National Consumer Disputes Redressal
Hindustan Petroleum Corpo. Ltd vs Vijaynagar Gas Agencies on 28 September, 2012
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO.132 of 2007 (From the Order dated 29.12.2006 in Complaint Case No.109/02 of the State Consumer Disputes Redressal Commission, Andhra Pradesh) 1. Hindustan Petroleum Corpo. Ltd. Regd. Office 17, Jamshedji Tata Road, Mumbai-400020 2. Chief Regional Manager, Hindustan Petroleum Corpo. Ltd. L.P.G. Regional Office, Cherlapally, Ranga Reddy District, Hyderabad-51 .. Appellants Vs. 1. Vijaynagar Gas Agencies, 7-1-282/C/1/82, B.K. Guda, Balkampet, Hyderabad 2. New India Assurance Co. Ltd. DO 4th Floor, Block A & D, Koutilya, Amrutha Estates, Somajiguda Hyderabad-500082 3. Miss. R. Raga Navya D/o R. Satyanarayana, R/o 7-1-304/24, Ravindranagar, B.K.Guda, S.R. Nagar, Hyderabad 4. Master R. Avinash S/o R. Satyanarayana, R/o 7-1-304/24, Ravindranagar, B.K.Guda, S.R. Nagar, Hyderabad 5. R. Satyanarayana S/o Late Sri R. Rama, R/o 7-1-304/24, Ravindranagar, B.K.Guda, S.R. Nagar, Hyderabad ..Respondents AND FIRST APPEAL NO.237 of 2007 (From the Order dated 29.12.2006 in Complaint Case No.109/02 of the State Consumer Disputes Redressal Commission, Andhra Pradesh) 1. Miss. R. Raga Navya D/o R. Satyanarayana, R/o 7-1-304/24, Ravindranagar, B.K.Guda, S.R. Nagar, Hyderabad 2. Master R. Avinash S/o R. Satyanarayana, R/o 7-1-304/24, Ravindranagar, B.K.Guda, S.R. Nagar, Hyderabad 3. R. Satyanarayana S/o Late Sri R. Rama, R/o 7-1-304/24, Ravindranagar, B.K.Guda, S.R. Nagar, Hyderabad (Complainants No.1 & 2 rep. through by Their father, Complainant No.3) ..Appellants Vs. 1. Hindustan Petroleum Corpo. Ltd. Regd. Office 17, Jamshedji Tata Road, Mumbai-400020 2. Chief Regional Manager, Hindustan Petroleum Corpo. Ltd. L.P.G. Regional Office, Cherlapally, Ranga Reddy District, Hyderabad-51 3. Vijaynagar Gas Agencies, 7-1-282/C/1/82, B.K. Guda, Balkampet, Hyderabad 4. New India Assurance Co. Ltd. DO 4th Floor, Block A & D, Koutilya, Amrutha Estates, Somajiguda Hyderabad-500082 5. The United India Insurance Co. Ltd. DO NO.13, 133, Jahanghir Building (JEROO) 4th Floor, Fort, Mumbai ..Respondents BEFORE: - HONBLE MR. JUSTICE ASHOK BHAN, PRESIDENT HONBLE MRS. VINEETA RAI, MEMBER APPEARANCE:- In F.A. No. 132 2007 For the Appellant(s) : Mr. B.R. Vig, Advocate For Respondent No.1 : Mr. B.S. Arora, Advocate For Respondent No.2 : Nemo For Respondents No.3 to 5 :.Mrs. K. Radha, Advocate For Respondent No.6 : Mr. Kishore Rawat, Advocate In F.A. No. 237 of 2007 For the Appellant(s) : Mrs. K. Radha, Advocate For Respondents No.1&2 : Mr. B.R. Vig, Advocate For Respondent No.3 : Mr. B.S. Arora, Advocate For Respondent no.4 : N E M O For Respondent No.5 : Mr. Kishore Rawat, Advocate PRONOUNCED ON: 28.09.2012 O R D E R
ASHOK BHAN, J., PRESIDENT Hindustan Petroleum Corporation Ltd. which was Opposite Party Nos.1 & 2 before the State Commission (hereinafter to be referred to as the Appellants) and the Complainants (hereinafter referred to as the Respondents) have filed these Appeals against the judgment and order dated 29.12.06 passed by the State Consumer Disputes Redressal Commission, Andhra Pradesh (in short, the State Commission) in C.D. No. 109/02 wherein the State Commission partly allowing the complaint filed by the Respondents has directed the Appellants and the Insurance Company (Opposite Party No.5 before the State Commission) to pay jointly and severally an amount of Rs.10,00,000/- to the Respondents towards compensation along with costs of Rs.3,000/-. Complaint against Opposite Party Nos. 3 and 4 was dismissed.
