Consumer Protection Council, Rourkela
CONSUMER DISPUTES REDRESSAL COMMISSION
Protection Council, Rourkela
Oil Corporation Ltd.,
General Manager (LPG-MO)
Sr. Manager (LPG)
Sri H.S. Dua
Sri B. Mintz
of India represented through
of Orissa, represented by
: MR. B. Vaidyanathan, Auth.
the IOC : Mr. S.K.
Sharma with Mr. Harish Puri and
For O.P. No. 9 : Ms. Kirti Mishra, Advocate
For the U.O.I. : Mr. Vikas Singh, Addl. Solicitor General
Dated the 16th August, 2007
PER JUSTICE S. N. KAPOOR, MEMBER
Case of the Complainant Council:
The Consumer Protection Council, Rourkela, a voluntary organisation, has
filed this complaint against the Indian Oil Corporation through its Chairman,
General Manager (LPG-MO), Sr. Manager (LPG), Sri H.S. Dua, Area Manager,
Sri B. Minz, Asstt. Manager (LPG), Director, Legal Metrology, Govt. of
India, Deptt. of Consumer Affairs, Dy. Director, Legal Metrology, Govt.
of India, Deptt. of Consumer Affairs, Bhubaneswar, Addl. Secretary, Govt.
of India, Deptt. of Consumer Affairs & Public Distribution, the Controller,
Legal Metrology Govt. of Orissa, Bhubanewar, through The Controller, Legal
Metrology, Govt. of Orissa, Food, Supplies & Consumer Welfare Deptt.,
Bhubaneswar and Secretary, M/s. R.W.C.C.S. Ltd., C/o Sahayog LPG (Indane)
A survey was conducted by the Voluntary Organization of the Council covering between 14th to 21st June, 2000 by visiting 48 households as per Annexure 2. The survey revealed:
In the complaint, the bottling process was explained as below:
"Refilling Process in Brief:
The empty refills after preparation (Water Wash, Inspection, etc.) are sent to the Carousel Machine. The Carousel Machine has 24 platforms to hold and fill 24 refill Cylinders continuously. The platforms which are located in a circle in the Carousel Machine, keep moving at the rate of 1 Revolution Per Minute (a sketch of the Carousel Machine is furnished at Annexure-VII) and the operator is required to adjust the tare weight of the refill on the gauge provided on the machine by rotating the knob provided for the purpose. The tare weight of the refills (empty cylinders) vary by as much as 2.5 kg. (say, from 14.8 kg. to 17.3 kg.) Hence, the operator is required to rotate the knob to set the tare weight within a span of 2.5 seconds so as to cope up with the speed of the rotating machine.
This process of setting the tare weight is obviously prone for human error
Thus the whole process of filling and checking of the weighment involving unreliable and cumbersome manual operations is inherently error prone and cannot ensure appropriate quantity to the consumers."
6 refills were got checked by the Secretary of the complainant and 3 were found under weighed by 0.5 kgs to 1 kg. By letter dated 30th August, 2000, the Council informed the Director, Legal Metrology, Govt. of India, Deptt. of Consumer Affairs, Chairman, IOC as well as others and requested the Director, Legal Metrology and others to take appropriate action about this problem so that the consumers might get right quantity of LPG in the Indane refills. Repeated and persistent requests initially did not bring about any desired result. Ultimately, the Secretary of the Council raised these issues during the Central Consumer Protection Council Meeting held on 8th November, 2000.The representatives of the Ministry of Petroleum & Natural Gas who were present in the meeting assured that they would do the needful.
The complainant Council once again did a random survey of weight of LPG refills in the Rourkela Steel Township, during April-June, 2001. The summary of the Survey Report is as under:
Total number of refills weighed/No. of households covered – 56
On the aforesaid basis, the Council found that in asmuchas 67.9% of refills were found under-weighed to the tune of 0.89 kg. The overall refills found under weighed by 0.54 kg. resulting in a loss of about Rs.10/- per refill to the consumer at the present rate of Rs.253/- per refill, sold at Rourkela. Balasore Bottling Plant was producing about 25,000 refills per day. Thus, assuming 300 working days per year, the Bottling Plant is producing 75,00,000 refills per year. Thus the plant was inflicting a loss of Rs.7.5 crores (Rs. 10 x 75,00,000) on the consumers per year. The estimate of LPG bottling plants in the country was about 100 and as per the Manager of the Balasore Bottling Plant, all the plants worked on similar technology and process. IOC alone would be getting unduly enriched to the tune of Rs.750 crores per year. Similarly, Bharat Petroleum and Hindustan Petroleum must also be getting unduly enriched if they were running similar bottling plants.
