1. The present Appeals have been filed against the Order dated 22.09.2011 passed by the Punjab State Consumer Disputes Redressal Commission, Chandigarh (hereinafter to be referred to as “State Commission”), whereby the Complaint filed by the Complainant was allowed and all the Opposite Parties were directed to pay jointly and severally the Compensation amount of ₹10 lakh alongwith interest @7.5% p.a. from the date of the accident till realisation.

2. Brief facts of the case that the Mrs. Rooth (now deceased) wife of Mr. Peter Maish (hereinafter referred to as the Complainant No. 1) was having LPG connection with M/s. Azad Gas Service (hereinafter referred to as the OP No.1) who is the dealer/agent of Indian Oil Corporation (hereinafter referred to as the OP No.2), i.e., Manufacturer of the LPG Gas Cylinder.  Mrs. Rooth was serving as Nurse at DMC & Hospital, Ludhiana and they have three children, i.e., Afrin (now deceased), Amone (hereinafter referred to as Complainant No.2) and Angel ((hereinafter referred to as Complainant No. 3).  It is the case of the Complainants that while on 28.06.2005 at about 7:00PM when Mrs. Rooth was cooking meals in the kitchen using the LPG Gas cylinder supplied by OP No.1 and manufactured by OP No.2, suddenly there was a blast with deafening sound and in the said blast, the entire cylinder, utensils, acquaguard water purifier, slabs fittings and fixtures stood dismantled. The wife of the Complainant No.1 and daughter Afrin also died in the blast.   The fact of the blast was reported to the OP No. 2 through OP No. 1, who sent the representative but did not offer condolence and rather threatened the Complainant No.1 not to take any action.  Alleging defect in the cylinder and its component, Complaint claiming compensation was filed before the State Commission. 

3. The Complaint was resisted by the OP Indian Oil Corporation but OP No. 1 Azad Gas Service did not appear before the State Commission.  The State Commission proceeded exparte against OP No.1 Azad Gas Service and vide Order dated 30.04.2009 allowed the Complaint.  In Appeal against the said Order, this Commission vide Order dated 12.04.2010 partly allowed the Appeal and remanded the Complaint to State Commission and passed the following Order:-
   • The appellant-M/s Azad Gas Service is granted one opportunity to file its written defence version before the State Commission subject to payment of ₹5,000/- as cost to the complainants. We direct the parties to appear before the State Commission on 10.05.2010. New India Assurance Company Limited will also file its defence version on the same date. After the written versions are filed, the parties will be free to lead evidence/further evidence. We expect the State Commission to decide the complaint as expeditiously as practicable.

Under the order dated 18.08.2009 of this Commission, the Indian Oil Corporation Limited has deposited the entire awarded amount with the State Commission and we gave liberty to the Complainant to withdraw the said amount subject to furnishing restitution security. The complainant No. 1 and his counsel state that the complainant has not able to withdraw the said amount as he was called upon by the State Commission to furnish bank guarantee though he was willing to which but could not furnish. In this regard, we may simply observe that vide order dated 18.8.2009, we had directed the State Commission to release the amount to the complainant on furnishing adequate security which did not necessarily imply that the State Commission should call for the bank guarantee for the same amount. Learned counsel for the complainants states that the complainant is in a position to furnish the collateral security for withdrawal of the said amount. Having regard to the facts and circumstances of the case, we direct that the said amount shall be released to the complainant No. 1, on furnishing adequate collateral security to the satisfaction of the State Commission. Amount deposited by the Indian Oil Corporation Limited will finally abide by the result of the complaint. The parties are directed to appear before the State Commission on 10.5.2010 for receiving further directions in the matter. On the request of learned counsel for the appellants in Appeals No. 274 of 2009 and 334 of 2009, we direct that the pre-requisite amount of ₹35,000/- be refunded to these appellants.”

