Case: JHARKHAND STATE ELECTRICITY BOARD AND OTHERS Vs. M/S RAMKRISHNA FORGING LIMITED

2. The brief facts, relevant for the present case, are that the respondent, which is a small scale industry, had entered into an agreement with the Board on 14.04.2004 for High Tension (H.T.) connection of 325 KVA load. The respondent thereafter applied for enhancement of load from 325 KVA to 1325 KVA, which was allowed by the General Manager-cum-Chief Engineer of the Board on 14.03.2006. The respondent again applied for enhancement of load from 1325 KVA to 3500 KVA, which was sanctioned by the Board on 26.12.2006. On a further request of the respondent, the load was again enhanced by 500 KVA to 4000 KVA. For each enhancement of load, fresh agreements to that effect were entered into between the respondent and the Board, the last one being on 07.07.2007 for supply of 4000 KVA load. The respondent alleges that after the enhancement of load, it was facing major trippings as well as continuous load shedding which was affecting the costly machineries and, therefore, the respondent decided to reduce the load from 4000 KVA to 1325 KVA. Accordingly, the respondent filed an application, on 20.09.2007, before the authority of the appellants- Board for such reduction. Vide its order dated 08.11.2007, the Electrical Superintending Engineer rejected the said application of the respondent for reduction of load from 4000 KVA to 1325 KVA informing the respondent that from the date of enhancement of supply of load, an agreement (dated 07.07.2007) would be enforced for a period of three years and treating it to be a case of determination of agreement, and quoting the Clause 9B of the agreement, it was provided that the agreement could not be permitted to be determined prior to the completion of initial period of three years from 07.07.2007 and that the respondent will have to pay the minimum guarantee charges and other charges, even if the respondent decides to terminate the agreement.3. Challenging the said order of the Board dated 08.11.2007, the respondent filed Writ Petition No.6651 of 2007, which has been allowed by the High Court vide its judgment dated 23.07.2008, primarily on the ground that the proviso contained in Regulation 9.2.1 of the Jharkhand State Electricity Regulatory Commission (Electricity Supply Code) Regulations, 2005 (for short, the Regulations of 2005), providing for no reduction of load to be allowed by the Distribution Licensee before expiry of the initial period of agreement was discriminatory, arbitrary and against the public policy. Challenging the aforesaid judgment, this appeal has been filed.

Reasoning: 5. It is noteworthy that after the initial agreement dated 14.04.2004, which came into effect from 16.04.2004 whereby the contract demand of 325 KVA was allowed in favour of the respondent, the Jharkhand State Electricity Regulatory Commission (for short, the Commission) in exercise of power conferred by Section 181(2)(x) read with Section 50 of the Electricity Act, 2003, framed the Jharkhand State Electricity Regulatory Commission (Electricity Supply Code) Regulations, 2005, which came into effect from 28.07.2005.11. From perusal of the communication dated 08.11.2007, it is clear that the application of the respondent for reduction of load has been rejected in terms of Clause 9(B) of the agreement, treating the date of commencement of the agreement to be 7/12.07.2007 and only by considering the provision of determination of the agreement, which could not have been without giving notice of less than 12 calendar months. It is clear that the said communication/order does not consider the provisions of the Regulations of 2005 with regard to reduction of load, but only treats the application for reduction of load to be an application for determination of the agreement.12. Chapter 9 of the Regulations of 2005 deals with the enhancement and reduction of contract demand/sanctioned load. Regulation 9.1 deals with enhancement of contract demand/sanctioned load, whereas Regulation 9.2 deals with the reduction of contract demand/sanctioned load.13. Just as the consumer has the liberty of getting its load enhanced under Regulation 9.1, the reduction of contract demand/sanctioned load can also be prayed for and decided in terms of Regulation 9.2. The proviso to Regulation 9.2.1, no doubt, provides that no reduction of load shall be allowed before expiry of the initial period of agreement, which is three years in the present case.15. It is noteworthy that the Jharkhand State Electricity Board (the Board) is a monopoly supplier of electricity which has laid down its own terms and conditions, regarding which the consumer has no say or choice but to sign on the dotted lines, if it wants of get electricity load varied for running its industry. The Board is an instrumentality of the State. It has to be fair and reasonable. If the Regulations provide for contract load to be varied even through a written communication, then in our considered view, in all fairness, though fresh agreements may have been executed at the stage of enhancement of load of the same electricity connection, the same cannot be treated as anything but an extension/amendment or modification of the initial agreement granting the electricity connection, which in the present case would be the agreement dated 14.04.2004. On the dictates of the Board, the consumer may have been required to sign fresh agreements for each enhancement of load, but the enhancement being for the same electricity connection which still continues, it would merely be amendment of the initial agreement. This would also be in consonance with the provisions of the Regulations of 2005, which have to be liberally interpreted in favour of the consumer.16. Reverting to the order dated 08.11.2007, which was impugned in the writ petition, we are of the opinion that the Board has gone wrong in treating the application dated 20.09.2007 of the respondent for reduction of load to be that for determination of the agreement under Clause 9B of the agreement, which application, in fact, ought to have been considered under Regulation 9.2 of the Regulations of 2005. Further, we are unable to accept the submission of the learned Counsel for the appellant that the application of the respondent for reduction of load was within the period of three years, because as we have discussed hereinabove, the agreement to be considered in the present case is the initial agreement dated 14.04.2004 and not the subsequent agreement dated 07.07.2007.17. The judgments of this Court rendered in Bihar State Electricity Board, Patna and Others v. M/s. Green Rubber Industries and Others, (1990) 1 SCC 731 ,  Orissa State Electricity Board v. Orissa Tiles Limited, (1993) Supp. 3 SCC 481, Andhra Steel Corporation Ltd. and Others v. Andhra Pradesh State Electricity Board and Others, (1991) 3 SCC 263    and Jharkhand State Electricity Board & Others v Laxmi Business and Cement Company Private Limited and Another, (2014) 5 SCC 236    as have been relied upon by learned counsel for the parties, are distinguishable on facts, in as much as they all relate to minimum guarantee charge, and that too under the old Electricity Act of 1910, as is so in the first three cases.