BIHAR STATE ELECTRICITY BOARD ETC. versus M/S ICEBERG INDUSTRIES LTD. AND OTHERS ETC.
[2020] 6 S.C.R. 231, Supreme Court of India, 2020
Outcome: Dismissed (Dismissed)
Segment: Ratio
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BIHAR STATE ELECTRICITY BOARD ETC.
v.
M/S ICEBERG INDUSTRIES LTD. AND OTHERS ETC.
(Civil Appeal Nos. 7649-7651 of 2019)
APRIL 27, 2020
[DEEPAK GUPTA AND ANIRUDDHA BOSE, JJ.]
Electricity Act, 2003– ss.2(15), 42(5) and 56– Agreement for
supply of high-tension electricity connection – Bills raised w.r.t sum
categorised as Annual Minimum Guarantee (AMG) and other
charges – Non-payment/part payment – Supply disconnected on
08.09.2006 – Consumer Grievances Redressal Forum inter alia held
disconnection as legal – Appellant challenged jurisdiction of the
forum – Supply continued to be disconnected occasionally, despite
the order of forum restraining the appellant, and bills kept being
raised – Eventually, Single Judge inter alia held that disconnection
without considering the request for instalments was unwarranted
and such default on respondent’s part did not constitute “neglect
to pay” u/s.56 – Affirmed by Division Bench – Held: Term
‘consumer’ is defined in s.2(15) – Respondent fits this description
– No reason to denude it of its locus to approach the forum – Object
of use of electricity may be to produce items for sale, but its
consumption by respondent was for their own factory – Further,
there is no dispute on respondent’s obligation to pay AMG charges,
at least so far as first bill is concerned – However, its representation
for instalment was in the nature of a mercy plea – Thus, the finding
of High Court that the consumer did not neglect to pay
warranting
the disconnection in s.56, not accepted – But, eventually instalment
was granted subsequent to the period of disconnection– Thus, once
respondent’s plea for payment in instalment was accepted and
agreement was entered into for clearing the dues, it demonstrated
its willingness to pay the dues in a manner acceptable to the
appellant – High Court rightly found that the act of disconnection
on 08.09.2006 was arbitrary – Judgment of Division Bench
sustained – Consumer Grievance Redressal Forum and Electricity
Ombudsmen Regulation, 2006 – Clause 2(1)(g).
[2020] 6 S.C.R. 231
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Dismissing the appeals, the Court
HELD: 1.1 The term ‘consumer’ is defined in Section 2(15)
of the Electricity Act, 2003. The respondent company fits this
description. No reason to denude the company of its locus to
approach the forum. The object of use of electricity may be to
produce items for sale, but use or consumption of electricity by
them was for their own factory. [Paras 10, 11][242-A, C, F]
1.2 Next comes the question as to whether it was permissible
on the part of the Board to disconnect the supply of the company
in spite of the order of stay granted by the Forum. The finding of
the Division Bench is accepted on that count. Board could not
have had ignored the directive of a statutory forum and imported
their own perception of what was legal to proceed against a
consumer. [Para 12][242-G]
1.3 The third point relates to the issue as to whether the
company was required to pay AMG charges or not during the
period their supply stood stalled by disconnection. The Forum
referred to Circular No. 477 dated 29.10.2002 (General Terms
and Conditions of Supply) while accepting the consumers stand
that the Board could not do so. The Redressal Forum in its order
of 12th February 2008 (in case no. 108/2007) has construed the
said Circular partly in favour of the company The statutory Forum
came to a finding in dealing with certain circular issued by the
Board. The Court ought not interfere at this stage with such
finding
so far the same related to applicability and interpretation
of the said circular. [Paras 13, 15 and 16][242-H; 243-A; 244-D;
245-F]
1.4 Under Section 56, disconnection of supply is special
power given to the supplier in addition to the normal mode of
recovery by instituting a suit. So far as the subject controversy is
concerned, there is no dispute on obligation of the respondent
company to pay the AMG charges, at least so far as first bill is
concerned. Its representation for instalment was in the nature of
a mercy plea. Going by that factor alone, this Court might not
have had accepted the finding of the High Court that the
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consumer did not neglect to pay so as to warrant the disconnection
provision contained in Section 56 of the Act. But in respect of
respondent company, eventually instalment was granted
subsequent to the period of disconnection. Once that plea for
instalment payment was accepted and agreement was entered
into for clearing the dues, it demonstrated willingness to pay on
the part of the company of the dues in a manner acceptable to the
appellant Board. Such plea of the company was accepted after
keeping the matter pending for a long time. In such
circumstances, the High Court was right in giving its finding that
the act of disconnection on 8th September 2006 was arbitrary.
