NCDRC

NCDRC

RP/1079-1080/2014

VIKRAM GAS AGENCY - Complainant(s)

Versus

OM PRAKASH SONI & 3 ORS. - Opp.Party(s)

MR. ANAND SHANKAR JHA & MRS. BHAVANA JHA

11 May 2017

ORDER

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
 
REVISION PETITION NO. 1079-1080 OF 2014
 
(Against the Order dated 06/08/2013 in Appeal No. 136/2011 & 1969/2010 of the State Commission Rajasthan)
1. VIKRAM GAS AGENCY
THROUGH ITS PROP NEAR SHRI KALYAN CIRLCE
SIKAR
RAJASTHAN
...........Petitioner(s)
Versus 
1. OM PRAKASH SONI & 3 ORS.
S/O LATE SHRI MOOL CHAND SONI, R/O WARD NO-11, MORI KA WAS
SIKAR
RAJASTHAN
2. BHARAT PETROLEUM CORPORATION LTD.,
THROUGH ITS TERRITORY MANAGER LPG-ROAD NO-14, VKI AREA,
JAIPUR
RAJASTHAN
3. ORIENTAL INSURANCE CO LTD.
THROUGH ITS MANAGER, KUNDAN BHAWAN, OPP CHAUDHARY HOTEL , M.I ROAD,
JAIPUR
RAJASTHAN
4. ORIENTAL INSURANCE CO LTD.
THROUGH ITS BRANCH MANAGER, BRANCH OFFICE AT BAJAJ ROAD, OPP. SAMRAT CINEMA,
SIKAR
RAJASTHAN
...........Respondent(s)

BEFORE: 
 HON'BLE MRS. REKHA GUPTA,PRESIDING MEMBER
 HON'BLE MR. PREM NARAIN,MEMBER

For the Petitioner :
For BPCL : Mr Anil K Batra, Advocate
For Om Prakash : MrUmeshNagpal, Advocate for R 1
For Vikram Gas Agency : MrAnand Shankar Jha, Advocate
For Insurance Company : Mr Rajesh K Gupta, Advocate
For the Respondent :

Dated : 11 May 2017
ORDER

These three Revision Petitions Nos.3945 of 2013 (Bharat Petroleum Corporation Ltd. Vs. Om Prakash and others), R.P. No.1079-1080 of 2014 (Vikram Gas Agency vs. Om Prakash Soni and others) and R.P. No.3047-3048 of 2014 (Oriental Insurance Company Ltd. and another vs. Om Prakash Soni and others)  have been filed against the common impugned order dated 6.8.2013 passed by the State Consumer Disputes Redressal Commission, Jaipur, Rajasthan (for short, ‘State Commission’) passed in appeals filed  against the orderdated 27.8.2010 of the District Consumer Disputes Redressal Forum, Sikar, Rajasthan (for short, ‘District Forum’) passed in Consumer Complaint No. 124 of 2009.

2.      Brief facts of the case are that In the year 2009, the complainant Om Prakash had filed a Complaint u/s 12 of Consumer Protection Act 1986 before the District Forum claiming Rs.19,79,000/- as compensation for the loss suffered by him and his two sons, due to the fire incident alleged to have taken place in his shop on 12.09.2008 when he opened the seal of a commercial gas cylinder supplied to him on 12.09.2008by Vikram Gas Agency. The BPCL/OP-4 filed its reply to the complaint denying its any liability on the ground that BPCL did not have any direct privity of contract with the consumer. Similarly, OP-1Vikram Gas Agency also denied any liability as it only sent the cylinder supplied by the manufacturer. OP-2-3 the Insurance Company resisted the complaint on the ground that the insurance contract is between the insurance company and the dealer and thereis no privity of contract with the consumer.                                                                                  

3. The District Forum vide its order dated 27.8.2010allowed the complaint filed by the complainant and awarded Rs.16,26,382/- as compensation, Rs.5,000/- for mental agony & Rs.5,000/- for litigation expenses and all the non-complainants were held  responsible jointly and severally.

