Ferro Alloys Corporation LTD. vs A. P. State Electricity Board

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1993 Supreme(SC) 408

SUPREME COURT OF INDIA
K. JAYACHANDRA REDDY AND S. MOHAN, JJ.
Ferro Alloys Corpn. Ltd., Appellant
Versus
A.P. State Electricity Board and another, Respondents.
Civil Appeals Nos. 2117 to 2122 of 1993 (arising out of S.L.P. (C) Nos. 15014-19 of 1989) with S.L.P. (C) Nos. 7475, 9661-65 of 1990 and W.P. (C) No. 6770 of 1990 and C.A. Nos. 4714, 4928-43 of 1991 and 2409, 4512 of 1992, etc. etc.
Decided on 15-4-1993.
Advocates appeared:
Mr. Altaf Ahmed and Mr. V. R. Reddy, Addl. Solicitor General, Mr. Narasimhamurthy, Mr. K. Parasaran, Mr. Anil B. Divan, Mr. Harish N. Salve, Mr. Soli J. Sorabjee, Mr. G.Ramaswamy, Mr. P. P. Rao, Mr. Gobind Mukhoty, Dr.Shanker Ghosh, Mr. Shanti Bhushan, Mr. G. L. Sanghi, Mr. Pawan Kumar, Mr. P. S.Poti and Mr. B. M. Patnaik, Sr. Advocates, Mr. Sanjay Parikh, Mr. P. Niroop, Mr. Kailash Vasdev, Mr. S. Khaitan, Mr. K. K. Khaitan, Mr. Darshan Singh, Mr.Sushil Kumar, Jain, Mr. A. P. Dhamija, Mr. S. Atreya, Mr. E. C. Agrawal, Mr. A. V. Palli, Mr. Atul Sharma, Ms. Reena Aggarwal, Mr. A.K. Mehta, Mr. R. K. Gupta, Mr. P. C. Kapur, Mr. T. V. S. N. Chari, Mr. B. Reddy, Ms. Pramila, Mr. Anil K. Sangal, Mr. Ajay K. Tayal, Mr. Koka Raghava, Mr. B. Kanta Rao, Mr. Shiv Prakash Pandey, Ms. Rekha Pandey, Mr. R. K. Priyokumar Singh, Mr. T. V. Ratnam, Mr. K. R. Chowdhary, Mr. K. Ram Kumar, Mr. Ashok Kr. Gupta, Mr. R. B. Misra, Mr. Pradeep Misra, Mrs. Sheil Mohini Seth, M/s. Jain Hansaria and Co., Mr. R. P. Gupta, Ms. Sarla Chandra, M/s. Mitter and Mitter Co., Ms. Abha Jain, Mr. Ranjit Kumar, Mr. M. P. Jha Mr. S. K. Jain, Mr. Vinoo Bhagat, Mr. Surya Kant, Mr. Aruneshwar Gupta, Mr. Badridas Sharma, Mr. Prabhu Dayal, Mr. Sudarshan Lal Aneja, Mr. R. Venkataramani, Mr. Y. P. Rao, Mr. D. K.Garg, Mr. K. C. Agarwala, Mr. O. P. Khaitan, Mr. P. B.Agarwala, Mr.Mohinder Rupal, Mrs. Kamakshi Mehllwal, Ms. Archna Kaul (for M/s. Gagrat and Co.), Mr. Vijay Hansaria, Mr. R. S. Sodhi, Mr. D. A Dave, Mr. Raian Karanjawala, Mrs. Manik Karanjawala, Mr. Rajesh Kumar, Ms. Suruchi Aggarwal, Mr. K. J. John, Ms. Deepa Dixit (for Swarup John and Co.) Mr. A. T. Patra, Mr. S. R. Agarwal, Ms. Bina Gupta, Mr. Prashant Bhushan, Mr. K. Rajendra Choudhary, Mr. Rakesh K. Sharma, Mr. Shivi Sharma, Mr. Anil K. Chopra, Mr. Pallav Sisodia, Mr. Ravinder Narain (for M/s. JBD and Co.) Mr. Praveen Kumar, Mr. Virender Kaushal, Mr. Bimal Roy Jad, Ms. Malini Poduval, Mr. K. K. Lahari and Mr. S. Sukumaran, Advocates with them for Appearing Parties.

