BIHAR STATE ELECTRICITY BOARD ETC. versus M/S ICEBERG INDUSTRIES LTD. AND OTHERS ETC. on 27 April 2020

[2020] 6 S.C.R. 231

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 forsupply of high-tension electricity connection – Bills raised w.r.t sumcategorised as Annual Minimum Guarantee (AMG) and othercharges – Non-payment/part payment – Supply disconnected on08.09.2006 – Consumer Grievances Redressal Forum inter alia helddisconnection as legal – Appellant challenged jurisdiction of theforum – Supply continued to be disconnected occasionally, despitethe order of forum restraining the appellant, and bills kept beingraised – Eventually, Single Judge inter alia held that disconnectionwithout considering the request for instalments was unwarrantedand such default on respondent’s part did not constitute “neglectto 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 – Objectof use of electricity may be to produce items for sale, but itsconsumption 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 representationfor instalment was in the nature of a mercy plea – Thus, the findingof High Court that the consumer did not neglect to pay warrantingthe disconnection in s.56, not accepted – But, eventually instalmentwas granted subsequent to the period of disconnection– Thus, oncerespondent’s plea for payment in instalment was accepted andagreement was entered into for clearing the dues, it demonstratedits willingness to pay the dues in a manner acceptable to theappellant – High Court rightly found that the act of disconnectionon 08.09.2006 was arbitrary – Judgment of Division Benchsustained – Consumer Grievance Redressal Forum and ElectricityOmbudsmen Regulation, 2006 – Clause 2(1)(g).

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ADismissing 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 thisdescription. No reason to denude the company of its locus toapproach the forum. The object of use of electricity may be toBproduce items for sale, but use or consumption of electricity bythem was for their own factory. [Paras 10, 11][242-A, C, F]

1.2 Next comes the question as to whether it was permissibleon the part of the Board to disconnect the supply of the companyin spite of the order of stay granted by the Forum. The finding ofCthe Division Bench is accepted on that count. Board could nothave had ignored the directive of a statutory forum and importedtheir own perception of what was legal to proceed against aconsumer. [Para 12][242-G]

1.3 The third point relates to the issue as to whether theDcompany was required to pay AMG charges or not during theperiod their supply stood stalled by disconnection. The Forumreferred to Circular No. 477 dated 29.10.2002 (General Termsand Conditions of Supply) while accepting the consumers standthat the Board could not do so. The Redressal Forum in its orderof 12[th] February 2008 (in case no. 108/2007) has construed theEsaid Circular partly in favour of the company The statutory Forumcame to a finding in dealing with certain circular issued by theBoard. The Court ought not interfere at this stage with suchfinding so far the same related to applicability and interpretationof the said circular. [Paras 13, 15 and 16][242-H; 243-A; 244-D;F245-F]

1.4 Under Section 56, disconnection of supply is specialpower given to the supplier in addition to the normal mode ofrecovery by instituting a suit. So far as the subject controversy isconcerned, there is no dispute on obligation of the respondentGcompany to pay the AMG charges, at least so far as first bill isconcerned. Its representation for instalment was in the nature ofa mercy plea. Going by that factor alone, this Court might nothave had accepted the finding of the High Court that the consumer did not neglect to pay so as to warrant the disconnectionprovision contained in Section 56 of the Act. But in respect ofrespondent company, eventually instalment was grantedsubsequent to the period of disconnection. Once that plea forinstalment payment was accepted and agreement was enteredinto for clearing the dues, it demonstrated willingness to pay onthe part of the company of the dues in a manner acceptable to theappellant Board. Such plea of the company was accepted afterkeeping the matter pending for a long time. In suchcircumstances, the High Court was right in giving its finding thatthe act of disconnection on 8[th] September 2006 was arbitrary.The judgment of the Division Bench of the Patna High Court issustained. [Paras 19-21][247-C, G-H; 248-A-C]

Corporation of the City of Nagpur v. Nagpur ElectricLight and Power Company Limited AIR 1958 Bom. 498;Amalgamated Commercial Traders v. A.C.K.Krishnaswami1995(XXV) CC 454; LaxmikantRevchand Bhojwani and another v. PratapsingMohansingh Pardeshi(1995) 6 SCC 576 –referred to.