FACTS:-
Briefly stated the facts of the case are that Smt. R. Lakshmi, mother of the Respondent No.3 & 4 and wife of the Respondent No. 5 was cooking food for her family on 08.02.2002. She found the existing cylinder empty and changed the same at about 11 A.M. with a new sealed cylinder supplied on 3.01.02 by Vinjaynagar Gas Agencies, the authorized dealer of the Appellants, Hindustan Petroleum Corporation Limited. After installing the new cylinder, the gas started leaking around 11.45 A.M. due to failure of the washer, i.e., O ring in the cylinder neck as a result of which the gas accumulated under the platform of the gas stove and around 12.00 A.M suddenly fire broke out in which she sustained burn injuries on abdomen, chest, neck, both the palms and the legs. She was admitted in Yashoda Super Speciality Hospital for treatment. She died after 10 days in hospital on 17.02.2002. Respondents spent more than Rs.1,00,000/- on her treatment. The official of the Appellants visited the Respondents house and Crime No.89/2002 was registered. Thereafter, Respondents issued a legal notice on 18.7.02 to the Appellants demanding Rs.20,00,000/-
as compensation. Appellants replied to the notice on 11.10.02 denying their liability to indemnify the Respondents and fastening the liability on the dealer who supplied the cylinder. Respondents, being aggrieved, filed the complaint before the State Commission seeking compensation.
Opposite parties, on being served, filed separate Written Statements.
Hindustan Petroleum Corporation Limited took the stand that as per terms of the Distributorship Agreement, relationship between the Hindustan Petroleum Corporation Ltd. and the Distributor/dealer was on principal to principal basis and not principal to agent basis and, therefore, the liability of the Appellants came to an end as soon as the cylinders were delivered at the premises of the Distributors/Dealer; that it was not liable to reimburse for the loss suffered by the Respondents as there was no privity of contract between Hindustan Petroleum Corporation Limited and the Respondents; that after the accident the valve and O ring were found in good condition without any signs of burns and the reason for leakage of gas was due to minor cracks in the rubber tube which was not a manufacturing defect in the cylinder supplied to the Respondents.
The dealer filed its Written Statement taking the contrary stand that it was only the dealer of the Appellants and was distributing the gas cylinders received from them as an their agent; that they were not involved in any kind of manufacturing or filling the cylinders or packing or sealing the cylinders.
State Commission, after taking into consideration the relevant clauses of the agreement which read as under:
The Dealer shall comply with all laws, bye-laws, rules and regulations and requisitions of the Central or Local Government or of the Municipality or other authority in respect of storage of goods and articles mentioned in clause 4 hereof, and shall obtain at its expense all licenses or permits necessary for the erection, storage or use of storage accommodation and shall comply with the terms and conditions thereof. The dealer shall be responsible for all the consequences of any breach of the provisions of this clause and shall indemnify and at all times keep the company indemnified against any claims and demands by any third party or by Central or Local Government of Municipality or Local authority in respect thereof.
The dealer shall make its own arrangements for the transport of full cylinders from its premises to the consumers premises and also for the return of the empty cylinders from the consumers premises to the dealers premises. The dealer shall be responsible for the prompt return of all empty cylinders to the company and further be liable to the company for any loss or damage arising out of any act of negligence either on its part or on the part of its employees or servants. The dealer shall comply with the laws, bye-laws, rules, regulations and requisitions of Central or Local Government or of the Municipal or Local authority with regard to such transport over and above any instructions or directions which the company from time to time give in the respect.
All necessary installation work including the connection disconnection of cylinder to/from the appliances and/or pressure regulators and the work of repairs to appliances and the replacement of rubber tubing will be carried out at the Consumers expense and on his own responsibility by the Dealer and not on behalf of the Corporation. The fact that the consumer supplied HP Gas shall not be deemed to impose any liability on the Corporation with regard to the fitness or otherwise of the installation and/or repair work. The Corporation and/or the Dealer and/or the persons authorized by either of them shall, however have the right to inspect the installation at any time and, if considered necessary for reasons of safety, to refuse to supply the gas to the consumer.
