- : 1 : - IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION LETTERS PATENT APPEAL NO. 338 OF 2002 IN WRIT PETITION NO. 4155 OF 2002 Al Aziz Plastics Ltd ] A company registered under the ] Indian Companies Act, 1956 having its ] office at 10/11, Vijay Nagar, Marol ] Mumbai-400 059 and having factory at ] Plot No.5-14, Acchad, Acchad Industrial ] Estate, Acchad, Taluka-Talasari ] Dist-Thane, Maharashtra-401 606 ] ......Appellants Versus The Maharashtra State Electricity Board ] O & M Circle, Office of the Superintending ] Engineer, Lawrence Trade Centre ] Vasai Circle, Vasai, Dist-Thane 401 202 ] ......Respondents. ====== Shri.R.V.Govilkar, with J.A.Sarkhot advocate for the appellants. Shri.P.P.Chavan with Mr.Kiran Gandhi i/by. M/s. Little and Co., advocate for respondents. Coram: Smt.Ranjana Desai, J. Smt.R.P.SondurBaldota, JJ. Judgment Reserved on : 16 th June, 2008. Judgment Pronounced on: 6 th August, 2008. - : 2 : - JUDGMENT (PER CORAM:- SMT.R.P.SONDURBALDOTA, J) 1. This Letters Patent Appeal arises out of the order dated 13th August, 2002 passed in Writ Petition No.4155 of 2002. The appellant is the original petitioner and the respondent, original respondent. By the impugned order, the learned Single Judge has confirmed the order dated 23rd April, 2002 of the competent authority of respondent no.1 passed in appeal preferred under Condition-31(e) of the M.S.E.B.Rules. 2. The brief facts leading to the appeal are as follows :- . The appellant is a private limited company, engaged in the business of manufacturing various plastic items. It had applied for high tension connection for running the factory which was granted on 21st December, 1998. A special team of testing staff including Assistant Engineer (O & M), Junior Engineer (T) and Sub-Engineer (O & M) visited the petitioner's factory on 29th December, 1999 for routine calibration of T.V. Meter, Simco make, S.N. 303766. The team found that the meter box fixed in the premises of the petitioner was sealed with lead seal MSEB-100 and a paper seal dated 24th December, 1999 of A.E.(O & M), Talasari. The team removed the outer seals and opened the meter box, to note positions of the inner seals. It found that the seals provided to test terminal block and terminal cover were in order. However the body seals to the T.V. meter were in objectionable condition. The plastic seal 011849 (Red) provided - : 3 : - to the right hand side bottom corner and 011706 (Red) provided to left hand side top corner appeared to be duplicate seals. The lead seal provided to right hand side of T.V. Meter in top TDK-11 was “likely to be repressed” and lead seal provided to left hand side lower corner TDK-1 was “suspected”. The team found that all four paper seals provided to the T.V. Meter body by Shri.D.V Reddy, A.E. Testing division, Vasai on 1st January, 1997 were broken. There was one lead seal TDK-11 found lying insider the meter box. The testing staff then immediately sent intimations to the concerned authorities and also the representatives of the appellant. Thereafter, it sealed the meter box with lead seal TDK-5 and paper seal signed by A.E.(T)/A.E.(O & M),Talasari and consumer representative. The team also locked the meter room and sealed it with paper seal signed by the same two persons. It then prepared a spot panchanama which was signed by the representatives of the petitioner, Mr.Ugrasen Singh Mr. Pradeep Prasad in addition to the officers of the respondent. Thereafter, the respondents lodged a police complaint for theft of energy. 3. The respondent then sent provisional bill dated 29th December, 1999 in the sum of Rs.27,42,233/- being a supplementary bill against theft of electricity/energy between period of December, 1998 to December, 1999. The appellants however failed to pay the bill and power supply to the factory was - : 4 : - disconnected. When the appellant made a representation for reconnection it was told that the reconnection of the power supply could be done only on the appellant depositing a sum equivalent to 20% of the demand in the supplementary bill, as required by the conditions of supply. Therefore, the appellant deposited a sum of Rs.5,48,450/- equivalent to 20% of the amount in the supplementary bill and the power supply came to be reconnected on 5th January, 2000. Thereafter, the Superintending Engineer of the respondent by his letter dated 23rd February, 2000 informed that the bill in respect of theft of electricity was in the sum of Rs.29,13,29.04/- for 5,74,926 units and called upon the appellant to pay Rs.23,64,579.04/- after deducting the amount of deposit. 