The judgment of the Division Bench of the Patna High Court is
sustained. [Paras 19-21][247-C, G-H; 248-A-C]
Corporation of the City of Nagpur v. Nagpur Electric
Light and Power Company Limited AIR 1958 Bom. 498;
Amalgamated Commercial Traders v. A.C.K.
Krishnaswami 1995(XXV) CC 454; Laxmikant
Revchand Bhojwani and another v. Pratapsing
Mohansingh Pardeshi (1995) 6 SCC 576 –
referred to.
Case Law Reference
(1995) 6 SCC 576
referred to
Para 19
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 7649-
7651 of 2019.
From the final Order dated 07.02.2013 of the High Court of
Judicature at Patna in Letters Patent Appeal Nos. 521 of 2011, 1490 of
2010 and 1491 of 2010.
Navin Prakash, Abhishek Vikas, Advs. for the Appellant.
Nikhil Nayyar, Sr. Adv., Susmit Pushkar, Anchit Oswal,
Ms. S. Nausad, Ms.
Bhawna Mishra, Abhinav Mukerji, Ms. Pratishtha
Vij, Bihu Sharma, Samarth Khanna, E. C. Vidya Sagar, Manish Kumar,
Srikaanth S., Advs. for the Respondents.
BIHAR STATE ELECTRICITY BOARD v. M/S ICEBERG
INDUSTRIES LTD. AND OTHERS
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The Judgment of the Court was delivered by
ANIRUDDHA BOSE, J.
These appeals are directed against a judgment of a Division Bench
of the Patna High Court affirming in substance the decision of the learned
Single Judge in disposing of three writ petitions in disputes arising out of
obligation of the first respondent to pay certain sum categorised as Annual
Minimum Guarantee (AMG) and certain other charges to the Bihar State
Electricity Board. The appellant was the Board. The complaint of the
first respondent, Iceberg Industries Ltd. (the company) over disconnection
of their supply which they argued to be illegal was sustained by the
Single Judge and it was also held by the First Court that the said company
was not liable to pay AMG and certain other charges as per Board’s
computation. The judgment of the Division Bench was delivered on 7th
February 2013. The company had entered into an agreement for supply
of electricity with the appellant Board for contract demand of 1,000
KVA on 16th April 2004. This was for supply of high-tension electricity
connection for setting up of a brewery. Supply to the company was
energised on 06.05.2005. The dispute involved in the three writ petitions
giving rise to these appeals originated from a bill for Rs. 27,11,814/-
dated 17th April 2006. This was raised by the appellant towards AMG
and was payable by 06.05.2006. The company did not make payment
thereof within the prescribed date.
Three disconnection notices, dated
15th May, and 26th May and 29th June 2006 on account of default in
payment of AMG as  also  energy  charges  were  issued  by  the  Board.
The company on 29th July 2006 made a representation for liquidating
their dues on account of AMG in ten monthly instalments citing certain
business related difficulties. Part payment of the dues to the extent of
Rs. 14,71,952/- was made. Next disconnection notice under Section 56
of the Electricity Act, 2003 (the Act) was sent to the company dated
23rd August 2006 for a sum of Rs. 33,38,572/- for non-payment of AMG
as also on account of Delayed Payment Surcharge (DPS). Another bill
was raised on 1st September 2006, the due date for which was 20th
September 2006. The bill amount was Rs. 37,00,923/- and the bill heads
were AMG, DPS as also energy charges. Supply to the company,
however, was disconnected on 6th September 2006. There is some doubt
as to whether such disconnection took place on 6th September or 8th
September, but this variation is of little significance so far these appeals
are concerned.
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2. The factual background of the three petitions would appear
from the recordal made in the following passages of the judgment under
appeal:
“Subsequently a fresh bill was raised on 1.9.2006 which included
arrears of AMG and DPS under the bill dated 17.4.2006 also for
a total of Rs.37,00,923/- along with current charges. The due date
for payment was 20.9.2006. The Board disconnected supply on
6.9.2006 pursuant to the notice for disconnection dated 23.8.2006.