4.  The BPCL and the Insurance companypreferred separate appeals before the State Commission, Rajasthan, Jaipur, being F.A. No.1969/2010 and F.A. No.136/2011. The State Commission vide its order dated6.8.2013  partly allowed both the appeals filed by the non-complainants and the compensation  awarded to the complainant was reduced from Rs.16,36,382/- to Rs.9,13,182/- including amount for mental agony which was increased from Rs.5,000/- to Rs.4,00,000/-. Rs.5,00,000/- was deposited by the Insurance Company before the District Forum, in compliance of the orders passed on stay  Application and the same was directed to be released to the complainant. The  State Commission further held that there was no Privity of Contract  between Complainant and the Insurance Company therefore, Vikram Gas Agency and BPCL shall pay the balance amount of the compensation within one month to Complainant and thereafter, Vikram Gas Agency may recover the amount from the Insurance Company under the policy.  In fact the order of the State Commission reads as follows:-

          “25.Now the question is what should be the compensation. The learned DCF has awarded Rs.85,182/- towards medical expenses, Rs.2,50,000/- towards loss of goods, equipments, machinery, metals, furniture and other belongings and rs.1,68,000/- for temporary loss of business. We do not wish to interfere in this order. Learned DCF believed the evidence of complainant and there was no counter affidavits on the part of opposite parties.

          26.As regards the compensation for loss of future income, learned DCF has held that the complainant received grievous burn injuries on his hands and there is a report of 72% permanent disability. Learned DCF has opined that complainant a goldsmith will not be able to carry out his profession of goldsmith by his hands for whole of his life. Considering his age 50   years it applied    a multiplier of 13 assuming his monthly income of Rs.10,000/-.

          27. We have considered this point in view of the law submitted by learned counsel for insurance company.  As the facts disclose complainant had a goldsmith shop. His two sons alongwith workers were engaged in this profession. We find no evidence on record to conclude that complainant himself earned Rs.10,000/- p.m. by doing goldsmith’s work individually. Similarly there is no evidence that his each son earned Rs.7,000/- individually. They were working together, what was arrangement between them is not proved. What was shop’s monthly income is not on record.  In our opinion the complainant can very well supervise his shop and get the work done engaging workers. His sons were already working with him. We cannot conclude that complainant will not able to earn in future. Complainant has been regularly attending the proceedings and we believe he can engage himself some convenient job profession. Thus, it will not be proper to apply any multiplier to assess his future income. We are in agreement with learned counsel for insurance company that loss of profit and quantum of compensation has always to be on the basis of established loss.  We would follow the ratio laid down in III (1995) CPJ82 NC on this point.  We wish to modify the order of learned DCF awarding future income loss by applying multiplier.

          28. As a result of above discussions, both the appeals are partially accepted. Order of the learned DCF awarding Rs.11,23,200/- is quashed and is modified as under:-

Award of medical expenses of Rs.85,182/-, Rs.2,50,000/- for loss of goods, equipments, machinery, metals etc. and Rs.1,68,000/- for temporary business loss is maintained. The compensation for mental agony to complainant and his family is increased to Rs.4,00,000/- cost of prosecution is also increased to Rs.10,000/-.

          29.BPCL & VGA jointly and severally held liable to pay this amount to the complainant within one month failing which interest @ 9% p.a. shall be payable. VGA may recover the amount from insurance company under the policy.”

5.    Hence these revision petitions.

6.   Heard the learned counsel for the parties and perused the record.

7. The learned counsel for BPCL stated that no service was ever provided by it directly to the complainant and, therefore, the complainant does not come in the purview of consumer as far as the OP-4 is concerned.  As per clause 15 & 22 of the agreement dated 07.04.1982, executed between the Vikram Gas Agency and the BPCL, in the event of occurrence of any accident, the liability to pay compensation is only of the distributor, as the liability of the BPCL is up to delivery of the cylinder to the Distributor’s go-down and the delivery of the cylinder to the consumer is made by the Distributor on his own level. It was also stated that the OP-1Vikram Gas Agency has taken an insurance coverage from the Oriental Insurance Company i.e. OP-2-3 and therefore, in the event of accident,compensation if any awarded to the complainant is payable by the Insurance Company.It was further pointed out that the State Commission had altogether ignored the contention of BPCL that rights and obligations of BPCL and Vikram Gas Agency qua the customers are governed by agreement dated 7.4.1982 executed between them and pursuant to the said agreement the OP No.1, Vikram Gas Agency, has taken an insurance cover from the Oriental Insurance Company, OP No.2-3, in the event of any accident. It was emphasized by the learned counsel that the State Commission ought to have appreciated that there was no privity of contract between the complainantand the BPCL/OP-4 and he was not the direct consumer of BPCL and, therefore, BPCL should not have been made liable to pay any compensation. Ld. Counsel has cited the following judgments in support of his assertions:-