4. By their letter dated 28th March 2000, the appellant claimed that it had taken measures for saving the energy consumption, which saves energy consumption to the extent of 45% to 55%. With this claim, the appellant contended that the allegation of theft of energy made against it was wrong. Then a final notice dated 23rd January 2001 was served upon the appellant for payment of the supplementary bill, in default of which, it was informed that, the power supply would be disconnected immediately without any further notice. 5. After some correspondence, the appellant by its letter dated 20th February, 2001 requested the Chief Engineer of the Kalyan Zone for giving hearing for the - : 5 : - final assessment order. The Chief Engineer responded by his letter dated 14th March, 2001 accepting the request for personal hearing at zonal level and fixed the date of 19th March, 2001 at 11.30 hrs in his office. The hearing was attended by one Shri. Deshmukh. In the hearing, the Chief Engineer reduced the maximum demand from 155 K.W. To 130 K.W. Consequently, the total units assessed got reduced to 702702 and the bill was reduced to Rs.21,849,86.94/-. The appellant was informed by the Superintending Engineer by his letter dated 30th May 2001, that the competent authority had approved the revised assessment and the bill was revised to Rs.21,84,386.94/-. After deducting the amount of deposit, the appellant was asked to pay a sum of Rs.16,35,936.94/- within a period of 15 days. 6. The appellant then preferred an appeal under Condition – 31(e) of the Condition & Miscellaneous Charges for supply of Energy framed under the Electricity Supply Act, 1948. The Special Committee, i.e. the appellate authority of the respondent heard the appeal. The hearing was attended by Mr.S.W.Deshmukh, Consultant, Mr.Daramyan Singh Advocate and Mr.Uday Adhikari, Managing Director of the appellant. The appellant also filed its written submissions. The contentions of the appellant in the hearing can be summarized as follows :- . There was no theft of supply from the meter installed in their premises. - : 6 : - Mere irregularity as regards the seals to the meter cannot mean actual theft of energy. The appellant had taken power supply in December, 1998. The disputed bill came to be issued soon thereafter, that is, on 29th December, 1999. The appellant was just in the process of establishing their factory and had yet not reached the stage of optimum utilization of its Plant & Machinery. During the initial four months, the appellant was taking only trial runs and started production on commercial basis only from April, 1999. Thereafter, during the short span of May 1999 to December 1999, the appellant could not have established a huge pattern of consumption justifying the disputed bill. Further, the appellant industry being a plastic industry, applying load factor of 0.8 for assessment is not justified as every machinery is not running to its full capacity for all the time. Therefore, the load factor of 0.6 should be applied. Lastly, the appellants industry being located in rural area of Talasari, District-Thane, the supply of power was not continuous for all the time of the assessment period. 7. The special committee after due consideration accepted two of the contentions. As regards the load factor it directed that the same be reduced to 0.6, the calculation be made accordingly. It also granted deduction of the number of hours of “no supply” to the appellant due to interruption of load shedding etc. based on the available record. The appellant then filed Writ Petition No. 4155 of 2002 in this court to challenge the order of the competent - : 7 : - authority taking up the same contentions as before the authority. The Writ Petition was rejected by the order dated 13th August, 2002. Hence, the instant Letters Patent Appeal. 8. Mr.Chavan, learned counsel for the respondents submits, at the outset, that in the matters of such type, the scope of judicial review is a limited one. The High Court while hearing the writ petition or letter patent appeal arising therefrom, is not hearing an appeal against the order of the appropriate authority. The inquiry is limited to whether the petitioner was afforded sufficient opportunity of hearing and whether the order passed is unreasonable or perverse in any manner. In support of his submissions, he relies upon a decision of the Apex Court in the case of J.M.D Alloys Ltd V/s. Bihar State Electricity Board and Ors reported in (2003) 5 SCC 226. In the said decision, the Apex Court was considering a challenge to a similar order of the Chief Engineer of Bihar State Electricity Board. While deciding the scope of judicial review, in such matters the Apex Court quoted with approval, observations from its two earlier decisions that clinched the issue. The same are reproduced below : 14) “......The High Court was not hearing an appeal against the decision of the Chief Engineer. The scope of inquiry in such a matter is a limited one. We would like to quote here