The Board thereafter acted on the representation dated 26.8.2006
and granted facility of instalments. An agreement was signed
between the parties on 11.4.2007 for payment of AMG and DPS
in instalments. The connection was restored 7 months later on
16.4.2007. It is not in dispute that payments under the bill dated
17.4.2006 has then been made as agreed.
A fresh bill was thereafter raised by the Board on 4.5.2007 for
Rs.70,23,149/- as the minimum guarantee charge/base charge for
the disconnected period of 1.11.2006 to 30.4.2007, along with AMG
charge for the financial year 2006-07 (which also included charges
for the disconnected periods of August, September, October 2006)
of Rs.18,02,582/-. The total bills thus raised was for
Rs.88,389,528/-. A fresh disconnection notice for non-payment of
the same was issued on 22.5.2007. The industry moved the Forum
under the Act. By order dated 12.2.2008 the Forum held the
industry liable to pay minimum charges up to November 2006.
The minimum charges from December
2006 to April 2007 were
held to be bad. The Industry, to the extent it was aggrieved by the
order, questioned it in CWJC 4637 of 2008. The latter part of the
order was not challenged by the Board.
On 19.3.2008, a fresh disconnection notice was served for non-
payment of Rs.1.33 Crores inclusive of AMG and DPS for the
period December 2006 to April 2007 disallowed by the Forum.
The Board also refused to accept current consumption charges.
Based on a demand contrary to the order of the Forum, the Board
disconnected electric supply for the second time on 2.4.2008.
After it had disobeyed the order dated 12.2.2008 of the Forum
CWJC 7314 of 2008 was filed by the Board on 5.5.2008
questioning the same. The writ petition did not disclose that the
Board had already disobeyed the order and disconnected supply
BIHAR STATE ELECTRICITY BOARD v. M/S ICEBERG
INDUSTRIES LTD. AND OTHERS  [ANIRUDDHA BOSE, J.]
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without raising fresh revised bills. No prayer for interim stay of
the order of the Forum was made in the Writ Petition.
Pursuant to an interim deposit of 35 Lacs directed on 15.5.2008 in
CWJC 4637 of 2008, electric supply was restored on 24.5.2008.
A fresh bill was again raised on 22.5.2009 for Rs.1.47 Crores
along with notice for disconnection. It included AMG and DPS
for the period disallowed by the Forum. It also included AMG and
DPS charges for the subsequent disconnection from 2.4.2008 to
23.5.08. The industry challenged the same again before the Forum.
The demand was stayed by the Forum on 12.6.2009. Without
challenging the order of the Forum, the Board in complete disregard
refused to accept even current payments, showed arrears of
Rs.1.82 crores and disconnected supply of the Industry again on
7.8.2009. CWJC 9742 of 2009 was preferred against the same
by the Industry. Rs.80 Lacs was deposited pursuant to the order
of the Court, and electric supply was restored on 1.12.2009. The
industry therefore also questioned AMG and DPS charge for the
disconnection period from 7.8.2009 to 30.11.2009. Further payment
of Rs.40 Lacs has been made pursuant to interim directions in the
present Appeals.”
3. The Single Judge found the act of disconnection without
considering the request for instalments was unwarranted. It was held
that such default on the part of the company did not constitute “neglect
to pay” as contemplated in
Section 56 of the 2003 Act. The fresh bill,
which was raised on 1st September 2006 showed the due date of payment
to be 20th September 2006. Disconnection was however made on 6th
September 2006 on the basis of earlier notice of 23rd August 2006. This
was held to be unjustified. The demands raised thereafter contrary to
the order of the Forum constituted under Section 42(5) of the Act was
also held to be illegal by the Single Judge.
4. The Appeal Bench, inter, alia, found:-
“The bill dated 19.3.2008 which included the AMG and DPS for
the period 1.11.2006 to 3.4.2007 contrary to the order of the Forum
being illegal, the Industry was under no obligation to pay the same.
The subsequent disconnection on 2.4.2008 automatically becomes
illegal. Surprisingly, the officials of the Board persisted in defying
the order of the Forum in the bill dated 22.5 2009 by again including
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AMG and DPS for the period of disconnection disallowed by the
Forum and reiterating the subsequent illegal bill also for the period
of illegal disconnection from 2.4.2008 to 23.5.2008. The petitioner
challenged this bill before the Forum again which stayed
disconnection on 12.6.2009. The authoritarianism of the Board
persisted in flagrant disobedience and supply again disconnected
on 7.8.2009 leading to institution of CWJC 9742 of 2009. The
supply was restored on 1.12.2009 upon payment of Rs.80 Lacs
under orders of the Court. The disconnection from 7.8.2009 to
30.11.2009, needs no further discussion to be held illegal. We are
constrained to observe that this second occasion when the officials
of the Board acted in gross defiance of the orders of the statutory
authority is indicated of dangerous executive thinking. We expect
the officials of the Board to understand their folly and act prudently,
take action against the officers concerned so that in future such
administrative adventurism is not attempted.
