Consumer rights
LPG cylinder blast: Oil company to take rap
Pushpa Girimaji

In case of an accident involving an LPG cylinder, can the oil company escape liability by pointing to the ‘dealership agreement’ which holds the dealer responsible in all matters associated with LPG customers? This was the main issue that came up before the apex consumer court in a case involving the tragic death of a consumer — an engineer working with the Office of Director General, Civil Aviation, New Delhi. And the verdict of the highest consumer court was that the oil company — Hindustan Petroleum Corporation in this case — has to take responsibility for any manufacturing defect in the cylinder.

Given the tragic circumstances in which the consumer, Suresh Kumar Govilkar, suffered burn injuries and died, one would expect the oil company, the dealer and the insurance company to immediately pay the bereaved family compensation. But instead, here is a case where each one of them tried to escape liability, forcing the wife and the two children to seek the intervention of the consumer court. And equally tragic is the long wait for justice that the family had to suffer. For a tragedy that happened in 1995 and the subsequent case field in 1996, the apex court’s decision came on October 3, 2006 — after 10 years.

The case goes back to that fateful day in August 1995, when 47-year-old Govilkar went to make tea. Since the cylinder in use was empty, he replaced it with a refilled cylinder that had come from the dealer, Pelicon Gas Agency, and lit the stove. Immediately, there was a major fire which spread and caught Govilkar unawares. Eventually, it was put out and Govilkar admitted to a hospital, where he breathed his last.

Describing the cylinder as defective, the complaint drew attention to these points: (a) Even after the fire was put out, the cylinder was found burning all along the periphery at the bottom lip of the regulator with a dense yellow flame of approximately nine inches in length. (b) There was no smell of leaking gas as that would have alerted the consumer. (c) Even when the regulator was fixed on the cylinder, there was an unusual sound.

In response to the complaint, the dealer argued that there was no defect in the cylinder and that it had been checked when the consumer took delivery at the godown. He also argued that when there was an unusual sound, the consumer should not have lit the stove, but called the gas agency. He also contended that he had taken an insurance policy to cover all such liabilities and it was the insurance company — National Insurance — which alone was liable.

The oil company in turn argued that as per the dealership agreement, the dealer acts as the principal and not as an agent of the oil company and would therefore be responsible in respect of all contracts entered with the customers for the sale of LPG cylinders. The oil company also argued that the cylinder was not defective.

Dismissing all these arguments, the apex court said in this case the maxim ‘res ipsa loquitur’ was applicable. The only inference that could be drawn from the complaint was that there was a defect in the gas cylinder, leading to the fire. And the opposite parties were unable to show affirmatively that they took all reasonable precautions to avoid this kind of an accident or that the cause of the injury was not on account of negligence on their part in supplying a defective cylinder. "This would certainly be a manufacturing defect. Hence there is apparent deficiency in manufacturing of the LPG cylinder," the Commission said.

Observed Justice M.B.Shah President and Mrs Rajyalakshmi Rao, member, National Consumer Disputes Redressal Commission: Once the defect is established, the manufacturer is liable and it does not require any further consideration. They therefore held that both the dealer and the oil company were jointly liable to pay a compensation of Rs 10,08,000 along with interest at the rate of 9 per cent per annum and costs amounting to Rs 5000.

National Insurance Company also came under fire for its "negative attitude". Referring to its advice to the dealer (when informed of the accident and the claim) not to make any admission of compensation without the insurance company’s prior consent, the Commission said it showed a typical negative approach on the part of the insurance company. "Such type of negative defence increases the litigation in this country. In any case, such defence on the part of National Insurance Company is totally unjustifiable," the Commission said (Mrs Madhuri Govilkar and others Vs M/S Hindustan Petroleum Corporation and others, Original Petition No 289 of 1996).