Case Law Reference

(1995) 6 SCC 576referred toPara 19

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 7649-7651 of 2019.

From the final Order dated 07.02.2013 of the High Court ofJudicature at Patna in Letters Patent Appeal Nos. 521 of 2011, 1490 of2010 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. PratishthaVij, Bihu Sharma, Samarth Khanna, E. C. Vidya Sagar, Manish Kumar,Srikaanth S., Advs. for the Respondents.

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234SUPREME COURT REPORTS

AThe Judgment of the Court was delivered by ANIRUDDHA BOSE, J.

These appeals are directed against a judgment of a Division Benchof the Patna High Court affirming in substance the decision of the learnedSingle Judge in disposing of three writ petitions in disputes arising out ofBobligation of the first respondent to pay certain sum categorised as AnnualMinimum Guarantee (AMG) and certain other charges to the Bihar StateElectricity Board. The appellant was the Board. The complaint of thefirst respondent, Iceberg Industries Ltd. (the company) over disconnectionof their supply which they argued to be illegal was sustained by theCSingle Judge and it was also held by the First Court that the said companywas not liable to pay AMG and certain other charges as per Board’scomputation. The judgment of the Division Bench was delivered on 7[th]February 2013. The company had entered into an agreement for supplyof electricity with the appellant Board for contract demand of 1,000KVA on 16[th] April 2004. This was for supply of high-tension electricityDconnection for setting up of a brewery. Supply to the company wasenergised on 06.05.2005. The dispute involved in the three writ petitionsgiving rise to these appeals originated from a bill for Rs. 27,11,814/-dated 17[th] April 2006. This was raised by the appellant towards AMGand was payable by 06.05.2006. The company did not make paymentEthereof within the prescribed date. Three disconnection notices, dated15[th] May, and 26[th] May and 29[th] June 2006 on account of default inpayment of AMG as also energy charges were issued by the Board.The company on 29[th] July 2006 made a representation for liquidatingtheir dues on account of AMG in ten monthly instalments citing certainbusiness related difficulties. Part payment of the dues to the extent ofFRs. 14,71,952/- was made. Next disconnection notice under Section 56of the Electricity Act, 2003 (the Act) was sent to the company dated23[rd] August 2006 for a sum of Rs. 33,38,572/- for non-payment of AMGas also on account of Delayed Payment Surcharge (DPS). Another billwas raised on 1[st] September 2006, the due date for which was 20[th]GSeptember 2006. The bill amount was Rs. 37,00,923/- and the bill headswere AMG, DPS as also energy charges. Supply to the company,however, was disconnected on 6[th] September 2006. There is some doubtas to whether such disconnection took place on 6[th] September or 8[th]September, but this variation is of little significance so far these appealsare concerned.H

BIHAR STATE ELECTRICITY BOARD v. M/S ICEBERGINDUSTRIES LTD. AND OTHERS [ANIRUDDHA BOSE, J.]

2. The factual background of the three petitions would appearfrom the recordal made in the following passages of the judgment underappeal:

“Subsequently a fresh bill was raised on 1.9.2006 which includedarrears of AMG and DPS under the bill dated 17.4.2006 also fora total of Rs.37,00,923/- along with current charges. The due datefor payment was 20.9.2006. The Board disconnected supply on6.9.2006 pursuant to the notice for disconnection dated 23.8.2006.The Board thereafter acted on the representation dated 26.8.2006and granted facility of instalments. An agreement was signedbetween the parties on 11.4.2007 for payment of AMG and DPSin instalments. The connection was restored 7 months later on16.4.2007. It is not in dispute that payments under the bill dated17.4.2006 has then been made as agreed.