In fairness to the Board, we must deal with CWJC 7314 of 2008
filed by it against the order of the Forum. It does not appear from
the impugned Judgement that any substantive challenge was laid
out to it except that the Board did not agree with the same. Even
before us no substantive challenge has been laid out why the order
of the Forum was wrong. The only ground urged before us was
that the order of the Forum was contrary to the agreement signed
between
the parties for an H.T. connection. It was the foremost
duty of the Board to either comply the order of the Forum and
then challenge it or alternately challenge the order immediately
and seek stay of the order. Its conduct has been found grossly
wanting on both aspects. An evasive and purposefully vague
statement was made in paragraph 9 of disconnection. No details
of the date was stated or that it had already disobeyed the order
before filing the Writ petition. If the Board was seeking the
protection of the law against the statutory quasi-judicial order, it
had to first respect the law. A person falling foul of the law cannot
seek the shelter of the law to perpetuate disobedience. The writ
petition filed by the Board was therefore fit to be dismissed on
this ground also.
The case of (Southco) (supra) relied upon by the Board has no
application to the present case. The words “revenue focus” was
BIHAR STATE ELECTRICITY BOARD v. M/S ICEBERG
INDUSTRIES LTD. AND OTHERS  [ANIRUDDHA BOSE, J.]
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used in context of unauthorised use of electricity. Similarly Kesoram
Industries (supra) related to construction of a taxing statute.
Likewise Raymond (supra) and Green Industries (supra) did not
relate to the obligation for payment of Minimum Guarantee
Charges for the period of illegal disconnection by the Board.
Affirming the reasoning and findings of the Writ Court, we hold
that the initial disconnection itself being illegal, the Board does not
have the authority to charge any AMG and DPS not only for that
period but also for each and every subsequent period of illegal
disconnection also, because it failed to revise the bills. The
directions given by the Writ Court in the penultimate paragraph of
the judgment calls for no interference.”
5. Before us three issues emerge, which we need to address. The
first one is whether the company could have invoked the Redressal
Forum’s jurisdiction over the dispute pertaining to AMG and DPS including
the question of disconnection in terms of Section 56 of the Act. The
second issue is as to whether, after receiving a representation seeking
instalment payment, supply to consumer could be disconnected without
dealing with such representation. The third issue is as to whether AMG
was payable by the company for the entire period during which supply
to the consumer remain disconnected.
6. The company’s request for grant of instalments to liquidate
their dues was ultimately accepted by
the Board and to that effect an
agreement was executed between Company and the Board for liquidation
of the outstanding dues of Rs. 37,09,027/- in ten instalments. This
agreement is dated 11th April 2007. A copy of this agreement has been
made Annexure R11 to the counter-affidavit of the Company. On payment
of the first instalment, supply line of the company was energised on 16th
April, 2007. Another bill dated 04.05.2007 was sent to the company for
Minimum Monthly Base charges for the period between 1st December
2006 and 30th April 2007, AMG charges for the year 2006-2007 and
total amount demanded under this bill was for Rs. 88,389,528/-. The
next notice under Section 56 of the Act was issued on 22.05.2007 as the
company did not make payment of the bill dated 4th May, 2007. The
Company thereafter approached the Consumer Grievances Redressal
Forum questioning legality of the notice dated 4th May 2007. Their
application was registered as Case no. 108 of 2007 and initially the demand
was stayed by the Forum. In the final order dated 12th February 2008,
the Forum gave its finding in the following terms:-
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1. The disconnection of the electric line of the Petitioner on
08.09.2006 is being held “legal”
2. The date of disconnection of “08.09.2006” has been found as
notice for determination of the agreement.
3. The Petitioner/consumer is liable for payment of Energy Bill
of AMG Charge for September’ 2006 & October’ 2006 and
monthly Minimum Base Charge of November’ 2006 i.e. for
three months from the month of disconnection of the line.