In the light of the aforesaid facts to get the grievance redressed, the complainant Council ultimately filed a complaint on 26.6.2001 seeking following reliefs:
The Chairman, IOC and other officials of the IOC, opposite party Nos. 1 to 5 filed their joint reply and contested the matter inter alia on the following preliminary objections:
"Firstly, I submit that impleading of several officers of IOC, including its Chairman and its other high officials apart from other who have no part to play and when there are no allegations made against them in the complaint not any relief is claimed against them, is without any justification which make the complainant misconceived and bad for misjoinder of parties.
Secondly, no defects have been pointed out and no case is made out for alteration and or change in the Bottling Procedure being followed, complainant is without merit and deserved to be dismissed.
Thirdly, no amount as alleged have been received directly or indirectly by the answering opposite parties, therefore, the prayer for payment of compensation and / or costs to the complainant or any one else does not arise.
Fourthly, keeping in view the allegations made in the complaint the complainant is not a ‘consumer’ and is not entitled to maintain the complaint.
Fifthly, in any event, the allegations in the complaint are vague and lack in material and relevant particulars and no cause of action is made out to maintain the complaint.
But on facts, they denied the allegations made by the Complainant Council in respect of the following:
In short, the shortcomings alleged by the Complainant Council were denied and according to them their team checked 25 filled cylinders by the stationery platform type electronic check scale which they had brought with them for the inspection. The result of the inspection was found to be satisfactory on 13th October, 2000.
In this regard, they (GM, IOC) also relied upon the measures suggested to the Under Secretary, Govt.of India, Ministry of Energy,(Deptt. of Petroleum), Shastri Bhavan, New Delhi about use of weighing balance which reads as under:
"We are fully in agreement about protecting the interest of consumers in respect of delivering correct quantity of product. However, equipping the deliverymen with portable spring balance would not serve the desired purpose. Portable spring balances cannot be depended upon to give accurate weight, especially with passage of time and that too for weighing LPG cylinders whose gross weight would be around 30/32 kgs. The Oil Industry has, however, taken measures to have weighing scales provided in distributors’ godown, where every filled cylinder is required to be weighed for correct weight before despatch to customers. Moreover, Oil Companies have an arrangement to replace cylinders found to be underweight so that the distributors are not put to loss and are not induced to pass on underweight cylinders to consumers on this account."
It was further submitted that:
"As per the prevailing policy and the practice in vogue in the industry distributors are obliged to by way of special instructions to carry out checks of the filled cylinders received as to their weight while unloading the trucks and to carry out hundred percent pre-delivery checks of the cylinders as to their weight and serviceability prior to leaving the distributor’s godown for the consumer’s premises. It is submitted that all care and attention is taken by IOC to ensure that there is no deficiency in the supplies made to the consumers…."
Interim order dated 4.12.2002:
Seeing the high stake of consumers, this Commission passed following order dated 4.12.2002:
"Heard the parties. Main point made by the Complainant is that the Carousel Machine installed in the filling plant itself, needs to checked to ascertain its capability to deliver correct weight. In view of the controversy involved, we request Director, IIT Kharagpur, West Bengal to nominate appropriate Faculty Member to visit the LPG Filling plant at Balasore (Orissa) and report on the following issue:
"Whether the existing Carousel Machine and its working system is capable of delivering the correct weight of 14.2 Kgs. of LPG."
For carrying out this agreement the nominee of the IIT, Khargpur may establish contact with Mr. Ajit Kumar Majumdar, Deputy Manager Law, Office of IOC, resident of 275-A, Shahid Nagar, Bhubneshwar as also Mr. B. Vaidanathan, Consumer Protection Council, C-66, Sector 2, Rourkela – 769 006, Orissa and visit the filling plant at a mutually convenient date and time to carry out the necessary examination of the equipment.
For this initial fee is fixed at Rs.10,000/- plus Travel expenses (actual) to be paid by IOC.
Report of the expert of IIT be send directly to this Commission in a sealed cover by 31st March, 2003."
Summary of Report of Dr. R.K. Shah:
Prof. & Head, Department of Chemicals Engineering, Dr. R.K. Saha after checking 303 samples in the presence of both the parties, gave the report that "11% of the cylinders have been found under weight as under:
Under weight in gms.