  1. National insurance Company Ltd. through its Manager Vs. BabulalLodhi S/o Shri ShankanLodhi, Hindustan Petroleum Corporation Ltd. through Area Manager Office and Director, Phoenix Distributors; III (2010)CPJ120(NC)

“9. Having heard the learned Counsel appearing for the petitioner/Insurance Company and the manufacturer and having gone through the records of the case, it may be stated that the law of liability with regard to the manufacturer vis-à-vis the dealer stands settled in the judgment of the Hon'ble Supreme Court in the case of Indian Oil Corporation v. Consumer Protection Council (1994) 1 SCC 397 wherein it clearly laid down the primacy of the clauses under the agreement between the manufacturer and the dealer and has ruled that when the agreement is on principal-to-principal basis, the manufacturer will not be liable. Thus, no fault can be found with the order passed by the State Commission that the manufacturer will not be liable.”

2.  New India Assurance Co. Ltd. Vs. KalurajJasraj Vyas and Ors., I (2009) CPJ 444 (NC)

“17. At the same time, it is to be stated that because of the defective cylinder or the regulator the accident has taken place, and hence, it cannot be held that the Dealer or the HPCL would not be liable. Primary liability would be that of the HPCL.

18. In this view of the matter, it is held that the dealer and the HPCL would be jointly and severally liable to pay compensation to the Complainant. However, as the insurance cover is taken by the dealer, the Insurance Company would be also liable. In the result, the appeal is partly allowed and the order passed by the State Commission is modified accordingly.

20. In this view of the matter, it is directed that the remaining amount of Rs.4,65,800/- shall be paid jointly and severally by the dealer (Respondent no.3) and the HPCL (Respondent No.4) to the Complainant. However, the Insurance Company is also required to reimburse the said amount to the dealer. Therefore, the Insurance Company is directed to pay the remaining amount to the Complainant within a period of six weeks from today.”

8.  The learned counsel appearing on behalf of OP-1Vikram Gas Agency stated that the State Commission arrived at a finding that the accident was caused due tomanufacturing defect in the cylinder but erroneously relied on the judgment of this Commission in MadhuriGovilka&Ors. Vs. Hindustan Petroleum Corporation IV (2006) CPJ 338 to saddle the OP-1with liability to compensate the complainant.The State Commission has not appreciated the basic contention of the OP-1that it is in no manner engaged in the activity of manufacturing or filling of gas cylinder and is merely a distributor. Thus, in absence of any finding of deficiency, OP-1has been directed to compensate the consumer/complainant. The learned counsel emphasized that the OP-1was merely a distributor and was not involved in manufacturing of the gas cylinder and hence cannot be made liable for any manufacturing defect. It was further pointed out that the State Commission erred in not appreciating that the gas cylinder was delivered to the complainant in good and usable condition pursuant to which he had signed the purchase slip. Thus, there was no deficiency in service on the part of the OP1. The learned counsel submitted that the complainant for the first time informed the OP-1after a delay of 2½ months of the alleged accident without any justifiable reason. Thus, OP-1 did not get any opportunity to ameliorate the situation to minimize the loss and to verify the factual position as well as to submit insurance claim and to facilitate any assessment by the surveyor.