The Corporation shall not be liable for any loss or damage caused to any person or property as a result of the installation and/or the use of the gas by the consumer.
In the event of any accident involving the consumers installation, he shall forthwith inform the Dealer.
rejected the plea taken by the Appellants that the sale made by it to the dealer was on principal to principal basis and allowed the complaint directing the Appellants and the Insurance Company (O.P.No.5) to pay jointly and severally an amount of Rs.10,00,000/- as compensation to the Respondents along with costs of Rs.3,000/-. It was held that leakage of gas was due to manufacturing defect in the cylinder.
State Commission on facts recorded the following finding:-
The contention of the opposite parties that since the cylinder was purchased on 3.1.02, had it been defective, the deceased would have complained about the leakage of gas on that very day itself, is unsustainable on the ground that there is no evidence to state that the complainants having purchased the gas cylinder on 3.1.02 had used it on the same day. It is a matter of common knowledge that gas cylinders are purchased and kept in stock in advance and subsequently used whenever there is a requirement. To contend that since the deceased purchased the cylinder on 3.1.02, a complaint should have been given on the very same day about leakage is not sustainable in these circumstances. Even in the FIR, which is the initial statement given to the Police, and the final report of the Police, it is clearly stated that the death was due to accidental burns caused by gas leakage which caught the saree of the deceased and resulted in severe burn injuries and subsequently her death. The contention of the opposite parties 1 and 2 that there is a dealer agreement and therefore only the dealer is responsible for all the consequences is also unsustainable on the ground that it is the manufacturer who manufactures, who in this case are opposite parties 1 and 2, and it is their responsibility for taking all the precautions before filling the cylinders prior to delivering them to the dealer. The role of the dealer is only the distribution of the cylinders as per the requirement of the consumers.
and concluded as under:-
Keeping in view the aforesaid judgments, we are of the considered opinion that the opposite parties 1 and 2 and their insurance company i.e. opposite party No.5 are jointly liable. Opposite Party No.3, who is the dealer and his insurance company, opposite party No.4, are not liable and the complaint against them is dismissed without costs. Taking into consideration the medical expenses and income tax statement and the fact that the deceased was aged only 35 years leaving behind two minor children and her husband who have lost love and affection of the mother and wife, we are of the considered opinion that an amount of Rs.10,00,000/- as compensation would meet the ends of justice and opposite parties 1, 2 and 5 are jointly liable to pay this amount. Case against opposite parties 3 and 4 is dismissed without costs.
Insurance Company accepted the order of the State Commission and has not filed the appeal.
Appellants, being aggrieved, has filed the First Appeal No.132/2007 seeking quashing of the order of the State Commission whereas the complainants have filed First Appeal No.237/2007 seeking enhancement of compensation.
Ld. Counsel appearing for the Appellants relying upon the judgments of the Supreme Court in Indian Oil Corporation vs. Consumer Protection Council, Kerala & Anr., Civil Appeal No.7330 of 1993 decided on 07.12.1993 and the judgment of this Commission in Flame Gas SErvece, Bikaner & Ors. Vs. Aklesh Kumar Bansal & Ors., I (1995) CPJ 78 (NC) and the appellants own case REVISION PETITION 4871/2008, M/s Hindustan Petroeum Corporation Limited vs. M/s PSNR Combines & Ors. contends that since the sale made by it to its distributer/dealer was on principal to principal basis there was no relationship of service provider and consumer with the complainants and, therefore, the Appellants were not liable to reimburse for the loss suffered by the Respondents. That in Indian Oil Corporations casa (supra), Honble Supreme Court after taking into consideration Clause 17 of the agreement entered into between Indian Oil Corporation and the dealer came to the conclusion that the sale made by the Indian Oil Corporation to the dealer was on principal to principal basis and, therefore, there was no relationship of service provider and consumer with the complainants. That this Commission following the same judgment in the Flame Gas Serveces case (supra) held that since the sale made by the Indian Oil Corporation to its dealers was on principle to principle basis, the Indian Oil Corporation was not liable to reimburse for the loss suffered by the complainants. He further submits that this Commission in M/s Hindustan Petroeum Corporation Limiteds case (Supra) followed those judgments without specifically dealing with the clause of the distribution agreement entered into between the Appellants and the distributer/dealer.
