Transmissn.Corp.Ltd & ANR. Vs. Ashok Iron Works Pvt. Ltd.  INSC 252
(9 February 2009)
Reportable IN THE
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO 1879 OF
2003 Karnataka Power Transmission Corpn. & Anr. ... Appellants Versus Ashok
Iron Works Pvt. Ltd. ... Respondents CIVIL APPEAL NO 7784 OF 2002 H.V.
Balachandra Rao ... Appellant Versus Karnataka Power Transmission Corpn. &
Anr. ... Respondents
two appeals by special leave, involving common questions, were heard together
and are being disposed of by this judgment.
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 (for short, `the company') 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 (now Karnataka Power Transmission Corporation and hereinafter
referred to as `KPTC'). 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 was extended by the High Court
upto 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 3 commenced in the month of November, 1992. The company accordingly
filed a complaint under the Consumer Protection Act, 1986 (for short, `the 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 a commercial consumer
for a commercial purpose was outside the scope of the Act, 1986.
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.
The District Forum
was persuaded by the objection raised by the KPTC and it held that the
complaints were not maintainable.
company challenged the order of the District Forum in appeal before Karnataka
State Consumer Disputes Redressal Commission (for short, `State Commission').
Few other appeals from the common judgment dated 10th September, 1993 also came
to be filed before the State Commission. The State 4 Commission vide its order
dated June 15, 1995 set aside the order of the District Forum and held that complaints
were maintainable being covered by the definition of "Consumer" under
the provisions of the Act, 1986.
challenged the order of the State Commission by filing a revision petition
before the National Consumer Disputes Redressal Commission (for short,
"`National Commission"). It appears that initially revision petition
was dismissed in default but later on, on the application of restoration made
by KPTC, the revision petition was restored but it was dismissed in view of its
decision dated 23rd November, 2001, in the case of M/s Welmelt Steel Cast Pvt.
Ltd. v. Karnataka State Electricity Board. It is from this order that appeal
1879/2003 by special leave arises.
S.K. Kulkarni, learned counsel for KPTC made the following submissions before
(i) The complaint by
the company before the Consumer Forum against KPTC was incompetent and not
maintainable because the complainant is not a `person' under Section 2(1)(m) of
the Act, 1986 and as such the complainant is not the `consumer' within the
opening limb of the definition of that expression in Section 2(1) (d).
(ii) The complainant
is not a `consumer' within the definition of Section 2(1)(d)(i) of the Act,
1986 since 5 it purchased electrical energy from the KPTC for commercial
complainant's case does not fall within the scope of Section 2(1)(d)(ii) of the
Act, 1986. The expression "service" in Section 2(1)(o) cannot be read
in a wider sense as it is circumscribed by the word "facilities",
thereby limiting the service only to the consumers of facilities in connection
with supply of electrical energy.
In other words, the
dispute relating to sale and supply of electricity does not come within the
ambit of "service"
under Section 2(1)(o)
of the Act, 1986. If for the arguments' sake, it is treated
"service", since it is for commercial purpose, it is excluded from
the purview of sub-clause (1)(d)(ii).
this stage, it would be appropriate to refer to some of the provisions of the
Act, 1986 as were existing at the relevant time in the year 1992 which are
relevant for the consideration of the submissions of the learned counsel for
2(1)(d) defines "consumer" as follows:- "Consumer" means
any person who, - (i) buys any goods 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 user of such goods other than the person who buys such
goods for consideration paid or promised or partly paid 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 obtain such goods for resale or
for any commercial purpose; or 6 (ii) hires 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 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
to Section2(1)(m), "person" includes :-
"(i) a firm
whether registered or not;
(ii) a Hindu
(iii) a co-operative
(iv) every other
association of persons whether registered under the societies Registration Act,
1860 (21 of 1860) or not."
2(1)(o) defines "service" thus:
service of any description which is made available to potential users and
includes the provision of facilities in connection with banking, financing,
insurance, transport, processing, supply of electrical or other energy, board
or lodging or both, entertainment, amusement or the purveying a news or other
information, but does not include the rendering of any service free of charge
or under a contract of personal service."
re : contention -(i)
question that falls for our determination is: is a private limited company a
`person' as contemplated under Section 2(1)(d).
