IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH WEDNESDAY, THE 4TH MARCH 2009 / 13TH PHALGUNA 1930 WP(C).No. 2878 of 2009(P) -------------------------------------------- PETITIONER(S): ---------------------- T.SANTHAMMA, W/O.G.ABRAHAM, S.V. PUTHENVEEDU, CHIRATTAKKONAM, THALACHIRA PO., KOTTARAKKARA. BY ADV. SRI.S.RAMESH BABU RESPONDENT(S): ---------------------- 1. KERALA STATE ELECTRICITY BOARD REP. BY ITS SECRETARY, VYDYUTHI BHAVAN, PATTOM THIRUVANANTHAPURAM. 2. DEPUTY CHIEF ENGINEER, ELECTRICAL CIRCLE KOTTARAKKARA. 3. EXECUTIVE ENGINEER, ELECTRICAL DIVISION KOTTARAKKARA. 4. DEPUTY TAHSILDAR, REVENUE RECOVERY, NEDUMANGAD. ADV. SRI.C.K.KARUNAKARAN, SC FOR KSEB FOR R1-3 SRI.P.P.THAJUDEEN, SC, K.S.E.B FOR R1-3 R4 BY GOVERNMENT PLEADER SRI. BEJOY CHANDRAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04/03/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K. M. JOSEPH, J. -------------------------------------- W.P.C. NO. 2878 OF 2009 P -------------------------------------- Dated this the 4th March, 2009 JUDGMENT Case of the petitioner, in brief, is as follows: Petitioner was running a Cattle Feed Unit for which she had availed electricity supply. She had to execute Ext.P1 Minimum Guarantee Agreement dated 28.02.2002, incurring the liability to make monthly payments for a period of seven years. Petitioner had been regularly paying the instalments of Rs.6,280/= from August, 2002 to October, 2003, ie. for fifteen months and the petitioner became unable to pay the instalments from December, 2003 and the electric supply was disconnected. On 2.2.2005, the connection was dismantled. Petitioner is aggrieved by the steps taken to recover the amounts due in terms of the Minimum Guarantee Agreement. Accordingly, the petitioner challenges Exts.P3 and P3(a). Ext.P3 is a recovery notice issued under Section 7 of the Revenue Recovery Act and Ext.P3(a) is a notice issued under Section 34 of the Revenue WPC.2878/09 P 2 Recovery Act. Petitioner had also approached the Lok Ayukta and the complaint culminated in Ext.P4 order. The Lok Ayukta took the view that it has no jurisdiction, but it is also pointed out that it went into the merits of the matter and found that the line and the transformer had not become self-remunerative and the petitioner had to pay the minimum guarantee for the rest of the period. Ext.P5 is the service connection agreement executed by the petitioner. Petitioner seeks also a declaration that the petitioner is not liable to pay the minimum guarantee charges on Ext.P1 agreement from the date of disconnection of the supply in December, 2003. A direction also is sought to adjust the caution deposit of Rs.1,06,594/= and Rs.20,925/= against the existing dues towards the Minimum Guarantee charges payable by the petitioner upto December, 2003 and to refund the balance, if any, due to the petitioner with interest at 12% per annum from December, 2003 till the date of payment. A Statement is filed on behalf of the respondents. 2. I heard Shri S. Ramesh Babu, learned counsel for the WPC.2878/09 P 3 petitioner and the learned standing counsel appearing for the respondent Electricity Board. Shri S. Ramesh Babu, learned counsel for the petitioner would confine his arguments to the legality of the proceedings against the petitioner after the disconnection was effected on the score that after the Electricity Act, 2003 was enacted and brought into force in June, 2003, it is not open to the Electricity Board to rely on the Conditions of Supply of Electric Energy Regulations which is a subordinate legislation made under the Electricity Supply Act, 1948 which stood repealed. He would point out that a Division Bench of this Court in Meledam Saw Mills v. K.S.E.B. (1998 (2) KLT 227) had actually taken the view that when a Minimum Guarantee Agreement was executed, it is not open to the Board to disconnect supply and yet seek to recover amounts under the Minimum Guarantee Agreement. The Division Bench in the said decision held as follows: “The learned Judge found that the Board should not have demanded the cost of energy in terms of agreement in as much as minimum WPC.2878/09 P 4 guarantee agreement stood terminated on disconnection of electrical supply in February, 1984. Ext.P1 is the copy of the Minimum Guarantee Agreement in Form No.7. Clause 7 of Ext.P1 only authorises the revenue recovery proceedings in the case of default in payment of dues and not the disconnection of service. In the absence of a provision authorising the disconnection in the agreement, the Board has no power to disconnect the supply. In this case, the disconnection was made in the year 1984. There is no dispute on this point in view of the statement contained in the counter