TMI Blog1998 (4) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs calling upon the appellant to file its objections to the provisional assessment. The appellant denied the allegations made by the Board. After enquiry, the final assessment was made fixing the loss at ₹ 55,72,511.81 Ps. The order was challenged by the appellant in appeal but in vain. The appellant filed a suit in the court of Additional Chief Judge, City Civil Court (Temp), Hyderabad for a declaration that it was not liable to pay any amount as penal damages and prayed for a direction for refund of the amount of ₹ 22.50 lakhs collected by the Board during the pendency of the assessment proceedings and for perpetual injunction restraining the defendants therein from disconnecting the power supply. 2. The suit was contested by the Board. Several issues were raised including one relating to the jurisdiction of the civil court. The trial court held that it had jurisdiction to try the suit but negatived all the contentions of the plaintiff and dismissed the suit. On appeal, a Division Bench of Andhra Pradesh High Court rejected the pleas of the appellant and dismissed the same. The High Court held that the terms and conditions of supply on the basis of which the agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... body. Ultimately the Full Bench concluded its order as follows: In view of the above discussion, we have no hesitation to hold that condition 39 of the conditions framed by the Board, to the extent it prescribes the procedure for adjudication of the dispute relating to pilferage or malpractice of energy and for final assessment of the additional charges, is ultra virus of Section 24, 26(6) and C1.IV(3) of schedule of the Act of 1910 and Sect. 49 of Act of 1948, and is wholly vitiated as being arbitrary and violative of Article 14 of the Constitution and is accordingly struck down. However, the contention of the learned Advocate General that the Board is empowered to regulate the supply of energy including the power of disconnection, on a prima facie satisfaction or suspicion of a conduct amounting to malpractice or pilferage of energy, appears to be unexceptionable. The Board is certainly within its limits to discontinue supply of energy on ground of including malpractice of pilferage of energy. The conditions in the agreements in Appendix III IV also contain stipulation of disconnection of supply on suspicion of violation of conditions. Thus, if an allegation is made of mal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the supply and use of electrical energy. The said Act was not a complete Code on the subject. It was apparently found to be inadequate for coordinating development of electricity on regional basis. Hence, the Supply Act was enacted in 1948 to provide for rationalisation of the production and supply of electricity and generally for taking measures conducive to electricity. While the earlier Act deals with the supply and use of electric energy and the rights and obligations of the licensees, the later Act deals with statutory powers and functions of the Central Electricity Authority, State Electricity Boards and Generating companies. Section 70(1) of the later Act provides for giving an overriding effect to its provisions in so far as there is any inconsistency therewith in the provisions of the earlier Act or any Rules made thereunder or any instrument having effect by virtue of the said Act or Rules. The proviso to sub-section (1) clarifies that nothing in the later Act shall be deemed to prevent the State Government from granting, after consultation with the Board, a licence not inconsistent with the provisions of the earlier Act to any person in respect of such area and on s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r interfered any appliance or controlled or interfered with the use of energy in contravention of sub-section (1), the matter shall be either referred to an Electrical Inspector and decided by him, or, if the licensee or consumer so desires, determined by arbitration. Section 24(1) and (2) read as follows:- (1) Where any person neglects to pay any charge for energy or any (sum, other than a charge for energy,) due from him to a licensee in respect of the supply of energy to him, the licensee may, after giving not less than seven clear days notice in writing to such person and without prejudice to his right to recover such charge or other sum by suit, cut off the supply and for that purpose cut or disconnect any electric supply-line or other works, being the property of the licensee, through which energy may be supplied, and may discontinue the supply until such charge or other sum, together with any expenses incurred by him in cutting off and re-connecting the supply, are paid, but no longer. (2) Where any difference or dispute (which by or under this Act is required to be determined by an Electrical Inspector, has been referred to the Inspector) before notice as aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - VI. Requisition for supply to owners or occupiers in vicinity (1) Where, (after distributing mains have been laid down under the provisions of Clause IV or Clause V and the supply of energy through those mains or any of them has commenced,) a requisition is made by the owner or occupier of any premises situate within (the area of supply) requiring the licensee to supply the energy for such premises the licensee shall, within one month from the making of the requisition, (or within such longer period as the (Electrical Inspector) may allow) supply, and, save in so far as he is prevented from doing so by cyclones, floods, storms or other occurrence beyond his control continue to supply, energy in accordance with the requisition. ... ... (3) Where any difference