No. of cylinders
It is evident from the above that 19 cylinders out of 35 cylinders i.e. 54% use under filled in the range of 50 to 150 gms from the stipulated lower limit of 150 gms. only 12 cylinders out of 35 (i.e. 34%) are under filled in the range of 200 gms to 350 gms from the stipulated limit.
Objections by I.O.C. against Dr. Shah’s Report:
It was contended by the IOC that all the underweight cylinders and report was placed to be perused. The report given by Dr. R.K. Shah of IIT Kharagpur was confined to under weighed cylinders without taking note of over weighed cylinders. It was contended by the IOC that the Correction Unit in the plant was capable of correcting about 100 cylinders per hour with the average magnitude of under/over-weighment of 500 gms. It was also pointed out in the objection to the report that even without looking 44% of the cylinders after filling the carousel were found to be over weight. Magnitude of overweight is given below:
Over weighment in cylinders
No. of cylinders
On this basis, it was submitted that the results were satisfactory and above facts and figures were ample evidence regarding the quality of cylinders filled and despatched from the plant. In addition, it was pointed out that the Director (Legal Metrology), Govt. of India and Dy. Director (Legal Metrology) from Bhubneswar conducted inspections at the plant on 13.10.2000 and they took the cylinder ready for despatch on random basis and in their inspection it was found to be satisfactory. They were constantly monitoring the quality of cylinders at the plant and they were regularly conducting inspections. Copies of inspection reports dated 11.9.00, 14.11.00, 31.07.00, 22.12.00, 9.01.01, 18.01.01, 19.02,01, 13.03.01, 30.04.01, 15.05.01, 26.06.01 and 10.08.01 have been annexed.
There is a letter of Mr. R.K. Nayak, Deputy Director, Legal Metrology of the Govt. of India, Deptt. of Consumer Affairs, Bhubneswar, Orissa dated 27th October, 2000 and he made a request to the Controller, Legal Metrology, Govt. of Orissa, Bhubneswar to instruct the Asstt. Controller at Rourkela to go into details of individual cases and check the gas cylinders by using working standard balance and weights.
and Recommendations of Committee
Recommendations of the Committee:
The Committee set up by the Deptt. of Consumer Affairs, made the following recommendations for adoption uniformly by all the companies in the best interest of consumers:
This Commission, however, by order dated 19.10.2005 felt desirable that in order to decide the issue raised in this complaint effectively, notice be issued to the Ministry of Petroleum and Natural Gas. Accordingly, notices were issued to the Ministry of Petroleum & Natural Gas and the Ministry of Consumer Affairs along with copies of the complaint, written version filed by the Opposite parties, report of the IIT Kharagpur, report filed on 26.7.05 as also report of Project Development India Ltd.
This Commission also directed the opposite parties (IOC) to issue advertisement as inserted by Hindustan Petroleum by way of temporary measure informing consumers that every deliverymen is to carry weighing scale and consumer was given option of checking the weight of the cylinder by the deliverymen at the door step. Indian Oil Corporation Ltd. was also directed to ensure that weighing scale was made available to all deliverymen who would give delivery of domestic cylinders to the customers only after weighing them in the presence of consumers with effect from 1.11.2005.
It is submitted by the Ld. Counsel and the Learned Additional Solicktor General that recommendation of the Committee have been fully complied with wherever possible. It is submitted that the major recommendations was to the following facts:
1. Oil Marketing Companies (OMCs for short) have undertaken installation of with electronic filling systems replacing old carousels/unit filling systems which had outlived their useful life and were difficult to maintain. OMCs had also decided to provide electronic carousel systems in all future plants.
2. The Companies converting/upgrade existing mechanical filling systems to electronic wherever the performance is not satisfactory. As of now 58 Nos. of OMC bottling plants are with electronic carousel systems and balance 120 plants would be provided with electronic filling systems on need basis in a phased period of four years.
3. As regards to standard procedures the LPG bottling plants are adopting the standard operating practices as per OISD (Oil Industry Safety Directorate), CCOE stipulations and other statutory rules.
4. As regards transportation of cylinders to plant and to godowns, as per Mr. Nangia’s report, the filled cylinders loaded in a truck will be accessible from outside even if the truck is sealed due to caging arrangement provided. Hence, even with provision of sealing the possibility of malpractice cannot be eliminated. However, OMCs monitor the transporter’s track record based on feed back from distributors and take necessary actions as per contract terms for violations/malpractices.
