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PATNA HIGH COURT
S.K.Chattopadhyaya, J.
Pyrites, Phosphates And Chemicals Limited
Versus
Bihar Electricity Board
Civil Writ Jurisdiction Case No. 5939 of 1994 ;
Decided On : MARCH 29, 1995
ELECTRICITY - ANNUAL MINIMUM GUARANTEE CHARGES - REMISSION - POWER SUPPLY - INTERRUPTION - CLAIM FOR PROPORTIONATE REDUCTION - REASONABLENESS - FAIRNESS - ADMINISTRATIVE AUTHORITY - JUDICIAL REVIEW - CLAUSE 13 OF THE AGREEMENT - INTERPRETATION - REPORT OF THE ELECTRICAL SUPERINTENDING ENGINEER - CONSIDERATION - DUTY OF THE GENERAL MANAGER - PUBLIC AUTHORITIES - JUSTICE - NATURAL JUSTICE - WRIT JURISDICTION - MAINTAINABILITY.
Fact of the Case:
The petitioner, a company engaged in manufacturing, entered into an agreement with the Bihar State Electricity Board (Board) for the supply of high tension electrical energy. The agreement provided for annual minimum guarantee charges (AMG charges) and maximum demand charges. The petitioner filed claims for remission of AMG charges for the period 1988 to 1992, alleging that the Board had raised the bills without giving any proportionate reduction for the duration of non-supply of electricity due to frequent trippings and load sheddings. The Board rejected the petitioner's claims, and the petitioner challenged the Board's decision in the High Court under Article 226 of the Constitution.
Finding of the Court:
The High Court held that the petitioner was entitled to proportionate reduction in AMG charges for the duration of trippings, load sheddings, and power cuts, as well as for the period when the petitioner was unable to consume electrical energy due to reasons beyond its control, as provided under clause 13 of the agreement. The Court found that the General Manager of the Board, who was appointed as an arbitrator under the agreement, had failed to consider the report of the Electrical Superintending Engineer, which had verified the petitioner's claim, and had also failed to give adequate opportunity to the petitioner to prove its claim. The Court set aside the General Manager's decision and directed him to reassess the petitioner's claim for proportionate reduction of the AMG bill.
Issues: 1. Whether the High Court had jurisdiction to review the decision of the General Manager under Article 226 of the Constitution. 2. Whether the petitioner was entitled to proportionate reduction in AMG charges for the duration of trippings, load sheddings, and power cuts, as well as for the period when the petitioner was unable to consume electrical energy due to reasons beyond its control. 3. Whether the General Manager had acted fairly and reasonably in rejecting the petitioner's claim.
Ratio Decidendi: 1. The High Court held that it had jurisdiction to review the decision of the General Manager under Article 226 of the Constitution, as the agreement between the petitioner and the Board was a statutory one rather than a contractual one, and the General Manager was acting in a quasi-judicial capacity. 2. The Court held that the petitioner was entitled to proportionate reduction in AMG charges for the duration of trippings, load sheddings, and power cuts, as well as for the period when the petitioner was unable to consume electrical energy due to reasons beyond its control, as provided under clause 13 of the agreement. The Court interpreted clause 13 broadly and held that it was not limited to cases of vis major, but also included cases where the consumer was prevented from using the electrical energy for reasons beyond its control. 3. The Court held that the General Manager had not acted fairly and reasonably in rejecting the petitioner's claim. The Court found that the General Manager had failed to consider the report of the Electrical Superintending Engineer, which had verified the petitioner's claim, and had also failed to give adequate opportunity to the petitioner to prove its claim.
Final Decision: The High Court allowed the petitioner's writ petition and set aside the General Manager's decision. The Court directed the General Manager to reassess the petitioner's claim for proportionate reduction of the AMG bill, after giving the petitioner an opportunity to prove its claim.
1. The point for consideration in this writ application is as to whether the petitioner is entitled for remission in Annual Minimum Guarantee charges and maximum demand charges preferred by the petitioner.
2. The fact of the case lies in a narrow compass. The petitioner-Company entered into an agreement with the Bihar State Electricity Board (hereinafter referred to as the Board) for supply of High Tension electrical energy at 33 KVA supply. Originally the agreement was for a contract demand of 4000 KVA but subsequently the contract demand was revised at the request of the petitioner and fresh agreements were entered into. The said agreement was for : - From 15-10-1988 to 28-2-1989 - 4000 KVA From 1-3-1989 to 28-2-1992 - 9000 KVA From 1-3-1992 to till date - 7000 KVA.Bills were raised by the Board for shortfall in annual minimum guarantee charges (in short AMG charges) for the period 1988 to 1992 based on uninterrupted supply of electricity by the Board for 24 hours each day and for 365 days in the year. According to the petitioner, this bill was raised without giving any proportionate reduction for the duration of non-supply by the Board even though the supply was interrupted with frequent trippings and load sheddings. The petitioner filed claims for all the aforesaid years and made repeated request to the respondent No. 2 for expeditious hearing and disposal of their pending claims. As the disposal of the claim was being delayed at the respondents end, the petitioner moved this Court in CWJC No. 3386/94 and this Court directed the respondent No. 2 to dispose of the claims of the petitioner. By an order dated 22-6-1994 the respondent No. 2 decided the claims of the petitioner for all the said years by reason of a composite order, which is impugned in this application as Annexure 1.
3. Mr. Bajla, learned counsel appearing on behalf of the petitioner, has firstly contended that the claim of the petitioner was for remission in respect of the period of two hours after each interruption and ground for such claim was that the machineries and equipments installed in the factory are so sophisticated that any interruption in supply of power makes it impossible for the petitioner to use electrical energy for at least two hours even after resumption of supply. Such claim, it is contended, was being a question of factual verification. The respondent No. 2 directed the Electrical Superintending Engineering, respondent No. 3 to hold physical inspection of plants and machineries of the petitioner and to submit his report. The respondent No. 3 submitted his report after visiting the plants as well as after physical verification of the process and perusing the literatures and manuals submitted to him by the petitioner in respect of the sequence of starting the operations. The report of the respondent No. 3 is dated 5th May, 1994 as contained in Annexure 7.
4. The grievance of Mr. Bajla is that though the respondent No. 3 made physical verification of the process and inspected the plants on the basis of the order passed by the respondent No. 2 himself but unfortunately the respondent No. 2 did not even care to mention about the report of the respondent No. 3 in the impugned order. It is contended by the learned counsel that the respondent No. 2 has failed to consider the very important words in clause 13 of the High Tension Agreement which is ......... "any other case reasonably beyond control ......."
5. Lastly it is contended that in view of the illegal impugned order, the bills as contained in Annexure 8 which were raised on the basis of the said order, are fit to be set aside.
6. Mr. Shiv Kriti Singh, learned counsel appearing on behalf of the Board, while countering the submissions of Mr. Bajla, has raised a preliminary point regarding maintainability of the writ application. It is urged that the agreement entered into between the petitioner and the Board is a contractual agreement and not a statutory one and as such, the petition
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