or dispute arises as to the amount of energy to be taken or guaranteed as aforesaid, or as to the cost of any service-line or as to the sufficiency of the security offered by any owner of occupier, (or as to the position of the meter board) or as to the improper uses of energy, or as to any alleged defect in any wires, fittings, works or apparatus, or as to the amount of the expenses incurred under the third p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 79A provides that every rule made by the State Government under Section 78 and every regulation made by the Board under Section 79 shall be laid as soon as may be before the State Legislature. III. RELEVANT CLAUSES OF THE TERMS AND CONDITIONS OF SUPPLY 14. Clause 39 which is the main target of attack defines various malpractices and provides for enquiries by designated officials. Clauses 39.4, 39.5., 39.6 read as follows:- Clause 39.4. Officers authorised to inspect and deal with cases of malpractice and pilferage of energy are as indicated below: (See table below) Clause 39.5. Where on the inspection of consumer's installations or premises or on the basis of other information or data there is scope for suspecting that a consumer is guilty of supply of electricity to any service, which, is disconnected by the Board or pilferage of energy , the officer authorised in this behalf by the Board may without prejudice to Board's other rights, cause the supply of electricity to such consumer to be forthwith disconnected without any notice and report the matter to the Final assessing authority. In the case of the malpractices other than the one mentioned abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d (see statement referred to in clause 39.4 above) shall issue a show cause notice in the forms prescribed therefore advising the consumer to file his representation if any, within 30 days from the receipt of the notice. Clause 39.9.2 The said officer of the Board shall, after the expiry of the aforesaid notice period, enquire into the matter and after giving reasonable opportunity to the consumer and taking into account all relevant facts and circumstances shall decide whether the consumer has committed malpractice or pilferage of energy and if so satisfied proceed to assess to the best of his judgment, the loss sustained by the Board on account of such malpractice or pilferage of energy by the consumer. The consumer may be represented by an advocate at the time of personal hearing provided the consumer files proper vakalatnama. Clause 39.9.3 The final assessing authority shall then pass an order setting out his conclusions and the reasons thereof and communicate a copy of the order to the consumer and demand the amount if any due from the consumer on the basis of such order after giving credit to the amounts paid by him. Clause 39.9.4 Payment of amount of final assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. SUPPLY OF POWER I/We the above mentioned have requested the Board to Supply Electricity' at High Tension for the purpose of...and the Andhra Pradesh State Electricity Board agreed to afford such supply on the terms and conditions notified by them from time to time under section 49 of the Electricity (Supply) Act, 1948 and those herein after mentioned. 3. LOAD/MAXIMUM DEMAND I/We agree to take from the Andhra Pradesh State Electricity Board Electric Power for a maximum load not exceeding....KVA which shall be taken to be my/our contracted demand for our exclusive use for the purposes above mentioned, at our Mills/Factory/premises situated at...My/our contracted load shall be...Hp...and/or...KW. I/We shall not effect any change in the maximum demand or contracted load. 4. RE-SALE OF ELECTRIC POWER I/We undertake that; I/We shall not sell electrical energy obtained under this agreement without the sanction in writing of the Board. 5. OBLIGATION TO COMPLY WITH REQUIREMENT OF ACTS AND TERMS AND CONDITIONS OF SUPPLY: I/We further undertake to comply with all the requirements of the Indian Electricity Act, 1910, the Electricity (Supply) Act, 1948 the Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Others, AIR 1996 SC 2214, the court held that they are part of statutory terms and conditions. In para 16 of the judgment the court said: Before we advert to the effect produced by a combined reading of the four clauses, it deserves to be pointed out that the terms and conditions have sacrosanctity, in that Rule 27 of the Indian Electricity Rules, 1956, framed by the Central Electricity Board in exercise of power under Section 37 of 1910 Act has, read with Annexure VI thereof, provided the model conditions of supply which are required to be adopted by the State Boards. It is on the basis of this statutorily prescribed model, with suitable variations, that energy had been supplied by the Board to the consumers. The model conditions can be said to be akin to the model Standing Orders prescribed by Industrial Employment (Standing Orders) Act, 1947, which, when certified, become part of the statutory terms and conditions of service between the employer and employees and they govern the relationship between the parties, as held in Workmen v. Firestone Tyre Rubber Co. of India (P) Ltd., (1973)ILLJ 278 SC . We are inclined to think that similar is the effect of terms and condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 only. The only limitation in that Section is that the terms and conditions of supply should be subject to the provisions of the Act. Clause 39 does not violate any provision in the Supply Act. It is the statutory duty of the Board to arrange for the supply of electricity throughout the State and for transmission and distribution of the same in the most efficient and economical manner. For that purpose it has necessarily