9.  The learned counsel for OP-2-3 /Insurance Company argued that the State Commission has erroneously directed to release Rs.5,00,000/- to the complainant that was deposited by the Insurance Company before the District Forum  in compliance of the order of the State Commission for grant of stay.Although the State Commission rightly held that there was no privity of contract between the complainant and the insurance company and therefore M/s. Vikram Gas Agency and BPCL were directed to pay the balance amount, yet it erroneously gave recovery rights to M/s. Vikram Gas Agency against the insurance company. It was further stated thatthe State Commission failed to notice that under the terms and conditions of the L.P.G. Traders Policy no liability accrued against the insurance company. Section VI of the aforesaid policy deals with Public Liability and Employer’s Liability and provides as under:

          “SECTION VI –PUBLIC LIABILITY AND EMPLOYER’S LIABILITY

  1. PUBLIC LIABILIITY

The company will indemnify the insured in respect of all sums which the insured is legally liable to pay as compensation and litigation expenses incurred by the insured with the Company’s written consent, in respect of accidental death of or bodily injury to any person other than a person under the insured’s service and/or accidental damage to property caused by or arising from the installation of gas filled L.P.G. Cylinder in the premises of the insured’s customers or whilst such cylinder’s from the insured’s premises are in the course of being carried for installation in the premises of the insured’s customers or whilst such empty cylinders are in the course of being carried from the premises of insured’s customers to the insured’s premises.”

10.  The learned counsel submitted that when the State Commission has returned a clear finding that there was a manufacturing defect in the cylinder, the sole responsibility for the alleged fire incident would be of that of M/s. Bharat Petroleum Corporation Ltd. and /or of M/s. Vikram Gas Agency. No liability can be fastened on to the Insurance Company. It was also argued by the learned counsel that the State Commission also failed to take note of the fact that there was unreasonable delay in intimation to the insurance company severally prejudicing its rights to carryout investigation and appoint a surveyor as mandated by law. No Claim was ever filed and as such the insurance company could not have been saddled with any liability. It was also emphasized that the State Commission exercised its jurisdiction illegally and with material irregularity by enhancing the compensation from Rs.5,000/- to Rs.4,00,000/- on account of mental agony without a reasoned order especially in view of the fact that no appeal was preferred by the complainant challenging the same.

11.    We have carefully perused the material on record and have given a thoughtful consideration to the arguments advanced by the learned counsel for the parties. First of all it is seen that all these revision petitions have been filed with delay.  BPCL/OP-4 has filed an application for condonation of delay of 5 days in filing the revision petition.  Similarly, the OP-1,Vikram Gas Agency has filed an application for condonation of delay of 88 days.  Even the Insurance Company/OP-2-3 has filed the revision petition with a delay of 260 days and the application for condonation of delay has been filed.  In the interest of justice, as all the three revision petitions are linked and require to be decided together, we deem it appropriate to condone the delay in filing the revision petitions on the grounds mentioned in the applications for condonation of delay at a cost of Rs.25,000/- to be paid by all the three petitioners separately.  The argument of the BPCL/OP-4 that OP-4 has no privity of contract with the consumer and the relationship between OP-4 manufacturer and the distributor OP-1 is that of principal to principal basis, hence, OP-4 is not liable for any compensation to be paid to the complainant, is not tenable because the gas cylinder has been found to be defective with manufacturing defect and gas cylinder is the property of BPCL/OP-4. So long as the seal is put by the manufacturer/OP-4 and the gas cylinder is returned back to the manufacturer itself for refilling purposes, the manufacturer cannot  escape its responsibility from manufacturing defect or any problem in the seal of the cylinder.   In the first case cited by  the learned counsel for the BPCL i.e.National insurance Company Ltd. through its Manager Vs. BabulalLodhi (supra), it is seen that primarily this was the revision petition filed by  the insurance company and the State Commission had only found dealer liable and  the same decision was upheld by  the National Commission.  It was not a direct decision for a dispute between dealer and the manufacturer. Even if the relationship is on principal to principal basis, we have to see the subject matter of dispute. The subject matter of dispute is the gas cylinder which is definitely owned by  the manufacturer BPCL and its distribution is only managed by the dealer. So far  as  any manufacturing defect would be concerned, the manufacturer cannot  escape from the liability. In the second judgemnet filed by  the learned counsel for BPCL/OP-4, namely,  New India Assurance Co. Ltd. Vs. KalurajJasrajVyas and Ors. (supra),  this Commission has decided that both  the manufacturer as well as  the dealer are  responsible and share joint and severe liability for any damage to the consumer. Hence, it is amply clear that   there is no illegality in the order of the State Commission in holding the manufacturer BPCL and the dealer Vikram Gas Agency jointly and severally responsible for paying  the compensation to the complainant.