4. On remand, the OP No. 1 Azad Gas Services submitted that they are only a dealer of OP No.2 Indian Oil Corporation and there is no evidence that the cylinder in question was supplied by them. The last supply of the cylinder was made on 24.11.2004 and the incident took place on 28.06.2005. The address of the consumer was different to the supply address. It was further contended that the supply of the cylinder was never made. Incomplete distribution card of cylinder was placed on record. The Complainants have also not followed the Gas Cylinder Rules, 2004 which requires notice and inquiry into the accident. The cylinder was not manufactured by them, whereas it was manufactured by OP No.2 Indian Oil Corporation, and, as such, they are not, at all, liable for any mishap. It was further contended that they have taken Group Personal Accident Liability insurance policy for the period 14.02.2005 to 13.02.2006 for a sum of ₹10.00 lacs from the National Insurance Company Limited (hereinafter referred to as the OP No. 3 Insurance Company) and if any liability is fastened on them, it will be payable by National Insurance Company Limited.

5. On behalf of OP No. 2 Indian Oil Corporation Ltd., it was submitted that there is no privity of contract between the Complainants and OP No.2.  It was also submitted that the relationship of OP No.2 and OP No.1 is on Principle-to-Principle basis and not of Agent and Principle which is clear from the Clause-17 of the Agreement executed between them. It was further contended that Sh. Rakesh Kumar, Deputy Manager (LPG-S), Ludhiana inspected the place of accident and observed about the articles scattered and also collected the detail of the accident from Complainant No.1. It was further observed that the reason of the blast/explosion of the cylinder could not be ascertained from the condition of the kitchen/cylinder. He also visited the showroom of OP No.1 and found that Consumer Card No.AZ-2829 was in the name of Smt. Rooth and last re-fill supply was made on 24.11.2004 and the consumer shifted the residence from Ranjhoth Park to Mahavir Jain Colony. OP No.1 informed that the supply is not sent to that area and the consumer has not reported for change of the address. It was contended that they are not liable, as there is no evidence to prove the defect in the cylinder. It was further contended that they have taken Public Liability Policy from M/s New India Assurance Company (hereinafter referred to as OP No. 4 Insurance Company) and in case they are fastened with any liability it will be payable by M/s New India Assurance Company Ltd.
6. OP No.3 insurance company contended that they are not liable to pay any amount as no Policy of Insurance or contract exists between them and Complainants and/or OP No. 1 Agency to cover such type of risk  and the Compliant is liable to be dismissed.
7. On behalf of OP No.4 Insurance Company , it was argued that there is no privity of contract with the Complainants and OP No.4 and no deficiency in service is proved on behalf of OP No. 2 and thus they are not liable to pay any amount.
8. After hearing all the Parties and perusal of material on record, the State Commission allowed the Complaint by observing as under:-

“….This blame game is not appreciable and in no way can exonerates the Opposite Parties because it is proved on record that the gas cylinder which was supplied by Opposite Party No.1 to the consumer Mrs. Rooth even on 24.11.2004, was supplied by Opposite Party No.1 and was manufactured by Opposite Party No.2. Opposite Parties Nos.1 & 2 have not brought on record any evidence that the accident took place due to mishandling or some negligence on the part of Mrs. Rooth or her daughter Afrin. There was no violation of Section 3(2) of the LPG Control Order as the said cylinder was supplied by the distributor i.e. Opposite Party No.1, authorized by Opposite Party No.2 to supply the LPG gas cylinders to the Consumers. There was no violation of the Gas Cylinder Rules, 2004 as the notice of the accident was immediately given and the inspection/inquiry was conducted by Sh. Rakesh Kumar, Deputy Manager (LPG-S) and he has visited the place of the accident immediately in the morning on the next day and gave his report dated 29.06.2005. If no inquiry has been conducted by the District Magistrate or the other officers mentioned in Rule-68 or 69 of Gas Cylinder Rules, 2004, for that the complainants cannot be blamed and the Opposite Parties cannot take any benefit of the same.

38. The fact remains and it is proved that Mrs. Rooth and Afrin died due to blast of the cylinder and cylinder was supplied by Opposite Party No.1 and was manufactured by Opposite Party No.2.

39. The photographs depict the damage and the loss caused to the house of the complainants and Er. Ravi Kumar of R.K. & Associates prepared the estimated cost for the repair of the house. Sh. Varun Gagneja, Forensic Science Expert gave his report that cylinder blasted from the junction of the upper and the lower part as the nozzle of the cylinder was found to be tightly intact and no melting or deterioration of the metal sheet was observed near the nozzle point. He also attached the photographs with his report which further proves that it was the defective cylinder which was supplied to the consumer. Newspaper cuttings further depict the death of mother and daughter due to blast of the gas cylinder.

