeal which are thus, briefly put. M/s. Ashok Iron Works Private limited is
a Private Limited Company and engaged in the activity of manufacture of iron products. The
company applied for the supply of electrical energy. (2500 KVA) to the Karnataka Electricity
Board The application made by the Company was cleared by the Single Window agency and
supply of electric energy 1500 KVA was sanctioned. The company is said to have deposited
an amount of Rs. 8,40,000 on 1st February, 1991 as per demand. KPTC did not commence
supply of electricity as agreed upon and that necessitated the company to approach Karnataka
High Court for a direction to KPTC to supply the sanctioned energy. On 16th April, 1992, the
High Court directed KPTC to supply electrical energy as per sanction forthwith and
subsequently, time for supply of electricity wanted by the High Court up to 21st July, 1992.
KPTC raised an additional demand of Rs. 8,38,000/- from the company and further demand
in the sum of Rs. 1,34,000/-. The company is said to have deposited the said amount.
However, the actual supply of the power commenced in the month of November, 1992. The
company accordingly filed a complaint under the Consumer Protection Act, 1986 before the
Consumer Disputes Redressal Forum, Belgaum claiming damages in the sum of Rs. 99,900/-
for delay in supply of electricity. The complaint was contested by KPTC, and, inter alia,
preliminary objection was raised that complaint was not maintainable as the complainant was
engaged in commercial activity and electricity being goods; sale of goods to acommercial
consumer for a commercial purpose was outside the scope of the Act, 1986.
As there were several complaints wherein identical objection pertaining to the
maintainability of such complaints was involved, all these complaints were taken up and
disposed of together by the District Forum by a common order dated 10th September,
1993.And the supreme court held that if the supply of electricity were not provided in time
this would constitute a service deficiency the court chose to ignore the wording but not
include in the acta person who avails of such service for any commercial purpose which was
inserted in the act by an amendment . moreover the court held that Ashok iron works
complaint was valid before the national consumer disputes redressal forum.

CONCLUSION
The order dated 7th October, 2002 passed by National Consumer Disputes Redressal
Commission and the Order of Karnataka State Consumer Redressal Commission passed on
15th June, 1995 are affirmed and, accordingly, the complaint stands remitted to District
Forum for its disposal in accordance with law.

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That private companies now fall within the definition of a ‘person’ under the act and the
supply of electricity is a service under the act accordingly complaints regarding deficiencies
in that service can be taken to a consumer redressal forum . however it remains to be seen
how the amendment to the act will affect future court decision
I found that it is one of the leading industry in foundries manufacturing and designing. The
teamwork of the company is the main backbone of its success.

CASE LAWS
Mritunjoy Mukherjee vs M/S. Meera Industries on 12 January, 2010
The case made out in the complaint, in brief, is that the complainant is the proprietor of firm
Mritunjoy Mukherjee and Co. and he carries on business to maintain himself and his family
and for his own livelihood. The complainant is a self-employed person. The OP2 is
manufacturer of Mobile Hot Mix Plant. The complainant purchased 6 to 8 tone per hour
Mobile Hot Mix Plant with some extra facilities from the OP on 04.6.05 for his use to
execute job contract to earn his livelihood. The said Hot Mix Plant from the very beginning
never functioned properly and instead of 6 to 8 M.T. the said machine was providing 3 M.T.
and the machine used to consume excessive diesel. The complainant repeatedly asked for
rectification of the machine and even lawyers notice was also issued on behalf of the
complainant on 25.1.06.

We have perused the Revision Petition and the written argument filed by the
OP/Complainant. It is an admitted position that the OP purchased the Hot Mix Plant for Rs.
4,94,000 from the Revision Petitioners on 4.6.2005. But after installation of the machine he
found some defects and the machine was performing below the rated capacity. After having
failed to elicit proper response from the petitioner for removing the defects he sent
Advocate’s Notice and when no action was taken by the petitioners, he filed a dispute before
the Forum below. The petitioner has challenged the maintainability of the petition before the
Forum below on three counts-
(i) the petition is time-barred, 4
(ii) the machine was purchased for commercial purpose and
(iii) the complainant is not a Consumer.
We find that after purchase of the machine the OP/Complainant had repeatedly drawn the
attention of the Petitioners to the inherent defects of the machine and asked for proper
repair/replacement, but the petitioners did not take proper steps to ensure the declared
performance of the machine, for which the OP/Complainant had paid substantial price. The

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contention of the Petitioners that the complainant is not a Consumer is not tenable due to the
fact that within the warranty period even the commercial operator is treated as a Consumer as
per settled principle of law. In this context we are inclined to refer to the decision in IV
(2007) CPJ 161 (NC), wherein the Hon’ble National Commission held that the contention of
commercial purchase is not acceptable as the purchaser becomes a Consumer within the
warranty period. The Hon’ble Apex Court in Indochem Electronic and Another v. Additional
Collector of Customs, A.P., I (2006) CPJ 1 (SC)=128 (2006) DLT 143 (SC)=II (2006) SLT
658=2007 (1) CPR 52 (SC), held that since the defects in system pointed out by the
Respondent had started within a period of warranty, the purchaser was a Consumer in terms
of Section 2(1)(d) of the Act. In III (2007) CPJ 371 (NC)=2007 CTJ 1019 (CP) (NCDRC),
Kurji Holy Family Hospital v. Boehringer Mannheim India Ltd. and Others, the Hon’ble
National Commission held, 'It is to be stated that this Commission has taken a consistent
view that even if the goods were purchased for commercial purpose which have become
defective within the warranty period, the complaint before the Consumer Fora is maintainable
because warranty agreement is a service agreement'.

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