12.    Coming to the arguments advanced by the learned counsel for OP-1 Vikram Gas Agency, we find that it was the duty of the dealer to get the cylinder fixed by its own personnel which was not done. Thus, the negligence on the part of the dealer is self-evident and he cannot escape his liability for compensating the damages to the complainant.

13.    All the appellants have argued that the State Commission has erred in enhancing the compensation for mental agony from Rs.5,000/- awarded by the District Forum  to Rs.4,00,000/-  for which there was no                             request from the complainant side as no appeal was preferred by the complainant against the order of the District Forum.  We find that the State Commission has not given any reasoning for enhancement of compensation. Hence, we hold that enhancement of compensation from Rs.5,000/- to Rs.4,00,000/- as ordered by the State Commission is arbitrary and is a material irregularity in its order which cannot be sustained. 

14.    So far as the case of the insurance company/OP-2&3 is concerned, we agree with the observation of the State Commission that the insurance company had no direct privity of contract with the complainant as the insured was the dealer Vikram Gas Agency and not the complainant.  Accordingly, we are of the view that the State Commission was not justified in ordering the release of Rs.5 lakhs deposited by the insurance company to the complainant. However, the argument of the insurance company that Section VI of the L.P.G. Traders Policy deals with Public Liability and Employer’s Liability and according to this Section, insurance company is not liable for any accident occurring in the customer premises is not tenable, as  a perusal of the Section VI relating to Public Liability and Employer’s Liability clearly shows that the insurance company will indemnify the insured in respect of all sums which the insured (Distributor) is legally liable to pay as compensation in respect of accidental  death or bodily injury to any person other than a person under the insured’s service and/or accidental damage to property caused by the installation of gas filled cylinder in the premises of the insured’s customers.  Thus, the present case is not barred under the Section VI of  the said policy as argued by the learned counsel for the OPs No.2 and 3. It is true that the claim form has not been filed by the insured/distributor, but the liability to reimburse the compensation having been paid by the insured is covered under the policy. As the payment of  this amount has already been made to the complainant, we are desisting from passing any order for refund by the complainant to the insurance company.  However, the responsible parties i.e.  the manufacturer/OP-4 and  the dealer/OP-1 are liable to pay interest on this amount to the insurance company.

15.    From the above discussion, we conclude that the complainant is liable only to receive Rs.85,182/- for medical expenses, Rs.2,50,000/- for loss of goods, equipments and machinery etc. and Rs.1,68,000/- for temporary loss of business alongwith Rs.5,000/-  as compensation and Rs.10,000/- towards cost of litigation,  thus totaling Rs.5,18,182/- as agreed by the State Commission except for the compensation. This amount is payable by the dealer Vikram Gas Agency/OP-1  and BPCL/OP-4 jointly and severally to  the complainant. As Rs. 5,00,000/- has already been received by the complainant, the remaining amount of Rs.18,182/- should be paid by the OP-1 and OP-4 jointly and severally to the complainant. As no claim has yet been preferred by the dealer, Vikram Gas Agency to the insurance company, we deem it appropriate to further order that insurance company will be liable only to reimburse upto Rs.2,59,091/- to OP-1.Vikram Gas Agency which shall pay interest @ 8% p.a. to the insurance company/OP-2-3 on  the amount of Rs.2,50,000/- from the date of release of Rs.5,00,000/- to the complainant, till submission of claim form to the insurance company by the Vikram Gas Agency. The manufacturer BPCL/OP-4 shall pay Rs.2,50,000/- to the insurance company alongwith interest @ 8% p.a. from the date of release of Rs.5,00,000/- to the complainant till actual date of reimbursement to the insurance company. The BPCL/OP-4, Vikram Gas Agency/OP-1 and Oriental Insurance Company/OP-2-3 shall also be liable to pay Rs.25,000/- (Rupees Twenty Five Thousand only) each to the complainant as cost for condoning the delay in filing the revision petitions. All these directions will be complied with by all the parties within a period of six weeks from the date of this order. Accordingly, the three revision petitions stand disposed of in terms of this order with no order as to costs for these revisions.

 
......................
REKHA GUPTA
PRESIDING MEMBER
......................
PREM NARAIN
MEMBER

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