A fresh bill was thereafter raised by the Board on 4.5.2007 forRs.70,23,149/- as the minimum guarantee charge/base charge forthe disconnected period of 1.11.2006 to 30.4.2007, along with AMGcharge for the financial year 2006-07 (which also included chargesfor the disconnected periods of August, September, October 2006)of Rs.18,02,582/-. The total bills thus raised was forRs.88,389,528/-. A fresh disconnection notice for non-payment ofthe same was issued on 22.5.2007. The industry moved the Forumunder the Act. By order dated 12.2.2008 the Forum held theindustry liable to pay minimum charges up to November 2006.The minimum charges from December 2006 to April 2007 wereheld to be bad. The Industry, to the extent it was aggrieved by theorder, questioned it in CWJC 4637 of 2008. The latter part of theorder 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 theperiod 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 Boarddisconnected electric supply for the second time on 2.4.2008.

After it had disobeyed the order dated 12.2.2008 of the ForumCWJC 7314 of 2008 was filed by the Board on 5.5.2008questioning the same. The writ petition did not disclose that theBoard had already disobeyed the order and disconnected supply A

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Awithout raising fresh revised bills. No prayer for interim stay ofthe order of the Forum was made in the Writ Petition.

Pursuant to an interim deposit of 35 Lacs directed on 15.5.2008 inCWJC 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 CroresBalong with notice for disconnection. It included AMG and DPSfor the period disallowed by the Forum. It also included AMG andDPS charges for the subsequent disconnection from 2.4.2008 to23.5.08. The industry challenged the same again before the Forum.The demand was stayed by the Forum on 12.6.2009. Withoutchallenging the order of the Forum, the Board in complete disregardCrefused to accept even current payments, showed arrears ofRs.1.82 crores and disconnected supply of the Industry again on7.8.2009. CWJC 9742 of 2009 was preferred against the sameby the Industry. Rs.80 Lacs was deposited pursuant to the orderof the Court, and electric supply was restored on 1.12.2009. TheDindustry therefore also questioned AMG and DPS charge for thedisconnection period from 7.8.2009 to 30.11.2009. Further paymentof Rs.40 Lacs has been made pursuant to interim directions in thepresent Appeals.”

3. The Single Judge found the act of disconnection withoutEconsidering the request for instalments was unwarranted. It was heldthat such default on the part of the company did not constitute “neglectto pay” as contemplated in Section 56 of the 2003 Act. The fresh bill,which was raised on 1[st] September 2006 showed the due date of paymentto be 20[th] September 2006. Disconnection was however made on 6[th]September 2006 on the basis of earlier notice of 23[rd] August 2006. ThisFwas held to be unjustified. The demands raised thereafter contrary tothe order of the Forum constituted under Section 42(5) of the Act wasalso 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 forGthe period 1.11.2006 to 3.4.2007 contrary to the order of the Forumbeing illegal, the Industry was under no obligation to pay the same.The subsequent disconnection on 2.4.2008 automatically becomesillegal. Surprisingly, the officials of the Board persisted in defyingthe order of the Forum in the bill dated 22.5 2009 by again including H

AMG and DPS for the period of disconnection disallowed by theForum and reiterating the subsequent illegal bill also for the periodof illegal disconnection from 2.4.2008 to 23.5.2008. The petitionerchallenged this bill before the Forum again which stayeddisconnection on 12.6.2009. The authoritarianism of the Boardpersisted in flagrant disobedience and supply again disconnectedon 7.8.2009 leading to institution of CWJC 9742 of 2009. Thesupply was restored on 1.12.2009 upon payment of Rs.80 Lacsunder orders of the Court. The disconnection from 7.8.2009 to30.11.2009, needs no further discussion to be held illegal. We areconstrained to observe that this second occasion when the officialsof the Board acted in gross defiance of the orders of the statutoryauthority is indicated of dangerous executive thinking. We expectthe officials of the Board to understand their folly and act prudently,take action against the officers concerned so that in future suchadministrative adventurism is not attempted.

