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High Court Of Calcutta
V. N. KHARE, BARIN GHOSH
WEST BENGAL STATE ELECTRICITY BOARD - Appellant
Versus
SIDDHARTA FERRO ALLOYS LTD. - Respondent
F. M. A. 337 Of 1988
Decided On : 01/29/1997
UNJUST ENRICHMENT - ELECTRICITY SUPPLY - DEMAND CHARGES - MAXIMUM DEMAND - MAXIMUM DEMAND CHARGE - STANDING CHARGES - FIXED COSTS - VARIABLE COSTS - INDIAN ELECTRICITY ACT, 1910, SEC. 22 - ELECTRICITY SUPPLY ACT, 1948, SEC. 2 (8) - WEST BENGAL ELECTRICITY ENERGY (MAINTENANCE OF SUPPLY) ORDER, 1977 - INDUSTRIAL CONSUMERS - BOARD'S OBLIGATION TO SUPPLY ELECTRICITY - CONSUMER'S OBLIGATION TO PAY CHARGES - DEMAND CHARGES TO COVER FIXED COSTS - SUPPLY CHARGES TO COVER VARIABLE COSTS - BOARD'S RIGHT TO RECOVER BOTH FIXED AND VARIABLE COSTS - BOARD'S OBLIGATION TO EARN REASONABLE RETURN ON INVESTMENT - ORDER UNDER SEC. 22-B OF THE INDIAN ELECTRICITY ACT, 1910, RESTRICTING SUPPLY OF ELECTRICITY - BOARD'S CLAIM FOR DEMAND CHARGES DURING PERIOD OF RESTRICTED SUPPLY - CONSUMER'S CONTENTION THAT CLAIM IS UNJUST ENRICHMENT - HELD, CLAIM IS NOT UNJUST ENRICHMENT - BOARD ENTITLED TO DEMAND CHARGES FOR SUPPLY OF ELECTRICITY DURING UNRESTRICTED PERIOD - CONSUMER'S OPTION TO AVOID BARGAIN IF APPREHENSIVE OF BEING OVER-CHARGED - COURT CANNOT RE-WRITE CONTRACT TO CONSUMER'S ADVANTAGE - UNIFORM TARIFF TO BE CHARGED BY BOARD - DISPARITY IN TARIFF RECOVERABLE FROM SAME CLASS OF CONSUMERS TO BE AVOIDED.
Fact of the Case:
The appellant, the West Bengal State Electricity Board, supplied electricity to the writ petitioners, industrial consumers, under written contracts. The agreements provided that the appellant would supply electricity at an agreed pressure of 33000 Kva and that the writ petitioners would be entitled to draw power up to the maximum demand, as mentioned in the agreements. The agreements also provided for the installation of two meters, one to record the maximum demand and the other to record the actual consumption of electricity. The writ petitioners contended that by reason of the orders of the State Government, issued under Section 228 of the Indian Electricity Act, 1948, the appellant was prevented from supplying electrical energy during certain specified hours of each day of each month for a long period of time and in addition thereto there were widespread load-shedding during which period also no energy was supplied. The writ petitioners, therefore, contended that they are entitled to appropriate adjustments in relation to Maximum Demand i.e. consumption of electricity at highest pressure for a consecutive period of half an hour in any day of the month, as recorded in the first meter. They contend that in view of the appellant being ready and able to supply energy at such highest pressure during the whole month, the writ petitioners agreed to pay charges therefor. They, therefore, contend that when by reason of the Order of the State Government, issued under Section 228 of the said Act or otherwise than the charges for supply of electrical energy at maximum pressure during the month as reflected in the first meter, should be proportionately reduced.
Finding of the Court:
The Court held that the claim of the appellant for the charges on account of drawl of electricity at the highest pressure during a month as recorded in the first meter is not an unjust claim, when admittedly by reason of the order of the State Government issued under Section 228 of the Indian Electricity Act, 1910 no supply could be effected during certain hours each day of the months for a long period of time. The Court further held that the demand charges are to cover the fixed costs and the supply charges are to over variable costs. The Board is obliged to meet both these costs and thereupon to generate reasonable return on investment.
