B. SURESH NAYAK vs Chairman, Karnataka Electricity Board

IN this complaint, the complainant has sought the following reliefs : "7. This complainant therefore prays that while accepting the complaint, this Hon''ble Commission may be pleased to direct the respondent to :- (a) Pay the complainant a sum of Rs. 6.97 lakhs or such amounts which this Hon''ble Commission deems fit as compensation for the loss and injury suffered by the complainant consumer due to the negligence of the opposite party; (b) Direct the opposite party to carry out the repairs of the transformers and put them in operation immediately and to maintain continuity of supply of electrical energy to the complainant with immediate effect; and (c) To pay the complainant the cost of this proceeding."

THE complainant is a public limited company. THE factory of the complainant, manufactures steel and steel products with the use of electrical energy. THE complainant entered into an agreement with the opposite party-the Karnataka Electricity Board, as per Ex. C-6, for the supply of electrical energy to the factory of the complainant. The complainant further averred that the complainant, as per Clause 5 of the agreement, Ex. C-6 was to supply electrical energy un-interrupted for the manufacture of steel and steel products, by the respondent.

The factory of the complainant is situated at Baikampady, Mangalore and the opposite party was supplying the electrical energy from Kavoor Sub-Station transformers.

THE complainant further averred there were two transformers at Kavoor. One transformer failed on 27.2.1990. Immediately another transformer was switched on and electrical energy was being supplied to the factory of the complainant through the second transformer. THE complainant, nextly, averred that eventhough he had requested that opposite party to repair the transformer which had failed in the month of February 1990, immediately, but the opposite party did not take any immediate steps for its repair. A second transformer also failed on 30.11.1990. Consequently, the supply of electrical energy to the factory of the complainant was stopped for a period of about 60 hours and thereafter electric supply was commenced from some other transformer and in consequence of which the supply of electrical energy to the factory of the complainant was reduced. The complainant, nextly averred that the complainant used to consume electrical energy nearly 15 to 16 lakh units per month. But in consequence of reduction in supply from the month of Dec, 1990, the complainant suffered a loss of Rs. 6.97 lakhs for the month of January 1991. The specific averments of the complainant at para 4 of the complaint, in this regard, reads thus : "The complainant''s production has suffered for want of regular supply of power and the loss caused to the complainant is calculated at a reasonable figure of Rs. 6.97 lakhs per month. This complaint is restricted to the loss occurred on account of the acts of the opposite party for the month of January 1991."

THE complainant, rextly averred that due to the negligence of the Opposite Party in not repairing the transformer which failed in the month of Feb., 1990, in time, the complainant suffered heavy loss and thereby the services rendered by the opposite party were deficient in nature. The complainant, on the basis of these aver-ments, sought the refief as narrated above. The opposite party, filed the version and admitted the agreement entered into between the complainant and the opposite party, as per Ex. C-6, for regular supply of electrical energy to the complainant''s steel factory.

THE opposite party further admitted the fact of failure of one transformer in the month of Feb., 1990 and another in the month of Nov., 1990. THE opposite party averred that soon after failure of the transformer in the month of Feb., 1990, several measures were initiated for its rectification. As both the transformer were Italian Make transformers they were also very heavy transformers, the weight of the one transformer is around 134 M.Ts. So it was very difficult to get it repaired at an early date. THE opposite party, nextly averred that it approached B.H.E.L, and N.G.E.F. engineers for its repair and it also approached the manufacturer of the said transformer of Italy for its repairs. So it had taken all necessary steps for its early repair.

THE opposite party further averred that when the second transformer failed in the month of November 1990, immediately supply of electrical energy to the complainant''s factory was arranged through transformer at Kulshekhar and as the capacity of the said transformer was only 20 MVA, restriction was imposed on the loads of all stations fed from this transformer including the factory of the complainant. The opposite party, nextly averred that the complainant was requested to limit the load to 3.5 MWs as against their demand of 5.5 MWs.

The opposite party, further averred that the complainant did not comply with the restrictions imposed and denied any negligence or lapse on its part in either repairing the transformers or in supply of electrical energy to the complainant''s factory.