Advocates:
A.K.MEHTA, A.K.Sangal, A.P.Dhamija, A.T.PATRA, A.V.Pillai, Abha Jain, AJAY K.TAYAL, Altaf Ahmed, Anil B.Divan, Anil Chopra, ARCHNA KAUL, ARUNESHVAR GUPTA, ASHOK KUMAR GUPTA, Atul Sharma, B.C.AGRAWAL, B.Kanta Rao, B.M.PATNAIK, B.REDDY, Badri Das Sharma, BIMAL ROY JAD, BINA GUPTA, D.A.DAVE, D.K.GARG, DARSHAN SINGH, Dipa Dixit, G.L.SANGHI, G.RAMASVAMY, GAGRAT JANEDRA LAL, GOBINDA MUKHOTY, HARISH N.SLAVE, Jain Hansaria, K.J.JOHN, K.K.KHETAN, K.K.LAHRI, K.PARASARAN ATTORNEY, K.RAJENDRA CHAUDHARY, K.RAM KUMAR, KAILASH VASUDEV, KOKA RAGHAVA RAO, M.P.Jha, MALINI PODVAL, MANIK KARANJAVALA, MITTER, MOHINDER S.RUPAL, Narasing Murthy, O.P.KHAITAN, P.B.AGRAWAL, P.C.KAPUR, P.NIRUP, P.P.Rao, P.S.POTI, PALLAV SHISHODIA, PAVAN BAHL, PRABHU DAYAL AGRAWAL, PRADIP MISHRA, Pramila Choudhary, Prashant Bhushan, PRAVIN KUMAR, R.B.MISHRA, R.K.CHAUDHARY, R.K.GUPTA, R.K.PRIYOKUMAR SINGH, R.P.GUPTA, R.S.SODHI, R.VENKATARAMANA, RAIAN KARANJAVALA, RAJESH SHARMA, RAKESH K.SHARMA, RANJIT GHOSAL, Ravindra Narayan, REKHA PANDEY, RISHI AGARWAL, S.Atreya, S.K.JAIN, S.KAMAKSHI MEHIVAL, S.KHAITAN, S.P.PANDEY, S.R.AGARWAL, S.SUKUMARAN, Sanjay Parikh, Saria Chandra, SHANKAR GOPAL PAGIRE, SHANTI BHUSHAN, SHEIL MOHINI SETH, SHIVI SHARMA, SOLI J.SORABJI, SUDARSHAN LAL ANEJA, SURUCHI AGARWAL, SURYA KANT SHARMA, SUSHIL JAIN, SVARUP JOHN, T.V.RATNAM, T.V.S.N.Chari, V.R.REDDY, Vijay Hansaria, VINU BHAGAT, Virender Kaushal, Y.P.RAO

Headnote:
Electricity Supply Act, 1948 - Section 5 - Supply Act - Section 49- Board to enter into a special agreement with any consumer and prescribe different tariffs for him - Under Section 4, an obligation is cast on Board not to show undue preference to any person while fixing the tariff and terms and conditions for supply of electricity - In all these cases appellants are covered by the general terms and conditions notified under Section 49(1) of Act - Terms and conditions were notified by Board and B. P. M.S. of September - It is not necessary to refer in detail to various terms and conditions - However what requires to be noticed is terms and conditions oblige every consumer executing an agreement in prescribed form undertaking to abide by terms and conditions prevailing of agreement and also agreed to be bound by terms and conditions as may be notified from time to time - It is important to note under Section 25 Board has unilateral right to vary the term from time to time under clause terms and conditions for supply of electricity by special or general proceeding – Held, In view of above finding upholding clause relating to non-payment of interest for example what is to happen to such of those cases where interest is provided - In all those cases wherever the electricity Boards have framed a provision for payment of interest after adjusting its finances at a stated rate they cannot be allowed to delete such a clause - Provision for interest has been made by various Boards having regard to the overall budgetary and financial position - Further keeping in view the quantum and mode of security deposit and billing and recovery practice - Nor again, could the Board withhold payment of interest on the basis of this judgment - However if there is any change in circumstances affecting budgetary and financial position Board can examine the case and decide future course of action - But any change resulting in non-payment or reduction of interest will have to be justified by cogent reasons and materials having a bearing on financial position of each Board and of each case - Order accordingly