40. Hon’ble State Consumer Disputes Redressal Commission, Uttranchal in case “Indian Oil Corporation Limited Vs Shiv Shankar”, I(2005) CPJ-104, observed that it was not for the complainant to lead expert evidence, but it was for the respondent to lead expert evidence and the respondents are jointly liable.

41. The opposite party no.2 along with the written arguments, relied upon the authority of the Hon’ble Supreme Court in case “Indian Oil Corporation Vs Consumer Protection Council, Kerala & Anr.”, CPC 1994(1)-477(SC) and “M/s Flame Gas Service, Bikaner & Ors. Vs Aklesh Kumar Bansal & Ors.”, CPC 1995(1)-335(NC), but both these authorities are not applicable. In case Indian Oil Corporation Vs Consumer Protection Council, Kerala & Anr. (supra), the unauthorized gas connection was issued. In case ‘M/s Flame Gas Service Vs Aklesh Kumar Bansal’(supra), the distributor and mechanic while repairing the complainant’s gas stove, acted in negligent manner, resulting in death of complainant’s wife. The facts and circumstances of the present case are all together different as detailed above.

42. As per certificate Ex.C24 brought on file, Mrs. Ruth was working as nurse and was earning ₹12,411/- per month and she was 34 years old at the time of death. Complainant no.1 has lost companionship and complainants no.2 & 3, their mother and the damage to the house was also caused, as is clear from the report of Er. Ravi Kumar.

43. Keeping into consideration all the above facts, suffice it be to award ₹10.00 Lacs (Rupees Ten Lacs) as compensation in lumpsum which includes all the above losses and all the opposite parties are liable to pay the same jointly and severally to the complainants. Accordingly, the complaint filed by the complainants is allowed and a sum of ₹10.00 Lacs is awarded as compensation to the complainants.

44. Opposite party no.1-Azad Gas Service had taken the insurance policy from National Insurance Company Limited, opposite party no.3 vide cover note no.40 324018 book no.400000/12/03 012961 valid from 14.02.2005 to 13.02.2006 under which, the opposite party no.1 is insured for a sum of ₹10.00 lacs towards Group Personal Accident Liability to unnamed public customer. Opposite party no.2-Indian Oil Corporation is insured with the New India Assurance Company Limited, opposite party no.4 vide policy Ex.OP3/1 bearing policy no.12100/46/05/00078 for the period w.e.f. 21.04.2005 to 21.04.2006 for ₹1,08,00,00,000/-(Rupees One Hundred Eight Crore). Therefore, all the opposite parties are liable to pay the compensation amount of ₹10.00 lacs jointly and severally. The opposite parties are also liable to pay interest on this amount @ 7.5% per annum from the date of the accident till realization. The order shall be complied with by the opposite parties within two months from the receipt of the copy of the order.

45. As ordered by the Hon’ble National Commission vide its order dated 12th April, 2010, the amount of ₹5,50,000/- lying deposited with this Commission, shall be released by the registry to complainant no.1 on furnishing adequate collateral security to the satisfaction of this Commission.”

9. Feeling aggrieved by the Order dated 22.09.2011 passed by the State Commission, while the Complainants has filed FA No. 460/2012 for enhancement of the Compensation, the Opposite Parties, M/s Azad Gas Services, Indian Oil Corporation and National Insurance Company have filed FA No. 17/2012, FA No. 763/2012 and FA No. 67/2012 respectively for quashing/setting aside the Order passed by the State Commission.