In fairness to the Board, we must deal with CWJC 7314 of 2008filed by it against the order of the Forum. It does not appear fromthe impugned Judgement that any substantive challenge was laidout to it except that the Board did not agree with the same. Evenbefore us no substantive challenge has been laid out why the orderof the Forum was wrong. The only ground urged before us wasthat the order of the Forum was contrary to the agreement signedbetween the parties for an H.T. connection. It was the foremostduty of the Board to either comply the order of the Forum andthen challenge it or alternately challenge the order immediatelyand seek stay of the order. Its conduct has been found grosslywanting on both aspects. An evasive and purposefully vaguestatement was made in paragraph 9 of disconnection. No detailsof the date was stated or that it had already disobeyed the orderbefore filing the Writ petition. If the Board was seeking theprotection of the law against the statutory quasi-judicial order, ithad to first respect the law. A person falling foul of the law cannotseek the shelter of the law to perpetuate disobedience. The writpetition filed by the Board was therefore fit to be dismissed onthis ground also.

The case of (Southco) (supra) relied upon by the Board has noapplication to the present case. The words “revenue focus” was A

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used in context of unauthorised use of electricity. Similarly KesoramIndustries (supra) related to construction of a taxing statute.Likewise Raymond (supra) and Green Industries (supra) did notrelate to the obligation for payment of Minimum GuaranteeCharges for the period of illegal disconnection by the Board.

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BAffirming the reasoning and findings of the Writ Court, we holdthat the initial disconnection itself being illegal, the Board does nothave the authority to charge any AMG and DPS not only for thatperiod but also for each and every subsequent period of illegaldisconnection also, because it failed to revise the bills. Thedirections given by the Writ Court in the penultimate paragraph ofCthe judgment calls for no interference.”

5. Before us three issues emerge, which we need to address. Thefirst one is whether the company could have invoked the RedressalForum’s jurisdiction over the dispute pertaining to AMG and DPS includingthe question of disconnection in terms of Section 56 of the Act. TheDsecond issue is as to whether, after receiving a representation seekinginstalment payment, supply to consumer could be disconnected withoutdealing with such representation. The third issue is as to whether AMGwas payable by the company for the entire period during which supplyto the consumer remain disconnected.

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6. The company’s request for grant of instalments to liquidatetheir dues was ultimately accepted by the Board and to that effect anagreement was executed between Company and the Board for liquidationof the outstanding dues of Rs. 37,09,027/- in ten instalments. Thisagreement is dated 11[th] April 2007. A copy of this agreement has beenFmade Annexure R11 to the counter-affidavit of the Company. On paymentof the first instalment, supply line of the company was energised on 16[th]April, 2007. Another bill dated 04.05.2007 was sent to the company forMinimum Monthly Base charges for the period between 1[st] December2006 and 30[th] April 2007, AMG charges for the year 2006-2007 andtotal amount demanded under this bill was for Rs. 88,389,528/-. TheGnext notice under Section 56 of the Act was issued on 22.05.2007 as thecompany did not make payment of the bill dated 4[th] May, 2007. TheCompany thereafter approached the Consumer Grievances RedressalForum questioning legality of the notice dated 4[th] May 2007. Theirapplication was registered as Case no. 108 of 2007 and initially the demandHwas stayed by the Forum. In the final order dated 12[th] February 2008,the Forum gave its finding in the following terms:-

1. The disconnection of the electric line of the Petitioner on08.09.2006 is being held “legal”

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2. The date of disconnection of “08.09.2006” has been found asnotice for determination of the agreement.

3. The Petitioner/consumer is liable for payment of Energy Billof AMG Charge for September’ 2006 & October’ 2006 andmonthly Minimum Base Charge of November’ 2006 i.e. forthree months from the month of disconnection of the line.

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4. As per Board’s Notification no-477 dated 29.10.2002 and letterNo. 793 dated 22.10.2013-both issued in the signature ofCSecretary, Bihar State Electricity Board, Patna; thereconnection done on 16.04.2007 by accepting of amount of1[st] instalment with disconnection & Reconnection Charge hasbeen decided as clear violation of the Board’s directives, asthe electric line of the Petitioner remained disconnected from08.09.2006 to 15.04.2007 i.e. more than six months period.D

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5. Any request made by the Petitioner for availing/providingelectric power should have been treated, as the case of NewApplicant and reconnection done is found as improper.

