U.P. Power Corporation Ltd. & Anr vs Asp Sealing Products Ltd

2. The respondent had set up a factory at Rudrapur, District Udham Singh Nagar, which now forms part of the State of Uttarakhand for manufacture of PVC and EPDM rubber profiles for automobile vehicles. In 1990, the Board sanctioned electric connection of 400 KVA load for the respondent's factory. Thereafter, as per the requirement of the Regulations, the respondent entered into an agreement with the Board. On 12th February, 1997, the respondent applied for an additional load of 200 KVA, which was duly sanctioned. As a sequel to this, fresh agreement was executed between the parties for the total load of 600 KVA. After one year and seven months, the respondent approached the Board for reduction of load from 600 KVA to 250 KVA. The competent authority of the Board accepted the respondent's request, who then executed another agreement dated 21st September, 1998.

3. In May 1999, the supply of electricity to the respondent's factory was discontinued at the latter's request. After five months, the concerned Executive Engineer sent communication on 5.10.1999 to the respondent requiring it to pay Rs.6,13,592/- towards minimum charges for six months. 3 This was followed by notice dated 4.5.2000 and recovery certificate dated 4.8.2000 issued under Sections 3 and 5 respectively of the U.P. Government Electricity Undertakings (Recovery of Dues) Act, 1958 [for short, "the 1958 Act"].

6. `Date of commencement of supply' means the date mentioned in Para (C) hereunder and if no such date is mentioned then the date of actual connection of Consumer's installation or the date of expiry of a period of one month from the date of intimation to the consumer about the availability of power after completion of the arrangements required to connect his installation whichever is earlier. C. AND WHEREAS this agreement shall be deemed to have been effective from the 21st day of September One thousand nine hundred ninety eight which date shall be construed as the date of commencement of supply under this agreement.

(b) In case of reduction/addition of loads, the consumer hereby covenants that for all the purposes he shall be deemed as old registered consumer--the supplier having taken supply for different loads before execution of this agreement. The supplier shall treat him accordingly.

Regulations 10(b) Application for reduction of load.- If a consumer, in whose name the service is connected, wishes to have his contracted load reduced, he shall submit an application thereof, giving full particular of reduction of load required by him. The reduction in the contracted load of various categories of power consumers on such an application shall be allowed by the Supplier on the terms and conditions detailed below, after completion of necessary formalities by the consumer, which are subject to revision by the Supplier from time to time.

17. Agreement.- (i) The consumer shall enter into a formal declaration/agreement for a minimum period of two years for taking electrical energy before release of supply. After expiry of the above period of two years, the declaration/agreement will continue on year to year basis on the same terms and conditions unless terminated in accordance with the provisions of the declaration/agreements.

All consumers shall execute declaration/agreements governing supply of energy in the form prescribed by the Board from time to time.

(ii) If the supply to a consumer is disconnected on request or in default before compulsory period of two years is over, he shall be liable for payment of minimum charge for the remaining period by which it falls short of two years or for the period of six months from the date of disconnection whichever is less, together with the estimated expenditure on the erection and demolition of the sub-station and the line (not paid by the consumer) actually dismantled due to the disconnection, together with the estimated expenditure on the cartage of the salvaged materials to stores and the cost of unsalvaged materials plus 15% supervision charges on the labour and cartage only.

13. The reasons assigned by the High Court for quashing the demand created by the Board are ex facie untenable. A reading of the order under challenge shows that the High Court decided the writ petition by assuming that the respondent had completed initial guarantee period of two years and Clause 17 of the Regulations is not applicable to its case. In the process, the High Court not only omitted to consider the fact that the respondent had executed fresh agreement dated 21st September, 1998 and in terms thereof the period of two years commenced from the date of agreement, but also misconstrued Clause 17 of the Regulations, sub- clause (ii) whereof unequivocally lays down that if the supply of electricity is disconnected at the instance of the consumer, the latter is liable to pay minimum charges for the remaining period of the agreement or for six months, whichever is less. The High Court also failed to note that the supply of electricity was disconnected at the respondent's request within 12 nine months of agreement dated 21st September, 1998. Therefore, the impugned order is liable to be set aside.

16. In the result, the appeal is allowed and the impugned order is set aside. As a corollary, the demand of minimum charges created by the predecessor of appellant No.1 is upheld and the writ petition filed by the 14 respondent is dismissed. The appellant shall now be entitled to encash the bank guarantee furnished by the respondent in terms of interim orders dated 13th September, 2002 and 5th December, 2003 passed by this Court.