Concept of Public Utilities under Consumer Protection Act, 2019

The Consumer Protection Act (CPA), 2019, encompasses a wide range of services, including those traditionally classified as "Public Utilities." While the Act does not explicitly use the phrase "Public Utility" as a distinct legal category, these essential services are integrated into the broad definition of "Service" under Section 2(42).

The inclusion of public utilities ensures that state-run or regulated monopolies, such as electricity boards, water supply departments, and transport corporations, are held accountable for "deficiency in service" just like private entities.

What are Public Utility Services?

Public utility services are facilities provided by the government which are essential to cater citizens’ need. For instance, these services include supply of water, supply of electricity, postal service, banking service, railways etc.  The consumer protection laws enable the consumers to file a complaint about the public utility services.

Complaint Mechanism

If someone is stopping or not providing you with a public utility service, you can file a complaint with the national government services portal. Even complaints about the Bureau of Indian Standard (BIS) can be filed here. This means that the consumer can file complaint about the quality of a BIS certified product, hallmark product, misleading advertisement about the BIS standard etc.

Supply of Electricity Services under CPA

Electricity is governed by the Electricity Act, 2003. Electricity service has been included in the definition of service and consumer who faces deficiency in electricity, service, or anything related to it, can file a case in the consumer forum.

Supply of electricity falls within the purview of CPA. A case regarding delay in releasing electricity connection for a flour mill was held to be deficiency in service. [Shamsher Khan v. Rajasthan State Electricity Board (1993)].

Following key areas are covered in the electricity rules:

1. Rights of consumers and obligation of distribution of licenses
2. Release of new connection and modification of existing connection
3. Billing and payment
4. Disconnection and re-connection
5. Call centre for consumer services
6. Grievance redressal mechanism

Electricity Supply, Disconnection of Supply without Prior Notice:

Case: Ms. Luv Properties Pvt. Ltd. v. Bihar State Electricity Supply Rajdhani Power Limited (2010)

In this case, electricity supply was disconnected without prior notice and the respondent wrongly imposed misuse charges. Due to restoration of power supply after more than one year, the complainant had been deprived of use of his property for more than 14 months causing a loss of amount of Rs. 80,000 per month.

Lok adalat directed withdrawal of all misuse charges and to raise the bills as per the actual consumption only. Complainant has claimed compensation for deficiency in service.

The National Commission ruled that it is crystal clear that the opposite party had levied misuse charges on the complainant without giving adequate opportunity to defend his case. So due to this, the National Commission considered it a deficiency in service.

Supply of Electric Service on Hire is a Service:

Case: Manju Singh Chauhan v. M.P.S.E.B (1992)

It was held that the supply of electricyty to a person who hires services for consideration even for commercial purposes, falls within the meaning of service under Section 2(42) of CPA, 2019. Where the sale of electricity was consideration and supply of electricity was on continuing basis over a period of time against payment, the supply of electricity is service under Section 2(42) of the Act.

Defective Meters to be Replaced:

Case: Consumer Protection Council v. Ahmedabad Electricity Company Ltd.

The complaint was regarding installation of defective meter at the premises of the consumer by the respondent company. However, assurance was given on behalf of the company that steps would be taken to have meter properly tested and would be rectified or replaced in case it is found to be defective. It was held that the assurance given is sufficient to set right whatever grievance of consumer may have on this account.

No Delay in Giving Electricity Connection:

Case: U.P.S.E.B v. Mona Confectionery Industries

The complainant completed all formalities but electricity connection was not given, consequently could not be started. The State Commission allowed the complaint and awarded compensation on account of delay. In appeal, National Commission held that there was no delay in giving electricity connection to the complainant and electricity board and its officers were not guilty of any negligence or deficiency in rendering service and order passed by the State Commission was set aside. 

In cases like U.P.S.E.B v. Mona Confectionery Industries, the National Commission held that when there is no established deficiency in service (i.e., the procedures were followed and the delay was justified), the board cannot be held liable for damages. 