Issues: 1. Whether the appellant made unjust enrichment, and if so, to what extent? 2. Whether the claim of the appellant for the charges on account of drawl of electricity at the highest pressure during a month as recorded in the first meter is an unjust claim, when admittedly by reason of the order of the State Government issued under Section 228 of the Indian Electricity Act, 1910 no supply could be effected during certain hours each day of the months for a long period of time?
Ratio Decidendi: 1. The demand charges are to cover the fixed costs and the supply charges are to over variable costs. The Board is obliged to meet both these costs and thereupon to generate reasonable return on investment. 2. The claim of the appellant for the charges on account of drawl of electricity at the highest pressure during a month as recorded in the first meter is not an unjust claim, when admittedly by reason of the order of the State Government issued under Section 228 of the Indian Electricity Act, 1910 no supply could be effected during certain hours each day of the months for a long period of time.
Final Decision: The appeal was allowed and the order under appeal was set aside. All interim orders stood vacated.
( 1 ) THE only question in these appeals is whether the appellant made unjust enrichment, and if so, to what extent? The trail Judge held against the appellant and directed it to give appropriate adjustment.
( 2 ) THE appellant, in these appeals, is the West Bengal State Electricity Board, being supplier of electricity. The writ petitioners are consumers of electricity, supplied by the appellant exclusively. The terms and conditions of supply of electricity are recorded in written contracts. The principal terms and conditions are identical. Those terms and conditions provide that the appellant will supply to the writ petitioners electricity at an agreed pressure of 33000 Kva. The agreements further provide that the writ petitioners will be entitled to draw power to the extent but not exceeding maximum number of kilovoltampere for each of the first five years of supply as mentioned in schedule one of the agreements, called "contract demand". The agreement say that there shall be installed a meter which will record the maximum demand, i. e. , maximum drawal of power. These meters, we have been told, record consumption of electricity at the highest pressure during a particular month. The needle recording the same in the meter moves upwardly and never comes down unless mechanically turned. The needle moves upward only when electricity is consumed at a higher pressure for a continuous period of 30 minutes during any part of a month than any previous consumption. In addition to such meters, the agreements say, that there shall be meters to record actual consumption of electricity measured in Kwh. In the event the writ petitioners consume electricity the first meter will record the highest pressure at which electric was consumed and the second meter will record the actual consumption. In one of the writ petitioners consumes electricity in a given month, say at 1000 Kva continuously for 30 minutes during any of the hours of any of the days of a given month, then the first meter will record that the said writ petitioner has consumed electricity at the highest pressure of 1000 Kva during that month, even if the said writ petitioner has not consumed electricity beyond that particular 30 minutes period of the month. During the period of such consumption the actual consumption, measured in Kwh, made by him will be recorded in the second meter. Thus, if the consumer during a particular month consumes electricity at the highest pressure of 1000 Kva for any 30 minutes during that month, the first meter will show 1000 Kva consumption, and in the second meter the actual consumption in Kwh will be reflected. Suppose one of the writ petitioners consumes electricity only for half an hour during a particular month and does not consume electricity for the rest of the month, then in the first meter the pressure at which he had consumed electricity would be reflected and in the second meter his actual consumption of electricity will be reflected. Suppose these are 1000 Kva and 50 Kwh respectively, the same will be recorded accordingly. In the second month if the said writ petitioner consumes electricity all throughout the month at variable pressures ranging from 400 Kva to 800 Kva then the first meter will show consumption of electricity at the peak pressure during the month at 800 Kva. Since during the whole month the consumer has consumed electricity, the second meter may record, while recording the actual consumption, at 1000 Kwh. .
( 3 ) THE provision for installation of two meters, one for recording the consumption at the highest pressure and the other for recording the actual consumption, have been provided for in the agreements entered by the appellant with the writ petitioners inasmuch 3 as the writ petitioners are industrial consumers. The industrial consumers need bulk electrical energy at very high pressure. When an industrial machine is started, it needs electricity at a high pressure, but when it starts, running, it can
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