10. Mr. Ashish Kapoor, learned Counsel appearing for the Indian Oil Corporation Limited submitted that mere holding LPG connection does not entitle the Complainants to be a consumer of M/s. Azad Gas Services.  The Complainants had taken the Cylinder from a Rehriwala on 27.06.2006, as is clear from the statement given by the Complainants to Dy. Manager (LPG-S), LHA-A dated 29.06.2005.  The Complainants failed to prove that the said LPG cylinder was procured from its distributor Azad Gas Service or from Indian Oil Corporation.  The expert report relied upon by the State Commission is a fabricated one as the incident occurred on 28.06.2005 while the expert report is prepared after two years.  It was further submitted that relationship of OP No.2 and OP No.1 is on Principle-to-Principle basis and not of Agent and Principle which is clear from the Clause-17 of the Agreement executed between them.  There is no privity of contract between them and Complainants.  In case of any liability, the OP No.1 Azad Gas Services should pay the Compensation.  In support of his contentions he relied upon a Judgment passed by this Commission in “Indian Oil Corporation Ltd. vs. Sh. Hansmukhbhai M. Patel” [FA No. 527 / 2006 dated 13.08.2012].  The State Commission erred in fastening the liability on them.  It was prayed that the Order passed by the State Commission be set aside and the Complaint be dismissed.

11. Mr. Arvind Mishra, learned Counsel appearing on behalf of Azad Gas Agency submitted that the last cylinder was supplied to the Complainants by them only on 24.11.2005, i.e., prior to 6 months of the date of incident of blast.  Complainants did not provide the purchase receipt of the LPG Cylinder.  It was further submitted that although the Complainant was having a LPG connection from them but had taken the Cylinder from a Rehriwala on 27.06.2006, as is clear from the statement given by the Complainants to Dy. Manager (LPG-S), LHA-A dated 29.06.2005.  There are also 3 distributors of IOC in the area.  Therefore, no liability can be fastened on them.  The State Commission erred in fastening the liability on them.  It was prayed that the Order passed by the State Commission be set aside and the Complaint be dismissed.

12. Mr. G.S. Ahluwalia, learned Counsel appearing on behalf of National Insurance Co. Ltd. submitted that they have issued LP Gas Traders Combined Policy to the OP No. 1, i.e., M/s Azad Gas Services.  In terms of the Policy, the risk is covered on the entire building above plinth level, cylinders empty or filled at the premises of the M/s. Azad Gas Services.  Therefore, they are liable to indemnify the insured, i.e., M/s. Azad Gas Services and not the Complainants.  The Policy issued by them did not cover the risk/accident due to blast of gas cylinder at the residence of the Complainants, as no extra premium was paid by the insured towards coverage of any such risk/accident suffered by the general public.  The liability towards the unfortunate Complainants is directly of the insured, i.e., M/s. Azad Gas Services.  He prayed that the Order passed by the State Commission be set aside and complaint be dismissed. 

13. Per contra, Mr. Ajay Mahajan, learned Counsel appearing for the Complainants submitted that her wife Mrs. Rooth was 34 years of age at the time of accident.  Her salary was ₹12,000/- per month.  The State Commission committed a grave erred in not granting compensation of ₹36 lakh considering the loss of her salary for 24 years.  The State Commission also did not take into account the loss towards renovation and repair of the house estimated at ₹5.35 lakh by a Civil Engineer.  He prayed that Compensation awarded by the State Commission is in lower side and it should be enhanced and rate of interest 7.5% awarded by the State Commission also be increased to 10%.

14. We have heard Mr. Ajay Mahajan, learned Counsel appearing for the Complainants, Mr. Ashish Kapoor, learned Counsel appearing for the Indian Oil Corporation Limited, Mr. G.S. Ahluwalia, learned Counsel appearing on behalf of National Insurance Co. Ltd., Mr. Arvind Mishra, learned Counsel appearing on behalf of Azad Gas Agency, perused the material on record and given a thoughtful consideration to the various pleas raised by the learned Counsel for the respective Parties,
15. So far as the plea of M/s. Azad Gas Service and Indian Oil Corporation Ltd. that the said LPG cylinder was purchased from a rehriwala is concerned, no cogent/hard evidence has been filed by them in support of their contention. They have simply relied upon their Inter Office Memo Report prepared by their employee, i.e., Dy. Manager (LPG-S), LHA-A dated 29.06.2005, in which it has been mentioned that “Sh. Peter Masih informed them he was consumer of M/s. Azad Gas Service & cylinder that exploded was taken from some rehriwala on 27.06.2005 and not from the M/s. Azad Gas Service after booking.’’  But it is not signed by Mr. Peter Masih and is prepared by their own employee and not by any third party, therefore, it cannot be said to be a cogent proof.  On the other hand, in the Complaint, which is duly supported by the Affidavit of Complainant, it has been categorically stated by the Complainant that ‘the defective Indane Gas cylinder was supplied by the OP No. 1 on behalf of OP No. 2 at Ludhiana’.  Therefore, we do not find any force in the contention that ‘the said LPG cylinder was purchased from a rehriwala’ and we agree with the findings recorded by the State Commission that “Mrs. Rooth and Afrin died due to blast of the cylinder and cylinder was supplied by OP No.1, Azad Gas Service and was manufactured by OP No.2 Indian Oil Corporation.”     

