Important point
Failure to provide electrical energy after consumer was asked to deposit security amount and other charges within reasonable period would constitute deficiency in service on part of electricity Board.

Headnote:Consumer Protection Act, 1986—Sections 2(1)(o) and 12—Indian Electricity Act, 1910—Sections 22 and 24—Statutory liability of licensee to supply electrical energy to prospective consumer—Respondents-complainants had filed applications and Board asked them to deposit security amount which were complied with but electrical energy was not supplied—Complaints were filed alleging deficiency in service on the part of Board—National Commission upholding the order of Forum below directed appellant Board to release connections to all applicants by 31-3-2004 and directed to pay interest at 12 on amounts deposited by complainants and pay Rs. 10,000/- each as compensation—Appeal—Administrative circulars and regulations required supply of electrical energy to agriculturists within period of two months from date of receipt of amount as per demand notice—Complainants had applied for grant of connection in 1986 and Board asked them to deposit security in 1999—No reasons were assigned by Board before Foras as to why it could not comply with its administrative circulars—Commission rightly found Board guilty of deficiency in service—In the facts and circumstances of the case however, interest rate at 12 p.a. reduced to 9 and compensation amount reduced to Rs. 5000/-.
       Held : What would be a reasonable period for supply of electrical energy to different categories of consumers has been specified in the administrative circulars issued as well as the regulations made by the Board itself. We find from the records that the persons had applied for grant of electrical connection as far back in 1986 and the Board had asked then to deposit the security amount only sometimes in the year 1999. The complaints were filed as despite expiry of the prescribed period, no electrical connection was given. If the Board was serious to implement its own circular, it was obligatory on its part to draw a blue-print so as to enable it to make supply of electrical energy to the consumers in order of seniority of application upon procuring the requisite materials therefor. It failed and/or neglected to do so. It was also under an obligation to notify the persons concerned stating the reasons why such supply could not be made during the period specified in the administrative circular and/or regulations. The Board does not say that the said requirements were complied with. It is also idle to contend that the Board was cash-starved owing to any faulty decision on the part of the State. If it suffered losses owing to any direction issued by the State pursuant to any policy decision adopted by it, the same being an internal matter between the State and the Board, the prospective consumers cannot suffer therefor. Furthermore, it is evident from the orders passed by the District Forums, State Commission and the National Commission that no reason was assigned by the Board as to why it could not comply with its administrative circulars/regulations. Section 24 of the Indian Electricity Act, 1910 mandates a licensee to grant electrical connection to an applicant. Although the said provision is not applicable so far as the Board is concerned, as has been noticed hereinbefore, it is bound to supply electrical energy. The provisions contained therein also envisage supply of electrical energy within a reasonable time. The Board being a deemed licensee under the Indian Electricity Act having been constituted in terms of Section 5 of the Act ordinarily cannot be heard to say that it was not in a position to supply electricity to a class of consumers, having invited applications therefor from them. (Para 29 to 32)
       In the premises aforementioned, the Commission, in our opinion, has rightly found that the Board having not made itself ready to supply electrical energy to the agriculturists unjustly enriched itself with the money deposited by the complainants without rendering any service in return. It is evident that the Board wanted to fill its coffer with the amount of the security deposits and other deposits made by the prospective buyers of electricity. It has also not been denied that relying on or on the basis of the representations made by the Board in terms of its circular letters and/or regulations, the prospective consumers also spent a huge amount on construction of kotha and making themselves ready for getting the electrical connection. (Para 35)
       Keeping in view the said fact as also the peculiar facts and circumstances of this case, we are of the opinion that the interest of justice shall be sub-served if the directions issued by the National Commission is modified to the extent that in stead and place of interest at the rate of 12 per annum, the Appellants are directed to pay interest at the rate of 9 per annum and in stead of compensation at the rate of Rs. 10,000/- in each, compensation of Rs. 5000/- in each is directed to be awarded. (Para 43)

Judgment

S.B. Sinha, J.—Leave granted in S.L.Ps.

2. Punjab State Electricity Board (for short ‘the Board’) is a statutory authority created in terms of Section 5 of the Electricity (Supply) Act, 1948 inter alia for the purpose of rationalization of the production and supply of electricity to the consumers. Supply and distribution of electricity indisputably are public utility services. The Respondents herein are agriculturists.

3. Section 22 of the Indian Electricity Act, 1910 imposes a statutory obligation on the licensee to supply the electrical energy in the following term:

“Where energy is supplied by a licensee, every person within the area of supply shall, except in so far as is otherwise provided by the terms and conditions of the licence be entitled, on application, to a supply on the same terms as those on which any other person in the same area is entitled in similar circumstances to a corresponding supply.”

4. Electrical undertakings acquire the character of public utilities by reason of their virtually monopolistic position and their profession to serve the public. The State in exercise of its legislative power had a right to compel the licensees to render service efficiently, promptly and impartially to the members of the public, as has been done by enacting Section 22 of the said Act. Even in common law such public utilities having obtained a licence under a statute are under an automatic obligation by reason of the fact that the property of a public utility is dedicated to public service and impressed with public interest to serve the public and any such statutory obligation is in effect and substance a declaration of the common law.

5. Upon the dedication of public utility to public use and in return for the grant to it of a public franchise, the public utility is under a legal obligation to render adequate and reasonably efficient service, without unjust discrimination and at reasonably rates to all the members of the public to whom its use and scope of operation extend and who apply for such service and comply with reasonable rules and regulations of the public utility. Although Section 22 of the Indian Electricity Act, 1910 per se does not apply to Board in view of the provisions of the Electricity (Supply) Act, 1948, the provisions contained therein indicate that the Board has also a duty to render such services.

6. The right of a prospective consumer is meticulously and minutely regulated under the Electricity (Supply) Act, 1948 and/or the Indian Electricity Act, 1910 and Indian Electricity Rules. The grounds upon which a licensee can refuse to supply electrical energy is also governed by the statute.

7. The licensee, thus, has a statutory liability to supply electrical energy to any prospective consumer on the same terms as those on which any other person in the same area is entitled in similar circumstances to a corresponding supply. Such a statutory obligation on the part of the licensee is also reinforced in terms of Clause VI of the Schedule appended to the Act.

8. The Respondents herein with a view to obtain supply of electricity energy filed applications and the Board asked them to deposit the security amount. As despite deposit of such security amount and compliance of other formalities electrical energy was not supplied to the Respondents, complaints were filed before various District Forums alleging deficiency in service on the part of the Board.

9. The Respondents had also spent a huge amount on construction of Kotha and making other arrangements for obtaining supply of electrical energy. The District Forums found the Board guilty of deficiency in service and directed the Board to give the connections to the complainants within the period(s) specified therein and also awarded compensation. The Board preferred appeals thereagainst inter alia on the ground that it was obligated to supply electrical energy to the applicants maintaining the order of seniority, in view of Regulation 24 of the Sales Manual. Th

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2005 Supreme(SC) 1034

Important pointFailure to provide electrical energy after consumer was asked to deposit security amount and other charges within reasonable period would constitute deficiency in service on part of electricity Board.

Cases Referred (8)

Important point
Failure to provide electrical energy after consumer was asked to deposit security amount and other charges within reasonable period would constitute deficiency in service on part of electricity Board.