This ruling reinforces that in commercial connections, compliance with technical and administrative requirements can take time, and a delay alone does not necessarily constitute "deficiency" if the Board followed its regulations.

Consumer Protection in Postal and Courier Services

Postal department provides postal services throughout the country. It does not restrict its functions with only this, the organisation also engages in providing financial insurance services.

Grounds for Complaint:

1. Late delivery
2. Parcel is often not delivered at the correct address
3. Delay or non – receipt of money order
4. Delay or misplace of registered letter
5. Non – delivery or delay in delivery of parcel

Complaint Redressal System or Mechanism:

Complaint can be first registered at the concerned post office. If the complaint is not addressed or resolved, then the consumer can approach the customer care centre of the zonal area. The next step is to approach the chief post master general of the concerned state. The next move must be to approach Deputy Director General (DDG) in the central office Dak House or Bhawan. If the complaint is still not redressed, even after taking all the above mentioned steps, the customer can approach the consumer forum.

• Case: Ram Gopal v. Director Postal Services -  The failure to make a proper endorsement of refusal on a registered letter by the postal staff, when the addressee has admittedly refused to accept it, was held to be a deficiency in service.
• Post Master General of Rayagada v. Rubeen Sankar Patty - Halting interest on a Public Provident Fund (PPF) account based on an unrecorded or disputed closure is considered a deficiency in service. If the post office fails to record the closure of an account in its official records, it cannot later deny interest, as it is deemed a failure of the department to maintain proper records. 

Telecom Services

Telecom facility is a service under the CPA. There have been a number of dispute before CPA, 2019, with respect to whether telecom dispute can be adjudicated by the consumer forum. The telecom consumer protection and redressal of grievance regulation, 2007, has provided that consumer can seek redressal for their grievance under CPA.

A telecom subscriber who is enjoying telecom facility on payment is a consumer and provision of such facility is “service”. Remedies under Section 7B of the Indian Telegraph Act, 1885, which contain provisions for arbitration may not be invoked and the prosecution can be launched under CPA.

Relevant Case Laws

1. Delay in installation of telephone –

Case: Department of Telephones, Jalandhar v. Om Prakash

There was undue delay in the installation of telephone, even after the term of the complainant had matured. There was further delay in making the telephone operational. The opposite party was held liable to pay compensation for the same.

2. Excess Billing –

Case:  UOI v. Nilesh Agarwal (1991)

A complaint was made that there were excess charges in the telephone bill. The Rajasthan State Commission held that the complainant, who is subscriber, is a consumer and the telephone service provided by the telecom department is a service for which he pays rent. Over billing of telephone is a deficiency in service within the meaning of this act.

3. Wrongful Shifting –

Case: Commercial Officer, Office of the Telecom, Patna v. Bihar State Warehousing Corporation (1991)

The National Commission without disturbing the finding arrived at by the State Commission held that, in effecting the wrongful shifting of the telephone, there was negligence on part of the appellant (telecom department) and it constituted a deficiency in the service rendered by the appellant to the consumer.

Housing Construction is a Service

The expression “Service” under Section 2(42) of the act includes the provision of facilities in connection with house construction activities.  Under Section 2(42) of the act, the expression “Service” is wide enough to cover both residential and non-residential structures and activity of construction falls within the purview of the act.

After taking possession, a complainant cannot say that there was delay in construction.

• Case: Pankaj Gupta v. Chandigarh Housing Board and Another (2004) - In case of delay in construction if the complainant has possessed the property, due to implied consent, delay in construction is not deficiency.

Delay in delivery of possession of house.

• Case: Lucknow Development Authority v. M.K. Gupta (1994) - In this Case, the complainant had deposited the prescribed amount to the opposite party (LDA) for taking possession of house and the opposite party issued possession later. Although the house was found incomplete, the house was occupied by someone else unauthorised. The complainant was awarded Rs. 3000 per month from the date of cheque of Rs. 22,85,070, to be able to take possession till the date of actual possession of house. The Supreme Court held that development authorities, when providing housing or allotment services, are "service providers" under the Consumer Protection Act.