7 The contention of
the learned counsel for the KPTC is that persons specified and enumerated in
Section 2(1)(m) are the only categories of persons covered by that clause and a
company incorporated under the Companies Act is not covered thereunder.
The learned counsel
would submit that a company is excluded from the definition of `person' since
the object of the Act, 1986 is to provide an affordable remedy to individuals
or four categories of collectivities or associations of individuals which may
constitute legal entities for suing or being sued. According to learned
counsel, the companies incorporated were never intended to be covered by Act,
1986 as they could always pursue the ordinary remedy provided in law. The
learned counsel also submitted that the word "includes" must be read
as "means". In this regard, the learned counsel placed reliance upon
two decisions of this Court namely; (1) The South Gujarat Roofing Tiles
Manufacturers Association and Anr. v. The State of Gujarat and Anr. [(1976) 4
SCC 601] (2) Reserve Bank of India v. Peerless General Finance and Investment
Co. Ltd. and Ors. [(1987) 1 SCC 424)]
Watson in Dilworth v. Commissioner of Stamps (1899) AC 99 made the following
8 "The word
"include" is very generally used in interpretation clauses in order
to enlarge the meaning of words or phrases occurring in the body of the
statute; and when it is so used these words or phrases must be construed as
comprehending, not only such things as they signify according to their natural
import, but also those things which the interpretation clause declares that
they shall include. But the word "include" is susceptible of another
construction, which may become imperative, if the context of the Act is
sufficient to show that it was not merely employed for the purpose of adding to
the natural significance of the words or expressions defined. It may be
equivalent to "mean and include", and in that case it may afford an
exhaustive explanation of the meaning which, for the purposes of the Act, must
invariably be attached to these words or expressions."
(supra) and few other decisions came up for consideration in Peerless General
Finance and Investment Co.Ltd.
and this Court
summarized the legal position that inclusive definition by the Legislature is
used; (one) to enlarge the meaning of words or phrases so as to take in the
ordinary, popular and natural sense of the words and also the sense which the
statute wishes to attribute to it; (two) to include meaning about which there
might be some dispute; (three) to bring under one nomenclature all transactions
possessing certain similar features but going under different names.
goes without saying that interpretation of a word or expression must depend on
the text and the context. The resort of 9 the word `includes' by the
Legislature often shows the intention of the Legislature that it wanted to give
extensive and enlarged meaning to such expression. Sometimes, however, the
context may suggest that word `includes' may have been designed to mean
"means". The setting, context and object of an enactment may provide
sufficient guidance for interpretation of word `includes' for the purposes of
2(1)(m) which enumerates four categories namely, (i) a firm whether registered
or not; (ii) a Hindu undivided family; (iii) a co-operative society; and (iv)
every other association of persons whether registered under the Societies
Registration Act, 1860 (21 of 1860) or not while defining `person' cannot be
held to be restrictive and confined to these four categories as it is not said
in terms that `person' shall mean one or other of the things which are
enumerated, but that it shall `include' them.
General Clauses Act, 1897 in Section 3(42) defines `person':
include any company or association or body of individuals whether incorporated
3 of the Act, 1986 upon which reliance is placed by learned counsel for KPTC
provides that the provisions of the Act are in addition to and not in
derogation of any other law for the time being in force. This provision instead
of helping the contention of KPTC would rather suggest that the access to the
remedy provided to the Act of 1986 is an addition to the provisions of any
other law for the time being in force. It does not in any way give any clue to
restrict the definition of the `person'.