4. As per Board’s Notification no-477 dated 29.10.2002 and letter
No. 793 dated 22.10.2013-both issued in the signature of
Secretary, Bihar State Electricity Board, Patna; the
reconnection done on 16.04.2007 by accepting of amount of
1st instalment with disconnection & Reconnection Charge has
been decided as clear violation of the Board’s directives, as
the electric line of the Petitioner remained disconnected from
08.09.2006 to 15.04.2007 i.e. more than six months period.
5. Any request made by the Petitioner for availing/providing
electric power should have been treated, as the case of New
Applicant and reconnection done is found as improper.
6. The charging of Monthly Minimum Base charge from
December’ 2006 to March’2007 is decided as illegal and liable
for withdrawal, as the connection was given in the Month of
April’ 2007.
7. If the Petitioner is found fit to avail the benefit of exemption,
necessary suitable and appropriate action may be taken to
allow the benefit of exemption from payment of Monthly
Minimum Base Charge as
per Industrial Policy Resolution’
2006.
7. Supply to the Company was disconnected again on 2nd April
2008. Both the appellant and the respondent company had assailed the
order of the forum invoking the Constitutional Writ jurisdiction of the
Patna High Court. The company’s writ petition, registered as CWJC
4637 of 2008 challenged that part of the order in which disconnection  of
electricity on 8th September 2006 was held to be legal. The Board’s writ
petition was registered as CWJC 7314 of 2018. In this writ petition, the
Board questioned the jurisdiction of the Redressal Forum to adjudicate
BIHAR STATE ELECTRICITY BOARD v. M/S ICEBERG
INDUSTRIES LTD. AND OTHERS  [ANIRUDDHA BOSE, J.]
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the dispute on the ground that the company was not using the electricity
for their own use. They also wanted invalidation of the Forum’s order by
which the energy bill dated 4th May 2007 was quashed.
In the first writ petition filed by the company (CWJC 4637 of
2008), by an interim order, the High Court had directed deposit of sum of
Rs.35 lacs for the purpose of reenergising supply and this amount, we
are apprised, was deposited by them. The supply line was also restored
on 24.5.2008. But between 2nd April 2008 and 24th May 2008, the
company’s electricity stood disconnected. Thereafter, demands were
made on different dates under several heads including arrears, DPS and
a fresh notice of disconnection under Section 56 of the 2003 Act was
issued on 22nd May 2009.  The  company  again approached the Forum
against  a  bill  dated 5th  June 2009 for a sum of Rs.1,63,15,452/-. The
Forum had stayed the demand and passed an order restraining the Board
from disconnecting supply of the respondent no.1. But on 7th August,
2009, again supply to the company was disconnected, which prompted
filing of the third writ petition by the company, which was registered as
CWJC 9742 of 2009. An interim order was issued in that writ petition
requiring them to deposit a sum of Rs.40 lacs within a week after which
the power supply was to be restored to be followed by further deposit of
a sum of Rs.40 lacs by 6th November 2009. This interim
order was
passed on 15th October 2009. The said sum was deposited and supply
was restored. Ultimately, the learned Single Judge disposed of all the
three writ petitions by a common judgment and order passed on 29.4.2010
with the following directions and observations: -
“(1) The Board would have to delete from the demands being
made as against the petitioner amounts in relation to the period of
disconnections, because, as shown above, each disconnection was
illegal, wrongful and the petitioner cannot be made to pay for the
period of such wrongful disconnections.
(2) The bills and the liability of the petitioner would have to be re-
caste from the very initial period, deleting charges aforesaid, giving
due credit to payment made in between & then final amount has
to be worked out.
(3) The final amount being worked out for which the period of
one month is granted to the Board, the Board would serve the bill
giving the full details in respect thereof, deleting the charges as
indicated above.
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(4) As this Court has found that the amounts as claimed were
incorrectly claimed, then the bills being revised would not contain
delayed payment charges for balance due in view of Division
Bench judgment of this Court in the case of M/s Gaya Roller
Flour Mills Private Ltd. Vs. Bihar State Electricity Board since
reported in 1995(2) PLJR 715.
(5) Petitioner by one of the interlocutory applications has prayed
that he is entitled to exemption under the Industrial Policy 2006 of
the Government. That dispute is pending before the Industries
Development Commissioner. The petitioner would have liberty to
pursue the matter before that authority.”