what was said by Venkatachaliah J. in State of U.P. Vs. Maharaja Dharmander Prasad Singh, which reads as under (AIR para 28: SCC pp.524-25, paras 60-62) - : 8 : - “60. The purpose of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a matter which it is authorised by law to decide for itself a conclusion which is correct in the eyes of the court.......” A N D 15.In Apparel Export Promotion Council Vs. A.K. Chopra Chief Justice Anand held as under :” (SCC p.771 para 17) “17. Judicial review, not being an appeal from a decision, but a review of the manner in which the decision was arrived at, the court, while exercising the power of judicial review, must remain conscious of the fact that if the decision has been arrived at by the administrative authority after following the principles established by law and the rules of natural justice and the individual has received a fair treatment to meet the case against him, the court cannot substitute its judgment for that of the administrative authority on a matter which fell squarely within the sphere of jurisdiction of that authority. “ . The above are the parameters within which we are required to consider the challenge in the instant appeal. It may be noted that the submissions advanced on behalf of the appellants are on the merits of the decision taken by the appropriate authority. It is not the case of the appellant, that was not afforded opportunity of hearing. It is also not the case of the appellant that the appropriate authority had neglected to take into account any relevant factor. Infact, the perusal of the writ petition and the appeal memo indicates that the appellant wants this - : 9 : - court to consider the same factors relevant according to it and arrive at a decision different from that of the appellate authority. Still, we have undertaken the exercise of considering all the submissions advanced before us. 9. Mr.Govilkar, learned counsel for the appellant, submits relying on the provisions of Section 26 of the Indian Electricity Act, that it is the duty of the Electricity Board to keep the meter in order and therefore if the seals are broken, the petitioner cannot be held liable. It is not possible for us, to accept the submission. As rightly submitted by Mr.Chavan, learned counsel for respondent, the meter is installed in the premises of consumer, which premises are entirely in the control of the consumer. Therefore, it is the consumer who is responsible for keeping the meters in order after officers of the board seal the same. 10. The second submission advanced by Mr.Govilkar is that an officer of the board comes every month and opens the meter box for taking meter reading for the purpose of preparing bills for consumption of electricity. In the instant case, such reading was taken by an officer on 24th December, 1999. For taking the reading, the officer has to remove the seal on the outer box and later reseal the same. Mr.Govilkar, submits that, had there been any tampering with the meter seals, the officer checking the meter reading, would have detected the same. The very fact that no complaint was made by the officer, indicates there can be no - : 10 : - substance in the complaint of tampering of the seals. Mr.Chavan, learned counsel for the respondents explains that the officer who visits the premises of the consumer for taking the meter reading for the purpose of preparation of bill, does not have to check the inner seals. Further, this officer is not an expert as regards the inner seals and the T.V. Meter. Therefore, non-detection of tampering of the seals by the officer on 24th December, 1999 is not relevant. The visit on 29th December, 1999 to the appellants' premises was by the testing staff consisting of the officers with the requisite expertise. These officers had found the outer seals of the meter box intact. The seals that were found tampered with, were the inner seals. The officer found that the seals were duplicate. The paper seals put on the T.V. meter body on 1st January, 1997 were broken. Further, one lead seal was found lying inside the meter box. The appellant, has not at any place, disputed the correctness of the spot panchanama. The obvious reason for the same is that the panchanama was conducted in the presence of its representatives, who were the cadre of supervisors. The two representatives, Mr.Ugrasen Singh and Mr.Pradeep Prasad have put their signatures on the spot panchanama. An attempt was made on the part of the appellant to contend that the representatives of the appellant were not any responsible officers, but, mere members of the staff, who were forced and compelled to put their signatures on the document. This complaint has been made for the first time in the writ petition and in the instant appeal proceedings. It does not find mention in - : 11 : - either any of the correspondence made with the respondent or in the appeals filed before the authorities. It is not the case of the appellant, that any officer above the rank of the supervisor was present and available at the relevant time at the factory. In any case, nothing could have prevented one of the supervisors from calling any of the higher officers. In the circumstances, there is no reason for us to doubt the correctness of the spot panchanama. 