affidavit. Therefore, the finding of the learned Judge that after disconnecting the power supply in February, 1984, the Minimum Guarantee Agreement stood terminated by the Electricity Board is unassailable.” Learned standing counsel would then point out a later Division Bench decision of this Court in Rajesh v. K.S.E.B. (2006 (1) KLT 686). Therein, the Division Bench distinguished the earlier Division Bench on the ground that in the facts of the earlier Division Bench decision, that was a case where the Minimum WPC.2878/09 P 5 Guarantee Agreement stood on its own and without the support of enabling provisions in the Conditions of Supply of Electrical Energy Regulations. In other words, the distinguishing feature in the facts of the latter case was that not only was there a Minimum Guarantee Agreement executed by the party, but the Minimum Guarantee Agreement contained a provision which predicated the operation of the subordinate legislation in the form of the Conditions of Supply of Electrical Energy Regulations, 1990. This is how the later Division Bench took the view that even after disconnection, it is open to the Board to proceed to recover the amounts due under the Minimum Guarantee Agreement. The Court held as follows: “8. We are of the view, the decision in Meledam Saw Mills' case, supra, would not apply to the facts of this case. The Division Bench was dealing with a situation prior to the coming into force of the Conditions of Supply of Electrical Energy, 1990. An identical question came up for consideration before the Division Bench of the Andhra Pradesh High Court inM/s. Thrimurthy WPC.2878/09 P 6 Steel Industries v. A.P. State Electricity Board (1997 (1) An. W.R.587) and the court interpreting similar provisions of the Conditions of Supply held that the consumer is liable to pay minimum charge even after the service is disconnected. The same is the view taken by the Division Bench of the Allahabad High Court in M/s. Pilibhit Ispat (Pvt). Ltd. v.U.P. State Electricity Board (AIR 1996 All.329). Same view has been taken by the Karnataka High Court in Karnataka State Electricity Board v. D.P. Gurumoorthy (AIR 2000 Kant. 214) and the Jharkand High Court in Rishi Cement Co. Ltd. v. Bihar State Electricity Board (AIR 2001 Jharkhand 64). The Apex Court in Bihar State Electricity Board v. M/s. Green Rubber Industries & Ors. (1990) 1 SCC 731) has also adopted the same view. On law and facts, we are in agreement with the Board that it can demand amount under the minimum guarantee agreement even after the disconnection of supply till the line becomes self-remunerative. The reference is answered accordingly and the Writ Petition is dismissed.” 3. However, the learned counsel for the petitioner would WPC.2878/09 P 7 contend that with the enactment of the Electricity Act, 2003, the question would arise as to why the dicta laid down by the earlier Division Bench would not apply to the facts of this case. In other words, it is his contention that in view of the provisions contained in Section 185 of the Electricity Act 2003, it is the earlier Division Bench decision which would apply and not the later decision. This is for the reason that the enactment of the Electricity Act, 2003 would result in the Board being deprived of the power it previously had under the subordinate legislation. Without the support of the subordinate legislation, it would not be open to the Board to rely upon the provisions of the Agreement alone and to recover the amount due even after disconnection, it is contended. In order to appreciate this argument, it is necessary to refer to Section 185 which, inter alia, is extracted hereunder: “185. Repeal and Saving.- (1) Save as otherwise provided in this Act, the Indian Electricity Act, 1910 (9 of 1910), the Electricity (Supply) Act, 1948 (54 of 1948) and the Electricity WPC.2878/09 P 8 Regulatory Commissions Act, 1998 (14 of 1998) are hereby repealed. (2) Notwithstanding such repeal.- (a) anything done or any action taken or purported to have been done or taken including any rule, notification, inspection, order or notice made or issued or any appointment, confirmation or declaration made or any licence, permission, authorisation or exemption granted or any document or instrument executed or any direction given under the repealed laws shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act.” 4. Learned counsel, in fact, raised two broad submissions against the recovery. In the first place, he would contend that there is no provision under the new regime empowering recovery in like circumstances. He would further contend that Section 185 contains a stipulation that in respect of liability incurred, rights accrued, the