8. We shall first address the question as to whether the Forum
under Section 42(5) of the 2003 Act had the jurisdiction to entertain and
determine the company’s application. We must point out here that before
the Appeal Bench the counsel for the Board had acknowledged Forum’s
jurisdiction to adjudicate the dispute raised before it. This appears from
the recordal of submission of the counsel for the Board before the Appeal
Bench as it appears in the judgment under appeal:-
“…….Before us, Counsel for the Board fairly acknowledged that
the Forum had jurisdiction to adjudicate the dispute……”
9. But even if we proceed on the basis that concession on law
made before a judicial forum against whose decision we are hearing
these appeals would not bind a party to such concession, we do not find
anything in law which barred the
Redressal Forum from adjudicating the
dispute. Section 42(5) of the 2003 Act lays down:
“42. Duties of distribution licensees and open access.- (1)
xxx xxx
(2) xxx
xxx
xxx
(3) xxx
xxx
xxx
(4) xxx
xxx
xxx
(5) Every distribution licensee shall, within six months from the
appointed date or date of grant of licence, whichever is earlier,
establish a forum for redressal of grievances of the consumers in
accordance with the guidelines as may be specified by the State
Commission.”
BIHAR STATE ELECTRICITY BOARD v. M/S ICEBERG
INDUSTRIES LTD. AND OTHERS  [ANIRUDDHA BOSE, J.]
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10. The term ‘consumer’ has been defined in Section 2(15) of the
2003 Act in the following terms:-
“2(15) “consumer” means any person who is supplied with
electricity for his own use by a licensee or the Government or by
any other person engaged in the business of supplying electricity
to the public under this Act or any other law for the time being in
force and includes any person whose premises are for the time
being connected for the purpose of receiving electricity with the
works of a licensee, the Government or such other person, as the
case may be;”
11. The respondent company fits this description. A case was
sought to be made out that since the company was a high-tension
commercial consumer, they could not apply to the Forum. On this count,
definition of consumer as specified in clause 2 (1) (g) of the Consumer
Grievance Redressal Forum and Electricity Ombudsmen Regulation, 2006
was sought to be relied upon. This clause specifies:-
2 (1) (g):- ‘Consumer’ means any person who is supplied with
electricity for his own use by a licensee and includes any person
whose premises are connected for the purpose of receiving
electricity with the works of a licensee or a person whose electricity
supply is disconnected by a licensee or the person who has applied
for connection for receiving electricity from a licensee, as the
case may be.
But we do not find any reason to denude the company of its locus
to approach the forum.
The object of use of electricity may be to produce
items for sale, but use or consumption of electricity by them was for
their own factory.
12. Next comes the question as to whether it was permissible on
the part of the Board to disconnect the supply of the company in spite of
the order of stay granted by the Forum. We have reproduced the passage
from the judgment of the Division Bench dealing with that aspect of the
controversy. We accept the finding of the Division Bench on that count.
Board could not have had ignored the directive of a statutory forum and
imported their own perception of what was legal to proceed against a
consumer.
13. The third point urged before us relates to the issue as to whether
the company was required to pay AMG charges or not during the period
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their supply stood stalled by disconnection. The Forum referred to Circular
No. 477 dated 29.10.2002 (General Terms and Conditions of Supply)
while accepting the consumers stand that the Board could not do so. In
the order of the Forum dated 12th February 2008 paragraphs 6(B) and
6(B)(iii) of that circular have been quoted as:
“If the line of a consumer is disconnected for default in payment
of dues of the Board and the same remains disconnected for a
period of 3 months, the date of disconnection of line shall be deemed
to be the date of notice for termination of agreement and the
agreement shall be deemed to have ceased and determined after
a period of three months, calculated from the month of
disconnection. The Consumer shall be liable to pay minimum
energy/charge/demand charges; as per tariff provisions for this
period of 3 months.”
“If, after termination of agreement, the consumer comes forward
with a request to provides to his premises, he will be treated as a
new applicant, but he shall clear all dues against the erstwhile
connections.”
14. The AMG charges quantified in the bills raised subsequent to
the one dated 17th April 2006 did not take into account the period during
which supply to the consumer had remained disconnected. On behalf of
the Board, on the other hand reliance was placed on clauses 9(a) and
(b) of the Supply Agreement dated 16th April 2004 to contend that the
circular No. 477 could not have had been made applicable within the
first three years from the date of commencement of the supply of energy.