FIRST APPEAL NO. 17 / 2012

16. Since the LPG cylinder was manufactured by OP No. 2, Indian Oil Corporation, we find no deficiency in service on the part of the OP No.1 Azad Gas Service and it is exonerated from the liability to pay the compensation.  Consequently, FA No. 17/2012 filed by the OP No. 1 Azad Gas Services is allowed and the complaint is dismissed qua the OP No. 1 Azad Gas Service.

FIRST APPEAL NO. 67 / 2012

17. As the OP No. 1 Azad Gas Service, has been exonerated from the liability of paying compensation, FA No. 67/2012 filed by the National Insurance Company has become infructuous and the same stands disposed off accordingly. 

FIRST APPEAL NO. 460 / 2012

18. Keeping in view the peculiar facts and circumstances of the case, we do not find any reason to enhance the lumpsum Compensation of ₹10 lakh alongwith interest @7.5% p.a. from the date of accident till realization, which has been rightly awarded by the State Commission.   Consequently, FA No. 460/2012 filed by the Complainants is dismissed.

FIRST APPEAL NO. 763 / 2012

19. Since the LPG cylinder was manufactured by OP No. 2, Indian Oil Corporation, we are of the considered view that OP No. 2, Indian Oil Corporation is liable to pay the Compensation. 

20. As far as the plea of Indian Oil Corporation that there is no privity of contract between OP No.2 and Mrs. Rooth, therefore, they are not liable to pay the compensation, is concerned, the Hon’ble Supreme Court in “Laureate Buildwell Pvt. Ltd. vs. Charanjeet Singh” [2021 SCC OnLine SC 479], held that absence of privity of contract is not a bar for maintaining a Complaint against a service provider, by observing as under:-

25.     In another decision, Canara Bank v. United India Insurance Co. Ltd. (2020) 3 SCC 455, the issue which this court had to consider was whether the insurer could repudiate liability in respect of a fire which destroyed farm produce kept in a cold storage, when the farmers had no privity with the insurer, but with the cold storage, and who availed credit on the security of the crop. The court held as follows:

“28. Taking the issue of privity of contract, we are of the considered view that as far as the Act is concerned, it is not necessary that there should be privity of contract between the Insurance Company and the claimants. The definition of “consumer” under Section 2(d) quoted hereinabove is in two parts. Sub-clause (i) of Section 2(1)(d) deals with a person who buys any goods and includes any user of such goods other than the person who buys such goods as long as the use is made with the approval of such person. Therefore, the definition of consumer even in the first part not only includes the person who has purchased but includes any user of the goods so long as such user is made with the approval of the person who has purchased the goods. As far as the definition of “consumer” in relation to hiring or availing of services is concerned, the definition, in our view, is much wider. In this part of the section, consumer includes not only the person who has hired or availed of the services but also includes any beneficiary of such services. Therefore, an insured could be a person who hires or avails of the services of the Insurance Company but there could be many other persons who could be the beneficiaries of the services. It is not necessary that those beneficiaries should be parties to the contract of insurance. They are the consumers not because they are parties to the contract of insurance but because they are the beneficiaries of the policy taken out by the insured.

29. The definition of “consumer” under the Act is very wide and it includes beneficiaries who can take benefit of the insurance availed by the insured. As far as the present case is concerned, under the tripartite agreement entered between the Bank, the cold store and the farmers, the stock of the farmers was hypothecated as security with the Bank and the Bank had insisted that the said stock should be insured with a view to safeguard its interest..”