11. Mr.Govilkar, thirdly submits that merely because the inner seals to the T.V. Meter were found tampered with, it cannot mean that there was any theft or illegal extraction of energy by the appellant. He points out that at the time of inspection, the officers had not noticed any external implement or artificial means like chip or wire, which would indicate, prima-facie, dishonest abstraction of energy. Therefore, according to Mr.Govilkar it cannot be said that there was any pilferage or dishonest abstraction of energy. He also points out there was no deviation recorded in the consumption of energy. Perusal of Condition-31 of the M.S.E.B. Conditions and Miscellaneous Charges (For Supply of Energy framed under the Electricity Supply Act, 1948) shows that existence of artificial means shall only be treated as prima-facie evidence of dishonest abstraction. Therefore, the appellant cannot be allowed to argue that because there was no artificial means found at the time of inspection, there could be no dishonest abstraction. As rightly pointed out by Mr.Chavan, Condition (e) of - : 12 : - Clause 31 concerns prejudicial use of supply. Such prejudicial use is inferred even in case of detection of commission of any malpractice that refers to his use of electrical energy which includes violation of law and/or the provisions of conditions of supply including unauthorised extensions, unauthorised alterations to his installations or malacious wastage or diversion of energy. It is thus seen that Clause 31(e) is sufficiently wide to include tampering of seals to the electric meters. Therefore, the respondent cannot be faulted with in taking action under Clause 31(e) of the Conditions of Supply. 12. Mr.Govilkar, next submits that the appellant company is conscious of importance of energy conservation. It has installed energy saving devices that save energy to the extent of 45% to 55%. Therefore, there can be no charge of dishonest abstraction of energy against such a company. This aspect has also been considered and decided by the appropriate authority. The authority has also observed that “ the appellant pleaded that he has installed energy saving devices such as A.C. Drivers consisting of rectifier/inverter system with control circuits, but the appellant has not explained in his submission, how the energy is saved. It is also not mentioned on which date this device is installed.” The questions raised by the appropriate authority in the above quoted paragraph remain unanswered till date. Even in the writ petition and in the instant letters patent appeal, the appellant is silent on all these aspects. The appropriate - : 13 : - authority has further made a relevant note, that after installation of the device, neither the M.D., that is maximum demand nor the units consumption had shown a downward trend. Therefore, the appellate authority rejected the plea of the appellant regarding energy saving by installing A.D. Devices. Considering the parameters of the judicial review noted above, this court cannot go into the correctness of the decision of the appropriate authority which consists of experts. The appropriate authority was constituted of Chief Engineer (Commercial) & Member Secretary, Technical Director (EHVP-COMM) and Technical Director (Distribution). 13. The next contention raised is regarding calculation of the assessment by the respondents. According to the appellant, there is no rationale behind either the method of calculation or the period of assessment. Mr.Govilkar, submits that the respondent has been absolutely wrong in taking the period for illegal abstraction of energy from the date of connection to the date of detection i.e. from 2nd December, 1998 to 29th December, 1999. According to him, since the last date of taking the meter reading was 24th December, 1999 the period of assessment could have been only between that day and the date of inspection i.e. from 24th December, 1999 to 29th December, 1999. A similar submission had been advanced before the Apex Court in the case of J.M.D. Alloys Ltd (supra). There the Apex Court considered the legal position as regards the conditions of - : 14 : - supply of Electricity notified by the Board. It has held that the terms of conditions for supply of electricity to consumers notified by the board under Section 49 of the Electricity (Supply) Act, 1948 and made applicable to all consumers availing the supply of electricity are statutory in character. For that purpose, it has found support from the earlier decision in Hyderabad Vanaspathi Ltd V/s. A.P.SEB reported in 1998 (4) SCC 470. In view of this legal position the Apex Court held in its decision that the formula applied under the Conditions of Supply notified by Bihar State Electricity Board was rightly applied and there was no infirmity in the assessment made and the bill prepared in pursuance thereof. 