Legal Advice

Indane distributor committed fraud

Question: I am a consumer of the Indane an Indian oil petroleum gas service, i.e. Indane. My distributor committed fraud by issuing several connections without having the authority. Later on, the Indane has terminated his agency and transferred all connections to another distributor. Indian oil has ceased my consumer number by stating that distributor issued it without any authority.


You are a bona-fide consumer of Indane distributor because you have paid the requisite fee for a new connection. The distributor has concealed the fact that he had no authority to issue a new connection. If you had been receiving refill cylinder on the same connection number, then you can claim that you are a bona-fide consumer.

There is no fault from your side. Issuing a connection without having authority amounts of deficiency in service. The distributor is liable to compensate the consumers to whom he inducted unauthorisedly. A person becomes an LPG customer only on signing a subscription voucher. That voucher contains the terms and conditions governing the loaning of gas cylinders and pressure regulator etcetera.

I think you have signed that consumer voucher and paid all the requisite fees. Hence, the distributor cannot refuse or deny that you obtained that voucher by committing fraud. In the above condition, the distributor is under obligation to compensate you.

You should file a complaint before the district consumer forum for the compensation as well as you can register an FIR for the offence of cheating. It is a criminal act and punishable under section 420 of the Indian penal code.

Liability of Indian Oil Corporation (Indane)

The Indian Oil Corporation is not liable for compensation. Clause 17 of the LPG distributorship agreement postulates the distributor to act as principal and not as an agent. Hence, indane is not liable to compensate for the illegal act of its distributor. The distributor is not an agent of Indane, so the relationship as of principal and agent does not exist.

In the above condition, indane has no legal obligation to regularise the connection. There is privity of contract between you and the distributor; however, the distributor had no authority to make a new consumer. Hence, such act of distributor constitutes deficiency in service and comes under section 2(g) of the Consumer Protection Act.

According to that section, the ‘deficiency’ means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.

It is the fault of the distributor to issue new connection without having any authority from the Indane. Hence, the distributor is liable for the deficiency in service committed from his end. You should file a complaint before the district consumer forum.

Shivendra Pratap Singh


High Court Lucknow