26.      If one also considers the broad objective of the Consumer Protection Act, which is to provide for better protection of the interests of consumers and for that purpose, provide for the establishment of Consumer Councils and other authorities for the settlement of consumer disputes and for matters connected therewith, as evident from the Statement of Objects and Reasons of the Act. The Statement further seeks inter alia to promote and protect the rights of consumers such as—

“(a) The right to be protected against marketing of goods which are hazardous to life and property;

(b)   the right to be informed about the quality, quantity, potency, purity, standard and price of goods to protect the consumer against unfair trade practices;

(c)   the right to be assured, wherever possible, access to variety of goods at competitive prices;

(d)   the right to be heard and to be assured that consumers' interests will receive due consideration at appropriate forums;

(e)   the right to seek redressal against unfair trade practice or unscrupulous exploitation of consumers; and

(f)    right to consumer education.”

27.     In Lucknow Development Authority v. M.K. Gupta (1994) 1 SCC 243, this Court held:

“The importance of the Act lies in promoting welfare of the society by enabling the consumer to participate directly in the market economy. It attempts to remove the helplessness of a consumer which he faces against powerful business, described as, ‘a network of rackets’ or a society in which, ‘producers have secured power’ to ‘rob the rest’ and the might of public bodies which are degenerating into storehouses of inaction where papers do not move from one desk to another as a matter of duty and responsibility but for extraneous consideration leaving the common man helpless, bewildered and shocked.”

28.      It was further held that:-

“The Act thus aims to protect the economic interest of a consumer as understood in commercial sense as a purchaser of goods and in the larger sense of user of services. … It is a milestone in history of socioeconomic legislation and is directed towards achieving public benefit.”

29.     This court has further observed in State of Karnataka v. Vishwabharathi House Building Coop. Society, (2003) 2 SCC 412, that (the) “provisions of the said Act are required to be interpreted as broadly as possible. It has jurisdiction to entertain a complaint despite the fact that other forums/courts would also have jurisdiction to adjudicate upon the lis”⁸

30.     It is therefore evident that the Consumer Protection Act, 1986 was conceived as a legislation to address complaints of consumers (an expression defined and interpreted widely) and provide a forum for their quick redressal, and, furthermore, wherever third parties have claimed relief, technicalities have been brushed aside consistently, by this court. Thus, even after an original consumer is indemnified for a fire accident, the insurer can maintain a complaint against the carrier/service provider, and claim damages (of course along with the insured party). Likewise, absence of privity of contract is not a bar for maintaining a complaint against a service provider, by a third party who suffers an incident, which is otherwise covered by an agreement…...”

21.   Respectfully following the principle laid down by the Hon’ble Supreme Court in Laureate Buildwell Pvt. Ltd. (supra), we are of the considered view that even the absence of privity of contract between OP No. 2 and Mrs. Rooth (now deceased) does not help the OP No. 2 Indian Oil Corporation, in exonerating it from the liability to pay the compensation to the legal heirs of Mrs. Rooth, who died due to blast of the LPG cylinder manufactured by the OP No.2, Indian Oil Corporation. 

22. Accordingly, we direct the OP No. 2 Indian Oil Corporation and OP No. 4 M/s New India Assurance Company, from which it had obtained Public Liability Policy, to pay jointly or severally lumpsum compensation of ₹10 lakhs alongwith interest @7.5% p.a. from the date of accident till the date of realization.  In compliance of Order dated 12.04.2010 passed by this Commission, a sum of ₹5,50,000/- has already been deposited by the OP No. 2 Indian Oil Corporation with the Registry of the State Commission and has been released to the Complainants.  Vide Order dated 22.08.2012, State Commission was also directed to release the sum of ₹1,17,535/- lying deposited before it towards interest in favour of the Complainants. The remaining balance amount of ₹4,50,000/- alongwith interest @7.5% p.a. from 28.06.2005, i.e., the date of accident till the date of realization, shall be jointly and severally paid by the OP No. 2 Indian Oil Corporation and OP No. 4 M/s New India Assurance Company, to the Complainants within four weeks from today.
23. The impugned Order dated 22.09.2011 passed by the State Commission stands modified in above terms.  First Appeal No. 763 / 2012 filed by the OP No. 2 Indian Oil Corporation is dismissed.