6. The charging of Monthly Minimum Base charge fromDecember’ 2006 to March’2007 is decided as illegal and liableEfor withdrawal, as the connection was given in the Month ofApril’ 2007.

7. If the Petitioner is found fit to avail the benefit of exemption,necessary suitable and appropriate action may be taken toallow the benefit of exemption from payment of MonthlyMinimum Base Charge as per Industrial Policy Resolution’2006.

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7. Supply to the Company was disconnected again on 2[nd] April2008. Both the appellant and the respondent company had assailed theorder of the forum invoking the Constitutional Writ jurisdiction of thePatna High Court. The company’s writ petition, registered as CWJC4637 of 2008 challenged that part of the order in which disconnection ofelectricity on 8[th] September 2006 was held to be legal. The Board’s writpetition was registered as CWJC 7314 of 2018. In this writ petition, theBoard questioned the jurisdiction of the Redressal Forum to adjudicate G

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Athe dispute on the ground that the company was not using the electricityfor their own use. They also wanted invalidation of the Forum’s order bywhich the energy bill dated 4[th] May 2007 was quashed.

In the first writ petition filed by the company (CWJC 4637 of2008), by an interim order, the High Court had directed deposit of sum ofBRs.35 lacs for the purpose of reenergising supply and this amount, weare apprised, was deposited by them. The supply line was also restoredon 24.5.2008. But between 2[nd] April 2008 and 24[th] May 2008, thecompany’s electricity stood disconnected. Thereafter, demands weremade on different dates under several heads including arrears, DPS anda fresh notice of disconnection under Section 56 of the 2003 Act wasCissued on 22[nd] May 2009. The company again approached the Forumagainst a bill dated 5[th] June 2009 for a sum of Rs.1,63,15,452/-. TheForum had stayed the demand and passed an order restraining the Boardfrom disconnecting supply of the respondent no.1. But on 7[th] August,2009, again supply to the company was disconnected, which prompted Dfiling of the third writ petition by the company, which was registered asCWJC 9742 of 2009. An interim order was issued in that writ petitionrequiring them to deposit a sum of Rs.40 lacs within a week after whichthe power supply was to be restored to be followed by further deposit ofa sum of Rs.40 lacs by 6[th] November 2009. This interim order was passed on 15[th] October 2009. The said sum was deposited and supplyEwas restored. Ultimately, the learned Single Judge disposed of all thethree writ petitions by a common judgment and order passed on 29.4.2010with the following directions and observations: - “(1) The Board would have to delete from the demands beingmade as against the petitioner amounts in relation to the period ofFdisconnections, because, as shown above, each disconnection wasillegal, wrongful and the petitioner cannot be made to pay for theperiod 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, givingGdue credit to payment made in between & then final amount hasto be worked out.

(3) The final amount being worked out for which the period ofone month is granted to the Board, the Board would serve the billgiving the full details in respect thereof, deleting the charges asHindicated above.

(4) As this Court has found that the amounts as claimed wereincorrectly claimed, then the bills being revised would not containdelayed payment charges for balance due in view of DivisionBench judgment of this Court in the case of M/s Gaya RollerFlour Mills Private Ltd. Vs. Bihar State Electricity Board sincereported in 1995(2) PLJR 715.

(5) Petitioner by one of the interlocutory applications has prayedthat he is entitled to exemption under the Industrial Policy 2006 ofthe Government. That dispute is pending before the IndustriesDevelopment Commissioner. The petitioner would have liberty topursue the matter before that authority.”

8. We shall first address the question as to whether the Forumunder Section 42(5) of the 2003 Act had the jurisdiction to entertain anddetermine the company’s application. We must point out here that beforethe Appeal Bench the counsel for the Board had acknowledged Forum’sjurisdiction to adjudicate the dispute raised before it. This appears fromthe recordal of submission of the counsel for the Board before the AppealBench 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 lawmade before a judicial forum against whose decision we are hearingthese appeals would not bind a party to such concession, we do not findanything in law which barred the Redressal Forum from adjudicating thedispute. Section 42(5) of the 2003 Act lays down:

“42. Duties of distribution licensees and open access.- (1)

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(5) Every distribution licensee shall, within six months from theappointed date or date of grant of licence, whichever is earlier,establish a forum for redressal of grievances of the consumers inaccordance with the guidelines as may be specified by the StateCommission.”