As against this, Ld. Counsel for the Respondents contends that the compensation awarded by the State Commission is inadequate as the deceased was only 35 years of the age at the time of death and her income was Rs.2,50,000/- p.a. We do not find any substance in the submissions made by the Ld. Counsel for the Appellants. On perusal of the clauses of the agreement reproduced in earlier part of the order we are of the view that the agreement between the Appellants and the dealer was not on principal to principal basis. In Indian Oil Corporations case (supra) in view of the clause 17 where it was specifically mentioned that the sale by the IOC to its dealer was on principle to principle basis, the Supreme Court held that the relationship between the IOC and the dealer was on principle to principle basis and not as a principle to agent. It was further held since IOC had sold the cylinders to the dealer on principle to principle basis, there was no privity of contract between the IOC and the consumer and, therefore, the complaint filed by the consumer against the IOC was not maintainable. Similar view was taken by this Commission in Flame Gas Services case (supra). However, in the present case in the Dealership Agreement, a clause similar to clause 17 which existed in the Dealership Agreement in IOCs case (Supra) before the Supreme Court and in Flame Gas Services case (Supra) before this Commission, is not there. In the Dealership Agreement in the present case, it is not provided anywhere that the sale of filled cylinder by the Appellants to the dealer was on principle to principle basis and as such the Appellants are liable to indemnify the loss suffered by the Respondents. Finding recorded by the State Commission to the effect that the sale made by the Appellants to its dealer was on principle to agent basis and not on principle to principle basis is upheld.
The next question which falls for our consideration is, as to whether there was any manufacturing defect in the cylinder. Counsel for the Appellants referring to the report dated 09.02.02 whereas it has been stated that the leakage of gas was due to improperly fitted regulator and cracked rubber tube at stove end, contends that leakage was not due to any manufacturing defect. That the leakage of gas took place because of the cracked rubber tube and ill-fitted regulator. We do not find any substance in this submission as well. The name of the person who prepared the report dated 09.02.02 has not been disclosed. He has also not filed his affidavit in evidence. The report is not proved. There was no opportunity to the Respondents to challenge the veracity of the report as the person who prepared the report did not file his affidavit in evidence.
The said report cannot be taken into consideration. In any case in the concluding part of the report under the reading of remedial action it has been stated that the damaged regulator and rubber tube were immediately changed and the installation was checked by the dealer. In the conclusion portion the reference is to the damaged regulator. The defective regulator was supplied by the Appellants and, therefore, the Appellants are liable to indemnify the Respondents. The State Commission has rightly held that the Appellants were the manufacturers and it was their duty as well as responsibility to take all possible precautions while filling the cylinders before delivering them to the dealer. The complaint has rightly been dismissed against the dealer as there was manufacturing defect in the cylinder.
FIRST APPEAL No.237 of 2007 The deceased was 35 years of the age at the time of her death. She was working as Director of Shrirama Pharma Chemicals Pvt. Ltd. Her net income as per the income tax return for the year 2000-01 was Rs.1,20,000/- and taxable income was Rs.1,00,000/- after deducting Rs.20,000/- as standard deduction. If we deduct 1/3rd towards the personal expenses, her net income comes to Rs.80,000/- p.a. Taking into consideration the age of the deceased, the multiplier of 16 is taken. If we multiply Rs.80,000/- p.a by 16, the total compensation payable comes to Rs.12,80,000/-.
For the reasons stated above, First Appeal No.132/07 filed by the Hindustan Petroleum Corporation Ltd. is dismissed and the First Appeal No. 237/07 filed by the Complainants is partly allowed. The compensation of Rs.10,00,000/- awarded by the State Commission is enhanced to Rs.12,80,000/-.
The sum of Rs.5,00,000/- deposited by the Appellants had been withdrawn by the Respondents under the orders of this Commission. Appellants had taken an indemnification policy of Rs.10,00,000/- from the Insurance Company. Therefore, the liability of the insurance company has to be limited upto Rs.10,00,000/-
only. Appellants along with Insurance Company are directed to pay the sum of Rs.12,80,000/- to the Respondents after adjusting the sum of Rs.5,00,000/- already paid. Liability of the Insurance Company is limited to Rs.10,00,000/-. Balance amount of Rs.7,80,000/- to be paid to the Respondents within two months failing which the amount shall carry interest @ 9% p.a. from the date of filing of complaint till realization.
Registry is directed to refund Rs.35,000/- deposited by the Appellant as statutory deposit along with accrued interest, if any.
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(ASHOK BHAN J.) PRESIDENT . . . . . . . . . . . . . . . .
(VINEETA RAI) MEMBER Yd