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SUPREME COURT OF INDIA
Deepak Gupta, Aniruddha Bose, JJ.
BIHAR STATE ELECTRICITY BOARD ETC. – APPELLANT(S)
VERSUS
M/S ICEBERG INDUSTRIES LTD. AND OTHERS ETC. – RESPONDENT(S)
CIVIL APPEAL NOS. 7649-7651 of 2019
Decided on : 27-04-2020
(A) Electricity Act, 2003 – Section 42(5) – Consumer Grievance Redressal Forum and Electricity Ombudsmen Regulation, 2006 – Clause 2 (1) (g) – Disconnection of power supply for non-payment of AMG as also on account of Delayed Payment Surcharge (DPS) – Legal remedy – There is no reason to denude company of its locus to approach the Forum – 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. (Para 11)
(B) Electricity Act, 2003 – Section 56 – Obligation to Annual Minimum Guarantee (AMG) – Disconnection of power supply for non-payment of AMG as also on account of Delayed Payment Surcharge (DPS) – Board had agreed to instalments for clearing dues and restored supply – On that basis, an independent arrangement came into existence vis-à-vis company’s terms of supply in given case – Disconnection of supply is special power given to supplier in addition to normal mode of recovery by instituting a suit – Both Single Judge and Appellate Bench of High Court have held that respondent company did not neglect to pay their dues, for which reason supplier could have effected harsher mode by disconnection supply – There is no dispute on obligation of respondent company to pay AMG charges, at least so far as first bill is concerned – Its representation for instalment was in nature of a mercy plea – Once that plea for instalment payment was accepted and agreement was entered into for clearing the dues, it demonstrated willingness to pay on part of company of dues in a manner acceptable to appellant Board – Such plea of company was accepted after keeping the matter pending for a long time – In such circumstances, High Court was right in giving its finding that act of disconnection was arbitrary – Judgment of Division Bench of High Court sustained and appeals filed by Board dismissed. (Paras 17, 19, 20 and 21)
Facts of the Case:
Present 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.
Findings of the Court:
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, 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.
Result : Appeals dismissed.
JUDGMENT
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 installments 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.
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 installments. An agreement was signed between the parties on 11.4.2007 for payment of AMG and DPS in installments. 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
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