2(1)(m), is beyond all questions, an interpretation clause, and must have been
intended by the Legislature to be taken into account in construing the
expression `person' as it occurs in Section 2(1)(d). While defining `person' in
Section 2(1)(m), the Legislature never intended to exclude a juristic person
like company. As a matter of fact, the four categories by way of enumeration
mentioned therein is indicative, categories (i), (ii) & (iv) being
unincorporate and category (iii) corporate, of its intention to include body
corporate as well as body un-incorporate. The definition of `person' in Section
2(1)(m) is inclusive and not exhaustive. It does not appear to us to admit of
any doubt that 11 company is a person within the meaning of Section 2(1)(d)
read with Section 2(1)(m) and we hold accordingly. re: contention - (ii) and
CST v. M.P. Electricity Board, Jabalpur; case 1969 (2) SCR 939, this Court held
that electricity is `goods'. In the case of State of Andhra Pradesh v. National
Thermal Power Corporation; (2002) 5 SCC 203, the Constitution Bench approved
the observations made in M.P. Electricity Board to the extent that electrical
energy can be transmitted, transferred, delivered, possessed, etc., but did not
agree with the observation that electrical energy can be stored. The
Constitution Bench held that significant characteristic of electrical energy is
that its generation or production coincides almost instantaneously with its
In the case of Indian
Aluminium Co. v. State of Kerala; (1996) 7 SCC 637, the characteristics of
electrical energy were noticed by this Court thus, ".....continuity of
supply and consumption starts from the moment the electrical energy passes
through the meters and sale simultaneously takes place as soon as meter reading
is recorded. All the three steps or phases (i.e. sale, supply and consumption)
take place without any hiatus. It is true that from the 12 place of generating
electricity, the electricity is supplied to the sub- station installed at the
units of the consumers through electrical high-tension transformers and from
there electricity is supplied to the meter...."
this Court in the case of Southern Petrochemical Industries Co. Ltd. v.
Electricity Inspector & ETIO and Others ;
(2007) 5 SCC 447,
made following pertinent observations:
"149. It may be
that electricity has been considered to be "goods" but the same has
to be considered having regard to the definition of "goods" contained
in clause (12) of the Article 366 of the Constitution of India. When this Court
held electricity to be "goods" for the purpose of application of
sales tax laws and other tax laws, in our opinion, the same would have nothing
to do with the construction of Entry 53 of List II of the Seventh Schedule of
the Constitution of India."
49 of The Electricity (Supply) Act, 1948 makes the following provision:
[49. Provision for
the sale of electricity by the Board to persons other than licensees. - (1)
Subject to the provisions of this Act and of regulations, if any made in this
behalf, the Board may supply electricity to any person not being a licensee upon
such terms and conditions as the Board thinks fit and may for the purposes of
such supply frame uniform tariffs.
(2) In fixing the
uniform tariffs, the Board shall have regard to all or any of the following
factors, namely:- (a) the nature of the supply and the purposes for which it is
(b) the co-ordinated
development of the supply and distribution of electricity within the State in
the most efficient and economical manner, with particular reference to such
development in areas not for the time being served or adequately served by the
simplification and standardization of methods and rates of charges for such
(d) the extension and
cheapening of supplies of electricity to sparsely developed areas.
(3) Nothing in the
foregoing provisions of this section shall derogate from the power of the
Board, if it considers it necessary or expedient to fix different tariffs for
the supply of electricity to any person not being a licensee, having regard to
the geographical position of any area, the nature of the supply and purpose for
which supply is required and any other relevant factors.
(4) In fixing the
tariff and terms and conditions for the supply of electricity, the Board shall
not show undue preference to any person.]
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? We do not think so.
Although title of Section or marginal note speaks of "the sale of
electricity by the Board to persons other than licensees" but the marginal
note or title of the Section cannot afford any legitimate aid to the
construction of Section. Section 49 speaks of supply of electricity to any
person not being a licensee upon said terms and conditions as a Board 14
thinks fit and for the purpose of such supply free uniform tariffs.
This Court has
already held in Southern Petrochemical Industries (supra) that supply does not
mean sale. As a matter of fact, the company has brought its case to be covered
by Section 2(1)(d)(ii) and not 2(1)(d)(i) as the dispute raised by the company
is with regard to non-performance of the services for consideration within time
frame. For the purposes of the maintainability of the complaint, therefore,
what is important to be seen is whether there is deficiency in service within
the meaning of Section 2(1)(d)(ii).