proceedings taken, they may be continued as if they are being taken under the corresponding provisions of the Act. He would submit that under the WPC.2878/09 P 9 Electricity Act, 2003, there is no power with the Electricity Board which is the licensee to enact subordinate legislation and, therefore, there is no provision, like the Conditions of Supply of Electrical Energy Regulations available after the repeal. No doubt, learned counsel for the petitioner himself would bring to my notice the decision of the Division Bench of this Court in K.S.E.B. v. Najeeb (2005 (1) KLT 406). There, the question was whether the regulation relating to Conditions of Supply of Electricity Energy Regulations 42(d)) is inconsistent with Section 126(6) and hence the latter will prevail. Therein, the Division Bench proceeded to consider the issue and at paragraph 18, held as follows: “The provisions of Electricity Act, 2003 are therefore required to be understood and interpreted in the light of the provisions of the General Clauses Act including Ss.6 and 24 thereof. Regulations Relating to Conditions of Supply of Electrical Energy, therefore, would apply so far as it is not inconsistent with the provisions of the re- enacted Act, that is, Electricity Act, 2003. WPC.2878/09 P 10 Regulations which are not inconsistent with S. 126 and other related provisions would apply till Electricity Supply Code is framed under S. 50 of the Electricity Act, 2003.” However, the Court took the view that the Board has no power to charge three times, but only as provided in the Electricity Act, 2003. This is on the premise that it is the provisions contained in Section 126 which provides for a lesser rate which would prevail over Regulation 42(d). In a similar vein is the decision of the another Division Bench of this Court in Purushothaman v. K.S.E.B. (2007 (2) KLT 827). Therein, the question was whether after the coming into force of the Electricity Act, 2003, if a prospective consumer applies for connection to a premises where there is dues, without clearing the same, the Board is bound to give connection. The Court held as follows: “Consequently, Regulation 7 of the Kerala State Electricity Board Terms and Conditions of Supply, 2005 also cannot be given effect to. Further, by virtue of S. 185 of the Electricity Act, 2003, Regulation 15(e) of the Conditions of WPC.2878/09 P 11 Supply of Electrical Energy would continue to apply.” 5. A perusal of these Division Bench decisions would show that the view taken by the Division Bench is that the subordinate legislation made under the Electricity Supply Act, 1948, namely the Conditions of Electrical Energy Regulations will hold the field except to the extent that it is inconsistent with the provisions contained in the Electricity Act, 2003 or any subordinate legislation made thereunder. Concededly, there is no provision in the Electricity Act or in any Regulation made thereunder which militates against the power of the Board to recover amounts due under a Minimum Guarantee Agreement, even after the connection is disconnected. If that is so, in so far as, admittedly the Agreement was executed prior to the coming into force of the Electricity Supply Act, 2003 and the petitioner had incurred the liability thereunder with the support, no doubt, of the subordinate legislation to have the amounts recovered despite disconnection, it may not be open to the petitioner to contend that with the mere enactment of Section 185 in the WPC.2878/09 P 12 Electricity Act, 2003, the subordinate legislation made under the Electricity Supply Act will die a natural death. Therefore, this contention is only to be rejected. However, the learned counsel has a contention, which he pressed before me, that under Section 185 and on the phraseology of Section 185(2), recovery can be continued only if there is a corresponding provision in the Act. Of course, there is no power with the licensee to make a regulation under the Electricity Act, 2003. Both the Central Commission and the State Commission have been vested with power to make Regulations vide Sections 177 and 181 respectively of the Act. This is besides the power of the State to frame Rules. However, I feel that in the light of the pronouncement by the Division Bench in the decisions I have referred to, namely KSEB v. Najeeb (2005 (1) KLT 406) and Purushothaman v. KSEB (2007 (2) KLT 827), I feel that it may not appropriate for one to undertake the exercise of re-visiting the Section on the strength of the arguments advanced by the WPC.2878/09 P 13 petitioner and accordingly I decline to consider this question. The Writ Petition fails and it is dismissed. Sd/= K. M. JOSEPH, JUDGE kbk. // True Copy // PS to Judge