These two clauses read:-
“9(a) The consumer shall not be at liberty to determine this
agreement before the expiration of three years from the date of
commencement of the supply of energy. The consumer may
determine this agreement with effect from any date after the said
period on giving to be Board not less than twelve calendar months’
previous notice in writing in that behalf and upon the expiration of
the period of such notice this agreement shall cease and determine
without prejudice to any right which may then have accrued to
the Board hereunder provided always that the consumer may at
any time with the previous consent of the Board transfer and
assign this agreement to any other person and upon subscription
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of such transfer, this agreement shall be binding on the transferee
and Board and taken effect in all respects as if the transferee had
originally been a party hereto in place of the consumer who shall
henceforth be discharged from all liabilities under or in respect
thereof.
(b) In case the consumer’s supply is disconnected by the Board
in exercise of its powers under this agreement and/or law and
the consumer does not apply for reconnection in accordance
with law within the reminder period of the compulsorily availing
of supply as stated above or the period of notice whichever
be longer, he will be deemed to have given a notice on the
date of the disconnection in terms of aforesaid clause 9(a) for
the determination of the agreement and on expiration of the
abovesaid reminder period of compulsorily availing of supply
or the period of notice whichever is longer, this agreement
shall cease and determine in the same way as above.”
15. The Redressal Forum in its order of 12th February 2008 (in
case no. 108/2007) has construed the said Circular partly in favour of
the company in the following manner:-
“Thus, it is very clear that after three months of the month of
disconnection, i.e. after termination of the agreement, the consumer
requested to the concerned authorities of the  Board to allow him
20 equal instalments of the AMG bill for 2005-2006 and monthly
energy bill for August 2006, but the concerned authorities of
the
Board has executed the agreement of instalments with
disconnection & reconnection on 11.04.2007 in violation of this
important Circular of the Board and the line was reconnected on
16.04.2007 after acceptance of payment of Rs.9,27,257.00 (1st
instalment) and disconnection & Reconnection charge of
Rs.2,000=00 vide money receipt no – 444920 & 444921
respectively of dated 12.04.2007; whereas the petitioner/consumer
would have been treated as new applicant.
This letter of ESE/Patna further states that on reconnection, the
consumer were served the regular energy bill and the AMG bill
during the period of this connection i.e. from 11/2006 to 4/2007
worth Rs.70,23,149.00.
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The Forum finds that, during the issue of energy bill for the month
of 4/2007, the bill issuing authority i.e. ESE (Consumer &
Revenues)/Patna Electrical Circle has issued MMC bill including
the period of 01.11.2006 to 30.04.2007 – for six months for
Rs.70,36,946=00 by mentioning the rebate Amount of Rs.13797=00,
if paid before 16.05.2007.
On examination of the copy of his issued energy bill, the Forum
finds; that this energy bill-mentioned as bill for the month of 4/
2007 – is wrongly prepared and levied as after termination of
agreement, as per Circular of Board the consumer/petitioner is
only liable for payment of AMG/MMC charge for three months
from the months of disconnection i.e. AMG charge for the month
of Sept’ 2006 and Oct.2006 and Monthly Minimum Base Charge
for the month of November 2006 only, hence charging/levying of
Monthly Minimum Base charge for the period December 2006 to
March 2007 is wholly illegal and incorrect.
The Forum also detects that Electricity Duty of 6% of
Rs.3,47,684=00 on the total amount of Monthly Minimum base
charge of Rs.57,94,740=00 have been wrongly levied, where as
the Electricity Duty @ 6% is to be chargeable only on the energy
charge of the units as recorded and calculated as per reading
shown in the installed Meter.
Even though the amount of DC&RC Charge for Rs.2000=00 has
already been deposited by the consumer on 12.04.2007, this amount
of Rs.2000=00 is again shown as charged in the instant bill for the
month of
4/2007, issued on 04.05.2007, with due date of the date
16.06.2007, which makes this bill as incorrect.”
16. We thus find that the statutory Forum has come to a finding in
dealing with certain circular issued by the Board. We do not think we
ought to interfere at this stage with such finding so far the same related
to applicability and interpretation of the said circular.
17. As regards the provisions of clauses 9 (a) and (b) of the
agreement, the first provision curb the right of a consumer to determine
the agreement unless certain conditions are fulfilled. The circular relied
upon by the Forum however has wider application and its applicability
has not been disputed by the Board. Contention of the Board is that the
Forum did not adhere to clause 6 (B) (i) of the circular, which according
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to the Board, constituted partial modification of general terms and
conditions of supply. We do not accept this argument, particularly in the
factual perspective of these appeals. The Board had agreed to instalments
for clearing the dues and restored the supply. On that basis, an independent
arrangement came into existence vis-a-vis the company’s terms of supply
in the given case.