THE opposite party further averred that this Commission has no jurisdiction to entertain the complaint as the complainant cannot be classified as a "consumer" under the provisions of the C.P. Act. The opposite party on the basis of these averments, sought the complaint to be dismissed.

DURING enquiry, the complainant examined C.W. 1, Shri Vijaya Kumar, Manager (Maintenance) and C.W. 2, Shri Vasudev Shet, Senior Officer in the complainant''s company and got Exs. C-l to C-8 marked in evidence. The opposite party examined R.W. 1, Shri Shivakumar, Assistant Executive Engineer, KEB, Kavoor Sub-Division and got Exs. R-l to R-41, marked in evidence. We have perused the pleadings and the material placed on record by the parties and also heard the learned Counsel for the parties. Having regard to the pleadings of the parties, the only point that arises for our consideration is "whether the services rendered by the opposite party were deficient in nature and inconsequence of which the complainant did suffer loss as claimed by him?".

BEFORE we proceed to consider the evidence placed on record by the parties, it is necessary to notice a preliminary objection raised by the opposite party. The objection raised was that the complainant cannot be classified as a "consumer" nor the allegations contained in the complaint can be classified as "complaint" as defined under Sections 2(1)(d) and 2(1)(e) of the C.P. Act, so this Commission has no jurisdiction to entertain the complaint.

IT is next contended that supply of electric energy is purchase of "goods". Electric energy comes within the definition of "goods". Hence, when a person buys it for running a factory, the purchase is for "commercial" purpose. Hence the complaint regarding the defective supply is not maintainable. We cannot accept has contention. "Consumer" has been defined under Section 2(1)(d) of the C.P. Act, 1986, which reads as under : "2(1)(d) ''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 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 (ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and 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; Explanation : For the purpose of sub-clause (i) ''Commercial purpose'' does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood by means of self-employment."

A person who hires any service for consideration which has been paid or promised or partly paid or partly promised is classified as a "consumer" as referred above under Section 2(1)(d)(ii) of Consumer Protection Act, 1986.

THE word "service" has been defined under Section 2(1)(o), which reads as under: "2(1)(o) "service" means 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, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;"

It is clear from this, that supply of electrical energy, has in express terms been included in the definition of "service" in Section 2(1)(o), quoted above. THE statute expressly lables the same as a "service" then it is very difficult to lable it as a "sale of goods". THErefore, a person who receives the services by way of supply of electrical energy and which he had hired for consideration is a "consumer". THEre is clear distinction between the "consumer" who purchases goods for consideration and one who hires any service for the same. Whilst a person purchasing the goods for a commercial purpose is ousted from the definition of a consumer as per the provisions under Section 2(1)(d)(i), a person who hires services for consideration even for commercial purposes remains squarely within its ambit. So having regard to these facts, it is clear that the complainant is a "consumer" and the complaint is maintainable under the provisions of the Act. It is not disputed that the O.P. was supplying electrical energy to the factory of the complainant under the terms of the agreement, as per Ex. C-6.

IT is also not disputed that the electrical energy was being supplied to the factory of the complainant by the opposite party from Kavoor Sub-Station. One transformer failed in the month of February, 1990, immediately another transformer was switched on and regular supply of electricity was continued. The second transformer failed on 31.11.1990, immediately within a period of about 60 hours an arrangement was made to supply electrical energy to the factory of the complainant from Kulshekhar Sub-Station. The complainant has averred that the opposite party did not take immediate necessary steps for repairing the transformer that failed in the month of February, 1990. R.W. 1, has averred in his statement that immediate steps were initiated to repair the transformer that failed in the month of Feb., 1990 as it was an imported transformer and was very heavy one and it took considerable time to repair it. The opposite party has also placed on record several documents, that is, correspondence, as per Exs. R-4 to R-35 to show that several technicians and authorities were approached for the repair of the said transformer by the opposite party. Ex. R-37 is the letter dated 5.12.1990 written to all the Assistant Executive Engineers of Mangalore Division for the restriction of power supply. The restriction of supply of electrical energy to the factory of the complainant was limited 3.5 M.Ws.