Under Section 2(1)(o)
of the Act, 1986, `service' means service of any description which is made
available to potential users and includes the provision of facilities in
connection with supply of electrical or other energy. "Deficiency"
under Section 2(1)(g) means any fault, imperfection, shortcoming or inadequacy
in the quality, nature and manner of performance which is required to be
maintained by or under any law for the time being in force or has been
undertaken to be performed by a person in pursuance of a contract or otherwise
in relation to any service. As indicated in the definition of `service', the
provision of facilities in connection with supply of electrical energy is a
service. Supply of electricity by the Board or for that matter KPTC to a
consumer would be covered 15 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
counsel for KPTC relied upon an order of this Court in the case of SDO,
Electricity and Anr. v. B.S. Lobana; (2005) 6 SCC 280 in support of his
contention that in the matter such as present one, the Consumer Forum is not an
appropriate forum. We are afraid no such absolute proposition as canvassed by
the learned counsel is discernible from the said order. The said order is
confined to its own facts which is clear from paragraph 3 that reads thus:
" The respondent
has filed written submissions. We have perused the same. In the facts and
circumstances of the case, we are of the view that instead of moving the
District Forum, the respondent should have moved an application under section
26(6) of the Electricity Act, 1910 (for short " the Act") for
referring the matter to the Electrical Inspector."
counsel urged that the definition `service' is of limited nature and is limited
to the providing facilities in connection with electricity. According to him,
the facility is an expression which facilitates the supply of electricity to an
installation and the definition 16 of service does not cover supply of
electricity. This contention of the learned counsel is founded on erroneous
assumption that supply of electricity is a sale of electricity and the use of
expression `supply' is synonym for `sale'. We have already noticed above, which
we need not repreat, that supply of electricity to a consumer by KPTC is not
sale of electricity. The expression `supply' is not synonym for `sale'. We
reiterate what has been stated by this Court in Southern Petrochemical
Industries Co. Ltd. (supra) 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.
what we have discussed above, 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.
so far as Civil Appeal No. 7784/2002 is concerned, the complainant (appellant
herein) is a sole proprietor of Techno Batteries which is a battery charging
unit. According to the complainant, for the power supplied by Karnataka
Electricity Board 17 (now `KPTC' ) charges payable are under
but in the Bill dated
6th March, 1990, a sum of Rs. 22,628.40 was demanded as "Audit Short
Claim" on the ground that the charges payable for the consumption of
electricity by the complainant are under Tariff-Schedule L.T.-3 and not L.T.
-5. The complainant moved the District Forum at Bangalore challenging the
The District Forum
allowed the complaint vide its order dated 22nd February, 1994. KPTC preferred
an appeal before the State Commission. The State Commission by its Order dated
19th June, 1997 allowed the appeal on the ground that the complainant was not a
consumer within the meaning of Section 2(1)(d) of the Act, 1986 and consequently,
it set aside the order of the District Forum.
Aggrieved by the
order of the State Commission, the complainant preferred Revision before the
National Commission. The Revision Application came to be dismissed as the
complainant was not present and also because the National Commission was
satisfied with the order passed by the State Commission. This appeal arises
from the Order dated 1st December, 2000, passed by the National Commission.
view of the discussion already made by us above while dealing with contentions
(ii) and (iii) in Civil Appeal No. 1879/2003, 18 it has to be held that the
complaint by H.V. Balchandra Rao is covered under Section 2(1)(d)(i)(ii) of the
the foregoing reasons:
(1) Civil Appeal No.
1879/2003 is dismissed; 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.
(2) Civil Appeal No.
7748/2002 is allowed and the Order dated 1st December, 2000 passed by National
Consumer Disputes Redressal Commission and the Order dated 19th June, 1997
passed by Karnataka State Consumer Disputes Redressal Commission are set aside.
168/1994 is restored
to the file of Karnataka State Consumer Disputes Redressal Commission for its
disposal in accordance with law.
(3) The parties shall
bear their own costs.