Case: Indian Oil Corporation Vs. Consumer Protection Council, Kerala and Another

the 2nd respondent, Karthika Gas Agency has issued several unauthorised connections which would amount to a criminal breach of trust. No liability can be fastened on the appellant. 12. Clause 17 of the L.P.G. distributorship agreement clearly postulates the distributor to act as principal and not as an agent. In fact, the complainant was informed under letter dated 23rd of March, 1990 as to the correct position. In these circumstances, if there is no legal obligation to regularise the connection the complaint ought to have been thrown out. The authorities below erred in their approach. 13. In opposition to this, the learned counsel for the respondent would contend that the subscription voucher is not the sole evidence to establish the existence of an authorised connection. Possession of L.P.G. gas cylinder, pressure regulator and regular supply and refill of cylinders would constitute enough evidence to establish consumership since no other person can possess these items as they are monopoly items available with L.P.G. producing companies only. 14. The letter dated 8.12.89 establishes the fact that the appellant was aware of the unauthorised acts of dealer from 1989 onwards where for the unauthorised act of 2nd respondent his agency came to be terminated. There was no justification whatever to revive the same. Besides, how the appellant allowed the 2nd respondent to give continuous supply of gas cylinder is not explained. Therefore, the presumption is that the appellant had ratified the unauthorised acts of the respondent. 15. In order to decide this question it is necessary for us to look at clause 1(a) of Exb. R-2. That is the memorandum of agreement between Indian Oil Corporation and M/s. Karthika gas Agency. That establishes the relationship between Indian Oil Corporation, the appellant and Karthika Gas Agency as Distributor of the Corporation, on principal to principal basis. 16. Clause 17 of the agreement is as under : "In all contracts or engagements entered into by the Distributor with the customers for sale of LPG and/or the sale and/or installation and/or repairs of appliances and/or connections thereof with LPG Cylinders (filled or empty) and/or refills and/or pressure regulators and/or attached equipment the Distributor shall act and shall always be deemed to have acted as a principal and not as an agent or on account of the Corporation, and the Corporation shall not in any way be liable in any manner in respect of such contracts and/or engagements and/or in respect of any act or omission on the part of the Distributor, his servants, agents and workmen in regard to such installation, sale, distribution, connections, repairs or otherwise. The Distributor shall be bound to inform the customers in writing of this provision, through correspondence or at the time of enrolment, of the customer." * Thus, it is clear that the relationship is one of principal to principal basis. The reliance by the authorities below that the circumstances, documents and conduct of parties proved the relationship as of principal and agent is difficult to understand. This is a case in which the 2nd respondent Karthika Gas Agency has given an unauthorised connection. If it was a legal connection nothing would have been easier than to produce the subscription voucher. Such a voucher as rightly pointed out by the learned counsel for the appellant, is important and will bind the appellant-Corporation. The authorities below have not given due importance to the subscription voucher. Section 3(2) of the LPG Control Order reads as under : "No person shall possess or use liquified petroleum gas filled in cylinder or in bulk form unless he has received supply thereof from a distributor or from an Oil Company." 18. The possession of an L.P.G. gas cylinder by Dr. Kamalasanan in this case has not been proved to be authorised. Therefore, on the strength of obtaining possession by means of an unauthorised connection it is not open to the 1st respondent to foist a contract on the Corporation. 19. The letter dated 23rd of March, 1990 to Dr. Kamalasanan is as under : "Indian Oil Corporation Limited LPG : 104 23.3.90 Dr. P. Kamalasanan Consumer Protection Council of Kerala TC 5/96, Perurkada, Trivandrum 695 005. Dear Sir, Sub : LPG distribution at Karunagapally. We make reference to your letter dated 8.1.90 on the subject. On enquiry it is understood that M/s. Karthika Gas Agencies, Karunagapally, has released a number of cylinders and regulators unauthorisedly to various persons in Karunagapally. It is also understood that for such releases a receipt in the name of the Karthika Gas Enterprises has been issued and not in the name of Karthika Gas Agencies, who are our authorised distributors. This appears to be a clear unauthorised action entailing criminal breach of trust. However, in so far as we are not provided with a valid document such as receipt of subscription voucher issued by M/s. Karthika Gas Agencies who are our authorised distributors we may not be in a position to take any action in regularising the connection. In regard to the supply of refills we are taking up the matter suitably with our Manager, Trivandrum to further streamline the existing arrangement of supplies ex Haripad. Thanking you, Yours faithfully, for Indian Oil Corpn. Ltd. sd/- Area Manager" * 20. This puts the position beyond doubt. It should have made the consumer aware of his legal rights. Further, in this case for the unauthorised acts of 2nd respondent, it is distributorship came to be cancelled. The fact that it was revived is of no consequence if due regard is to be had to clause 17 of the agreement which has been extracted above. Section 2(1)(g) of the Consumer Protection Act states as follows :"(g) "deficiency " 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 has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service;" *

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]Thus, it is clear that the relationship is one of principal to principal basis. The reliance by the authorities below that the circumstances, documents and conduct of parties proved the relationship as of principal and agent is difficult to understand. This is a case in which the 2nd respondent Karthika Gas Agency has given an unauthorised connection. If it was a legal connection nothing would have been easier than to produce the subscription voucher. Such a voucher as rightly pointed out by the learned counsel for the appellant, is important and will bind the. The authorities below have not given due importance to the subscription voucher. Section 3(2) of the LPG Control Order reads as under :"No person shall possess or use liquified petroleum gas filled in cylinder or in bulk form unless he has received supply thereof from a distributor or from an Oil Company."18. The possession of an L.P.G. gas cylinder by Dr. Kamalasanan in this case has not been proved to be authorised. Therefore, on the strength of obtaining possession by means of an unauthorised connection it is not open to the 1st respondent to foist a contract on the Corporation19. The letter dated 23rd of March, 1990 to Dr. Kamalasanan is as under :"Indian Oil Corporation Limited LPG : 104 23.3.90Dr. P. Kamalasanan Consumer Protection Council of Kerala TC 5/96, Perurkada, Trivandrum 695 005Sub : LPG distribution at KarunagapallyWe make reference to your letter dated 8.1.90 on the subject. On enquiry it is understood that M/s. Karthika Gas Agencies, Karunagapally, has released a number of cylinders and regulators unauthorisedly to various persons in Karunagapally. It is also understood that for such releases a receipt in the name of the Karthika Gas Enterprises has been issued and not in the name of Karthika Gas Agencies, who are our authorised distributors. This appears to be a clear unauthorised action entailing criminal breach of trust. However, in so far as we are not provided with a valid document such as receipt of subscription voucher issued by M/s. Karthika Gas Agencies who are our authorised distributors we may not be in a position to take any action in regularising the connectionIn regard to the supply of refills we are taking up the matter suitably with our Manager, Trivandrum to further streamline the existing arrangement of supplies ex HaripadYours faithfully, for Indian Oil Corpn. LtdArea Manager" *20. This puts the position beyond doubt. It should have made the consumer aware of his legal rights. Further, in this case for the unauthorised acts of 2nd respondent, it is distributorship came to be cancelled. The fact that it was revived is of no consequence if due regard is to be had to clause 17 of the agreement which has been extracted above. Section 2(1)(g) of the Consumer Protection Act states as follows :"(g) "deficiency" 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 has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service;" *