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A10. The term ‘consumer’ has been defined in Section 2(15) of the2003 Act in the following terms:- “2(15) “consumer” means any person who is supplied withelectricity for his own use by a licensee or the Government or byany other person engaged in the business of supplying electricityBto the public under this Act or any other law for the time being inforce and includes any person whose premises are for the timebeing connected for the purpose of receiving electricity with theworks of a licensee, the Government or such other person, as thecase may be;”

C11. The respondent company fits this description. A case wassought to be made out that since the company was a high-tensioncommercial consumer, they could not apply to the Forum. On this count,definition of consumer as specified in clause 2 (1) (g) of the ConsumerGrievance Redressal Forum and Electricity Ombudsmen Regulation, 2006was sought to be relied upon. This clause specifies:-D

2 (1) (g):- ‘Consumer’ means any person who is supplied withelectricity for his own use by a licensee and includes any personwhose premises are connected for the purpose of receivingelectricity with the works of a licensee or a person whose electricitysupply is disconnected by a licensee or the person who has appliedEfor connection for receiving electricity from a licensee, as thecase may be.

But we do not find any reason to denude the company of its locusto approach the forum. The object of use of electricity may be to produceitems for sale, but use or consumption of electricity by them was forFtheir own factory.

12. Next comes the question as to whether it was permissible onthe part of the Board to disconnect the supply of the company in spite ofthe order of stay granted by the Forum. We have reproduced the passagefrom the judgment of the Division Bench dealing with that aspect of theGcontroversy. We accept the finding of the Division Bench on that count.Board could not have had ignored the directive of a statutory forum andimported their own perception of what was legal to proceed against aconsumer.

13. The third point urged before us relates to the issue as to whetherHthe company was required to pay AMG charges or not during the period

their supply stood stalled by disconnection. The Forum referred to CircularNo. 477 dated 29.10.2002 (General Terms and Conditions of Supply)while accepting the consumers stand that the Board could not do so. Inthe order of the Forum dated 12[th] February 2008 paragraphs 6(B) and6(B)(iii) of that circular have been quoted as:

“If the line of a consumer is disconnected for default in paymentof dues of the Board and the same remains disconnected for aperiod of 3 months, the date of disconnection of line shall be deemedto be the date of notice for termination of agreement and theagreement shall be deemed to have ceased and determined aftera period of three months, calculated from the month ofdisconnection. The Consumer shall be liable to pay minimumenergy/charge/demand charges; as per tariff provisions for thisperiod of 3 months.”

“If, after termination of agreement, the consumer comes forwardwith a request to provides to his premises, he will be treated as anew applicant, but he shall clear all dues against the erstwhileconnections.”

14. The AMG charges quantified in the bills raised subsequent tothe one dated 17[th] April 2006 did not take into account the period duringwhich supply to the consumer had remained disconnected. On behalf ofthe Board, on the other hand reliance was placed on clauses 9(a) and(b) of the Supply Agreement dated 16[th] April 2004 to contend that thecircular No. 477 could not have had been made applicable within thefirst 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 thisagreement before the expiration of three years from the date ofcommencement of the supply of energy. The consumer maydetermine this agreement with effect from any date after the saidperiod on giving to be Board not less than twelve calendar months’previous notice in writing in that behalf and upon the expiration ofthe period of such notice this agreement shall cease and determinewithout prejudice to any right which may then have accrued tothe Board hereunder provided always that the consumer may atany time with the previous consent of the Board transfer andassign this agreement to any other person and upon subscription A

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of such transfer, this agreement shall be binding on the transfereeand Board and taken effect in all respects as if the transferee hadoriginally been a party hereto in place of the consumer who shallhenceforth be discharged from all liabilities under or in respectthereof.