C.W. 1, has stated, in this regard, thus : "During Jan., 1991, there was demand cut by 20% and energy cut of 45% throughout the Karnataka." C.W. 2, has in this regard, stated thus : "In the month of January, 1991, there was a power cut in the State of Karnataka. As per the notification in the month of Jan., 1991, 20% was the demand cut and 40% was the energy cut. Such power cuts were there even in previous years. Our sanctioned limit of energy was for all the 3 shifts for the month i.e., we were entitled to work all the 24 hours if 40% cut were to be there, even then we were capable to run the factory for 24 hours. If one was entitled to use 10 lakhs units and if there were to be 40% power cut, then he would be entitled to make use of 6 lakhs units of electricity. It is not true to suggest that though there was power cut the company has not adhered to it. The power cut was from 30.11.90 till 15.7.91."

From this evidence of the complainant, it is clear that there was a power cut in the entire State of Karnataka from December, 1990 to July, 1991. The power cut was 20% demand cut, and 40% energy cut.

R.W. 1, has in this regard, stated thus ; "There was 40% power cut for a particular period probably from Oct., 1990 till Jan., 1991. From Feb., 1991 to April, 91 there was 50% power cut. From 1.4.91 to 1.7.91 the power cut was 55% throughout the State."

Ex. R-1 is the extract of the ledger maintained by the opposite party. It is a statement showing the MD and energy recorded during January, 1989 to October, 1991 in respect of the complainant''s factory. This statement shows the consumption of energy by the complainant''s factory during the month of December, 1990 as 11,62,800 units and during the month of February, 1991 as 10,00,800 units. Admittedly, during this period the consumption of power by the factory of the complainant was restricted to 3.5 MWs. The statement further shows that during the month of April, 1991, the consumption of energy by the factory of the complainant was 6,55,200 units. The complainant has claimed loss of Rs. 6.97 lakhs for the month of January, 1991 due to the short supply of energy by the opposite party. But the statement referred above does not show that there was any short supply of energy during the month of January, 1991 and in consequence of which the complainant did suffer any loss. The complainant had, as per the statement, used, even in the month of January and February, 1990, only 4,440 and 4,380 KVA respectively and even in the month of January and February, 1991, he had used 4,440 and 4,380 KVA.

C.W. 2, the Senior Officer of the Company of the complainant, has in this regard, stated thus :- " I cannot tell without reference from the relevant records as to why in the month of April, 1991 power consumption was only 6,25,200 units. I cannot say whether the company has incurred any loss during April, 1991.It is not true to suggest that the company did not incur any loss in the month of April, 1991 and as a matter of fact the company earned profits. The financial year of the company is from April to March. Ex. R-3 is the 18th annual report for 1991 of the company. According to the report the company has earned profits. It is not referred in the said report Ex. R-3 that the company incurred loss as claimed in the complaint due to the failure of supply of electricity by K.E.B."

AS noted above, even though the company used only 6,55,200 units in the month of April, 1991 C.W. 2 was not in a position to say that the company did suffer any loss in the said period. Then it would be very difficult to accept the say of the complainant that even though the consumption of energy in the month of January, 1991, was 11,17,800 units, there was a loss of Rs. 6.97 lakhs to the company due to the short supply of energy. As referred above, C.W.-2 has fairly admitted that the company as per the report, Ex. R-3, had earned profits and absolutely there was no reference in the report, Ex. R-3 , that there was loss to the company, in a sum of Rs. 6.97 lakhs due to the short supply of energy in the month of Jan., 1991.

THESE facts and circumstances would clearly go to show that the complainant failed to establish the fact that there was deficiency of service on the part of the opposite party and in consequence of which he did suffer any loss. Therefore, we are of the opinion that the complainant failed to establish the fact that the services rendered by the opposite party was in any way deficient in nature. ORDER In the result, therefore, this complaint fails and it is dismissed. The parties are directed to bear and pay their own costs. Complaint dismissed.