PATNA HIGH COURT
Satyeshwar Roy and B.P.Singh JJ.
Tata Iron And Steel Co.Ltd., Jamshedpur
Versus
Bihar State Electricity Board
Civil Writ Jurisdiction Case No. 1526 of 1986 ; 1527 of 1986 ;
Civil Writ Jurisdiction Case No. 1526 of 1986 ; 1527 of 1986 ;
Decided On : AUGUST 20, 1988
ELECTRICITY - ANNUAL MINIMUM GUARANTEE (AMG) AND MAXIMUM DEMAND CHARGES (MDC) - CONSTANT SUPPLY OF ELECTRICITY - INTERPRETATION OF AGREEMENT - REDUCTION IN ANNUAL CHARGES - RELEVANT FACTS AND CIRCUMSTANCES.
Fact of the Case:
The petitioner, TISCO, challenged the order of the Board rejecting its representation for relief under clause 13 of the H.T. Agreement and for other reliefs. TISCO claimed that it was not liable to pay AMG and MDC at the contract rate as electrical energy was not supplied continuously and to the extent of contract demand. The Board claimed delayed payment surcharge.
Finding of the Court:
The court held that the Board was obliged to supply electrical energy to its H.T. consumers constantly and continuously for all 24 hours. If the Board failed to supply at least 6 hours of electrical energy constantly and continuously at the rate of contract demand, it could not claim the annual charges i.e. AMG and MDC. If the Board supplied electrical energy for more than 6 hours a day but not continuously for all 24 hours, where the factory runs all 24 hours, the consumer would be entitled to claim a reduction in annual charges. The court also held that the Board was required to take into consideration if there had been any interruption in the constant supply of electrical energy to the units of TISCO at Adityapur complex at the contract demand for all 24 hours for the periods 1977-78, 1978-79 and 1982-83. If in fact it found that there had been any interruption, the Board would be liable to proportionately reduce the annual charges.
Issues: 1. Whether the Board was obliged to supply electrical energy to its H.T. consumers constantly and continuously for all 24 hours? 2. Whether the Board could claim AMG and MDC if it failed to supply at least 6 hours of electrical energy constantly and continuously at the rate of contract demand? 3. Whether the Board was required to take into consideration if there had been any interruption in the constant supply of electrical energy to the units of TISCO at Adityapur complex at the contract demand for all 24 hours for the periods 1977-78, 1978-79 and 1982-83?
Ratio Decidendi: 1. The court interpreted the agreement between the parties to mean that the Board was obliged to supply electrical energy to its H.T. consumers constantly and continuously for all 24 hours. 2. The court held that the Board could not claim AMG and MDC if it failed to supply at least 6 hours of electrical energy constantly and continuously at the rate of contract demand. 3. The court held that the Board was required to take into consideration if there had been any interruption in the constant supply of electrical energy to the units of TISCO at Adityapur complex at the contract demand for all 24 hours for the periods 1977-78, 1978-79 and 1982-83.
Final Decision: The court allowed the writ petitions and quashed the order of the Board rejecting TISCO's representation. The court also directed the Board not to raise any bill claiming AMG and MDC and/or delay payment surcharge for the period 1977-78, 1978-79 and 1982-83 till the matter was decided by the Board.
1. Both these cases are being this judgment.
2. In C.W.J.C. No.1527/86(R) the petitioner has challenged the order dated 610-86 (Annexure-3) passed by respondent No. 2 rejecting the representation of the petitioner claiming relief under clause 13 of the H.T. Agreement and also for other reliefs. The petitioners are claiming that they are not liable to pay Annual Minimum Guarantee (in short A.M.G.) and Maximum Demand Charges (in short, M.D.C.) at the contract rate as the electrical energy was not supplied to the Adityapur complex of the petitioner company (TISCO) continuously and to the extent of contract demand. It has also challenged the validity of the claim of the Board demanding delayed payment surcharge.
3. In C.W.J.C. No. 1526/86(R) the petitioner has challenged the validity of the notice vide Sec.24 of the Indian Electricity Act, 1910 (Annexure-1) threatening disconnection for non-payment of the dues to the tune of more than Rs. 4 crores. The notice (Annexure-1) was issued after the issuance of Annexure-3 of the other writ petition.
4. We have heard the counsel at length only on the question whether the petitioner can claim relief in terms of the agreement, a sample of which is Annexure-8 to C.W.J.C. No. 1527/86(R), particularly because under clause 1(a) the Board (as not only required to arrange to supply electrical energy at the pressure of 33000 Volts, 50 cycles, 3 phase, 3 wire, alternating current system subject to standard variations as provided in Indian Electricity Rules, 1956, or any other statutory modification thereof as may be in force from time to time for the purpose and up to the maximum specified (hereinafter referred to as the contract demand) and under the conditions laid down in the Schedule, but also supply it continuously during the working hours of the factories at the Adityapur complex of the petitioner. Learned counsel appearing on behalf of the petitioner submitted that the supply must be for 24 hours a day because the factories at Adityapur complex of the petitioner company work for 24 hours a day. There had been default on the part of the Board not only in supply of energy at the contract demand, but the supply was also not continuously for 24 hours a day during the period 1977-78, 1978-79 and 1982-83 and, therefore, the Board was not entitled to charge either AMG or MDC as per agreement. The petitioner was only liable to pay for the energy actually consumed by it.
Learned counsel for the Board on the other hand submitted that it is true that the Board had imposed restrictions on drawing of electrical energy as per the contract demand, and directions were issued to draw energy at varying MVAs. which in all cases was less than the contract demand, but TISCO did not abide by it and drew energy at the same level at which it usually drew. It was also urged that the Board was not obliged to supply electricity 24 hours a day as constant supply in clause 1(a) of the agreement refers to constant supply as per the contract demand. We are, therefore, to see the terms and conditions of the agreement, particularly, clauses 1(a) and 13 which read as follows : - 1(a). "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 this agreement, a constant supply of electrical energy at the pressure of 33000 volts, 50 cycles, 3 phase, 3 wire, alternating current system subject to standard variations as provided in Indian Electricity Rules, 1956, or any other statutory modification thereof as may be in force from time to time for the purpose and up to 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 the supply due to lock-outs, strikes breakdo
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