JUDGMENT

MOHAN, J.:—Leave granted.

2. These Civil appeals are directed against the judgment of the Division Bench of Andhra Pradesh High Court reported in Southern Steel Ltd. v. A. P. State Electricity Board, Hyderabad, AIR 1990 AP 58. The facts briefly are as under:

The Andhra Pradesh State Electricity Board is constituted under Section 5 of the Electricity Supply Act, 1948 (hereinafter referred to as the Act). The said Board is engaged in generation, distribution and supply of electricity in the State of Andhra Pradesh. Electric energy is supplied for industrial, commercial, agricultural and domestic purposes. To such of these industries, using energy about a particular level, it is supplied at a higher voltage. They are classified as high tension consumers (H. T. consumers). All the appellants herein belong to that category.

3. Section 49 of the Act empowers the Board to notify the terms and conditions upon which it will supply electricity to a person. It is also empowered to frame uniform tariffs in that behalf. Sub-section (2) specifies in fixing the uniform tariff, the Board shall have regard to all or any or the following factors, namely-

(a) the nature of the supply and the purposes for which it is required;

(b) the co-ordinated development of the supply and distribution of electricity within the State in the most efficient and economical manner, with particular reference to such development in areas not for the time being served or adequately served by the licensee;

(d) the extension and cheapening of supplies of electrcity to sparsely developed areas.

4. Sub-section (3) empowers the Board to enter into a special agreement with any consumer and prescribe different tariffs for him. Under Section 4, an obligation is cast on the Board not to show undue preference to any person while fixing the tariff and terms and conditions for the supply of electricity. In all these cases, the appellants are covered by the general terms and conditions notified under Section 49(1) of the Act. The terms and conditions were notified by the Board and the B. P. M.S. No. 690 dated 17th of September, 1975. It is not necessary to refer in detail to the various terms and conditions. However, what requires to be noticed is the terms and conditions oblige every consumer executing an agreement in the prescribed form, undertaking to abide by the terms and conditions prevailing on the date of agreement and also agreed to be bound by the terms and conditions as may be notified from time to time. It is important to note under Section 25, the Board has unilateral right to vary the term from time to time under clause 25.1. The terms and conditions for supply of electricity by special or general proceedings.

5. Condition 32.1. provides "the Board shall as far as possible within 15 days after the expiration of each calendar month cause to be delivered to every consumer a bill of charges stating the amounts payable by the consumer towards charges for energy supplied and any other sum in connection with supply of energy by the Board."

6. Conditions 32.2.1 obliges the consumers to pay the amount shown in the bill within 15 days of the date of the bill, in default whereof they are liable to pay "an additional charge of 2 per month or part thereof for the period of delay" in paying the bill. Condition 32.3. empowers the Board to disconnect the supply in case of default in paying the bill, without prejudice to its right to recover the amount due. Condition 24.3 also lays down that the consumer shall pay to the Board every month the charges for electrical energy supplied to him during the preceding month at the tariff in force from time to time. Condition 28 obliges the consumers to deposit an amount equivalent to three months consumption charges with the Board. It would be appropriate to set out condition No. 28 as far as it is necessary for our purposes, omitting what is not r

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1993 Supreme(SC) 408

Cases Referred (17)