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PATNA HIGH COURT
Birendra Prasad Sinha, J.
Dipte Input
Versus
Bihar State Electricity Board
Civil Writ Jurisdiction Case No. 991 of 1981 ;
Decided On : FEBRUARY 21, 1986
ELECTRICITY - ANNUAL MINIMUM GUARANTEE CHARGES - LIABILITY OF CONSUMER - CONDITIONS PRECEDENT - CONSTANT SUPPLY OF ELECTRICAL ENERGY - FAILURE OF ELECTRICITY BOARD TO SUPPLY CONSTANTLY - LIABILITY TO PAY ANNUAL MINIMUM GUARANTEE CHARGES - NIL.
Fact of the Case:
The petitioner, a small-scale industry engaged in the production of steel shots, entered into an agreement with the respondent Electricity Board for the supply of electrical energy. The agreement provided for a constant supply of electrical energy at a specified voltage and frequency. The petitioner was required to pay annual minimum guarantee charges irrespective of whether the energy to that extent was consumed or not. The petitioner's industry required constant power supply, and any interruption or failure in the supply of electrical energy led to the solidifying of the molten or semi-molten steel. The Board failed to supply constant electrical energy, and there were frequent trippings, interruptions, and breakdowns. The petitioner's industry was seriously affected, and the petitioner had to close the foundry. The Board disconnected the petitioner's electrical line for non-payment of the annual minimum guarantee charges.
Finding of the Court:
The court held that the petitioner was not liable to pay the annual minimum guarantee charges. The court found that the Board had failed to supply constant electrical energy as required by the agreement. The court held that the failure to supply constant electrical energy amounted to a breach of contract by the Board. The court further held that the petitioner could not be saddled with the liability for the inefficiency and callousness on the part of the supplier.
Issues: 1. Whether the petitioner was liable to pay the annual minimum guarantee charges even when there was no constant supply of electrical energy by the respondent Board? 2. Whether the agreement had been broken by disconnecting the line for non-payment of unauthorized charges?
Ratio Decidendi: The court held that the annual minimum guarantee charges were an essential part of the contract. However, the court held that the liability to pay the annual minimum guarantee charges was subject to the condition that the Board had supplied energy. The court held that when there was no supply of energy, the Board was not ready to serve the consumer, and consequently, the consumer was prevented from consuming energy. The court held that if a party was unable to perform its part of the contract for reasons not mentioned in the contract itself, it must be said that that party had broken the contract.
Final Decision: The court allowed the writ petition and quashed the Board's order disconnecting the petitioner's electrical connection. The court directed the Board to restore the petitioner's electrical connection immediately on submitting fresh bills, if there were any dues, which must be presented by the Board to the petitioner within one month from the date of the judgment.
Birendra Prasad Sinha, J.
1. The question for consideration is whether the petitioner is liable to pay the annual minimum guarantee charges even when there is no constant supply of electrical energy by the respondent-Board in terms of the agreement and/or in case where the agreement has been broken by disconnecting the line for non-payment of unauthorised charges ?
2. The petitioner is a partnership firm registered as a Small Scale Industry and is engaged in production of steel shots which is an import substitute. The factory is situated at Mihijam in the district of Santhal parganas. It is the only factory engaged in manufacture of steel shots in the State of Bihar according to the petitioner. Steel shots are manufactured through the medium of electric are furnance which needs constant power supply and any interruption and failure in the supply of electrical energy leads to solidifying of the molten or semi-molten steel. In view of the nature of production requiring constant power supply, this type of industry has been characterised by the respondent-Board as the priority sector to be fed by electricity continuosly. It is stated that this industry cannot accept any trippings or interruption in the process of its manufacture while the furnance is in operation.
3. On 21-1-1978 the petitioner-company executed an agreement with the respondent-Board in Form I. A copy of the agreement has been annexed as annexure 2 to the writ application. According to the agreement the respondent-Board agreed to supply and the consumer, namely, the petitioner-company agreed to take energy in bulk at the premises in the schedule annexed to the agreement for its own use subject to certain terms and conditions. Clause 1 (a) of the agreement, which is relevant, reads as under :-
"the Board shall furnish to the consumer and the consumer shall accept at the point of supply mentioned in the schedule hereto on and from the date on which the said premises shall be connected with the supply distributing mains and during the continuance of the Agreement, a constant supply of electrical energy at the pressure of 400 kv-11kv Volts, 50 cycles, 3 phase 3 wire (under lined by me)alternating current system, subject to standard variation as provided in Indian Electricity Rules, 1956 or any other statutory modification thereof as may be in force specified as may be in force from time to time for the purpose and upto the maximum specified (hereinafter referred to as the Contract Demand) and under the conditions laid down in the Schedule. The Board will not however be responsible for any interruption or diminution or stoppage of supply due to lockouts, strikes, break-down of machinery or plant, floods or other force majeure or other causes beyond the control of the Board. "
Clause 1 (b) provides that the consumer shall commence to take supply within three months of intimation from the Board to the effect that supply is available, falling which a month charge of 50% of the minimum guarantee by the consumer will be levied as penalty until the service is availed of. Clause 4 (a) requires the consumer to pay to the Board the minimum guarantee charges for the energy so supplied even though the energy to that extent has not been consumed. It reads as under :-
"4 (a) The consumer shall pay to the Board for the energy so supplied and registered as aforesaid at the rates given in the schedule provided that the minimum charges as specified in the schedule appended hereto shall be paid irrespective of whether energy to that extent has been consumed or not. " (underlined by me)According to the agreement to character of service being A C 50 cycle 3 phase at 11 V K with a contract demand of 400 KVA. The tariff applicable to the petitioner is General High Tension Service Symbol HT SI. Under the Head "special terms and conditions of supply" the energy charges is 25% load factor and 75% power factor on the contract demand. The tariff formulated by the respondent board is two p
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