18. The only point which now remains to be dealt with is as to
whether the representation of the company after issue of notice of
disconnection could absolve them from rigours of Section 56 of the 2003
Act which relates to disconnection of supply, on the ground that such
representation demonstrated there was no negligence on the part of the
consumer to pay any charge of electricity. Section 56 of the Act provides:-
“56 Disconnection of supply in default of payment- (1) Where
any person neglects to pay any charge for electricity or any sum
other than a charge for electricity due from him to a licensee or
the generating company in respect of supply, transmission or
distribution or wheeling of electricity to him, the licensee or the
generating company may, after giving not less than fifteen clear
days’ notice in writing, to such person and without prejudice to his
rights to recover such charge or other sum by suit, cut off the
supply of electricity and for that purpose cut or disconnect any
electric supply line or other works being the property
of such
licensee or the generating company through which electricity may
have been supplied, transmitted, distributed or wheeled and may
discontinue the supply until such charge or other sum, together
with any expenses incurred by him in cutting off and reconnecting
the supply, are paid, but no longer:
Provided that the supply of electricity shall not be cut off if such
person deposits, under protest,-
(a) an amount equal to the sum claimed from him, or
(b) the electricity charges due from him for each month
calculated on the basis of average charge for electricity paid
by him during the preceding six months,
whichever is less, pending disposal of any dispute between
him and the licensee.
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(2) Notwithstanding anything contained in any other law for
the time being in force, no sum due from any consumer, under
this section shall be recoverable after the period of two years
from the date when such sum became first due unless such
sum has been shown continuously as recoverable as arrear of
charges for electricity supplied and the licensee shall not cut
off the supply of the electricity.”
19. Under the aforesaid provision, disconnection of supply is special
power given to the supplier in addition to the normal mode of recovery
by instituting a suit. Both the Single Judge and the Appellate Bench of
the High Court have held that the respondent company did not neglect to
pay their dues, for which reason the supplier could have effected the
harsher mode by disconnection supply. The Single Judge referred to two
authorities, Corporation of the City of Nagpur Vs. Nagpur Electric
Light and Power Company Limited – (AIR 1958 Bom. 498) and
Amalgamated Commercial Traders Vs. A.C.K. Krishnaswami –
(1995)(XXV) CC 454 in which it has been held that in the event there is
bona fide dispute between the parties on the quantum of dues, non-
payment of such sum would not amount to negligence to pay. The first
authority relates to Section 24(1) of the Indian Electricity Act, 1910 having
provision similar to that of Section 56 of the 2003 Act. The second case
related to initiation of winding-up proceeding under the Companies Act,
1956. The other authority referred to
was the case of Laxmikant
Revchand Bhojwani and another Vs. Pratapsing Mohansingh
Pardeshi – (1995) 6 SCC 576.  In this case, one of the issues involved
was default in payment of dues on account of rent, for which eviction
could be asked for. The court found that the rent in that case was sought
to be paid through money order within the specified period. It was held
that it was not a case default to pay simpliciter and hence the rigours of
the default provision leading to eviction under the applicable rent law
stood diluted.
20. So far as the subject controversy is concerned, there is no
dispute on obligation of the respondent company to pay the AMG charges,
at least so far as first bill is concerned. Its representation for instalment
was in the nature of a mercy plea. Going by that factor alone, we might
not have had accepted the finding of the High Court that the consumer
did not neglect to pay so as to warrant the disconnection provision
contained in Section 56 of the Act. But in respect of respondent company,
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eventually instalment was granted subsequent to the period of
disconnection. Once that plea for instalment payment was accepted and
agreement was entered into for clearing the dues, it demonstrated
willingness to pay on the part of the company of the dues in a manner
acceptable to the appellant Board. Such plea of the company was
accepted after keeping the matter pending for a long time. In such
circumstances, in our opinion the High Court was right in giving its finding
that the act of disconnection on 8th September 2006 was arbitrary.
Because of these reasons we do not want to disturb the finding of the
Courts below.
21. The appeals filed by the Board are accordingly dismissed.
The judgment of the Division Bench of the Patna High Court is sustained.
All connected applications stand disposed of. There shall be no order as
to costs.
Divya Pandey
Appeals dismissed.