got to prevent unauthorised user, pilferage or malpractices by the consumers. Hence the necessary safeguards have to be provided as part of the conditions of supply so that the consumers will be bound by them. While on the one hand, the Board has to recoup the loss suffered by such pilferage or other malpractices., it has also on the other got to stop immediately the continuation thereof. Hence the terms and conditions of supply have to provide for compensation as well as immediate disconnection. For ascertaining the loss and fixing the compensation, uniform procedure has to be framed and a machinery constituted. Clause 39 is only doing that. Every consumer is made fully aware of the said terms and he signs the contract only on that basis. He gives an undertaking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nti Bhushan, has fairly conceded that the orders are subject to judicial review and the jurisdiction of Courts cannot be taken away by that Clause. It is to be noted that the trial court and the High Court have in this case upheld the jurisdiction of the civil court to entertain the suit and consider the validity of the orders passed by he Board against the consumers. 31. Reliance is placed on the decision in Indian Express Newspaper (Bombay) pvt. Ltd. and others etc. etc. v. Union of India others etc.etc, , to support the argument that Clause 39 is in breach of the principle of delegated Legislation. According to learned counsel the terms and conditions of supply may tantamount to a subordinate legislation but it must yield to the plenary legislation and that the Supply Act never intended to confer powers on the Board to frame such terms and conditions of supply including the power to adjudicate a dispute between itself and the consumer and assess the damages. We have already adverted to the provisions of Section 49 of the Supply Act and pointed out that the power conferred on the Board is not circumscribed by any limitation other than that it should not contravene the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le in as much as it deviates from the provisions of the Electricity Act and the Rules. 35. We are unable to accept any of the aforesaid contentions. We have carefully perused the provisions of the Electricity Act and we find that those provisions provide for a different situation. Clause 39 will come into play whenever there is malpractice or pilferage on the part of the consumer or a fraud played by the consumer. The Electrical Inspector has no jurisdiction to deal with those matters. He can be approached only when there is a defective meter or any defect in wires, fittings, works or apparatus. As regards, CI. (VI) of the Schedule to the Electricity Act, it is not applicable unless distribution mains have been laid down under the provisions of Clause (IV) or Clause (V) and the supply of energy through those mains or any of them has commenced. The provisions of Section 26 of the Supply Act exclude the applicability of Clauses (1) to (V) of the schedule to the Board. Hence CI. (VI) of the schedule cannot by itself apply and that is why the second proviso to Section 26. clarifies the position that the provisions of Clause (VI) of the Schedule shall apply to the Board in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no jurisdiction to decide such cases of fraud. This Court has clearly pointed out that under Section 26(6) if the dispute is as to whether the meter is or is not correct, it is to be decided by the Electrical Inspector. We are entirely in agreement with that judgment. 38. In Municipal Corporation of Delhi v. Ajanta Iron Steel Company (Pvt.) Ltd., [1990]1SCR733 , this court found that there was a provision in the agreement between he Delhi Electric Supply Undertaking and the consumer for service of notice as a pre-requisite for disconnection. Hence this Court upheld the decree for mandatory injunction directing restoration of supply of electricity discontinued during the pendency of the suit without issue of such notice. 39. In M.P. Electricity Board, Jabalpur and others Versus Harsh Wood Products and Another, AIR 1996 SC2258 , the Court held that Section 24 of the Electricity Act would apply to a case of regular supply made and prior demand of payment of electricity charges and it does not apply to demand on detection of pilferage. The court upheld the validity of similar conditions of supply of electricity and held that on a prima facie conclusion of power-theft reached b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... malidas, v. Gujarat Electricity Board and another, AIR (1987) Gujarat 188, a Division Bench of Gujarat High Court considered similar conditions and upheld their validity. The Bench said: Thus, it is clear that the Board has formulated such a condition in order to safeguard its interest. Such a condition is there for the purpose of checking, apart from other things, the theft of electricity. It is not a case of any defective meter, but it is a case of theft of electricity by the consumer concerned. As a matter of fact, in this case it is alleged that the petitioner, by inserting a plastic strip, was able to stop the running of the meter and thereby, committed theft of electricity. The condition clearly states as to the procedure that has to be adopted for the purpose of questioning the departmental action in levying penal charges. It has also been made clear in the condition as to the limit to which the Department can go for the purpose of assessing the theft of electricity. In no case the Department can go beyond a period of six months, according to this condition. In condition No. 34, we are able to see that manner of assessment also has been specified. If all these steps are ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