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B(b) In case the consumer’s supply is disconnected by the Boardin exercise of its powers under this agreement and/or law andthe consumer does not apply for reconnection in accordancewith law within the reminder period of the compulsorily availingof supply as stated above or the period of notice whicheverbe longer, he will be deemed to have given a notice on theCdate of the disconnection in terms of aforesaid clause 9(a) forthe determination of the agreement and on expiration of theabovesaid reminder period of compulsorily availing of supplyor the period of notice whichever is longer, this agreementshall cease and determine in the same way as above.”

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15. The Redressal Forum in its order of 12[th] February 2008 (incase no. 108/2007) has construed the said Circular partly in favour ofthe company in the following manner:-

“Thus, it is very clear that after three months of the month ofdisconnection, i.e. after termination of the agreement, the consumerErequested to the concerned authorities of the Board to allow him20 equal instalments of the AMG bill for 2005-2006 and monthlyenergy bill for August 2006, but the concerned authorities of theBoard has executed the agreement of instalments withdisconnection & reconnection on 11.04.2007 in violation of thisFimportant Circular of the Board and the line was reconnected on16.04.2007 after acceptance of payment of Rs.9,27,257.00 (1[st]instalment) and disconnection & Reconnection charge ofRs.2,000=00 vide money receipt no – 444920 & 444921respectively of dated 12.04.2007; whereas the petitioner/consumerwould have been treated as new applicant.

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This letter of ESE/Patna further states that on reconnection, theconsumer were served the regular energy bill and the AMG billduring the period of this connection i.e. from 11/2006 to 4/2007worth Rs.70,23,149.00.

The Forum finds that, during the issue of energy bill for the monthof 4/2007, the bill issuing authority i.e. ESE (Consumer &Revenues)/Patna Electrical Circle has issued MMC bill includingthe period of 01.11.2006 to 30.04.2007 – for six months forRs.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 Forumfinds; that this energy bill-mentioned as bill for the month of 4/2007 – is wrongly prepared and levied as after termination ofagreement, as per Circular of Board the consumer/petitioner isonly liable for payment of AMG/MMC charge for three monthsfrom the months of disconnection i.e. AMG charge for the monthof Sept’ 2006 and Oct.2006 and Monthly Minimum Base Chargefor the month of November 2006 only, hence charging/levying ofMonthly Minimum Base charge for the period December 2006 toMarch 2007 is wholly illegal and incorrect.

The Forum also detects that Electricity Duty of 6% ofRs.3,47,684=00 on the total amount of Monthly Minimum basecharge of Rs.57,94,740=00 have been wrongly levied, where asthe Electricity Duty @ 6% is to be chargeable only on the energycharge of the units as recorded and calculated as per readingshown in the installed Meter.

Even though the amount of DC&RC Charge for Rs.2000=00 hasalready been deposited by the consumer on 12.04.2007, this amountof Rs.2000=00 is again shown as charged in the instant bill for themonth of 4/2007, issued on 04.05.2007, with due date of the date16.06.2007, which makes this bill as incorrect.”

16. We thus find that the statutory Forum has come to a finding indealing with certain circular issued by the Board. We do not think weought to interfere at this stage with such finding so far the same relatedto applicability and interpretation of the said circular.

17. As regards the provisions of clauses 9 (a) and (b) of theagreement, the first provision curb the right of a consumer to determinethe agreement unless certain conditions are fulfilled. The circular reliedupon by the Forum however has wider application and its applicabilityhas not been disputed by the Board. Contention of the Board is that theForum did not adhere to clause 6 (B) (i) of the circular, which according A

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Ato the Board, constituted partial modification of general terms andconditions of supply. We do not accept this argument, particularly in thefactual perspective of these appeals. The Board had agreed to instalmentsfor clearing the dues and restored the supply. On that basis, an independentarrangement came into existence vis-a-vis the company’s terms of supplyin the given case.