14. Similarly in the case on hand, it must held that the formula applied under Clause 31(e) of the Conditions of Supply, have rightly applied by the respondents for assessment. The provision under Clause 31(e) reads as follows :- “31(e).......The period during which malpractice or prejudicial use of electricity or dishonest abstraction, pilferage has occurred as aforesaid, shall be actual but limited to a maximum period of three years prior preceding the date of detection of malpractice, prejudicial use, pilferage of electricity. The consumption so assessed shall be charged as prescribed in Condition No.31(E).” The formula prescribed in Condition No.31(e) reads as follows : “ Pilferage : - : 15 : - 1. H.T.Consumers : In case of pilferage or dishonest abstraction of electricity by H.T. Consumers, the quantity of electricity consumed shall be assessed as follows :- (a) Demand Charges : For the purpose of assessment of maximum demand for the month, contracted demand of the consumer or 60% of the connected load, at the time of inspection whichever is higher shall be taken as maximum demand and billed accordingly. (b) Energy charges : ___________________________________________________________ One Shift : Assessed MD in KW x 7 hours x 25 days -------------------------------------------------------------------------------------------------- Two Shift: Assessed MD in KW x 14 hours x 25 days -------------------------------------------------------------------------------------------------- Three Shift: Assessed MD in KW x 21 hours x 25 days _____________________________________________________________ 15.As per this condition, the respondent can calculate the pilferage for the actual period of connection but limiting it to a maximum period of three years preceding the date of detection of malpractice. Therefore, the respondents have been within their rights in calculating the period of assessment as from 2nd December, 1998 to 29th December, 1999 and in employing the method of calculation prescribed above. 16.Lastly, Mr.Govilkar, made a request that the entire dispute be referred to the Electrical Inspector for his consideration. According to Mr.Govilkar, the Electrical Inspector had visited the appellants' factory and inspected the various - : 16 : - devices installed by the appellant for consumption of energy. However, this request cannot be granted as by the same decision as above, the Apex Court has held that a dispute regarding commission of fraud in tampering with the meter and breaking the body seal is one outside the ambit of Section 26(6) of the Indian Electricity Act. The relevant observations in the case of J.M.D.Alloys Ltd (supra) are as follows : “10. The contention that the dispute regarding tampering of the seal of CT/PT terminal unit should have been referred to the Electrical Inspector, has hardly any merit. In M.P. Electricity Board Vs. Basantibai, it has held that a dispute regarding the commission of fraud in tampering with the meter and breaking the body seal is one outside the ambit of Section 26(6) of the Indian Electricity Act and the Electrical Inspector has no jurisdiction to decide such cases of fraud. It was further held that under Section 26(6), the only dispute which can be decided by the Electrical Inspector is as to whether the meter is correct and is accurately recording the reading or there is some fault in the same. Since in the present case it has been found that the seal on the CT/PT terminal box had been tampered with and the natural working of the meter had been affected by taking recourse to external devices, a dispute of this kind cannot be referred to an Electrical Inspector. “ 17. The next contention of the appellant is that in the first six months, its factory was running only on trial basis and the machines were not being run to their full capacity. The appropriate authority has favourably considered this plea of the appellant and reduced the load from 0.8 to 0.6. It is not possible for this court to further enquire into this aspect and arrive at any other load factor. The appropriate authority has also similarly accepted the argument of the appellant that the appellants factory being located in rural area of Talasari, District-Thane, - : 17 : - the supply of power was not continuous