Karnataka Power Transmission Corporation (KPTC)

Vs.
Ashok Iron Works Pvt. Ltd

Case Title : Karnataka Power Transmission Corporation (KPTC) vs. Ashok

Iron Pvt. Ltd

Citation : (2009) 3 SCC 240

Appellant : Karnataka Power Transmission Corporation

Respondent : Ashok Iron Pvt. Ltd.

Judge : Justice Markandey Katju and Justice R.M. Lodha

Summary of the fact:

Ashok Iron Pvt Ltd. manufactures iron products. In 1991 it applied for supply of electrical
energy from Karnataka Power Transmission Corporation and paid the amount for the supply.
The Karnataka Power Transmission Corporation failed to supply the power. So, Ashok Iron
Pvt Ltd filed a complaint with Karnataka High Court. The case later proceeded and was taken
up by the Supreme Court.
Issue:
As per the principal argument, Ashok Iron Pvt Ltd (hereon referred to as the company) deals
in manufacturing iron products. For its operation in Karnataka, it applied for electrical energy
of 2500KVA to Karnataka Power Transmission Corporation. The company was sanctioned a
power supply of 1500KVA by the KPTC and a deposit of Rs. 8,40,000 was paid on February
1st, 1991. KPTC failed to supply the power for which the company approached Karnataka High
Court to direct KPTC to supply the sanctioned electricity.
April 16th1992, The High Court gave its decision, and it ruled KPTC to supply the sanctioned
electricity and subsequently extended the time for the supply of electricity July 21st, 1992.
KPTC further demanded Rs. 8,38,000, to which the company complied. But KPTC failed to
commence the supply on time, and the actual power supply started in November of 1992. The
company filed a complaint under the Consumer Protection Act, 1986 before the Consumer
Disputes Redressal Forum, Belgaum demanding Rs. 99,900 in damages for the delay in energy
delivery. KPTC contested the claims on the grounds that Ashok Iron Pvt Ltd. Was involved in
commercial activity and electricity being the goods supplied here; sales of goods to a
commercial consumer for commercial purpose doesn't fall in the scope of the Consumer
Protection Act, 1986. The judgment was in favor of KPTC, and it ruled that the company's
complaints were not maintainable. The Company Re-appealed before Karnataka State
Consumer Dispute Redressal Commission. This time, the court found in the company's favor,
finding that the complaint was genuine and that Ashok Iron Pvt Ltd. was covered by the
Consumer Protection Act of 1986's definition of consumer.
The KPTC appealed the State Commission's decision by submitting a revision petition with the
National Consumer Disputes Redressal Commission, which was eventually dismissed.
 Appellants moved their appeal to the Supreme Court. And argued that:
• According to Section 2(1)(m) of the Act, Ashok Iron Works was not a person.
• According to Section 2(1)(d) of the Act, Ashok Iron Works was not a customer.
•According to Section 2(1)(o) of the Act, a dispute over the sale and supply of energy is not
considered a service.

Issues can be summarised as:

 Whether a private company purchasing services for commercial purposes be included in the
definition of a consumer?
 Whether a private company is a person according to Section 2(1)(m) of the Act
 Whether Sale and supply of electricity is considered as service according to Section 2(1)(o) of
the Act

Decision:
In the case of Ashok Iron Works Private Limited vs. Karnataka Power Transmission Corporation, the
court ruled in favour of Ashok Iron Works Private Limited. The Company's financial claim for KPTC's
delay in supplying energy was bolstered by a decision based on judges' interpretations of certain words
like consumer, defect in service.

Reasoning:
The court determined that the supply of electricity by the board qualifies as a service under section-
2(1)(o), and that if the supply is not made on time as promised, there may be a case of deficiency of
service under section-2(g). The court further found that the legislature never meant to exclude a juristic
person such as a business when defining "person" under section-2(1)(m), hence the definition of
"person" is inclusive rather than exhaustive. The decision also means that private corporations are now
classified as persons and the supply of electricity as service under the Consumer Protection Act.