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18. The only point which now remains to be dealt with is as towhether the representation of the company after issue of notice ofdisconnection could absolve them from rigours of Section 56 of the 2003Act which relates to disconnection of supply, on the ground that suchrepresentation demonstrated there was no negligence on the part of theCconsumer to pay any charge of electricity. Section 56 of the Act provides:- “56 Disconnection of supply in default of payment- (1) Whereany person neglects to pay any charge for electricity or any sumother than a charge for electricity due from him to a licensee orthe generating company in respect of supply, transmission ordistribution or wheeling of electricity to him, the licensee or thegenerating company may, after giving not less than fifteen cleardays’ notice in writing, to such person and without prejudice to hisrights to recover such charge or other sum by suit, cut off thesupply of electricity and for that purpose cut or disconnect anyelectric supply line or other works being the property of suchlicensee or the generating company through which electricity mayhave been supplied, transmitted, distributed or wheeled and maydiscontinue the supply until such charge or other sum, togetherwith any expenses incurred by him in cutting off and reconnectingthe supply, are paid, but no longer:

D

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F

Provided that the supply of electricity shall not be cut off if suchperson deposits, under protest,- (a) an amount equal to the sum claimed from him, or (b) the electricity charges due from him for each monthcalculated on the basis of average charge for electricity paidby him during the preceding six months, G

whichever is less, pending disposal of any dispute betweenhim and the licensee.

(2) Notwithstanding anything contained in any other law forthe time being in force, no sum due from any consumer, underthis section shall be recoverable after the period of two yearsfrom the date when such sum became first due unless suchsum has been shown continuously as recoverable as arrear ofcharges for electricity supplied and the licensee shall not cutoff the supply of the electricity.”

19. Under the aforesaid provision, disconnection of supply is specialpower given to the supplier in addition to the normal mode of recoveryby instituting a suit. Both the Single Judge and the Appellate Bench ofthe High Court have held that the respondent company did not neglect topay their dues, for which reason the supplier could have effected theharsher mode by disconnection supply. The Single Judge referred to twoauthorities, Corporation of the City of Nagpur Vs. Nagpur ElectricLight and Power Company Limited – (AIR 1958 Bom. 498) andAmalgamated Commercial Traders Vs. A.C.K. Krishnaswami –(1995)(XXV) CC 454 in which it has been held that in the event there isbona fide dispute between the parties on the quantum of dues, non-payment of such sum would not amount to negligence to pay. The firstauthority relates to Section 24(1) of the Indian Electricity Act, 1910 havingprovision similar to that of Section 56 of the 2003 Act. The second caserelated to initiation of winding-up proceeding under the Companies Act,1956. The other authority referred to was the case of LaxmikantRevchand Bhojwani and another Vs. Pratapsing MohansinghPardeshi – (1995) 6 SCC 576. In this case, one of the issues involvedwas default in payment of dues on account of rent, for which evictioncould be asked for. The court found that the rent in that case was soughtto be paid through money order within the specified period. It was heldthat it was not a case default to pay simpliciter and hence the rigours ofthe default provision leading to eviction under the applicable rent lawstood diluted.

20. So far as the subject controversy is concerned, there is nodispute on obligation of the respondent company to pay the AMG charges,at least so far as first bill is concerned. Its representation for instalmentwas in the nature of a mercy plea. Going by that factor alone, we mightnot have had accepted the finding of the High Court that the consumerdid not neglect to pay so as to warrant the disconnection provisioncontained in Section 56 of the Act. But in respect of respondent company, A

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C

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H

Aeventually instalment was granted subsequent to the period ofdisconnection. Once that plea for instalment payment was accepted andagreement was entered into for clearing the dues, it demonstratedwillingness to pay on the part of the company of the dues in a manneracceptable to the appellant Board. Such plea of the company wasaccepted after keeping the matter pending for a long time. In suchBcircumstances, in our opinion the High Court was right in giving its findingthat the act of disconnection on 8[th] September 2006 was arbitrary.Because of these reasons we do not want to disturb the finding of theCourts below.

21. The appeals filed by the Board are accordingly dismissed.CThe judgment of the Division Bench of the Patna High Court is sustained.All connected applications stand disposed of. There shall be no order asto costs.

DDivya Pandey

Appeals dismissed.

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