it is a case law.

1. Karnataka Power Transmission
Corporation Vs. Ashok Iron
Works Private Limited
Case under the Consumer Protection Act, 1986

2. Consumer Protection Act, 1986
The Consumer Protection Act,1986 (COPRA) was
an Act of the Parliament of India enacted to protect the
interests of consumers in India. It was replaced by
the Consumer Protection Act, 2019. It was made for the
establishment of consumer councils and other
authorities for the settlement of consumers’ grievances
and matters connected with them. The act was passed
in Assembly in October 1986 and came into force on
December 24, 1986.

3. About the Case
In the Hon’ble Supreme Court of India
Name of the Case Karnataka Power Transmission Corporation v.
Ashok Iron Works Private Limited
Citation (2009) 3 SCC 240
Year of the Case 9 February 2009
Appellant Karnataka Power Transmission Corporation
Respondent Ashok Iron Works Private Limited
Bench/Judges Justice Markandey Katju and Justice R.M.
Lodha
Acts Involved Consumer Protection Act, 1986

4. Facts of the Case
Ashok Iron Works Private Limited, a Private Limited Company established in 1981,
engaged in the activity of manufacturing iron products. It operates in the state of
Karnataka. The company applied for the supply of electrical energy (2500 KVA) to
the Karnataka Power Transmission Corporation (`KPTC'). The company is said to
have deposited an amount of Rs. 8,40,000/- on 1st February 1991 as per demand,
for the supply of 1500KVA of electrical energy from KPTC. However, KPTC did not
commence the supply of electricity, as agreed upon. So Ashok Iron Works filed a
complaint with the Karnataka High Court.
On 16th April 1992, the High Court directed KPTC to supply electrical energy as
per sanction forthwith, and subsequently, the time for the supply of electricity was
extended by the High Court up to 21st July 1992. KPTC raised an additional
demand of Rs. 8,38,000/- from the company and further demand in the sum of Rs,
1,34,000/-. It also complied with a further monetary demand by KPTC, but again
corporation failed to commence the supply of electricity on time. The actual supply
of power commenced in the month of November 1992.

5. Ashok Iron Works Private Limited accordingly filed a complaint under the Consumer Protection
Act, 1986 before the Consumer Disputes Redressal Forum, Belgaum claiming damages in the
sum of Rs. 99,900/- for delay in supply of electricity. The complaint was contested by KPTC,
and, preliminary objection was raised that complaint was not maintainable as the complainant
was engaged in commercial activity and electricity being goods; sale of goods to a commercial
consumer for a commercial purpose was outside the scope of the Act, 1986. The district court
held in favour of KPTC and it held that the complaints were not maintainable.
The company challenged the order of the District Forum in appeal before Karnataka State
Consumer Disputes Redressal Commission which ruled in its favour, holding that the complaint
was valid as Ashok Iron Works was covered by the definition of a 'consumer' under the act.
KPTC challenged the order of the State Commission by filing a revision petition before the
National Consumer Disputes Redressal which was later dismissed. Appellants then moved
their appeal to the Supreme Court. It is argued that:
• Ashok Iron Works was not a person under Section 2(1)(m) of the Act.
• Ashok Iron Works was not a consumer under Section 2(1)(d) of the Act.
• A dispute relating to the sale and supply of electricity does not come within the ambit of
service under Section 2(1)(o) of the Act.

6. Issues
Whether a private company purchasing
service for commercial use can be included
within the ambit of the term consumer?
Whether the complaint regarding delay or
deficiency in services is raised before
consumer dispute redressal forums
established under the acts?
Whether the private company is a person
within the meaning of section 2 (1)(d) and
section 2(1)(m) of the Act?
Whether services under section 2 (1)(o)
comprises dispute related to the sale and
supply of electricity?
Provisions
Consumer Protection Act, 1986
Section 2(d): Definition of
‘consumer’
Section 2(m): Defines the term
‘person’
Section 2(o): Definition of ‘service’

7. Section 2(1)(d) in the Consumer Protection Act, 1986
“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 paid 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 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 [but does not include a person who avails of such services for any
commercial purpose];

8. Section 2(1)(m) in the Consumer Protection Act, 1986
“person” includes,—
(i) a firm whether registered or not;
(ii) a Hindu undivided family;
(iii) a co-operative society;
(iv) every other association of persons whether registered under the
Societies Registration Act, 1860 (21 of 1860) or not;

9. Section 2(1)(o) in the Consumer Protection Act, 1986
“service” means service of any description which is made available to
potential [users and includes, but not limited to, 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; [oo] "spurious goods
and services" mean such goods and services which are claimed to be
genuine but they are actually not so;]

10. Application of the Provisions
The company is considered as a consumer within the definition of Section 2(1)(d)(i) of the Act, 1986 even
though it purchased electrical energy from the KPTC for commercial production not for personal
consumption. The definition of consumer relates only to “person”, whereas the definition of person
includes the following four categories under Section 2(1)(m).
• A firm whether registered or not;
• A Hindu undivided family;
• A co-operative society;
• Every other association of persons whether registered.
The court held that the term “person” in the act is not restrictive but it is exhaustively interpreted as
“including them”. The provision hence is inclusive and not exclusive. The court stated that the legislature
deliberated not to exclude a juristic person like a company, it should involve both corporate and
incorporated companies. It was held that a private company is within the meaning of section 2(1)(d) read
with Section 2(1)(m).
The court differentiated that ‘supply of electricity’ is not a sale under section 2(1)(d) but is a form of
service under section 2(1)(o). So KTPC not supplying the electricity constitutes deficiency of services
and compensation claimed by the respondent is valid.

11. Judgement of the Court
The judgement was given in the favour of Ashok Iron Works Private Limited against
Karnataka Power Transmission Corporation. The financial claim made by the
Company for the delay in supply of electricity by KPTC was reinforced by
judgement based on the following interpretations by judges on specific words
consumer, defect in service.
Having concluded that Ashok Iron Works was covered by the definition of 'a person'
and that the supply of electricity is indeed a service, the Supreme Court held that if
the supply of electricity were not provided in time, this would constitute a service
deficiency. The court chose to ignore the wording "but does not include a person
who avails of such services for any commercial purpose", which was inserted in the
act by an amendment, as the period under consideration was prior to that
amendment. Moreover, the court held that Ashok Iron Works' complaint was valid
before the National Consumer Disputes Redressal Forum.

12. Conclusion
A company is for all practical purposes equated to a person in law and it is not
excluded from the purview of the Consumer Protection Act, 1986, said the
Supreme Court in a recent order.
The decision means that private companies now fall within the definition of a
'person' under the act and the supply of electricity is a service under the act.
Accordingly, complaints regarding deficiencies in that service can be taken to a
consumer redressal forum. However, it remains to be seen how the
amendment to the act will affect future court decisions.
The Hon’ble court interpreted the terms “person” and “service” to provide
justice to the company. Private companies can now fall under the definition of a
“person” under the act. This interpretation enables companies to file a
complaint under The Consumer Protection Act and claim damages for the
deficiency of services.

13. Thank You
Done By:
2128839 – Salvi Singh
2128843 – Suruchi
2128849 – Zoya Tabassum