5. In regard to godown checking after receipt and storage of cylinders, Mr. Nagia in his report has stated that OMC were carrying random inspection at distributors godowns and were taking actions as per MDG (Marketing Discipline Guidelines) wherever malpractices are observed.
Year-wise actions taken by OMCs as per MDG for the last three years against the distributors for supplying for supplying underweight cylinders to customers are given below for the information:
6. OMCs have already implemented the system of demonstrating the net weight to the consumers with 80% of the distributors, as per Mr. Nangia’s report.
As per submissions made, the Ld. Addl. Solicitor General, Mr. Vikas Singh, so far as the bottling plants are concerned, the investment of huge amount of more than 250 crores was likely to be involved for modernisation. For about 120 bottling plants and 145 number of filling systems were required to be modernized as per the recommendations of the Committee.
Ld. Addl. Solicitor also submitted that considering the limited availability of vendors, huge investment involved oil companies have planned to modernize the bottling plants in a phased manner in next four years. The anxiety of this Commission in regard to supply of LPG cylinders to consumers, would not only depend upon the steps which have been taken by the Ministry of Petroleum as well as marketing Companies ensuring that steps are being taken at various stages.
Having heard the Secretary of the Consumer Council and the Counsel for the parties and Learned Addl. Solicitor General, it is felt, while seeing the loss which is being caused to the customer a sum of Rs. 250 crores is just one third of the amount of unjust enrichment, if this Commission goes by the estimate of the Complainant Council. But at the same time, this Commission cannot afford to cause any dislocation in distribution system by closing some units and to start modernisation without making any alternative arrangements for supply during that period. Though we are accepting the submission about period of modernising bottling plants in next four years but we still believe, not just expressing merely a pious hope that Ministry of Petroleum and Natural Gas would ensure modernisation at the earliest possible time without making it a prestige issue of not completing modernisation before four years. It may be mentioned that if it is done earlier, it would be assuring consumers that not only the Ministry of Consumer Affairs but also the Ministry of Petroleum and Natural Gas cares about the consumers.
However, seeing the averments made in para 4 about the verification of weight and measures for demonstrating the net weight to the consumers at delivery points, we have already issued directions to the IOC that weighing scales shall be made available to the deliverymen to enable them to give delivery of the domestic cylinders to the consumers after only weighing them in the presence of the customer/consumer and this direction was issued and is being incorporated in this order, for this appears to be only way to stop source of pilferage of LPG and unauthorised sale of pilfered LPG in the light of the advertisement made by Hindustan Petroleum which gave an option of checking the weight of the gas cylinder at the door steps of the consumers virtually guarantying that the cylinder carried the right weight of the gas without there being any pilferage.
The Ministry of Petroleum may also deem it desirable issue appropriate similar directions to other all LPG Marketing Companies on the same lines, particularly, in the light of the averments made in para 4.
The Ministry, of Petroleum may further deem it proper to advise all marketing Companies to ensure that the deliverymen should be trained personnel to advise the consumers about the safety measures required to be taken to avoid any explosion of gas cylinder, and that in case the appropriate caution card containing ‘Safety tips’ is not readily available at the residence etc. of the consumer, he should provide a caution card for taking necessary precautions to use the gas cylinder, particularly, when the gas starts leaking from the gas cylinder. Several accidents, which have taken place, have happened on account of lack of proper precautions due to lack of awareness of consumer as well as the deliverymen. All the Marketing Companies are also responsible in terms of Section 3 of the Essential Commodities Act, 1955 read with Section 3(2) of the LPG (Regulation of Supply and Distribution) Order dated 26.4.2000. The distributor thus has been registered and granted licence first under public distribution system, under an authorisation from the Government Oil Company.
We decide the complaint with the following directions:
1. The Ministry of Petroleum is given four years time as prayed for, in terms of the submissions and our observations mentioned hereinabove.
2. The Ministry of Petroleum as well as the Ministry of Consumer Affairs shall ensure that all Marketing Companies do issue necessary instructions that the Distributors will provide to deliveryman proper weighing scale for the purpose of weighing LPG Gas Cylinder in the presence of customers and they will give it due publicity by publishing the same in the vernacular language of each and every State as well as in English and Hindi in newspapers apartment from giving similar type of advertisement in TV for information of the consumers.
We direct the Indian Oil Corporation to pay a sum of Rs.50,000/- to the Complainant-Council to meet the expenses incurred by it in protecting the interest of consumers and to continue to protect the interest of the consumers, within a period of four weeks.
The complaint is decided accordingly.